Could Aiken County’s forfeited-land commission deduct cleanup settlement and legal expenses before distributing land-sale proceeds?

Plain-English summary

In 1999, Aiken County's forfeited-land commission held a contaminated former finishing plant acquired after delinquent taxes. The requester asked whether an environmental settlement, legal fees, and related sale expenses could be deducted before the sale proceeds were distributed to the county and state. The Attorney General's office said those kinds of costs appeared capable of qualifying as “expense warrants” if the commission determined they were necessary to facilitate a sale in the county's and state's best interests.

The writer emphasized that the statute did not enumerate every permitted expense. He inferred from the commission's broad power to sell forfeited land that it could incur necessary legal and settlement costs to complete a sale and return land to the tax rolls. The final determination of necessity in this particular transaction was a policy decision for the commission. The letter's footnote said the county's share of proceeds followed payment of commission expenses.

Currency note

This opinion was issued in 1999. 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 opinion allow legal fees to be deducted from a forfeited-land sale? A: The writer said fees needed for repossession and sale could be reasonable commission expenses, subject to the commission's decision that they were necessary in the particular sale.

Q: Could an environmental settlement be treated the same way? A: The opinion said a settlement necessary to facilitate the sale appeared to be the kind of allowable expense contemplated by the statute. It did not independently approve the requested settlement amount.

Q: When did the county receive its share of proceeds? A: The footnote said the county received its portion after the commission's expenses were paid, under the distribution provision the office discussed.

Q: Who made the final necessity decision?
A: The office left the final policy judgment about expenses in a particular case to the forfeited-land commission.

Background and statutory framework

The property had tax delinquency, environmental contamination, and a federal cleanup lien. Aiken County's commission was negotiating a sale and settlement. Section 12-59-100 addressed sale proceeds and deductions for expense warrants before county-state division; Section 12-59-40 required the commission to dispose of forfeited lands in the best interests of both. The office read those provisions together, while saying no state case or prior opinion directly answered the expense question. This was an informal opinion by the signing assistant attorney general.

Citations and references

• Sale proceeds: Section 12-59-100, discussed for expense warrants and distribution.
• Commission powers: Section 12-59-40, discussed for selling forfeited land in the county's and state's best interests.

Official title

Stating: in 1991 the Forfeited Land Commission of Aiken County became the owner due to delinquent taxes on the Clearwater Finishing Plant that was a dye and finishing plant which was once a division of United Merchants.

Requester

The Honorable Linda Sharpe, Treasurer of Aiken County

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/march-15-1999-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/99march15sharpe.pdf

Original opinion text

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The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES M. CONDON
ATTORNEY GENERAL

March 15, 1999

The Honorable Linda Sharpe
Treasurer of Aiken County
828 Richland Avenue, W.
Aiken, South Carolina 29801

Re: Informal Opinion
Dear Treasurer Sharpe:
Attorney General Condon has forwarded your opinion request to me for reply. In your request, you state: In 1991 the Forfeited Land Commission of Aiken County became the owner due to delinquent taxes of the Clearwater Finishing Plant that was a dye and finishing plant once a division of United Merchants. It was determined that this property was contaminated and in 1995 EPA was involved in a cleanup effort. In the spring of 1998 the Commission began negotiations with a prospective buyer and stated a price equal to the amount of taxes owed when ownership · was transferred. In September the EPA placed a lien on the property of
$1,120,462.50 plus interest and future costs.
The Commission has since retained an environmental attorney because the county chose not to represent the Commission due to possible conflict of interest between the Forfeited Land Commission and Aiken County. Through the Commission attorney an offer to settle with EPA was made but the offer

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Treasurer Sharpe
Page 2
March 15, 1999
was declined since Aiken County was not a part of the negotiations. The Commissions question, based on state statute 12-59-100 is whether the settlement amount, the attorney's fees and all other expenses incurred resulting from these negotiations are legal expenses to be deducted from the proceeds of the sale before any distribution is made. Also would the county settlement portion be considered as expenses to be taken from the gross amount of the sale since they believe themselves to be a separate entity?

