Can a South Carolina town spend public money to rebuild a culvert or road that mainly benefits one private property?

Plain-English summary

The Town of Summerville asked the South Carolina Attorney General about a drainage project with a private-benefit wrinkle. Years ago the town installed two culverts in a town-maintained ditch and covered them to form a bridge that gave an otherwise landlocked property owner access to his land; the owner paid for materials and the town supplied the labor and equipment. Later the town tore the bridge out because it was flooding neighbors, and promised to rebuild it when the owner got a building permit. Now the town wants to know: would rebuilding a culvert on municipal property, carrying a public road that dead-ends at one private parcel, violate the state constitution's ban on spending public money mainly for a private party?

The AG's answer was a hedged "probably not, but we can't be sure." It concluded that, although "it is not free from doubt," a court MAY hold the project does not violate the public-funds prohibition. Two features pointed that way: the culvert would sit "solely on municipal property," and the road over it would stay open to the public up to where the private lot begins. But the AG stressed twice that resolving the question requires factual determinations it cannot make, so a court has the final say.

Just as important, the AG said the first move belongs to the town council, not the courts or the AG. Whether a project serves a "public purpose" is a legislative question, and the council should make explicit legislative findings stating how the culvert and road benefit the public. The AG walked through the South Carolina Supreme Court's four-part Nichols test and the line of cases (including prior AG opinions) holding that public money generally cannot build or maintain roads on private property, contrasted with situations where the public retains access or the property has been irrevocably dedicated to public use.

What this means for you

The opinion is about three years old, so the constitutional provisions it cites are likely still current, but the AG deliberately declined to say whether this specific project is constitutional.

Town councils and municipal officials

The opinion's practical takeaway is procedural: before spending public funds on a project that visibly benefits a private owner, the governing body should adopt legislative findings that clearly state the public purpose served. The AG treated the council's public-purpose determination as the first step and something a court will respect unless "clearly wrong" (Elliott v. McNair). It also flagged the facts that helped here (municipal ownership of the culvert site and continued public access to the road) without guaranteeing they would be enough.

Property owners seeking access improvements

If your access depends on a town rebuilding infrastructure, this opinion shows the analysis the town has to run. The fact that a project helps a private parcel (here, curing a landlocked lot) does not automatically doom it, but the town must be able to articulate a genuine public benefit, and public money generally cannot be spent to build or maintain purely private roads or bridges the public cannot use.

Anyone challenging or defending a public expenditure

The opinion collects the governing authorities: S.C. Constitution article X (§ 5's stated-public-purpose requirement and § 11's ban on lending public credit to private parties), the four-part Nichols test, and S.C. Public Interest Foundation v. S.C. Department of Transportation, where the Supreme Court struck down state inspection of privately owned, access-restricted bridges as serving the owners rather than the public.

Common questions

Q: Did the Attorney General approve the culvert project?
A: No. The AG said only that a court "may" find the project does not violate the public-funds ban, given that the culvert is on municipal property and the road stays publicly accessible. It repeatedly noted it cannot make the factual findings needed to decide, so a court would.

Q: What is the "public purpose doctrine" in South Carolina?
A: Under article X of the South Carolina Constitution, public funds and public credit must be used for a public purpose, not primarily for the benefit of private parties. The Supreme Court's Nichols test weighs the intended public benefit, who the primary beneficiaries are, how speculative the project is, and the probability the public interest is served.

Q: Can a town spend public money on a road that ends at private property?
A: Sometimes. The opinion explains that public money generally cannot build or maintain roads on private property, but a road on public land that remains open to the public, even one that terminates at a private parcel, may satisfy the public-purpose test if the council makes supporting findings and a court agrees.

Q: Who decides whether a project serves a public purpose?
A: In the first instance, the legislative body, here the town council, which should make findings stating the public benefit. A court reviews that determination and will not interfere unless it is "clearly wrong."

Background and statutory framework

Two provisions of article X of the South Carolina Constitution frame this opinion. Section 5 requires that any tax "distinctly state the public purpose" its proceeds serve, which the courts read to mean all taxes must be levied for a valid, stated public purpose (Bus. License Opposition Comm. v. Sumter Cty.). Section 11 bars the State or its political subdivisions from pledging or loaning their credit "for the benefit of any individual, company, association, corporation," which the courts have read to prohibit spending public funds or resources for the primary benefit of private parties (State ex rel. McLeod v. Riley).

