Could South Carolina let counties and towns impose real estate transfer fees with legislative delegation approval?

Plain-English summary

In 2003, Representative Herbkersman asked about a bill that would allow certain South Carolina municipalities and counties to charge a real estate transfer fee. The proposed fee could not exceed 0.025 percent and had to fund the purchase of wetlands, green space, or open areas for public benefit. The bill also made each local fee depend on a petition and approval by the county legislative delegation.

The Attorney General thought most of the proposal would survive constitutional scrutiny. The South Carolina Supreme Court had upheld an earlier version of the transfer fee statute in Town of Hilton Head Island v. Morris, and the AG saw no facial Home Rule or equal protection defect in this bill. That assessment assumed the bill applied generally; the office said it could not determine whether it targeted particular localities as a factual matter.

The delegation approval requirement was the exception. Relying on Gunter v. Blanton and Aiken Co. Bd. of Ed. v. Knotts, the AG warned that allowing legislators to approve or veto a local fee would likely assign them a role barred by the state constitution's separation of powers clause. The opinion suggested reconsidering that part of the bill. It did not declare the proposed legislation void; it explained that only a court could strike down an enacted law.

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 say South Carolina could authorize local real estate transfer fees? A: The AG considered the proposed bill generally constitutional, assuming it applied statewide as its text appeared to do. The opinion identified a separate problem with legislative delegation approval.

Q: Why was county delegation approval a problem?
A: The AG read two South Carolina Supreme Court decisions as barring legislators from exercising approval or veto power over local tax decisions in this way. The bill required delegation approval before a municipality or county could impose the fee.

Q: Did the AG invalidate the bill?
A: No. This was a proposed bill, and the opinion said only a court could strike down an enacted law. It advised the requester to consider removing the delegation's role.

Q: What would the proposed fee have funded?
A: Under the bill described to the AG, the fee was capped at 0.025 percent and earmarked for DHEC-recognized wetlands, green space, and open areas for public benefit.

Background and statutory framework

The bill would have amended Section 6-1-70, which at the time generally barred local real estate transfer taxes or fees without express authorization by general law. The AG treated the earlier Morris ruling as support for the General Assembly's power to regulate these fees. Its separation of powers analysis turned on the delegation's proposed role in approving individual local fees, even if that approval happened before local adoption.

Citations and references

• Section 6-1-70: the existing restriction and proposed amendment discussed in the opinion.
• Town of Hilton Head Island v. Morris, 324 S.C. 30, 484 S.E.2d 104 (1997): earlier transfer fee statute upheld.
• Gunter v. Blanton, 259 S.C. 436, 192 S.E.2d 473 (1972), and Aiken Co. Bd. of Ed. v. Knotts, 274 S.C. 144, 262 S.E.2d 14 (1980): delegation approval of local tax decisions rejected.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/may-6-2003/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/03/03may-6-Herbkersman.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY McMAsTER
ATIDRNEY GENERAL

May 6, 2003

The Honorable Bill Herbkersman
Member, House of Representatives
434-A Blatt Building
Columbia, South Carolina 292 I 1
Dear Representative Herbkersman:
You have sought an opinion regarding the constitutionality of a proposed bill concerning real estate transfer fees. The bill would remove the prohibition on the imposition of a fee or tax on the transfer of real property thereby authorizing a municipality or county to impose the fee if it were being imposed prior to January l, 1991. Specifically, the legislation would authorize a municipality to impose a real estate transfer fee, upon petition and approval of the county legislative delegation, if any municipality in the county required such fee prior to January 1, 1991. Likewise, a county could, upon petition and approval of the legislative delegation, impose and collect a real estate transfer fee if it had imposed the fee prior to January 1, 1991. The fee could not exceed .025 percent and must be used to purchase DHEC-recognized wetlands, green space and open areas for the public benefit. Law I Analysis f~1

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The proposed legislation provides in pertinent part as follows: SECTION 1. Section 6-1-70(B) of the 1976 Code, as last amended by Section 72A, Part II, Act 155of1997, is further amended to read: "(B)ill A municipality that originally enacted a real estate transfer fee pt io1 to before January 1, 199 I,. may impose and collect a real estate transfer fee, by ordinance, regardless of whether imposition of the fee was discontinued for a period after January 1, 1991.

ill A municipality that is located in a county in which is located a municipality that was imposing a fee or tax on the transfer of real property before January l, 1991, may impose and collect a real estate transfer fee. by ordinance, regardless of whether imposition of the fee was discontinued for a period after REMBERT C. DENNIS BU!illlNG

