Arkansas House lawmakers on Monday overwhelmingly approved Gov. Mike Beebe's proposal to provide $125 million in state financing for the construction of a new steel mill in the northeast corner of the state.
Lawmakers voted 78-17 for a bill authorizing Arkansas to issue bonds to provide a loan and pay some construction costs of a $1.1 billion steel facility in Osceola. The Senate has already approved identical legislation to authorize Big River Steel's project and its funding.
A supermajority of 75 House lawmakers will still have to sign off on a budget bill before the proposal is finalized. House Speaker Davy Carter has said he expects that vote will happen later this week.
Big River Steel has promised to create at least 525 permanent jobs with an average wage of $75,000 in exchange for $125 million in state financing and other tax breaks. If the project is approved, the company has said it expects to close the deal in the third quarter of this year.
Proponents of the plan said the steel mill will be a boon for a depressed area of the state and Arkansas' economy in general.
Rep. Monte Hodges, D-Blytheville, the House sponsor of the bill, told lawmakers on Monday that they had "a rare opportunity" to bring such a large project to Arkansas.
But some conservatives mounted opposition to the project, taking issue with the size of the incentive package and with having the government help fund a new private company. Big River Steel is being led by a former Nucor executive John Correnti.
Seventeen Republicans, including the House GOP leader, voted against the project on Friday.
Rep. Stephen Meeks, R-Greenbrier, told lawmakers that he did not want to provide financing for a fledgling company that does not have a built-in customer base. He said he was concerned about the risk that the company would not perform as expected in a recovering economy.
"If the steel mill turns out to be good for Arkansas, I'll be glad to be on the wrong side of this," he said.
"With the economy, if it takes a double-dip, it could end up being a money pit for this state."
Koch Industries is a major investor in the project, investing $120 million to become a 40 percent stakeholder, according to George Hopkins, executive director of the Arkansas Teacher Retirement System, which is itself planning to be a 20 percent investor in Big River Steel.
Nucor Steel, which operates two steel plants near Blytheville, also lobbied against the project. They said that adding another steel mill in northeast Arkansas would negatively impact their business and could force them to scale back their Arkansas workforce.