Did South Carolina's 1998 proposal to cap homeowner assessment growth raise constitutional problems?

Plain-English summary

A House researcher asked whether H.4695, a proposed cap on increases in the taxable fair market value of owner-occupied homes, was constitutional. The Attorney General identified two possible problems. The formula might undermine Article X's equal-and-uniform assessment rule by tying value changes to improvements and countywide growth rather than the home's actual value. It also might conflict with Article III's requirement to levy property taxes on actual value.

The letter did not declare the bill unconstitutional. It stressed that legislation is presumed valid, only courts can invalidate it, and an enacted statute would have to be followed until a court ruled otherwise. Its concern addressed the proposed 1998 formula, not a current assessment cap.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What did H.4695 try to limit?
A: The bill proposed limiting increases in the assessed value of an owner-occupied residence during a period of ownership, using improvements and countywide value growth in its formula.

Q: Why did the AG raise an equal-assessment concern?
A: The letter said the proposed formula might produce values unrelated to the home's actual market value and unequal treatment across homeowners.

Q: Did the AG strike down the proposed tax change?
A: No. The opinion said only a court could declare an enacted statute unconstitutional.

Background and statutory framework

The letter quoted H.4695 and analyzed it under Article X, Section 1 and Article III, Section 29 of South Carolina's constitution. It used Cox v. Bates to explain the presumption of constitutionality and discussed the constitutional requirement of taxation based on actual value.

Citations and references

• H.4695, the proposed assessment formula quoted in the letter.
• Article X, Section 1 and Article III, Section 29 of the South Carolina Constitution.
• Cox v. Bates, 237 S.C. 198, 116 S.E.2d 828 (1960).

Official title

Asking as to the constitutionality of H.4695.

Requester

Robert A. Morales, Research Analyst, Ways and Means Committee, South Carolina House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/april-6-1998-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/98april6morales.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL

--

CHARLEs-lYIOLONY CoN~N
ATTORNEY GENERAL

April 6, 1998

I

Robert A. Morales, Research Analyst
Ways and Means Committee
South Carolina House of Representatives
P.O. Box 11867
Columbia, South Carolina 29211
RE:

Informal Opinion

Dear Mr. Morales:
Your opinion request has been forwarded to me for reply. You have asked for this Office's opinion as to the constitutionality of H.4695. This Bill would amend Article 3, Chapter 37, Title 12 of the South Carolina Code of Laws, relating to assessment of property taxes by adding Section 12-37-224. H.4695 provides as follows: SECTION 1. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding: "Section 12-37;.224. (A) For purposes of ad valorem taxation, and in addition to the provisions of Section 12-43-280, the fair market value of owner-occupied residential property assessed pursuant to Section 12-43220( c) may not increase more than an amount equal to the value of permanent improvements, as defined by the Department of Revenue, made by the owner-occupant after acquiring title and the percentage increase in the assessed value of all taxable properties in the county in the year immediately preceding a countywide reassessment and the year of a countywide reassessment.

Rn1BERT

c. DENNIS BUILDING

•

POST OFFICE Box 11549

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COLUMBIA . S.C. 29211-1549

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TELEPHONE:

803-734-3970

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FACSIMILE : 803-253-6283

Robert A. Morales
Page 2
April 6, 1998

(B) When the property is transferred, other than between spouses, the CO-unty assessor shall determine the fair market value of the property in the ~hands of the transferee, effective as of the date of transfer. If the transferee qualifies as an owner-occupant, fair market value may be increased during his term of ownership only in accordance with subsection (A). When considering whether an Act of the General Assembly is unconstitutional, a court is governed by the guidelines set forth in Cox v. Bates, 237 S.C. 198, 116 S.E.2d 828 (1960), as follows: The supreme legislative power of the State is vested in the General Assembly; the provisions of our State Constitution are not a grant but a limitation of legislative power, so that the General Assembly may enact any law not expressly, or by clear implication, prohibited by the State or Federal Constitution; a statute will, if possible, be construed so as to render it valid; every presumption will be made in favor of constitutionality of a legislative enactment; and a statute will be declared unconstitutional only when its invalidity appears so clearly as to leave no room for reasonable doubt that it violates some provision of the Constitution. While this Office may comment upon potential constitutional problems, it is solely within the province of the courts of this State to declare an act unconstitutional. I have reviewed H.4695 and there appears to be two areas of constitutional concern. The first area of constitutional concern is Article X, Section 1 of the State Constitution, which provides in pertinent part as follows: The General Assembly may provide for the ad valorem taxation by the State or any of its subdivisions of all real and personal property. The assessment of all property shall be equal and uniform in the following classifications:

(3) The legal residence and not more than five acres
contiguous thereto shall be taxed on an assessment equal to four percent of the fair market value of such property.

Robert A. Morales
Page 3
April 6, 1998

I
I

It appears that the method of taxation found in H.4695 may not be equal and uniform. Under H.4695, an increase in the fair market value of owner-occupied residential property would be tied to the value of permanent improvements and the percentage increase of all taxable properties in the county, rather than the property's actual value. Thus, while this Office cannot declare the statute, if enacted, to be unconstitutional, an argument could be made by one attacking the constitutionality of the statute that it lacks uniformity and is not based upon actual value. The constitutional attack would be based most likely upon the argument that the tax burden would inequitably fall upon those homeowners at the lower end of the economic scale. In other words, the tax burden would not be dollar for dollar. Thus, while the purpose of the legislation is laudable in providing tax relief, the literal language of the Constitution may well provide a problem if the statute is subsequently attacked in court. The second area of constitutional concern is Article III, Section 29 of the State Constitution, which provides as follows: All taxes upon property, real or personal, shall be laid upon the actual value of the property taxed, as the same shall be ascertained by an assessment made for the purpose of laying such tax. Actual value denotes the true market value of the property. Lee County v. Stevens, 277 S.C. 421, 289 S.E.2d 155 (1982). As previously stated, H.4695 does not tie the increase in the fair market value of the property to the property's actual value. Consequently, the taxes would not be laid upon the actual value of the property taxed as required by the Constitution. Therefore, it may be possible for one challenging the constitutionality of the statute to argue that it violates the "actual value" requirement of the State Constitution. Finally, I reiterate that this Office must presume H.4695, if enacted, to be constitutional. Consequently, the statute would have to be followed until a court of competent jurisdiction declares otherwise. This letter is an informal opinion only. It has been written by a designated assistant attorney general and represents the position of the undersigned attorney as to the

Robert A. Morales
Page 4
April 6, 1998

~ecific questions asked. It has not, however, been personally scrutinized by the Attorney
..General norofficially published in the manner of a formal opinion.

With kindest regards, I remain
Very truly yours,

7?J A f.J.

Paul M. Koch
Assistant Attorney General