Tourism Expenditure v. City of Myrtle Beach

THIS OPINION
HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Tourism
Expenditure Review Committee, Appellant/Respondent,

v.

City of Myrtle
Beach, Respondent/Appellant.

Appeal From Richland County

G. Thomas Cooper, Jr., Circuit Court
Judge

Unpublished Opinion No.  2011-UP-464

Heard February 9, 2011 – Filed October 21,
2011

APPEAL DISMISSED

John M.S. Hoefer, Tracey C. Green, and Andrew
J. MacLeod, of Columbia, for Appellant/Respondent.

Michael Warner Battle, of Conway, for
Respondent/Appellant.

PER CURIAM: This cross-appeal arises out of the
Tourism Expenditure Review Committee (TERC) and the City of Myrtle Beach's (the
City's) dispute over the disbursement of funds for "tourism-related
expenditures" for two events under section 6-4-10(4) of the South Carolina
Code (2004).  We dismiss this appeal as moot.

FACTS/PROCEDURAL HISTORY

Section
12-36-920(A) of the South Carolina Code (Supp. 2010) imposes a seven percent
sales tax on "the rental or charges for any rooms, campground spaces,
lodgings, or sleeping accommodations furnished to transients by any hotel, inn,
tourist court, tourist camp, motel, campground, residence, or any place in
which rooms, lodgings, or sleeping accommodations are furnished to transients
for a consideration."  Of that tax, two percent is a local accommodations
tax that must be allocated to cities and counties pursuant to statute.  S.C.
Code Ann. § 12-36-2630(3) (Supp. 2010).  In cities or counties collecting more
than $50,000 from the local accommodations tax, after certain amounts are
allocated, "[t]he remaining balance plus earned interest received by a
municipality or county must be allocated to a special fund and used for
tourism-related expenditures."  S.C. Code Ann. § 6-4-10 (2004 & Supp.
2010).  Section 6-4-35(B)(1)(a) of the South Carolina Code (2004) provides TERC
"shall serve as the oversight authority on all questionable
tourism-related expenditures and to that end, all reports filed pursuant to [s]ection
6-4-25(D)(3) [of the South Carolina Code (2004)] must be forwarded to the
committee for review to determine if they are in compliance with this
chapter."

In 2003, the City
approved $20,000 in tax fund disbursements for the Myrtle Beach Fireworks/Beach
Bang 2003 (Fireworks Displays), which were put on by for-profit entities including
hotels, motels, restaurants, bars, and merchants.  Of that amount, $321.03 was
used to advertise the displays, although the application had contemplated
$2,000 towards advertising.  The remaining amount was used towards the $68,200
cost of putting on the displays.  The same year, the City also approved $10,000
for the 4th Annual Myrtle Beach Fall Rally (Fall Rally), which the Myrtle Beach
Tavern Owners Association and the Doghouse Bar, also for-profit entities, put
on to attract motorcycle enthusiasts to a biker rally in the Myrtle Beach
area.  The City's disbursement was used to advertise and promote the rally on
billboards, on websites, and in motorcycle enthusiast publications.  The Fall
Rally doubled its attendance in 2003 from the previous year.

In 2004, TERC
informed the City it had notified the South Carolina Treasurer's Office (Treasurer's
Office) to withhold $30,000 from the City's future accommodation tax
disbursements.  The notice stated the two disbursements were not appropriate
because the recipients were for-profit entities.  The City contested that
decision to the administrative law court (ALC), which found the Fireworks
Displays were not tourism related based on the amount spent on advertising the
event and that TERC had properly decided $20,000 should be withheld.  The ALC
found the primary use of the disbursement was to entertain tourists already in
the Myrtle Beach area.  Additionally, the ALC found the Fall Rally complied
with section 6-4-10 and thus TERC had incorrectly determined $10,000 should be
withheld.  Both the City and TERC appealed to the circuit court, which affirmed
the ALC's order. 