To test a claimed public purpose, the South Carolina Supreme Court uses the four-part framework from Nichols v. S.C. Research Authority: identify the ultimate public benefit, ask whether public or private parties are the primary beneficiaries, weigh how speculative the project is, and balance the probability and degree to which the public interest is served. Applying related principles in S.C. Public Interest Foundation v. S.C. Department of Transportation, the Court held that inspecting privately owned bridges in a gated community, where public access was limited, benefited the owners rather than the public and was therefore unconstitutional. Prior AG opinions likewise treated public spending on private roadways as generally prohibited, except where the roadway is irrevocably dedicated to public use. The AG measured Summerville's culvert project against that body of law and landed on a cautious "a court may uphold it," subject to the council's findings and a court's ultimate review.

Citations and references

Constitutional provisions:

• S.C. Const. art. X, § 5 (taxes must state a public purpose)
• S.C. Const. art. X, § 11 (no pledge or loan of public credit for private benefit)

Cases (all South Carolina courts):

• Bus. License Opposition Comm. v. Sumter Cty., 304 S.C. 232, 403 S.E.2d 638 (1991)
• State ex rel. McLeod v. Riley, 276 S.C. 323, 278 S.E.2d 612 (1981) (overruled on other grounds by WDW Prop. v. City of Sumter)
• WDW Prop. v. City of Sumter, 342 S.C. 6, 535 S.E.2d 631 (2000)
• S.C. Public Interest Foundation v. S.C. Department of Transportation, 421 S.C. 110, 804 S.E.2d 854 (2017)
• Elliott v. McNair, 250 S.C. 75, 156 S.E.2d 421 (1967)
• Nichols v. S.C. Research Authority, 290 S.C. 415, 351 S.E.2d 163 (1986)

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-addressing-whether-a-project-violates-the-prohibition-on-using-public-funds-for-the-primary-benefit-of-private-parties/
• Original PDF: https://www.scag.gov/media/ziedveig/03339690.pdf

Original opinion text

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

ALAN WILSON
ATTORNEY GENERAL

July 05, 2023

Mr. G. Waring Parker, Esq.
Attorney

Town of Summerville

200 S. Main Street
Summerville, SC 29211

Dear Mr. Parker:

Attorney General Alan Wilson has referred your letter to the Opinions section. Your letter
states the following:

Approximately eleven (11) years ago the Town of Summerville (Town)
installed two (2) culverts in a Town maintained drainage ditch/stream which were
then covered with rocks and dirt to form a bridge to give the property owner access
to his property which was otherwise landlocked. The property owner paid for the
materials and the Town used its Employees and equipment for the installation.
Some nine (9) years later the Town determined the bridge was contributing to the
flooding of adjacent properties and removed it. At the time of removal, the property
owner was told by the Town it would rebuild the bridge.when he or his successor
in title applied for and granted a building permit. The issue on which the Town is
requesting an opinion is as follows:

ISSUE

Is it a violation of the Public Purpose Doctrine for a municipality to use
public funds to replace/repair a culvert for access over a stream on a portion of a
public road which is maintained by the municipality where that portion of the road
and culvert terminates and serves only the private property with the culvert being
solely on municipal property? The culvert (now removed) was built approximately
eleven (11) years ago with the then property owner paying for the materials and the
municipality using its labor and equipment for installation.

REMBERTC. DENNIS BUILDING © Post GFFICE BOX 11549) o CoLumibns, SC 29211-1849 6 TELEpHonE $02-724.3670 FACSIMILE 8G3-254-6283

Mr. G. Waring Parker, Esq.
Page 2
July 05, 2023

In subsequent correspondence, you clarified that the proposed project would place the
culvert in Richardson Creek and the public would have access to drive over the new portion of the
road until it terminates at the private property.

Law/Analysis

Although it is not free from doubt, it is this Office’s opinion a court may hold the use of
public funds to replace/repair a culvert for access over a stream on a portion of a public road which
is maintained by the municipality and serves only a single privately-owned property does not
violate the South Carolina Constitution’s prohibition on using public funds for the primary benefit
of private parties. See S.C. Const. art. X, §§ 5, 10. It must be noted that the resolution to your
question concerning the expenditure of public funds on a particular project requires factual
determinations which are beyond the scope of this Office's opinions. See Op. S.C. Att'y Gen., 2006
WL 1207271 (April 4, 2006) (“Because this Office does not have the authority of a court or other
fact-finding body, we are not able to adjudicate or investigate factual questions”). However, we
will assume the facts provided in your letter in order to offer guidance.

