February 6, 2013
Video
Transcript
Bills discussed (27)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1133
· 3 mentions in chapter, transcript
Matched: “HB1133 (9 Batched)”
|
Pre-2017 bill | ||
|
HB1146
· 2 mentions in transcript
Matched: “…lar joint budget calendar for later consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1…”
|
Pre-2017 bill | ||
|
HB1147
· 2 mentions in transcript
Matched: “…budget calendar for later consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1148
· 2 mentions in transcript
Matched: “…alendar for later consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1150
· 2 mentions in transcript
Matched: “…consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1162
· 2 mentions in transcript
Matched: “…tion. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1163
· 2 mentions in transcript
Matched: “…1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1222
· 2 mentions in transcript
Matched: “…1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1044
· 1 mention in transcript
Matched: “Clerk, we're going to pass over House Resolution 1002 and House Bill 1044. So we'll go to the yellow budget calendar.”
|
Pre-2017 bill | ||
|
HB1061
· 1 mention in transcript
Matched: “…sures from the regular session of the 89th General Assembly House Bill 1061 Act 46 House Bill 1062 Act 47 House Bill 1066 Act 48 House…”
|
Pre-2017 bill | ||
|
HB1069
· 1 mention in transcript
Matched: “House Bill 1069 Act 51 House Bill 1072 Act 52 House Bill 1074 Act 53 House…”
|
Pre-2017 bill | ||
|
HB1110
· 1 mention in transcript
Matched: “…er, we, your Committee on House Rules, to whom was referred House Bill 1110 by Representative Broughtaway, begged Lee to report that we…”
|
Pre-2017 bill | ||
|
HB1112
· 1 mention in transcript
Matched: “House Bill 1112, Act 63, House Bill 1115, Act 64, and House Bill 1117, Act…”
|
Pre-2017 bill | ||
|
HB1117
· 1 mention in transcript
Matched: “House Bill 1112, Act 63, House Bill 1115, Act 64, and House Bill 1117, Act 65. Sincerely, Mike B.B., Governor. I'd like to take t…”
|
Pre-2017 bill | ||
|
HB1149
· 1 mention in transcript
Matched: “…or later consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.”
|
Pre-2017 bill | ||
|
HB1210
· 1 mention in transcript
Matched: “…, your Committee on State Agencies, to whom was referred to House Bill 1210 by Representative George McGill,”
|
Pre-2017 bill | ||
|
HB1226
· 1 mention in transcript
Matched: “House Bill 1226 by Representative Joe Jett, House Bill 1235 by Representati…”
|
Pre-2017 bill | ||
|
HB1235
· 1 mention in transcript
Matched: “House Bill 1226 by Representative Joe Jett, House Bill 1235 by Representative Wes Wagner, House Bill 1236 by Representa…”
|
Pre-2017 bill | ||
|
HB1236
· 1 mention in transcript
Matched: “…ive Joe Jett, House Bill 1235 by Representative Wes Wagner, House Bill 1236 by Representative Wes Wagner House Bill 1237 by Representat…”
|
Pre-2017 bill | ||
|
HB1237
· 1 mention in transcript
Matched: “…ve Wes Wagner, House Bill 1236 by Representative Wes Wagner House Bill 1237 by Representative Jeff Wardlaw and House Bill 1247 by Repre…”
|
Pre-2017 bill | ||
|
HB1245
· 1 mention in transcript
Matched: “…committee on city, county, and local, to whom was referred House Bill 1245 by Representative Hammer, begged leave to report that we've…”
|
Pre-2017 bill | ||
|
HB1247
· 1 mention in transcript
Matched: “…s Wagner House Bill 1237 by Representative Jeff Wardlaw and House Bill 1247 by Representative Mark McElroy begged lead to report that w…”
|
Pre-2017 bill | ||
|
HR1002
· 1 mention in transcript
Matched: “Clerk, we're going to pass over House Resolution 1002 and House Bill 1044. So we'll go to the yellow budget calen…”
|
Pre-2017 bill | ||
|
HR1004
· 1 mention in transcript
Matched: “…committee on aging children and youth, to whom was referred House Resolution 1004 by Representative Jonathan Barnett, I beg to lead the repor…”
|
Pre-2017 bill | ||
|
SB115
· 1 mention in transcript
Matched: “…mmittee on Joint Public Retirement, to whom was referred to Senate Bill 115 and Senate Bill 231 by Senator Jeremy Hutchison, 115 by Sen…”
|
Pre-2017 bill | ||
|
SB125
· 1 mention in transcript
Matched: “…er, we, your Committee on Agriculture, to whom was referred Senate Bill 125 by Senator Bobby Pierce, beg lead report that we've had the…”
|
Pre-2017 bill | ||
|
SB231
· 1 mention in transcript
Matched: “…lic Retirement, to whom was referred to Senate Bill 115 and Senate Bill 231 by Senator Jeremy Hutchison, 115 by Senator Robert Thompson…”
|
Pre-2017 bill |
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Speaker 1
0:00
that your word teaches us that each and every day your mercies are new for us. Lord, I know it's been a long week and they've done much this week and today is the middle point of the week and so there's still much to go on. And so Lord, I just pray that today you will give physical and emotional and mental and spiritual strength to the representatives they're serving. Lord, I pray that you'll just bless them with the ability to focus and keep going and finish the work that you've set before them for the rest of the week. Lord, I pray that you'll keep their families safe and take that worry from them.
Lord, I pray you'll guide them and give them wisdom as they serve the people of Arkansas. Lord, we thank you for the gift of salvation through Jesus. In his name we pray.
Speaker 2
0:45
Amen. Amen. What a allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
Speaker 3
0:59
Members, please indicate your presence by pushing your yellow present button.
Prepare the machine, Mr. Clerk. Cast with ballots, Mr. Clerk. There are 98 members present. The chair receives a quorum. Are there any requests for leave? Representative Nichols, you're recognized. Leave
for Representative Walker. Leave granted for Representative Walker.
Leave granted Representative Murdoch, you're recognized. Leave for Representative Love. Leave granted for Representative Love. Leave is granted. Representative James L. Word moves we dispense
with the reading of the previous day's journal. No objections, so ordered. Are there reports from select committees? Read
Speaker 11
1:53
the reports, Mr. Clerk. Mr. Speaker, we, your Committee on House Rules, to whom was referred House Bill 1110 by Representative Broughtaway, begged Lee to report that we've had the same under consideration herewith,
returned the same with the recommendation that it do pass as amended number two, Representative Stephanie Malone, Chair. Mr. Speaker, we, your Committee on Joint Budget, or we, your Committee on Joint Public Retirement, to whom was referred to Senate Bill 115 and Senate Bill 231 by Senator Jeremy Hutchison, 115 by Senator Robert Thompson. Beg leave the report. We've had the same under consideration.
Herewith return the same with the recommendation that it do
Speaker 15
2:46
pass. The reports from standing committees? Yes.
Speaker 11
2:49
Read the reports, Mr. President. Mr. Speaker, we, your committee on city, county, and local, to whom was referred House Bill 1245 by Representative Hammer, begged leave to report that we've had the same under consideration herewith, returned the same with the recommendation that do pass, respectably submitted Representative David Fielding Chair.
Mr. Speaker, we, your committee on aging children and youth, to whom was referred House Resolution 1004 by Representative Jonathan Barnett, I beg to lead the report that we've had the same under consideration and herewith return the same with the recommendation that it do pass, respectively submitted, Representative David Meeks, Chair. Mr. Speaker, we, your Committee on State Agencies, to whom was referred to House Bill 1210 by Representative George McGill,
House Bill 1226 by Representative Joe Jett, House Bill 1235 by Representative Wes Wagner, House Bill 1236 by Representative Wes Wagner House Bill 1237 by Representative Jeff Wardlaw and House Bill 1247 by Representative Mark McElroy begged lead to report that we've had the same under consideration and herewith returned the same with the recommendation that they do pass
respectfully submitted Representative Andrea Lee Chair Mr. Speaker, we, your Committee on Agriculture, to whom was referred Senate Bill 125 by Senator Bobby Pierce, beg lead report that we've had the same under consideration herewith, return the same with the recommendation that do pass, as amended, number one, respectfully submitted, Representative Matthew Shepard, Chair. is there any
unfinished business are there any executive communications please read the letter
Speaker 11
4:47
from the governor mr clerk to the speaker of the house dear mr speaker this is to inform you that on february the 6th 2013 i approve the following measures from the regular session of the 89th General Assembly House Bill 1061 Act 46 House Bill 1062 Act 47 House Bill 1066 Act 48 House Bill 1067 Act 49 House Bill 1068 Act 50
House Bill 1069 Act 51 House Bill 1072 Act 52 House Bill 1074 Act 53 House Bill 1079 Act 54 house bill 1081 act 55 house bill 1085 act 56 house bill 1086 act 57 house bill 1092 act 58 house bill 1093 act 59 house bill 1094 act 60 house bill 1095 act 61 house bill 1111 act 62
House Bill 1112, Act 63, House Bill 1115, Act 64, and House Bill 1117, Act 65. Sincerely, Mike B.B., Governor. I'd like to take this time
to welcome our doctors of the day, Dr. J. Jeffrey and Dr. Edward Jones, both from Batesville. Welcome.
And our nurse of the day, again, Ms. Geraldine Rambeau.
Glad you're here. Morning hour has ended. Mr.
Clerk, we're going to pass over House Resolution 1002 and House Bill 1044. So we'll go to the yellow budget calendar.
Representative Baird, you are recognized. All right,
Representative Duncan Baird
Unverified
7:06
members, we've got nine bills on the appropriation calendar today, and we're going to go ahead and batch those together like we've done last week. Same procedure. I'm going to start reading through this, and then I'm going to read through the bills one by one. If you have any questions, if for some reason you want to pull one out and vote on it individually, just let us know when I read the name of the bill.
So, members, the issue is the passage of the appropriation bills and emergency clauses on the list before you. I'm going to read down the list of bills one by one by bill number. If there is one objection to the consideration of a bill, it will be removed from the list and placed on the regular joint budget calendar for later consideration. HB 1133, HB 1146, HB 1147, HB 1148, HB 1149, HB 1150, HB 1162, HB 1163, HB 1222.
Your one vote will be recorded on each bill and each emergency clause after they have been read for the third time So Mr. Speaker,
Speaker 20
8:26
clerk to read the bills for the third time Mr. Clerk, read the bills for the third time House Bill 1133 House Bill 1146 House Bill 1147 House Bill 1148 House
Speaker 11
8:38
Bill 1149 House Bill 1150 House Bill 1162 House Bill 1163, and House Bill 1222.
Unknown speaker
8:44
Prepare the machine, Mr. Clerk. Is everyone voted?
Is everyone voted? Voting on the bill and the emergency clause. With 95 yeas.
Cast with ballots, Mr. Clerk. Ninety-five yeas, zero nays, and zero present. You
Speaker 3
10:04
have passed the bill. All right, members, we're going to go ahead and do our committee announcements
and any other announcements that you want to make. We're going to recess thereafter until 2 o'clock to allow time for the governor and the others that are coming to be here, too. So that's what's going on. So let's take announcements. If anybody has any announcements, this is the time to make them because we're going to go into committee of the whole. And then we're going to, you know, when that's done, we're going to adjourn. The House will be adjourned. So Representative
Representative John Burris
Unverified
10:37
Burris, you recognize. Thank you, Mr. Speaker. There's going to be a meeting today at 5 o'clock, and I'm sorry about the late notice.
It's informal, a joint with the Senate to have the officials from DHS there to discuss the revised numbers on the forecast that was changed last week. So it's at 5 o'clock today, in room 171, if you're interested in coming and hearing that from Director Selig and Andy Allison. So thank you. Representative Collins, you're recognized. The
Representative Charlie Collins
Unverified
11:08
Revenue and Tax Committee will meet tomorrow morning at 10 a.m. in room 151.
Representative Walls McCrary
Unverified
11:15
Representative McCrary, you're recognized. Announcement. Bill Beavis at the Country Caucus is going to be at his lake house at 6 o'clock tonight. It's a beautiful night. Y'all come to District 14 and eat
Representative James L. Word
Unverified
11:31
some brisket with us. Thank you. Representative Word, you're recognized. Announcement. Recognized. The full Congressional Caucus will meet Tuesday the 12th at the Poetry Foundation at 1145. Lunch will
Chair
Unverified
11:41
be served. Representative McClain, you're recognized. Announcement? Recognized.
House Education will meet tomorrow at 10, room 138. Representative Jett, recognized for an
Speaker 45
11:52
announcement. Museum of Discovery, ask everybody to attend, please, at 4 o'clock to 6.30 p.m. today.
Representative Barnett, you're recognized for an announcement. House Transportation, tomorrow morning, Big Mac B, 10 o'clock. Representative
Lee, you're recognized for an announcement.
Speaker 47
12:10
Thank you, Mr. Chairman. 4.30 today, Noble Strategies, Corner of 3rd and Ringo, is a reception for all members.
Speaker 49
12:17
Thank you. Members, I would also like to welcome, as guest of Representative John Catlett, with us today is Counsel David Prestiado. So I hope I did not mess that up too bad, but welcome. He is with the Republic of Mexico. Thank you for being here.
And in the North Gallery is guest of Representative John Hutchinson,
and it's Poinsett County Assessor Johnny Rye, Jr. Welcome, Johnny. and i don't think they're have made it they're over here yet but guests are representative lane gene the sixth seventh eighth and ninth graders from pleasant valley schools in gin city and if they uh come over i don't know i don't think they made it but we'll we'll get them when they come down again so all right we will stand in recess until two o'clock
Unknown speaker
14:49
Thank you.
Thank you.
Two, one, two, one, two, one.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Oh, my God.
Thank you.
We'll be right back.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
so
Thank you.
Thank you.
House, come to order. Recognize Representative Barris, you're recognized for a motion. I'm
Representative John Burris
Unverified
28:25
a little late. Oops. Mr. Speaker, I move that the House do now resolve itself into Committee of the Whole for a briefing of the issues surrounding
a potential development of the new steel mill in northeast Arkansas. That's a proper motion, not available. All in favor say aye. Aye. And opposed,
say nay. Motion carries. I'd like to welcome all of our distinguished guests today, and particularly the Honorable Mike Beebe.
Speaker 57
29:10
Thank you, Mr. Speaker. I am not going to stay with you for a couple of reasons. I've been listening to this stuff for weeks, if
Speaker 58
29:27
not months, and I don't need to listen to it again, but you do. I didn't stay in the Senate very long for the same reason, and you know how the Senate is. They'd get real upset if I stayed with you and didn't stay with them.
Speaker 58
29:51
it's kind of funny now, but years ago, when I was in the Senate, there was always a constant fight back and forth, more often than not good-natured, but sometimes not so good-natured between the House and Senate. And it was usually over silly stuff. You know, anything real serious, you set aside all that stuff and got with it. But there used to be a house member, a wily old house member, a veteran old house member.
And I'm not going to mention his name because he's dead now and I don't want to. But a wily old house member that used to take great delight in stirring the house up about the Senate. and he'd get up here and he'd say things like the Senate's trying to tell you all what to do. The Senate's down there laughing and they said they were going to trick you. I mean, and then he'd walk back and he'd see one of us and he'd say, you know. And he just got his kicks
out of stirring that stuff up. He was a good guy and ultimately it all ended up working out good but there's been a history of good-natured rivalry between the House and the Senate for years. And while that may not yet be going on in this session, trust me, before it's over, there'll be some of that going on. But the reason I'm here is just to bring an entourage. Where's everybody here? Where's
Speaker 57
31:18
who's not here? The guy, the main guy is not here.
I don't know where he is. And French Hill's
Speaker 58
31:28
not here. He's coming in. At any rate, we're going to have an array of different people We're representing different interests, outside private interests, public interests, to answer your questions about the Amendment 82 project. The Amendment 82 project, as you all know, is the steel mill in northeast Arkansas. Very briefly, it's a $1.1 billion project that will employ 525 initially full-time jobs.
