LITTLE ROCK — The House speaker announced his support Thursday for a package of incentives for Big River Steel to build a $1.1 billion steel mill in Mississippi County as details of the deal surfaced in legislation.
House Speaker Davy Carter, R-Cabot, said he is urging House members to get behind the proposal, which is contingent upon legislative approval of a $125 million bond issue.
"I think we ought to approve the bonds and to help that part of the state that’s been struggling for so long. It’s easy to forget that that part of the state for 100 years paid the bills around the state, and it’s on hard times now," Carter said.
Northeastern Arkansas has a long history of agricultural production and was formerly home to a major Air Force base near Blytheville.
"I think we’ve got an opportunity here to try to inject some light in the area, so I hope to see the project approved," he said.
Carter said Gov. Mike Beebe, state economic development and finance officials and other experts who have reviewed the deal have concluded that there is much more potential for an upside than a downside.
"We know what the results will be if we do nothing," he said.
Carter said he will sign on as a co-sponsor to Senate Bill 820, which was amended this week to include 52 pages of details laying out the terms and conditions of a proposed deal calling for the state to float a $125 million bond issue and provide tax credits and other incentives to the project. Principles of Big River Steel say the operation will employ more than 500 workers and pay them an average of $70,000 a year.
The mill would have to be producing steel by the spring of 2016 to qualify for the incentives and would have to report annually that it is maintaining that and other requirements to keep them.
The bond issue requires legislative approval under Amendment 82, the so-called superproject amendment approved by voters in 2004, and would allow for lower financing rates for a $50 million loan and $75 million in grants and incentives to begin the infrastructure for the project.
The amendment to SB 820, co-sponsored by Sen. David Burnett, D-Osceola, and Rep. Monte Hodges, D-Blytheville, also includes a copy of the agreement between the state and Big River Steel.
To qualify for the benefits outlined, Big River Steel must:
—Begin its work prior to March 31, 2016, and be considered a qualified steel manufacturer.
—Have begun production after Jan. 1, 2013.
—Invest $500 million in the mill on property, machinery and equipment, motor vehicles, project planning, or construction labor costs.
—Employ 300 individuals in management, operations and maintenance of the steel mill.
—Pay wages equal to or in excess of $70,000 per year per employee.
Senate President Pro Tem Michael Lamoureux, R-Russellville, said Thursday he did not plan to sign on to SB 820 as a co-sponsor, but he said he was inclined to vote for it.
"I still have concerns like other people, but if we have two weeks of the session left it’s time to vote on things," he said. "I’d like to see it pushed to a vote, and I think it would be at least good for us to get it over to the House and let them have an opportunity to debate it."
Lamoureux said the concerns he has include the financial risk involved and the complaints raised by Nucor Steel Arkansas, which has two mills in Mississippi County and has said it may have to forgo planned upgrades and move employees to other states if the Big River Steel project happens.
On Tuesday night, the Mississippi County Quorum Court unanimously approved a $14 million incentive package for the the project.
Arkansas News Bureau business columnist Roby Brock contributed to this report.