Could Williamston Rescue Squad collect unpaid bills through South Carolina’s tax-refund setoff program?

Plain-English summary

A legislator asked whether Williamston Rescue Squad could use South Carolina’s Setoff Debt Collection Act as a quasi-governmental claimant agency. The Attorney General said no in 2009. The squad provided emergency medical services under contract with Anderson County, but the contract expressly made it an independent contractor rather than a county agent or partner. Providing a service the county was required to furnish did not, by itself, make the squad a governmental or quasi-governmental agency under the opinion’s analysis.

Currency note

This opinion was issued in 2009. 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: Could this rescue squad offset a debtor’s tax refund under the Act? A: The opinion said no because it did not qualify as a claimant agency under the contract and facts supplied.

Q: Did delivering county EMS service make the squad a county agency? A: No. The Attorney General emphasized that the agreement called it an independent contractor and disclaimed agency or partnership status.

Q: Did nonprofit status change the conclusion?
A: The opinion identified the squad as a nonprofit corporation but still concluded it was not a quasi-governmental claimant agency.

Background and statutory framework

The Act’s claimant-agency definition included governmental and quasi-governmental entities, and eligible agencies could collect delinquent debts from tax refunds. The opinion compared the rescue squad’s independent-contractor agreement with examples of entities created or recognized by legislation and concluded the squad did not qualify.

Citations and references

Statute: S.C. Code Ann. §§ 12-56-10 et seq.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/february-5-2009/
• Original PDF: https://www.scag.gov/wp-content/uploads/2017/01/Gambrell-M.-2-5-2009-01212358xD2C78.pdf

Original opinion text

February 5, 2009

The Honorable Michael W. Gambrell

Member, House of Representatives
436-A Blatt Building
Columbia, South Carolina 29211
Dear Representative Gambrell:

In a letter to this office you questioned whether the Williamston Rescue Squad would qualify as a"claimant agency"for purposes ofS.C. Code Ann. §§ 12-56-10 et seq., this State's SetoffDebt Collection Act ("the Act"), based upon its being considered a "quasi-governmental entity." A "claimant agency" for purposes of the Act is defined as "...a state agency, board, committee, commission, public institution of higher learning, political subdivision, or other governmental or quasi-governmental entity of anv state...." (emphasis added). As referenced in Gardner v. South Carolina Dept. of Revenue. 353 S.C. 1, 577 S.E.2d 190 (2003), the Act was established for the benefit ofrecognized claimant agencies who are owed delinquent debts by taxpayers allowing them a means of collecting these debts through any tax refund owed the debtor. According to the other materials relevant to your inquiry forwarded to this office, the Williamston Rescue Squad is a non-profit emergency medical service that provides EMS coverage to a portion ofAnderson County pursuant to a contract with Anderson County. You stated that the Rescue Squad contracted with Anderson County to provide emergency medical services that the County is required by law to provide. A letter dated November 5, 2008 to Attorney General McMaster stated that "...due to the fact that Anderson County does not provide EMS coverage by a county agency, but provides this coverage through a contract with a non-profit EMS provider, we should be considered a quasi-governmental body" for purposes of the Act. A copy of the agreement between the Williamston Rescue Squad (the "Contractor") and Anderson County("the County") was also forwarded to this office. That contract states in part as follows:

Contractor is an independent contractor and is not an agent of the County. This Agreement shall not be construed as establishing an employment agreement, a partnership, a general agency, or a joint venture... RembertC. Dennis Building •. Po.st Office Box 11549 • Columbia,SC 29211-1549 • Telephone 803-734-3970 • Facsimile 803-25.3-6283

The Honorable Michael W. Gambrell
Page 2

February 5, 2009

...collection efforts.. .(by the Contractor)...shall be within the sole discretion of the Contractor, and Contractor agrees to indemnify and hold harmless the County from

any and all liability and expenses including, but not limited to, attorney fees arising from any collection efforts by Contractor, its employees and agents related thereto... County hereby disclaims and Contractor hereby releases County and County Council,

its officers, servants, employees and agents from any and all liability... The parties acknowledge that Contractor is providing the services contemplated herein as an independent contractor and is neither agent, employee, servant, partner, nor joint venturer of the County or of the other Rescue Squads...

Contractor hereby represents and warrants that it is a non-profit corporation duly

organized and validly existing in good standing under the laws of the State of South Carolina. As set forth by the referenced agreement, the Williamston Rescue Squad is an independent contractor. In its decision in Wiredata. Inc. v. Village of Sussex. 751 N.W.2d 736 (Wis. 2008), the Wisconsin Supreme Court recognized the distinction between a quasi-governmental corporation or a governmental entity and an independent contractor for purposes of that State's open records law. In Stephens v. Correctional Services Corp.. 428 F.Supp. 580 at 583 (E.D. Tex. 2006), the district court determined that the defendant, a private jail corporation, was not entitled to sovereign immunity since it was not established as a governmental entity particularly commenting that "...CSC has failed to direct the court to a statute granting it governmental or quasi governmental status...and the court has found none." Similarly, in Citv of Alton v. Sharvland Water Supply Corp.. 145 S.W.3d 673 (Tex. Ct. App. 2004) the court found that there was no statute or other legislative act

granting sovereign immunity for an independent contractor which contracted with the City ofAlton for wastewater collection. In Perales v. Thomburgh. 762 F.Supp. 1036 at 1068 (S.D.N.Y. 1991) the court found that the actions of Qualified Designated Entities (QDE) which assisted the Immigration and Naturalization Service (INS) with amnesty programs were not attributable to the government "...because they were not caused, condoned or approved by the INS." The court commented that
[fjirst, we find that the plaintiffs have not carried their burden of showing that the

QDEs were agents of the INS and not mere independent contractors. Accordingly, we expressly decline to adhere to our previous, uninformed characterization of the QDEs as "quasi-governmental agencies..."

Ibid. Therefore, the courts have made a distinction between independent contractors and the treatment of such as governmental or quasi-governmental agencies. As a result, in the opinion of this office an independent contractors who contract with a government to perform a particular service should not necessarily be considered governmental or quasi-governmental entities.

The Honorable Michael W. Gambrell
Page 3

February 5, 2009

As to the Williamston Rescue Squad, the contract referenced above clearly states that the rescue squad is an independent contractor, not an agent of the County. Moreover, by the various

provisions specifying that the County is held harmless from any liability for any actions ofthe rescue squad and that the rescue squad "...is neither...(an)... agent, employee, servant, partner, nor joint venturer of the County....", in the opinion of this office the Williamston Rescue Squad should not be considered a quasi-governmental agency for purposes ofthe Act. Compare: Op. Atty. Gen. dated

August 3, 2001 (determined that the Williamsburg County Memorial Hospital, established by state law as a hospital public service district, qualified as a "claimant agency" for purposes of the Act); Op. Atty. Gen. dated December 1 1, 2001 (holding that the Emerald Center Multi-County Disabilities

and Special Needs Board is a "political subdivision" having been created by legislation with a board

appointed by the Governor to function as legislatively mandated). With kind regards, I am, Very truly yours,

Henry McMaster
Attorney General
/

By:

Charles H. Richardson

Senior Assistant Attorney General
REVIEWED AND APPROVED BY:

Robert D. Cook
Deputy Attorney General