Lawmakers Pass Industrial Tax Credit Bills | News, Sports, Jobs
CHARLESTON – On the eve of the start of the 2022 legislative session, lawmakers concluded a two-day special session on Tuesday by passing several bills aimed at attracting large industrial manufacturers to West Virginia.
The West Virginia House of Delegates passed six bills Tuesday morning, including Senate Bill 1001, the West Virginia Industrial Advancement Act. The bill was passed by 91-2, with delegates Chris Pritt, R-Kanawha and Laura Kimble, R-Harrison, being the only no votes.
Bill is now heading to Gov. Jim Justice’s office, who called the special session on Saturday night. The state Senate passed SB 1001 on Monday in a 30-1 vote, with Sen. Owens Brown, D-Ohio, the only down vote.
SB 1001 creates several tax incentives that come into effect when large capital and labor intensive industrial manufacturers make certain investments and employment commitments.
The West Virginia Industrial Advancement Act creates a tax credit equal to 50% of a company’s qualified manufacturing investment. Projects eligible for the tax credit require a minimum investment of $ 2 billion in an industrial building and the hiring of at least 500 full-time jobs during the first 36 months of the tax year of the incentive.
The credit could be used to reduce personal income tax or net corporate income tax for qualifying certificate holders. The bill also includes a consumer sales and use tax credit already available to cover the cost of equipment and materials for the construction and expansion of industrial sites. The bill includes provisions for clawbacks if licensed companies do not meet their commitments.
The House spent nearly an hour and a half on the bill on Tuesday, with comments ranging from the rapturous enthusiasm of the Republican members to the cautious support of the Democratic members. Delegate Mark Zatezalo, R-Hancock, said the project would be good for the future of West Virginia.
“It’s the start of something really good” Zatezalo said. “This is not the end of anything. The hard work begins now. We have a lot of work to do. If we keep doing what we are doing right now, working hard, we will be successful because we have the base energy charge and we have a good location.
“Due to the policies that we have adopted here in recent years, we are finally getting types of looks similar to the ones we have here in front of us” said House Majority Whip Paul Espinosa, R-Jefferson. “For me, it’s not really a difficult call at all when you look at the economic impact numbers.”
Members of the Democratic House all voted for the bill, but many voiced concerns about the timing, how quickly the bill moved through the legislative process, the promises of the company involved and whether the project would use out-of-state construction workers.
“I’m confused by what the rush is,” said delegate Phillip Diserio, D-Brooke. “We have no idea who is going to build these very large facilities… These jobs can be essential for our construction workers, families, and provide opportunities for our laid-off coal miners and other West Virgins who need help. good jobs. “
“I rise to support this bill, but I do so with caution”, said delegate Lisa Zukoff, D-Marshall. “I’m excited about the opportunities… but I’m also a little scared. This is a huge deal for our state. The biggest we have ever had. I am concerned about the hyperbole we hear.
Sources said SB 1001 and other bills passed on Tuesday were aimed at luring NUCOR, a North Carolina-based steel maker, to the state. West Virginia economics officials are negotiating a memorandum of understanding with NUCOR, which is interested in building a steel plant in Mason County and a transshipment facility in Weirton.
NUCOR’s investment in the state would amount to $ 2.7 billion, which would allow it to withdraw up to $ 1.35 billion in tax credits. The justice plans to announce the economic development project Wednesday evening during his speech on the state of the state.
The remaining bills passed on Tuesday transfer $ 315 million to the Ministry of Economic Development to provide matching funds for the NUCOR project, the highest amount the state has ever offered for a project. Once the company reaches certain dollar investment thresholds, the government would inject a certain portion of the matching funds.
During debate on these bills, members of the Democratic House stressed that it would not be possible to provide the $ 315 million without using the COVID-19 federal dollars from President Joe Biden’s US bailout. These funds replace the state agencies from which the funding comes.
“The problem with this particular source of funding is that it comes from the US bailout coronavirus funds, which was very aptly presented to the US Congress by Joe Biden and passed by Congress,” said delegate John Doyle, D-Jefferson. “I found it interesting in one of the meetings to listen to one of the (righteous) servants say that we do not launder money. I would suggest that if we don’t bleach it, at the very least, we dry clean it.
According to a West Virginia University study cited by state officials, NUCOR’s facilities could generate up to $ 24.4 billion in economic activity in West Virginia over a 10-year period. including $ 438 million in taxes during the same period. The projects could provide around 800 full-time jobs, with a three-year moving average of company wages for non-management workers amounting to more than $ 96,000 per year. The projects could also require around 1,000 construction jobs over a two-year period.
A tax note provided by the state’s Revenue Department on Tuesday said the West Virginia Industrial Advancement Act would have no negative tax effects on the state.
“There is no net tax cost associated with the adoption of this bill given the parameters necessary to benefit from such tax incentives”, the note indicated. “The investment needed to benefit from tax incentives happens very rarely. Such an investment will generate additional economic activity in the region and additional tax revenues for state and local governments beyond the value of the tax incentives.
Another bill approved by lawmakers on Tuesday would transfer $ 15 million of the nearly $ 400 million in fiscal surplus for the current fiscal year to the Department of Economic Development for a separate economic development project. Senate Bill 1006 would transfer those dollars to the Department’s Economic Development and Closure Fund for a possible project in Morgantown to be announced during the governor’s state-of-the-state speech on Wednesday.