SCRA: Key Player in Proposed State Agency

May 18, 2010

Investigative Reports

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The NerveA largely under-the-radar, state-created agency would play a prominent role in a proposed state agency aimed at bringing businesses to 17 counties near Interstate 95, under an amended S.C. Senate bill and budget proviso.

The bill (S. 1323), sponsored by Sen. John Matthews, D-Orangeburg, would allow the new agency, which would be called the “I-95 Corridor Authority,”  to hire the S.C. Research Authority (SCRA) to help “execute the recommendations” of a study published last year dealing with economic development and other issues along the corridor.

The bill, introduced March 25, passed the Senate on April 30 – a day senators were not actually present at the State House, The Nerve reported earlier – and is now in the House Ways and Means Committee.

Matthews told The Nerve in a recent interview that he hopes the House will pass his bill this year, noting, “Most people I talk to think it’s a good concept.”

Matthews, whose district is located in the I-95 corridor, earlier said that to his knowledge, the proposed authority has no counterpart in South Carolina or the United States. He and other supporters contend it is needed to provide an economic  jump-start to a large area of the state that historically has suffered from high poverty and unemployment.

Under Matthews’ bill, taxpayers could wind up funding incentives to businesses that locate in the corridor.

The original version of his bill didn’t mention the SCRA. It was amended April 14 in the Senate Finance Committee, chaired by Hugh Leatherman, R-Florence, one of the bill’s seven co-sponsors and whose district is in the corridor.

A  Senate budget proviso (89.143) proposed later by Leatherman and bill co-sponsor Sen. John Land, D-Clarendon, would funnel $3 million in tobacco settlement money next fiscal year to the SCRA to “promote health-related issues” along the I-95 corridor.  Land, whose district also is in the corridor, told The Nerve recently that the money would be used to bring new water and sewer lines to the area.

“It would comply with the legislative intent of it,” Land said of the infrastructure proviso. “It would be used for clean water and sewer.”

Land said the corridor authority is needed, noting, “We’ve been trying to pull ourselves up by our own bootstraps for a long, long time, but the reason we’ve not progressed … is we just don’t have the infrastructure, and we don’t have the funds for this infrastructure.”

Asked if the settlement money could go for water and sewer lines to benefit a single company, Land replied, “I reckon it could, but I would hope the (corridor) authority would not approve the expenditure on one unless all of us agreed that it was so vital.”

Any tobacco settlement award would require a double match from the grant recipient under the proviso, which passed the Senate on April 29 as part of the chamber’s proposed 2010-11 state budget.  Senate and House leaders last week reportedly were working out differences on a  $21.1-billion state budget, which may or may not retain the proviso in the final version.

Matthews’ bill also would give the proposed corridor authority “state funds as appropriated by the General Assembly.” Matthews told The Nerve that in addition, the authority would seek federal grants and private donations.

Under an earlier amendment, proposed by Land and Leatherman, to a House bill raising the state’s cigarette tax by 50 cents, $3 million in annual tobacco settlement money would have been allocated directly to the proposed corridor authority. But the House stripped that provision out of the final version of the bill.

“We were afraid that if we forced it on them (lawmakers), we would lose two or three (veto) override votes,” Land said before the General Assembly last week voted to override Gov. Mark Sanford’s veto of the cigarette tax increase.

Leatherman, who initially proposed giving $3.5 million out of the proposed cigarette tax increase to the corridor authority for unspecified “infrastructure improvements,” did not respond last week to written questions from The Nerve.

“A Good Partner”

Matthews’ bill would allow the SCRA, created by the General  Assembly in 1983 in part to, according to its enabling legislation, “promote the development of high technology industries and research facilities in South Carolina,” to help the proposed corridor authority with “technology-based economic development.”

That would include, but would not be limited to, according the bill:

  • Testing and deployment of bio-technology to “remediate brown fields,” or environmentally contaminated and abandoned industrial or commercial property.
  • Crop and algae development for bio-fuels, water purification and freshwater “aquaculture.”
  • Agriculture waste-to-energy applications.