They say the average is $75,000 a year salaries. They claim that's conservative, but that's the number, the conservative number they're using. Another 2,000 construction jobs, which will be temporary. They'll last a couple years in varying degrees as it's being built. And while they're not saying this and while you can't necessarily count on this, There's inevitably a number of other entities that join around, either suppliers or customers,
that end up locating businesses around a steel mill, and that's been kind of the history. This is the first Amendment 82 project Arkansas has ever tried. So you are plowing new ground. Part of what that whole Amendment 82 process that the legislature devised back in the 404 and that ultimately the voters voted on envisioned a very healthy, very in-depth, very lengthy review of the project by the General Assembly to ensure that it was in the best interest of our people, our taxpayers and all of the people of Arkansas.
And so that's what you're going to be doing. I urge you to do that. That's what we've done, or we wouldn't already. It's nice of you to join us, Grant. Did you get a new job? Hi, French. I can't fire you. You own more than I do. So you're going to be going through this in depth, and we've got the people here that can answer any question you've got. And if they can't, they'll go figure out who to bring back to answer any additional questions.
There's no pressure. There's no high sales pitch on my part. You satisfy yourself that this is good or it's not good and act accordingly. I will tell you this. I made this little comment or lighthearted oversimplification in front of the Senate the other day. We do this on every project. This is the First Amendment 82 project where it's much deeper and involves many, many more things. But we analyze cost-benefit analysis on anything that we do your state incentives for.
And for the new members here, when I ran in 06, one of the things I ran on was that we needed a pot of money that allowed us to be competitive with sister states who had been doing this a while. We ended up calling it the Governor's Quick Action Closing Fund. Virtually every member of this body has been touched in some way or another by that fund. Some of you maybe not as much as others, and there may be some areas where because of the rural nature and the lack of economic activity, you haven't been touched.
But most people in this chamber have been the beneficiary of that fund. You fund it. You fund it. It doesn't happen without the legislature. But part of the reason we've been able to get through this recession in the fashion we have, part of the reason we've been competitive with our other states on either retaining, expanding, or attracting new business opportunity is because of that tool. Now, it's not that tool that does it. It's usually that tool that closes the deal. It's usually at the end game the one final thing that kind of makes a difference.
And in every one of those things we go through this analysis, and I joke about the fact that DF&A has never seen an incentive incentive or a tax dollar that they thought should be spent on business ever that's hyperbole that's not true but uh that's one extreme and uh aedc has never seen a job opportunity that they thought wasn't worth every incentive we could give them that's also hyperbole but the point is that they approach it from different angles and when they approach it usually they come down on the side
of sound accounting and tax-based principles on what's good and what's worth it and what's the return on the investment, what's the repayment to our taxpayers, what is good for Arkansas. And so we use that approach in virtually any of these projects that we pursue. We win some, we lose some. But this is the first time we're using it with an Amendment 82 issue that involves much deeper analysis by the General Assembly.
So they're here to answer your questions. They're here to provide you any and all information for as long as it takes, whether you get it done today or whether it takes longer, that you might request. And if there are folks here that can't answer your questions, you let me know. And the ones that work for me, we'll get them up to speed. And the ones that don't, you've just got to deal with them. French is smarter than most of us anyway, so if he can't answer it, it may not get answered. But this is your day.
No time limit, no time delay, y'all's decision. And I appreciate the interest, Mr. Speaker, that you had and that your members had to do this in a fashion that really lets everybody hear it kind of at once so that it really does cut down on time. It's a good use of committee the whole time, and I wish you all the best of luck in making what you believe is the best decision in the best interest of the state. So thank you, ladies and gentlemen of the House. Members,
before I introduce Grant Tenille, I think it's important to take a few minutes to review how we got
to where we are at this point.
Speaker 49
37:50
So bear with me, but I'm going to read through some of the legal issues that we've had and walk us up to today. Because I think unless we know, if we know, it'll facilitate a
better format going forward. The 84th General Assembly, during the 2003 regular session, proposed Amendment 82. That was on the ballot in 2004 in the general election.
Amendment 82 passed by a vote of 612,277 for and 349,000 and change against. That's 63% for, 36% against. There were subsequent enabling legislation known as the Arkansas Amendment 82 Implementation Act, and there's a section in the code that you can find that. Subsequent to Amendment 82, the 87th General Assembly proposed Amendment 90,
And that was on the ballot in 2010, and it passed 62% for, 37% against. Amendment 90, or prior to Amendment 90, there was a $500 million minimum requirement for the bond issuance. And Amendment 90 took that away. And Amendment 90 now reads, under Amendment 90, the General Assembly may authorize the issuance of bonds bearing the full faith in credit, et cetera, et cetera, if the prospective employer planning and economic development project is eligible under criteria established by law.
So those are our constitutional provisions that the voters approved. Our enabling legislation in 1543203, the General Assembly delegated to the Arkansas Economic Development Commission, the Finance Authority, and the Chief Fiscal Officer to review all proposed projects. They have to be eligible businesses, and that's defined in the statute.
The Commission initiates the process of selecting the proposed project for referral to the General Assembly by performing an economic impact and cost-benefit analysis to evaluate the capability of the sponsor. The Commission goes through this process. It refers it to the authority. The authority performs an assessment of feasibility and impact of issuing Amendment 82 bonds. If the authority's initial assessment is that Amendment 82 bond financing for the project is feasible, then the authority notifies the department, and the department sends the findings to the department and the authority over to the chief fiscal officer.
Then the chief fiscal officer assesses the MIMA-82 project and is charged with making a finding that the bond issue will not have a substantial negative impact on any agency, program, or program supported from general revenue. If the sponsor of a proposed project determines to accept Amendment 82 financing, then the sponsor and the commission on behalf of the state signs a letter of commitment, and that is sent to the governor for review.
Now, that's where we are. I mean, I know that's a lot, but that's where we are. All of that, Grant will tell you how long that has taken to get to this point, but that's where we are. Now, going forward, whenever we're delivered the commitment letter, we have 20 days to obtain our own
study or review of the study of the economic impact study.
That has not been done. We have not been delivered the
Speaker 49
42:27
letter, the package. You will all ultimately get a copy of these economic impact studies. Every single member will
get this data when it's available. And Grant, I know you'll talk more about
that, but this is where we are. So with that, I'm going to recognize Mr. Grant Tennille.
Speaker 72
42:48
thank you mr speaker and um the only correction
Speaker 73
42:54
i will make to what the speaker just outlined is that what will actually be sent to
the legislature when it's completed is an unratified amendment 82 agreement which will
Speaker 73
43:11
include all of the provisions that are in the letter of commitment and quite a bit more depth and detail and that's
what we're working to finalize right now the other thing that i i told the senate the other day i i have a gentleman's agreement with the speaker and the president that we're not going to
Speaker 75
43:38
send that over until they tell us that they're ready, because that
Speaker 73
43:43
20-day clock's a hard clock. And I want to make sure that you all have identified who's going to do your study, because
they've got 20 days to get it done. So I don't want to send you the agreement and have the bodies still trying to find somebody or to settle upon whoever they're going to hire. So we're working together to try and keep this process that we're all going through for the first time as orderly and organized as we possibly can. Very quickly, before I get started, I want to make sure that everyone knows who's here in the room so that you'll
Speaker 75
44:29
know where to direct your questions when you have them.
We have Mack Dodson, the director of the Arkansas Development Finance Authority. ADFA will
Speaker 73
44:42
be the entity through which the bonds are issued. And so bond questions, more likely than not, will go to ADFA. We've got George Hopkins, who is the director of the Arkansas Teacher Retirement Association.
It's been fairly well publicized that ATRS will be making an equity investment. And so George is here to answer questions pertaining to his investment and to teachers' participation. Richard Weiss is here. Needs no introduction. but Richard, Tim, and Dr. Shelnut are here to answer any questions about the impact on general revenue and taxes.
The governor has already indicated. We have French Hill with us from Delta Trust and some of his team
members. French performed the due diligence for teacher retirement on their investment. From
Speaker 75
45:52
my team, I have Brian Scoggins, who's our head of business finance, Becky Thompson, who is our deputy director and head of global business, and Bentley Story, who is our chief project manager and has been the project manager on this project.
Speaker 73
46:14
But Shane Broadway has joined us. There were some questions in the Senate about how the training will be structured, who will do it, what the roles will be of our two- and four-year schools. So we thought it might be prudent to have Shane with us to address any of those questions that you all might have. And finally, Patrick's here from the Attorney General's Office. They have served as our attorney through this process.
Speaker 79
46:48
In an effort to try and keep from plowing all the
Speaker 73
46:54
same ground that we plowed in the Senate the other day, we prepared a sheet, which mine looks like front and back. Yours, I think, looks like two pages, that gives
you the basics of the deal. There are a couple
Speaker 73
47:13
of things that I want to point out quickly.
You'll see in the bond estimated cost, we've got a
Speaker 75
47:28
swag of $14 to $18 million in the principal and interest for two years.
Speaker 76
47:39
The reason that that's not a hard number yet is that until we sell the bonds, we don't know what the interest rate will be.
We have done these calculations based on what the interest rate was two months ago. And as everybody knows, the interest rate environment has been fairly steady. but there will be, between now and
Speaker 75
48:08
the time we sell this, maybe some upticks, maybe some downticks, and so until we're ready to go, that number remains a swag.
Speaker 76
48:24
The other thing that, upon reflecting on our experience in the Senate and all of the
talking that we've done over the last few weeks about this, I wanted to point out at the beginning is what
Speaker 75
48:37
we're really here asking you all to do and that is bless you and that is
Speaker 76
48:55
we are asking you to authorize the state to sell these bonds that doesn't mean
Speaker 75
49:13
that if you authorize it we're going to go out and
Speaker 76
49:19
sell the bonds the next day there is a mountain of things
Speaker 75
49:27
that have to happen before these bonds will ever get sold. I've spoken about two of them that we insisted upon to provide some safeguards for the taxpayers. The first is that the equity from the equity investors has to flow into an escrow account in
the form of cash or letters of credit that are as good as cash.
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49:59
and the financing for the other $700 million has to be in place. That agreement has to be done and signed and ready to go before we'll ever sell the
Speaker 73
50:14
bonds. So to make that as simple as I know how to make it, they've got to put
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50:29
Secondly, once closing happens and all the money's there and ready to go,
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they've got to spend $250 million before they can spend the first dollar of the state's money. So they've got to put up
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50:56
before we put up our money, and then they've got to start spending on making that thing come out of the ground before they get a chance to spend a dollar of ours.
Those are two important safeguards that we insisted upon. But let me step back even further. And I'll tell you
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51:25
what else stands between this deal and that closing day.
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51:34
They're going to have to go in front of the Public Service Commission to
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51:42
get the power rate authorized. They're going to have to get all of their environmental permits from ADEQ and EPA.
Bond Council is going to have to do its due diligence and approve it. the lender is going
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52:07
to have to do its due diligence and approve the deal.
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52:18
All of the people, once again, who have said they're in are
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52:25
going to have to complete their due diligence
and put their money in
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52:37
the pot. we are asking for your approval to tell them
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52:43
that the state is ready when they are to sell the bonds and do our part. But it's important for all of us
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53:00
to understand that Your approval is not the starting gun, nor
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53:09
is it the green light, nor are you all alone in determining whether or not this project is viable and appropriate.
there are going to be multiple layers of due diligence done by people who, quite frankly, have
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53:35
more in the pot than we do and, therefore, a lot more to risk. So, as we work through this process today and over the coming weeks, We need to remind ourselves that what we're asking for here is the approval to sell the bonds at the appropriate time
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54:09
when everybody's questions, everybody's questions around the world have been answered satisfactorily.
I have had people over the last few days ask me about risk. And I wish that
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54:36
I were able to tell you today that this is entirely risk-free. It's not. There's risk.
But we've approached this understanding that there's risk. We felt like our first duty when we started looking at this was to understand
Speaker 73
55:02
the nature of the risk. Where is it? We think we've accomplished that, and we're going to talk to you about that today. Our second duty was
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55:15
to do everything we could in structuring the deal to mitigate the risk to the taxpayers of the state of Arkansas.
We think we've done that. And I can tell you with some
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55:37
level of confidence that I believe the risk is strongest during this time period between today and the day they spend the first of the $250 million that they're required to spend before we spend a dollar. If this thing's going to fall apart,
Speaker 76
56:03
it's going to fall apart in that time frame.
Speaker 73
56:14
If it falls apart in that time frame, we are out exactly this right now. A year's worth of my team's time. quite a number of months of time for all the people
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56:30
you see up here. We're out the $15,000 that we paid French
to do the due diligence and we're going to be out
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56:38
some amount of legal fees that we're going to share with the Attorney General for some outside counsel that's looked at this
Speaker 75
56:52
deal. So again, if it falls out before they turn the first bulldozer on, we're not out anything.
But I believe strongly that the day they turn those bulldozers on and start clearing that ground, the worst of the risk is behind us. These are incredibly experienced operators and sharp business people. They're not going to spend the money until they know they can achieve the goal.
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57:40
So, as we talk through this again over the coming
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57:54
days, let's remember what the question is that we're really asking here and understand where
the risks are and the decision that has to be made is
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58:10
Is this a good use of general revenue dollars, and have we done enough to mitigate the risk? Mr. Speaker, with your permission, before we open up to questions, there were a lot
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58:33
of questions in the Senate around the due diligence that Delta Trust performed on behalf of teachers, particularly as it relates to what they learned and the conclusions they drew about the marketplace
and the strategy that this mill plans to employ. So I'd like to ask
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58:52
French to come up here and address some of that directly for a couple of moments because I
think it will better inform some of the questions that we'll hear throughout the afternoon. So is that
okay? Absolutely. Thanks, French. Ms. Chill, you're recognized.
Speaker 114
59:10
Thank you, Mr. Speaker, and I can say before this body that with this many group of experts in the
Speaker 115
59:16
Senate, we were able to do man-to-man.
We're going to go to a zone offense in here today, but thank you very much for having us. Some of the core questions that came up in our presentation on Tuesday afternoon to the Senate or Monday were interesting, and they fell into the typical questions you'd ask in any assessment of any venture capital type of an investment. And for the past 35 years, I've been involved in the venture capital business in one form or another. And so the first question that
we drilled down into on behalf of the Arkansas Teacher Retirement System was management. If you're going to start any kind of a new business or a new endeavor, you want to look at the strength and the depth of management first. John Carini has been in this industry 40 years. He's been in the private part of the business. He's been in the public part of the business. He's been the chief executive officer of a number of companies in the steel business.
and he's been the startup chief executive officer of a number of individual mills. His management team has built and expanded over 15 different mills. It's the most experienced team doing this kind of work in the world. They did the first flat-rolled mini-mill ever built, the first flat-rolled mini-mill capacity expansion when they doubled the size.
The first mini-mill to produce pipe-grade steel. The first mini-mill with a variable thickness capacity. The widest mini-mill steel thickness and widest in history, and he's done that three times. This will be the fourth time that he's added value in that arena. the first mini-mill to produce automotive grades and the first mini-mill to produce certain grades of electrical steel.
So for anything you read about John Carini, he's a committed individual, he's a doer, and he's a producer. And his track record speaks for itself, that when the financing is available and the shovel has turned the dirt, John knows how to bring the most competitive mill out of the ground. The second thing we looked at was what niche will this mill attempt to fill? In other words, the competitive advantage.
Why does America need another mini mill? And in that regard, we looked at, and John has done this each time he's innovated, whether he was CEO of Nucor, an employee of Nucor, or off being an entrepreneur. He looked at the future need for steel, the expanding niches in the industry, and he tried to fill them. And that is what he has proposed for this mill that is being considered by the state of Arkansas and Osceola.
