Can a South Carolina city charge fire protection fees only to certain tax-exempt properties, like dorms and apartments?

Official title

Opinion regarding fire protection fees for tax exempt properties provided under Section 12-37-235 of the South Carolina Code of Laws.

Requester

Requested by Robert C. Childs, III, Esquire, Attorney for the City of Travelers Rest.

Plain-English summary

The City of Travelers Rest wanted to impose a fire protection fee on tax-exempt properties, but not on all of them equally. The city's data showed that high-occupancy buildings (college dorms, apartments, assisted living facilities, fraternity and sorority houses, nursing homes, and similar places housing more than 10 people overnight for most of the year) generate the vast majority of fire department calls, while churches, parsonages, and daycare centers generate far fewer. The city proposed a per-square-foot fee aimed at the high-occupancy properties and asked whether it could charge some exempt owners but not others.

The Attorney General concluded the statute allows differential fees. Section 12-37-235 lets counties and municipalities charge tax-exempt property owners "reasonable fees for fire protection," and it says the fees "shall be based on the protection and services provided." Reading that plainly, the AG found the Legislature intended different owners to be charged different amounts based on the services they receive.

But the analysis did not stop there. A fee must be a valid uniform service charge and must satisfy equal protection. The AG walked through the test: a fee is valid if the revenue benefits the payers, is used for the specific purpose, does not exceed the cost, and is uniformly imposed; and a classification survives equal protection if it is reasonably related to a proper legislative purpose, treats class members alike, and rests on a reasonable basis. Because the city offered a concrete reason (the targeted properties use fire services far more), the AG said a court "may very well" find the classification reasonable. But whether it actually meets equal protection is a factual determination only a court can make. In the meantime, an enacted ordinance is presumed valid and enforceable until a court rules otherwise.

What this means for you

City and town councils considering fire protection fees

The opinion reads § 12-37-235 to let you charge tax-exempt owners fire protection fees scaled to the services they receive, so charging high-call properties more than low-call ones is consistent with the statute's "based on the protection and services provided" language. The risk is on the equal-protection side: build a clear, documented record (like the call-volume data Travelers Rest cited) showing the classification is reasonably related to fire-service costs and that owners within each class are treated alike. Whether the classification holds up is ultimately for a court.

Owners of tax-exempt high-occupancy properties

Tax-exempt status does not automatically shield you from a fire protection fee. Section 12-37-235 lets local governments charge exempt owners reasonable, service-based fees, and a fee aimed at high-occupancy buildings that generate more fire calls is the kind of classification the AG suggested a court could uphold. The fee cannot exceed what the property's taxes would have been for that one service.

Churches, daycares, and other low-call exempt owners

The statute itself exempts certain categories (for example, government property used exclusively for public purposes and public libraries) from these fire fees, and a service-based fee structure may leave low-call properties paying little or nothing. The opinion does not decide any specific classification, so the exact lines depend on the ordinance and, if challenged, a court.

Common questions

Q: Can a city charge fire protection fees on property that is exempt from taxes?
A: Yes. Section 12-37-235 authorizes counties and municipalities to charge owners of tax-exempt real property reasonable fees for fire protection, with certain statutory exceptions.

Q: Can the city charge some exempt owners more than others?
A: Per this opinion, yes, because the statute says fees "shall be based on the protection and services provided." The AG read that to allow different owners to be charged different amounts based on services received.

Q: Is there a limit on the fee?
A: Yes. The fee cannot exceed the amount of taxes that would be levied on the property for any one service if it were subject to ad valorem taxation, and the fees must reflect protection and services maintained by ad valorem tax funds.

Q: Could a court strike down the fee?
A: Possibly, on equal-protection grounds. Whether singling out high-occupancy properties is reasonably related to a proper purpose and treats class members alike is a factual question only a court can decide. The AG did not pre-decide it.

Q: If the city passes the ordinance, is it valid right away?
A: The opinion says any ordinance the city enacts is presumed valid and enforceable unless and until a court rules otherwise. Only a court, not the AG, can declare it unconstitutional.

Background and statutory framework

Section 12-37-235 lets each county and municipality charge owners of certain property exempt from ad valorem taxation (under specified items of § 12-37-220) reasonable fees for fire protection, with exceptions for government property used exclusively for public purposes and public libraries. The statute requires that the fees be based on the protection and services provided and maintained by ad valorem tax funds, and caps each fee at what taxes would be for one service if the property were taxable.

