DomainsNewMedia.com v. Hilton Head Island-Bluffton Chamber of Commerce , 814 S.E.2d 513 ( 2018 )

THE STATE OF SOUTH CAROLINA
In The Supreme Court
DomainsNewMedia.com, LLC, Respondent,
v.
Hilton Head Island-Bluffton Chamber of Commerce,
Appellant.
Appellate Case No. 2016-000460
Appeal from Beaufort County
Michael G. Nettles, Circuit Court Judge
Opinion No. 27803
Heard October 19, 2017 – Filed May 23, 2018
REVERSED
Robert E. Stepp, Tina M. Cundari, and Bess J. DuRant,
all of Sowell Gray Step & Laffitte, LLC, of Columbia,
for Appellant.
Andrew S. Radeker and Taylor M. Smith, IV, both of
Harrison & Radeker, P.A., of Columbia, for Respondent.
William W. Wilkins and Kirsten E. Small, both of
Nexsen Pruet, LLC, of Greenville, for Amicus Curiae
Myrtle Beach Area Chamber of Commerce.
Jay Bender, of Columbia, for Amicus Curiae South
Carolina Press Association.
JUSTICE KITTREDGE: This appeal presents the question of whether Appellant
Hilton Head Island-Bluffton Chamber of Commerce (Chamber) is subject to the
Freedom of Information Act (FOIA)1 due to its receipt and expenditure of certain
funds designated for promoting tourism, which we will refer to collectively as
accommodation tax funds. The Chamber's receipt and expenditure of these funds
is pursuant to, and governed by, the Accommodations Tax (A-Tax) statute and
Proviso 39.2 of the Appropriation Act for Budget Year 2012–2013.
Respondent DomainsNewMedia.com, LLC (Domains) filed a declaratory
judgment action, seeking a declaration and corresponding injunctive relief on the
basis that the Chamber's receipt of these funds renders the Chamber a "public
body" pursuant to FOIA, thus subjecting the Chamber to all of FOIA's
requirements. The Chamber countered that FOIA did not apply, for the receipt,
expenditure, and reporting requirements concerning these funds are governed by
the more specific A-Tax statute and Proviso 39.2.
The trial court held that the Chamber was a public body and, thus, was subject to
FOIA's provisions. We reverse. We hold, as a matter of discerning legislative
intent, that the General Assembly did not intend the Chamber to be considered a
public body for purposes of FOIA as a result of its receipt and expenditure of these
specific funds.
I.
FOIA was enacted to promote transparency in government. While declaring
FOIA's purpose, the General Assembly stated "it is vital in a democratic society
that public business be performed in an open and public manner so that citizens
shall be advised of the performance of public officials and of the decisions that are
reached in public activity and in the formulation of public policy." Lambries v.
Saluda Cty. Council, 409 S.C. 1, 9, 760 S.E.2d 785, 789 (2014) (quoting S.C. Code
Ann. § 30-4-15 (2007)). Thus, FOIA "must be construed so as to make it possible
for citizens, or their representatives, to learn and report fully the activities of their
public officials at a minimum cost or delay." S.C. Code Ann. § 30-4-15.
Subsequent to the passage of FOIA, the General Assembly enacted the A-Tax
statute, which involves the administration of a state sales tax imposed on sleeping
accommodations provided to overnight guests. S.C. Code Ann. § 12-36-920(A)
1
S.C. Code Ann. §§ 30-4-10 to -165 (2007 & Supp. 2017).
(2014 & Supp. 2017); S.C. Code Ann. §§ 6-4-5 to -35 (2004 & Supp. 2017). A
portion of this tax is remitted to the local governments where it was collected and,
in turn, they must expend the A-Tax funds in accordance with the statutory
provisions governing allocation. See S.C. Code Ann. § 12-36-2630(3); S.C. Code
Ann. §§ 6-4-10 to -35. Specifically, the A-Tax statute dictates that the local
governments must select at least one organization—referred to as the designated
marketing organization (DMO)—to manage the expenditure of the funds; however,
the local governments must ensure the funds are "used only for advertising and
promotion of tourism." S.C. Code Ann. § 6-4-10(3).
