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Legislature liable for steel plant borrowing

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Posted: Aug 19, 2011 10:07 AM
Source: Associated Press, The Advocate

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Topics: baton rouge, bond, commission, legislature, nucor, steel, borrowing, debt, wbrz, louisiana

BATON ROUGE - The state Bond Commission has put the Legislature on the hook for repaying $35 million in borrowing for steel producer Nucor Corp.

The Advocate reports the commission's action on Thursday means the legislators will have to come up with as much as $975,382 by next summer to pay the first installment on the bonds.

As the project proceeds, so will the state's debt service obligations, reaching as much as $4 million in the 2012-2013 state fiscal year. The state will have nine years to repay the money.

Lt. Gov. Jay Dardenne told the legislators on the panel to pay attention. He said the commission essentially obligated the Legislature to appropriate the money by approving the borrowing arrangement.

"This is a great project. We all want to see it go forward. But I just raise this concern," Dardenne said.

State Rep. Jim Fannin, D-Jonesboro, and chairman of the House Appropriations Committee, said afterward that he knew dollars would have to be scrapped together for the project during tough economic times for the state.

"(It) don't make me like it," Fannin said. "But I was aware of it."

Nucor Corp. broke ground in March on the first of five phases of a steel and iron plant in St. James Parish.

The state offered a number of incentives to lure the North Carolina steelmaker to build in Louisiana. The project will be built in phases. If all phases are completed, the facility eventually will employ 1,250 people.

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