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LawI Analysis
The legislation governing a county forfeited land comm1ss10n (hereinafter "commission") is found in Chapter 59 of Title 12. Section 12-59-100 addresses the disposition of the proceeds from the sale ofland by the commission. Under this section, the proceeds of any sale are to be turned over by the commission to the county treasurer. The county treasurer then, at the close of his fiscal year, divides the funds, after deducting the expense warrants as drawn on him by the commission, between the county and the state in proportion to their respective interests. Id. If any tract ofland is sold for less than the taxes and penalties due thereon the proceeds of such sale shall be divided between the State and county in proportion of the amount of taxes and penalties due each of them. Id.

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In essence, your question is whether the settlement amount, attorney's fees and other expenses incurred while negotiating the sale of land would be considered allowable "expense warrants" under Section 12-59-100. Unfortunately, the statute does not set forth the permitted expenditures of the commission and I have been unable to locate any South Carolina cases or prior opinions of this Office addressing this question. Therefore, attention must be focused on the statutory powers of the commission to determine what might be considered necessary expenses incurred by the commission while fulfilling its statutory duties. Pursuant to Section 12-59-40, the commission shall effect the sale oflands forfeited and bid in for the commission. All lands deeded to the commission of any county are to be held by it as assets of the county and State and sold to the best interest of the county and State. Id. The commission shall sell and dispose of such lands in such a manner and upon such terms and conditions as to it may appear to be for best interest of its county, but the terms of sale shall not in any case provide for a longer term than ten years for the full payment of the purchase price of such property and shall be secured by a first real estate mortgage upon the property sold. Id.

Treasurer Sharpe
Page3
March 15, 1999
As a general rule, an express grant of power to an administrative body or officer includes the authority to do all that is reasonably necessary to execute that power or to perform the duty specifically conferred. O'Grady v. Cook County Sheriffs Merit Board, 632 N.E.2d 87 (Ill.App.Ct.1994 ). In addition, courts have concluded that attorney's fees are considered to be an inherent expense of repossession and sale of property. The National Cash Register Co. v. Warner, 142 N.E.2d 584 (Mass.1957).

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One of the main purposes of the commission is to return lands to the tax rolls, rather than have the lands continue as a drain on the tax base. The commission is charged with the duty of selling and disposing lands in a manner and upon such terms and conditions which appear to be for the best interests of the county and the State. The General Assembly did not rule out that in certain situations, the interests of the county and State would be best served by the commission selling the land for a price lower than the amount of taxes and penalties due on the land. In order to adequately perform their duties, the General Assembly seems to have granted the commission broad discretionary authority to structure the sale of lands in such a way as it may deem appropriate, so long as the sale is in the best interest of the county and State. Given its purpose and duties, it seems necessary that the commission incur certain expenses while carrying out its statutory responsibilities. It is reasonable to conclude that one of these expenses may be attorney's fees, as such are considered by courts to be an inherent expense in the repossession and sale of property. In fact, the Massachusetts Supreme Court found "[i]t is certain that the average layman often could not take these steps
[those necessary for the repossession and sale ofland] without legal advice." The National Cash Register Co. v. Warner, supra. It is also reasonable to conclude that the commission may incur other expenses, such as the settlement amount present here, which are necessary to facilitate the sale of the land and, thus, usher reentry of the land onto the tax rolls.

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Since the commission has been granted broad discretion in determining whether a particular sale is for the best interest of the county and State, its decision is entitled a great deal of deference. Ifthe commission determines the types of expenses raised in your opinion request are necessary to facilitate the sale of the land, such expenses would appear to of the type allowable under Section 12-59-100. 1 I have no legal basis, at this time, to conclude otherwise. Of course, a final decision as to what types of expenses are necessary in a

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Pursuant to Section 12-59-100, the county would receive its portion of the proceeds of the sale of the land after the expenses incurred by the commission are paid.

Treasurer Sharpe
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March 15, 1999
particular case is a policy decision left up to the commission. 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 specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion.

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With kindest regards, I remain
Very truly yours,

Bl l(..J.

Paul M. Koch
Assistant Attorney General