In this case, the Chamber was selected to be a DMO—to direct the expenditure of
tourism funds—for several local governments and it received funds from the
Department of Parks, Recreation, and Tourism (a PRT Grant). These public funds
are at the center of this appeal and raise the question of whether the legislature
intended the Chamber to be subject to FOIA on the singular basis that it expends
these funds.
The Chamber is a nonprofit organization that was created in 1957. The Chamber's
stated purpose is to promote the common interests of its members, stimulate the
expanding regional economy, and enhance the quality of life for all. The Chamber
offers private membership and conducts seminars, as well as other events, for the
benefit of its members. These members pay dues and contribute to the Chamber's
various projects.
In addition to these purely private activities, since 1983, the Chamber has served
the Town of Hilton Head Island as its DMO.2 To be eligible for selection, the
Chamber was required to demonstrate to the local governments "that it has an
existing, ongoing tourism promotion program or that it can develop an effective
tourism promotion program." S.C. Code Ann. § 6-4-10(3). Moreover, the
Chamber received a PRT Grant during the 2012–2013 fiscal year. The Chamber
was required to submit a proposal to measure the success of its tourism marketing
plan before it could be selected for the PRT Grant.3
2
The Chamber began serving as the DMO for the Town of Bluffton and Beaufort
County in approximately 2001 and 2008, respectively.
3
Only one specific proviso providing a PRT Grant is at issue—Proviso 39.2
contained in the Appropriation Act for Budget Year 2012–2013 (Proviso 39.2).
Domains is a website company, based out of Beaufort County, which has
questioned the Chamber's expenditure of the accommodation tax funds. In
November 2012, Domains sent a FOIA request to the Chamber for information
regarding its staff membership, policies, minutes, and accounts. Oddly, most of
the information requested by Domains extends beyond the expenditure of these
tourism funds. For example, Domains requested the non-exempt minutes of all
meetings and votes by the Chamber. The Chamber refused to provide the
requested information on the basis that it was not a public body for FOIA purposes,
as the expenditure of these discrete funds is governed by the A-Tax statute and
Proviso 39.2 and the corresponding records are available to the public through the
local governments or the State.4
Thereafter, Domains filed suit seeking declaratory and injunctive relief to establish
that the Chamber was a public body under FOIA and to require production of the
requested information concerning all the Chamber's activities. After the parties
conducted discovery, cross-motions for summary judgment were filed. The trial
court granted Domains' summary judgment motion and held that the Chamber was
a public body under FOIA's definition. Relying on Weston v. Carolina Research &
Development Foundation, 303 S.C. 398, 401 S.E.2d 161 (1991), the trial court
concluded there was a diversion of public funds to a related organization with no
public access to information regarding the expenditure of the funds. The Chamber
appealed, and the appeal was certified to this Court pursuant to Rule 204(b),
SCACR.
II.
A.
Domains argues that the Chamber's expenditure of public funds—through its role
as DMO—causes it to fall within the plain language of FOIA and, moreover, it is
considered a public body under the interpretation provided in Weston. The
Chamber argues that public accountability for the expenditure of these funds has
been provided through the A-Tax statute, as well as Proviso 39.2, such that the
General Assembly did not intend for it to become a public body under FOIA, and
furthermore, its provision of services as a marketing organization does not render it
a public body for FOIA purposes under Weston.
4
It is important to note that FOIA applies to the governmental entities that
administer these funds.
"The standard of review in a declaratory action is determined by the underlying
issues." Nationwide Mut. Ins. Co. v. Rhoden, 398 S.C. 393, 398, 728 S.E.2d 477,
479 (2012) (citing Felts v. Richland County., 303 S.C. 354, 356, 400 S.E.2d 781,
782 (1991)). "The interpretation of a statute is a question of law." Sparks v.
