The West Virginia Legislature on Monday didn’t put the finishing touches on a package of bills in an incentive package for at least one out-of-state corporation to set up shop in the Mountain State.
The six-bill package sprinted through the Senate but moved more deliberately through the House of Delegates during Monday’s first day of a special legislative session.
Lawmakers were considering bills that established an investment of up to $315 million in taxpayer money, backfilling the state’s budget with funding from the federal American Rescue Plan, and providing at least $1 billion in tax exemptions for a company that tentatively is to make an almost $3 billion investment in West Virginia.
The Legislature has to pass the bills to help the state Economic Development Office uphold its end of a memorandum of understanding between West Virginia and an as-yet-unidentified company, Brian Abraham, Gov. Jim Justice’s chief of staff, said Monday.
The Senate and House of Delegates will reconvene at 9 a.m. Tuesday.
The West Virginia University College of Business and Economics estimated that the development would generate $25 billion in the economy over the next 10 years and $480 million in tax revenue, even with the exemptions the Legislature approved Monday, Abraham said.
“We think it’s a wise investment, and it’s the beginning, not the end,” Abraham said. “It’s a chance to bring companies of this caliber into West Virginia, and you’ll see that start to grow.”
Legislative leaders in the House and Senate took different approaches to considering the legislation.
The Senate considered and adopted all of the bills in about an hour Monday morning and adjourned until 9 a.m. Tuesday. Members of the House more slowly considered its bills during a House Finance Committee meeting Monday afternoon.
Justice called lawmakers in for a special legislative session two days before the start of the 2022 60-day regular legislative session.
The regular session begins Wednesday.
Justice, who is to give his annual State of the State address Wednesday, has teased a “big announcement” during his speech in the House of Delegates chamber.
In the Senate, the 31 senators who were present Monday unanimously adopted all but one of the bills. Sens. Mike Maroney, R-Marshall, Patricia Rucker, R-Jefferson, and Tom Takubo, R-Kanawha, were absent for Monday’s vote.
Sen. Owens Brown, D-Ohio, was the lone no vote on Senate Bill 1001, which established the West Virginia Industrial Advancement Act, which included the tax exemptions for certain manufacturers.
Brown said he could not see why the bills were being rushed through, and asked for lawmakers to use due diligence as this project is lifted off the ground.
Sen. Mike Woelfel, D-Cabell, also cautioned lawmakers about moving too quickly with legislation of this weight.
“The devil can be, and usually is, in the details,” he said.
Proceedings in the House comparatively were deliberative, and it was where lawmakers aired out most of the details of the package.
Delegates vetted the bills during a 90-minute House Finance Committee meeting, where tax and executive officials answered questions from committee members, who unanimously supported advancing the legislation.
During a session Monday evening, the House and Senate bills were advanced to the amendment stage, but the House did not vote on any of them.
All of the bills in the House and Senate are the same and culminate in the same result, if passed.
The Legislature passing the bills would help Economic Development officials adhere to the terms established in the memorandum of understanding with the unidentified company, Abraham said.
He described the deal as being one of the biggest in state history, both in terms of the investment from the company and the investment by the state into the company.
In effect, the six-bill package takes $315 million from the state Department of Health and Human Resources and the Department of Homeland Security.
In particular, the government is moving money through Homeland Security’s Division of Corrections and Rehabilitation and West Virginia State Police.
That $315 million goes into the Department of Economic Development’s closing fund, and it will be used as a roughly 10% match of the company’s investment in the state, Abraham said.
Next, the governor authorized, and the Legislature appropriated, $315 million in federal American Rescue Plan funding to backfill the budgets for Health and Human Resources, Corrections and Rehabilitation and the State Police.
State officials said that, based on opinions from their accounting firms and legal opinions about the uses for American Rescue Plan funds, they are using the funds appropriately by using them to backfill government entities dealing with public health and safety.
“We think we’re on solid ground,” Abraham said.
After approving the move of money through those departments, the Legislature also adopted a law that expands existing property and sales tax exemptions for manufacturing companies that meet certain criteria.
Under the proposed law, if a manufacturer invests at least $2 billion in property and business development and hires at least 500 full-time employees three years after it made its investment, the company would be eligible for a tax exemption worth 50% of its investment. That means, if a company invested the requisite $2 billion, it would be eligible for up to $1 billion in tax exemptions.
That would mean the unidentified company in question would have until December 2025 to hire 500 people, Abraham said.
Fitting the bill of what Abraham described is North Carolina-based Nucor Corp. That company announced in September that West Virginia was among three states in which executives were considering establishing a $2.7 billion steel recycling facility. Pennsylvania and Ohio were the other states.
Nucor manufactures steel and steel products and brokers certain steel components through The David J. Joseph Co., according to the company’s website.
The company has facilities in 23 states, including Virginia, Ohio and Kentucky. It is the largest recycler in North America, according to its website.
Justice is scheduled to give his State of the State address at 7 p.m. Wednesday in the House.