Oil companies eyed to fund South Carolina roads

| 1/26/2005

A South Carolina state lawmaker is pursuing legislation that would charge oil companies serving fuel stations in the state a 5 percent franchise fee to help pay for road work.

The bill, offered by Sen. Scott Richardson, R-Hilton Head, would raise $268 million a year for the South Carolina Department of Transportation, the Beaufort Gazette reported.

Intended as an alternative to raising the state’s fuel tax on drivers, the 5-percent fee would be charged monthly to companies based on the amount of fuel sold to fuel stations, with the revenue earmarked for road improvements.

“It basically has the same effect as the sales tax,” said Michael Covington, director of governmental affairs for SCDOT.

While the state’s fuel tax is paid at the pump, the franchise fee would be charged to about 45 oil companies doing business in the state.

A 2002 review by the Transportation Department found a $560 million annual shortfall for maintenance on the state’s roads and $1.3 billion shortage for new construction.

Half of the money generated through the franchise fee, about $134 million a year, would go toward repairs, with a primary focus on repaving roads.

The other $134 million would go toward the state’s larger road improvement projects.

The bill – S101 – also would allow SCDOT to sell bonds earmarking the franchise fee as a steady revenue source.

Richardson’s proposal would require road dollars be spread out around the state.

The bill is in the Senate Finance Committee.