Was the Clinton–Newberry Natural Gas Authority a state agency, and could city officials sit on its board and share its net revenue?

Plain-English summary

The Lieutenant Governor asked three questions about the Clinton–Newberry Natural Gas Authority in 2003. The Attorney General said the authority was a special-purpose district and political subdivision of South Carolina, rather than a state agency. Its enabling act placed the mayors of Clinton and Newberry and two council members from each city on the authority's board ex officio. The AG concluded that this board composition did not violate the state prohibition on dual office holding.

The third question concerned dividing net revenue between the two cities. The AG described the enabling act's separate formulas for revenue from firm gas and interruptible gas, plus a reimbursement provision for a Newberry transmission line. It said a transfer of net revenues whose disposition had not already been committed appeared consistent with the act on its face. Whether a particular distribution actually followed the statutory formula was a factual question the office declined to resolve.

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.

Common questions

Q: Did the AG classify the gas authority as a state agency? A: No. It classified the authority as a political subdivision created as a special-purpose district.

Q: Did the mayors' and council members' authority board seats violate the dual-office ban? A: The AG said no, because the enabling act assigned those seats ex officio by virtue of their city offices.

Q: Could the authority distribute net revenue to Clinton and Newberry? A: The AG said a distribution appeared permissible on its face under the act's formula for uncovenanted net revenue. It did not determine whether any particular payment met that formula.

Background and legal framework

Act No. 789 of 1952 created the authority and set its board composition and revenue provisions. The opinion used Ashmore v. Greater Greenville Sewer District for the ex officio dual-office analysis and cited Condon v. Hodges when discussing the duty to use legislatively designated funds as directed.

Citations and references

• Act No. 789 of 1952: creation, board composition, and net-revenue distribution.
• Ashmore v. Greater Greenville Sewer District: ex officio service discussed by the AG.
• Condon v. Hodges: designated use of public funds.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/march-12-2003/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/03/03march12bauer.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY MCMASTER
ATIDRNEY GENERAL

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March 12, 2003

Lieutenant Governor Andre Bauer
Office of the Lieutenant Governor
Post Office Box 142
Columbia, South Carolina 29202

Re:

Your Letter of February 14, 2003

Dear Lieutenant Governor Bauer:
In your above-referenced letter on the behalf of your constituent, Louis Neiger, you ask for this Office's opinion on the following questions: 1.

Is the Clinton Newberry Natural Gas Authority (authority) an agency of South Carolina?

2.

Does serving on the board of the authority violate the dual office holding prohibition when the board is composed of the following members: Clinton Mayor, Newberry Mayor, two Clinton City Council members, and two Newberry City Council members?

3.

Can the authority divide its net revenues between the cities of Clinton and Newberry? Law I Analysis

As to your first question, this Office opined on March 11, 1982 that the Clinton Newberry Natural Gas Authority was created as a special purpose district and a body corporate and politic by Act No. 789of1952. Special purpose districts perform a governmental function. Ops. Atty. Gen., March 11, 1982. They, like counties, municipalities and school districts, are considered political subdivisions of the state. Ops. Atty. Gen., March 18, 1996. In an opinion, dated February 15, 1995, we noted that "[w]hile South Carolina case law does not contain a complete and concise definition of the term 'political subdivision,' characteristics 'which are generally regarded as distinctive of a political subdivision are that it exists for the discharging of some function of local government, that it has a prescribed area and that it possesses authority for subordinate self-government by officers selected by it."' Quoting, McClanahan v. Cochise College, 540 P .2d 744 (197 5). Therefore, the Authority is not a state agency, but a political subdivision of the State. REMBERT C. DENNIS BUllDJNG • POST OmcE Box 11549 • COLUMBIA, S.C. 29211·1549 • TELEPHONE: 803-734-3970 • A /
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FACSIMILE: 803-253-6283