The AG layered on the uniform-service-charge and equal-protection requirements South Carolina courts apply to fees. A valid uniform service charge benefits the payers, is used for the specific purpose, does not exceed the cost, and is uniformly imposed (C.R. Campbell Const. Co. v. City of Charleston), and courts have upheld fees that charge different payers different amounts based on services received (J.K. Construction, Inc. v. Western Carolina Regional Sewer Authority). On classifications, the AG drew on Brown v. County of Horry, which upheld a road maintenance fee and described the equal-protection test (reasonable relation to a proper purpose, like treatment within a class, reasonable basis), and on the presumption that ordinances are constitutional (Harkins v. Greenville County). Applying these, the AG concluded the city likely has authority to structure a service-based fee but that the equal-protection question is factual and reserved to a court.

Citations and references

Statutes:
- S.C. Code Ann. § 12-37-235 (fire protection fees on tax-exempt property; service-based; cap)
- S.C. Code Ann. § 12-37-220 (property tax exemptions referenced by § 12-37-235)
- S.C. Code Ann. § 4-9-30 (county fee authority, discussed via Brown v. County of Horry)

Cases:
- Mid-State Auto Auction of Lexington, Inc. v. Altman, 324 S.C. 65, 476 S.E.2d 690 (1996) (rules of statutory construction)
- C.R. Campbell Const. Co. v. City of Charleston, 325 S.C. 235, 481 S.E.2d 437 (1997) (test for a valid uniform service charge)
- J.K. Construction, Inc. v. Western Carolina Regional Sewer Authority, 336 S.C. 162, 519 S.E.2d 561 (1999) (fee may vary by services received)
- Brown v. County of Horry, 308 S.C. 180, 417 S.E.2d 565 (1992) (road maintenance fee; uniformity and equal-protection test)
- Harkins v. Greenville County, 340 S.C. 606, 533 S.E.2d 886 (2000) (ordinances presumed constitutional)

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-regarding-fire-protection-fees-for-tax-exempt-properties-provided-under-section-12-37-235-of-the-south-carolina-code-of-laws/
• Original PDF: https://www.scag.gov/media/tuqbaifk/03411418.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

ALAN WILSON
ATTORNEY GENERAL

October 9, 2023

Robert C. Childs, II, Esq. .

City Attorney

Town of Travelers Rest

Post Office Box 1519

Travelers Rest, South Carolina 29690

Dear Mr. Childs:

We received your request for an opinion from this Office concerning the fire protection fees for
tax exempt properties provided under section 12-37-235 of the South Carolina Code. In your letter,
you state the City of Travelers Rest (the “City”) is considering enacting an ordinance to impose a
Fire Protection Fee for tax exempt properties located in the City. You state:

In particular, the City has found that tax exempt properties that house multiple
individuals in a congregate, dormitory or appartement like setting such as
college or university residential buildings, apartments, assisted living facilities,
dormitories, barracks, sorority houses, fraternity houses, continuing care
retirement centers, hotels, motels, nursing care facilities, nursing continuing
care retirement centers, residential, rooming or boarding houses and other
facilities that house more than 10 individuals on an overnight basis for more
than 50% of the year result in the vast majority of fire department response calls
to tax-exempt properties. Tax exempt premises such as churches, parsonages,
burying grounds and child and adult daycare services without overnight housing
have far less calls for service.

The City proposes to impose a per square footage fee of 50 cents on all college
and university residential buildings, apartments, assisted living facilities,
dormitories, barracks, sorority houses, fraternity houses, continuing care
facilities that house more than 10 individuals on the property on an overnight
basis more than 50% of a year.

Law/Analysis

Section 12-37-235 of the South Carolina Code (2014) allows counties and municipalities to impose
a fee for fire protection on owners of real property exempt from property tax and states as follows:
Robert C. Dennis Building • Post Office Box 11549 • Columbia, SC 29211-1549 • Telephone 803-734-3970

Robert C. Childs, III, Esq.
Page 2
October 9, 2023

Each county and municipality in this State may charge the owners of all real
property exempt from ad valorem taxation under the provisions of items (2),
except property of the State, counties, municipalities, school districts and other
political subdivisions where such property is used exclusively for public
purposes, (3), except public libraries, and (4) of subsection (A) of Section 12-
37-220 of the 1976 Code, which is located within their respective boundaries,
reasonable fees for fire protection; provided, that no fees may be charged by a
county for protection or service provided to such owners by a municipality.

