House approves tax credits to attract steel mills

FILE - Rep. Jack Ladyman (left) talks with Rep. Monte Hodges about Senate Bill 688, which would provide tax credits to businesses. The bill was approved by the House.
FILE - Rep. Jack Ladyman (left) talks with Rep. Monte Hodges about Senate Bill 688, which would provide tax credits to businesses. The bill was approved by the House.

The House approved legislation Friday aimed at helping persuade Big River Steel to expand its operations in Arkansas by giving it tax credits.

Senate Bill 688 by Sen. David Wallace, R-Leachville, heads to the governor after a 79-11 vote. He has said Arkansas is in competition with Texas for a Big River Steel expansion.

The bill could cost up to $11 million per year per project, according to an analysis by the Department of Finance and Administration.

Under the bill, a steel mill would qualify for the tax credits if its projects met job and wage requirements and received a positive cost-benefit analysis from the Arkansas Economic Development Commission and the Department of Finance and Administration.

Rep. Monte Hodges, R-Blytheville, who presented the bill Friday, said Arkansas is leading the way when it comes to steel production.

"It has to be done. It has to be built. The jobs have to be in place before we give them a cent," he said. "That's what I really like about this incentive."

Rep. Charlotte Douglas, R-Alma, was the only person to speak against the bill. She asked why the chamber would support this measure when it failed to pass a bill to establish "education savings accounts" that would total $9 million in tax credits over four years.

She ended up voting in favor of SB688.

David Ray, state director of Americans for Prosperity, had said he opposed the bill. He said it should have been vetted more and that the Legislature could have reduced corporate income taxes and benefited all companies, not just one.

Big River Steel's $1.3 billion mill near Osceola employs more than 400 people. In 2013, the Legislature authorized the state to issue $125 million in bonds for the construction of the steel mill in the first use of state authority under Amendment 82 to the Arkansas Constitution.

Mississippi County has an unemployment rate of 6.7 percent, according to Bureau of Labor Statistics. That's the fifth-highest in the state.

After World War II, mechanization threw Arkansas' agricultural economy into crisis. Machines began replacing people, who turned to the state's industrial community for employment and found few jobs, according to a 1975 article in the Arkansas Democrat.

"Now you see a downturn. You see all kind of big equipment in Northeast Arkansas and it's absolutely obliterated the job market," said Rep. Johnny Rye, R-Trumann. "We're trying to come back and I'll say this -- we are coming back."

A Section on 04/01/2017

Upcoming Events