What the House Did on the Senate Roads Plan

South Carolina roads legislature

STILL NO TAX INCREASE, BUT STILL NO ACTUAL REFORM

The House took up the Senate roads plan (H.3579) on Wednesday, April 13, and amended the bill once again. Debate was extensive, but all the votes related to the bill were lopsided.

Representatives Jonathon Hill (R-Anderson) and Rick Quinn (R-Lexington) each proposed amendments that would abolish the Department of Transportation (DOT) Commission in favor of a DOT fully run by a secretary appointed by the governor. Rep. Hill’s amendment also abolished the State Transportation Infrastructure Bank (STIB) and imposed new transparency requirements on DOT.

The House vast majority ignored these reforms and instead adopted an amendment proposed by the House leadership by a vote of 113 to 6. That amendment makes no substantial improvements to the Senate road plan and some of its provisions are actually worse.

What does the House amendment do?

Revenue: The House amendment removes the Senate plan’s requirement that $400 million be annually appropriated from the state’s general fund revenues into the State Highway Fund. The amendment adds language requiring 100 percent of revenues from the sales/use/taxes/titling of a motor vehicle be dedicated to the DOT. Current law requires 50 percent of these revenues go to roads, specifically the State Non-Federal Aid Highway Fund.

DOT Reform: Like the Senate plan, the House amendment has the governor appoint all eight members of the DOT commission and then has the commission appoint the DOT secretary. As in the Senate plan, the governor would only be able to remove commissioners for cause (malfeasance, misfeasance, conflicts of interest, etc.), not at will. Unlike the Senate plan, the governor is not required to be consulted by the commission when it appoints the secretary. The House amendment also requires the advice and consent of the entire General Assembly, by a roll call vote in each chamber, on the appointment of commissioners and the Secretary. The Senate plan only requires the advice and consent of the Senate on these appointments.

State Infrastructure Bank:  Again, like the Senate plan, the House plan leaves the structure and powers of the State Transportation Infrastructure Bank (STIB) intact. The STIB board will simply have to get the approval of the DOT Commission before it finances a qualified project. One new feature in the House plan is that the cost standard for a project to qualify for STIB financing is lowered from $100 million to $25 million in costs. This will allow more counties to expand existing roads or build new roads with STIB financing. Another new feature in the House amendment is the requirement that STIB use the Act 114 project prioritization requirements when prioritizing projects to finance. The General Assembly can, however, by joint resolution allow the STIB to put aside the prioritization requirements for a specific project.

DOT Internal Auditor: One component in the House amendment absent from the Senate plan is the placement of the DOT’s chief internal auditor under the authority of the State Auditor rather than the DOT Commission. The current structure has been criticized for limiting the independence of the internal auditor and inhibiting the internal auditor from doing his job.

What the amendment doesn’t do

Just like the Senate plan, the House amendment falls far short of genuine reform. The amendment fails to achieve accountability at the DOT. Unlike the House or Senate proposals, a DOT run by a secretary appointed by the governor would establish clear accountability for the department with the governor.

A commission is far more difficult for an executive to hold accountable than one secretary. The task is made nearly impossible when commission members cannot be removed by the executive at will. Essentially once the commissioners are appointed, the governor will have little control over the commission or input into its actions. Further, the more legislators are involved in the process of confirmation of commissioners and the secretary, the more politicized and less accountable the selection process will become. Citizens are already represented by senators when they give their advice and consent to gubernatorial appointees: there is no need to add House members to the mix as well.

The STIB isn’t any more reformed by the House amendment than it was by the Senate plan, and it certainly isn’t abolished as it would be by genuine reform. Requiring the DOT commission approve STIB financing decisions is likely to amount to little more than a rubber stamp process. And allowing the STIB to finance lower costs projects will only lead to the STIB financing more questionable road expansions. As more counties become eligible to have their expansion projects financed more politicians will wish to preserve the STIB so they can get their piece of the pie.

There are no meaningful transparency measures for DOT in the House plan, a vital measure for establishing accountability and ensuring the department stays on mission. A full reform plan would include provisions (like those in Rep. Hill’s amendment) requiring transparency in all DOT spending and contracts. The process for all state contracts for road construction, maintenance, or repair should be open to public inspection, and the DOT should also make publicly available detailed descriptions of its expenditures, including all the road projects in which it is currently engaged.

What next?

The amended H.3579 will return to the Senate, which will likely non-concur with the House amendments. The House will then likely insist on its amendments,and the bill will go to a conference committee consisting of 3 members of each body. The conferees will first debate on whose version of the bill should become the official text. If they can’t reach an agreement the conferees will ask their respective chambers for free conference powers – the ability of the conferees to draft compromise language for the disputed sections of the bill.

If the conference committee is able to produce a compromise conference version of the legislation, that bill will go to each chamber for an up or down vote.

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