House Speaker Greg Stumbo, left, is joined by Auditor Adam Edelen to announce a bill that would firm up reporting requirements for special districts, such as volunteer fire departments, water and sewer districts, and airport and health department boards.

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FRANKFORT – House Speaker Greg Stumbo and state Auditor Adam Edelen announced today that a comprehensive effort to bring greater transparency to special districts would become House Bill 1 during the 2013 Regular Session.

“Both the House and Senate reserve the lower bill numbers for their highest priorities, which underscores the importance we have for this issue,” said Speaker Stumbo, D-Prestonsburg. “The legislature has debated reform before in piecemeal fashion, but the auditor’s recent report on special districts is the first time anyone has gotten a comprehensive look at their true impact on the state. House Bill 1 will make sure these entities conform to the same rules that have long applied to local and state governments.”

Auditor Edelen’s office earlier this month unveiled a public database and accompanying report that shine new light on a $2.7 billion layer of government that has operated in the shadows for decades. The auditor’s office identified more than 1,200 special districts, ranging from water, sewer and fire districts to airport and health department boards and more. They spend roughly the same as what the state spends on elementary and secondary education.

“In a time in which accountability demands precision, the people of Kentucky deserve a system of oversight for what very well may be the second-largest level of government in Kentucky,” Auditor Edelen said during a press conference with Speaker Stumbo. “What we have done today is an extraordinarily important first step in making sure we’ve got that kind of reform.”

Both Speaker Stumbo and Auditor Edelen recognized the good work done by the vast majority of the districts, and noted that often the law itself was a hindrance, with more than 1,000 statutes governing one or more aspects of special districts. In some cases, for example, there is no way to dissolve certain special districts, while there are about 50 different ways to form one.

While the legislation is still being finalized, both officials said it would:

· Clean up the statutes that govern special districts;

· Add teeth to compel compliance with reporting requirements;

· Create an online centralized registry for special districts to report their financials; and

· Establish education and ethics for special district board members and staff.

“We just want to clarify the rules,” Speaker Stumbo said.

House Bill 1 will be formally introduced when the 2013 Regular Session begins Jan. 8.