All such fees shall be based on the protection and services provided and which
are maintained in whole or in part by funds from ad valorem taxes. No fees shall

exceed the amount of taxes that would be levied on any of the subject property
for any one service if the subject property were subject to ad valorem taxation.

S.C. Code Ann. § 12-37-235 (emphasis added). Whether or not this statute permits the imposition
fees on some exempt property owners and not others is a question of statutory interpretation.

The primary rule of statutory construction is to ascertain and give effect to the
intent of the legislature. Gilstrap v. South Carolina Budget and Control Board,
310 S.C. 210, 423 S.E.2d 101 (1992). In ascertaining the intent of the
legislature, a court should not focus on any single section or provision but
should consider the language of the statute as a whole. Creech v. South Carolina
Public Service Authority, 200 S.C. 127, 20 S.E.2d 645 (1942). Unless there is
something in the statute requiring a different interpretation, the words used ina
statute must be given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529,
220 S.E.2d 231 (1975).

Mid-State Auto Auction of Lexington, Inc. v. Altman, 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996).

As we stated in a 1982 opinion regarding section 12-37-235, “the intended purpose was to allow
counties and municipalities to charge owners of exempt real property reasonable fees for fire
protection.” Op. Att’y Gen., 1982 WL 155037 (S.C.A.G. Nov. 9, 1982). According to the plain
language of this provision, local governments are allowed to impose these fees on all property
exempt from property tax with the only exceptions being listed in the statute. S.C. Code Ann. §
12-37-235. Section 12-37-235 also states the amount of the fee must be based on the services
provided. Therefore, the plain language of the statute indicates the Legislature’s intent for different
owners to be charged different amounts.

However, our analysis does not end here. Fees require uniformity to be valid uniform service
charges. According to our Supreme Court,

a fee is valid as a uniform service charge if (1) the revenue generated is used to
the benefit of the payers, even if the general public also benefits (2) the revenue

Robert C. Childs, III, Esq.

Page 3

October 9, 2023

C.R. Campbell Const. Co. v. City of Charleston, 325 S.C. 235, 481 S.E.2d 437, 438 (1997)

(emphasis added). Nonetheless, our courts have upheld fees charging different individuals
different amounts based on the services received. In J.K. Construction, Inc. v. Western Carolina
Regional Sewer Authority, 336 S.C. 162, 519 S.E.2d 561 (1999), the Court considered the validity

generated is used only for the specific improvement contemplated (3) the
revenue generated by the fee does not exceed the cost of the improvement and

(4) the fee is uniformly imposed on all the payers.

of a new account fee imposed by a sewer authority. The fee ranged from $500 to $80,000

depending on the customer. In discussing the uniformity of the fee, the Court stated:

In a 2007 opinion, we considered whether a county could exempt elderly individuals from the
county’s road maintenance fee. Op. Att’y Gen., 2007 WL 3244893 (S.C.A.G. Aug. 15, 2007). We

noted:

While no statute or constitutional provision explicitly requires charges by
special purpose districts to be uniform, the Court has stated that charges or
assessments imposed only upon certain individuals “must be fairly and justly
apportioned among those charged with their payment. A method of
apportionment, whether by statute or by regulation, that is manifestly arbitrary
or discriminatory does not fulfill the constitutional requirements of due process
and equal protection.” Hagley Homeowners Ass’n, 326 S.C. at 76-77, 485
S.E.2d at 97 (quoting Newton v. Hanlon, 248 S.C. 251, 149 S.E.2d 606 (1966)).

In Brown v. County of Horry, 308 S.C. 180, 184, 417 S.E.2d 565, 567 (1992),
the Supreme Court observed that section 4-9-30 of the South Carolina Code
“does not specify the amount of such fees or the persons upon whom they can
be imposed.” Thus, upon finding the Horry County had the authority to levy a
road maintenance fee, the Court considered whether that fee was uniform and

’ whether it was contrary to the equal protection clause. Id. Because the fee was

imposed on all motor vehicles registered in Horry County, the Court found it
uniform and therefore, “[t]here is not inequity or discrimination which would
render the fee invalid.” Id. at 186, 417 S.E.2d at 568.