Palmetto Hardwood, Inc., 406 S.C. 124, 128, 750 S.E.2d 61, 63 (2013) (citing
CFRE, L.L.C. v. Greenville Cty. Assessor, 395 S.C. 67, 74, 716 S.E.2d 877, 881
(2011)). "This Court may interpret statutes, and therefore resolve this case,
'without any deference to the court below.'" Brock v. Town of Mount Pleasant, 415
S.C. 625, 628, 785 S.E.2d 198, 200 (2016) (quoting CFRE, 395 S.C. at 74, 716
S.E.2d at 881).
B.
We are presented with the following question—did the legislature intend that the
Chamber be a public body for FOIA purposes due to its receipt and expenditure of
accommodation tax funds? While the Chamber technically expends public funds,
we are firmly persuaded that the General Assembly did not intend the Chamber to
be considered a public body for FOIA purposes based upon its receipt and
expenditure of accommodation tax funds.
We begin with an analysis of FOIA. To further its purpose of a transparent
government, "FOIA subjects a 'public body' to record disclosure." Disabato, v.
S.C. Ass'n of Sch. Adm'rs, 404 S.C. 433, 442, 746 S.E.2d 329, 333 (2013). As this
Court has recognized, "[i]f public bodies were not subject to the FOIA,
governmental bodies could subvert the FOIA by funneling State funds to nonprofit
corporations so that those corporations could act, outside the public's view, as
proxies for the State." Id. at 455, 746 S.E.2d at 340. "Among those entities
defined as a public body subject to the statute are 'any organization, corporation, or
agency supported in whole or in part by public funds or expending public funds . . .
.'" Id. at 442, 746 S.E.2d at 333 (emphasis added) (quoting S.C. Code Ann. § 30-4-
20(a)). FOIA's record disclosure requirement provides that a "person has a right to
inspect, copy, or receive an electronic transmission of any public record of a public
body" subject to certain exceptions. S.C. Code Ann. § 30-4-30(a) (emphasis
added). A "public record" is defined to include "all books, papers, maps,
photographs, cards, tapes, recordings, or other documentary materials regardless of
physical form or characteristics prepared, owned, used, in the possession of, or
retained by a public body" with certain exclusions. S.C. Code Ann. § 30-4-20(c)
(emphasis added).
Moreover, FOIA imposes additional disclosure requirements on public bodies,
such as all meetings must be open to the public, subject to limited exceptions. S.C.
Code Ann. § 30-4-60. Also, a public body must provide advance notice of all
meetings and keep written minutes, which include statutorily specified
information. S.C. Code Ann. §§ 30-4-80, -90. In addition, FOIA provides that a
citizen of the State may seek a declaratory judgment and injunctive relief to
enforce the provisions of FOIA. S.C. Code Ann. § 30-4-100.
Thus, the General Assembly has evidenced its intent to ensure transparency is
provided to the public with regard to the general expenditure of public funds.
C.
We now turn our attention to the A-Tax statute and Proviso 39.2. With regard to
the specific expenditure of the accommodation tax funds involved in this case, the
General Assembly enacted section 6-4-10(3), which sets forth the following:
To manage and direct the expenditure of these tourism promotion
funds, the municipality or county shall select one or more
organizations, such as a chamber of commerce, visitor and convention
bureau, or regional tourism commission, which has an existing,
ongoing tourist promotion program. . . . Immediately upon an
allocation to the special fund, a municipality or county shall distribute
the tourism promotion funds to the organizations selected or created to
receive them. Before the beginning of each fiscal year, an
organization receiving funds from the accommodations tax from a
municipality or county shall submit for approval a budget of planned
expenditures. At the end of each fiscal year, an organization receiving
funds shall render an accounting of the expenditure to the
municipality or county which distributed them. . . .
S.C. Code Ann. § 6-4-10(3) (emphasis added).5 The reporting and accountability
provisions directly governing the expenditure of these funds control the disposition
of this appeal.
