Arkansas governor proposes $87 million in bonds to help Lockheed Martin defense lure project

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Arkansas Gov. Asa Hutchinson speaks about a special legislative session at the Arkansas state Capitol in Little Rock, Ark., Thursday, May 21, 2015. The session, Hutchinson is calling to take up an incentive package aimed at helping the state land a defense contract, is scheduled to begin Tuesday, May 26. (AP Photo/Danny Johnston)


Arkansas Gov. Asa Hutchinson speaks about a special legislative session at the Arkansas state Capitol in Little Rock, Ark., Thursday, May 21, 2015. The session, Hutchinson is calling to take up an incentive package aimed at helping the state land a defense contract, is scheduled to begin Tuesday, May 26. (AP Photo/Danny Johnston)


LITTLE ROCK, Arkansas — Gov. Asa Hutchinson on Thursday said he's proposing that the state issue $87 million in bonds to help Lockheed Martin land a defense contract for its south Arkansas facility.

The Republican governor said most of the bonds would go toward infrastructure improvements and equipment for the company's Camden facility if it's awarded a contract to manufacture a new tactical vehicle to replace the Humvee. The Legislature is set to convene Tuesday for a special session to take up the bond proposal.

"We are trying to put Lockheed Martin...in the most competitive position to win this contract from the Department of Defense," Hutchinson said at a news conference at the state Capitol. "It's a competitive marketplace as to which company gets to produce the 55,000 vehicles for the Department of Defense, and we want to do the state's part to make sure that Lockheed Martin and south Arkansas is in a position to win this."

If approved by the Legislature, the proposal would mark the second time the state has issued bonds under a 2004 constitutional amendment intended to help Arkansas land major economic development projects. The Legislature two years ago approved $125 million in financing for a steel mill under construction in east Arkansas.

The state will only provide the bonds if Lockheed Martin wins the contract, which is expected to be awarded later this summer. Lockheed Martin is competing against Indiana-based AM General and Wisconsin-based Oshkosh Defense. A spokeswoman for the Indiana Economic Development Corporation declined to comment on whether the state was offering any incentives, and the Wisconsin Economic Development Corporation didn't immediately return a call Thursday.

Hutchinson's office said the proposal includes a 25-year agreement with Lockheed Martin requiring the company to pay back the incentives if a certain number of jobs aren't created. Hutchinson has said nearly 600 new jobs are expected to come from the project. Hutchinson spokesman J.R. Davis said the state is expected to pay off the bonds within 15 to 20 years, depending on the market.

Hutchinson said another proposal he's including on the session's agenda to reorganize some state agencies will save the state $10 million to $12 million over the next five years. The reorganization includes merging the Department of Rural Services and the Science and Technology Authority into the Arkansas Economic Development Commission.

Hutchinson said he's also calling for lawmakers move up the state's primary next year from May to March to ensure voters will have a say in who the presidential nominees will be. Unlike a proposal that stalled before the Legislature earlier this year, the proposal would move all of the state's primaries and not just the presidential contest.

Legislative leaders have said the proposal — part of an effort to create a southeastern regional nominating contest dubbed the "SEC primary" — may be the most contentious item on the session agenda. The proposal faces opposition from Democrats and some Republicans who have questioned the need for the move.

"The people of Arkansas want to have a meaningful vote deciding the next president of the United States, both on the Democrat and Republican side," Hutchinson said, saying he believed the nominees would be decided before May.


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