At the WV Legislature: House debates SB 523 – Use of Economic Development Project Fund to provide incentives to businesses and site development assistance
CHARLESTON, W.Va. – On day 59 of the state’s 86th Legislature, tensions were high in the House as delegates debated bills on third reading.
One heavily debated bill, the committee substitute of SB 523, was ultimately passed with 83 votes, but not before some harsh words were spoken.
As explained during the House floor session, SB 523 will allow the Economic Development Authority to use money in the Economic Development Project Fund to provide incentives to businesses who wish to open in the state, and for site development assistance.
For high impact development projects, the bill provides up to $300 million per year “in the form of loans, grants, or other offers of financial assistance or aid upon such terms as the Governor may request and the authority shall deem appropriate.”
Additionally, the bill makes available up to $250 million per year, on a rolling basis, for traditional loans “for business formation or expansion,” and up to $50 million per year, on a rolling basis, for business retention.
The Legislature may appropriate more funding if needed, according to the bill.
Del. Todd Kirby, R-Raleigh, proposed an amendment to the bill, which would have reduced the cap from $300 million to $50 million per year for high impact development projects and would have made traditional loans available to out-of-state businesses drop from $250 million to $50 million per year.
Del. Vernon Criss, R-Wood, Chairman of the House Finance Committee, disagreed with the proposed amendment. He stated that the funds, including over $400 million already appropriated for high-impact development districts, need to be “put to work” for potential economic development projects. He explained that if this type of funding is not made available to attract businesses, like Nucor in Mason County and Form Energy, an iron-air battery manufacturing plant slated for the city of Weirton, they may have decided to locate elsewhere.
Del. Gary Howell, R-Mineral, also spoke against the proposed amendment.
“West Virginia is experiencing a Renaissance,” Howell stated. “Between 2017-2021, we had about $6.2 billion of investment in the state. Last year, we had about $6.3 billion in the state.”
He said that should the amendment pass, it would “tie the hands” of those with the Economic Development Authority, and “keep jobs out of everybody’s districts.”
Howell said that businesses will often be interested in several states, but ultimately choose the one that can offer the best incentives.
“We need to have this ability to say, ‘We can move that highway to give you the room that you need,’ or, ‘We can run those water lines or move a rail line or put in a rail spur.’ We need to have that on the table.”
Del. Adam Vance, R-Wyoming, spoke in favor of Del. Kirby’s amendment by stating that the “Legislature has no idea what is going on behind closed doors” to get businesses to come to West Virginia.
“We don’t have a clue of what deals are made – how much money is being spent off of that,” Vance said, adding that they only know an out-of-state business is asking for millions of dollars. “To me, that’s bad business.”
Del. Kirby added that he proposed his amendment because he couldn’t just “sit back” and let the state give potential grants to big business while overlooking smaller state businesses. He referred to the debate surrounding his amendment as “the future of the Republican party and the future of this state.”
“Are we going to be a party that doles out hundreds of millions of dollars behind closed doors for code name groups and secret deals that are agreed to by people that aren’t elected into office? That were summarily beaten in their own primaries? Or, are we going to take control of our taxpayers dollars? That’s the conflict that you are seeing play out today,” Kirby stated, adding that this money should have returned to the state’s taxpayers in the form of additional tax cuts.
After Kirby’s amendment was voted down, Del. Henry Dillion, R-Wayne, said he was happy the Legislature just voted for a historic tax cut, but the taxpayers were still “overcharged.”
“From the looks of it, we stopped about halfway from where we should have been,” Dillion stated. “We’re told that PEIA is on the verge of insolvency, and we are told there is nothing we can do – just raise premiums, cut benefits, penalize spouses and their families.”
“What the people really want to know is, when did they abandon the free enterprise model of economic growth in favor of this Soviet Robin Hood in reverse scheme – taking from the citizens and handing out to oligarchs who are in the good graces of the politburo.”
Dillion said voters wanted a “red wave of Republicans,” instead “what showed up on their porch was the wish.com version.”
“So, on behalf of the citizens of West Virginia, if we can’t fix our roads, if we can’t fix our schools, if we can’t fund PEIA, if we can’t staff our prisons, if we can’t support local communities across the state, if it please the politburo, we want our money back. I will be a no,” Dillion said, speaking of passage of the bill.
Del. John Hardy, R-Berkeley, responded “Well, well, well, a smart man told me one time, you are either going to be a show horse or a workhorse, and, boy, the show horses have showed up.”
He said he was in favor of the bill because the state’s Economic Development Authority has been “nothing but successful” by bringing billions into the economy.
“The best social program we can offer anyone in this state is a good job. I think Ronald Reagan said that–it’s pretty high on my register.”
After House passage, SB 523 has completed legislation. It passed the Senate on Feb. 22 with 34 yes votes.