Hutchinson calling for special session

Aim to lure defense contract to state

Gov. Asa Hutchinson speaks Monday with Arkansas House Speaker Jeremy Gillam, R-Judsonia, during a lunch meeting at the governor’s mansion organized by the Political Animals Club. Hutchinson announced plans for a special session of the Arkansas Legislature.
Gov. Asa Hutchinson speaks Monday with Arkansas House Speaker Jeremy Gillam, R-Judsonia, during a lunch meeting at the governor’s mansion organized by the Political Animals Club. Hutchinson announced plans for a special session of the Arkansas Legislature.

Arkansas Gov. Asa Hutchinson is calling the Arkansas Legislature back for a special session aimed at creating incentives to lure a defense contract to the state, he announced Monday.

Speaking at the monthly meeting of the Little Rock Political Animals Club at the Governor's Mansion, Hutchinson said the special session would start May 26, and he expected the session's work could be finished in under a week.

The agenda has not been officially set and other issues may be added, he said.

Hutchinson aims at strengthening a bid from Lockheed Martin, which has a facility in Camden, to win a contract with the Department of Defense to build the Joint Light Tactical Vehicle for the U.S. Army and Marine Corps.

The vehicles would replace the Humvee line of military-grade vehicles, and Lockheed Martin officials have said that if they won the contract, production would happen in Arkansas.

Hutchinson said Monday that he wants to go through the process set out by Amendment 82 of the Arkansas Constitution, one created in 2004 after Arkansas lost a bid on a Toyota truck plant in Marion, to provide state bond financing support that would make the defense contractor's bid more competitive.

State funding for any Amendment 82 project, such as the $1.3 billion Big River Steel mill in Osceola, would be capped at 5 percent of the state's general revenue from the last fiscal year.

"I would emphasize that this is what we would call a 'contingent liability' I'm asking [legislators] to approve. We need to approve this Amendment 82 project so that Lockheed Martin's bid can be considered in a competitive environment," Hutchinson said. "There's not any guarantee that the [Department of Defense] will reward that contract. We're hoping they will... it is the right step for Arkansas and it's the right step for our nation."

The Camden facility would build more than 55,000 of the new military vehicles. Hutchinson said that the project would create more than 500 jobs over the next few years as well as protect 500 existing jobs.

Hutchinson said that because of the sensitivity of the bidding process, the issue wasn't raised during the legislative session.

State Senate President Pro Tempore Jonathan Dismang, R-Searcy, said legislative leaders are still talking with Hutchinson about what the special session should include.

"The priority is the super project," Dismang said. "There are some other items that are being discussed... It's just a little bit early at this point to say if they will and what exactly those items will be."

He said questions about specifics should go through the governor's office. Hutchinson said that details about Lockheed Martin's contract, and the bond proposal, would become clearer over the next few weeks.

The Defense Department has signaled it plans to award a contract to one vendor this year and President Barack Obama's fiscal 2016 budget asks Congress for $456.9 million for the contract.

The Army plans to buy about 50,000 vehicles by 2040, and the Marine Corps would buy 5,500 by 2022, according to the Congressional Research Service report.

Dismang said the Legislature has begun its economic impact study of the project.

"We were notified approximately a week ago that we would be moving forward and that study would need to be conducted by [the Department of Finance and Administration] and the governor's office," Dismang said. "We've had discussions for quite some time about the project, but it's become more specific in recent weeks."

In a statement, Lockheed Martin said it plans to conduct final assembly of its Joint Light Tactical Vehicle (JLTV) in Camden.

"Should Lockheed Martin win the JLTV contract, the financial benefits to the state could be substantial. There have been some discussions about potential economic incentives, but there is nothing to announce or discuss at this time," it stated.

Speaker of the House Jeremy Gillam, R-Judsonia, said he didn't know how much opposition, if any, the project would face in the special session.

"I feel like [House members] are going to be as excited as we are about the project," Gillam said. "But with 100 members in the House, I'm not going to presume to offer up any analysis just yet because the members haven't had a chance to look at the information.... I'm not going to presume anything at this point."

Rep. Doug House, R-North Little Rock, said he "loves" Lockheed Martin but feels conflicted.

The retired U.S. Army officer and attorney said that he is adamantly opposed to state subsidized private ventures he describes as "corporate welfare."

In early April, House was among a mix of Republicans and Democrats who voted against SJR 16, which would remove the cap on the amount a state can bond a special project.

SJR 16 passed both chambers and will go before voters in November 2016.

"I've flown in their airplanes and [Lockheed Martin] is a tremendously successful corporation," House said. "But I just can't get myself out of the philosophical [problem] of giving a corporation money. Investing, yes. But not incentives."

Camden Area Chamber of Commerce Executive Director Beth Osteen said such a 'super project' would have a substantial effect on South Arkansas.

"It would mean a boost to our economy and workforce," Osteen said. "[Lawmakers] already know the importance of this and what it would mean, not only to Camden but south Arkansas in general."

Osteen said a major economic project would mean new suppliers and businesses for the area and an economic benefit for the whole state.

"We're anxious and hope that certainly Lockheed is awarded the contract," Osteen said. "All of our defense contractors in the industrial park are wonderful community partners and not only in our area, but throughout the state."

Lawmakers say they're not sure which other items Hutchinson will place on the agenda when he issues the call for the special session.

One likely issue, according to Gillam, is the prospect of having Arkansas throw in with a group of other Southern states to hold a March 1 presidential primary.

Known as the "SEC primary" in reference to the college sports conference, it aims to boost Arkansas' political clout by moving its primary date up from May. Legislation to move the date passed the Senate but died in a House committee.

Hutchinson, who backs former Arkansas Gov. Mike Huckabee for president, has expressed support for the regional primary.

Gillam said that many legislators didn't have time to review the proposal and that there are several different ideas of how to best proceed with moving the state's presidential primary forward.

"We're anticipating that there is a high probability it will be on the call [for special session], but we don't know for sure," Gillam said. "We're starting to do our research and prepare for that contingency in case it is."

Metro on 05/12/2015

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