Lawmakers gave final approval to an $87 million incentive package intended to bring a Lockheed Martin military vehicle assembly plant to south Arkansas.
The Senate approved the measure 30-2 on Thursday, while the House approved an identical bill 90-0. The plan calls for issuing bonds if Lockheed Martin wins a defense contract to assemble a new tactical vehicle that will replace the Humvee.
The Joint Light Tactical Vehicle was designed by Lockheed’s Missiles and Fire Control unit in Grand Prairie.
Republican Gov. Asa Hutchinson said he plans to sign the incentive package Friday.
“This is an important next step in our attempt to help Lockheed Martin secure a federal defense contract and create hundreds of new jobs in south Arkansas,” Hutchinson said in a statement. “The state of Arkansas is doing its part by overwhelmingly passing the Amendment 82 legislation. We are on board with bipartisan support.”
State officials have said that if Lockheed wins the contract for its Camden facility, the project will create about 600 jobs and keep more than 500 existing jobs in Arkansas. The proposal was the top agenda item for a special session that began Tuesday.
Lockheed is competing with two other companies for the contract — Indiana-based AM General and Wisconsin-based Oshkosh Defense. The bonds won’t be issued unless Lockheed wins the pact, expected to be awarded this summer.
The proposed incentives have drawn little vocal opposition. The conservative interest group Americans for Prosperity criticized the proposal Tuesday as a “misguided corporate handout,” and a GOP lawmaker said the state should instead focus on policies that would help businesses grow.
A consultant hired by the Legislature said the project would provide a $16.3 million net benefit to the state over 25 years after the bonds and interest are paid off. But the report by Colorado-based IHS said the benefit would likely be higher, since its analysis didn’t factor in the possibility of suppliers moving to the state or Lockheed selling the vehicles to other countries.
If approved, the project would mark the second time Arkansas has issued bonds under a 2004 constitutional amendment aimed at helping the state land large economic projects. Two years ago, lawmakers approved $125 million in financing for a steel mill under construction in eastern Arkansas.
Arkansas officials say they expect the state to pay off the bonds in 15 to 20 years. The state would pay $109 million to $122 million for the repayment and interest, depending on how the bonds are structured.