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Posr OFFICE Box 11549 • COLUMBIA , S.C. 29211-1549 • TELEPHONE: 803-734-3970 • FACSIMILE: 803-253-6283

The Honorable Bill Herbkersman
Page 2
May 6, 2003
January l, 1991, upon petition and approval of the legislative delegation of that
county.

ill A county that is located in a municipality that was imposing and
collecting a real estate transfer fee before January l, 1991, may impose and collect
a real estate transfer fee by ordinance, upon petition and approval of the legislative
delegation of that county.
ill A transfer fee imposed pursuant to the provisions of this section may not
exceed .025 percent and must be used by the municipality or county to purchase the
Department ofHealth and Environmental Control-recognized wetlands, green space,
and open areas for the public benefit."
SECTION 2. This act takes effect upon approval by the Governor.
We begin with the legal proposition that "[i]t is always to be presumed that the Legislature
acted in good faith and within constitutional limits .... " Scroggie v. Scarborough, 162 S.C. 218, 160
S.E. 596, 601 (1931). The General Assembly is "presumed to have acted within ... [its]
constitutional power despite the fact that, in practice, ... [its] laws result in some inequality .... " State
v. Solomon, 245 S.C. 550, 572, 141 S.E.2d 818 (1965).

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Moreover, our Supreme Court has often recognized that the powers of the General Assembly
are plenary, unlike those of the federal Congress, whose powers are enumerated. State ex rel.
Thompson v. Seigler, 230 S.C. 115, 94 S.E.2d 231, 233 ( 1956). Accordingly, any act of the General
Assembly must be presumed valid and constitutional. An act will not be considered void unless its
unconstitutionality is clear beyond any reasonable doubt. Thomas v. Macklen, 186 S.C. 290, 195
S.E. 539 (1937); Townsend v. Richland Co., 190 S.C. 270, 2 S.E.2d 779 (1939). Every doubt
regarding the constitutionality of an act of the General Assembly must be resolved favorably to the
statute's constitutional validity. More than anything else, only a court and not this Office, may strike
down an act of the General Assembly as unconstitutional. While this Office may comment upon
what we deem an apparent unconstitutionality, we may not declare the Act void. Put another way,
a statute "must continue to be followed until a court declares otherwise." Op. S.C. Atty. Gen.,
June 11, 1997.
In conjunction with the presumption of constitutionality which must be given every statute
enacted by the General Assembly, it must also be noted that, if possible, a statute will be construed
in a constitutional rather than an unconstitutional manner. Gardner v. S.C. Dept. of Revenue, 353
S.C. 1, 577 S.E.2d 190 (2003). As the Court instructed in Westvaco Corp. v. S.C. Dept. ofRevenue,
321 S.C. 59, 467 S.E.2d 739 (1995), "[a] possible constitutional construction must prevail over an
unconstitutional interpretation."

Section 6-1-70, at present, provides as follows:

The Honorable Bill Herbkersman
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May6, 2003
(A)

Except as provided in subsection (B), the governing body of each county,
municipality, school district, or special purpose district may not impose any
fee or tax of any nature or description on the transfer of real property unless
the General Assembly has expressly authorized by general law the imposition
of the fee or tax.

(B)

A municipality that originally enacted a real estate transfer fee prior to
January 1, 1991 may impose and collect a real estate transfer fee, by
ordinance, regardless of whether impositions of the fee was discontinued for
a period after January 1, 1991.

A predecessor statute to current§ 6-1-70 was upheld by the State Supreme Court in Town of Hilton
Head Island v. Morris, 324 S.C. 30, 484 S.E.2d 104 (1997). The statute, as it existed when the Court
decided Morris, and which was enacted as 1994 Act No. 497, Part II, § 132A, provided as follows:
(A)

... [t]he governing body of each county and municipality which enacts and
collects any fee which is charged on the transfer of real estate shall, not later
than ten days after the close of a fiscal year quarter, remit to the State
Treasurer an amount equal to the amount of real estate transfer fees collected
in the previous fiscal year quarter. The county or municipality may
voluntarily elect to have the State Treasurer or Comptroller General, as
appropriate, deduct the amount required to be remitted from any distributions
authorized to be made to the county or municipality under Aid to
Subdivisions.