5
In addition, Proviso 39.2 requires the DMO to submit a proposal and final report
regarding the expenditures:
Organizations applying for a grant must include in the grant
application, information on how the organization proposes to measure
Under the A-Tax statute, to evidence compliance in expending these funds, a local
government must fulfill several requirements. Importantly, the A-Tax statute
provides three layers of review for these expenditures—a local advisory
committee, a statewide oversight committee, and an expenditure review
committee. First, it requires a local government receiving over $50,000 in revenue
from A-Tax funds to appoint an advisory committee "to make recommendations on
the expenditure of revenue generated from the accommodations tax." Id. § 6-4-
25(A).6 Second, the local government must submit certain information to the
South Carolina Accommodations Tax Oversight Committee, to include a "list of
how funds from the accommodations tax are spent," which is due "before October
first and must include funds received and dispersed during the previous fiscal
year." Id. § 6-4-25(D). Finally, these reports are provided to the Tourism
Expenditure Review Committee (TERC) for review to ensure that the local
government complies with the basic requirements for expenditures set forth in the
statute. Id. § 6-4-35; Id. § 6-4-25(D). TERC may consider "further supporting
information" from the local government or find "an expenditure to be in
noncompliance," resulting in certification to the State Treasurer who will withhold
the noncompliant amount from the local government. Id. § 6-4-35(B)(1)(a). In
the success of the marketing and public relations program, including
the estimated return on investment to the state. . . . An organization
receiving a grant must use the public and private funds only for the
purpose of destination specific marketing and public relations
designed to target international and/or domestic travelers outside the
state to destinations within the state. . . . Grant recipients shall
provide an annual report by November first, to the Chairmen of the
Senate Finance Committee and the House Ways and Means
Committee and the director of the Department of Parks, Recreation
and Tourism on the expenditure of the grants funds and on the
proposed outcome measures.
Act No. 288, 2012 S.C. Acts 402–03 (Proviso 39.2).
6
The local governments in this case are subject to this provision, which requires
the advisory committee to "submit written recommendations to a municipality or
county at least once annually" and these "recommendations must be considered by
the municipality or county in conjunction with the requirements of this chapter."
S.C. Code Ann. § 6-4-25(C). The Chamber, as DMO, may provide the proposed
budget to this committee for its review and recommendation before obtaining
approval from the local government.
addition, TERC "has jurisdiction to investigate and research facts on written
complaints submitted to it with regard to the appropriate tourism-related
expenditures and resolve these complaints." Id. § 6-4-35(B)(2). Any citizen may
file such a complaint.
Thus, these provisions provide that the local governments must select a qualified
DMO to receive the funds designated for promoting tourism, but the local
governments remain accountable for the expenditure of these funds as they must
review and, if appropriate, approve the budget proposed by the DMO, receive an
accounting of expenditures from the DMO, and submit evidence of their
compliance to proper committees. Likewise, the expenditure of the funds received
through the PRT Grant are provided in an annual report to the Senate Finance
Committee, the House Ways and Means Committee, and the Department of Parks,
Recreation, and Tourism.
D.
FOIA is a general statute; the A-Tax statute is a specific statute. "Where there is
one statute addressing an issue in general terms and another statute dealing with
the identical issue in a more specific and definite manner, the more specific statute
will be considered an exception to, or a qualifier of, the general statute and given
such effect." Capco of Summerville, Inc. v. J.H. Gayle Const. Co., 368 S.C. 137,
142, 628 S.E.2d 38, 41 (2006) (citation omitted).
According to FOIA, any organization that is "supported in whole or in part by
public funds or expending public funds" is a public body. S.C. Code Ann. 30-4-
20(a) (emphasis added). Accommodation tax funds are, of course, public funds.
Therefore, if we look only to FOIA as Domains suggests and go no further, it
would appear that the Chamber is subject to FOIA as a public body. The
subsequently enacted A-Tax statute and Proviso 39.2, however, provide a specific
and comprehensive approach for the receipt, expenditure, and oversight of these
funds. The presence of the specific A-Tax statute and Proviso 39.2 play the lead
role in our disposition of this case.
