SECTION 1. Legislative findings and intent. (a) The General Assembly finds that the: (1) Creation of jobs and economic growth are critical to improving the lives of the citizens of the State of Arkansas; and (2) Arkansas Economic Development Commission has submitted for approval of the General Assembly a proposal to issue general obligation bonds of the state to provide financing for a large economic development project. (b) The General Assembly further finds that: (1) The proposed project between the State of Arkansas and Big River Steel, LLC is a qualified project under Arkansas Constitution, Amendment 82, and the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., and Big River Steel, LLC qualifies as an eligible business under the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq.; (2) The proposed uses of the bond proceeds described in the Amendment 82 Agreement qualify as financing for infrastructure or other needs within the meaning of Arkansas Constitution, Amendment 82, and the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq.; and (3) Arkansas Constitution, Amendment 82, authorizes the General Assembly to issue bonds bearing the full faith and credit of the State of Arkansas if the prospective employer planning an economic development project is eligible under the criteria established by law. (c) This act is intended to authorize: (1) The issuance of bonds under the authority granted to the General Assembly under Arkansas Constitution, Amendment 82; and (2) Under Arkansas Constitution, Amendment 82, and the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., the execution and implementation of the Amendment 82 Agreement and other provisions necessary to carry out the Amendment 82 Agreement. (d) As provided under the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., this act includes the: (1) Authorization for the issuance of bonds bearing the full faith and credit of the State of Arkansas as authorized under Arkansas Constitution, Amendment 82; (2) Authorization of the agreement between the State of Arkansas and the Big River Steel, LLC; (3) Creation of a sales tax exemption for natural gas and electricity for Big River Steel, LLC; and (4) Extension of the waste reduction, reuse, or recycling equipment tax credit. SECTION 2. Big River Steel Project bonds issued under Arkansas Constitution, Amendment 82. (a) As used in this section: (1) "Amendment 82 Agreement" means the unexecuted document titled "Amendment 82 Agreement between the State of Arkansas and Big River Steel, LLC" submitted to the General Assembly and as found in Section 8 of this act; and (2) "Project" means the acquisition, development, construction, and operation of a mini-mill steel manufacturing facility by Big River Steel, LLC, on a site in Mississippi County, Arkansas, that is identified more specifically in the Amendment 82 Agreement. (b) (1) The General Assembly finds that the project qualifies as a large economic development project for which the issuance of general obligation bonds is authorized under Arkansas Constitution, Amendment 82, and the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., and is of the nature intended by the electors of the state to be financed with bonds under Arkansas Constitution, Amendment 82. (2) The General Assembly approves the terms of the Amendment 82 Agreement between the State of Arkansas and Big River Steel, LLC, and authorizes the execution of the Amendment 82 Agreement in substantially the same form as presented to the General Assembly but with such changes as shall be approved by the officers executing the Amendment 82 Agreement on behalf of the state. (c) (1) The General Assembly authorizes the Arkansas Development Finance Authority to issue general obligation bonds of the State of Arkansas in an amount not to exceed one hundred twenty-five million dollars ($125,000,000) in the aggregate. (2) The bonds authorized under subdivision (c)(1) of this section: (A) Are direct general obligations of the State of Arkansas; (B) Bear the full faith and credit of the State of Arkansas; and (C) Are payable from gross general revenues or special revenues appropriated by the General Assembly. (d) The authority shall issue the bonds in accordance with the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq. (e) (1) The Arkansas Economic Development Commission and the authority may implement the Amendment 82 Agreement consistent with this act, Arkansas Constitution, Amendment 82, and the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq. (2) If a provision of this act or of the Amendment 82 Agreement conflicts with any provision of the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., the provisions of this act and the provisions of the Amendment 82 Agreement control. SECTION 3. Sections 4 through 7 of this act shall be known and may be cited as the "Amendment 82 Big River Steel Project Tax Provisions". SECTION 4. Definitions. As used in sections 4 through 7 of this act: (1) "Invested" includes, but is not limited to, expenditures made from the proceeds of bonds, including interim notes or other evidence of indebtedness, issued by a municipality, county, or an agency or instrumentality of a municipality, county, or the State of Arkansas, if the obligation to repay the bonds, including interest thereon, is a legally binding obligation, directly or indirectly, of the taxpayer; (2) "Production, processing, and testing equipment" includes machinery and equipment essential for the receiving, storing, processing, and testing of raw materials and the production, storage, testing, and shipping of finished products, and facilities for the production of steam, electricity, chemicals, and other materials that are essential to the manufacturing process but which are consumed in the manufacturing process and do not become essential components of the finished product; and (3) "Qualified manufacturer of steel" means any natural person, company, or corporation, and any holding company of any of the foregoing, engaged in the manufacture, refinement, or processing of steel whenever more than fifty percent (50%) of the electricity or more than fifty percent (50%) of the natural gas consumed in the manufacture, refinement, or processing of steel is used to power an electric arc furnace or furnaces or continuous casting equipment in connection with the melting, continuous casting, or rolling of steel or in the preheating of steel for processing through a rolling mill or rolling mills, or both. SECTION 5. Certification required. (a) To claim the benefits of