Specifically, three target markets. Energy. Oil and gas drilling pipe. oil and gas, transmission pipe, is the first area that he emphasizes. Second, the automotive industry. Here, with CAFE
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1:02:47
standards rising and European standards advancing, Karenni believes that
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1:02:52
that's going to continue in the U.S., and instead of importing advanced steel that's lightweight to be used in automobiles
to help them be stronger and lighter and more energy efficient, that the U.S. will need to start producing that kind of steel here as opposed to by importation. And so that is the second area that they've identified. And the third area of product differentiation is in the electrical steel business. This is a highly technical area, one they've done a tremendous amount of due diligence in. And again, there are not abundant sources for those kinds of steel currently at work in the U.S.
Competitively, as it relates to those three niche areas, which are well known, they've been discussed in the newspaper, we had questions about overlap with this plant and the existing steel manufacturing capacity in Arkansas. The Nucor's plant, the Yamada plant, of course, there is no overlap because they produce structural steel I-beams. The Hickman plant, which is now 19 or 20 years old, is a successful steel mill, no doubt.
It has years of continued success left in its portfolio. It's a competitive mill. It will remain competitive. competitive. But structurally, from the point of view of the equipment installed there, it will not be competitive in these same types and grades of steel that a brand new facility that will come out of the ground in a couple of years will. It's
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1:04:32
just a fact. You can take everything out of the Hickman plant and completely retool it for an investment of hundreds of millions of dollars,
But that's not the proposal. So in the short run, the Karenni management team believes there's about a 20 percent overlap as the proposed Osceola mill comes online
Speaker 115
1:04:55
and moves up its curve of expertise in steel and the types of steel in the three areas that I mentioned. The last thing I'll say in closing before we turn to your questions is putting the hat on of return on investment.
In other words, the prudence issue. Is this a prudent investment? Is this an appropriate investment for Arkansas Teacher Retirement System to consider? And the short answer to that is yes. About 20 percent of Arkansas Teacher Retirement's portfolio is in alternative investments now. Private equity investments, timberland investments, distressed debt funds, and other forms of alternatives to just plain stock and bond types of allocation on an international basis.
The proposed $60 million investment by the retirement system is less than 1 percent of their total assets and is even a modest piece in that alternative portfolio of several billion dollars. In our view, in working through the management and oversight issues of the retirement system, we believe that they have the systems, the skills, the talent, and the ability to oversee this kind of an investment in their portfolio as they have for years in some select direct investments in commercial real estate, for example.
And with that, Mr. Speaker, I will return my time and yield the floor. French, will you take a question?
Representative Alexander, you're recognized for a question. Thank you, Mr. Speaker. You
Representative Randy Alexander
Unverified
1:06:46
may have covered this and I missed it, but what is the
source of the grant money for the site preparation and the subsurface stabilization?
Speaker 128
1:06:56
What, Mr. Tennille? The source is the Amendment 82, bond funding. Okay.
Representative Randy Alexander
Unverified
1:07:03
If I understand this correctly, I've got a little bit of experience in this, and the site preparation, or I'm sorry, the subsurface stabilization, depending on the locale and a variety of factors, there can be a lot of unknowns there. That's right. And a project that you think is going to cost X dollars can go up rather quickly.
That's right. Based on what you find under the ground. Correct. How conservative are the estimates, do you think, for the cost for this part of
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1:07:35
the project? Well, I think the estimates are conservative, but I'll tell you what we did to further
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1:07:41
protect the state. We're putting up $20 million. They're putting up $20
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1:07:47
million. We're going to start sinking pilings. When our $20 million runs out, they're going to take the rest.
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1:07:57
So, you know, the $40 million and one-th dollar will be theirs all the way to the end. Because you're
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1:08:06
exactly right. We don't know. We're going to put that first piling in the ground. And if it sticks out of the Great Wall of China on the other end, we've got a long way to go. And we
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1:08:17
wanted to limit our liability to $20 million. So that's what we
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1:08:24
did. Just on the point of potential cost overruns at the construction phase, because it is a good one,
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1:08:28
and Director Hopkins and the other equity investors have a 10 percent contingency fund of their equity investment set aside that will be paid in at closing in an escrow account to help
account for that kind of contingency.
Representative Nichols, you're recognized for question. Thank you, Mr. Speaker. I noticed that this is the entity that will be receiving so much of the money is an LLC. Correct. And members of LLCs, that's confidential, is my understanding.
I would like to know who all the members are just so the state can know, the people can know where their money is going. Sure. And so can either on your end or some end have a requirement that anybody who has a membership or however you figure the equity interest, that that be disclosed so the people of Arkansas will know who is benefiting from this $132 million.
Do you have any comments on that? Well, first I'll say that in
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1:09:43
most of these cases, the entity itself isn't going to receive the money. A lot
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1:09:50
of these dollars are going to flow through Mississippi County to get the
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1:09:58
work done. But I take your general point that the money being spent is to the benefit of this larger company.
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1:10:06
A lot of the equity team has already been disclosed. John Kareni and his
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1:10:20
partners will put up a portion. Arkansas Teacher
Retirement will put up a portion. And Koch Industries will put up a portion.
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1:10:40
The portion that remains, that has been discussed, is there is a private
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1:10:46
equity fund that will go out and raise
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1:10:52
from individual investors the last chunk of the equity.
And that's liable to be hundreds of people. I do
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1:11:14
not know that there's any provision in Amendment 82 that requires
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1:11:21
disclosure of all of the members of something like this.
I will tell you that if we seek to require that, I
have a strong suspicion that we'll still get this deal
closed, but we'll probably never get another look at a deal this size again. I believe the legislature has the ability to put parameters on, and I would assume that means the legislature could require the disclosure of those with an equity interest in this project.
And I do not doubt your ability as a legislature to put that term on the deal. And what
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1:12:12
I can't tell you right now, because I've never discussed it with any of the people we're doing it with, whether
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1:12:21
that will cause them to say goodbye. And if it will, that may be the choice that the legislature chooses to make. But I do know that you'll run some risk. And, again, whether we can get this deal closed with that condition is one issue.
Whether we'll ever get another look at another deal is another issue entirely. So I'm just trying to answer your question. Yes, that's possible. I think we do so if we choose to do that at our own peril to some
Speaker 75
1:12:57
degree. because none of the other super projects that have closed in any of the states around us that I'm aware of have made such a requirement. And as I've said many
times, if we choose not to take this deal,
which is, you know, again, a valid choice, I have no doubt
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1:13:22
that it will be announced quickly in a neighboring state. But your
concern is for future projects would not be available because we have a disclosure requirement on who's receiving the benefits?
Speaker 145
1:13:37
I think there are people who just will say, we're not going to play that game, and will choose not to even give us a look.
Chair
Unverified
1:13:50
Okay. Thank you. George Hopkins, you're recognized. I'm George Hopkins, executive director of the Arkansas Teacher Retirement System. When the Arkansas Teacher Retirement System invests in a project like this, don't even think that we would ever hold that interest in the name of the Arkansas Teacher Retirement System In order to shelter ourselves from liability and to protect the money of the trust fund that belonged to teachers,
any interest we have in this project will be held in Pinnacle Mountain Holdings, too, LLC. And I guess the question would be like this. Most smart investors don't put their name on the line on a multibillion-dollar potential debt. I think I remember the name of a former coach who didn't do a good job of that, but I don't remember exactly what state he coached in. But most smart investors will never hold this in their name.
They will hold it in LLCs. And I guess my question, if we revealed Pinnacle Mountain Holdings to LLC, would it tell you anything? And if we had to go further, should we list every teacher and beneficiary in Arkansas who is a participant in our trust? At what level do you get the information you want and at what cost? If you are just looking for the name of all the LLCs that will be in there, you haven't achieved much,
but you may have done a lot of damage to the Amendment 82 process. Representative Hammer,
Representative Kim Hammer
Unverified
1:15:38
you're recognized for a question. Thank you. I realize that going into a project like this, I appreciate you being here, but I've got to ask the question. On the second page, it uses the word if. If the company pays off the loan in four years, and then the second one is if the company pays off the loan over 24 years, Would you educate me, please, as far as what the mechanisms are in the event that they do not pay off their loans?
Speaker 150
1:16:04
Well, they're going to pay off the loan. The bonds that will back the
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1:16:13
loan, the plan is to sell two tranches, the $70 million tranche, which will represent the grants, and the $50 million tranche that will represent the loans. We will pay the principal and interest on both tranches for the first two years during the construction phase. At the end of that two-year period, the state will continue to pay the principal and interest on the $70 million tranche.
The company will then start to pay the principal
Speaker 76
1:16:42
and interest on the loan. loan, we have given them the ability to pay back that loan
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1:16:56
early. If they pay it back before the end of the fourth year and announce phase two of the
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1:17:04
mill at that point, they get to take a $5 million discount on their payback. Dr. Shelnut can talk about how it
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1:17:25
or not they choose that early repayment option or they
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1:17:30
just let the loan continue to run for all 20 years and still keep paying the principal and interest. Either way, they're on the hook to pay back the loan. It's just a question of the timing. If they pay it back before the end of the fourth year, and let me say
the deal that they structured to build the Severcore mill in Mississippi had a similar provision in it and they paid it back at the end of the first year but if they pay it back before the end of the fourth year the project goes cash flow positive to the state at the end of the fourth year meaning we're starting to collect
Speaker 76
1:18:16
more in taxes than we put out the door and on the subject
Representative Kim Hammer
Unverified
1:18:23
to taxes, I noticed also on the second page other incentives that under the sales tax exemption on utilities, I noticed that there was a time frame for the recycling equipment tax credit of 3 to 14 years. I'm just curious on the sales tax exemption on utilities, is that an indefinite period of time that they would never... That's in perpetuity
Speaker 73
1:18:42
and it's a reflection of the same deal that was done for Nucor when Nucor located here. Okay. Thank
Chair
Unverified
1:18:48
you. Thank you, Mr. Chair. Representative Viviano, you recognize your question.
Representative Mark Biviano
Unverified
1:18:55
Thank you, Mr. Chairman. Grant, you guys have done a good job in this document and putting together the parameters of the project. Could you elaborate a little bit different on the total cost of the state? We know what the bond costs are going to be or project with the interest, but when you add all the other incentives, local cost, education, do you have some information to tell us kind of what the
Speaker 76
1:19:18
total cost would be? Well, remember, when we look at other incentives, and again, Tim or Richard can
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1:19:25
stand up here and help me when I start to stray.
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1:19:32
Most of those costs are really us foregoing taxes that
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1:19:37
we're not collecting today. So we're not collecting any of this money right
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1:19:43
now. And what we're really saying is we're not going to collect it in the future for some period of time
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1:19:54
either. So it's sort of tough to figure out exactly how to put a cost next to any of these things.
Because a lot of them are, most of those are performance driven as well. And so you don't know what they're going to owe that you're not
Speaker 73
1:20:16
going to collect until they buy something that they would theoretically otherwise owe taxes on. And I know that's confusing, but I think you're following
Speaker 73
1:20:34
costs that we know, we will be putting $5 million from the Governor's Quick Action Closing Fund into a training fund that will be matched by $5 million from R.T. Williams' Training Trust Fund.
Now, it's important to remember, and I think everybody in this room knows how we do training here in the state of Arkansas. First and foremost, we don't pay wages on the employees as they're being trained, which makes us different from a lot of the states around
Speaker 75
1:21:11
us. We only pay for the training. We'll pay for the training. We'll pay for equipment that a college or university needs to purchase to facilitate that training.
And we'll pay for the trainers. But all of that money will end up flowing through to your schools. And it's all done on a reimbursement basis. So we pay you back for the
Speaker 76
1:21:42
money you spend to train the people. In terms of other
Speaker 95
1:21:50
costs, I can't remember if we put it.
Speaker 75
1:21:57
Did we put the local contribution on this sheet somewhere? Okay. Mississippi County
Speaker 95
1:22:09
is putting up 12. City of Osceola is putting up two. So there's another
Speaker 73
1:22:18
$14 million that's coming from the state of Arkansas.
all. The bond cost is sort of what it is, and
Speaker 75
1:22:33
I think we've reflected it pretty accurately
here, again, with the swag that I indicated that's there until we get closer to selling the bonds and can nail that number down. But if anybody on the panel can think of any hidden costs that I'm
Speaker 73
1:22:53
not thinking of, please step forward. But I think that's really what it is. And again, we'll
Speaker 76
1:23:00
get closer to knowing what the impact of some of these other incentives are as we see
what they do. But again, it's not money coming out of the Treasury that's there today. It's the foregoing of collecting of taxes that would otherwise
Speaker 75
1:23:19
be owed because of their business activity. So kind of hard to put a cost on that. Representative, one question. One more.
Representative Mark Biviano
Unverified
1:23:35
Thank you for that explanation. Is there any provision in the project that would require a certain percentage of Arkansans to hold the jobs?
Speaker 73
1:23:44
No, and it's actually, and there are plenty of lawyers in the room, it's our understanding that such a provision would violate the Commerce Clause, and therefore we
Speaker 75
1:23:54
can't do it. But that came up quite a bit the other day, and let me address it as best I know how. We had that concern from the very beginning.
Speaker 79
1:24:14
We did everything we could to try and find
Speaker 73
1:24:21
a site in central Arkansas that was as good as that site in Osceola in order to
locate the thing as far away from the border as we possibly could. In the
Speaker 75
1:24:37
end, and as Mr. Kereni said in the press conference, that particular site just happens
Speaker 73
1:24:43
to be steel mill heaven, as he puts it.
Speaker 76
1:24:48
And so, try as we might, we couldn't get over the hump of
Speaker 73
1:24:55
some infrastructure issues and some logistics issues to pull the thing into central Arkansas where we'd get some of that protection. I will say that the difference in location relative to the bridge we
think is going to be somewhat significant.
Speaker 95
1:25:22
We think because Osceola is a little further south, it's going to
put it out of reach of some of the folks who have been taking those jobs at Nucor. but I certainly
Speaker 75
1:25:39
would never tell you that, you know, if you take a 75-mile circle and draw it around
Speaker 76
1:25:44
that plant, that there aren't going to be some people coming in from Tennessee and Missouri to try and be employed there.
Speaker 75
1:25:55
The one thing that we went over in the Senate, and again, Tim or Richard can stand up and answer this question, if you live in Tennessee and
Speaker 73
1:26:06
work in this plant you're going to pay income tax to the state of Arkansas and we're going to keep it and you're not going to put your kids in school here and unless you get hurt on the job you're not likely to go to the hospital here
Speaker 75
1:26:25
and other than driving back and forth to work you're only going to drive on our roads a
Speaker 73
1:26:37
very limited amount of time So the worst aspect of outsiders coming in and taking these jobs Is that they're going to pay taxes and use less services Having said that, we want every one of these jobs to go to an Arkansan
Speaker 95
1:27:06
your challenge, the education establishment's challenge, really from
Speaker 73
1:27:11
K-12 all the way into college, is to make sure that we're putting the resources in place to
Speaker 76
1:27:18
provide the training that's going to make Arkansans competitive for these jobs.
Representative Mark Biviano
Unverified
1:27:27
Brief follow-up to that. Would the non-Arkansans be eligible for the education reimbursement? Well, no body
Speaker 142
1:27:37
is going to be reimbursed. But if you're asking the same question
Speaker 75
1:27:43
the other people were asking, which is are we going to spend training dollars training non-Arkansans to go to work
Speaker 183
1:27:52
in this mill, the answer is yes. That
was my question. Yes. Representative Overby, you're recognized. Thank you, Mr. Speaker. I've
heard some, a few constituents and some of the media describe this incentives as corporate welfare. Would you answer that, please?
