Horry County Sch. Dist. v. Horry County

• Decision Date: 04 September 2001
• Docket Number: No. 25355.,25355.
• Citation: 346 S.C. 621,552 S.E.2d 737
• Court: South Carolina Supreme Court
• Parties: HORRY COUNTY SCHOOL DISTRICT, Appellant, v. HORRY COUNTY and the City of Myrtle Beach, Respondents.

346 S.C. 621

552 S.E.2d 737

HORRY COUNTY SCHOOL DISTRICT, Appellant, v. HORRY COUNTY and the City of Myrtle Beach, Respondents.

No. 25355.

Supreme Court of South Carolina.

Heard January 11, 2001.

Decided September 4, 2001.

Kenneth L. Childs, William F. Halligan, and John M. Reagle, of Childs & Halligan, of Columbia; and Wallace K. Lightsey and John C. Moylan, of Wyche, Burgess, Freeman & Parham, of Greenville, for appellant.

John P. Henry, of The Thompson Law Firm, of Conway; Emma Ruth Brittain, of The Thompson Law Firm, of Myrtle Beach; Thomas A. Hutcheson, of Sinkler & Boyd, of Charleston; and B. Eric Shytle, of Sinkler & Boyd, of Columbia, for respondents.

Burnet R. Maybank, III, of Nexsen Pruet Jacobs & Pollard, of Columbia for amici curiae South Carolina Chamber of Commerce and South Carolina Manufacturer's Association.

Terry E. Richardson, Jr. of Ness, Motley, Loadholt, Richardson & Poole, of Barnwell, for amicus curiae Barnwell School District 45.

Roy D. Bates, of Columbia, for amicus curiae Municipal Association of South Carolina.

Robert E. Lyon, Jr. and Kelly J. Golden, both of Columbia, for amicus curiae South Carolina Association of Counties.

Richard M. Gergel and W. Allen Nickles III, of Gergel, Nickles & Solomon, of Columbia; and Dwight F. Patterson, Jr., of Perrin, Perrin, Mann & Patterson, of Spartanburg, for amici curiae South Carolina School Boards Association, South Carolina Association of School Administrators, South Carolina Education Association, Palmetto State Teachers Association, South Carolina Association for Rural Education, South Carolina Alliance of Black School Educators, South Carolina Association of School Psychologists, and South Carolina League of Women Voters.

BURNETT, Justice:

This is an appeal from an order of the circuit court granting summary judgment to respondents Horry County and the City of Myrtle Beach (collectively "the county"). The Horry County School District brought suit challenging the constitutionality of S.C.Code Ann. §§ 4-1-170 and -175 (Supp.2000) and Horry County Council Ordinances Nos. 171-99, 174-99, and 57-00. The trial court granted summary judgment to the county. We affirm.

FACTS

This controversy arose when Horry County initiated creation of a multi-county business park (MCBP) in conjunction with contiguous Marion, Georgetown, and Dillon Counties. The MCBP consists of twenty-seven separate tracts of land covering 3,889.23 acres situated wholly within Horry County and partially within the limits of the City of Myrtle Beach.

The Horry County School District is coterminous with Horry County and the City of Myrtle Beach is located entirely within the county and the school district. The school district has authority to levy ad valorem taxes. The Horry County Board of Education prepares an annual budget and determines the necessary millage for the operation of schools for the succeeding year. The county auditor sets the millage for the school district's debt service. The Myrtle Beach City Council and the Horry County Council also establish annual budgets and determine annually the millage necessary for their respective operations. The Horry County Council plays no role in setting, levying, or approving the budget or millage of the school district.

For the 1999-2000 fiscal year, the county levied 56 mills in unincorporated areas of the county and 40.9 mills in incorporated areas, the city levied 61 mills, and the school district levied 91 mills for school operations and 22 mills for debt service, for a total of 113 mills for school purposes. Thus, based on the 1999-2000 millage rates and disregarding the effect of the MCBP, the school district would receive 67% of all property tax revenues in unincorporated areas and approximately 53% of the revenues in Myrtle Beach.

As discussed infra, property within the MCBP is constitutionally exempt from ad valorem taxation, but the owners must nevertheless pay an amount equivalent to the taxes that would otherwise have been due. The agreement creating the MCBP at issue in this case allocates the revenue derived from property situated within the MCBP without regard to the millage imposed by the various taxing entities. Specifically, the agreement allocates 50% of MCBP revenue to the school district.