this act, a taxpayer must obtain a certification prior to March 31, 2016, from the Director of the Arkansas Economic Development Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer: (1) Is a qualified manufacturer of steel; (2) Operates a steel mill in Arkansas which began production after January 1, 2013; and (3) Has invested after January 1, 2013, and prior to December 31, 2015, more than five hundred million dollars ($500,000,000) in the steel mill, and the investment expenditure is for one (1) or more of the following: (A) Property purchased for use in the construction of a building or buildings or any addition or improvement thereon to house the steel mill; (B) (i) Machinery and equipment to be located in or in connection with the steel mill. (ii) Motor vehicles of a type subject to registration shall not be considered as machinery and equipment; and (C) Project planning costs or construction labor costs, including: (i) On-site direct labor and supervision, whether employed by a contractor or the project owner; (ii) Architectural fees or engineering fees, or both; (iii) Right-of-way purchases; (iv) Utility extensions; (v) Site preparation; (vi) Parking lots; (vii) Disposal or containment systems; (viii) Water and sewer treatment systems; (ix) Rail spurs; (x) Streets and roads; (xi) Purchase of mineral rights; (xii) Land; (xiii) Buildings; (xiv) Building renovation; (xv) Production, processing, and testing equipment; (xvi) Drainage systems; (xvii) Water tanks and reservoirs; (xviii) Storage facilities; (xix) Equipment rental; (xx) Contractor's cost-plus fees; (xxi) Builders' risk insurance; (xxii) Original spare parts; (xxiii) Job administrative expenses; (xxiv) Office furnishings and equipment; (xxv) Rolling stock; and (xxvi) Capitalized start-up costs related to the construction as recognized by generally accepted accounting principles. (b) To continue to claim the benefits provided under Section 7 of this act after December 31, 2018, a taxpayer shall: (1) Obtain an annual certification from the Director of the Arkansas Economic Development Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer meets the requirements of subsection (a) of this section; and (2) Employ at least three hundred (300) individuals in the management, operations, and maintenance of the steel mill at an average wage equal to or in excess of seventy thousand dollars ($70,000) in cash compensation per calendar year. SECTION 6. Exemption from taxes. Beginning on the date that production, processing, and testing equipment are first in operation, sales of natural gas and electricity to a qualified manufacturer of steel that is certified under Section 5 of this act shall be exempt from the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, Arkansas Code § 26-52-101 , et seq., the Arkansas Compensating Tax Act of 1949, Arkansas Code § 26-53-101 et seq., and any other state or local tax administered under those acts. SECTION 7. Recycling tax credits. (a) (1) (A) A qualified manufacturer of steel that has been certified under Section 5 of this act after January 1, 2013, and prior to December 31, 2020, and that has qualified for the income tax credit for the purchase of waste reduction, reuse, or recycling equipment provided by Arkansas Code § 26-51-506 , may carry forward any unused income tax credit earned under § 26-51-506 for a period of fourteen (14) consecutive years following the taxable year in which the credit originated. (B) However, if a qualified manufacturer of steel is not certified under Section 5(b) of this act, the carry-forward period allowed under subdivision (a)(1)(A) of this section shall be reduced by one (1) year for each year that the qualified manufacturer of steel does not obtain certification under Section 5(b) of this act. (2) Income tax credits that would otherwise expire during that period shall be claimed first. (b) (1) As used in subdivision (a)(1) of this section, the term "waste reduction, reuse, or recycling equipment" as defined in § 26-51-506 shall include production, processing, and testing equipment used to manufacture products containing recovered materials. (2) The provisions of § 26-51-506(d)(4) shall not apply. (3) However, the qualified manufacturer of steel shall make a good faith effort to use recovered materials containing Arkansas post-consumer waste as a part of the materials used. (c) (1) Except as provided in subdivision (c)(2) of this section, the refund provisions of Arkansas Code § 26-51-506(f) shall not apply to a qualified manufacturer of steel that has been certified under Section 5 of this act. (2) The qualified manufacturer of steel shall refund the amount required under subdivision (c)(3) of this section if within three (3) years of the taxable year in which the credit originated: (A) (i) The waste reduction, reuse, or recycling equipment is removed from Arkansas, disposed of, or transferred to another person, or the qualified manufacturer of steel otherwise ceases to use the required materials or operate in accordance with § 26-51-506 or this section. (ii) Reorganization transactions, changes of ownership and control, and sales and transfers of waste reduction, reuse, or recycling equipment among affiliates which do not constitute sales or transfers to a third-party purchaser shall not be considered disposals, transfers, or cessations of use for purposes of § 26-51-506 or this section; or (B) The Director of the Arkansas Department of Environmental Quality finds that the qualified manufacturer of steel has operated the waste reduction, reuse, or recycling equipment in a manner which demonstrates a pattern of intentional failure to comply with final administrative or judicial orders which clearly indicates a disregard for environmental regulation. (3) If the provisions of subdivision (c)(2) of this section apply, the qualified manufacturer of steel shall refund the amount of the allowed tax credit claimed by the qualified manufacturer of steel which exceeds the following amounts: (A) Within the first taxable year, zero dollars ($0.00); (B) Within the second taxable year, an amount equal to thirty-three percent (33%) of the amount of credit allowed; and (C) Within the third taxable year, an amount equal to sixty-seven percent (67%) of the credit allowed. (4) Any refund required by subdivision (c)(2)(A) of this section shall apply only to the credit given for the particular waste reduction, reuse, or recycling equipment to which that subdivision applies. (5) A qualified manufacturer of steel that is required to refund part of a credit pursuant to