Speaker 108
1:28:11
Sure. I've said for the better part of a year in every speech that
I give, despite what the governor said about me, somewhat with his tongue planted in his cheek, I don't like incentives. i wish we
Speaker 73
1:28:32
didn't have to have them but the truth of the matter is every state in the united states has them
Speaker 76
1:28:40
and most of the states that are our neighbors have them and have more than we do
Speaker 75
1:28:45
so that's the way the game is played But
I've learned a lot through this year of dealing with these folks About
Speaker 76
1:29:01
how they look at these kinds of projects And why they feel like they've got I don't want to call it a right But they've got the ability to come and ask for incentives
Speaker 95
1:29:19
as you can see on this sheet there's going to be some period of time
Speaker 73
1:29:28
where they're not going to pay any taxes but they'll get to the
Speaker 75
1:29:37
point at about a third probably of the useful life of the plant where
Speaker 73
1:29:44
they're going to start owing us taxes And over the course of that period of time, they're going to pay us tens of millions of dollars in taxes.
Speaker 75
1:29:55
That's just the corporate. They're going to
Speaker 76
1:30:02
buy things from Arkansas companies. One of the things I hadn't mentioned yet, and maybe on this sheet again,
Speaker 73
1:30:12
And they've agreed to spend, during the construction and startup phase, $250 million with vendors in the state of Arkansas. So they're going to pay us a lot of taxes.
They're going to spend a ton of money. And they're going to
Speaker 73
1:30:36
employ a bunch of people. their impact on the economy of whatever state they
Speaker 76
1:30:43
locate in over the life of this plant is going to be many hundreds of millions of dollars. The
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1:30:54
other way that they look at these things is they sit down with their engineers and they say,
Speaker 73
1:31:02
here's what we want to do. Design this
Speaker 75
1:31:09
for us. And the engineer designs that plant as if it's being built on a marble tabletop out here somewhere. And then these guys go out and start looking
Speaker 73
1:31:31
for locations. And some locations are more expensive in terms of either cost of land
or structural deficiencies or issues that you've got to address than other locations are. So
Speaker 76
1:31:49
when these companies show up, their basic attitude
Speaker 75
1:31:54
is, we're going to spend over the next 40 years or cause to
Speaker 73
1:32:04
be spent many, many hundreds of millions of dollars in your state.
Speaker 76
1:32:12
And the quality of your ground is going to determine
Speaker 73
1:32:18
a significant chunk of our profitability over the first few years of this operation because if we've got to sink high links
Speaker 75
1:32:27
from here to China, it's going to take a longer time for us to be profitable. And
Speaker 76
1:32:37
so I think that their basic approach is we're going to do this somewhere
Speaker 75
1:32:46
and somebody is going to see enormous benefit because of our investment. And again,
Speaker 73
1:32:53
people have said, to your point, well, surely a bank would
Speaker 76
1:33:01
loan them the money. Why do they need to get it from the state? If they're
Speaker 73
1:33:06
investing a billion, they could go get it from somebody else. And the answer is absolutely yes,
Speaker 76
1:33:15
they could. But they look at it as we are bringing you an enormous revenue stream.
and we want you to invest in this alongside of us. People have said, well,
Speaker 75
1:33:30
what's the state's equity in this thing? First and
Speaker 73
1:33:35
most important thing to know is that we're constitutionally prohibited from holding equity in any of these companies. So we couldn't
have it even if they'd give it to
us. But the other way to think
Speaker 73
1:33:54
about it is equity investors do so in order to achieve a return on their investment.
It's my argument that over 40 years of operation, the state of Arkansas is going to
Speaker 76
1:34:10
see enormous return on the investment that it's making on the front end. So, do
Speaker 75
1:34:16
I think it's corporate welfare? No. Do I wish
we didn't have to do it? Yes. But, all in
Mr. Tenille, I'm going to ask the Chair a question from here. Best forecast situation, when do we get our money back? Best forecast
Speaker 108
1:34:48
situation is, well, we break even at the
Speaker 75
1:34:54
end of year four, meaning that we start collecting more than we put out at the end of year four.
And again, John, come up here real quick and talk about which pieces of revenue you're looking at when you say we go in the black and which ones you aren't, because I think these numbers
Speaker 198
1:35:26
are pretty conservative. John, you're recognized. I'm John Shelnut with DFA. Anyway, as Grant mentioned, there are certain costs that are not recognized because the firm does not exist here.
So we're looking at it in terms of general revenue impact, the existing forecast, and the existing base. So some of these effects are not counted because they're not already in that base. But looking forward, clearly we're taking the project payroll and an estimate of the indirect payroll from the other types of related jobs.
The direct payroll is over $38.5 million a year, subject to Arkansas income tax. We used conservative estimates of those indirect jobs and indirect payroll related to the activities, and that generates another $25 million in payroll and other entities related to the project. That's also a conservative estimate of the number of jobs producing that income.
We also took a conservative approach to the project entity's contribution to our future revenue collections. We assume that with the recycling tax credit, there essentially is no tax coming directly from the project. And that may be a bit too conservative, but I think it's good for at least the next 10 years. and we're not sure when that assessment would change beyond year 10.
We also considered the impact of a corporate income tax contribution to our base as these other entities come in as contractors to this project, as customers locating close to the project site, we took a conservative approach to that as well. But there
Speaker 200
1:37:41
is some significant contribution later on from that. The only thing I'll add
Speaker 73
1:37:51
is that all of those calculations were done based on this 525.
Speaker 76
1:37:58
They're not done based on any growth projection for this mill
Chair
Unverified
1:38:07
itself. George. Mr. Hopkins, you recognize. Thank you, Mr. Speaker. George Hopkins, Executive Director of Arkansas Teacher Retirement System again. Although Grant is correct that the state of Arkansas itself cannot hold an equity position in this plan, obviously the Arkansas Teacher Retirement Trust Fund can. And my first opportunity to speak to many of you, let me tell you, as of June 30, 2012,
the Arkansas teacher retirement system needed a 2.85 percent increase in the employer contribution rate to get back to a 30-year amortization. That's 80 extra million dollars a year if we just looked at the legislature to give the public schools general revenue to get back to a 30-year amortization. The Teach Retirement System has a group of bills that will cut your retirees' benefits coming in monthly by up to $74 a month.
We have a group of bills that will increase the cost of the contribution for our active members and a lot of bills that will cut the benefit accrual for our members. If we get a 17% return this year, we're back to a 30-year amortization without any of that. We're probably about 11% now. That means we probably have 185 basis points to make up. My point is this. Based upon conservative numbers, let me tell you what they did in terms of what we expect our internal rate of return on this to be.
We first of all took the average cost of scrap over the last five years, and then we looked at the capacities that most of these plants operate at that are mini-mills. Let me tell you there's a big difference between a mini-mill and an integrated mill. Mini mills are much more efficient. They recycle scrap metal, and we used 82 percent capacity for a mini mill that was going to be producing thick, wide plate that was going to be producing electrical steel and would be able to produce automotive high-strength steel.
We expect that 82% probably low, but we took that, and then we didn't stop there. We stress tested it two standard deviations back and said, what if it's really not as good as what we thought? And so not just one standard deviation, but two to really stress test this. First of all, this thing makes a profit for us and pays all our debt service at 62% capacity. But when you do that double standard deviation back, after five years, we get a 23% return on our investment based upon very depressed market conditions.
And that's not just return money to us. That's increasing the value of our asset, which our actuaries give us credit for. What that means is we make our 8% assumed rate of return and 15% additional return a year. That 15% return on $60 million is the equivalent of $9 million a year. That's $9 million a year. If we don't hit that 17%, I'm not going to be asking you to fund. There's a bill in there asking for you to let us go up to 15%. He's not going to recommend it for 2013-14.
We'll argue about July 1, 2015. But there is a second part, Mr. Speaker, And that is that when you look at ATRS actually being an equity investor, which we can do, the benefits of the state starts kicking in much earlier. We will carry this on our book at cost until essentially it starts production. The last steel mill, Severcore in Mississippi, was highly profitable after the third month of operation. You know, after we see what this mill will produce, then the value on our books will greatly go up, which will shift if this thing, even at two standard deviations, is as good as what it should be, a great benefit.
By the way, just on the average, what we would expect, based upon historic conditions for a mill that we'll produce instead of the arch steel, is a 44% return. I'm not going to tell you what the number is there, but it's a whole lot better. So, you know, there's a difference when you're looking at this investment when you have a state player that's an equity owner that can participate. John, I want to go back to the
Speaker 49
1:42:36
question I asked about when we started getting our money back.
Can you tell the body what the estimated annual P&I payments that we're going to be looking at? And
let's get that number locked down first, and then let's talk about the revenue that we're going to have coming in. So what are our payments going
Speaker 198
1:43:06
to be? Again, this is based on a recent quote. but it's not the final number, it could change.
And this is based on a $75 million bond. The P&I would be roughly $5 million a year, and that would not count the first two years. So we would be looking at the first P&I number in FY16, 2016.
So that is a known cost that we put in our estimate across
Speaker 49
1:43:49
time. Well, I want to be clear, and that would be tranche 1 that you referred to, and that's why it's 75 and not this. So when does the other, when does tranche two hit?
Speaker 207
1:44:04
Mr. Speaker, I'm Mack Dodson with ADFA. The $75 million tranche will be paid as soon, you know, the $5 million a year roughly starting at the first bond payment after we issue the bonds.
The $50 million piece, which I'll call Series B, after the first two years, the revenue to pay that bond is going to be paid by the company in their loan payments that they'll start making after the first two years. The first two years cost, and we could, on both, depending on whether we want to pay principal and interest or interest only on the Series B.
So it can be any, and that's I think on your sheet, we have $14 to $18 million. That's part of that difference depending on how you want to do it. The maximum it could be would be $9 million a year for those two years for both, for Series A and B. Now, when I say
Speaker 49
1:45:17
maximum, that's at current interest rates. So the company starts paying Series B, the Series B bonds, at some point in the future.
Speaker 207
1:45:25
At the end of year two. Year two. That's supposed to be the
construction period. That's the reason they did it that way. And on the revenue side, we're forecasting that we're going to have at least $5 million in new revenue after year four, and that's the break-even number. Did I hear that
Speaker 198
1:45:49
right, Grant? No? John? Yes, we have two break-even numbers depending on the path they choose for early payoff or not on that loan.
So it's six years if there is no early payoff. And prior to that point, you know, when we put this in fiscal year terms, we consider the construction activity as well in the return
Speaker 214
1:46:12
to the state. So there was an up-and-down motion.
Speaker 95
1:46:18
But the other point is the early payback assumes and we will write the agreement
Speaker 75
1:46:26
that we'll forward to you such that when they pay it back, it's going straight to the trustee and we're paying off the bonds.
So that's how we get to a faster scale is we take care of it. Now, if they pay it back before the end of the fourth year, there'll be a $5 million discount. It will be up to a future legislature and a future governor to determine at that point whether, you know, I mean, if there's some GIF sitting
Speaker 76
1:47:04
around and we want to wipe out the whole 50,
or do we want to just carry that last $5 million along to the 20 years is a decision that you all have
to make. Thank you. Representative Wren, you're recognized for
Representative Tommy Wren
Unverified
1:47:22
a question. Thank you, Mr. Speaker. Grant, you could probably answer this question, but Mr. Hill alluded to it. In doing the analysis for the teacher retirement system, you mentioned that the first thing you looked at was management. And we're using Mr. Corrente here, but, you know, I know that financial institution has got a loan on a business.
They're going to have that owner's life insurance policy or self-insured policy on him. So that's my first question. The second question is, can you talk more about that management team? I mean, how long it's been in place and, you know, what are they coming? Because, you know, if something happens, I mean, he's the cog in his wheel, and we need to make sure that, you know, we've got somebody that can run this. Sure. Well, let me answer the first question,
Speaker 73
1:48:11
and then I'll turn it back over to French to talk because he's got more on the management
Speaker 76
1:48:16
team right in front of him, although I've met a lot of them.
So, in terms of key man policy, we haven't required that as part of
Speaker 73
1:48:29
our deal, but only because, to your point, there are people with a whole lot more money
Speaker 76
1:48:37
in this thing than us, and they're going to have it in spades. So that's just not something that we've entered into, but I'm assuming, we've all assumed that
Speaker 73
1:48:50
you're exactly right and that the big entity that's doing the financing on the $700 million piece is going to require.
Speaker 114
1:48:57
And French, if you want to come up and talk about the rest. Mr. Hill, you recognize? Thank you, Mr. Speaker. On the subject
Speaker 115
1:49:14
of protections on the management team, for example, you mentioned life insurance and things of that nature. The secured lender is a multinational bank that is doing the senior financing, $700 million for this property and the construction on it.
And that deal will have to be finalized. It will be finalized just like the equity piece will be. All that will be finalized to the satisfaction of the state before the state's benefits are paid. So that agreement between the lenders, the senior lenders, and the management group does not exist yet, but you can be sure it has every customary protection in it. Plus, it's likely it may have some additional guarantees associated with it that will even protect the project further.
In terms of the management team, you asked about the specific talents. and John is bringing his team back together that has worked on these 15 mills and no one has less than 15 years' experience in precisely the kind of construction and manufacturing experience that will be expected in this Osceola plant. Some are employed elsewhere, both nationally and internationally, that have agreed, agreement in principle, that if this deal goes through,
They're coming on board with Mr. Carrente. And just looking down at their list of bios, it's all 25 years' experience. The steel, one of the lead managers at the site, will have 48 years' experience. So Carrente's taking the best of the best from the 15 mills that he's constructed and bringing them to bear at the Oceola site.
Speaker 114
1:50:56
Is that responsive to your question? Thank you.
Chair
Unverified
1:51:00
Mr. Hopkins, you're recognized. Thank you. I've traveled to Pittsburgh and met with a lot of the talent. I've met with them here in Arkansas. Let me tell you, like Dave Stickler, who's with Principal Partners, he scares me. He's so smart and talented in this area. You have Mr. Garris and Mr. Levy. They're extreme talent. If you have the idea that if John Carrente goes away, that the talent of this group goes away, you're highly mistaken.
One other very important point, with John Carrente and the 15 mills that he's either built or expanded and the six mini mills that he has built, he has worked extensively with SMSCMAG, the company that will build this mill. They're a German company that build the best of the best mills. They've been in business, you know, essentially forever. They have $4 billion in U.S. dollars business a year. They have 11,000 employees.
They want this to be a showcase meal because they know the mini-build business the United States has to pick up. Since we import 30 percent of our steel and we're a net exporter of scrap, and because of what we have to do in the electrical industry, because of what we have to do in the oil and gas industry, The truth of the matter is that in the next 15 years, this country will be energy independent if we keep on the path we are in drilling and drilling and drilling.
It takes 3 million pounds of steel and concrete in each one of those wells to make them safe. And when you look at the needs of the electrical transmission industry, it is a shame that we're importing that metal, that specialized metal, instead of building it ourselves. And they want this to be a showcase mill because they know they're going to build a lot more than they want to be the company building them. And so when you bring together John Carrente and his team,
then you bring together the manufacturers who manufactured a lot of these and built those, and they will be on site from before the first shovel is put in the ground until after it's working. By the way, let me tell you, SMSC mag has guaranteed every operational aspect of this mill. They've guaranteed that it will produce wide and thick steel, wider and thicker than any other steel ever built at a mini mill. They have guaranteed its uptime. They have guaranteed its electric usage.
They have guaranteed every operational aspect of this mill, and they have $4 billion a year in cash flow to stand behind it. So when you take that, you don't have to worry about John Carrente falling out and this thing falling apart. There's a whole lot more behind it than John Carrente, although he is a great operator and has pulled mills out of the ground and had them operating on cost, on time, time after time. Mr. Burris, you recognize your question?
Representative John Burris
Unverified
1:54:07
brief with my questions if you want to be brief with your answers.
We're going to do our best. Okay, two quick ones. One, it's about $10 million to service these bonds out of general revenue that's currently not built in the governor's balanced budget. Is that correct?
Well, the first two years will be general improvement.
Speaker 73
1:54:29
So he's got a proposal to put $10 million a year for the first two years to take care of the years that we're paying both principal and interest.
