Hospitality Ass'n of South Carolina, Inc. v. County of Charleston
| Decision Date | 21 September 1994 |
| Docket Number | No. 24346,24346 |
| Citation | 320 S.C. 219,464 S.E.2d 113 |
| Court | South Carolina Supreme Court |
| Parties | HOSPITALITY ASSOCIATION OF SOUTH CAROLINA, INC., Thomas L. Sponseller, GHI, Inc. d/b/a Hampton Inn Airport, John Street Associates d/b/a Hampton Inn Historic District, SAFHI, Inc. d/b/a Hampton Inn Mt. Pleasant, Airport Properties, Inc. d/b/a Radisson Inn-Charleston Airport, and Red Roof Inn, Inc., Plaintiffs, v. The COUNTY OF CHARLESTON, a political subdivision of the State of South Carolina, Defendant. HOSPITALITY ASSOCIATION OF SOUTH CAROLINA, INC., Thomas L. Sponseller, Mariners Inn Owners Association d/b/a Hilton Head Island Hilton Resort, South Carolina Hyatt Corp. d/b/a Hyatt Regency Hilton Head, The Westin Resort, Inc. d/b/a Westin Resort of Hilton Head, and Holiday Inn BV d/b/a Crystal Sands Resort, Plaintiffs, v. The TOWN OF HILTON HEAD ISLAND, SOUTH CAROLINA, a municipality and body corporate and politic, Defendant. HOSPITALITY ASSOCIATION OF SOUTH CAROLINA, INC., Thomas L. Sponseller, CFC Food Management Corporation, Fast & French, Inc., The Oyster Factory, Inc., Crazy J's, Inc., Claire, Inc., Port City Foodservices, Inc., S.S.W.N.N. Corp., H.C.R. Enterprises, Inc., Old Munich, Inc., S & S Ole Towne, Inc., Cusch Carolina, Inc., Hyman's Seafood Co., Knoxville, Inc., J.R.C., Inc., Mistral, Ltd., Porta Via, Ltd., Mike Calder's Pub, Gennaro's, Inc., LaTasha's Taste of New Orleans, Inc., Plaintiffs, v. The CITY OF CHARLESTON, a municipality and body corporate and politic, Defendant. . Heard |
John M.S. Hoefer and B. Craig Collins, both of Willoughby & Hoefer, P.A., and Professor William Quirk, of the University of South Carolina School of Law, Columbia, for plaintiffs.
A. Arthur Rosenblum and Nancy B. Tecklenberg, Charleston, for defendant County of Charleston.
Curtis L. Coltrane, of Wilson & Coltrane, Hilton Head, for defendant Town of Hilton Head Island.
William B. Regan and Frances I. Cantwell, both of Regan & Cantwell, Charleston, for defendant City of Charleston.
In these consolidated actions, plaintiffs challenge certain ordinances enacted by defendants County of Charleston (County), Town of Hilton Head Island (Town), and City of Charleston (City). For the reasons discussed below, we render judgment for defendants.
On November 16, 1993, County adopted an ordinance imposing a 2% fee on the gross proceeds from the rental of any accommodations furnished to transients within Charleston County. "Accommodations" is defined in the ordinance as all rooms (excluding meeting and conference rooms), campground spaces, recreational vehicle spaces, lodgings or sleeping accommodations furnished to transients by any hotel, inn, condominium, motel, "bed and breakfast," residence, or any other place in which rooms, lodgings, or sleeping accommodations are furnished for consideration. Accommodations supplied to the same person for a period of 30 continuous days are specifically exempt from the ordinance.
The fee imposed by the County Ordinance is imposed upon the person to whom the The ordinance requires the establishment of an interest-bearing, segregated and restricted account into which all revenues received from the accommodations fee will be deposited. The ordinance provides that the funds received from the accommodations fee shall be utilized "for capital projects, the support of tourism and tourist services in a manner that will best serve the tourists from whom it was collected." It is further stated that the funds shall be spent to build capital projects which "will serve and attract tourists who regularly seek accommodations in Charleston County."
accommodation is rented or leased and becomes due and payable at the time the accommodation is rented or leased. The fee is to be collected by the provider of the accommodation and is to be remitted to the County.
The Town Ordinance was adopted on November 15, 1993, and was amended on January 10, 1994. As amended, the ordinance imposes a 2% fee on the gross proceeds from the rental of short-term accommodations furnished to transients within the Town. The fee is imposed upon those utilizing the accommodations and is collected and remitted to the Town by the provider of the accommodations.
