Harper v. Schooler

• Decision Date: 31 May 1972
• Docket Number: No. 19433,19433
• Citation: 258 S.C. 486,189 S.E.2d 284
• Court: South Carolina Supreme Court
• Parties: , 4 ERC 1277 Keith M. HARPER, individually and representing the taxpayers and property owners of Georgetown County, South Carolina, Appellant, v. A. B. SCHOOLER, as Chairman, et al., Respondents.

Page 284

189 S.E.2d 284

258 S.C. 486, 4 ERC 1277

Keith M. HARPER, individually and representing the taxpayers

and property owners of Georgetown County, South

Carolina, Appellant, v. A. B. SCHOOLER, as Chairman, et al., Respondents.

No. 19433.

Supreme Court of South Carolina.

May 31, 1972.

Patrick J. Doyle, Georgetown, for appellant.

Atty. Gen., Daniel R. McLeod, Columbia, Sylvan L. Rosen, and Arthur M. Flowers, of Smith, Moore, Flowers & Doar, Georgetown, Theodore B. Guerard, of Sinkler, Gibbs, Simons & Guerard, Charleston, for respondents.

PER CURIAM:

This is an action challenging the constitutionality of Act No. 156 of the Acts of 1971, 57 Stats. at L. 134, which authorizes the issuance of bonds for the purpose of certain pollution control facilities. The appeal is from a circuit decree sustaining the validity of the Act against all objections. We have fully considered the said decree which will be reported herewith as the judgment of this Court, with one exception.

Since the parties are proceeding under and relying upon the above cited Act, we find it unnecessary to decide whether, as held by the lower court, the parties could have financed the particular facilities by means of the Industrial Revenue Bond Act, 1967 Act No. 103, 55 Stats. at L. 120, if so minded. We, accordingly, intimate no opinion thereabout. We do agree with the reasoning of the lower court, however, to the effect that the bonds here proposed, at least to an extent, serve the same public purpose as bonds issued under the Industrial Revenue Bond Act.

DECREE OF JUDGE SINGLETARY

The Plaintiff has instituted the captioned action pursuant to the Uniform Declaratory Judgment Act individually and as a representative of a class consisting of the taxpayers and property owners of Georgetown County, South Carolina, to contest the constitutionality of the legislation enacted at the 1971 Session of the South Carolina General Assembly, entitled 'An Act To Authorize Each Of The Counties Of The State To Contract With Industries Located Therein For The Acquisition, Construction Or Operation Of Air Or Water Pollution Control Facilities; To Authorize Each County To Issue Revenue Bonds Payable Solely From Payments To Be Made By Such Industries; To Prescribe The Terms And Conditions Of Such Revenue Bonds, The Remedies Of Those Who May Acquire The Same, and The Terms And Conditions Under Which Such Revenue Bonds May Be Issued; To Provide That Such Bonds And Any Agreements Made In Connection Therewith Shall Not Constitute An Indebtedness Of Such County Or A Pecuniary Liability Of Any Kind; To Provide The Purposes For Which The Proceeds From The Sale Of Such Bonds May Be Used; And To Provide For Borrowing In Anticipation Of The Issuance Of Such Bonds And For The Refunding Of Bonds Issued Hereunder; And To Confirm The Existing Authorization Of Incorporated Municipalities To Construct And Finance Water Pollution Control Facilities' (hereinafter called the 'Bond Fact').

The Bond Act was passed by the General Assembly in order to provide statutory authority to permit counties and incorporated municipalities of the State to issue revenue bonds under the terms and conditions of the Bond Act whose proceeds would be applied to acquire and construct facilities to eliminate, mitigate or prevent air and water pollution, thus assisting industry to raise moneys to pay the cost of such facilities.

The Defendants include the County Board of Commissioners of Georgetown County (hereinafter called the 'County Board'), International Paper Company, a New York corporation (hereinafter called 'International'), and Daniel R. McLeod, as Attorney General of the State of South Carolina, all of whom have filed Answers contending that the Bond Act is valid and constitutional in all respects.

Pursuant to an Order dated May 15, 1971, notice of the institution of this action was duly published in the Charleston, S.C. 'News & Courier', the Columbia, S.C. 'The State', the Greenville, S.C. 'The Greenville News', and the Georgetown, S.C. 'The Georgetown Times', giving notice of the institution of this action and permitting any interested person not later than twenty (20) days following the date of publication to petition to intervene herein. Although the twenty (20) day period has expired, no person has sought to intervene and an appropriate Order of Default has been entered.