And then in that third year, it's actually $5.1 million. So it's not $10 million. By the time it
Speaker 76
1:54:50
falls back to GR, it's $5 million, not $10 million. GIF the first two years? Yep. Okay. A second question,
Representative John Burris
Unverified
1:54:56
I want to talk about the tax stuff because I'd heard you say previously at a meeting we had over the summer that you've never heard a business mention taxes as a reason for choosing a state to locate, but I'm noticing that we're giving a lot of tax breaks.
We are. So I assume this was the
Speaker 73
1:55:15
first company that asked. No, but, again, when we were talking over the summer, we were specifically talking about corporate income. I think
we were talking about personal income Well, personal income At any rate,
Representative John Burris
Unverified
1:55:30
I will tell you The 4% income tax credit Does that mean that they get a credit And for the employees, the top rate will be 3% Is that how the program works?
How does it work? Say it again The 4% income tax credit Based on new payroll for new jobs For the first five years Advantage That's corporate income? Yeah, straight corporate. Okay, I guess the fact that it was for new payroll and new jobs threw me off to leave me to believe it was personal income.
No, it's corporate. It's corporate income. So they get to take corporate in
Representative John Burris
Unverified
1:56:07
return for creating the payroll? I think they're right, 2.5. I always get the capital gains and corporate income mixed up.
But either way, they'll be paying a 4% lower corporate income tax than any other business in
Speaker 232
1:56:22
the state. Ms. Leathers, you recognize. Mr. Speaker, Tim Leathers of DFA. The way this credit is calculated, it's used against corporate. It's calculated on payroll. So you get 4% of your payroll, but there are limitations on how much you can use. So, you know, if they're – as you know, corporations manipulate their base, and they don't – sometimes they don't pay a lot of corporate income tax at any rate.
But this can only be used against corporate income. So their employees are going to be withholding, and they're going to be paying individual income tax, and this is not related. But it will be calculated 4 percent of payroll, and then they use it against their corporate income tax if they owe any. And most startups owe little or nothing
Representative John Burris
Unverified
1:57:07
anyway. Okay, that's good. I'm just glad we finally got around to admitting that it matters. Thank you. Professor Williams, you recognize.
Representative Darrin Williams
Unverified
1:57:19
Thank you, Mr. Speaker. And Mr. Neal, and you and your team, first let me thank you for your hard work. This has been a long time in coming, and you've been spending some time on this, so I appreciate it. We all know that two things that we need are jobs and education in Arkansas, so I appreciate your effort here with these jobs. But let's talk a little bit about the jobs and the performance. You've talked a little bit about the clawbacks. Right. How do we make sure that we protect Arkansas taxpayers in case this doesn't perform like we think it's going to perform?
How do we make sure we protect ourselves with the clawbacks? Explain that a little bit. Okay. And my second question with regard to jobs, Any industry or any business this large is going to attract other suppliers and vendors around them. Right. Are you working to try to attract those businesses and industries that you know usually locate around these type of mills? And can you speak to that? Are those figures counted in your economic gain for Arkansas on what those new businesses make? Let me take the
second one first because I know the answers to that one myself,
Speaker 73
1:58:21
and then I'm going to get Brian Scoggins to come up here. and answer the clawback question. As Dr. Shelnut said a few moments ago, on
Speaker 76
1:58:38
a very conservative basis, he has included some of those
Speaker 73
1:58:44
ancillary jobs into his calculation for the economic impact of this facility. But it's very conservative.
Speaker 76
1:58:53
I will tell you that when the first mill opened in Blytheville, it was
Speaker 75
1:59:07
340 jobs, roughly. They're at 1,400 employees today. And Tenaris, which uses steel
Speaker 73
1:59:17
coming out of the Hickman mill to build pipe and tube, has more employees now than Nucor does.
If you've driven down that road to the front gate of the Hickman facility, it's just metal building, metal building,
Speaker 76
1:59:37
metal building, metal building. so one of the things that i've heard is sure it
looks like a whole lot per job and that's true it's a whole
Speaker 75
1:59:59
lot per job for these 525 jobs but these mills are like magnets
they tend to draw other things closer to them and so when you look at opportunities like this you look at
what you think the mill itself is going to do in terms of growth and expansion and you look at what else you think it's going to attract. One of the things I probably haven't talked about enough is as part of this deal,
Speaker 73
2:00:42
the company is going to put up $150,000 a year for the next three years, and we're going to match it out of our existing marketing budget to do nothing but talk to the
world about Arkansas Steel. And not just going to be limited to this plant's steel, it's going to
Speaker 76
2:01:12
be Arkansas steel. We have already identified some projects that have been announced in terms
Speaker 73
2:01:20
of big companies that are looking in the United States that this mill is going to enable us to go after.
And we've already started that process.
Right now in Mississippi County, you've got that
Speaker 75
2:01:44
number somewhere. There are 3,500 jobs directly related to steel. That's
Speaker 76
2:01:50
not even counting truck drivers and cooks and waiters and waitresses
and all of the kinds of jobs that you tend to get when people get clustered together like that. So
when you think about the kind of projects we ought to
Speaker 73
2:02:23
do Amendment 82 for, It ought to be something that has enormous capital requirements.
Speaker 76
2:02:32
And my preference is that it be something that's really heavy and hard to move. You can't load a steel mill up on the back of a truck and drive it out of town in the
Speaker 73
2:02:47
middle of the night. we talk a lot about the fact that we want to attract the jobs of the 21st century we also talk about the fact that a lot of the jobs that are of the 21st century the value of the companies only exist in the six inch space between a bunch of really smart people's
ears the problem with really smart people is they can buy
Speaker 76
2:03:14
plane tickets and hire moving companies. If you looked at me and said, you can have 500 jobs from IBM or you can
Speaker 73
2:03:27
have 500 jobs from this steel mill and they're going to pay about the same and
Speaker 95
2:03:35
the investment going to be about the same,
which one do you want? If I'm taking general revenue to invest in it, I want
Speaker 76
2:03:46
the steel mill. Because the guys from IBM can skedaddle. I mean, we've all watched. Look at what happened in St. Louis
Speaker 73
2:03:56
when Southwestern Bell decided virtually overnight that they were moving their entire executive team to Texas. I mean, it
Speaker 76
2:04:06
gutted. the middle class and the upper middle class of that town.
So we're betting on growth, and they're good models for the growth. Now, on to the
Speaker 73
2:04:21
clawbacks. Brian, if you will, come help me. But the most important thing to remember is we've got a 15-year clawback period on this. It's the longest one we've ever negotiated, and it's the longest one, quite honestly, that I've heard of. They squealed because they said 15 years. We've never done 15 years. Nobody's ever done 15 years.
And we said, well, we need 15 years. So tell them how it's going to work.
Speaker 240
2:04:47
I'm Brian Scoggins with AEDC. What we've done is we've structured in several looks at this thing in regards to any conditional repayment requirements. We've structured in one that is a one-time look to determine, okay, did you make the capital investment that you indicated that you were going to make? It's kind of a one-time. And we only start measuring after we get through the construction period. And then we've structured in a look to see, okay, you said there's going to be 525 employees there.
We're going to look and see if you're maintaining those 525 employees over that length of time. And then we structured in a look and said, okay, regardless of how many you have, what is the average wages of the job that you're created? And we've looked at that over time. And then there's just a proportional repayment requirement if
Speaker 49
2:05:39
you underperform according to the measurements. that we're taking. Can I go back to the money part again, Richard, Tim, John, on $75 million, just on a cash
basis? $75 million is out. Let's just assume we wrote a check for that. What's the revenue forecast
to break even in total on cash basis? When will we get that money back? Well, I
Speaker 198
2:06:10
think your question is related to the first two years. I mean, one estimate of that is $13 million paid out to cover those two years.
No, that's not what I'm asking. I'm asking, you know, you've had some forecasts of revenue that this investment or the steel mill is going to generate over the long term in the form of taxes back to the state. How long is it going to take for the state to collect
Speaker 198
2:06:53
$75 million in taxes? Well, we don't simplify it quite that much because during the construction phase, we have a year where it already turns positive on an annual basis with a positive 6.4 million short-term impact.
It goes back negative, and then over the long run, you're looking at a net annual benefit of about 4 million a year.
Speaker 49
2:07:20
15 years after year six is that right 15 years is that am i doing the math
right no what year do we collect our 75th million dollar in taxes related to this project if
Speaker 3
2:07:40
get that yeah i'm not i'm not i'm not trying to put you on the
spot i'm just thinking on a cash basis
when do we think we're going to get the money back Well,
Speaker 90
2:07:50
and I do respect, Mr. Speaker. I don't know that $75 million is the
Speaker 75
2:07:55
number you want. I think what you want is what year do we collect all of the principal and the interest back, right, rather than the $75 million. Yeah, good point,
good point. So, okay, we can get you that number. Okay. Riverside
Representative Andy Mayberry
Unverified
2:08:11
Mayberry, you're recognized. Thank you, Mr. Speaker. First, before I get to my question, I would like very much to thank you and the department and DFNA and everybody else who have brought us this opportunity,
because whether we decide to approve this or not, it's a great dilemma to have, and a lot of other states don't have that dilemma right now, so thank you. I used to work at AEDC and worked on the committee to help pass Amendment 82, the Super Project Amendment, So I understand that this is a needed economic development incentive tool. And the question is whether this is the right time, the right project. At the time that we were marketing this to the state to pass this amendment, what we used often as an example was an auto manufacturer.
And I know that in my mind that's what I had envisioned, and I think that's what a lot of people had envisioned. And so this is a little different from that. If we were to go forward at this point, from what I understand, we've got about $235 million available. We're talking about $125 of it here. That eats into our resources considerably. How does that affect or does it affect our ability to continue to seek out and market ourselves
to another super project of the type of magnitude that would require us to utilize Amendment 82 funds and then turn around and come back here to the legislature again saying, you know, I know that we just obligated ourselves greatly. We need you to do it again. How does that play into the
whole big picture? That's a reasonable question. But let me say that the way we
Speaker 95
2:09:55
play the game and we've got to play the game,
Speaker 76
2:09:58
you swing at the pitch that's in front of you. And we're not, you know, we can sit here all together and hold hands and close our eyes and wish that a bigger project is going to come along that we need all the money for. So maybe we shouldn't do this one, but we might stand here with our eyes closed wishing a real long time before we got another opportunity. So we swing
Speaker 78
2:10:29
at the pitch that's in front of us. But, you know, I will say that I think that the
Speaker 76
2:10:42
location of this plant makes our case for pursuing an auto plant in the future.
And I'm not sure that any auto plants are going to get built any time in the next few years. But I think that the location of this plant makes our case stronger than it is today. So that's one reason to look at it that way. The
Speaker 78
2:11:11
other thing that I will say is that we're going to get a significant chunk of this money back pretty quickly.
Speaker 73
2:11:23
we will still have, you know, assuming that everything stayed the same just for argument's sake, if we get the $50 million paid off within four years, then we're back to $185 million in authority plus
Speaker 75
2:11:48
revenue growth. So, you know, I think
Speaker 73
2:11:53
we're still in position to be competitive.
I recognize that that's what we thought. But if you'll remember, and the speaker talked about this, the way 82 was written before we
Speaker 76
2:12:09
went in and changed it, it was $500 million and 500 jobs. This is a billion dollars and 500 jobs. So it's right in the wheelhouse of, you know, what we thought we were talking about, size-wise. It might not be the same product, but, you
Representative Bruce Westerman
Unverified
2:12:36
We're going to swing at this pitch. Representative Westerman, you're recognized. Thank you, Mr. Speaker. Talking about mitigating risk, I want to go back to the $1.1 billion cost. How far along is Big River on the development of that cost? Is it an estimate? Is it a guaranteed maximum price from a contractor? How much work has been put into developing that
Speaker 73
2:13:03
cost? I think there's been an enormous amount of work that's gone into developing that cost.
Speaker 76
2:13:08
i can't tell you that they've got contract in hand i know that a lot of the principals were in germany this weekend having those very conversations but i do know that the letter of commitment that we've signed together they're on
the hook to us for at least that much So the test will be done based on $1.1 billion, or
Speaker 137
2:13:50
one now, based on a billion dollars.
Representative Bruce Westerman
Unverified
2:13:54
Okay, so that's not plus or minus 10 percent or 20 percent? That's a hard number? Just on
Speaker 114
2:14:02
the financing package, I mean, they've done enough due diligence and enough cost estimating with their principal contractor that's going to build it to propose to both the senior bank and to all the equity investors the numbers that you've seen, $300 million in equity plus the $700 million in debt plus the state support is sufficient.
They did ask the equity investors to set aside 10% or an additional $30 million in case they had
Speaker 115
2:14:32
any kind of a cost overrun, such as the gentleman's question about ground preparation or some surprise once they break ground. But, I mean, they've submitted those numbers to their banks, and they've submitted those numbers to their equity investors. So they've got enough confidence to do that.
Representative Bruce Westerman
Unverified
2:14:52
I just know on some capital projects that you get into cost overruns that aren't anticipated on the front end,
and I was wondering if any sensitivity analysis had been run on the economics, say it went over 10% or 20% above the $1.1 billion or $1 billion. I think
Speaker 240
2:15:08
actually John would probably be in better shape to answer, but my own thought is that as far as the economic impact on what it does for the state, We're more focused on the number of jobs and the wages and the income taxes and all those sorts of things that come into the state as opposed to is it $1 billion or $900 million that's in capital investment into the property.
That's much, much less of an impact to us as a state as a whole rather than the number of employees and the wages that are paid to those employees. And that's why we kind of stuck real hard on those numbers and provided a little bit of space as far as the capital investment is
Representative Bruce Westerman
Unverified
2:15:46
concerned. But on the teacher retirement, that would be critical on the return on the investment for the teacher retirement. Well, sure. That would be his question. Tom,
Chair
Unverified
2:15:57
could you recognize? Well, obviously, if there's cost overrun, first teacher retirement is ready to make that 66.
By the way, we appreciate the state if you do put in that money because it just magnifies our investment. It quits being 60. It starts being something more. But I also know that there is not going to be any difficulty based upon the interest rates and things that I have seen being able to put in extra equity and, in fact, maybe get a very subordinated debt to finish it out based upon the historic returns of these. But very importantly, when the last mill was built in Columbus, Mississippi in 2005, it came in on time, on budget, and that's what John Crindy is most famous for.
I sort of chuckled when somebody said he was a great salesman. He's a whole lot better operator than he is a salesman, I can tell you. We are confident that we could complete it. It could impact our return a little bit, but not materially. And remember, we've already taken two standard deviations down from our expected return to get it to 23% annual IRR. Okay, and my
Representative Bruce Westerman
Unverified
2:17:07
final question, I believe you described the side as steel mill heaven. You also said that if this deal didn't go through with the Amendment 82, that they would probably go to another state.
how much of a financial impact is it to the project if we don't put the 125 or 100 million into it it just won't happen
i mean it won't happen in arkansas so it's not a question of what the impact would be they've got and it's been reported so i've
Speaker 73
2:17:41
used the number they they got 160 million dollars from mississippi sitting on the table waiting on them right now. All
Speaker 76
2:17:46
they've got to do is say we're done there and go collect the $160 million
bucks. So if we don't do it, it's not a question of impact to the project. The project is just going to happen somewhere else. And the other thing I'll say is that Governor Jindal has approached them. And, you know, Governor Jindal put quite a bit of money into a new Nucor mill last year and
Speaker 73
2:18:16
you know he'd like another mill down there um and uh the governor of oklahoma
Speaker 76
2:18:21
flew to see them is my understanding so it's not a question of if we don't do it it's just going to go somewhere else it's not that it's going to have a material impact because they've already got more money than we've offered sitting on
Representative Bruce Westerman
Unverified
2:18:41
the table in another state So you're saying the project is more capital-sensitive than it is favorable to the location in Arkansas?
Well, no. And I think that's why they had to put up $160,000 as opposed to our $120,000.
