MORGANTOWN – Legislators met in special session Monday morning and the Senate quickly passed a series of bills for what is expected to enable construction of a $2.7 billion steel manufacturing plant in Mason County.
Following Senate passage, the House Finance Committee reviewed and approved its versions of the bills and sent them to the House floor. At its 6 p.m. floor session, the House took up all of the House and Senate bills and read them a first time. Deliberations were set to resume at 9 a.m. Tuesday when the House returns.
While no legislator named a facility, Gov. Jim Justice said in announcing the special session that the bills would provide “certain tax incentives, based upon very significant investment and employment thresholds, for labor and capital intensive heavy industrial facilities to locate in the state.”
Justice’s Chief of Staff Brian Abraham told House Finance that there is a memorandum of understanding with a Fortune 150 company for a factory that will create 800 full-time jobs and at least 1,000 construction jobs. Construction is expected to be completed with 24 months of completion of this process.
“I believe this to be the largest singe investment in West Virginia history in terms of our infrastructure and manufacturing,” he said.
This correlates with an announcement North Carolina-based steelmaker Nucor issued in September, saying it plans to build a “new state-of-the-art, 3 million ton sheet mill” and was evaluating sites in West Virginia, Pennsylvania and Ohio to serve its Midwest and Northeast markets.
Nucor said then that the mill is expected to cost about $2.7 billion and have the capacity to produce 3 million tons of steel annually in the form of hot-rolled sheet products.
Justice announced the special session on Saturday and presented six bills. The first, SB 1001 and HB 101, establishes the “West Virginia Industrial Advancement Act” to provide tax incentives, “based upon very significant investment and employment thresholds, for labor and capital intensive heavy industrial facilities to locate in the state.”
The other five were supplemental appropriations bills, Justice said Saturday, “capitalizing upon the state’s spectacularly strong revenues and investing in West Virginia’s future to assure jobs and goodness for generations to come.”
The appropriations, his office said, “will be used by our Department of Economic Development to secure tremendous private investment all around the state. These appropriations will mark the largest investment in economic development in this state’s history, and will pay untold dividends in recruiting businesses, their employees and families, and further private investment in West Virginia.”
It’s expected he will make a more specific announcement during his Wednesday State of the State Address. He hinted on Saturday, “Stay tuned for announcements of potential investments.”
Senators first passed SB 1001, the Industrial Advancement Act, suspending the three-day reading rule to OK it in just a few minutes. Finance chair Eric Tarr, R-Putnam, said the bill is intended to attract new labor- and capital-inventive heavy industrial facilities to the state.
It requires the company, he said, to buy property for expansion or revitalization, to spend at least $2 billion and hire 500 full-time employees within six months. Hanshaw said the project should employ about 800, with another 1,000 construction jobs. It’s believed the site will be in Mason County.
Tarr told the Senate that SB 1001 provides for the company to take a 50% tax credit for its investments against the personal income tax or corporate net income tax, along with certain sales tax exemptions already in code for other companies.
The vote was 30-1, with only Sen. Owens Brown, D-Ohio, voting against. Brown objected to the speed of passing the bill. “I cannot see why its being rushed through without actually looking at it.”
Sen. Mike Romano, D-Harrison, supported the bill but offered words of caution. “I certainly cheer this one on with all my support,” he said. “Any time we put West Virginians to work it’s a good thing.”
But the state has executed a memorandum of understanding with the company, he said, and MOUs are not enforceable. Also, the state needs to be careful about who’s on the hook for the lost tax money if the deal falls through. And as an attorney, he noted some flaws in the contract wording regarding enforcement of its provisions.
Sen. Mike Caputo, D-Marion, said this deal could be “one of the best things to hit West Virginia, if it hits West Virginia.” Many deals don’t achieve their promise. “We have to take a shot here and bring those jobs to West Virginia.” He urged the the company to employ West Virginia workers.
Abraham told House Finance that on top of the tax credits, the state will put up about $315 million. (House Speaker Roger Hanshaw said this will be for infrastructure offsets.)
Abraham said the state expenditures will be tied to expenditures by the company. After it invests $500 million, the state will put up $125 million. After the company invests another $750 million, the state will put up $150 million.
The third state payment will be linked to the company leasing or purchasing property for a related Northern Panhandle transloading facility, said to be outside Weirton. That payment will be $40 million.
Much of the state money, Abraham said, will come from unused American Rescue Plan funds, reappropriated through the supplemental appropriations bills.
A WVU economic impact study, Abraham said, estimates the factory will generate about $438.8 million in employment tax revenue over 10 years and have a $25 billion economic impact across that span. The company’s average wage across a rolling three-year span is $96,000.
Speaking of HB 101, the House’s version of SB 1001, he said, “We believe that this bill is a wise decision to attract not just any company but this particular company.” He continued, “”It’s a beginning, not the end.” More companies will come.
The five appropriations bills all passed unanimously.
Abraham said that the sixth bill, SB 1006/HB 106, appropriates $15 million for a separate project in the Morgantown area. A Fortune 500 medical equipment and supplier has entered into a relationship with WVU to establish a 250,000-square-foot facility. The company will invest $60 million and create 125 to 140 jobs.
The regular legislative session starts Wednesday. Justice called this special session to correspond with interim meetings already set to run Sunday-Tuesday.
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