The Town Ordinance provides that any money collected thereunder shall be deposited in a segregated account, and that the money shall be utilized for the primary purpose of:
(i) Nourishment, re-nourishment (re-sanding), and maintenance of public beach access within the territorial limits of the Town of Hilton Head Island; and,
(ii) Dune restoration, including the planting of grass, sea oats or other vegetation useful in preserving the dune system within the territorial limits of the Town of Hilton Head Island.
If sufficient funds have accrued to achieve the primary purpose, the ordinance provides that the funds may also be used for the following additional purposes:
(i) Maintenance of public beach access within the territorial limits of the Town of Hilton Head Island; and,
(ii) Capital improvements to the beaches and beach related facilities, such as public parking areas for beach access; dune walkovers; and rest room facilities, with or without changing rooms, at public beach parks within the territorial limits of the Town of Hilton Head Island.
The City Ordinance, which was enacted on December 7, 1993, imposes a 1% fee on the gross proceeds derived from the sale of food and beverages sold in establishments that maintain a license for the on-premises consumption of alcohol, beer or wine. The fee is imposed upon the patron to whom the food or beverage is sold and becomes due and payable at the time the food or beverage is sold. The fee is to be collected by the establishment selling the food or beverage and is to be remitted to the City.
The City Ordinance establishes a special account where monies remitted to the City pursuant to the ordinance are deposited. All monies in this account, including interest, must be used "only for the purpose of offsetting, to the extent possible, the costs to the City in providing police, fire inspection, and sanitation services to the establishments subject to [the] ordinance, and for tourism related costs incurred by the City in providing for the safety, security, and well-being of patrons."
Plaintiffs, which include a trade association, a "citizen and resident" of the State, and businesses that will have to collect and forward the fees imposed by the ordinances, brought these actions in the Court's original jurisdiction, arguing that the ordinances were invalid.
Are the local ordinances valid?
Determining if a local ordinance is valid is essentially a two-step process. The first step is to ascertain whether the county or municipality
that enacted the ordinance had the power to do so. If no such power existed, the ordinance is invalid and the inquiry ends. However, if the local government had the power to enact the ordinance, the next step is to ascertain whether the ordinance is inconsistent with the Constitution or general law of this State. For the reasons discussed below, we hold that (1) the local governments had the power to enact the ordinances, and (2) the ordinances are not inconsistent with either the Constitution or general law of this State.
For generations, legislative delegations of the General Assembly controlled virtually every aspect of local government. Relinquishment of this control effectively began in April of 1966, when the General Assembly created a Committee to study the South Carolina Constitution and appointed then Senator John C. West as chairman. The major task assigned to the West Committee was to develop and recommend amendments to the Constitution that would eliminate archaic provisions and "strengthen it in such other areas, so that it [would] provide a workable framework with proper safeguards for sound State, County and local governments." 1
In June of 1969, after three years of numerous hearings and conferences, the West Committee submitted its Final Report to the Governor and General Assembly. In the Report, the Committee unanimously recommended amendments to the Constitution that would place the control and management of county and municipal affairs in the hands of duly elected local officials. 2
Following three years of legislative debate on the Report, the General Assembly placed upon the November 1972 general election ballot for referendum vote an Amendment of Article VIII of the Constitution. See Act No. 1631, 1972 S.C.Acts 3184. Acting upon a favorable vote of the people, the General Assembly, on March 7, 1973, ratified the Amendment. See Act No. 63, 1973 S.C.Acts 67.
As ratified, new Article VIII directed the General Assembly to implement what was popularly referred to as "home rule" by establishing the structure, organization, powers, duties, functions, and responsibilities of local governments by general law. 3 S.C. Const. art. VIII, §§ 7 and 9. In addition, new Article VIII mandated a liberal rule of construction regarding any constitutional provisions or laws concerning local government. S.C. Const. art. VIII, § 17. 4
Although the General Assembly was required to implement home rule, new Article VIII essentially left it up to the General Assembly to decide what powers local governments should have. 5 Acting under this One such statute is S.C.Code Ann. § 4-9-25 (Supp.1994). This statute, which was enacted by the General Assembly in 1989, states in part as follows:
authority, the General Assembly enacted various statutes regarding the powers of counties and municipalities. 6
All counties of the State ... have authority to enact regulations, resolutions, and ordinances ... respecting any subject as appears to them necessary and proper for the security, general welfare, and convenience of counties or for preserving health, peace, order, and good...
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