Speaker 73
2:18:58
They'd rather be here and take $120,000 than be there and take $160,000. But if we can't get the deal done, they'll go there and take that $160 million. The President
Speaker 226
2:19:10
of Collins, you're recognized. Thank you, Mr. Speaker. Grant,
Representative Charlie Collins
Unverified
2:19:14
I was really encouraged to hear the niche areas that this mill is going to work in. I think the future of American energy is tremendous. Fracking and some other things have really created a great long-term market there, so that's encouraging. The same thing with car steel and the importance of that market.
My question is, I'm sharing some of Mr. Hopkins' excitement about 23 to 44 percent returns. I know I could sure use some of those in my portfolio. But when I look at the money that the state is putting forward, we're kind of calculating, you know, when do we get our money back, right, which, you know, is not a positive return. So my question is, is there any potential, since it's against the law for us to take an equity stake, Is there any potential that if this project does extraordinarily well, that we can get some kind of a benefit in terms of ending tax abatement sooner or, you know, whatever creative approach so that while we're taking the risk, we also can partake in the upside in one way or another?
Speaker 73
2:20:19
Well, I don't know that we can end the tax abatement sooner, but certainly if the project does extraordinarily well, they're going to go hire more Arkansans who are going to pay the state more income taxes on their salary. They're going to be hiring more trucking companies to truck steel in and out of there. um they're going to require more rail cars to move everything in and out which means that the
the rail car factory up there in uh northeast arkansas is hopefully going to be making more rail cars um again you know
Speaker 76
2:21:03
we've asked some questions today about when do we get our money back but after we get our money back we're still collecting taxes and so over the useful life of this mill the number that we have
Speaker 73
2:21:22
and John has done one impact analysis and we've done another
and the numbers differ a little bit but the number that we have is we're going to collect a hundred million dollars
Speaker 76
2:21:32
in tax dollars so it's not just when do we get it back it's we're going to start putting money in our pocket you know that's one of the other funny things about this the governor said i've never met a deal i don't like richard's never met one he
Speaker 73
2:21:50
likes well when we first went and sat down to talk to these guys about it as usual i expected to get laughed out of the room
Speaker 261
2:21:57
because that's their first response to anything i say
Speaker 76
2:22:05
and they actually said you know we like these We've done this before.
Speaker 73
2:22:11
I mean, you know, these guys have worked here since Moses wore short pants. And so they were in
Speaker 76
2:22:17
on the first deal. And they've got their minds around how this whole thing works. And the steel mill is the thing they go, well, yeah, okay.
We know how we get our money back off of this deal.
We've done it before. So it's going to be positive. But
Speaker 95
2:22:40
in terms of changing any of the terms today, it's just not
an option. I mean, we can try, but again, I think their response will be, let's go to
Mississippi. Quickly, we've got a handful of questions here.
Speaker 200
2:23:00
I'll just say this. The benefit the state gets is if we're really doing gangbusters, we put in the second phase of this, which
Chair
Unverified
2:23:09
is about a $580 million investment. We add more jobs. The state just gets greater benefit faster. This thing is designed, phase one, with the ability to produce steel out the backside for two phases. So essentially, the state gets the benefit. Don't start taking away the returns of Arkansas teacher retirement just because we're doing well. All right, members.
Speaker 49
2:23:32
Here's who I have down. I've got everybody's name down. It's just taken
a while to get through it. Representative Miller is next. I've got Representative Meeks and Alexander, Hammer, Wardlaw, Howe, Shepard, and Hutchinson. So I'm coming around the mountain. Just bear with me. Representative Miller, you're
recognized. Thank you, Mr. Speaker. I appreciate all the hard work you guys have put into this. And I may have just gotten part of my question answered. We were talking about, or y'all were talking about, Phase 2 being announced.
At some point, I was wanting clarification to make sure that the 525 jobs were
in Phase 1. Yes, and in fact, all of these calculations have only been done based on
Phase 1. Is there any kind
of rough estimate of the job creation that would come about through Phase 2? we start getting into things
Speaker 73
2:24:28
that they don't want me talking about, but it's another large number.
Let it go on up. Thank
Representative Randy Alexander
Unverified
2:24:48
you. Representative Alexander, you recognize. Thank you, Mr. Speaker. I have zero
experience building a steel mill, but 10% contingency seems pretty healthy, and I'm just curious if it ends up being 5% is actually spent. What do the bond requirements or state statutes say about the flow of funds for any excess contingency?
We don't have – I mean, our money is what our money is. If it ends up costing them $1.3 billion, we don't put up any new money. I understand that. I'm saying
Representative Randy Alexander
Unverified
2:25:31
if we don't spend our contingency, what happens to the remainder of the money if we don't spend all of
Speaker 269
2:25:38
it? We don't have a contingency. I mean, George has a contingency. oh
Speaker 95
2:25:44
well oh okay so on the the pilings if we sink a piling and it sticks up out of the ground after
Speaker 73
2:25:51
we hammer on it and we that money comes yeah it's prorated between the two parties so we take
Speaker 273
2:26:09
the 40 million bucks and out it goes yeah the ceiling is is
Chair
Unverified
2:26:14
20. okay thank you representative Thank you, Mr. Speaker.
Representative Stephen Meeks
Unverified
2:26:17
Hopefully, I've got two real quick questions. The first one, since teacher retirement has taken an equity stake in the mill,
at what point, if any point, will they have say-so in management decisions since they will be an investor? Let's
Chair
Unverified
2:26:33
let George answer. It is possible that Arkansas teacher retirement or somebody preferred by teacher retirement will be put on the board of Big River Steel, LLC. If that happens, all the board fees of Big River, LLC, the pace to that person will go into the LLC owned by the teachers for the benefit of teachers.
But the teacher retirement system will have, you know, an input at a board level either directly or a preferred position on the board of directors. Have you all developed policies on how you're going to select that board member or what that input is going to be? Let me tell you, there's not a guarantee that we're going to invest. I mean, there's a whole lot of work that has to happen before the board of trustees agreed to the recommendation of a $60 million investment.
There are investments we decide to make on a frequent basis that never gets finalized because issues could not be worked out to our satisfaction. But, you know, if we go down that path, you know, the board of directors will adopt a, you know, a resolution that sets forth how that person would operate. And it's somewhat difficult having a public entity potentially represented on a board where there's a whole lot of trade secrets and other things that have to be sheltered.
So it's got to be carefully done, I will tell you. Right. And
Representative Stephen Meeks
Unverified
2:28:05
that's my concerns and, you know, potential conflicts of interest and so forth. So I'm glad you're at least thinking along those lines and would be if and when we get to that point, I would like to see what you come up with as far as that goes. My second question, I guess, would probably be to Mr. Tennille. Let's say we approve this as a legislature. We get through all the grants and we get all of our permits and everything to go. Who is going to be our responsible – who's going to be the trigger man, the gatekeeper?
Who's going to be the last person that says, everything's in line, we've got all of our permissions, we've got everything in order? Who's going to be that last person to say, we're going to do it? Is that you? Is
that the governor? Who's that last person going to be? I guess under Amendment 82,
Speaker 73
2:28:57
by law, it's the governor. But obviously, he's going to be looking most directly at me and Richard and Mack.
Speaker 76
2:29:06
And he's going to say, okay, you know,
Speaker 90
2:29:09
here's the checklist. Boom, boom, boom, boom, boom, boom, boom. We ready? And we'll say, yes, sir. And he'll say, go.
Chair
Unverified
2:29:18
Okay. All right. That was my question. Thank you, Mr. Speaker. Representative Hammer,
Representative Kim Hammer
Unverified
2:29:23
you recognize? Thank you. A few questions, please. As a person who lives in central Arkansas, and I'm proud for the folks up in the northeast to the level that you can talk to about, What particular reason was Central Arkansas excluded from this scenario?
Speaker 75
2:29:42
A couple of things. There was an advantage to doing business with one railroad over another that was a
Speaker 78
2:29:59
significant advantage. In terms of the physical location of the site,
Speaker 73
2:30:05
the levy costs were going to be fairly high on the central
Speaker 76
2:30:12
Arkansas site. The distance that was going to be required to bring the power from the main 500 kV line into the site was greater than it is in Osceola.
And I was shocked, and I bet you'd be shocked, too, how much it costs to bring power any distance at all. I mean, you very quickly get up into the tens of millions of dollars to, you know, take it two miles. And the
Speaker 73
2:30:44
best site was located at a place where the Arkansas River gets a little narrow. and the
Speaker 76
2:30:53
channel was on the same side as the facility would have been.
So it would have been difficult to get the barges lined up right because they would have been sitting in the middle of the channel. And so in order to make it work, we were probably going to have to spend a whole bunch of money and go through a whole
Speaker 75
2:31:17
lot of pain with the Corps to dig out sort of an impoundment area where we could have put the barges. So those
Representative Kim Hammer
Unverified
2:31:25
were the physical issues. Okay, thank you for that. The 15 mills that have been referenced, are all 15 of those mills still in business?
Yeah, I believe so. I don't know if any of them have kind of
Representative Kim Hammer
Unverified
2:31:44
passed useful life at this point. Well, the
reason I'm asking that question is because that's an item that's being referenced, the success of this individual as far as this industry
Speaker 266
2:31:55
is concerned. Well, now, and I'd love to address
Speaker 73
2:32:08
Thank you. Anyway, the issues that have been referenced are two projects related to the silicon industry, which ultimately are related to solar panels.
The other one was rebar. However, I think that, I know that Mr. Carrente would tell you that none
Speaker 76
2:32:31
of those three projects have been scrapped. They've been delayed. They've been delayed the way lots and lots of other announced projects have been delayed over the course of the last three or four years. In the specific cases
Speaker 73
2:32:49
tell you that on the rebar mill, the largest investor on the rebar mill found nearly overnight that their net worth was half
Speaker 76
2:32:57
of what it was the day before.
And also, as construction slowed, there wasn't a whole lot of people screaming and yelling for more rebar. On the
solar panel side, and those stories are legion, there was a sense a number of years ago that the U.S. government was going to
Speaker 76
2:33:29
do a lot of things policy-wise to make solar a priority in this country.
because solar doesn't stand on its own right now. It can't compete against the panels coming out of China because it's not generating electricity efficiently and economically enough to make it worth doing. But on those deals, they were announced. No money ever changed hands. States didn't put up any dough. They were announced. They were put on the shelf. And they're sitting on the shelf. Hopefully someday they'll come off the shelf.
But the state of Mississippi, for as angry as Joe Max Higgins has said he
Speaker 95
2:34:21
is in the pages of the Memphis Business Journal, they're not so angry
Speaker 73
2:34:27
that the state of Mississippi didn't put $160 million on the table for this deal. And they're not
Speaker 76
2:34:33
so angry that if the Silicor deal or the Rebar deal came back
Speaker 75
2:34:38
to life tomorrow, that they wouldn't take that $75 million that they've allocated for it and put it right into the project.
But let's talk about Correnti and steel mills. He's the best there is,
Speaker 76
2:34:53
in my opinion, on steel mills. If you do as many deals as somebody like him does, you're bound to have a few that don't do as well as others. You're bound to have a few that never get off
Speaker 73
2:35:10
the drawing board. But in this case, the fact that those projects didn't get off the drawing board didn't cost the taxpayers of any state a dime.
Representative Kim Hammer
Unverified
2:35:20
Okay. Not to be callous or anything, but a lot of emphasis, and just to come to the point, did you do due diligence if he dies or if he's out of the picture totally or he's bought out of his position? Can you give us reassurance that you did due diligence to make sure the support network is in place? Yeah, and
Speaker 76
2:35:38
Mr. Wren asked that question, and you may have been out of the room, but the short answer is yes, so we don't go all over it again. I
Representative Kim Hammer
Unverified
2:35:45
heard the life insurance question. I just want to make sure it's bigger than that.
And wrapping it up for my questions, I want to ask Mr. Hopkins a question when I get done with this question for you. In church world, we talk about how the front door is only as good as the back door being shut. But we're losing industry out of the state, but we're recruiting industry into the state. I need a comfort level to know how this ties together when we're losing a plant out of Fort Smith, but we're bringing a plant into Osceola.
And I just need a little comfort level understanding that, so I'd be curious as to your insight in the short version to that, please. Well,
I think that one of the ways you've got
Speaker 76
2:36:35
to look at the things that we've lost, and I would argue that we've lost them for a couple of reasons, and I've talked about them a bunch. One, obviously, is the state of the economy. But
Speaker 73
2:36:51
the other is we've lost some things that you referenced, for instance, Whirlpool.
and I've said it before, and I'll say it again here today, we actually lost Whirlpool nine or ten years ago. It was a
Speaker 76
2:37:14
dead man walking that long. And it was a dead man walking that long because the company stopped investing in it. They didn't open any new lines there. Ultimately, the reason that that plant shut is the only place they're still selling that side-by-side refrigerator
with the two narrow doors is in Mexico and South America. So they moved the production to Mexico because that's where
Speaker 75
2:37:42
they're selling those things. What we hope we're doing is attracting
Speaker 95
2:37:52
as... And some of what goes on in a case like that is you're talking about useful life of
Speaker 76
2:37:59
an investment. And if you don't renew that investment, at some point the useful life of that investment runs out.
And the company says, well, we're done with this. We have done more retention, reinvestment, and expansion projects in the last year and a half than we've done new acquisitions. We're putting a premium on that, particularly in this economic environment, because we know if we don't help companies reinvest in plant and equipment here in Arkansas,
Speaker 72
2:38:40
that we're going to end up in the same
Representative Kim Hammer
Unverified
2:38:44
situation we were in in Fort Smith. Okay, and last question from Mr. Hopkins while he's coming, please. Are we giving any incentives to businesses that are going to start up around this plant to equal magnitude that we're giving to the big plant? I'm sorry,
Speaker 76
2:39:05
I threw an extra question in on you. Oh, it'll depend. The companies that come in to serve these guys as vendors, no.
The companies that may come in to take what they make and hire a bunch of people to turn it into
something else, we might. Some of it will depend on how much they have to be there. What they bring to the table. Yeah, and
Speaker 76
2:39:33
what they bring to the table. But if they've absolutely got to be right next to that plant in order for them to have a business at all, no. I mean, you know, but if we end up in a competitive situation, we'll go after it with incentives.
Representative Kim Hammer
Unverified
2:39:51
And really, my question for Mr. Hopkins, I'm done. Thank you, Mr. Speaker, for your tolerance. You come before us and ask and make the statement you made a while ago that if you get the kind of returns that life is going to be good and, you know, you won't be coming back to us. What I want to have out of you, because when we put our name on the board that we would vote for this project, we're on record, I'd like to know from you a personal comfort level, what if this thing goes south?
Are you going to come back to us in a couple, two, three years or future legislators and say, you know, that thing really didn't work out as good as we thought it would, and now we want you to help pick up the tab because this thing didn't
Chair
Unverified
2:40:38
go well? I need some personal assurance from you in that area, please. First, let me give you a look. The ATRS pays out $64 million on the last business day of every month to our members and surviving spouses and kids of deceased teachers who died while they were working.
We've invested $65 million in South Arkansas Timberlands since 2010. We have over $12 billion in investments. We do our very best due diligence, and even if this thing returns 60% a year or 80% a year, unless the returns and other parts of our portfolio do well, we're still going to be coming back to you. that if you heard me say, if you do this deal, teacher retirement doesn't need money if we don't get a 17% return, you didn't hear me right.
But I will say this, is that we invest to shoot for an 8% return, and part of our investment is 20% in fixed income, and you just don't get 8% now when you invest in fixed income. You've got to have different risk profiles and different level of risk. This one goes up the risk profile, but just like when we invested with, With Vista Equity Partners III in 2008, right now we're getting about a 33% IRR from them since 2008. Same when we went to NCAP in the energy industry.