Lieutenant Governor Bauer
Page 2
March 12, 2003

Your second question concerns dual office holding. Section 3 ofthe Authority's Enabling Act provides for the composition of the board. Act No. 789 of 1952. The legislation states that the board shall consist of seven members as follows: " ( 1), the Mayor of Clinton, ex officio, shall serve as a member of the authority ... ; (2), the Mayor of Newberry, ex-officio, shall serve as a member of the authority ... ; (3), the Municipal Council of each of Clinton and Newberry shall elect two members of their respective councils who shall serve, ex officio, as members of the authority ... The six members so designated shall, at their first meeting, elect a seventh member, who shall reside in the service area ofthe authority." Article XVII, Section lA of the South Carolina Constitution provides that "no person may hold two offices of honor or profit at the same time ... ," with exceptions specified for an officer in the militia, member ofa lawfully and regularly organized fire department, constable, or notary public. For this provision to be contravened, a person concurrently must hold two public offices which have duties involving an exercise of some portion of the sovereign power of the State. Sanders v. Belue, 78 S.C. 171, 58 S.E. 762 (1907). Other relevant considerations are whether statutes, or other such authority, establish the position, prescribe its duties or salaries, or require qualifications or an oath for the position. State v. Crenshaw, 274 S.C. 475, 266 S.E.2d 61 (1980).

I

While the South Carolina Constitution prohibits dual office holding, such prohibition does not generally apply when one of the offices is held ex officio. The phrase ex officio is defined as "(f]rom office; by virtue of the office" or "[f]rom office; by virtue of office; officially. A term applied to an authority derived from official character merely, not expressly conferred upon the individual, but rather annexed to the official position." Lobrano v. Police Jury of Parish of Plaquemines, 150 La. 14, 90 So. 423 ( 1921 ). In Ashmore v. Greater Greenville Sewer District, 211 S.C. 77, 44 S.E. 2d 88 (1947), the South Carolina Supreme Court commented extensively on ex officio memberships: "The rule here enforced with respect to double or dual office holding in violation of the constitution is not applicable to those officers upon whom other duties relating to their respective offices are placed by law. A common example is ex officio membership upon a board or commission of the unit of government which the officer serves in his official capacity, and the functions of the board or commission are related to the duties of the office. Ex officio means 'by virtue of his office.' ... Similar observation may be made with respect to ex officio membership upon a governing board, commission or the like of an agency or institution in which the unit of government of the office has only a part or joint ownership or management. In mind as an example

Lieutenant Governor Bauer
Page 3
March 12, 2003
is an airport operated by two or more units of government. A governing board of it might be properly created by appointment ex officio of officers of the separate governmental units whose duties of their respective officers have reasonable relation to their functions ex officio ....

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Here, the Authority's Enabling Act provides that the mayors and the city council members hold their position on the Authority's governing board in an ex officio capacity. Therefore, the dual office holding prohibitions ofthe State Constitution are not violated by the composition ofthe board. Finally, you ask whether it is proper for the Authority to divide its net revenue between the cities of Clinton and Newberry. Your constituent is particularly concerned about the Authority's disposition of overage or surplus revenue. In section 5 of the Enabling Act, the Legislature designated the manner in which the Authority's funds are to be appropriated. The Act provides that "[a]ll net revenues derived from the system whose disposition the authority shall not have covenanted to otherwise dispose of shall be disposed of as follows:" Subsection (a) states that the "sum which reflects the proportion of revenue derived from the sale of firm gas shall be divided between Clinton and Newberry on the basis of firm gas sold within their respective municipal service areas." Subsection (b) adds that the "sum which reflects the proportion of the revenue derived from the sale of interruptible gas shall be divided equally between Clinton and Newberry, irrespective of where such interruptible gas shall be sold." Finally, subsection (c) states that a portion of the revenue to which Newberry is entitled shall be used to reimburse the authority for the cost of the construction of the transmission line located "between the northwestern municipal limits of Newberry and the line dividing the Counties of Newberry and Laurens." Of course, this Office cannot resolve factual questions in an opinion, Op. S.C. Atty. Gen., December 5, 1983 and it would be a factual issue as to whether these provisions are being followed by the Authority in a particular instance. Nevertheless, it is well recognized that where the General Assembly has appropriated funds in a particular manner, such funds must be spent in the manner designated by the General Assembly. See Condon v. Hodges, 349 S.C. 232, 562 S.E.2d 623 (2002). Accordingly, for the Authority to transfer to the cities of Clinton and Newberry net revenues "whose disposition the authority shall not have covenanted to otherwise dispose of'would, on its face, seem to be in keeping with the Authority's enabling legislation. Sincere I

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Assistant Deputy Attorney General