CHARLESTON – Members of the West Virginia Senate and House of Delegates met in special session Monday to consider a heavy industry tax credit for large industries, including a steel maker who may locate an installation in Weirton.
Governor Jim Justice issued a proclamation on Saturday night calling the Legislative Assembly into special session on Monday morning. The proclamation included six bills, including tax incentives based on certain investments and employment commitments targeting new and existing heavy industries that require substantial investments in capital and labor.
One of the companies solicited for the tax credit is NUCOR, a North Carolina-based steel maker, according to several sources who declined to be named because they did not have the authority to discuss the details of the ‘OK.
Lawmakers dance around the names of the companies for which the tax credit is intended as the deal is not final and the governor plans to announce the plans during his state of the state address on Wednesday evening at the start of the 2022 ordinary session. A request for comment from NUCOR was not returned.
Sources said NUCOR was interested in building two facilities in Mason and Weirton County, an investment of $ 2.8 billion. The Mason County facility would be a sheet metal plant, while the Weirton project would be a transload facility. The projects would create approximately 800 full-time jobs and approximately 1,000 construction jobs over a two-year period.
The House finance committee met on Monday afternoon in the House chamber so committee members and non-committee members could learn more about the bill. Brian Abraham, chief of the justice cabinet, said the bill was needed to secure the manufacturer, which could have a facility up and running within the next 24 months.
“I think this is the biggest investment in West Virginia history in terms of infrastructure and manufacturing,” Abraham said. “We’re trying to make a deal with a… Fortune 500 company to come to West Virginia. “
The West Virginia Industrial Advancement Act would create a tax credit equal to 50% of a company’s qualifying manufacturing investment. The tax credit is intended for industrial taxpayers and qualified labor-intensive heavy industry manufacturing projects involving a minimum investment of $ 2 billion in a property to be used as an industrial site and the Hire at least 500 full-time jobs in the first 36 months of the tax year the incentive is offered.
A qualified manufacturer has 72 months to meet the minimum requirements, otherwise the tax credits end and the state recovers any taxes that would have been owed before the tax credits went into effect. The credit could be used to reduce personal or corporate income tax. net income tax for eligible certificate holders.
The bill also provides for a consumer sales and use tax credit to cover the cost of equipment and materials for the construction and expansion of industrial sites. The state already has a manufacturer’s sales tax exemption, although the West Virginia Industrial Advancement Act would extend that.
The bill would allow a company like NUCOR to withdraw up to $ 1.35 billion in tax credits. According to the University of West Virginia, the company could generate up to $ 24.4 billion in economic activity in West Virginia over a 10-year period, including $ 438 million in taxes over the same period. According to a company presentation to lawmakers on Sunday night, the three-year moving average of company wages for non-management workers is over $ 96,000 a year.
Lawmakers are also considering several bills to take money from the nearly $ 400 million in excess tax revenue and funds from other state agencies for the Department of Economic Development. The money taken from the agencies would be topped up with the available COVID-19 federal dollars.
The transfer of funding to the Ministry of Economic Development will allow the state to also offer $ 315 million in matching funds for the project, the highest amount the state has ever offered for a project. The agreement is part of a memorandum of understanding between the company and the state.
The company would need to invest a minimum of $ 500 million to get the first $ 125 million. Once the company makes another $ 750 million investment, the state will provide $ 150 million. Once the company leases or purchases the facility or property in the northern enclave, the state will provide $ 40 million in matching funds.
“There is a considerable amount of money at stake here,” said Marty Gearheart, R-Mercer. “How did we come up with the amount of dollars that should be extended to this manufacturing entity and the negotiations that have been going on for several months?”
“By negotiating with them and figuring out what they thought was the level of state investment they felt comfortable coming to West Virginia and committing the money with,” Abraham said. .
The Senate quickly worked to pass its bills, including its version of the West Virginia Industrial Advancement Act, the Senate bill of 2001. The bill was passed by 30-1 with Senator Owens Brown, D-Ohio, as the only vote no.
“I’m for economic development, but it’s a matter of principle,” Brown said. “They say ‘haste is wasted.’ I don’t see why this should rush without really looking at him. I have read this bill and it is quite complicated; a lot of tax provisions here and there, and a lot of money will be leaving our state.
Last September, NUCOR announced plans to build a 3 million ton plate rolling plant and was looking for locations in Ohio, Pennsylvania and West Virginia. The plant would serve the East Coast and Midwest markets. According to financial statements, NUCOR reported net profit of $ 2.13 billion in the third quarter of 2021. Strong demand for steel products has caused a delay in manufacturing.
“This plant will allow us to competitively meet the growing need of many of our customers, especially in the automotive market, for high quality steel with a lower carbon footprint,” said Leon Topalian, President and CEO. management of Nucor Corporation, in a previous statement.