South Carolina Public Interest Foundation v. Harrell

The South Carolina Public Interest Foundation and Edward D. Sloan, Jr. challenged several 2007 acts of the South Carolina General Assembly as violating Article III, section 17 of the South Carolina Constitution, which requires that every act 'relate to but one subject' expressed in its title, in order to prevent legislative log-rolling and give lawmakers and the public fair notice of an act's contents. Among the challenged acts was 2007 Act No. 110, the Research and Development Tax Credit Reform Act.

Act 110's Section 5 Violated the One-Subject Rule

The court noted that, with the exception of two sections, all of Act 110 had already been superseded by a later, broader revenue act, Act 116. Of the two surviving sections, the Respondents conceded that Section 5 of Act 110 had been enacted in violation of the one-subject rule, and the court struck it accordingly.

The Methane Gas Tax Credit Survived as Related to the Research and Development Subject

The only other surviving section of Act 110, Section 57, provided a tax credit for methane gas. The court held that this credit was sufficiently relevant to Act 110's stated title — the Research and Development Tax Credit Reform Act — that it did not violate the one-subject rule, and upheld it.

Related Provisions of the Companion Revenue Act Were Also at Issue

The court separately reviewed Act 116, the sprawling, roughly 70-section revenue act that had absorbed most of Act 110's original research and development credit provisions along with dozens of other jobs, investment, and income tax credit provisions. The court held that because the great majority of Act 116's sections related to some form of revenue collection or taxation, they were sufficiently 'kindred in nature' to survive a one-subject challenge, but struck two unrelated provisions — a wine-tastings section and a renewable energy infrastructure loan and grant fund — as lacking any legitimate association with the act's revenue-raising subject.

The court severed the unconstitutional provisions from each challenged act while upholding the remainder, including the research and development-related provisions found to be properly related to their respective acts' titles.

Significance: This decision is the South Carolina Supreme Court's controlling precedent on the structural validity of the state's Research and Development Tax Credit Reform Act, confirming that most of its substantive provisions — including the version later consolidated into Act 116 — survived constitutional challenge, while illustrating how South Carolina courts police the boundary between provisions that are genuinely 'kindred' to a tax credit act's stated subject and unrelated riders that cannot ride along with it.