Lockheed Martin is one step closer to landing a contract to build military vehicles in Arkansas after an economic-incentive package sailed Wednesday through the state Legislature.
The House voted 96-0 to approve House Bill 1003 to authorize the state to issue an $87.1 million bond to help the Maryland-based corporation win the federal defense contract.
The bill, sponsored by Rep. Matthew Shepherd, R-El Dorado, cleared the Senate Agriculture, Forestry and Economic Development Committee on Wednesday afternoon. The Senate is likely to vote on it today as a matter of form.
The Senate voted 31-3 to approve identical legislation sponsored by Sen. Bobby Pierce, D-Sheridan. Senate Bill 6 cleared the House Agricultural, Forestry and Economic Development Committee on Wednesday afternoon, and a House vote is likely today.
Gov. Asa Hutchinson called this week's special session so that lawmakers could approve the economic incentives, which would help Lockheed Martin win the contract. If the company succeeds, it would need to retain 556 jobs and create 589 jobs in East Camden in exchange for the bulk of the money.
AM General LLC of Indiana and Oshkosh Defense of Wisconsin are competing with Lockheed Martin to win the contract to build joint light tactical vehicles for the Army and the Marine Corps. The vehicles would replace the line of vehicles known as Humvees made by AM General.
This is the second time that the Legislature has considered authorizing a bond issue for a "superproject."
In 2013, the Legislature authorized a $125 million bond issue for the Big River Steel mill near Osceola. That mill is under construction.
Amendment 82, enacted in 2004, allows the state to fund projects so long as the funding does not exceed 5 percent of the state's general revenue from the past fiscal year.
Wednesday, lawmakers portrayed the Lockheed Martin aid package as good for the economy.
SB6 sponsor Pierce it would help "bring some well-needed jobs" in south Arkansas and is "a good deal."
Lockheed Martin has operated in Arkansas for 40 years and "it's not like we are starting a new company," he said.
But Sen. Bart Hester, R-Cave Springs, who voted against SB6, said the state would be better off "to spend our time and resources on creating a level playing field and an environment for all citizens of the state of Arkansas."
Legislators should work to secure "less taxes and less regulation, whatever we need to do to get out of the private sector's way," Hester said.
Sens. Cecile Bledsoe, R-Rogers, and David Sanders, R-Little Rock, also voted against the bill.
Pierce said he wished that the state could get out of the private sector's business, "but we started the game" competing for this superproject.
"Let's finish the game and do what we got do," he said.
In the House, no one spoke against HB1003.
"Perhaps no other community in the state has suffered such an economic downturn as Camden has over the past 20 years," said Shepherd, the bill's sponsor. "With that being said, one of the real shining stars of south Arkansas has been the defense contractor community."
Shepherd said Lockheed Martin is a good corporate citizen that has provided well-paying jobs to a depressed area.
And Rep. John Baine, D-El Dorado, said there were no better workers to make a vehicle aimed at better protecting U.S. troops. He asked legislators to look at the long-term benefits of the deal, rather than focus on the initial cost.
"I encourage you to look beyond just the arguments that, well, you won't make money immediately," he said. "I rarely get investments that get an immediate profit."
While the Legislature debated incentives for Lockheed Martin, officials in Ouachita and Calhoun counties are preparing packages of their own, said Mike Preston, director of the Arkansas Economic Development Commission.
"It's kind of waiting on the state to see what happens here, but there is a local effort to put about $1 million into it from the local side," he said.
Most military contractor activity is in Ouachita County, where about 2,500 work in manufacturing, according to 2013 U.S. Census Bureau data. Fewer than 100 worked in manufacturing in Calhoun County, the data indicate.
The counties are taking a regional approach to economic development, Preston said.
It's unclear how the project would affect the local schools.
"They're still working out the local agreements, but it's my understanding that there will be school taxes paid," Preston said Wednesday.
Rep. Charlie Collins, R-Fayetteville, said he voted against the $125 million bond issue for the Big River Steel mill near Osceola but supported the Lockheed Martin project.
"The principle that's involved in this one is different in my eyes," he said.
Collins said that because the program is ultimately paid for by the country as whole, it makes sense for the state receiving the most benefit to pay extra.
"The federal government nowadays seems to be pursuing a path that says we're going to spend $30 billion of your hard-earned federal tax dollars on a new vehicle for our troops and we expect the state that's going to reap the benefit of that employment and other resources to kick in a disproportionate share of the tax money."
A spokesman for Hutchinson expressed satisfaction with Wednesday's votes. "The Governor is pleased with the way the legislature is working together -- in an overwhelmingly bipartisan manner -- to pass the Amendment 82 legislation," spokesman J.R. Davis said in a written statement.
A Section on 05/28/2015