None of the material facts are in issue. International has a large paper plant located in Georgetown County. At the present time, industrial waste originating at the plant is not being adequately treated before it is discharged into the Sampit River. In order to provide proper water pollution treatment facilities which will meet the legal requirements now in effect, International estimates that approximately Three Million Dollars ($3,000,000) will be required for construction cost. International and the County Board have negotiated a Loan Agreement wherein the County Board agrees to authorize the issuance of $3,000,000 Georgetown County Pollution Control Facility Revenue Bonds pursuant to the Bond Act, the proceeds of which will be used for the purpose of acquiring and constructing necessary water pollution control facilities for International's Georgetown plant. Under the terms of the Loan Agreement, International will be unconditionally obligated to repay the principal of, interest and premium, if any, on the said bonds as the same become due, and International will obligate itself to maintain and operate the pollution control facilities acquired from the bond proceeds. The Bond Act authorizes alternative arrangements by which the County may either (i) own and lease the pollution control facilities to International with an option to International to purchase to the same for One Dollar ($1.00) when the bonds have been repaid or (ii) provide that the pollution control facilities when acquired and constructed will become the absolute property of International, in which latter event the County will have no ownership interest therein nor any lien thereon to secure the obligations of International under the Loan Agreement. In the instant case, the County Board and International have agreed that International will own the pollution control facilities when the same are acquired and constructed.

In addition to the Loan Agreement, the County Board proposes to enter into a Trust Indenture with a bank yet to be named pursuant to which the proposed revenue bonds will be issued and wherein the terms and provisions of the bonds will be set forth.

A hearing on the merits was held before me at my Chambers, at the Charleston County Courthouse on July 16, 1971, the Resident Judge of the Fifteenth Judicial Circuit being out of the country. All parties were represented at the hearing except the Defendant, Daniel R. McLeod, who was given due notice thereof. A draft copy of the Loan Agreement was introduced by consent and the issues were argued.

I find that the Bond Act is valid and constitutional in all respects and that the County Board is fully authorized pursuant to the provisions thereof to enter into the Loan Agreement with International and to issue the proposed $3,000,000 Georgetown County Pollution Control Facility Revenue Bonds.

The Bond Act authorizes any of the several counties of the State by its governing body and any incorporated municipality of the State by its governing body (without any action required by the governing body of the county wherein the incorporated municipality is located) to issue revenue bonds to finance the cost of air or water pollution control facilities to be used by any industry as defined therein, and in connection therewith the several counties and the several incorporated municipalities of the State are authorized to enter into agreements with an industry providing for the construction, operation, maintenance and improvement of pollution control facilities and prescribing the terms and conditions of the payments to be made by the industry to meet the payments that shall become due on the bonds. The Bond Act specifically states that the bonds issued pursuant thereto shall be limited obligations of the county or incorporated municipality, as the case may be, payable solely out of the moneys to be paid by the industry pursuant to a loan agreement and no such bond or interest coupon shall ever constitute or give rise to a pecuniary liability of the county or incorporated municipality or a charge against its general credit or taxing powers. The Bond Act prescribes that prior to the issuance of any bonds pursuant thereto, the issuing county or incorporated municipality shall first obtain from the Pollution Control Authority of South Carolina, established by Act No. 1157 of 1970, as amended from time to time, a finding by the Authority that the proposed pollution control facilities are necessary and that the design thereof will result in the elimination, mitigation and prevention of air or water pollution.

The Bond Act also requires the issuing county or incorporated municipality prior to the issuance of any bonds pursuant thereto to file its petition with the State Budget and Control Board of South Carolina setting forth a brief description of the proposed pollution control facilities, a statement of the action taken in connection therewith by the Pollution Control Authority a reasonable estimate of the cost and a general summary of the terms and conditions of the loan agreement. Upon the filing of such a petition, the Bond Act requires the State Board to make such investigation as it deems advisable and the State Board is authorized to approve the proposed pollution control facilities if it finds that they are intended to promote the purposes of the Bond Act and may be reasonably anticipated to effect such result. Notice of the State Board's approval must then be published at least once in a newspaper having general circulation in the county where the proposed pollution control...