Moreover, even in the absence of a specific statute, this Court has recognized that
the applicability of FOIA to a non-governmental entity is more involved than
classification as a public body due to the receipt of public funds. See Weston v.
Carolina Research & Dev. Found., 303 S.C. 398, 401 S.E.2d 161 (1991).
Both parties cite Weston in support of their respective positions. 303 S.C. 398, 401
S.E.2d 161. We find Weston supports the Chamber's position.7 In Weston, this
Court evaluated whether a nonprofit foundation—operated exclusively for the
benefit of the University of South Carolina—was a public body pursuant to FOIA
on the bases of four transactions in which public funds were transferred to the
foundation. Id. We rejected the suggestion that the mere receipt or expenditure of
public funds automatically and categorically transformed an otherwise private
entity into a public body triggering the full panoply of FOIA requirements. We
made clear that the mere receipt or expenditure of public funds did not mean "that
the FOIA would apply to business enterprises that receive payment from public
bodies in return for supplying specific goods or services on an arms length basis."
Id. at 404, 401 S.E.2d at 165. We ultimately concluded in Weston that the
nonprofit foundation in that case was a public body under FOIA, as the Court
observed that the public needed access to the records of the organization "when a
block of public funds is diverted en masse from a public body to a related
organization, or when the related organization undertakes the management of the
expenditure of public funds" as otherwise the public is unable to determine how the
funds were spent. Id. Significantly, in that case, there was not a statute or proviso
governing the procedure and oversight for the expenditure of the specific funds at
7
This is the main point of divergence with the dissenting opinion. While we take
no issue with the important, indeed vital, goals served by FOIA, as we
acknowledged above, the dissent would classify the Chamber as a public body for
FOIA purposes simply as a result of its receipt of public funds. This is so,
according to the dissent, because we must apply the plain language of one phrase
in the FOIA statute. The dissent would apply all of FOIA to any organization that
receives any public funds. While we acknowledge that in many instances the
receipt of public funds will subject the organization to FOIA, the dissent's
categorical rule is contrary to this Court's discernment of legislative intent in
Weston. The dissent goes further and accuses us of "employ[ing] an elaborate
analysis to avoid the plain language of the FOIA." Not so. We are remaining
faithful to this Court's decisional framework in Weston, to which the legislature for
more than a quarter century has not responded, much less superseded. If the
dissent's "look only to FOIA" approach were dispositive, Weston could not stand as
the Court held that FOIA does not always and automatically apply when public
funds are received by an organization. As is our general stance, we elect to honor
our precedents and respect the authority of the legislature to respond to (including
superseding) our construction of statutes. If the General Assembly now disagrees
with Weston, or our decision today, it lies within the province of the legislature to
respond and overrule our precedents.
issue or mandating the public reporting and accountability as exists with respect to
A-Tax funds and the PRT Grant.
Here, as noted, there is a specific statute (or proviso) that directs the local
governments to select a DMO to manage the expenditure of certain tourism funds
and requires the governments to maintain oversight and responsibility of the funds
by approving the proposed budget and receiving an accounting from the DMO.
Thus, this is not the situation found in Weston wherein the funds were intended to
be given to a public body and, instead, were diverted to a private organization to be
spent without oversight. Through the A-Tax statute (and Proviso 39.2) there are
accountability measures in place and the public has access to information regarding
how the funds are spent. Therefore, the concern in Weston regarding the lack of a
legislatively sanctioned process mandating oversight, reporting, and accountability
is not present in the expenditure of these funds.