The circuit court
noted in its order that after the ALC's decision, the General Assembly enacted
an act requiring accommodations tax revenues withheld by the Treasurer's Office
prior to July 1, 2006, be returned to the entity from which they were withheld. 
The circuit court found that action by the legislature did not moot the appeal
because TERC still had the authority to certify the withholding of funds.  The
court found the decision satisfies at least one, if not all three, of the
recognized exceptions to mootness.  (citing Douan v. Charleston Cnty.
Council, 369 S.C. 271, 277 n.1, 631 S.E.2d 544, 547 n.1 (Ct. App.
2006), rev'd on other grounds, 373 S.C. 384, 645 S.E.2d 241 (2007) ("In
civil cases, there are three exceptions to the mootness doctrine: (1) an
appellate court can retain jurisdiction if the issue is capable of repetition
yet evading review; (2) an appellate court can decide cases of urgency to
establish a rule for future conduct in matters of important public interest;
and (3) if the decision by the trial court can affect future events or have
collateral consequences to the parties, the appellate court can take
jurisdiction.")).[1]  Both parties appeal.    

STANDARD OF REVIEW

The ALC presided as the
finder of fact at the contested hearing.  S.C. Code Ann. § 1-23-600(B) (2005).  The
circuit court's appellate review of the ALC's decision was governed by section
1-23-610(D) of the South Carolina
Code (Supp. 2005), which at the time provided:

The court shall not substitute its judgment for that of the agency
as to the weight of the evidence on questions of fact.  The court may affirm
the decision of the agency or remand the case for further proceedings.  The
court may reverse or modify the decision if substantial rights of the appellant
have been prejudiced because the administrative findings, inferences,
conclusions or decisions are:

(a) in violation of constitutional or
statutory provisions;

(b) in
excess of the statutory authority of the agency;

(c) made
upon unlawful procedure;

(d)
affected by other error of law;

(e) clearly erroneous in view of the
reliable, probative and substantial evidence on the whole record; or

(f) arbitrary or capricious or
characterized by abuse of discretion or clearly unwarranted exercise of
discretion.

This section also governs our review of the circuit court's decision.  S.C.
Coastal Conservation League v. S.C. Dep't of Health & Envtl. Control,
363 S.C. 67, 73, 610 S.E.2d 482, 485 (2005).

LAW/ANALYSIS

The City contends
the circuit court erred in affirming the ALC's interpretation of the
accommodation tax act to mean "tourism-related expenditures" were
determined by the amount of money spent on advertising and finding the $20,000
disbursement was properly withheld.  TERC argues the circuit court erred in
affirming the ALC's ruling that a disbursement of $10,000 in accommodations tax
revenue by the City was compliant with sections 6-4-5 to -35 of the South
Carolina Code when the purpose of the disbursement was not the promotion of
tourism as required by section 6-4-10(4).  TERC also maintains the circuit
court erred in affirming the ALC's ruling that two disbursements of
accommodations tax revenue totaling $30,000 by the City to
"for-profit" entities were compliant with sections 6-4-5 to -35. 
TERC alleges the statute is ambiguous and the ALC improperly failed to defer to
the TERC's interpretation of the statute as precluding such disbursements
because they do not promote tourism as required by section 6-4-10(4).  We find
these issues to be moot.

An appellate
court will not pass judgment on moot and academic questions or make an
adjudication when no actual controversy remains.  Linda Mc Co. v. Shore,
390 S.C. 543, 557, 703 S.E.2d 499, 506 (2010) (quoting Curtis v. State,
345 S.C. 557, 567, 549 S.E.2d 591, 596 (2001)); see also Sloan v.
Friends of the Hunley, Inc., 369 S.C. 20, 25, 630 S.E.2d 474, 477 (2006)
("Generally, this Court only considers cases presenting a justiciable
controversy.").  A moot case results when "'a
judgment rendered by the court will have no practical legal effect upon an
existing controversy because an intervening event renders any grant of
effectual relief impossible for the reviewing court.'"  Ex parte Doe,
393 S.C. 147, ___, 711 S.E.2d 892, 894 (2011) (quoting Friends of the Hunley,
369 S.C. at 26, 630 S.E.2d at 477); see also Friends of the Hunley,
369 S.C. at 25, 630 S.E.2d at 477 ("A justiciable controversy exists when
there is a real and substantial controversy which is appropriate for judicial
determination, as distinguished from a dispute that is contingent,
hypothetical, or abstract.").