(B)

The provisions of Section 6-1-70 of the 1976 Code are suspended through
January 1, 1997, in the case of any county or municipal real estate transfer tax
or fee imposed on or before August 1, 1993.

(C)

This section takes effect on July 1, 1994.

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In Morris, the Court upheld the earlier 1994 predecessor statute against a variety of legal
challenges. Plaintiff argued, for example, that § 6-1-70, as it earlier existed, violated Article VIII,
§ 17 of the Home Rule amendment. The contention was that since the Court had previously
concluded that real estate transfer fees were within a local government's general statutory authority
in Williams v. Town of Hilton Head, 311 S.C. 417, 429 S.E.2d 802 (1993), any limitation upon the
imposition of the fee by the General Assembly, contravened Article VIII, § 17. The Court rejected
this argument, noting that"[ t]he authority of a local government is subject to the general laws passed
by the General Assembly." Id., at 104. Likewise, the Court disagreed with the contention that§ 6-170 was not a general law. Section 6-1-70 applies to all real estate transfer fees, concluded the Court,
thereby rendering it a general and not a special law.

The Honorable Bill Herbkersman
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May6, 2003
Further, in rejecting other arguments made, the Morris Court concluded that there was no
violation of Equal Protection based upon the fact that real estate transfer fees apply only to those
local governments which chose to impose such fees. The Court responded that "[ s]ince § 6-1-70
applies to all local governments that are similarly situated, i.e. impose a transfer fee, there is no
unconstitutional classification." Citing, Grant v. South Carolina Coastal Council, 319 S.C. 348, 461
S.E.2d 388 ( 1995). Moreover, the Court also disposed of the argument that there was arbitrary
treatment imposed by § 6-1-70 in that those local governments which collected transfer fees before
August 1, 1993, were exempt until January 1, 1997 from the application of the statute. The Court
concluded that

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[t]his lapse in enforcement allows local governments which have relied on such fees
in adopting budgets to phase them out as a source of revenue. Accordingly, this
classification is not arbitrary but is reasonably related to a proper legislative purpose
and therefore does not violate equal protection.
484 S.E.2d at 108. Thus, the predecessor statute to present§ 6-1-70 has already been upheld by the
Court against a number of constitutional attacks. Such statute was deemed by the Court to be well
within the General Assembly's power to enact.

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Turning now to the legislation which you are proposing, except for one part, discussed below,
we are likewise of the opinion that the Bill would be constitutional. In light of the Morris decision,
referenced above, the proposed bill would likely not be vulnerable to any attack that it violated Home
Rule (Article VIII) or that it is special legislation. On its face, the Bill appears to apply statewide,
as was the case in Morris, and we have no information that the legislation is aimed at or would
impact only certain localities. Of course, an opinion of this Office cannot determine factual issues,
See, Op. S.C. Atty. Gen., December 12, 1983. Thus, we must assume that the legislation applies to
all areas equally as seems to be the case from the face of the Bill. See, Timmons v. S.C.
Tricentennial Comm., 254 S.C. 378, 175 S.E.2d 805 (1970) [fact that legislation might apply only
to certain cases is not determinative of constitutionality where neutral on its face]. With that
assumption in mind, however, the Bill is general in scope.
Any Equal Protection argument, based upon the fact that not all localities would necessarily
impose and collect the fee, would also likely not succeed as a result of the Morris decision.
Moreover, the fact that the imposition and collection of a real estate transfer fee might be tied to
certain facts, such as whether a municipality or a county had imposed the fee on the transfer of real
property before January 1, 1991, does not undermine the General Assembly's constitutional power
to enact this legislation. Joytime Distributors and Amusement Co., Inc v. State, 338 S.C. 634, 528
S.E.2d 647 (1999) [statutes which go into effect only on a certain contingency are constitutional].
There is one potential constitutional problem with the Bill in its present form, however. The
legislation makes imposition and collection of the fee conditional "upon petition and approval of the
legislative delegation of that county." In at least two cases, our Supreme Court has ruled that

The Honorable Bill Herbkersman
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May6, 2003
requiring such approval by the delegation contravenes the constitutional principle of separation of
powers under Article I, § 8 of the State Constitution.