Article X, Section 5 of the South Carolina Constitution states, in relevant part, “Any tax
which shall be levied shal] distinctly state the public purpose to which the proceeds of the tax shall
be applied.” S.C. Const. art. X, § 5. This Section has been interpreted to “require that all taxes
must be levied for a valid and distinctly stated public purpose.” Bus. License Opposition Comm.
v. Sumter Cty., 304 $.C. 232, 234, 403 S.E.2d 638, 639 (1991).

Article X, Section 11 of the South Carolina Constitution provides, “The credit of neither
the State nor of any of its political subdivisions shall be pledged or loaned for the benefit of any
individual, company, association, corporation, or any religious or other private education
institution except as permitted by Section 3, Article XI of this Constitution.” S.C. Const. art. X, §

11. This section has been interpreted to prohibit the expenditure of public funds or resources for
    the primary benefit of private parties. See State ex rel. McLeod v. Riley, 276 S.C. 323, 329, 278
    S.E.2d 612, 615 (1981), overruled on other grounds by WDW Prop. v. City of Sumter, 342 S.C.
    6, 535 S.E.2d 631 (2000).

In S.C. Public Interest Foundation v. S.C. Department of Transportation, 421 S.C. 110, 804
S.E.2d 854 (2017), the South Carolina Supreme Court described what constitutes a public purpose.

Mr. G. Waring Parker, Esq.
Page 3
July 05, 2023

In deciding whether governmental action satisfies a public purpose, we look to the
object sought to be accomplished. As a general rule a public purpose has for its
objective the promotion of the public health, safety, morals, general welfare,
security, prosperity, and contentment of all the inhabitants or residents, or at least
a substantial part thereof.

Id, at 123, 804 S.E.2d at 861 (citations omitted). In Elliott v. McNair, 250 S.C. 75, 88, 156 S.E.2d
421, 428 (1967), the Court explained that “the question of whether an act is for a public purpose
is primarily one for the Legislature, and this court will not interfere unless the determination by
that body is clearly wrong.” In Nichols v. S.C. Research Authority, 290 S.C. 415, 351 S.E.2d 163
(1986), the Court reaffirmed its four-part test for determining whether a legislative finding of a
“public purpose” is valid.

The Court should first determine the ultimate goal or benefit to the public intended
by the project. Second, the Court should analyze whether public or private parties
will be the primary beneficiaries. Third, the speculative nature of the project must
be considered. Fourth, the Court must analyze and balance the probability that the
public interest will be ultimately served and to what degree.

290 S.C. at 429, 351 S.E.2d at 163 (emphasis in original). Therefore, initially the question of
whether this particular project serves a public purpose is one for the town council to determine.
The council should make legislative findings that clearly state how the project will benefit the
public interest.

In regard to the use of public funds on private property, this Office’s prior opinions have
generally found the use of public funds to build or maintain roadways on private property to be
prohibited. For instance, in 2016, this Office issued an opinion addressing a proposed Richland
County ordinance that sought to allow the county to repair private roadways if the county
administrator determined that “access to such roadway [was] necessary for the performance of one
or more public functions.” Op. S.C. Att’y Gen., 2016 WL 5820152, at 1 (September 23, 2016).
Therein, it was noted, “[T]his Office has affirmed in numerous prior opinions that ‘there is a
prohibition against using public equipment and labor (i.e. public funds and resources) on private
property.’” Id. at 4; see also Op. S.C. Att’y Gen., 1967 WL 11888 (August 18, 1967) (“I advise
that the County Supervisor, in the opinion of this office, cannot use the road machinery of Calhoun
County for hire to do work on private property. The public equipment is provided by public funds
to be used for public purposes and cannot validly be used for private purposes.”).

However, in an August 29, 2003 opinion, we discussed how, after acceptance of an
irrevocable dedication of private roadways by a political subdivision, the maintenance of such
roadways could constitute a valid public purpose:

Mr. G. Waring Parker, Esq.
Page 4
July 05, 2023

It is beyond argument that maintenance of a public road constitutes a public purpose
for which public resources (funds, equipment, personnel, etc.) may be expended. I
would also note that the ordinance under consideration requires that any scraping
must be done for the passage of certain emergency vehicles.

