JBRC Approves STIB Projects

The Joint Bond Review Committee (JBRC) met this week, and among the items on the agenda was the approval of funding for recently approved SC Transportation Infrastructure Bank (STIB) projects. You will recall the projects (listed below) were approved by the STIB Board and SCDOT Commission last month. The JBRC was the final step in the process. View JBRC docs here. 

1. SC 41 Widening Project in Charleston County
2. Whiskey Road Connector Project in the City of Aiken
3. SC 246 Widening Project in Greenwood County
4. I‐77 @ Exit 90 (Carowinds) Interchange Upgrade in York County

However, the approval of the projects did not go without some discussion, which led to a lengthy conversation about Bank processes and financing mechanisms. 

Rep. Gilda Cobb-Hunter (D-Orangeburg) requested more information from the Bank on the recently announced rural application program, which aims to make STIB funding more accessible to rural counties. You will recall that Rep. Cobb-Hunter co-chaired a special JBRC subcommittee (established in 2019) tasked with assessing the accessibility of the STIB to rural counties.

STIB Board Chairman John White said the program intends to create a "more even playing field" for rural areas. He noted that two of the projects approved by the STIB Board since 2019 classify as rural (I-95 Exit 3 in Jasper County and SC 246 Widening in Greenwood County). However, he mentioned that Secretary Hall sent a letter last week which included some recommendations on the rural program, and they were in communication. 

Rep. Cobb-Hunter expressed confusion with the program's creation, citing a lack of response to the JBRC subcommittee following testimony that stakeholders provided. She reiterated that she was not opposed to the four projects up for JBRC approval, but the overall STIB process in general and the lack of attention to rural areas. She encouraged Chairman White to consider Secretary Hall's recommendations before the rural application program is officially rolled out in 2023. 

Senator Nikki Setzler (D-Lexington) inquired about the Bank's $312 million bonding capacity and ability to accept new applications. 

Chairman White noted that the SCDOT has requested funding for bridge projects in Allendale and Orangeburg, the City of Columbia is seeking financing to realign railroad tracks, and the Bank's plans to implement a rural program in 2023. However, he said that the Bank must be cautious with the current economy to ensure its solvency. 

Chairman White said that from a citizen's perspective, everyone hears about how much money the state has, how the SCDOT has paid off debt, and the mentality that it is better to pay in cash than acquire debt. But the reality is local governments are knocking on the STIB's door, asking for funding. 

As debt capacity is reduced, so is the Bank's ability to fund projects. He said the legislature could consider a financing situation to allow the STIB to use state dollars and get a greater worth through bonding. (Similar to what was done with Act 98.) 

Rep. Gary Simrill (R-York) noted the role that Act 40 played in aligning the priorities of the SCDOT and STIB. He pointed out that lawsuits and COVID have stymied the Bank in recent years, but in all, the goal is to have the Bank align priorities with those of SCDOT. 

Rep. Setzler requested that the JBRC hold a meeting in the future to hear directly from the STIB; however, no plans for a meeting were formally discussed on Tuesday.

House Continues Economic Development & Utility Modernization Talks

The SC House Economic Development and Utility Modernization Ad-hoc Committee met again this week to hear testimony from the public and the Office of Regulatory Staff (ORS). 

ORS Executive Director, Nanette Edwards, told the committee that the state has been able to accelerate the deployment of broadband infrastructure thanks to recent investments by the legislature. Edwards also touted the permitting process and SCDOT’s work with ORS to ease the administration of broadband permitting. She said the state needs to continue leveraging existing assets and infrastructure.  

She pointed out that from the investor-owned utility perspective, when it comes to rates/rate increases, federal, state, and local taxes flow through. Therefore, there could be some opportunities with tax relief when it comes to attracting specific types of infrastructure. She added that there were several opportunities with the federal government, including the recently passed Inflation Reduction Act that provides federal funding to states to implement programs and reduce energy costs. 

Committee Chairman Jay West (R-Anderson) said that the committee plans to work to meet again next month to begin discussions on workforce development. 

The Economic Development & Utility Modernization Ad-hoc Committee includes Representatives Nathan Ballentine (R-Richland); Sylleste Davis (R-Berkeley); Lee Hewitt (R-Georgetown); Kimberly Johnson (D-Clarendon); Roger Kirby (D - Florence); Steven Long (R-Spartanburg); Brandon Newton (R-Lancaster); Russell Ott (D-Calhoun); Mark Smith (R-Berkeley); Leon Stavrinakis (D-Charleston); and Deon Tedder (D-Charleston). 

SCDOT is Debt Free

Earlier this week, SCDOT officials announced the final payment on the agency’s outstanding highway bonds. By paying off all outstanding debt, including State Infrastructure Bank loans, the agency is saving money on future interest payments, and that money can be reinvested into ongoing projects. 

Secretary of Transportation Christy Hall said, “I’m proud to announce that we have reached this significant milestone. We are grateful to Governor McMaster and the South Carolina General Assembly for their continued investment in our work, and we take seriously our responsibility to be responsible stewards for the people of South Carolina. We appreciate the support of our colleagues at the State Treasurer’s Office as we continue to plan strategically for the future of the agency.” 

With this announcement, the SCDOT becomes one of six state departments of transportation in the nation with no outstanding highway bonds or loans. This announcement follows the early repayment of loans to the State Infrastructure Bank in December 2021. By using one-time funding, SCDOT saved $9.2 million in future principal and interest payments. 

With more financial security, one of the agency’s focuses will be on the reconstruction of I-256 between Mt. Pleasant and West Ashley, among others. Read the full press release here. 

BMW Investing $1.7B to Build EVs in SC

BMW announced Wednesday its plans to begin making electronic vehicles at the plant in Spartanburg and also plans to build a new battery assembly facility.

The company announced a $1.7 billion investment, including $1 billion to prepare for the production of the electric vehicles in Spartanburg and $700 million to build the new high-voltage battery assembly facility in Woodruff.

Company officials said BMW partnered with Envision AESC, which will build a new battery cell factory in South Carolina to supply the plant in Spartanburg. 

BMW said they expect at least six fully electric BMW models to be built in South Carolina by 2030.