A bill

 

To amend the south carolina code of laws by enacting the "South Carolina Special Purpose District Accountability and Transparency Act" by adding Article 3 to Chapter 7, Title 11 so As to Create the Special Purpose district accountability office within the office of state auditor, to provide for its powers and duties, and to designate Article 1, Chapter 7, Title 11 As "General Provisions".

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  The General Assembly finds that:

    (1) South Carolina has more than two hundred and fifty special purpose districts performing essential governmental functions and funded through public taxation, fees, and public debt.

    (2) There is currently no centralized oversight structure ensuring transparency, accountability, or financial compliance by these districts.

    (3) The absence of mandatory audits, uniform reporting, enforcement authority, and statewide directory increases the risk of fraud, waste, and financial mismanagement.

    (4) Several states including Florida, Texas, and Colorado provide successful oversight models with annual audits, statewide directories, enforcement powers, and public facing transparency portals.

    (5) It is necessary for the General Assembly to establish a comprehensive accountability framework for South Carolina's special purpose districts.

 

SECTION 2.  This act may be cited as the "South Carolina Special Purpose District Accountability and Transparency Act."

 

SECTION 3.  Chapter 7, Title 11 of the S.C. Code is amended by adding:

 

Article 3

 

Special Purpose District Accountability Office

 

    Section 11-7-100.  As used in this article:

    (1) "Special purpose district" or "district" means any local political subdivision created by act of the General Assembly or by county ordinance for providing limited governmental services including, but not limited to, water, sewer, fire protection, recreation, conservation, hospital, or public works districts.

    (2) "Office" means the South Carolina Special District Accountability Office.

    (3) "Governing board" means the board of commissioners or governing authority of a district.

    (4) "Annual financial report" means a standardized report format prescribed by the office.

    (5) "Annual audit" means an independent audit performed in accordance with Government Auditing Standards.

 

    Section 11-7-110.  (A) There is created within the office of the State Auditor the Special District Accountability Office (SDAO).

    (B) The office must:

       (1) maintain a public statewide directory of all special purpose districts;

       (2) collect and publish annual budgets, financial reports, audits, millage rates, fees, revenues, expenditures, and debt disclosures;

       (3) maintain a public transparency portal providing online access to all required filings;

       (4) monitor and enforce district compliance with this article;

       (5) provide reporting forms, instructions, guidance, and training materials for district officials; and

       (6) issue notices of delinquency and noncompliance.

 

    Section 11-7-120.  (A) Each district must file electronically with the office annually:

       (1) the adopted annual budget;

       (2) the annual financial report in a format prescribed by the office;

       (3) a certified annual audit if the district:

           (a) receives or expends more than two hundred fifty thousand dollars per fiscal year;

           (b) levies property taxes or assessments; or

           (c) maintains outstanding debt obligations;

       (4) a list of current board members, their terms, vacancies, and contact information;

       (5) a schedule of all fees, rates, assessments, and charges imposed;

       (6) a listing of all bonds, loans, leases, and debt service requirements; and

       (7) copies of all current intergovernmental agreements.

    (B) Reports must be filed within six months after the close of the district's fiscal year.

    (C) All documents filed under this section must be posted publicly on the transparency portal within thirty days of submission.

 

    Section 11-7-130.  (A) The office must maintain an online portal providing:

       (1) a statewide searchable database of all districts;

       (2) access to all required filings;

       (3) classification of each district as compliant, delinquent, or noncompliant;

       (4) historical submissions for a minimum of ten years; and

       (5) district boundary maps when available.

    (B) Each district must either maintain its own website posting these documents or link directly to the portal.

 

    Section 11-7-140.  (A) Upon failure to submit required reports, the office must issue a Notice of Delinquency.

    (B) If the delinquency is not cured within sixty days, the district must be designated noncompliant and subject to:

       (1) withholding of state disbursements administered by any agency;

       (2) suspension of authority to incur new debt or enter long term obligations;

       (3) mandatory financial review conducted by the State Auditor; and

       (4) referral to the Attorney General for enforcement action when appropriate.

    (C) Continued noncompliance for one hundred eighty days may result in a recommendation to the General Assembly for:

       (1) suspension of the governing board;

       (2) appointment of a temporary financial manager; and

       (3) dissolution or consolidation of the district.

 

    Section 11-7-145.  (A) The Special District Accountability Office is the exclusive state enforcement authority for violations of this chapter.

    (B) No other state agency, county auditor, county council, or local government entity may assume enforcement responsibilities unless expressly provided in this chapter.

    (C) The Attorney General must provide legal enforcement upon referral by the office.

    (D) The State Auditor must conduct mandatory audits if requested by the office.

 

    Section 11-7-150.  (A) Each district board member must complete annual training approved by the office on:

        (1) financial reporting requirements;

        (2) ethics and fiduciary duties;

        (3) public transparency obligations; and

        (4) open meetings and records laws.

    (B)Training must be completed within one year of assuming office.

 

    Section 11-7-160.  The office may promulgate regulations to carry out the provisions of this article, including reporting formats, audit standards, compliance procedures, penalties, and training content.

 

SECTION 4.  The existing sections of Chapter 7, Title 11 are designated as Article 1, entitled "General Provisions."

 

SECTION 5.  This act takes effect July 1, 2026.

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