Could a 2002–03 South Carolina budget proviso temporarily override restrictions on the Uninsured Motorist Fund?

Plain-English summary

The South Carolina Department of Insurance asked whether fiscal-year 2002–03 budget Proviso 72.69 let it use money from the Uninsured Motorist Fund for enforcement and regulatory operations, despite restrictions in the general insurance law. The Attorney General agreed with the department's position in March 2003.

The proviso authorized agencies, with specified budget approval and reporting, to spend certain earmarked and restricted special-revenue accounts to maintain critical programs previously supported by general funds. It also said the authority applied notwithstanding other restrictions on earned revenue. The AG relied on earlier opinions and State ex rel McLeod v. Mills: a later appropriations act had the force of law during its temporary life and suspended an irreconcilably conflicting general statute for that period. The response applied that rule to the fund accounts the requester said the Comptroller General had designated as restricted.

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 agree the department could use the fund for regulatory operations? A: Yes. On the facts supplied, it agreed with the department's position under the 2002–03 proviso.

Q: Did the opinion permanently repeal the fund's general-law restrictions? A: No. It described a conflicting general law as suspended only while the later appropriations act was in force.

Q: What condition did the proviso impose on increased spending authority? A: It required prior approval by the Office of State Budget and reporting to the Governor and the two legislative budget committees.

Background and statutory framework

The request described the fund created under § 38-77-151 and Proviso 72.69's temporary authority for restricted special-revenue accounts. The AG quoted State ex rel McLeod v. Mills for the rule governing irreconcilable conflicts between an appropriations act and an earlier permanent statute.

Citations and references

• § 38-77-151: provision described as creating and directing the Uninsured Motorist Fund.
• Proviso 72.69: fiscal-year 2002–03 budget provision at issue.
• State ex rel McLeod v. Mills: cited court authority for temporary suspension of conflicting general law.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/march-19-2003/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/03/03march19fuller.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY McMAsTER
ATIDRNEY GENERAL

Gwendolyn L. Fuller, Deputy Director & General Counsel
South Carolina Department of Insurance
Post Office Box 100105
Columbia, South Carolina 29202-3105

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March 19, 2003

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Uninsured Motorist Fund

Dear Ms. Fuller:
You have requested an opinion from this Office concerning the effect of a temporary proviso on an inconsistent general law. By way of background, you have indicated that In 1997, the South Carolina General Assembly enacted S.C. Act No. 154. This legislation reformed the private passenger automobile insurance delivery system in this state. The Act created, pursuant to § 38-77-151, a special fund known as the Uninsured Motorist Fund to be disbursed as provided by law. The funds are collected by the Department of Public Safety under Chapter 10 of Title 56, S.C. Code Ann. §§ 56-10-550 and 56-10-552 (Supp. 2001). The Director ofthis Department is given the authority to expend funds for the administration of Chapter 77; provided however, the Department shall retain ten percent of the Uninsured Motorist Fund to be used to enforce the provisions of Title 38 including Sections 38-77-112, 38-77122 and 3 8-77-123, to publish for consumers an automobile insurance buyer's guide, a brochure comparing automobile insurance premiums, and to provide for a public awareness campaign. S.C. Code Ann.§ 38-77-151 (2002)). The purpose of the Uninsured Motorist Fund is to reduce the cost of insurance required by Section 3877-150 and to protect and educate consumers. S.C. Code Ann.§ 38-77-154 (2002). The Director is supposed to distribute funds annually from the Fund among the several insurers writing motor vehicle bodily injury and property damage liability insurance on motor vehicles registered in this State. S.C. Code Ann. § 38-77-155 (2002).

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During the last legislative session, the South Carolina General Assembly enacted Proviso 72.69 (2002-03 Budget Bill 4878 - Part lB). The proviso provides:

REMBERT c. DENNIS BUil.DlNG • Posr 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

Ms. Fuller
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March 19, 2003

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72.69. (GP:Flexibility) In order to provide maximum flexibility in absorbing the General Fund reductions mandated in this act as compared to FY 2001-02 general fund appropriations and to allow for the orderly transition ofthe downsizing of state government, agencies are authorized for FY 2002-03 to spend agency earmarked and restricted accounts designated as "special revenue funds" as defined in the Comptroller General's records, to maintain critical programs previously funded with general fund appropriations. Any increase in spending authorization for these purposes must receive the prior approval of the Office of State Budget and must be reported to the Governor, Senate Finance Committee, and the House Ways and Means Committee. The Comptroller General is authorized to implement the procedures necessary to comply with this directive. This provision is provided notwithstanding any other provision oflaw restricting the use of earned revenue. Notwithstanding proviso 72 .14 (Transfers of Appropriations), appropriation transfers may exceed twenty percent of the program budget upon approval of the Budget and Control Board.

You have also indicated that "(t]he Office of the Comptroller General has designated the Uninsured Motorist Fund accounts as restricted accounts (emphasis yours)." Further, you state that it is the opinion of the Department oflnsurance that the " ... Department can use the funds to support the enforcement and regulatory operations functions of this Department." This Office has previously concluded that, in case of conflict between a provision of the annual appropriations act and an inconsistent general law, the provisions of the appropriations act would have the effect of suspending the provisions of the conflicting general law. See Ops. S.C. Atty. Gen Dated July 28, 1992, June 5, 1990, October 10, 1989 & November 21, 1978. Our opinion in this regard is based on and supported by longstanding authority from our Supreme Court. In State ex rel McLeod v. Mills, 256 S.C. 21, 180 S.E.2d 638 (1971), the Court cited with approval Brooks v. Jones, 80 S.C. 443, 61S.E.946 (1908); United States v. Mitchell, 109 U.S. 146, 3 S.Ct. 151, 27 L.Ed. 887 (1883); and, State ex rel. Buchanan v. State Treas., 68 S.C. 411, 47 S.E. 683 (1904) and held that "(a]n appropriation act, though generally in duration temporary, has equal force and effect as a permanent statute for the time being. If approved subsequently to such permanent act, and there is irreconcilable conflict, the latter is suspended during the time the appropriation act is of force." State ex rel McLeod v. Mills, 180 S.E.2d at 640. I can locate no authority which would now call into question the above referenced court holdings and opinions of this Office. As such, it remains our opinion that in case of conflict between a provision of the annual appropriations act and an inconsistent general law, the provisions of the appropriations act would have the effect of suspending the provisions of the conflicting general law. It further appears that the principals expressed in our previous opinions are relevant to the questions

Ms. Fuller
Page 3
March 19, 2003

raised in your request and therefore we would agree with the position of the Department of Insurance in this matter.

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David K. Avant
Assistant Attorney General
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