this section shall no longer be eligible to carry forward any amount of that credit which had not been used as of the date the refund is required. (6) A qualified manufacturer of steel aggrieved by a decision of the Director of the Arkansas Department of Environmental Quality under this section may appeal to the Arkansas Pollution Control and Ecology Commission through administrative procedures adopted by the commission and to the courts in the manner provided in Arkansas Code §§ 8-4-222 - 8-4-229 . (d) In the case of a qualified manufacturer of steel that is: (1) A proprietorship, partnership, limited liability company, or other business organization treated as a proprietorship or partnership for tax purposes, the amount of the credit determined under this section for any taxable year shall be apportioned to each proprietor, partner, member, or other owner in proportion to the amount of income from the entity which the proprietor, partner, member, or other owner is required to include in gross income or as otherwise provided for in the applicable ownership or operating agreements if at least one of the proprietor, partner, member or other owner of the organization is a public retirement system of the State of Arkansas; (2) A Subchapter S corporation, the amount of credit determined shall be apportioned to each Subchapter S corporation shareholder in proportion to the amount of income from the entity which the Subchapter S corporation shareholder is required to include as gross income or as otherwise provided for in the applicable articles of incorporation or bylaws if at least one of the shareholders is a public retirement system of the State of Arkansas; or (3) An estate or trust: (A) The amount of the credit determined for any taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each; and (B) Any beneficiary to whom any amount has been apportioned under this section shall be allowed, subject to the limitations contained in this section, a credit under this section for that amount. SECTION 8. Amendment 82 Agreement Between The State Of Arkansas And Big River Steel, LLC. AMENDMENT 82 AGREEMENT Between THE STATE OF ARKANSAS And BIG RIVER STEEL, LLC Dated as of MARCH __________________, 2013 AMENDMENT 82 AGREEMENT THIS AMENDMENT 82 AGREEMENT ("Agreement") is made and entered into by and between the State of Arkansas (the "State"); and Big River Steel, LLC, a limited liability company organized pursuant to the laws of the State of Delaware (the "Sponsor"). W-I-T-N-E-S-S-E-T-H For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. Definitions . For purposes of this Agreement, the following terms and variations thereof (including the singular, plural, and possessive and the past, present, and future tense) shall have the following meanings: "Act" shall mean and refer to the Arkansas Amendment 82 Implementation Act, A.C.A. § 15-4-3201 et seq., as amended through 2012. "Actual Project Capital Expenditures" shall mean and refer to the total of: (a) the Qualifying Site Preparation Costs, including Piling Costs, and the Infrastructure Costs actually invested by, or on behalf of, the Sponsor at the Project Site; and (b) any amounts paid by or received from the City of Osceola, Arkansas or Mississippi County, Arkansas with respect to the acquisition and lease of the Project Site. "Advantage Arkansas Agreement" shall mean and refer to a Financial Incentive Agreement with the State for job creation tax credits as required pursuant to A.C.A. § 15-4-2705 . "Advantage Arkansas Program" shall mean and refer to the job creation tax credit program established by the Consolidated Incentive Act. "Agreement" shall mean and refer to this Amendment 82 Agreement. "Amendment 82" shall mean and refer to Amendment 82 to the Constitution of the State of Arkansas of 1874. "Amendment 82 Financing" shall mean and refer to the funds to be provided by the State to, or for the benefit of, the Sponsor pursuant to the Grants and the Incentive Loan and the funds allocated to the reasonable and necessary closing costs and expenses of the State. "Amendment 82 Requirements" shall mean and refer to the provisions of Amendment 82 and the Act, and other requirements imposed by legislation approving this Agreement. "Announced Controlling Party" shall mean and refer to the Person who shall be proposed to be the successor to the Sponsor with respect to the Project following a Change of Control Event. "Authority" shall mean and refer to the Arkansas Development Finance Authority or any other agency of the State which succeeds by statutory enactment to the rights and obligations assigned to the Authority pursuant to this Agreement. "Bonds" shall mean and refer to the general obligation bonds issued by the State pursuant to the Amendment 82 Requirements in an amount not exceeding One Hundred Twenty-five Million Dollars ($125,000,000.00) for the Amendment 82 Financing. "Capital Commitments" shall mean and refer to: (a) the written commitments obtained by the Sponsor for private equity investments; (b) various other forms of capital including term loans and working capital financing; (c) written commitments obtained by the Sponsor for infrastructure; (c) incentives from the State including the Amendment 82 Financing and the incentives described in Section 8, but not those incentives described in Sections 9 and 10; (d) other incentives including amounts paid by or received from the City of Osceola, Arkansas or Mississippi County, Arkansas with respect to the acquisition and lease of the Project Site; and (e) other forms of financing, exclusive of the Amendment 82 Financing. "Capital Commitment Documents" shall mean and refer to any documents evidencing the Capital Commitments and any such other documents, records, and other information as are reasonably necessary to describe the nature, terms and conditions, and amount or value of the Capital Commitments. "Change of Control Event" shall have the meaning set forth in the Inter-Creditor Agreement that, when taken as a whole, is no less favorable to the State than a definition which includes the following events: (a) the sale or disposition of all or substantially all of the assets of the Project to a Non-related Entity; and (b) all such other events as may be defined in the Inter-Creditor Agreement. "Chief Fiscal Officer" shall have the meaning set forth in the Act. "Closing Date" shall mean and refer to the date of the issuance of the Bonds. "Commission" shall mean and refer to the Arkansas Economic Development Commission or any other agency of the State which succeeds by