The Arkansas House of Representatives replicated their Senate counterparts and met in a “committee of the whole” to ask questions and address issues related to a $1.1 billion steel mill super project.
The 525-job Big River Steel Mill, to be located near Osceola, Arkansas, will require the state legislature to approve a $125 million bond program to help with start-up costs related to the big plant.
It is the first test of the state’s Amendment 82, which allows for state-supported bonds to help with infrastructure for large industrial, job creating projects.
Gov. Beebe (D) and state economic and finance officials fielded questions from House members for nearly 3 hours on Wednesday (Feb. 6). The marathon Q&A session repeated a number of concerns raised by senators on Monday related to the project’s safeguards and the state’s exposure.
“It’s a lot of money, it’s a lot of investment for jobs,” said Rep. Terry Rice (R-Waldron) after the presentation. “There’s still some due diligence to do.”
House Speaker Davy Carter (R-Cabot), whose background is in banking, told reporters afterwards that he thought state officials did a solid job explaining the negotiations that have led to this point. He also thought that many members’ concerns were addressed, and Carter said he’s looking forward to the due diligence referred to by Rice.
By law, Gov. Beebe’s administration must forward a letter of commitment from Big River Steel to the Arkansas General Assembly. That begins a 20-day clock for the legislature to review the agreement and vote it up or down.
Carter said he and Senate President Michael Lamoureux (R-Russellville) have discussed an independent review of the state’s analysis and the possibility of hiring a third-party group to conduct it’s own feasibility study.
“I suspect it will be very expensive – tens of thousands of dollars,” Carter said. He added that he thought the money would come from the Bureau of Legislative Research.
Carter said for him, the deal revolves around how quickly and how risk-free the state’s loan to the company can be repaid.
“Does the pro forma from the business cash flow to the point that they can pay the $50 million loan back,” Carter said. “From what I know, I think this project does that.”
Grant Tennille, director of the Arkansas Economic Development Commission, fielded most of the inquiries in today’s floor action. After the meeting, Tennille said he hoped he emphasized that little to no state money would be invested in Big River Steel until private investors and private banking interests ponied up their financing to secure the balance of the deal.
“If a lot of the things they keep asking about go wrong, they’re going to go wrong before we sell any of these bonds,” he said. “It’s not as big of a concern as maybe they think it is. I’m trying to keep people focused on: what is the question?”
While the question of indebtedness and payback to the state will be the central focus of those voting on the super project’s merits, many legislators share the sentiment of Rep. Rice, who said he’s leaning toward supporting the deal.
“I am pro-jobs, I like jobs. I wish we could spread it all around the state. I would be leaning for jobs right now,” Rice said.
You can watch the opening 5 minutes of remarks from Gov. Beebe from today’s House proceedings in the video below.