2023 South Carolina Code of Laws › Title 5 - Municipal Corporations › Chapter 3 - Change Of Corporate Limits › Section 5-3-312. Plan to balance equities and interest.

The plan formulated under Sections 5-3-300 through 5-3-315 shall seek to balance the equities and interests of the residents and taxpayers of the annexed area and of the area of the district not annexed. The plan may be formulated with regard to any factors bearing on such balance of equities and interests in accordance with the following:
(1) The plan may provide for certain service contracts to be entered into between the municipality and the district. The municipality has the right, in its sole discretion, to determine whether the municipality will provide service to the area annexed directly or by contract with the district. At the option of the district, the plan may provide for service contracts by which the municipality will provide service to residents of unannexed areas of the district.
(2) In any case in which less than the total service area of the district will be annexed by the municipality, the plan shall:
(a) protect the district's ability to serve the residents of the district's unannexed area economically and efficiently and protect the district's ability to continue to expand or otherwise make service available throughout its unannexed area;
(b) protect the ability of the municipality to serve residents of the annexed area of the district economically and efficiently;
(c) protect the rights of the district's bondholders.
(3) To carry out the requirements of subitem (a) of item (2) above, the plan shall require the municipality to assume contractually the obligation to pay debt service on an amount of the district's bonded indebtedness or other obligations including lease purchase obligations adequate to offset the district's loss of net service revenue or tax revenue from the area annexed, in accordance with the following:
(a) specifically included within this amount must be revenues, if any, projected under the provisions of any governmentally approved plan promulgated pursuant to federal pollution control legislation;
(b) as the district retires bonded indebtedness existing at the time of annexation, the municipality's payment obligation under this provision must be reduced by the proportion which the principal amount of the indebtedness retired bears to the total principal amount of bonded indebtedness of the district at the time of annexation;
(c) as used herein, net service revenue means revenue from fees, charges, and all other sources, attributable to service provided in the area annexed, less the actual cost of operating and maintaining the system or facilities needed to serve that area; however, debt service or other payments required to finance capital assets may not be considered to be part of such operating and maintenance expenses. Tax revenue means taxes collected from property owners within the annexed area.
(4) Under any plan whereby the district must disconnect or reintegrate its facilities, the municipality shall bear the reasonable cost of such disconnection or reintegration. In the event that the plan contemplates that the district will continue to provide service by contract within the incorporated limits of the municipality, the municipality shall agree to provide the district with all permits or authority necessary to use municipal streets, alleys, ways, and other public spaces for the provision of such service.
(5) In no event may any provision be incorporated in any plan which will impair the rights of bondholders, or which will impair the statutory liens created by Section 6-21-330 or Title 7 of the United States Code, Section 1926(b), or which will accelerate the requirement to repay bonds, or which would violate the conditions of any grant.
(6) In no event may any plan require that the residents in the annexed area be taxed or assessed by both the municipality and the district for the provision of the same service, except as provided by the laws of this State.
(7) Absent consent of the district, neither annexation nor any plan hereunder entitles the municipality to any cash, securities, or other liquid assets of any kind of the district.
(8) Subject to the provisions of Article VIII, Section 15 of the Constitution of this State, the service provided or made available through any district may not be curtailed or limited by inclusion of the area served by the district within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area in a manner which would impair any of the district revenue bonds.
HISTORY: 1988 Act No. 626, Section 4; 2000 Act No. 250, Section 3.