statutory enactment to the rights and obligations assigned to the Commission pursuant to this Agreement. "Compensation Target" shall mean and refer to an average annual compensation with respect to the Direct Positions and Independent Direct Positions designated by the Sponsor of Seventy-five Thousand Dollars ($75,000.00) per year, excluding any non-cash benefits. "Confidential Business Information" shall have the meaning set forth in Section 15. "Consolidated Incentive Act" shall mean and refer to the Consolidated Incentive Act of 2003, A.C.A. § 15-4-2701 et seq., as amended. "Department" shall mean and refer to the Arkansas Department of Finance and Administration. "Development Plan" shall mean and refer to the plans attached to Exhibit 1. "Direct Positions" shall mean and refer to those employees: (a) who shall be designated by the Sponsor; (b) who shall hold Full Time Positions; and (c) who shall work directly for the Sponsor or a Related Entity at the Facility or on the Project Site. "Employment Target" shall mean and refer to at least five hundred twenty-five (525) New Full Time Positions through either Direct Positions or Independent Direct Positions at the Facility or on the Project Site. "Escrow Account" shall mean and refer to any interest earning escrow account administered by the Escrow Agent pursuant to an Escrow Agreement. "Escrow Agent" shall mean and refer to any Person appointed by the State as an escrow agent with respect to funds or items to be held or disbursed by the State pursuant to the terms and conditions of this Agreement. "Escrow Agreement" shall mean and refer to any escrow agreement with any Escrow Agent. "Exhibit" shall mean and refer to an exhibit specifically referred to in this Agreement that shall be either attached to this Agreement or delivered by a Party in conjunction with the execution and delivery of this Agreement. "Facility" shall mean and refer to the Mini Mill steel manufacturing facility and all related buildings and infrastructure to be acquired, developed, constructed, and operated at the Project Site as generally described in the Development Plan. "Financial Incentive Agreement" shall mean and refer to the financial incentive agreements described in the Consolidated Incentive Act. "Full Time Position" shall mean, when referring to a position or job, a position or job filled for at least nine (9) months during a calendar year with an average of at least thirty (30) hours of work each week. "General Assembly" shall mean and refer to the Senate and the House of Representatives of the State. "Governmental Authority" shall mean and refer to any executive, legislative, or judicial branch, or any agency, department, board, commission, council, court, tribunal, official, task force, or other authority exercising governmental powers of the United States of America or the State. "Governor" shall mean and refer to the Governor of the State. "Grants" shall mean and refer collectively to the cash grant for Qualifying Site Preparation Costs as described in Section 6.2 and the cash grant for Piling Costs as described in Section 6.3. "Incentive Loan" shall mean and refer to the loan of money as described in Section 6.4. "Incentive Loan Collateral" shall mean and refer to that part of the Infrastructure described in Exhibit 2 and all accessions, substitutions, and replacements thereto or thereof, whether now owned or hereafter acquired and all proceeds thereof whether of the same or different class. "Incentive Loan Documents" shall mean and refer to the promissory note, security agreement, mortgage, financing statement, fixture statement, and other documents entered into between the Authority and the Sponsor with respect to the Incentive Loan. "Independent Direct Positions" shall mean and refer to those employees and independent contractors of Non-related Entities who shall be designated by the Sponsor and who hold Full Time Positions at the Facility or on the Project Site with the primary objective of providing any of the following products and services necessary to the operation, maintenance, or repair of any part of the Project: (1) slag handling operations; (2) oxygen and hydrogen production operations; (3) roll shop operations; (4) maintenance shop operations; (5) scrap handling and processing operations; (6) material management operations; (7) logistic operations; (8) site maintenance; or (9) any other support services at the Facility or on the Project Site as approved by the Commission. "Infrastructure" shall mean and refer to the buildings, fixtures, machinery, and equipment acquired, developed, constructed, and operated at the Project Site and includes the Facility. "Infrastructure Costs" shall mean and refer to the costs and expenses paid or incurred by, on behalf of, the Sponsor with respect to the acquisition, development, construction of the Infrastructure at the Project Site, but shall not include any amounts paid by or received from the City of Osceola, Arkansas or Mississippi County, Arkansas. "Inter-Creditor Agreement" shall mean and refer to the inter-creditor agreement among the Authority and all Senior Term Lenders to the Project and all other Persons who may claim any interest in the Incentive Loan Collateral and certain other Persons. "Investment Requirement" shall mean and refer to the obligation of the Sponsor, as described in this Agreement, to make a minimum capital investment of One Billion Twenty-three Million Five Hundred Ninety Thousand Dollars ($1,023,590,000.00) in Actual Project Capital Expenditures. "Investment Threshold" shall mean and refer to the investment by the Sponsor of a minimum of Two Hundred Fifty Million Dollars ($250,000,000.00) in Actual Project Capital Expenditures for the use and benefit of the Project at the Project Site. "Joint Marketing Agreement" shall mean and refer to the joint marketing agreement to be entered into between the Commission and the Sponsor prior to the Closing Date. "Letter of Commitment" shall mean and refer to the letter of commitment entered into pursuant to the Amendment 82 Requirements between the Commission and the Sponsor as of January 28, 2013. "Mini Mill" shall mean and refer to the steel manufacturing facility to be acquired, developed, constructed, and operated at the Project Site as generally described in the Development Plan. "New Full Time Position" shall mean and refer to a permanent Full Time Position at the Facility or the Project Site that was created after the date of this Agreement. "Non-related Entity" shall mean and refer to any Person that shall not meet