We're getting about a 26% return on them. We expect this to do well, and I had great conviction on NCAP. I've had great conviction on others, but I had never had the conviction of any investment that I have on this one because, you know, I worked side-by-side with Mr. Hill and his team. I looked at the information. ATRS did side-by-side due diligence. We pressed them on all of that, and I looked at the team.
I have great conviction, and I'll tell you what. You know, if this thing doesn't return close to that 23 percent IRR after six years, I'll come here and
Speaker 287
2:42:39
eat a crow. Thank you. That's all I need to hear. Well, that took a long time
to get to that, but there you go. All right. Representative House, you recognize. Real quick, Mr. Hill had one thing he wanted to add to
one of my answers. Sure. Mr. Hill, you
Speaker 288
2:42:59
recognize. Thank you, Mr. Speaker. I look forward to that event.
Speaker 114
2:43:05
I wanted to be responsive to the member's question on the Carrenti projects. Are they still in
Speaker 115
2:43:12
function around the country? I want to address that briefly. And then repeat my comment I made to this gentleman about the depth of management. John Carrenti is the CEO. He's done this before. But this team he's put together that I referenced a few minutes ago is very deep and very broad on the manufacturing floor, in the manufacturing and maintenance of equipment, in finance, in control, in human resources.
All of that team is coming to Osceola. And there's depth there. And if John were killed on I-40, they've got a great group. They've got a great group. And so I just want to reiterate that point. On the mills, these are mills that John was specifically involved in as the CEO and having built. Nucor's mill at Crawfordsville, Indiana, it was about a $250 million investment. The payback on the investment was four years.
It's still producing steel. Nucor Hickman, you know, being built in Hickman, Arkansas in 1993. You've heard reports on how well that mill continues to do as a key provider in Nucor's portfolio. Nucor Berkeley, South Carolina, opened in 1996. It was a $500 million construction project, still in use. In 2000, Nucor built a mill in Hereford County, North Carolina, under John's leadership, still producing steel, one of the most modern in the country.
Then as an entrepreneur, John built a mill that's really a front page of the Wall Street Journal-type story up in Indiana. And this project was about a $385 million mill in Butler, Indiana. And that company actually has gone public and has traded on the exchange now as Steel Dynamics and continues to be one of the really benchmark facilities in the U.S. when John was able to take that public. It's now ranked 323rd on the Fortune 500 list and has a market cap of $3.2 billion.
The Severcore Mill in Mississippi was $880 million when John and his team opened it. And then, as others have mentioned, shortly after the startup, it was sold to one of its partners. It still operates under that 100 percent ownership of that partner. So the bottom line is, Karenni can bring a mill out of the ground, on time, and on budget, but it's not just his reputation, it's the reputation of that entire team that he is attracted to this project.
Thank you. Representative House, you're recognized. Thank you, Mr.
Speaker. Mr. Speaker, my first question is to the chair. At the introduction of either the governor or team, you said that the members of this body would receive the financial analysis. Mr. Sloan began his presentation of correcting your statements and said that what we would get would be an Amendment 82 package, and that's what we would receive.
I'm asking the chair to clarify that we will receive the financial analysis that's been
prepared by DF&A and AEDC. Good question, and I was referencing the
statute, and it says each member of the General Assembly. In order to expedite review by the General Assembly, the Commission and the authorities shall prepare and provide to each member of the General Assembly the reports described in subdivisions I-2 and 3 of the section the Commission's review.
can clarify. What I was saying— I'm sorry, Ms. Chair. Ms. Chair,
my question was to you, not to the Speaker. Well, the commission reports will include a description of the proposed project and itemization of the proposed infrastructure needs and other needs to be financed with the proceeds derived from the sale of Amendment 82
Speaker 3
2:47:21
bonds. I mean, it's listed here in the statute. Now, I'm going to defer to Grant or whoever to give the common term of these reports because he knows better than I.
Thank you, Mr. Chairman. I just want to know what
Speaker 100
2:47:37
time it was, not how to build a watch. Thank you. Well, first, and I think some of
Speaker 76
2:47:47
the confusion, what I corrected the speaker on was he said that you would get a copy of the letter of commitment. And actually what you'll get is the fully ratified Amendment 82 agreement, which is much more in-depth than the letter of commitment. I did not say that you wouldn't get because, in fact, the report that we give to you must include
a description of the proposed project, an itemization of the proposed infrastructure needs and other needs to be financed for the sale of the bonds, a description of all other economic incentives to be provided in connection with the project, a description of the economic impact and cost-benefit analyses of the proposed project for a period of at least 10 years that includes the annual projected benefit to the state from increased sales and use tax and income tax revenue, the annual projected cost to the state for each economic incentive offered in the proposed project,
and the overall net present value benefit to cost ratio for a period of at least 10 years, and then the amount of bonds necessary to be issued to defray project costs and a budget of the project costs, a tentative time schedule setting forth the period of time during which the proceeds of the bonds are to be expended, a certification by AEDC that the proposed project shall consist of an investment in the state of not less than $500 million and shall create no fewer than 500 new jobs,
and that's old language because, as we discussed, it was wiped out when we did Amendment 90, a copy of the signed letter of commitment, and a copy of the unexecuted Amendment 82 agreement for the proposed project. So, in fact, sir, I was wrong. You will get a copy of the signed letter of commitment as well as the copy of the unexecuted Amendment 82 agreement. The unexecuted
Speaker 73
2:49:42
Amendment 82 agreement will contain everything virtually that's in the letter of commitment and more.
Thank you, Mr. Speaker. I had read that, too. Next question. We received and I made some inquiries earlier of a handout that's ADC, and I understood that it was prepared by AEDC. Is that correct? Yes, sir. That's our. It uses the word in Amendment 82 subheading. It says $50 million grant for site preparation, $20 million grant for subsurface stabilization pilings.
Right. My question is, is my understanding of the English language that grant basically means gift? Correct. So if we are borrowing $125 million and giving away $70 million, that leaves roughly $55 million? Yes, sir. So the $70 million grant will not be paid back to the state. No, it's a grant.
It's a grant. Yes. So we are borrowing $125,000, but we will be repaid on something like a $75 million. No, we'll be repaid on $50,000. $50,000. Right. Okay, I'm sorry. I'm sorry. I said that exactly backwards. We'll be
Speaker 76
2:51:12
repaid $50,000. Right. The other five, and again, we don't know and won't
know exactly, that's a swag, is that $5 million is... Interest rates,
payback, I understand all that.
Bond lawyers, underwriters, all that stuff. So the discussion that was held earlier about different issuances, tranches of bonds, A and B, the bonds is what we sell to the public, discount it, we sell them for $125,
we get back $120 if there's zero-coupon bonds and so on and so forth. I presume we're using
zero-coupon bonds on something like this. Is that correct? No. Now, it'll be a taxable issue.
Okay, it will be a taxable issue. Yes. Okay, so we'll pay market rate or something a little bit better than market
rate. So when we start talking about payback periods, there was a discussion that I found somewhat confusing, that which bond issue would be paid back at particular times. But we're only talking about $50 million of this $125 million that's going to be paid back. The rest is given away, correct? Well, we're
Speaker 73
2:52:26
going to have to pay the bonds back, obviously, to the bondholders,
and that will be done over a 20-year
amortization. Okay, let me rephrase my question. $75 million is given away. No,
Speaker 85
2:52:39
$70 million is given away. Five is cost to sell the bonds. Okay. Between
$70 million and $75 million, we can go over that in
the next question. But that's gone. We, the state of Arkansas, the taxpayers, will be repaid $50 million out of the whole $125 million.
That is correct. That's a loan. So the discussion that was held earlier about repaying this bond issue versus repaying that bond issue, we're just talking about one bond issue of roughly $75 million in the form of that tranche A, I believe you called
Speaker 76
2:53:22
it. And this is why I'm getting confused, because I remember the conversation about when I said repaying this bond issue. We're going to repay both bond issues.
Speaker 228
2:53:33
We're going to owe the money to the bondholders. We're talking about Big River repaying the state. And, again, the
Speaker 76
2:53:44
loan will be backed by $50 million in bonds that will have the same 20-year amortization as the $70 million in bonds. Big River could choose to pay that loan out over the life of the 20 years. The $50 million.
The $50 million. Got that. But they have the opportunity. But that's not my question. Okay. I just wanted clarification. $50 million is being given, or $75 million, give or take, is being given away, and Big River is going to repay the state of Arkansas $50 million. With interest. Well, they're
Speaker 76
2:54:26
going to pay, yes, but if they pay it back before the end of the fourth year and announce phase two of the mill, they get a $5 million discount on their payback.
Yeah, there are terms and conditions. I understand that. Okay, I wanted that clarified. Now, next question. If the state of Arkansas gives $50 million for site preparation and $20 million for subsurface stabilization, who will own that land that that money will be spent improving?
Speaker 240
2:55:12
I think, Gene and Mac, it's going to be probably because there's going to be a pilot agreement associated with bond issues for the other financings. There's probably going to be public ownership in name only in order to be able to gain access to the pilot agreements, which is part of the overall package to the company. So I think you're going to have public ownership, but I want to make clear it's really in name only. The company is going to have the rights and uses and benefits of the property, but technically most of the property will be publicly owned.
Well, there will be a deed to this land, correct? It could be Mississippi County or it could be ADFA. It depends on how that's structured. We don't know. Well, it's going to be one or the other. It's going to depend on how the bonds are structured for a great deal. But, for instance, there's going to be bond issues through all the other entities, the other lenders that are coming through. They're going to be running that through a bond structure in order to allow the company to gain access to a payment in lieu of tax agreement associated with the bonds. That whole agreement requires public ownership of the assets, but, again, it's public ownership in name only, really, because the company has all the rights and uses and benefits of the assets.
But if the, and this is a question, I'm not talking, I'm asking questions, but, God forbid, the project goes up and there are certain improvements that are built on that land that become fixtures. They become owners. Those fixtures are then owned by the person that holds legal title to the land. So my question then is, who is going to hold legal title to the land? Will it be the state based on our $70 million gift or purchase?
Speaker 240
2:56:53
No. You'll either have a couple of possible scenarios. Number one, you could have assets that are permanently put on the property. If they're not run through a bond issue and they're privately financed somehow, it's possible that you could have private ownership of assets that are placed on that land. It's kind of like a land lease agreement or something along those lines that you have in shopping centers. People will come in and put things on top of the land. They may own the improvements, but they don't own the underlying land. You might have a situation like that.
My guess is, though, is that if you've got follow-on investments that they probably would try to utilize, if it's approved by the locals, they'd probably try to utilize a bond issuance capability in order to gain further property tax relief on those follow-on investments. If they're large enough and they make enough economic impact, you might get something like that. I think that's probably going to be your most likely scenario.
Well, I've been practicing real estate law for 30
years, and normally if you build something on property, it becomes a fixture and becomes part of that land, unless you provide otherwise by agreement.
And so what you're telling me then is that there is no agreement visualized of how the fixed assets may or may not be removed from this land? Well, they're not going
Speaker 35
2:58:12
to be removed, number one, because they're going to be so fixed that they're not going to be able to be able to pull
Speaker 240
2:58:19
them back to the trust. They will become fixtures. Technically, and I'm getting into Mac and Jean's business here, but you're going to have a lease agreement that's going to be issued with these bonds. And there's going to be, at some period in time after the lease runs out, then it flips over to private ownership,
at which point the pilot agreements go away and the property comes onto the tax rolls at whatever market value is assigned at the time. But during this bond issue period, there's going to be a lease agreement. And the lessor will be? The lessor would be the Mississippi County, probably, or something along those lines, lessee being the company. Thank you. And I
Speaker 76
2:59:02
think I can get at the heart of your question. the money for site preparation is largely going to do things like level the land and build roads
into the area and do a bunch of things that to your point if the thing goes belly up they're not going to unlevel the land and they're not going to tear up the roads on their way out of So, yes, those things are going to
Speaker 95
2:59:34
remain in Mississippi County and will continue to be, if not owned assets on the tax rolls of Mississippi County, they'll be
Speaker 286
2:59:46
assets of the county and assets of the state of Arkansas for the purpose of
Speaker 75
2:59:53
trying to secure future investment into that site.
then what you're saying is is that either the state of arkansas will have ownership of the
Speaker 301
3:00:03
land being improved or no that's first or be the first lien holder we're going
Speaker 100
3:00:09
to be the first we're getting now we on the loan we're going to be the first lien holder on some specific
Speaker 76
3:00:17
piece of either equipment or real property that's got the appropriate value and the appropriate useful life to be collateral for that loan, but we are not going to have first-leaning
position on the land of the site. Representative
Representative Matthew J. Shepherd
Unverified
3:00:43
Shepard, you recognize. Thank you, Mr. Speaker. Director, thank you for taking time and bringing quite an array of individuals to the House floor
Speaker 311
3:00:51
today. I appreciate it. One of the things you just spoke on in response to Representative House's question is what I wanted to ask about.
With regard to the security that the state will receive, will we be fully secured? Yes. Okay. And then secondly, with regard to the safeguards that were outlined in the document from ADC, One of the items mentioned is the escrow agreement, that there would be $300 million placed in an escrow account. And I'm wondering if you could share with us generally what the terms of that escrow agreement are in terms of when can that money be released if it is something that's being put forth as, in this case, a potential safeguard.
And then I have one other just brief question.
Speaker 258
3:01:41
Yeah. Well, the escrow account is they're setting
Speaker 240
3:01:44
it up kind of as a double protection. We would like it because we want to know that the investors have the money in that's putting it into the project. It's ready to go. We know that all the other lenders are there. Anyone else that's putting money into the project is a source of funds. and then they want to have that set up in order to know that then that we can go out with the bond issue
to complete the total source of financing. So it's kind of a double protection. We have a protection that we know that the investors and the other lenders and other sources are in, and they're going to have the protection knowing that we're going to proceed with our part of the deal and issue
Speaker 311
3:02:23
the bonds. Will the escrow account, will those monies be held, well, how long will those monies be held? after the bond issue, or I'm assuming that at some point that money is going to be released for putting it into the project. As
Speaker 240
3:02:37
soon as we close the bond issue, they're taking off with the project, and that money is probably coming out.
It may stay in the escrow account or it may come into the company account. Whatever it does, it's immediately going out the door toward project
Representative Matthew J. Shepherd
Unverified
3:02:51
expenditures. Thank you. Then my follow-up question is the second bullet point listed in this document is
Speaker 311
3:02:57
the $250 million of company money that must be spent. The question is, has money already been expended, and that company money, what all does that include? I mean, does that include travel? Does
Speaker 315
3:03:10
that include money that's been spent?
Speaker 240
3:03:13
No, no, not in this case. The $250, I think that's what you're talking about. The $250 is going for direct project expenditures. Now, it may not necessarily be you're going to be able to go out to the site and say, okay, there's that 50 and there's that 75, but it's going to be direct project expenditures, like they're going to have to be making progress payments on equipment. They're going to be having to do engineering studies, any of those sorts of direct project-type expenditures.
Representative Matthew J. Shepherd
Unverified
3:03:40
So I would take by that that at this point the belief is that we're basically there at zero
Speaker 311
3:03:46
and that that money is something that would be spent into the future.
Yes. Thank you. Sure. Representative Davis, you're recognized. Thank you, Mr.
Representative Andy Davis
Unverified
3:03:57
Speaker. My question is for the gentleman from the Teacher Retirement System. You're quite confident about your return on this investment, and I believe I've read that your $60 million is one-and-a-half of 1 percent of what you have available. I'm just curious why stop there. Why not go ahead and pony up the other $125 million and get this done?
Chair
Unverified
3:04:18
Sure. The answer is that, you know, we try to diversify, you know, we invest with private equity companies, we invest with real estate companies, and if you look at our historic practices over the last three or four years, we usually make, you know, 30, 40, 50, 60 million dollar investments in, you know, liquid investments, because remember, we pay out $64 million a month. If the private equity markets have disruption, if the fixed income markets have disruption, we've got to be careful
on our liquidity. Liquidity is very important to us, because we've also made billions of dollars of commitments and other private equity. A $60 million investment in this project, we thought, was the proper amount based upon our liquidity needs, the risk profile, and other opportunities. You know, we had to invest as prudent investors. The legislature has put a duty on Arkansas teacher retirement to prudently invest all our money. You know, and that means we have to invest all over the world.
