Q&A -Can they or can’t they?

Question– Since a special assessment is only used for improvements and based on the special benefit the property gets- and a road district cannot do improvements, would it not then mean that unless used for construction of road that fronts the particular property that is paying the special assessment, that there is no other way/reason a road district could impose a special assessment?

Answer– That is an astute interpretation of the South Dakota Codified Laws (SDCL), and you are essentially correct in your conclusion. The key lies in how the law distinguishes between funding mechanisms and the scope of work allowed.

A special assessment, by legal definition, is a compulsory levy against property owners to finance a specific local improvement that enhances the value of the properties within a designated zone. 

Given the South Dakota Attorney General’s opinion that a SDCL 31-12A road district is limited to “construction, maintenance, and repair” and that paving is an “improvement” that falls outside this scope, the district’s ability to use a special assessment is extremely limited.

Here is the breakdown of why your assertion holds true:

• Special Assessments are for “Improvements”: Special assessments are a mechanism designed specifically to pay for improvements that provide a special benefit to the assessed properties.
• Road Districts Cannot Do Most “Improvements”: A road district operating under SDCL 31-12A is generally barred from substantial improvements like paving or widening an existing road.
• “Construction” as an Exception: The law does permit “construction” within Chapter 31-12A’s scope. If a road district were laying a new road that directly fronts and primarily benefits specific properties, that initial construction could potentially be financed via a special assessment mechanism, as it meets the criterion of providing a specific, measurable benefit to the property. This would likely be tied to the initial development or creation of a new public highway within the district. 

Therefore, unless a project qualifies as the initial construction of a road directly benefiting specific fronting properties, there is generally no other lawful reason for a road district to impose a special assessment. Any recurring, flat “maintenance fee,” like the one in our story, is likely unlawful under this interpretation as it is not tied to a specific improvement or special benefit calculation. 

The funding for routine maintenance and repair must come from general funds or a separate, legally defined “maintenance fee” mechanism specifically authorized for maintenance, which has different legal parameters than a “special assessment” for improvements.

Question– You mentioned- “The funding for routine maintenance and repair must come from general funds or a separate, legally defined “maintenance fee” mechanism specifically authorized for maintenance, which has different legal parameters than a “special assessment” for improvements.” The SDCL 31-21a states the road district can impose a levy or a special assessment. There is no other fee mentioned in that chapter that a road district can impose.

Answer– You are right to point out that SDCL 31-12A primarily mentions a levy (general tax) or a special assessment as the mechanisms for funding. There is no explicit mention of a standalone “maintenance fee” mechanism with different parameters within that specific chapter. My previous phrasing was slightly imprecise. 

Here is the clarification:

• The road district can impose a general tax levy on all taxable property within the district for general road and bridge purposes (routine maintenance and repair). This is a tax, not a fee or special assessment.
• The district can also impose a special assessment. This funding mechanism is intended for projects that provide a specific, measurable benefit to the property, which is usually a capital improvement. 

The crucial point remains the distinction between the purpose of the funds and the mechanism used to collect them:

1. General Levy: Used for standard maintenance, repair, and general construction within the board’s discretion. The rate is typically a result of the district’s needs and the property valuation, applied uniformly across the district.
2. Special Assessment: Used for specific projects that specially benefit individual properties, typically capital improvements (like initial construction of a road fronting a property). 

The “maintenance fee” in the story, implemented as a flat annual charge, likely runs into legal trouble because it acts like an annual fee but attempts to use the mechanism of a special assessment without the necessary legal framework for that type of assessment (which must be based on a unique benefit, not a flat, recurring charge). 

Therefore, any funding a road district uses must fit within the strict definitions of a general levy or a proper special assessment, and the purpose of the expenditure must align with the authorized activities of the district (maintenance, repair, and construction, but not “improvements” like paving an existing road).

Question– You said- ‘You are right to point out that SDCL 31-12A primarily mentions a levy (general tax) or a special assessment as the mechanisms for funding.”

Is it not true that if the law does not clearly state a government agency can do something, that it cannot do it? Is it not true that the law must prescribe what a government entity is allowed to do, and if the law does not state that it can do something that it cannot do it. Meaning that the law states the road district can impose a special assessment or a levy. Therefore it cannot impose anything else.

Answer-Yes, you are correct. The principle you are describing is known as Dillon’s Rule, and it is the governing legal framework in South Dakota. 

Under Dillon’s Rule, local governments, including county road districts, are considered “creatures of the state legislature” and possess only those powers that are explicitly granted to them by state statute. 

The powers they can exercise are limited to:

1. Powers granted in express words by statute.
2. Powers necessarily or fairly implied from the expressly granted powers.
3. Powers essential to the very existence and declared purposes of the corporation. 

If a power is not explicitly granted, necessarily implied, or indispensable to its existence, the governmental entity cannot exercise it. This means that: 

• If SDCL 31-12A only authorizes a levy or a special assessment, the district cannot impose any other type of independent “fee” or charge (such as the flat “maintenance fee” used in the story) because it is not an expressly granted power.
• Any fair or reasonable doubt about the existence of a power is resolved against the local government. 

Therefore, for the road district to impose a fee other than the general levy or a legal special assessment, the state legislature would need to amend Chapter 31-12A to explicitly authorize such a fee. The trustees only have the authority that the law provides, no more.

Just a reminder. We are not providing legal advice. We are stating what we believe and why, pertaining to OUR situation.