the definition of a Related Entity. "Office of Economic and Tax Policy" shall mean and refer to the Office of Economic and Tax Policy of the Arkansas Bureau of Legislative Research. "Party" shall mean and refer to either or both of the State and the Sponsor. "Person" shall mean and refer to any Party, individual, entity, corporation, company, association, limited liability company, joint venture, general partnership, limited partnership, organization, Governmental Authority, revocable trust, irrevocable trust, estate, personal representative, executor, trustee, receiver, liquidator, or other person. "Piling Costs" shall mean and refer to those Qualifying Site Preparation Costs directly related to that part of the Facility on which the Mini Mill shall be situated and that shall be necessary for subsurface stabilization of the Mini Mill. "Piling Costs" include costs and expenses related to piling, subsurface stabilization, engineering, grading, footers, dewatering, excavation and foundation preparation, all installation, material and labor costs and expenses directly related to the foregoing, and all other necessary subsurface stabilization costs and expenses incidental to the Piling Costs. "Position Creation Requirement" shall mean and refer to the obligation of the Sponsor, as described in this Agreement, to achieve and maintain the Employment Target and the Compensation Target. "Preliminary Period" shall mean and refer to a term of thirty-six (36) months commencing on the Closing Date and continuing until the third anniversary thereof. "Project" shall mean and refer to the acquisition, development, construction, and operation of the Facility at the Project Site in a manner that shall satisfy the Investment Requirement and that shall achieve and maintain the Position Creation Requirement. "Project Site" shall mean and refer to the location of the Project in Mississippi County, Arkansas as described in Exhibit 3. "Qualified Amendment 82 Project" shall have the meaning set forth in the Act. "Qualifying Site Preparation Costs" shall mean and refer to the following costs and expenses of the Project at the Project Site: removal of trees, removal of structures, site clearing activities, grubbing, grading, environmental remediation costs, excavation and other earthwork, fill dirt, compaction, erosion control, installation of drainage and storm water detention, fencing, installation of temporary and permanent internal roads, footers and building foundations, on-site rail installation, on-site public infrastructure improvements or construction, engineering costs, and any other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing and that shall be approved by the State. "Recycling Credit Legislation" shall mean and refer to an act to extend the carry-forward of the income tax credit pursuant to the Recycling Equipment Tax Credit Program from three (3) years to fourteen (14) years for steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) in connection with a facility located in the State of Arkansas and that create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00). "Recycling Equipment Tax Credit Program" shall mean and refer to the program with such name established under A.C.A. § 26-51-506 . "Related Entity" shall have the meaning set forth in A.C.A. § 15-4-3202(24) (2011 Revision). "Repayment Calculations" shall mean and refer to the formulae set forth in Section 11 and Section 14 to be used if the Sponsor shall fail to satisfy the Investment Requirement and to achieve and maintain the Position Creation Requirement as set forth in this Agreement. "Repayment Penalties" shall mean and refer to the penalties payable by the Sponsor as determined by the Repayment Calculations. "Request for Disbursement" shall mean and refer to a request by the Sponsor with respect to a disbursement of the Grants or the Incentive Loan in the form to be reasonably approved by the State and the Sponsor. "Senior Term Lenders" shall mean and refer to those senior secured term lenders to the Project who shall be required to join as a party to the Inter-Creditor Agreement, as reasonably determined by the Authority and the Sponsor. "Sponsor" shall mean and refer to Big River Steel, LLC, a limited liability company organized pursuant to the laws of the State of Delaware. "State" shall mean and refer to the State of Arkansas. "Tax Back Program" shall mean and refer to the investment tax incentives program established by the Consolidated Incentive Act at A.C.A. § 15-4-2706 . "Termination Date" shall mean and refer to June 30, 2014. "Test Date" shall mean and refer to the date on which the Preliminary Period shall expire and the anniversary of such date during each year of the Testing Period. "Testing Period" shall mean and refer to a term of fifteen (15) years commencing upon the expiration of the Preliminary Period and continuing until the eighteenth (18 th ) anniversary of the Closing Date. "Training Agreement" shall mean and refer to the training agreement to be entered into between the Commission and the Sponsor with respect to the assistance to be provided by the Commission to the Sponsor in the recruitment and training of employees and independent contractors. "Utility Tax Legislation" shall mean and refer to an act to provide a full exemption of state sales taxes associated with the sale of natural gas and electricity for use directly in the manufacturing process of steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) and create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00). 2. Project . Subject to the terms and conditions of this Agreement, the Sponsor shall: (a) acquire, develop, construct, and operate the Facility at the Project Site; (b) satisfy the Investment Requirement prior to the expiration of the Preliminary Period; (c) achieve the Position Creation Requirement prior to the expiration of the Preliminary Period; and (d) maintain the Position Creation Requirement during the Test Period. The Facility shall be acquired, developed, and constructed as generally described in the Development Plan. 3. Investment Requirement . 3.1. Capital Commitments . The Project shall require a minimum capital investment at the Project Site in Actual Project Capital Expenditures of at least the Investment Requirement. The Sponsor shall satisfy the Investment Requirement by no later than the expiration of the Preliminary Period. Prior to the Termination Date, the Sponsor shall raise Capital Commitments in the form of private equity investments of a minimum of Three Hundred Million Dollars ($300,000,000.00), and the Sponsor shall obtain other Capital Commitments. 