DISCUSSION

The school district presents several issues, however, in essence, the sole issue on appeal is whether the county has complete discretionary authority to allocate the revenue from the fee in lieu of taxes paid by the MCBP. This issue poses two sub-issues: (1) did the trial court correctly construe the MCBP statutes to give the county this discretion? and (2) are the statutes as construed constitutional? We conclude the trial court correctly construed the statutes and the statutes are constitutional.

I. Statutory Construction

The district argues the trial court erred in construing § 4-1-170 (Supp.2000) as granting the county discretion over the allocation of revenue from MCBPs. We disagree.

In 1988, the voters of this state were asked to approve an amendment to the South Carolina Constitution authorizing the creation of MCBPs. The ballot question read as follows:

Shall Section 13 of Article VIII of the Constitution of this State be amended so as to provide that counties, subject to the General Assembly first providing by law for bonded indebtedness and school fiscal ability considerations, may jointly develop an industrial or business park with other counties within the geographical boundaries of one or more of the member counties where the area comprising the parks and all property having a situs therein is exempt from all ad valorem taxation because the owners or lessees of any property situated in the park must pay an amount equivalent to the property taxes or other in-lieu-of payments that would have been due and payable except for the above exemption?

Jt. Res. No. 690 (S.C.1988). The proposed amendment was billed as a means to help rural counties. See Amendment Benefits Rural Counties, The State, Oct. 18, 1988, at Metro 1. The voters approved the ballot question and the following amendment was added to the Constitution:

Counties may jointly develop an industrial or business park with other counties within the geographical boundaries of one or more of the member counties. The area comprising the parks and all property having a situs therein is exempt from all ad valorem taxation. The owners or lessees of any property situated in the park shall pay an amount equivalent to the property taxes or other in-lieu-of payments that would have been due and payable except for the exemption herein provided. The participating counties shall reduce the agreement to develop and share expenses and revenues of the park to a written instrument which is binding on all participating counties. Included within expenses are the costs to provide public services such as sewage, water, fire, and police protection. Notwithstanding the above provisions of this subsection, before a group of member counties may establish an industrial or business park as authorized herein, the General Assembly must first provide by law for the manner in which the value of the property in the park will be considered for purposes of bonded indebtedness of political subdivisions and school districts and for purposes of computing the index of taxpaying ability pursuant to any provision of law which measures the relative fiscal capacity of a school district to support its schools based on the assessed valuation of taxable property in the district as compared to the assessed valuation of the taxable property in all school districts of this State.

S.C. Const. Art. VIII, § 13(D) (emphasis added). Thus, before any MCBPs could be created, the General Assembly was required to enact legislation specifying how the value of park property would be considered relative to specific areas of school funding (bonded indebtedness and the index of taxpaying ability¹).

In accordance with the requirements of the constitutional amendment, the legislature enacted S.C.Code Ann. § 4-1-170 (Supp.2000), which provides:

By written agreement, counties may develop jointly an industrial or business park with other counties within the geographical boundaries of one or more of the member counties as provided in Section 13 of Article VIII of the Constitution of this State. The written agreement entered into by the participating counties must include provisions which:

(1) address sharing expenses of the park;

(2) specify by percentage the revenue to be allocated to each county;

(3) specify the manner in which revenue must be distributed to each of the taxing entities within each of the participating counties.

For the purpose of bonded indebtedness limitation and for the purpose of computing the index of taxpaying ability pursuant to Section 59-20-20(3), allocation of the assessed value of property within the park to the participating counties and to each of the taxing entities within the participating counties must be identical to the allocation of revenue received and retained by each of the counties and by each of the taxing entities within the participating counties....

§ 4-1-170 (emphasis added). Thus, as far as the Index of Taxpaying Ability is concerned, a school district will not be penalized for the value of MCBP property in its district if it does not actually receive funds from that property.

Statutes governing fees in lieu of taxes also address the allocation of revenue from MCBPs²:

For a project not located in an industrial development park as defined in § 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the same manner and proportion that the millage levied for school and other purposes would be distributed if the property were taxable.

§ 4-29-67(L)(1) (Supp.1999) (emphasis added). Conversely, "for a project located in an industrial development park as defined in § 4-1-170, distribution of the fee in lieu of taxes on...