The Court also considered whether placing Horry County registered vehicles in
a class violated the equal protection clause. The Court stated:

If a classification is reasonably related to a proper legislative purpose
and the members of each class are treated equally, any challenge under
the equal protection clause fails. Robinson v. Richland County Council,
supra; Medlock v. S.C. Fam. Farm Dev., 279 S.C. 316, 306 S.E.2d 605
(1983). The requirements of equal protection are satisfied if: (1) the
classification bears a reasonable relation to the legislative purpose; (2)

Robert C. Childs, III, Esq.
Page 4
October 9, 2023

the members of the class are treated alike under similar circumstances;
and (3) the classification rests on some reasonable basis. Medlock,
supra. In addition, the burden is upon those challenging the legislation
to prove lack of rational basis. Ex parte Yeargin, 295 S.C. 521, 369
S.E.2d 844 (1988).

A legislatively created classification will not be set aside as violative of
the equal protection clause unless it is plainly arbitrary and there is no
reasonable hypothesis to support the classification. Samson_v.
Greenville Hosp. System, 295 S.C. 359, 368 S.E.2d 665 (1988);

Medlock, supra.

Id. at 186, 417 S.E.2d at 568-69.

Id. We commented that there were no South Carolina cases addressing the constitutionality of a
statute or ordinance classifying based on age, but other jurisdictions appear to uphold similar
classifications as permissible. Id. We also noted,

In considering the constitutionality of the proposed exemption from the road
maintenance fee for elderly motor vehicle owners, we must keep in mind that
an ordinance is a legislative enactment and therefore, is presumed to be
constitutional. Harkins v. Greenville County, 340 S.C. 606, 533 S.E.2d 886
(2000). Moreover, only a court, not this Office, may declare an ordinance
unconstitutional.

Id. However, we concluded whether the classification bears a reasonable relationship to a
legitimate governmental objective was ultimately a question of fact, which a court must decide.
Id.

Similar to the Court’s observation in Brown, 308 S.C. 180, 417 S.E.2d 565, the City has authority
to impose the fee pursuant to section 12-37-235. Thus, like in Brown, we must consider whether
that fee was uniform and whether it was contrary to the equal protection clause. As we stated in
our 2007 opinion, this determination must be made weighing the facts to determine whether the
classification bears a reasonable relationship to the City’s governmental objectives. Op. Atty.
Gen., 2007 WL 3244893 (S.C.A.G. Aug. 15, 2007). Your letter includes reasons why the City
finds particular owners should be charged, while others are not. You state these owners use the
services much more frequently than others. Therefore, a court may very well find the classification
is reasonably related to a proper legislative purpose and the members of each class are treated
equally. However, this is a factual determination that must ultimately be determined by a court.
Op. Atty. Gen., 2021 WL 5235061 (S.C.A.G. Nov. 1, 2021). Furthermore, we must also keep in
mind all ordinances are presumed valid and constitutional. Op. Att’y Gen., 2023 WL 6279001
(S.C.A.G. Sept. 19, 2023). Therefore, should the City enact the ordinance as described it would be
enforceable until a court decides otherwise.

Robert C. Childs, III, Esq.
Page 5
October 9, 2023

Conclusion

Section 12-37-235 of the South Carolina Code gives municipalities authority to impose fire
protection fees on property exempt from ad valorem taxation and states “[a]ll such fees shall be
based on the protection and services provide ....” We believe this provision gives the City
authority to impose fire protection fees based on the services an exempt owner receives allowing
it to charge different property owners different amounts.

Nevertheless, a court would need to determine whether the City’s decision to impose a fee on some
exempt owners and not others comports with the equal protection clause. This requires a
determination that the classification is reasonably related to a proper legislative purpose and the
members of each class are treated equally. Because this is a factual determination, only a court
may make such a decision. Nevertheless, any ordinance enacted by the City is presumed valid and
enforceable unless and until a court rules otherwise.

Sincerely,

Cydney Milling
Assistant Attorney General

REVIEWED AND APPROVED BY:

Vina <

Solicitor General