We do agree with Domains that the A-Tax statute does not provide for the expanse
of disclosure requirements that are available under FOIA. Indeed, Domains makes
no pretense that FOIA would be imposed on the Chamber so that all of the
Chamber's procedures and activities would be controlled by all of FOIA's
provisions. This would subject the Chamber to all of the various requirements of
FOIA, such as advance notice of meetings, in every area of the Chamber's
activities. Unlike some other states, South Carolina's FOIA provisions do not
provide a limitation to the extent of FOIA's reach within an organization once it is
classified as a public body. Compare S.C. Code Ann. § 30-4-20(a) (stating
"'Public body' means . . . any organization, corporation, or agency supported in
whole or in part by public funds or expending public funds" (emphasis added)),
with Tex. Gov't Code Ann. § 552.003(1)(A)(xii) (West 2013) (defining a
"Governmental body" as including "the part, section, or portion of an
organization, corporation, commission, committee, institution, or agency that
spends or that is supported in whole or in part by public funds" (emphasis added)).
The degree of oversight and reporting requirements are policy decisions which lie
in the province of the legislature. Here, the General Assembly has specified a
detailed process for the expenditure and accountability of these tourism funds and
that determination is controlling.
III.
Contrary to Domains' suggestion, the receipt and expenditure of these
accommodation tax funds in no manner allows the Chamber (or any DMO) to
spend public funds free from public accountability and oversight. We fully
appreciate the need for some measure of transparency and public accountability in
the expenditure of public funds. Yet, in this case, the A-Tax statute and Proviso
39.2 set forth the General Assembly's determination of the required level of
oversight, transparency, and accountability.
FOIA, of course, remains vibrant as it provides the General Assembly's
determination for the optimum transparency in connection with the general
expenditure of public funds. Following the passage of FOIA, the General
Assembly enacted the more narrow and targeted A-Tax statute (and Proviso 39.2)
to provide what it determined were the necessary accountability safeguards with
regard to the expenditure of these specific funds while simultaneously protecting
the private nature of the organizations selected to perform this marketing function.
The General Assembly deemed these provisions sufficient to ensure that the funds
are being properly expended, and Domains has presented no valid legal basis to
contravene this legislative determination. Accordingly, the judgment of the trial
court is reversed.
REVERSED.
BEATTY, C.J., HEARN and JAMES, JJ., concur. FEW, J., dissenting in a
separate opinion.
JUSTICE FEW: The Freedom of Information Act (FOIA) applies to any "public
body," which is defined as "any organization . . . expending public funds." S.C.
Code Ann. § 30-4-20(a) (2007). The Hilton Head-Bluffton Chamber of Commerce
agreed to serve as the organization to "receive" and "direct the expenditure" of
accommodations sales tax revenues collected by the towns of Hilton Head and
Bluffton and Beaufort County "for advertising and promotion of tourism" pursuant
to subsection 6-4-10(3) of the South Carolina Code (Supp. 2017). In fiscal year
2013-14, as a representative year, the Chamber "expended" $1,531,000 of these
public funds to promote tourism. The FOIA provides any "person has a right to
inspect . . . any public record of a public body." S.C. Code Ann. § 30-4-30(A)(1)
(Supp. 2017). It requires no elaborate analysis to apply the plain words of the
FOIA and reach the conclusion that the Chamber's agreement to expend these
public funds renders it a public body subject to the record disclosure requirements
of the FOIA.
The majority has employed an elaborate analysis to avoid the plain language of the
FOIA under the guise of "discerning legislative intent." However, our law does
not permit us to look outside the language of a statute unless there is an ambiguity
in the statute. See Smith v. Tiffany, 419 S.C. 548, 555, 799 S.E.2d 479, 483 (2017)
("If a statute is clear and explicit in its language, then there is no need to resort to
statutory interpretation or legislative intent to determine its meaning." (quoting
Timmons v. S.C. Tricentennial Comm'n, 254 S.C. 378, 401, 175 S.E.2d 805, 817
(1970))); 419 S.C. at 556, 799 S.E.2d at 483 ("Absent an ambiguity, there is
nothing for a court to construe, that is, a court should not look beyond the statutory
text to discern its meaning."). The majority acknowledges there is no ambiguity,
stating,
According to FOIA, any organization that is "supported
in whole or in part by public funds or expending public
funds" is a public body. Accommodation tax funds are,
of course, public funds. Therefore, if we look only to
FOIA as Domains suggests and go no further, it would
appear that the Chamber is subject to FOIA as a public
body.