However, a court can address a moot issue
in three situations.  Sloan v. Greenville Cnty., 380 S.C. 528, 535, 670
S.E.2d 663, 667 (Ct. App. 2009).  "First, if the issue raised is
capable of repetition but generally will evade review, the appellate court can
take jurisdiction."  Id.  "In evaluating whether a moot issue
is capable of repetition, yet evading review the Court does not require that
the complaining party be subject to the action again."  Friends of the Hunley,
369 S.C. at 27, 630 S.E.2d at 478.  However, the action must actually evade
review.  Id.  All actions capable of repetition do not necessarily evade
review.  See Seabrook v. City of Folly Beach, 337 S.C.
304, 307, 523 S.E.2d 462, 463 (1999).

"'Second, an
appellate court may decide questions of imperative and manifest urgency
to establish a rule for future conduct in matters of important public interest.'"  Greenville Cnty., 380 S.C. at 535, 670 S.E.2d at 667 (quoting Curtis,
345 S.C. at 568, 549 S.E.2d at 596) (emphasis added by court).  "Application
of the public interest exception requires the question at issue to be (1) of
'public importance,' and (2) of 'imperative and manifest urgency.'"
 Id.  "This evaluation must be made based on the facts of each
individual situation."  Friends of the Hunley, 369 S.C. at 27, 630
S.E.2d at 478.

"Third, 'if
a decision by the trial court may affect future events, or have collateral
consequences for the parties, an appeal from that decision is not moot, even though the appellate court cannot give effective
relief in the present case.'"  Greenville Cnty., 380 S.C. at 535,
670 S.E.2d at 667 (quoting Curtis, 345 S.C. at 568, 549 S.E.2d at 596).  "The
utilization of an exception under the mootness doctrine is flexible and
discretionary . . . , not a mechanical rule that is automatically invoked."
 Id.

As part of its
budget bill for fiscal year 2006-2007, the General Assembly required the
accommodation tax revenues withheld by the Treasurer's Office pursuant to
section 6-4-35 prior to July 1, 2006, be returned to the entity from which they
had been withheld.  Act No. 397, 2006 S.C. Acts 492, Part 1B, Section 60.12. 
Thus, the $30,000 in accommodations tax proceeds certified by TERC to the Treasurer's
Office to be withheld from the City were not ultimately withheld.  Therefore,
this issue is moot.

The utilization
of an exception under the mootness doctrine is discretionary, and this case meets
none of the recognized exceptions.  First, this situation is not capable of repetition
yet evading review.  Although it is capable of repetition, we have no reason to
believe the legislature will refund the money collected in the future.  Consequently,
should the City submit requests for funds for activities TERC finds does not
meet the requirements of the statute, TERC can withhold the funds and the
parties can litigate the interpretation of the statute then.  Second, this is
also not a situation of imperative and manifest urgency to establish a rule for
future conduct in matters of important public interest.  Finally, this is not a
situation in which a decision by the trial court will affect future events, or
have collateral consequences for the parties.  Thus, this situation does not
meet any of the exceptions to the application of the mootness doctrine.  Accordingly,
we dismiss this appeal as moot.

APPEAL DISMISSED.

FEW, C.J., KONDUROS, J.,
and CURETON, A.J., concur.

[1] Neither party raises mootness as an issue on appeal.