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In Gunter v. Blanton, 259 S.C. 436, 192 S.E.2d 473 (1972), the Court considered the
constitutionality of a statute which granted to the county legislative delegation the authority to
approve or disapprove any tax increase by the board of trustees of Cherokee County School District
No. 1. The Court reasoned that the Act unconstitutionally delegated executive powers to members
of the General Assembly-in that instance the legislative delegation. In the majority's opinion, the
Act thus violated Article I, § 8 of the Constitution requiring that the legislative, executive and
judicial powers remain separate and distinct. Stated the Court,

The power of the Legislature to provide for the imposition of taxes is
unquestioned. Article 10, Section 3, South Carolina Constitution. Under Article 10,
Section 5, of the Constitution, this power to tax may be delegated, as it was in this
case. No contention is here made that the Legislature cannot impose limitations on
the power delegated, when such limitations are imposed in the exercise of its
legislative power. Thus, as stated in the order of the lower court, the Legislature may
delegate the power to tax, but also impose by law a maximum millage ceiling. This,
however, is not the effect of the provision here in question.

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Under Act No. 685, the Board of Trustees was granted the general power to
levy taxes for school purposes in the district. After conferring this power on the
Board, the Legislature passed Act No. 542 which attempted to amend the previous
Act by granting to the Cherokee County Legislative Delegation the authority to
approve or disapprove any tax increase adopted by the Board. This in effect,
constituted the County Legislative Delegation a committee of the Legislature to
determine not only when a tax increase was proper but also to take such action with
regard to the increase as that committee might deem proper.
That the determination of the amount of the tax levy in the school district may
be a legislative function delegable to the corporate authorities of the School District
under Article X, Section 5 of the Constitution is beside the point. The Act does not
and can not authorize the members of the delegation to participate in this
determination as legislators, for they may exercise legislative power only as members
of the General Assembly.
To authorize them to participate as corporate authorities of the school district,
as the Act attempts to do, clearly assigns to them a dual role in violation of the
separation of powers clause of the Constitution.
The dissent in Gunter disagreed that the delegation was exercising an executive power, but
thought instead it was a function legislative in nature. Justice Bussey, in dissent, reasoned that "[i]t
is, of course, true that the local legislative delegation would no doubt want to take a look at the

The Honorable Bill Herbkersman
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May6, 2003
proposed budget of the Board in deciding whether to approve or veto any proposed tax increase.
This it may appropriately do, as one of the 'corporate authorities', in the exercise of a purely
legislative function." 192 S.E.2d at 475. Given the fact that the statute must be given every benefit
of he doubt in favor of constitutionality, Justice Bussey would have upheld the statute as valid.
Again, however, the majority deemed the statute unconstitutional.

t.,

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The same conclusion was reached by the Court in Aiken Co. Bd. of Ed. v. Knotts, 274 S.C.
144, 262 S.E.2d 14 (1980). Relying upon Gunter, the Court invalidated a statute which qualified the
right of a county board of education to authorize assessment of millage to meet its budget by giving
approval authority of millage increases to the county legislative delegation. An attempt to
distinguish the legislation from the statute considered in Gunter on the basis that veto authority by
the delegation in Knotts was contingent rather than absolute was rejected by the Court. Defendants
in Knotts argued that millage increases were still possible even if the delegation vetoed such
increases because the school board could seek further recourse for such increases by referendum.
Notwithstanding that argument, however the Court observed that the question was not whether the
" ... Delegation's participation amounts to an absolute or qualified veto" but whether "such
participation is violative of the separation of powers provision of the constitution." 262 S.E.2d at

17. In the Court's opinion, "we are unable to discern any distinction between the instant case and
    Gunter that would justify different conclusions." Id.
    While there are some factual distinctions between the legislation struck down in Gunter and
    Knotts and the proposed bill, in our opinion, these differences are not constitutionally controlling.
    The fact that any veto of the imposition and collection of the fee by the delegation might occur
    before the municipality or county is afforded an opportunity to consider whether or not such fee
    should be imposed, as opposed to afterwards (as was the case in Gunter and Knotts), is most
    probably a distinction without a difference. In either event, the Delegation would be involved
    integrally in the process of whether or not such fee is imposed. Gunter and Knotts conclude this
    involvement violates separation of powers principles pursuant to Article I, § 8 of the Constitution.
    Accordingly, you may wish to consider whether or not the proposed legislation retains the
    Delegation's role in this process because of the constitutional problems which would be created
    thereby. Certainly, the Bill would be more constitutionally vulnerable to challenge if the portions
    of the Bill concerning the Delegation remain. Otherwise, in my opinion, the Bill would pass
    constitutional muster.

r;---. Cook
Assistant Deputy Attorney General
RDC/an