3.2. Escrow of Capital Commitments . When the Sponsor shall have raised such minimum of Capital Commitments in the form of private equity investments and shall have obtained such other Capital Commitments to satisfy the Investment Requirement as described in Section 3.1, the Sponsor shall: (a) deposit into escrow with the Escrow Agent cash or irrevocable letters of credit with a total value of at least Three Hundred Million Dollars ($300,000,000.00); (b) provide a written summary to the Commission and the Authority of the other Capital Commitments as shall be necessary to satisfy the Investment Requirement; and (c) provide a copy of all of the Capital Commitment Documents to the Commission and the Authority. The Sponsor shall reasonably cooperate with the Commission and the Authority with respect to any review of the Capital Commitment Documents. If the Commission and the Authority shall reasonably determine that the Capital Commitments and the proceeds of the Bonds shall not provide the Sponsor with sufficient financial capability to satisfy the Investment Requirement by the expiration of the Preliminary Period, the Commission and the Authority shall provide written notice thereof to the Sponsor within five (5) business days from the receipt of the Capital Commitment Documents, and the Sponsor shall have until the Termination Date to raise Capital Commitments in the form of private equity investments and to obtain other Capital Commitments to satisfy the Investment Requirement. If the Commission and the Authority shall reasonably determine that the Capital Commitments and the proceeds of the Bonds shall provide the Sponsor with the sufficient financial capability to satisfy the Investment Requirement by the expiration of the Preliminary Period, the Commission and the Authority shall send written notice thereof to the Sponsor and the Closing Date and the issuance of the Bonds shall be scheduled for a date within fifteen (15) calendar days after receipt of all the Capital Commitment Documents by the Commission and the Authority. 3.3. Local Investment . Prior to the expiration of the Preliminary Period, the Sponsor shall use its reasonable efforts to spend Two Hundred Fifty Million Dollars ($250,000,000.00) for products and services from vendors and suppliers based in the State. 4. Position Creation Requirement . Prior to the expiration of the Preliminary Period, the Sponsor shall achieve the Employment Target and the Compensation Target through either Direct Positions or Independent Direct Positions. During the Testing Period, the Sponsor shall maintain the Employment Target and the Compensation Target through either Direct Positions or Independent Direct Positions. The New Full Time Positions required by the Position Creation Requirement shall include those Direct Positions and Independent Direct Positions designated by the Sponsor. The Employment Target and the Compensation Target may be satisfied through a combination of Direct Positions and Independent Direct Positions which constitute Full Time Positions during the calendar year in question. 5. Time Periods . 5.1. Closing Date . The Parties anticipate that the Closing Date shall occur prior to December 31, 2013, but the Closing Date may occur on any date prior to the Termination Date. 5.2. Project Schedule . The acquisition, development, and construction of the Project by the Sponsor is currently scheduled to commence promptly following the Closing Date, and is currently scheduled to be substantially completed within twenty-four (24) months after the Closing Date. The Sponsor currently anticipates that commercial production by the Facility shall commence approximately twenty-four (24) months after the Closing Date. 5.3. Termination . In the event the conditions to Closing set forth in Sections 12 and 13 of this Agreement shall have not been satisfied or waived on or before the Termination Date, either the State or the Sponsor may send written notice of termination to the other Party and thereafter the Parties shall have no further obligations pursuant to this Agreement and the Sponsor shall no longer be required to satisfy the Investment Requirement and to achieve and maintain the Position Creation Requirement. 5.4. Preliminary Period . The Preliminary Period is intended to be the period during which the acquisition, development, and construction of the Project shall be completed. The Sponsor shall satisfy the Investment Requirement and shall achieve the Position Creation Requirement not later than the expiration of the Preliminary Period. 5.5. Testing Period . The Testing Period is intended to be the period during which the compliance with the Position Creation Requirement may be evaluated and during which the Repayment Penalties may be imposed. The Sponsor shall maintain the Position Creation Requirement during the Testing Period. 5.6. Other Periods . Except as provided in this Agreement with respect to the Investment Requirement and the Position Creation Requirement, the Sponsor shall comply with the terms and conditions of this Agreement commencing as of the date of this Agreement and continuing until the expiration of the Testing Period. The Sponsor hereby waives any right to extend any time period specified in this Agreement as set forth in A.C.A. § 15-4-3206 . 6. Amendment 82 Financing . 6.1. Bonds . Subject to the terms and conditions of this Agreement and the Amendment 82 Requirements, the State shall provide funding from the Amendment 82 Financing to, or for the benefit of, the Sponsor in an aggregate amount up to One Hundred Twenty Million Dollars ($120,000,000.00). The Amendment 82 Financing shall be funded through issuance of the Bonds in an amount not exceeding One Hundred Twenty-five Million Dollars ($125,000,000.00) in the aggregate. The Bonds shall be in such denominations and series and upon such terms and conditions as determined by the Authority, in its sole and absolute discretion. The Bonds shall be direct general obligations of the State for the payment of debt service on which the full faith and credit of the State shall be pledged. The Bonds shall be payable from gross general revenues or special revenues appropriated by the General Assembly. 6.2. Grant for Qualifying Site Preparation Costs . From the proceeds of the Bonds, the State shall fund to, or for the benefit of, the Sponsor a cash grant in the amount of Fifty Million Dollars ($50,000,000.00) for payment or reimbursement of Qualifying Site Preparation Costs. 