South Carolina H 5568: Public water systems

Bill Text

2025-2026 Bill 5568 Text of Previous Version (Apr. 22, 2026) - South Carolina Legislature Online 

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