January - Municipal Association of South Carolina

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In City of Beaufort v. Holcombe, a decision issued in July 2006, the state Court of Appeals rejected an equal protection challenge to the business license ordinance’s different treatment of owner-occupiers of commercial buildings and owners of commercial buildings who rent to third parties. The court ruled the business license ordinance did not violate equal protection rights by requiring a business license for a building owner who rented to third parties while exempting from the licensing requirement a building owner who occupied the commercial property for his own business or paid rent to himself. In a good review of equal protection law, the Appeals Court determined the circumstance of differing treatment alone did not result in a constitutional violation. Although the two types of building owners are treated differently, the different treatment had a rational and reasonable basis and was not arbitrary or unconstitutional. The appeals court agreed State appeals court upholds Beaufort’s business license ordinance By Danny Crowe, Attorney, Turner Padget Graham & Laney, P.A. with the circuit court. Two types of building owners were “not similarly situated” because the building owner who rents commercial property to third parties is in the “business” of renting commercial property while the building owner who rents to himself is not. The building owner in this case used one of two offices in his building for his own optometry business and rented the other office to an unrelated commercial tenant. He failed to obtain a business license as required for “lessors of nonresidential buildings (with gross rental income of $12,000 or more).” The building owner was charged and convicted in municipal court of failing to obtain a business license. The legal citation for the City of Beaufort case is 369 S.C. 643, 632 S.E.2d 894 (Ct. App. 2006). Does federal law preempt a business Q. license tax on income for the business activities of (1) the sale and leasing of satellite television equipment and (2) the installation of satellite television equipment for subscribers? No. Federal law (Section 602 of the 1996 A. Telecommunications Act) only preempts business license taxes by municipalities and counties on a provider for “direct-to-home satellite service,” a term specifically defined as “only programming transmitted or broadcast by satellite directly to the subscribers’ premises without the use of ground receiving or distribution equipment, except at the subscribers’ premises or in the uplink process to the satellite.” This federal law exempts the satellite service from a license tax on income from charges for Did you know? programming transmitted directly from satellite to the subscriber’s premises. However, other revenue-producing activities of the satellite service provider (such as equipment sales and rentals, equipment service and equipment installation) are not addressed by this federal law and are not preempted. Additionally, this federal law does not protect from taxation the activity of distributing satellite programming from a master antenna by cable to subscribers. (Thanks to Roy Bates for providing this explanation on the BLOA listserve.) 4
Legislative (continued from page 3) Cable Franchises Legislation changing the process for granting cable franchises was signed into law by the governor on May 23. The final legislation was a result of many hours of negotiations by representatives from MASC, telecommunications companies, cable service companies and consumer advocacy groups. The resulting compromise legislation is far better than the original language introduced in the House and Senate. The final legislation gives municipalities the right to grant approval of the use of the rights-of-way, expands the definition of gross revenues used in calculating the franchise fee and allows the municipality to increase the franchise fee to 5 percent. Companies seeking to provide cable services must apply the Secretary of State. The local government retains the right to grant approval to use the public rights-of-way. Incumbent cable service providers will continue to operate under their existing franchise agreements until a competitor begins to offer service in the same area. MASC had serious concerns about the language in the initial bills. Municipal franchise fees could have been reduced, and municipalities could have lost the right to grant approval for use of its public rights-of-way. Eminent Domain - Takings The General Assembly passed a bill on eminent domain that called for a constitutional amendment and approved a study committee. The constitutional amendment, which was approved by voters in November, basically supports South Carolina’s existing case law that requires property taken by eminent domain is only for public use. The study committee is currently working to evaluate all government entities with eminent domain powers. It is also studying the use and consequences of regulatory takings. The study committee will make a report to the General Assembly in April. Other legislation Other pieces of legislation enacted this year of interest to MASC dealt with retail facilities revitalization, municipal tax liens, electric and gas utilities termination of service policies, and an increase in the daily fee from $25 to $50 charged by the Department of Juvenile Justice for pre-trial detention of juveniles. BLOA regional contacts Appalachian Business License Officials Greg Morris, City of Greenville Phone: 864.467.4473 E-mail: gmorris@greatergreenville.com Association of Lowcountry Licensing Officials Kathy Barnes, Town of Hilton Head Island Phone: 843.341.4611 E-mail: kathyB@hiltonheadislandsc.gov Catawba Region (Contact to be determined) Central Midlands Area Sonya Lee, Town of Lexington Phone: 803.951.4631 E-mail: slee@lexsc.com Horry/Georgetown Counties Frankie O’Harrow, City of Myrtle Beach Phone: 843.918.1151 E-mail: foharrow@cityofmyrtlebeach.com Pee Dee Area Teresa Eaton, City of Florence Phone: 843.665.3128 E-mail: teaton@cityofflorence.com Upper/Lower Savannah Region Pat Fowler, Town of Williston Phone: 803.266.7015 E-mail: pat@williston-sc.com 5
Page 1 and 2: Creating safe business communities
Page 3: Legislative recap of the 116th sess
Page 7 and 8: 2006 - 2007 BLOA board of directors

January - Municipal Association of South Carolina

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