Was a nonprofit's affordable housing project for people with disabilities exempt from South Carolina development impact fees?

Plain-English summary

In December 2003, South Carolina's Attorney General said Fort Mill Housing Services' planned fourteen homes for people with disabilities should be exempt from development impact fees as defined in the state's Impact Fee Act. The project's intended residents had incomes no higher than eighty percent of the area median, fitting the statute's affordable-housing definition.

The exemption also required the project's proportionate share of system improvements to be paid from a source other than development impact fees. The AG stressed that separate fees might still apply, depending on the circumstances.

Currency note

This opinion was issued in 2003. 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.

Historical summary

Housing developers

The AG treated the proposed low-income project as affordable housing for this exemption. It did not say nonprofit status or disability housing alone established the exemption; the alternative-funding condition also mattered.

Municipal fee officials

The opinion distinguished development impact fees from other charges the law did not include in that term. It left room for other applicable fees after applying the impact-fee exemption.

Common questions

Did the AG say the project qualified as affordable housing?
Yes. The proposed residents' income limit matched the statute's definition discussed in the opinion.

Was affordable status the only requirement for an impact-fee exemption?
No. The project's share of system improvements had to be financed from another revenue source.

Were all development-related charges waived?
No. The AG said other fees could still apply on the facts.

Background and statutory framework

A senator asked about impact fees Rock Hill planned to assess on a donated-land, fourteen-unit housing project. The AG examined the statutory definitions of impact fee and affordable housing, the exemption's alternative-funding condition, and provisions preserving other possible charges.

Citations and references

The opinion discussed Section 6-1-970 and Section 6-1-920(1) of the South Carolina Development Impact Fee Act.

Official title

Questioning whether Fort Mill Housing Services, a nonprofit entity, should be exempt from impact fees dealing with the construction of fourteen units providing housing for persons with disabilities.

Requester

The Honorable Greg Gregory, Senator, District No. 16

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/december-17-2003-2/
• Original PDF: https://www.scag.gov/wp-content/uploads/2012/09/03dec-17-Gregory.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY McMAsTER
ATTDRNEY GENERAL

December 17, 2003

The Honorable Greg Gregory
Senator, District No. 16
P. 0. Box 700
Lancaster, South Carolina 29721

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Dear Senator Gregory:

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In a letter to this office it was indicated that Fort Mill Housing Services, a nonprofit entity whose purpose is to provide affordable housing to the low-income population, those whose income does not exceed 80% of the area median income, has been awarded a grant to build fourteen units to provide housing for persons with disabilities. It was indicated that the targeted population will be those persons who are assisted through Mental Health due to a mental illness. The fourteen units are to be built on property within the city limits of Rock Hill, on land donated to Fort Mill Housing Services for the purpose of building affordable housing. It was further indicated that the City of Rock Hill has informed you that there will be an assessment of impact fees appropriate for this type of construction. Reference was made reference to the provisions of S.C. Code Ann. Sections 6-1-910 et seq. (Supp. 2003), the "South Carolina Development Impact Fee Act". Such Act provides for the assessment of impact fees for certain developments and capital improvements. The term "impact fee" is defined by Section 6-1-920(8) as
... a payment of money imposed as a condition of development approval to pay a proportionate share of the cost of system improvements needed to serve the people utilizing the improvements. The term does not include: (a) a charge or fee to pay the administrative, plan review, or inspection costs associated with permits required for development; (b) connection or hookup charges; (c) amounts collected from a developer in a transaction in which the governmental entity has incurred expenses in constructing capital improvements for the development if the owner or developer has agreed to be financially responsible for the construction or installation of the capital improvements; ( d) fees authorized by Article 3 of this chapter.

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REMBERT
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c, DENl;JIS BUILDING • POST OFFICE Box 11549 • COLUMBIA, S.C. 29211-1549 • TELEPHONE: 803-734-3970 • FACSIMILE: 803-253-6283

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The Honorable Greg Gregory
Page2
December 17, 2003

Exemptions from impact fees are provided by Section 6-1-970 in stating that The following structures or activities are exempt from impact fees:
... (7) all or part of a particular development project if: (a) the project is determined to create affordable housing; and (b) the exempt development's proportionate share of system improvements is funded through a revenue source other than development impact fees. The term "affordable housing" is defined by Section 6-1-920(1) as
... housing affordable to families whose incomes do not exceed eighty percent of the median income for the service area or areas within the jurisdiction of the governmental entity.

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The primary goal of statutory construction is to ascertain the intent of the General Assembly. State v. Martin, 293 S.C. 46, 358 S.E.2d 697 (1987). A statutory provision should be given a reasonable and practical construction consistent with the purpose and policy expressed in the legislation. Hayv. S.C. Tax Commission, 273 S.C. 269, 255 S.E.2d 837 (1979). A statute's words must be given their plain and ordinary meaning without resort to a forced or subtle construction which would work to limit or expand the statute's operation. State v. Blackmon, 304 S.C. 270, 403 S .E.2d 660 (1991 ). When the terms of a particular statute are plain and unambiguous, the literal meaning should be applied. Duke Power Co. v. S.C. Tax Commission, 292 S.C. 64, 354 S.E.2d 902 (1987). As set forth, a particular development project is exempt from impact fees ifthe project is to create "affordable housing" as defined. The project outlined, a project to provide housing for the low-income population, those whose income does not exceed 80% ofthe area median income, would come within the definition of "affordable housing" so as to exempt the project from impact fees. However, Section 6-1-970 also provides that a particular project is exempt from impact fees if "the exempt development's proportionate share of system improvements is funded through a revenue source other than development impact fees." The term "system improvements" is defined by Section 6-1-920 (21) as "capital improvements to public facilities which are designed to provide service to a service area.". Also, other provisions of Sections 6-1-910 et seq. must be considered in determining whether any other fees are appropriate. For instance, Section 6-1-1060 provides that "(t)he provisions of this article do not repeal existing laws authorizing a governmental entity to impose fees or require contributions or property dedications for capital improvements. A development impact fee adopted in accordance with existing laws before the enactment ofthis article is not affected until termination of the development impact fee." Also, Section 6-1-1080 provides other exemptions for development impact fees for certain water or wastewater utilities.

The Honorable Greg Gregory
Page 3
December 17, 2003

Referencing such, it is our opinion that Fort Mill Housing Services should be exempt from impact fees as defined above. However, other fees may be applicable depending on the circumstances even if an impact fee is not. Sincerely,

Charles H. Richardson
Senior Assistant Attorney General