Economic Development Package For Nucor Plant Passes Senate, Moving In House
Since last week, Gov. Jim Justice has hinted about a major economic development announcement coming at this week’s State of the State address. Rumors and news reports are filtering out about a large manufacturing facility planned for Mason County.
To attract that company, the state is offering a series of financial incentives and tax credits. To make it all happen in time for his speech, Justice called the legislature into a special session.
The first bill taken up was called the West Virginia Industrial Advancement Act. It provides tax incentives, based upon investment and employment thresholds, to promote development.
Theoretically, this program would be available for any large manufacturing facility that wanted to locate in West Virginia. While the act is available to any company, it is being prepared for Charlotte, North Carolina-based Nucor in particular and there are also $315 million in direct financial incentives.
Nucor is the largest steel producer in the United States, as well as the largest "mini-mill" steelmaker. It is also the biggest recycler of scrap in North America.
The other bills in the special session move money around to pay for the financial incentives. The bills remove money from existing line items and put it into a closing fund operated by the West Virginia Development Office. The money will be reimbursed into those line items using American Rescue Plan money from the federal government.
The Senate suspended its regular rules and passed the package of bills. A few senators, like Mike Romano, D-Harrison, expressed some reservations.
“We need to be careful about who’s on the hook for any provisions that allow us to get our tax money back should this not go through,” he said before voting to support the program.
The House of Delegates sent the bills to the House Finance Committee for further discussion.
House Bill 101 is a tax exemption plan for property and construction along with purchases of equipment to operate the facility. The minimum to qualify for this exemption is $2 billion. If the project lasts at least four years, the company could be eligible for $1 billion in tax exemptions. The members of the committee also learned that the company has to create 500 jobs at 200 percent of the federal minimum wage.
Nucor is a Fortune 150 company that is looking to invest $2.7 billion and fill approximately 800 jobs along with about 1,000 construction jobs over the next two years.
An economic impact statement on the project indicates it will generate approximately $25 billion in economic impact over 10 years.
During Monday evening’s session, Del. Larry Rowe, D-Kanawha, asked for that statement and House Speaker Roger Hanshaw indicated he has requested it and it will be provided to House members before they will be asked to pass the legislation.
Brian Abraham, the governor’s chief of staff, also indicated Nucor’s three year rolling average in wages as $96,000 per employee and that excludes management.
The reallocated money from the other five bills in the special session call are matching funds based on investments. Once Nucor invests $500 million, the state will match it with $125 million. With another $750 million investment, the state’s match is $150 million. The final $40 million in state matching money comes from a separate facility Nucor has proposed in the Northern Panhandle. These matching funds are specific to Nucor.
Following the House Finance Committee's recommendation, the House passed the bills through a first reading. They will take them back up on Tuesday.