LITTLE ROCK — The Senate on Tuesday passed and sent to the House legislation comprising a proposed deal between the state and private investors for a planned $1.1 billion steel mill in northeastern Arkansas.
The Senate vote on Senate Bill 820 came about an hour after the Senate Committee on Agriculture and Economic Development unanimously endorsed the bill.
Principles of the proposed Big River Steel plant in Mississippi County have said the operation will employ more than 2,000 workers during construction, and more than 500 permanent workers with pay averaging $70,000 a year. The deal is contingent upon legislative approval of a $125 million bond issue.
“I think it’s good for the state, and good for Mississippi County, and good for all the citizens,” Sen. David Burnett, D-Osceola, the sponsor of Senate Bill 820, said after the Senate approved the measure 26-6 with little discussion.
“Hopefully this will help with the House,” said Big River Steel CEO John Correnti.
The House Agriculture, Forestry and Economic Development Committee was scheduled to consider House Bill 1870, which is identical to the SB 820, on Wednesday.
Correnti said if all goes well, construction on the steel mill could begin this fall.
“If the senators and representatives vote for what is in the best interest of the citizens of Arkansas, I’ll be fine,” Correnti said.
House Speaker Davy Carter, R-Cabot, endorsed the proposal last week after lawmakers received reports from two independent analysts on the proposal’s risks and potential benefits to the state.
Sam Commella, vice president of Nucor Steel, which operates two steel mills in Mississippi County and employees about 1,600 people, told the Senate committee Tuesday the company opposes the project and said it may have to forgo planned upgrades and move employees to other states if the Big River Steel project goes forward.
Commella said there is already a glut of steel on the market and existing steel mills “are on the market at fire sale projects.”
“We’re not afraid to compete against another private company. However, I’m telling you unequivocally, the proposed Big River steel mill will have a negative impact on mills currently in Arkansas,” Commella said.
Last week, the Mississippi County Quorum Court unanimously approved a $14 million incentive package for the project.
SB 820 is sponsored jointly by Burnett and Rep. Monte Hodges, D-Blytheville, sponsor of the House bill.
The legislation lays out the terms and conditions of a deal that calls for the state to float a $125 million bond issue and provide tax credits and other incentives to the project.
Under the measures, the mill would have to be producing steel by the spring of 2016 to qualify for the incentives and its managers would have to report annually that the facility 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.
Included in the legislation is 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.
Correnti said benefits of the proposed plant would not be limited to the northeastern part of the state. He said he heard from an official with Maverick Trucking Company in North Little Rock that the firm planned to purchase an additional 60 trucks if the Big River Steel project is approved.
“That’s 60 drivers, probably three more mechanics … a couple more dispatches, so that is going to have a significant impact here in Pulaski County, let along Mississippi County,” he said.