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Leatherman's Hand in $50 Million Transportation Cookie Jar

S.C. Sen. Hugh Leatherman, who wields more power than most legislators, apparently is still in the driver’s seat on a compromise bill that would direct $50 million to the state Transportation Infrastructure Bank, which is governed by a board that includes the Florence County Republican.

House and Senate members on a conference committee on H. 3360 could ask their respective chambers today for permission for “free conference” powers on the bill, which would give the panel more latitude in making final changes to the legislation, Rep. Joe Daning, R-Berkeley and a committee member, told The Nerve Monday. The committee on Monday decided to seek the additional latitude on the bill, he said.

The committee is considering a three-part, $141 million-plus plan to fund road and bridge improvements for next fiscal year, which starts July 1, according to Daning and information provided Monday to The Nerve from the Senate Transportation Committee. The compromise bill had not been signed by committee members as of Monday afternoon, a committee staffer told The Nerve.

One of the remaining issues is how much authority the infrastructure bank would have in determining which projects to fund with $50 million that it would receive through the state Department of Transportation (DOT). Under a separate bill (S. 731) sponsored by Leatherman that he successfully pushed earlier this month as an amendment to H. 3360, the DOT would be required to submit a list of bridge and road projects to the infrastructure bank for “its consideration,” though the bank wouldn’t necessarily  be required to adhere to the list.

A subsequent amended House version of H. 3360 added language requiring the infrastructure bank to spend the money only on projects approved by the state Department of Transportation Commission and in accordance with criteria specified for state projects under a 2007 law.

Daning said Monday he thought the House language would be kept in the final bill version, though according to information provided Monday to The Nerve by Senate Transportation Committee staff, the language in Leatherman’s proposal was retained, with the addition that any proposals by the infrastructure bank to sell state bonds for road or bridge projects must be approved by the state Joint Bond Review Committee (JBRC).

Leatherman, who is chairman of the budget-writing Senate Finance Committee, also chairs the 10-member JBRC. The Nerve in April reported that Leatherman is a former president of and current minority stockholder in Florence Concrete Products, which has received more than $30 million in state funding since 1993, mainly through the Department of Transportation.

Daning said it was his understanding that the proposed $50 million from DOT to the infrastructure bank would be used by the bank to leverage $500 million in bonds. The bank board in August approved an additional $138 million for the proposed controversial extension of Interstate 526 in Charleston County, committing funds it would have to borrow after 2020 because it had used up its bonding capacity, Coastal Conservation League Executive Director Dana Beach said publicly at the time.

Both the House and Senate versions of H. 3360 would ban the infrastructure bank from using the new money for projects approved by the bank before July 1 of this year, though it wasn’t immediately known Monday if the conference committee planned to retain that language.

Critics say the infrastructure bank board over the past 16 years has funneled several billions of dollars mainly to the Charleston, Myrtle Beach and Greenville areas - decisions, they contend, were based primarily on political considerations instead of objective criteria.

The Department of Transportation has estimated the state will need an additional $29 billion over the next 20 years to maintain the state’s existing roads and bridges. 

Asked Monday if he were concerned about giving the infrastructure bank board wide discretion in spending the proposed $50 million under H. 3360, Daning replied: “I’m not sure. I’ll have to listen to the debate tomorrow (on the House floor).”

Daning said, though, he believes that the infrastructure bank should have “some latitude” on spending decisions, particularly when it comes to projects in rural counties, noting, “There are a lot of projects in rural counties that aren’t getting done.”

Under a proposed version of H. 3360 under consideration by the conference committee, the $50 million would be used for “bridge replacement, rehabilitation projects, and expansions and improvements to mainline interstates,” according to information provided Monday by Senate Transportation Committee staff. That money would be contingent upon an appropriation by the General Assembly in the fiscal 2014 state budget.

The Legislature is expected to vote this week on a compromise state budget bill from a separate conference committee that includes Leatherman.

Two other main parts of the compromise transportation bill under consideration include dedicating half of the state sales tax on motor vehicle purchases – currently capped at $300 – to repair secondary roads, which Daning said would raise about $41.4 million; and $50 million in projected surplus general funds on bridge repairs.

Meanwhile, the state Supreme Court in a ruling last week upheld the Legislature’s appointment control of the infrastructure bank board. Under state law, four of the seven board members are appointed by the House speaker – currently Rep. Bobby Harrell, R-Charleston and a supporter of the I-526 extension project – and the Senate president pro tempore, a seat held for years by former Sen. Glenn McConnell, a Charleston Republican who became the lieutenant governor last year with the resignation of Ken Ard.

The governor makes two appointments to the board, one of whom serves as the board chairman; the Department of Transportation Commission chairman automatically is appointed to the panel by virtue of his position.

Besides Leatherman, the other lawmaker on the infrastructure bank board is Rep. Chip Limehouse, R-Charleston and a member of the Charleston County Aviation Authority. The Nerve in May revealed that companies with ties to Limehouse’s uncle run three hotels and an air charter service at or near Charleston International Airport, which is owned and operated by the aviation authority.

The Greenville-based South Carolina Public Interest Foundation, a not-for-profit government watchdog organization, contended in a lawsuit against the state, infrastructure bank, Harrell in his capacity as House speaker, and current Senate President Pro Tempore John Courson, R-Richland, that Leatherman’s and Limehouse’s service on the infrastructure bank board violates the state constitutional ban on dual-office holding.

But the Supreme Court disagreed, ruling there was a “constitutional nexus between service on the Board and service in the legislature.” The majority of justices said the General Assembly has the power under the S.C. Constitution to “set the terms and conditions of general obligation debt of the State,” and that the infrastructure bank board similarly has the power to “borrow money through issuance of bonds and other forms of indebtedness.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and on Twitter @thenervesc.

 

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Rep. Joe Daning South Carolina Public Interest Foundation Sen. John Courson Lt. Gov. Glenn McConnell Ken Ard Sen. Hugh Leatherman Rep. Chip Limehouse