We have to diversify it by manager. We have to diversify it by asset class. We have to diversify it by risk profile. And we have to diversify by liquidity and the needs of the system going forward. And when you look at all of that, going much above 60 in any one project of this type is maybe prudent, but we feel the most prudent level we can be at is about 60 million. Originally, we were looking at an amount less than that, and during discussions, you know, actually landed on 60.
Representative Ann V. Clemmer
Unverified
3:05:59
Representative Klemmer, you're recognized. Thank you, Mr. Speaker. Thank you guys for staying, and I'd like to look around the body. I just saw on Twitter that our numbers are dwindling. This is a pretty good turnout for two and a half hours in. And like all of you that spoke earlier, I like the sound of this, you know, the fact that this steel mill is going to be permanent or have a permanent nature to it.
Nothing is forever, though. So I would like somebody to talk about really maybe the generational life of a steel mill. And maybe we've already referenced where Nucor is. I'd, you know, just like to know a little bit. and I might like a reserve
Speaker 73
3:06:49
time for a follow-up. And French may know more accurately than I am, and he'll either nod or shake his head if I'm wrong, but the average useful life of these mills, from what I understand, is probably about 40 years at the outside without any massive reinvestment.
Speaker 76
3:07:06
Now, that also assumes that there's not some huge change
Speaker 73
3:07:11
in technology. sometime in the next few years. And I'll tell you that one of the reasons that this
Speaker 76
3:07:19
mill is getting built is that the technology has changed enough over the last few years that by making this investment, they're going to be able to be more efficient and do things that no other mill can do.
And so they're making the investment because they see an advantage. But, you know, Nucor
Speaker 73
3:07:45
has been there going on 30 now, I guess. 1993, going on the Hickman plant. Yeah,
Speaker 95
3:07:55
Yamato was mid-80s. So, you know, it's got a long life. I guess, you
Representative Ann V. Clemmer
Unverified
3:08:04
know, I just don't want to go back home one day and see abandoned steel mills dotting the riverbanks.
Can I also assume that, you know, with the current national environment and climate, we are taking care of environmental issues? Yes, absolutely. And what about the land not controlled by the steel mill? Will there be a negative impact
on that? Are they leasing everything they're going to have any impact on? They're leasing more than
Speaker 73
3:08:36
they need right now. Or they're planning on getting control of more than they need right now.
I will say that one of the things that makes this attractive is that because of where the financing
Speaker 76
3:08:59
is coming from, this mill is going to have to meet World Bank environmental standards, which are actually more rigorous than U.S. environmental
Speaker 73
3:09:12
standards. So it will be the cleanest of these mills operating in the world.
Representative Ann V. Clemmer
Unverified
3:09:18
Good to know. So there's a last brief follow-up, if I can put it together. Well, my brain just went dead, and I forgot what my last follow-up was, so I'll catch you later on that. Thank you. Thank
you, ma'am. Representative Payton, you recognize. We have two more.
Representative John Payton
Unverified
3:09:43
Thank you, Mr. Speaker, and thank you, Mr. Tennille, for your endurance. I have a couple of timeline questions.
The 4% tax break, is that at the end of construction, beginning of operation, when that five years starts? Or does that start 2014? When does that five-year period start for that 4% income tax credit? The Advantage Arkansas credit? Yes, sir. The
Speaker 76
3:10:11
day they hire the first employee is when the clock starts on that? Thank
Representative John Payton
Unverified
3:10:17
you. And one more question. The construction impact, I mean, this says up to 2,000 jobs at peak.
Right. Was that taken into consideration on the timeline for the break-even, the construction impact? Yes. Thank you. Representative Douglas.
Speaker 122
3:10:42
Go ahead. We can wait until you get down. Thank
Speaker 323
3:10:53
you, Mr. Speaker. Just a short question. I've had questions from constituents, county
Speaker 236
3:10:58
level, and this might be a question to be answered later, but they worry about this kind of an investment, drawing up money that would go through GIF, and maybe they'd be able to meet the needs of education, health care in the short term, maybe not in the long term. And I wondered if you have a
Speaker 108
3:11:26
projection on that. That's what DF&A is required by Amendment 82 to certify, and they have done that.
Speaker 76
3:11:32
I suppose the best way to answer that is that we certainly believe and hope that all of this
Speaker 73
3:11:44
economic activity is going to generate more revenue over time, as we've talked about for a long time
Speaker 75
3:11:51
today, and therefore will ultimately generate more money for all of the things that we need
Speaker 73
3:11:58
to do. And as Mr. Hill and I have discussed, may even generate capital
Speaker 76
3:12:04
that allows us to look at cutting taxes on some other things.
Speaker 236
3:12:15
Thank you. So your answer is that you hope it won't have any impact. Right. Thank you.
Representative Andy Davis
Unverified
3:12:22
Thank you, Mr. Speaker. Representative Dodson, you recognize? Thank you, Mr. Speaker.
Representative Jim Dotson
Unverified
3:12:27
I've got a couple questions here. Now, going back to the first two years of the state's obligation, the 9.1 estimated, I guess, because it's somewhere between 14 and 18 million, but 9.1 is what you wrote down.
Is that the total annual cost of everything? Is there some other hidden fees that might possibly be in there that we would be on the hook for? No, that's the total cost of the
service of that debt. This is coming out of the General Improvement Fund? That's the governor's GIF. Well, it is part of the recommendation that he will be making on GIF.
Representative Jim Dotson
Unverified
3:13:13
Okay. So that's where the pot of money is coming from.
I guess this is a question. Would the Governor's Quick Action Closing Fund cover any part of this debt service, or would that be a better pot of money for it
Speaker 73
3:13:30
to come out of? No. And, in fact, what the governor's Quick Action Closing Fund is covering in this case is
Speaker 334
3:13:36
part of the training. I've got another question about that later as
well. But, no, Quick is not covering the debt service. But the interesting
Speaker 73
3:13:46
thing is Quick is loaded from GIF, so you take it from here, you take it from here,
Representative Jim Dotson
Unverified
3:13:52
it's all the same bucket of money. Okay, so after the first two years, Big Rover is either paying off the loan or the full debt service. They're going to be covering the full debt service on the $50 million loan. And that leaves us with an obligation of about $5.1 million for 18 years. Yes. Obviously, we can't commit future legislators to specify the funding, but that's going to come from the GIF fund on a continual basis.
No, these are general obligation bonds, so it'll be full faith and credit of the state. It'll come off the top out
Representative Jim Dotson
Unverified
3:14:33
of GR. Okay, so that's how it is. I think you may have said that before. I'm sorry I missed that. And then coming to the $10 million training commitment, that's one-time upfront money? Yes. But there's no debt service on that. No. It's done. And it'll be spread over two years. And that's in addition to the $125 million? Yes. So total, we'll be unhooked for $135,000 as a state.
And then last question. If Big River still actually chooses to pay off a loan in four years and they choose Phase 2 to make that commitment, are they going to come back to us and ask for any more money for Phase 2? I guess we'll cross that bridge when we get
there. Is there any plans now for them to do
Representative Jim Dotson
Unverified
3:15:19
so? No. Okay. Thank you very much. Representative Bell, you recognize? Thank you, Mr. Chair.
Representative Nate Bell
Unverified
3:15:30
My question was kind of a follow-up to Representative Clemmer's earlier question regarding environmental situation. Given some of the issues that we had with the Turk plant, I know we're dealing with a completely different environmental situation here, but are we looking at any point source discharges and potential
Speaker 79
3:15:51
permitting problems with this, or where are we at on
Speaker 73
3:15:56
that? Well, I can tell you that the environmental consultant that the company has hired has already begun making the appropriate filings and having the appropriate meetings
at ADQ, and so the process for getting the air permit in place has already begun.
Representative Nate Bell
Unverified
3:16:14
Beyond air permit, I'm looking more specifically to water discharges. Are we going to have any water discharges there and potential permits required? In fact, they're planning
Speaker 73
3:16:23
on using city water, and they're setting up their own plant, and they're going to reuse a whole bunch of it. I don't think there's any plan to discharge into the Mississippi. Yeah, minimal at most.
Speaker 76
3:16:40
but they'll be using city water, but they're going to have their own treatment plant on site.
Representative Nate Bell
Unverified
3:16:48
So my question, I guess, remains, will there be a discharge permit required for this facility? I can't answer that, but I'll find out the answer for
Speaker 338
3:16:55
you. I'd appreciate that answer. Thank you. Mr. Tennille, I don't
see any other questions. Representative Lee. Representative Lee. I'll say their best for last.
Speaker 341
3:17:14
There we go. Representative Lee, recognize. Thank you, Mr. Chairman. Earlier you referenced the Hickman plant.
Speaker 47
3:17:19
Yes. Please excuse me. Someone was waving. I thought they were waving at me. My understanding in research is they're only operating at 75% right now. Is that correct? And if so, my
Speaker 341
3:17:36
concern is, will opening up another plan affect that in
Speaker 76
3:17:43
any way? Well, A, I can't tell you what percentage that they're operating at.
But, you know, and I'm going to ask French to step up and answer some of this. Again, the
Speaker 73
3:18:00
United States is a net importer of steel. We're importing 30 million tons a year. So is there room to make more steel in the United States and import less? I hope so, and I believe so. Okay,
Speaker 47
3:18:15
and my question just goes to not wanting to hurt another Arkansas plant, and you've answered that question. My next question then is you're saying you're going to take $150,000 out of the AEDC budget
to advertise Arkansas steel. Out of the marketing budget. Out of the marketing budget.
Speaker 344
3:18:29
What's your total marketing budget? Our total marketing budget
Speaker 76
3:18:32
is the same that it's been since 1986, and it's just under a million dollars a year. Is it a million dollars a year
Speaker 99
3:18:40
or a million dollars a biennium? I can't remember. A year. A million
Speaker 26
3:18:46
dollars a year. A million dollars a year to advertise. Okay. Thank you. That
Speaker 49
3:18:52
answers my question. Thank you. Well, I want to thank all of you
sincerely for taking the time to be here today
and all of the hard work that I know has gone into this. Grant, how long have you been working on this, roughly? Right out of year. Richard, how long have you all been involved in this, roughly? Six, eight months. Okay. I know it's been a lot of hard work. On behalf of everybody here, I want to extend our appreciation for your efforts and your willingness to come and share your knowledge with us. We may come back to the well again, if need be, but it's certainly been a productive day, and I appreciate you being here.
So thank you all. I'm going to give you
a round of applause. with that representative baird moves we rise and report progress it's proper motion non-debatable all in favor say aye any opposed motion carries representative baird you're
Representative Duncan Baird
Unverified
3:20:02
recognized after the announcements reading of the bills placing the calendars on the desks amending members' own bills with their own amendments, members withdrawing their own bills, finalizing
resolutions, reading communications, and any remaining committee reports. I move we adjourn until 1.30 tomorrow. It's a proper motion, not
debatable. All in favor say aye. Any opposed, motion carries. Read the bills, Mr. Clerk. Thank you.
Unknown speaker
3:21:06
Oh
We'll be right back.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Speaker 137
3:25:06
Read the bills, Mr. Clerk. House Bill
Speaker 348
3:25:23
1255. Without objection, read the bill a second time. House Bill 1255, State Agencies. House Bill 1256. Without objection, read the bill a second time. House Bill 1256. Public Health. House Bill 1257. Without objection, read the bill a second time. House Bill 1257. Judiciary. House Bill 1258. Without objection, read the bill the second time. House Bill 1258. Judiciary. House Bill 1259. Without objection, read the bill the second time. House Bill 1259. State agencies.
House Bill 1260. Without objection, read the bill the second time. House Bill 1260. Education. House Bill 1261. Without objection, read the bill the second time. House Bill 1261. Public Health. House Bill 1262. Without objection, read the bill the second time. House Bill 1262. Education. House Bill 1263, without objection, read the bill the second time. House Bill 1263, Judiciary.
House Bill 1264, without objection, read the bill the second time. House Bill 1264, Judiciary. House Bill 1265, without objection, read the bill the second time. House Bill 1265, Judiciary. House Resolution 1007 Without objection, read the resolution a second time House Resolution 1007 Agriculture, Forestry, and Economic Development House Resolution 1008
Without objection, read the resolution a second time House Resolution 1008 Aging Children and Youth House Resolution 1009 Without objection, read the resolution a second time House Resolution 1009, State Agencies. House Resolution 1010, Without Objection, Read the Resolution a Second Time. House Resolution 1010, Aging Children and Youth. Senate Bill 131, Without Objection, Read the Bill a Second Time.
Senate Bill 131, Judiciary. Senate Bill 155, Without Objection, Read the Bill a Second Time. Senate Bill 155, Calendar. Senate Bill 156 Without objection, read the bill a second time Senate Bill 156 Calendar Senate Bill 200 Without objection, read the bill a second time Senate Bill 200 State agencies Senate Bill 208 Without objection, read the bill a second time
Senate Bill 208 Insurance and Commerce Senate Bill 227 Without objection, read the bill a second time Senate Bill 227, Rules. Upon completion of
Speaker 314
3:28:33
the items named in the adjourned resolution, the House will be adjourned until 1.30 p.m. Thursday.
Agenda
Call To Order
Prayer & Pledge
Committee Reports
HB1133 (9 Batched)
Announcements
Recess
Committee of the whole
Reading of the Bills
Documents
No documents posted.
Speakers
Speaker 1
Speaker 2
Speaker 3
Representative Davy Carter Chair
Unverified
Representative Jim Nickels Chair
Unverified
Representative Reginald Murdock Chair
Unverified
Speaker 11
Speaker 15
Representative Duncan Baird
Unverified
Speaker 25
Speaker 20
Representative John Burris
Unverified
Representative Charlie Collins
Unverified
Representative Walls McCrary
Unverified
Representative James L. Word
Unverified
Chair
Unverified
Speaker 45
Speaker 47
Speaker 49
Speaker 51
Speaker 57
Speaker 58
Speaker 59
Speaker 72
Speaker 73
Representative Josh Miller Chair
Unverified
Speaker 75
Speaker 79
Speaker 76
Speaker 78
Speaker 93
Speaker 95
Speaker 97
Speaker 100
Speaker 108
Speaker 114
Speaker 115
Speaker 118
Representative Randy Alexander
Unverified
Speaker 128
Speaker 137
Speaker 145
Representative Kim Hammer
Unverified
Speaker 150
Representative Mark Biviano
Unverified
Speaker 142
Speaker 183
Representative Betty Overbey Chair
Unverified
Speaker 198
Speaker 200
Speaker 207
Speaker 214
Representative Tommy Wren
Unverified
Speaker 226
Speaker 232
Representative Darrin Williams
Unverified
Speaker 240
Speaker 64
Speaker 90
Representative Andy Mayberry
Unverified
Representative Bruce Westerman
Unverified
Speaker 261
Speaker 269
Speaker 273
Representative Stephen Meeks
Unverified
Speaker 266
Speaker 287
Representative Douglas House Chair
Unverified
Speaker 288
Speaker 179
Speaker 85
Speaker 228
Speaker 35
Speaker 286
Speaker 301
Representative Matthew J. Shepherd
Unverified
Speaker 311
Speaker 258
Speaker 315
Representative Andy Davis
Unverified
Representative Ann V. Clemmer
Unverified
Representative John Payton
Unverified
Speaker 122
Speaker 323
Speaker 236
Speaker 330
Representative Jim Dotson
Unverified
Speaker 334
Representative Nate Bell
Unverified
Speaker 338
Speaker 341
Speaker 344
Speaker 99
Speaker 26
Speaker 348
Speaker 314