LITTLE ROCK — If Arkansas is to land a superproject that Gov. Mike Beebe referred to last week as “one of the biggest projects this state has ever seen,” it apparently will take quick action from the Legislature under provisions of a never-used constitutional amendment crafted specifically to seal deals for major economic developments.
Amendment 82 was approved by voters in 2004 and amended in 2010. It allows the state to issue bonds to provide funding for infrastructure and other needs, including land acquisition and site preparation, environmental mitigation, roadway improvements, rail access, water and sewer services, employee training and training or research facilities for major projects.
Having such a tool has put Arkansas in a prime position to land an uncommonly large economic booster, according to the governor and others.
“I’ve spoken enough and enough people know that we are in the running for an advanced manufacturing project with an investment value north of $1 billion — a larger number of employees, a good company,” Arkansas Economic Development Director Grant Tennille said in an interview with Arkansas News Bureau business columnist Roby Brock. “And, we are increasingly confident that we will be back to the Legislature very quickly, very quickly to trigger Amendment 82.”
Voters approved Amendment 82 barely a year after a site near Marion in eastern Arkansas apparently finished second to San Antonio, Texas, for a $750 million Toyota truck plant. The measure originally stipulated that the state could only issue general obligation bonds to attract projects that returned a $500 million investment and created at least 500 jobs.
In 2007, the Legislature authorized the Governor’s Quick Action Fund, a $50 million reserve to give the governor flexibility to close economic development deals.
By 2010, Amendment 82 had never been used and many thought the financial incentives in the measure were too tough to entice major projects. So the Legislature proposed and voters approved a constitutional change to remove the thresholds in the amendment.
That change also authorized the lawmakers to set the criteria for financing economic development projects. The bonds would continue to be paid using general revenue or specific revenues appropriated by the Legislature.
Amendment 82 “can actually be used in just about any size project,” said Randy Zook, president and CEO of the Arkansas State Chamber of Commerce-Associated Industries of Arkansas.
“The presumption, though, is it will be only used in major deals, and this one certainly will qualify, would have qualified easily under the old standards, but certainly under today’s standards,” Zook said. “It’s very important in the context of the right kind of deal, as the governor is referring to.
“Given the right opportunity, it can spell the difference between success or failure in putting together a deal because it gives the state the opportunity to be competitive with surrounding states, which all have similar types of abilities.”
Zook declined to say whether he knew details of the project to which Beebe referred.
The governor has revealed little information about the project he first mentioned Tuesday in his state-of-the-state address to a joint session of the House and Senate.
“We don’t have it yet,” he told reporters Wednesday after an appearance before the Political Animals Club. “I thought we’d have it by now. But I needed to go ahead and mention it because a super project by its very nature under Amendment 82 … requires a vote of the Legislature, and so consequently we needed to have that at least in their minds going forward even if it doesn’t come to fruition … rather than surprising them.”
Beebe added he thought the state had a “pretty good” chance of landing the project.
“I don’t want to put a percentage on it, but it had to be fairly strong, beyond fairly strong, or I wouldn’t even have mentioned it. We’ve been working on it for over a year,” he said.
He said he did not know when an official announcement would come.
Sen. Keith Ingram, D-West Memphis, said Amendment 82 is key as Arkansas maneuvers to land major projects for which other states are also competing.
“I think that we’ve got things we can offer that other states can’t, so I sense … as far as economic development, that we have a number of projects in the mill that we might not ordinarily have because of our ability to incentivize,” he said.
Ingram, as a member of the House in 2011, was a lead sponsor of legislation that became Act 828, authorizing cities or counties to levy local sales taxes to fund economic development projects which meet at least three of seven criteria.
“It’s a mini-Amendment 82 for communities to utilize,” he said.