6.3. Grant for Piling Costs . From the proceeds of the Bonds, the State shall fund to, or for the benefit of, the Sponsor an additional cash grant in an amount up to Twenty Million Dollars ($20,000,000.00) for reimbursement of Piling Costs. Reimbursement by the State for Piling Costs shall be: (a) on a matching basis in which the State shall reimburse the Sponsor one-half (1/2) of eligible Piling Costs paid by the Sponsor; and (b) the maximum amount of Piling Costs to be reimbursed by the State shall be limited to not more than Twenty Million Dollars ($20,000,000.00) out of a total of Forty Million Dollars ($40,000,000.00) or more of Piling Costs. 6.4. Incentive Loan . Subject to the terms and conditions of this Agreement and the Incentive Loan Documents, the Authority shall make the Incentive Loan to the Sponsor as follows: (a) Amount Funded; Principal Amount . In order to fund the Incentive Loan and in consideration of the Sponsor's promissory note evidencing the Incentive Loan, the Authority will make available from the Bond proceeds the sum of Fifty Million Dollars ($50,000,000.00) for disbursement to the Sponsor under Section 7 hereof. The promissory note evidencing the Incentive Loan shall be in a principal amount equal to Fifty Million Dollars ($50,000,000.00). (b) Incentive Loan Collateral . The proceeds of the Incentive Loan shall be used solely for the engineering, design, procurement, installation, fabrication, and erection of the Incentive Loan Collateral and related purposes. The Incentive Loan shall be secured by a first priority, perfected, purchase-money lien and security interest in the Incentive Loan Collateral subject to the terms and conditions of the Inter-Creditor Agreement. (c) Debt Service . Interest will accrue on the Incentive Loan at the rate payable on the Bonds issued to fund the Incentive Loan, beginning twenty-four (24) months after the Closing Date. The payment of principal and interest due on the Incentive Loan shall be structured as nearly as possible to correspond with debt service payments due on the Bonds issued to fund the Incentive Loan (excepting interest accruing on such Bonds during the first twenty-four (24) months following their date of issuance, which shall be fully borne by the State). The first payment of debt service on the Incentive Loan is projected at this time to be due from the Sponsor on the first day of the thirtieth (30th) month following the Closing Date. A debt service schedule detailing the semiannual debt service payments due on the Incentive Loan (and the principal and interest components thereof) will be attached to the promissory note evidencing the Incentive Loan. In no event shall the total debt service payments due on the Incentive Loan or the net present value of such payments exceed the total debt service payments, or the net present value of such payments, due on the Bonds issued to fund the Incentive Loan. For purposes of determining the net present value of such total debt service payments, the total debt service payments will be discounted at a rate equal to the lesser of the true interest cost on the Bonds issued to fund the Incentive Loan or the rate agreed upon by the Authority and the Sponsor with respect to the Bonds issued to fund the Incentive Loan. (d) Term . The Incentive Loan shall have a term of twenty (20) years commencing on the Closing Date. (e) Prepayment . The Sponsor may prepay the Incentive Loan in whole or in part without penalty at any time beginning twenty-four (24) months after the Closing Date. The portion of any repayment in part that is attributable to principal shall be applied to satisfy principal component(s) of the Bonds issued to fund the Incentive Loan being redeemed in connection with the prepayment and the Authority shall promptly thereafter provide a revised debt service schedule for approval by the Sponsor and attachment to the promissory note. In the event the Sponsor meets the conditions in this Section 6.4(e) and the Sponsor elects to prepay the Incentive Loan in full prior to the expiration of forty-eight (48) months after the Closing Date, the prepayment amount shall be equal to Forty-five Million Dollars ($45,000,000.00) million less any principal amount of the Incentive Loan previously paid by the Sponsor plus any accrued interest on the Incentive Loan outstanding through the prepayment date. To qualify for the discount of the prepayment amount, both of the following conditions must be met: (1) within four (4) years after the Closing Date the Sponsor shall have obtained Capital Commitments, as audited and verified by the Commission and Authority, of at least Five Hundred Million Dollars ($500,000,000.00) (in addition to the Investment Requirement) with respect to an expansion of the steel mill operations of the Sponsor at or near the Project Site; and (2) construction of such expansion shall have commenced prior to the date of the receipt of the prepayment by the State. 6.5. Other Costs . An amount up to Five Million Dollars ($5,000,000.00) may be funded through the Bonds for the purpose of paying reasonable and necessary closing costs and expenses of the State, in the sole and absolute discretion of the Authority, including those that relate to the issuance of the Bonds and including costs and expenses due to those trustees, agents, underwriters, attorneys, advisors, and consultants performing services on behalf of the State in connection with the Project. The Sponsor shall not be responsible for any of such costs and expenses. 6.6. Related Entities . In the event that the Sponsor may elect for any part of the Amendment 82 Financing to be paid to or received by a Related Entity to the Sponsor, the Sponsor shall notify the Commission and the Authority. As a prior condition to the payment or receipt of any part of the Amendment 82 Financing, such Related Entity of the Sponsor shall execute and deliver a joinder to this Agreement in which such Related Entity shall agree to comply with all of the terms and conditions of this Agreement. 7. Disbursement . 7.1. Investment Threshold . Prior to any disbursement of funds by the State with respect to the Grants or the Incentive Loan, the Sponsor shall provide written confirmation to the Commission and the Authority that the Sponsor has achieved the Investment Threshold by investment of a minimum of Two Hundred Fifty Million Dollars ($250,000,000.00) in Qualifying Site Preparation Costs, Piling Costs, and Infrastructure Costs. The Commission and the Authority shall have the right to audit and verify the investment of the Investment Threshold before disbursing funds to, or for the benefit of the Sponsor, with such audit and verification to be conducted in a timely manner. After the Investment Threshold shall have been achieved, the Actual Project Capital Expenditures that comprise the Investment Threshold may be eligible for reimbursement through a disbursement from the Grants or the Incentive Loan, as applicable. 