Legislative Roundup: Big River Steel Project Close to Final Approval

by Mark Carter  on Friday, Apr. 5, 2013 9:05 am  

The Arkansas Senate this week gave its official blessing to the proposed $1.1 billion steel mill that Gov. Mike Beebe and state economic development officials want to see on the banks of the Mississippi River just outside Osceola.

The Senate vote was 26-6 in favor of authorizing the state to proceed with $125 million in incentives for Big River Steel. A House committee approved the deal on Wednesday (with a few voice “no” votes, according to the Associated Press), and the full House is waiting to vote on the measure.

During the General Assembly’s vetting process, some legislators criticized the deal as being too risky, and others expressed concern over the practice of even offering state incentives to businesses in the first place, lest the state create an uneven playing field.

House Speaker Davy Carter, R-Cabot, and Senate Pro Tem Michael Lamoureux, R-Russellville, officially endorsed the project this week. Lamoureux told Arkansas Business he didn’t like the idea of dangling incentives to lure manufacturers but understood it was necessary at times to compete with neighboring states.

Despite some grumblings, in the end the prospect of Big River’s promised 525 jobs at an average salary of $75,000 was too enticing.

Nucor Steel already operates facilities in Mississippi County, and officials testified to lawmakers that another mill would hurt their business. Consultants hired by the Legislature to analyze the potential deal said that both companies could function.

John Anton of IHS Global Services told legislators there would be growing pains with two mills in Mississippi County, but by the time Big River was producing steel, the market could support them.
Big River is set to receive $125 million in loans and grants from the state, in addition to $216 million over 14 years in tax credits for recycling.

Also, Mississippi County and the city of Osceola are kicking in another $16.5 million in incentives.

Medicaid Expansion
Beebe received word Tuesday that the federal government would support a state plan to use federal money to fund a private alternative to Medicaid for low-income Arkansans.

The next day, a House panel approved a plan that would do just that. The private option had been gaining support among Republicans who had previously opposed it, and the idea was endorsed by the Arkansas State Chamber of Commerce. Many lawmakers didn’t like the one-size-fits-all aspect of the feds’ proposed Medicaid expansion funding in the state.

The proposal that was advanced Wednesday (and awaited full House approval late last week) would give Arkansas residents who make below $15,415 a year the option of purchasing private insurance through an exchange using federal dollars. Carter and Lamoureux support the plan.

Meanwhile, a bill creating a state office to investigate Medicaid fraud was passed by the Senate.

Manufacturers’ Tax Cuts
Manufacturers received some good news when a bill to cut the taxes they pay on utilities was passed through House committee.

The bill would reduce the sales tax on electricity and natural gas to 1 percent by 2015. State officials estimated the measure would reduce state revenue by about $14 million next year.

Illegal Workers
A bill that would authorize the state contractors licensing board to revoke or suspend the license of a contractor found to knowingly employ an illegal worker — either directly or through a subcontractor — awaits hearing in Senate State Agencies & Governmental Affairs.

Senate Bill 1089 is sponsored by Sen. Jon Woods, R-Springdale. Similar bills by Rep. Jim Nickels, D-Sherwood, were introduced in the 2009 and 2011 sessions and failed to advance.

Elsewhere at the Capitol

  • The PACE Initiative — the Property Accessed Clean Energy Act — was signed into law. It allows for the establishment of energy improvement districts to fund loans for energy efficiency, renewable energy and water improvement projects.
  • Carter amended his proposal to cut the capital gains tax. The new version raises the standard deduction from $2,000 to $2,400 over three years.
  • As expected, the House voted to override Beebe's veto of the voter ID bill. The Senate had previously done so. Both votes were along GOP-led party lines. The voter ID bill requires photo identification to cast a ballot but requires the state to provide free IDs to those who don’t have one.



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