Under Smith and Timmons, therefore, we must "look only to FOIA," because there
is no ambiguity in it. Based on the plain language in subsection 30-4-20(a), the
Chamber is a public body and therefore subject to the record disclosure
requirements of the FOIA.
Even if we did look beyond the FOIA, however, the majority's justification for
finding the Act does not apply in this circumstance fails. First, the majority's
decision is inconsistent with the policy behind the FOIA, which is set forth in
section 30-4-15 of the South Carolina Code (2007). The General Assembly found
"it is vital in a democratic society that public business be performed in an open and
public manner so that citizens shall be advised of the performance of public
officials and of the decisions that are reached in public activity and in the
formulation of public policy." § 30-4-15. Therefore, the General Assembly
enacted the FOIA "to make it possible for citizens . . . to learn and report fully the
activities of their public officials at a minimum cost or delay to the persons seeking
access to public documents or meetings." Id.; see also Brock v. Town of Mount
Pleasant, 415 S.C. 625, 628, 785 S.E.2d 198, 200 (2016) ("The essential purpose
of FOIA is to protect the public from secret government activity.").
The majority states the accommodations tax statute and Proviso 39.2 "play the lead
role in our disposition of this case" because they "provide a comprehensive
approach for the receipt, expenditure, and oversight of these [public] funds." In
other words, the majority finds the policy of the FOIA is fulfilled through the
accommodations tax statute and Proviso 39.2. This conclusion is wrong.
Although the accommodations tax statute does have specific provisions relating to
the "receipt" and "expenditure" of public funds, its provisions concerning
"oversight" of spending public funds fall far short of meeting the policy goals of
the FOIA.
Specifically, the accommodations tax statute does not address the disclosure of
records at the core of the FOIA policy. In fact, the statute's "three layers of
review" the majority finds to be sufficient "oversight" is contrary to the policy. By
placing the responsibility for the expenditure of public funds in the hands of a
private entity such as the Chamber, and then relying on public officials for
"oversight," with no right of access by the public, the accommodations tax statute
actually inhibits citizens from being "advised of the performance of public officials
and of the decisions that are reached in public activity," thereby frustrating—not
furthering—the "vital" policy of open government.
To the extent the policy behind the FOIA could be furthered by "oversight" from
public officials, the record in this case reveals the information provided to those
public officials does not allow the officials to determine how the funds are being
spent. For example, I asked counsel for the Chamber at oral argument about a
specific line item contained in the Chamber's proposed budget for spending
accommodations sales tax funds in fiscal year 2013-14. The line appears under the
headings "Expenses" and "Digital Marketing," and reads, "SEM Marketing
[$]200,000."8 I asked, "In the town's relationship with the Chamber, . . . as a
matter of course, the town doesn't know what the $200,000 represents for SEM
marketing?" Counsel responded, "Well, it may. I don't know." After several other
questions and answers, counsel agreed with the following assertion:
Unless somehow the town takes the initiative to learn
from the Chamber what the $200,000 represents, then in
our scenario, a member of the public would never be able
to gain access to the individual vendors, whether they
submitted bids, what were the bids, what was the highest
bid, and on and on and on.
This demonstrates the reality that the accommodations tax statute does not allow
the public to learn how public funds are being spent with any degree of specificity,
and therefore the statute does not meet the policy goals of the FOIA.
Second, the majority relies heavily on the principle that a more specific statute
(subsection 6-4-10(3)—the accommodations tax statute) controls the more general
one (FOIA). That principle is inapplicable in this case because the two statutes do
not address the same subject. In Capco of Summerville, Inc. v. J.H. Gayle
Construction Co., 368 S.C. 137, 628 S.E.2d 38 (2006), the case cited by the
majority to support its application of the principle, we held the principle applied
only if the statutes address "the identical issue." 368 S.C. at 142, 628 S.E.2d at 41.
The FOIA requires that a public body disclose its records; the accommodations tax
statute does not even address that issue.
