STATE OF SOUTH CAROLINA IN THE COURT OF COMMON PLEAS COUNTY OF HORRY Case No. 2023-CP-26-07406 LAKE AGENCY, SC, LLC, Plaintiff, MYRTLE BEACH AREA CHAMBER OF COMMERCE’S PARTIAL MOTION TO. vs. DISMISS AND/OR MOTION TO. STRIKE MYRTLE BEACH AREA CHAMBER OF COMMERCE, Defendant, PLEASE TAKE NOTICE Defendant Myrtle Beach Area Chamber of Commerce (“MBACOC”), hereby moves, pursuant to Rules 12(b)(1) and/or 12(f) of the South Carolina Rules of Civil Procedure, for an order dismissing and/or striking the portions of Plaintiff Lake Agency, SC, LLC’s ("Plaintiff") Complaint which make allegations relating to the expenditure of accommodation tax funds collected pursuant to S.C. Code Ann. § 6-4-10. As set forth below, the Supreme Court of South Carolina has unambiguously held that courts lack subject matter jurisdiction to hear cases and controversies relating to the alleged misuse of accommodation tax funds. See Tourism Expenditure Rev. Comm. v. City of Myrtle Beach, 403 S.C. 76, 79, 742 S.E.2d 371, 373 (2013). S.C. Code Ann, § 12-36-920(A) and S.C. Code Ann, §§ 6-4-5 to -35 (collectively, the “Accommodations Tax statute” or the “A-Tax statute”) governs the administration of a state sales tax imposed on sleeping accommodations provided to overnight guests. DomainsNewMedia.com, LLC y. Hilton Head Island-Bluffion Chamber of Com, 423 8.C. 295, 298, 814 S.E.2d 513, 514 (2018). Under the A-Tax statute, a portion of the tax is remitted to the local governments where it was collected and, in tur, they must expend the A-Tax funds in accordance with the statutory provisions governing allocation, Jd. Specifically, the A-Tax statute dictates that the local governments must select at least one organization (referred to as the designated marketing 90PL09Zd9EZ0ZHASWO - SWI 1d NOWWOD - ANHOH - Wd 1:2 £0 Jdy ¥20Z- G34 ATIVOINOYLOITorganization (DMO) to manage the expenditure of the funds. Id. The statute further charges the local governments with ensuring that the A-tax funds are “used only for advertising and promotion of tourism.” Za. (citing S.C. Code Ann. § 6-4-10(3)). In this cas Plaintiff, in par, alleges that MBACOC misused A-Tax funds in a manner that violates the A-Tax statute.’ See Compl. $f] 50-55. However, this court lacks subject matter jurisdiction to hear and decide these allegations. In enacting the A-Tax statute, the legislature specifically provided for a local advisory committee and a statewide oversight body—the Tourism Expenditure Review Committee (TERC)—to ensure counties and municipalities comply with the basic requirements set forth in the A-Tax statutes. Tourism Expenditure Rev. Comm. v. City of Myrtle Beach, 403 8.C. 16, 79, 742 S.E.2d 371, 373 (2013) (citing S.C. Code Ann. § 64-35). In Tourism Expenditure Rev. Comm. v. City of Myrtle Beach, 403 S.C. 76, 742 S.B.2d 371 (2013), the Supreme Court of South Carolina plainly held that TERC has exclusive jurisdiction to hear claims and complaints relating to the use of A-Tax funds. In reaching that conclusion, the Court wrote: Here, the legislature has provided an exclusive statutory procedure for challenging the expenditure of A-Tax funds. Under section 6-4-35(B), TERC is authorized to ‘certify noncompliance to the State Treasurer.’ Once that provess is initiated, the State Treasurer ‘shall withhold the amount of the expenditure 8.C. Code Amn, § 6-4-35(B). An appeal from TERC’s noncompliance certification ‘lies with the Administrative Law Judge Division.’ /d. Section 6-4-35(B) provides the exclusive process and means to challenge an expenditure of A-Tax funds. [No case or controversy exists outside this statutory process. Tourism Expenditure Review Comm. v. City of Myrtle Beach, Appellate Case No. 2011-200407 *5 (emphasis added); see also DomainsNewMedia.com, LLC v. Hilton Head Island-Bluffion Chamber Commerce, 814 S.E.2d 513 (S.C. 2018) (“TERC ‘has jurisdiction to investigate and research facts on written complaints submitted to it with regard to the appropriate tourism-related expenditures denies all Plaintiffs allegations relating to the misuse of A-Tax fund 2 90PL09Zd9EZOZHASWO - SWI 1d NOWWOD - ANHOH - Wd 1:2 £0 Jdy ¥20Z- G34 ATIVOINOYLOITand resolve these complaints.”). Accordingly, like in Tourism Expenditure Review Comm., this court lacks subject matter jurisdiction to hear and decide claims relating to the alleged misuse of A-Tax funds. Only TERC has jurisdiction to hear claims relating to the use of A-Tax funds. WHEREFORE, MBACOC respectfully requests an order dismissing and/or striking Plaintiff's allegations relating to the alleged misuse of A-Tax funds. This Motion is based on the pleadings, applicable statutes, regulations, case law and legal authorities, and other materials as may be submitted in support hereof. April 3, 2024 Charleston, South Carolina Respectfully submitted, s/ Robert C. Osborne, II] Robert H. Jordan (SC Bar No.: 13612) Email: robertiordan@parkerpoe.com Robert C. Osborne III (SC Bar No.: 101827) Email: robertosborne@parkerpoe.com PARKER POE ADAMS & BERNSTEIN LLP 850 Morrison Drive, Suite 400 Charleston, SC 29403 Phone: (843) 727-2650 Fax: (843) 727-2680 Attorneys for Defendant Myrtle Beach Area Chamber of Commerce 90PL09Zd9EZOZHASWO - SWI 1d NOWWOD - ANHOH - Wd 1:2 £0 Jdy ¥20Z- G34 ATIVOINOYLOIT