There is authority in other jurisdictions which concludes that public safety alone
represents a legitimate public purpose and that where an ordinance designed to
promote public safety provides for the maintenance of private roads or streets, such
is valid.... We decline to follow these cases, however, because other authority
suggests that a much stricter standard is preferable where the maintenance of
roadways at public expense is involved. These cases suggest that, in the enactment
of an ordinance such as here, there must not only be a determination of a need to
promote public safety or some other public purpose, but that there must also be an

irrevocable dedication of the private property to the public, before an ordinance
meets the public purpose test.

While we have not found any authorities rendered by our Supreme Court directly
addressing the kind of ordinance being considered here, we have located an Order
issued by the Honorable Jonathan McKown, dated October 22, 1984, which
substantially deals with this question. Judge McKown held that roads should neither
be_built, nor maintained, on private property at public expense, unless certain

stringent guidelines are followed, namely that there has been an irrevocable

conveyance of such property by the landowner for public use; that such instrument

is recorded in the county courthouse; and that there is a determination by the county
that “the public benefit and use [is] substantial...”

Op. S.C. Atty. Gen., 2003 WL 22050883 at *4-6 (August 29, 2003) (emphasis added).

Subsequent to issuance of these opinions, the South Carolina Supreme Court held that the
S.C. Department of Transportation’s inspection of the privately owned bridges unconstitutionally
contravened the requirement that public funds only be used for a public purpose.

We find the inspection of the bridges did not serve a public purpose. We do not
doubt that the inspection was conducted to assuage safety concerns. However, the
owners of the bridges were the beneficiaries of the inspection, not the public at
large, whose access to the bridges is limited to the authorization provided by the

Mr. G. Waring Parker, Esq.
Page 5
July 05, 2023

homeowners. In short, it is not the public's responsibility to pay the maintenance
costs of bridges located within a gated community that seeks to exclude the public
from enjoying the use of the bridges. Thus, because it did not serve a public
purpose, we find the inspection was unconstitutional.

S.C. Pub. Int. Found., 421 S.C. at 123, 804 S.E.2d at 861. Broadly, these authorities can be
understood to prohibit the expenditure of public funds on the private roads and bridges where the
public at large is denied access to use that same infrastructure. This is not to say that public access
alone will transform an otherwise prohibited expenditure into one which is acceptable. Every
expenditure remains subject to review under the four-part Nichols test to evaluate whether the
legislative findings of public purpose is valid.

Turning to the scenario described in your letter, two elements of the proposed project
suggest that a court may uphold a legislative finding of public purpose; namely that the project
would take place on municipal property and that road would be accessible to the public. Your
letter states the culvert would be “solely on municipal property.” The road over the culvert would
be accessible to the public and connect to a currently existing public road. The public’s access to
the new portion of the public road would terminate at the boundary of a privately owned property.
While the project will certainly be a benefit to the private property in that it is no longer landlocked,
the town council may find the culvert and road project somehow serves the public interest. This
Office is unable to speculate what public purpose the project would serve, if any, or if a court
would ultimately uphold such an expenditure.

Conclusion

As is discussed more fully above, although it is not free from doubt, it is this Office’s
opinion a court may hold the use of public funds to replace/repair a culvert for access over a stream
on a portion of a public road which is maintained by the municipality and serves only a single
privately-owned property does not violate the South Carolina Constitution’s prohibition on using
public funds for the primary benefit of private parties. See S.C. Const. art. X, §§ 5, 10. It must be
noted that the resolution to your question concerning the expenditure of public funds on a particular
project requires factual determinations which are beyond the scope of this Office's opinions. See
Op. S.C. Att'y Gen., 2006 WL 1207271 (April 4, 2006) (“Because this Office does not have the
authority of a court or other fact-finding body, we are not able to adjudicate or investigate factual
questions”).

The initial question of whether this particular project serves a public purpose is one for the
town council to determine. Elliott v. McNair, 250 S.C. 75, 88, 156 S.E.2d 421, 428 (1967). The

Mr. G. Waring Parker, Esq.
Page 6
July 05, 2023

council should make legislative findings that clearly state how the project will benefit the public
interest. While the project will certainly be a benefit to the private property in that it is no longer
landlocked, the town council may find the culvert and road project serves the public interest. This
Office is unable to speculate what public purpose the project would serve, if any, or if a court
would ultimately uphold such an expenditure.

ae hae J J

— Houck
Assistant Attorney General

in AND APPROVED BY:

Solicitor General