Third, the majority's reliance on Weston v. Carolina Research & Development
Foundation, 303 S.C. 398, 401 S.E.2d 161 (1991), is misplaced. We did not create
any "decisional framework," see supra note 7, in Weston that permits us to ignore
the plain language of the FOIA. Rather, we applied that plain language to
transactions that are factually indistinguishable from the Chamber's receipt and
expenditure of accommodations sales tax revenues in this case, and held the FOIA
8
SEM marketing—or search engine marketing—is defined as "a process by which
multiple methods are utilized to improve market visibility and exposure for a
brand, product or service" and includes "search engine optimization (SEO), social
networking, bid placement, pay-per-click (PPC), contextual advertising, paid
inclusion, geomapping, . . . as well as multiple media formats, such as YouTube
and geospecific marketing, like Foursquare." Techopedia, Search Engine
Marketing (SEM), https://www.techopedia.com/definition/25079/search-engine-
marketing-sem (last visited Apr. 2, 2018).
applies. We stated "the unambiguous language of the FOIA mandates that the
receipt of support in whole or in part from public funds brings a corporation within
the definition of a public body." 303 S.C. at 403, 401 S.E.2d at 164.
The majority in this case refers to the following passage from Weston:
[T]his decision does not mean that the FOIA would apply
to business enterprises that receive payment from public
bodies in return for supplying specific goods or services
on an arm's length basis. In that situation, there is an
exchange of money for identifiable goods or services and
access to the public body's records would show how the
money was spent. However, when a block of public
funds is diverted en masse from a public body to a related
organization, or when the related organization undertakes
the management of the expenditure of public funds, the
only way that the public can determine with specificity
how those funds were spent is through access to the
records and affairs of the organization receiving and
spending the funds.
303 S.C. at 404, 401 S.E.2d at 165. The purpose of this passage was to point out
different types of transactions and to explain that transactions made on an "arm's
length basis" would not trigger the FOIA because "there is an exchange of money
for identifiable goods or services and access to the public body's records would
show how the money was spent." This passage was never intended to create any
additional requirement—or a "more involved" analysis—to determine the
applicability of the FOIA.
In contrast to the majority's proposition, the quoted language from Weston requires
a finding that the FOIA does apply to the Chamber. The Chamber's agreement to
expend these funds does not involve the type of "arm's length" transaction that is
an "exchange of money for identifiable goods or services" we said in Weston
would not be subject to the FOIA. Rather, the Chamber's decision to play this role
required it to "manage and direct the expenditure of these tourism promotion
funds," § 6-4-10, which is precisely the type of transaction we held in Weston is
always subject to the FOIA, 303 S.C. at 404, 401 S.E.2d at 165 (finding the FOIA
applies when an "organization undertakes the management of the expenditure of
public funds"). As such, "the only way that the public can determine with
specificity how those funds were spent is through access to the records and affairs
of the organization receiving and spending the funds." Id. Therefore, Weston does
not support the majority's proposition that "the applicability of FOIA to a non-
governmental entity is more involved than classification as a public body due to
the receipt of public funds." In fact, Weston rejects the majority's proposition that
there is any "decisional framework" for the FOIA except that set forth in the FOIA.
Finally, the majority expresses concern over the Chamber being exposed to other
requirements under the FOIA if we find it is a public body. Those other
requirements include open meetings, advanced notice of meetings, and the
requirement that public bodies keep written minutes. See S.C. Code Ann. §§ 30-4-
60, -80, and -90 (2007 & Supp. 2017). There are two simple solutions to this
problem. One, if the Chamber does not wish to subject itself to all of the
requirements of the FOIA, it may choose not to serve as the designated marketing
organization to "receive" and "direct the expenditure" of accommodations sales tax
revenues. Two, if the Chamber is unwilling to give up its position as the
designated marketing organization, it can easily create a separate subsidiary or
related entity devoted solely to that function. The majority's concerns are
unfounded.
For these reasons, I respectfully dissent.