H 5568

South Carolina General Assembly
126th Session, 2025-2026
Bill 5568
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
A bill
TO AMEND THE
SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 11 TO CHAPTER 1, TITLE 6 SO AS TO
PROVIDE A METHOD TO EFFECTUATE THE TRANSFER OF WATER SYSTEMS BETWEEN POLITICAL
SUBDIVISIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1.  Chapter 1, Title 6 of the S.C.
Code is amended by adding:
Article 11
Transfer of
Water Systems Between Political Subdivisions
    Section
6-1-3000.  (A) For purposes of this
article:
       (1) "Eligible system transferor" means
a political subdivision of this State that:
  (a) owns and operates a water system;
  (b) has, according to the most recent
decennial census, fewer than two thousand five hundred individual residents
within its corporate boundaries;
  (c) acquires water for its water system
from a supplying subdivision by long-term contract with that supplying
subdivision; and
  (d) is in arrears to its supplying
subdivision for water previously supplied in an amount greater than the total
amount invoiced to it by the supplying subdivision for the preceding three
months.
       (2) "Long-term contract" means a
contract for the wholesale supply of water to a water system, for which the
period from its effective date until its stated expiration date is greater than
thirty years.
       (3) "Political subdivision" means a
municipality or county in this State or a special purpose district created by
enactment of the General Assembly.
       (4) "Supplying subdivision" means
a political subdivision that supplies water pursuant to a long-term contract to
another political subdivision.
       (5) "Water system" means a system owned
by a political subdivision that makes water available for distribution to
residents and businesses within the corporate boundaries of that political
subdivision. If the system is operated as a combined system with wastewater
collection, then "water system" includes all components of the combined system.
    Section
6-1-3010.  (A) Notwithstanding
another provision of law, an eligible system transferor may, by resolution
adopted by majority vote of its governing body, transfer its water system to
its supplying subdivision without a referendum, on such terms as the governing
body of the eligible system transferor and its supplying subdivision may agree
in writing.
    (B) Any transfer must be full and in
fee simple. Upon transfer, all rights of ownership and rights to operate,
manage, direct, and control the transferred water system must be held by the
transferee supplying subdivision and the eligible system transferor political
subdivision and its governing body has no further rights or authority with
respect to the transferred water system.
    (C) The transferred water system becomes
a part of the water system of the transferee supplying subdivision for all
purposes of law.
    (D) For rate-setting purposes, the
transferee supplying subdivision may establish the area of the transferred water
system and any area into which it expands using the assets of the transferred water
system as a separate cost-and-revenue accounting center, the revenues from
which must be at least sufficient to cover all costs associated with it,
including an allocable share of administrative and overhead costs of the supplying
subdivision's water system. For purposes of that cost-and-revenue accounting of
the transferred water system, the amortization over an appropriate period and
at fair market interest rates of any amount that the transferee supplying subdivision
pays to the eligible system transferor, including any debt that it assumes or
any debt owed to it that it forbears, may be included as a cost of that center.
    (E) If agreed at the time of transfer
by the eligible system transferor and the transferee supplying subdivision in
the instrument of transfer, the eligible system transferor may grant to the
transferee supplying subdivision an exclusive franchise to operate a water system
within the corporate boundaries of the eligible system transferor for no more
than ninety-nine years.
    (F) If agreed at the time of transfer
by the eligible system transferor and the transferee supplying subdivision in
the instrument of transfer, the eligible system transferor may impose a
franchise fee on the transferee supplying subdivision as a percentage of gross
revenues actually received by the transferee supplying subdivision from
customers located within the corporate boundaries of the eligible system transferor;
provided, however, that:
       (1) the franchise fee shall not exceed ten
percent of the gross revenue actually received by the transferee supplying subdivision
from the customers located within the corporate boundaries of the eligible system
transferor; and
       (2) the franchise fee must be reflected
as a separate line item and identified as a charge imposed by the eligible system
transferor on each invoice that the transferee supplying subdivision sends to a
customer located within the corporate boundaries of the eligible system transferor.
    Section
6-1-3020.  (A) In every instance
where a transfer of a water system is authorized under the authority of this article,
after authorizing resolutions are adopted by the governing bodies of both the eligible
system transferor and the transferee supplying subdivision, the transferee supplying
subdivision must promptly file with the clerk of court of the county or counties
in which the eligible system transferor is located, with a copy of the
agreement of transfer authorized by those resolutions.
    (B) No action may be commenced after
the expiration of twenty-one days from the date of the filing that challenges
the consummation or effect of the transfer, and that transfer on the recorded
terms becomes incontestable.
    Section
6-1-3030.  (A) If, after a transfer
authorized by this article, the governing bodies of the eligible system transferor
and the transferee supplying subdivision mutually agree upon amendments to the
terms of transfer embodied in the transfer agreement, they may adopt and
effectuate those amendments in the same manner the transfer agreement was
adopted.
    (B) Any amendment must be recorded and
becomes incontestable pursuant to Section 6-1-3020.
SECTION
2.  This act takes effect upon approval by the Governor.
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This web page was last updated on April 22, 2026 at 11:01 AM