The Columbia-based SCRA, described in its enabling legislation as a “corporation owned completely by the people of the state,” was identified two years ago as a key player in House Speaker Bobby Harrell’s “knowledge-based economy” pyramid plan.  At least half of the tax-exempt organization’s board members represent public entities, including the state Department of Commerce and the S.C. Commission on Higher Education.

One of SCRA’s largest ongoing projects is the development of three “innovation centers” that would commercialize research by Clemson, the University of South Carolina and Medical University of South Carolina.

SCRA CEO Bill Mahoney was “traveling and in meetings,” a spokeswoman told The Nerve last week, and was unavailable for comment for this story.

In an initial Nerve story on the proposed corridor authority published April 14, Matthews said the SCRA would be a “consulting entity,” though it had not been added then to the bill. Matthews in his most recent interview earlier this month could not provide specifics on SCRA’s exact role under his amended bill, such as whether the organization would try to recruit companies to the corridor.

“Those details will come after the (corridor) authority is in place,” he said.

Matthews said his bill does not require the proposed authority to hire the SCRA, though no other “consulting entities” are mentioned.

“We thought they would be a good partner,” Matthews said of the SCRA. “They have been focusing on that I-95 corridor for a while.”

Asked earlier if the proposed corridor authority could provide taxpayer-funded incentives to specific companies that locate in the corridor, Matthews replied: “They would be given the authority to do a variety of things to go along with economic development. They would be doing things the state has done in the past.”

Full-Fledged State Agency

Under the bill, the corridor authority, described as a “public body, politic and corporate, and an agency of the state, “ would be controlled by 13 voting members of a 19-member board of directors, the majority of whom would be appointed by lawmakers in the affected counties. The board, according to the bill, would “appoint officers, agents, employees and consultants; prescribe their duties; and fix their compensation.”

Leatherman, as the Senate Finance Committee chairman, and Dan Cooper, R-Anderson, the House Ways and Means Committee chairman, would each appoint one member to the board.

The bill would allow the corridor authority to lease or buy and sell land and to enter into contracts with individuals, businesses and private “entities” that are “considered desirable in the furtherance of (the authority’s) purpose.”

The bill mandates that the authority “oversee the implementation of the recommendations” of the “I-95 Corridor Human Needs Assessment” report published in December. That report was prepared by a North Carolina-based research company for Francis Marion University and S.C. State University, which, under the bill, would have one voting member each – its president or designee – on the authority’s board of directors.

The report, prepared by RTI International, headquartered in Research Triangle Park, identifies six “fundamental needs in the region,” including “creating a shared vision for the region’s economic opportunities, and aligning resources with that vision will allow decision makers to leverage greater state and national resources for investment in the corridor.”

The report identifies 17 counties in the corridor: Bamberg, Beaufort, Calhoun, Colleton, Clarendon, Darlington, Dillon, Dorchester, Florence, Hampton, Jasper, Lee, Marion, Marlboro, Orangeburg, Sumter and Williamsburg.

Matthews said under his bill, all of the counties identified in the report would meet the criteria to be included in the proposed corridor authority.

Besides Land and Leatherman, the other five co-sponsors of the bill are Sens. Dick Elliott, D-Horry; Gerald Malloy, D-Darlington; Phil Leventis, D-Sumter;  Yancey McGill, D-Williamsburg; and Kent Williams, D-Marion.  All or parts of their districts are located in the corridor.

State lawmakers aren’t the only officials focusing on the corridor. Democratic U.S. Congressman James Clyburn, who represents part of the corridor, hosted the first “I-95 Corridor Summit” on Saturday at Lake Marion High School.  The event attracted more than 100 visitors, including local government, health and college officials, according to an article in the Orangeburg Times and Democrat.

Reach Brundrett at (803) 779-5022, ext. 106, or rick@scpolicycouncil.com