7.2. Generally . All funds to be disbursed by the State with respect to the Grants and Incentive Loan shall require the prior approval of the Commission and the Authority. All funds to be disbursed by the State with respect to the Grants and the Incentive Loan shall be disbursed to, or for the benefit of, the Sponsor, for payment or reimbursement of qualified project costs and expenses permitted by the Amendment 82 Requirements with such qualified project costs and expenses to include Qualifying Site Preparation Costs, Infrastructure Costs, and any other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing and approved as eligible by the State. The disbursement of funds with respect to the Incentive Loan shall also be subject to the terms and conditions of the Incentive Loan Documents. 7.3. Procedure . Subject to the terms and conditions of this Agreement, the Grants and the Incentive Loan shall be disbursed by the State to, or for the benefit of, the Sponsor in one (1) or more disbursements. The Sponsor may request a disbursement from the Grants or the Incentive Loan by submitting a Request for Disbursement to the Commission and the Authority. The Request for Disbursement shall specify the requested source of funding from either the Grants or the Incentive Loan. A Request for Disbursement shall include an itemization of each cost and expense for which the Sponsor may request payment or reimbursement. In support of a Request for Disbursement, the Sponsor shall provide a copy of all receipts, invoices, bills, statements, checks, payments, orders, correspondence, notices, and other documents sent, received, or exchanged with respect to each cost and expense identified in the Request for Disbursement. The Sponsor shall provide the State with full access to all documents, records, and other information in the possession of or available to the Sponsor that may relate to each cost and expense identified with respect to a Request for Disbursement. The State may audit and verify all such documents, records, and other information and may take all other reasonable actions to verify that each cost and expense identified with respect to a Request for Disbursement shall have been actually paid or incurred by the Sponsor, the reasonableness of the nature and amount of the cost and expense, and whether the cost and expense may be properly characterized as Qualifying Site Preparation Costs, Infrastructure Costs, Piling Costs, or other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing. Upon completion of the audit and verification by the State of the costs and expenses identified in a Request for Disbursement, the Authority shall send a Notice of Payment to the Sponsor setting forth the amount approved by the Commission and the Authority to be disbursed by the State with respect to the costs and expenses identified in a Request for Disbursement and the source of funding from either the Grants or the Incentive Loan. Within five (5) business days after the date of a Notice of Payment, the State shall cause the amount set forth in the Notice of Payment to be disbursed to, or for the benefit of, the Sponsor by wire transfer to the account of the Sponsor designated in the Request for Disbursement. 7.4. Eligible Costs and Expenses . A Request for Disbursement may request reimbursement of Qualifying Site Preparation Costs, Infrastructure Costs, Piling Costs, and other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing. A Request for Disbursement may include only such costs and expenses that constitute Qualifying Site Preparation Costs, Infrastructure Costs, Piling Costs, and other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing. With respect to any cost and expense that shall not constitute Qualifying Site Preparation Costs, Infrastructure Costs, or Piling Costs, the State shall determine whether such other cost and expense shall be incidental to the Project and whether such cost and expense shall be eligible for Amendment 82 Financing. A Request for Disbursement may not include any cost or expense that shall have been included in any prior Request for Disbursement. All Requests for Disbursement must be submitted by the Sponsor to the State no later than twenty-four (24) months after the Closing Date. 8. Training Benefits . The Commission shall assist the Sponsor in recruiting and training employees and independent contractors who shall work at the Facility or on the Project Site. The Commission and the Sponsor shall enter into the Training Agreement regarding the assistance to be provided to the Sponsor. Subject to the terms and conditions of this Agreement and the Training Agreement, the Commission shall fund up to Ten Million Dollars ($10,000,000.00) by payment or reimbursement of costs and expenses paid or incurred by the Sponsor for training activities and facilities with respect to the employees and independent contractors who shall work at the Facility or on the Project Site. The funds disbursed to, or for the benefit of, the Sponsor for such training activities and facilities shall be in addition to the Amendment 82 Financing described in this Agreement and shall be spread equally over a period of two (2) years based on a schedule of on-the-job training determined by the Sponsor in consultation with the Commission. The assistance to be provided by the Commission pursuant to the Training Agreement shall include the following support services: (a) recruitment advertising for new employees; (b) securing the use of facilities for accepting applications and interviewing new employees; (c) reproduction of training manuals; (d) reimbursement of compensation to instructors for on-the-job training (up to, but not to exceed actual hourly rate of pay); (e) on-site training facility space; and (f) reimbursement for train-the-trainer expenses, including reasonable expenses of travel. Requests for reimbursement shall provide the Commission, at a minimum, with the information described in paragraphs I(A) and I(B) of the form of Training Agreement. 9. Other Incentive Programs . 9.1. Advantage Arkansas Program . The Sponsor may be eligible for a job creation income tax credit provided pursuant to the Advantage Arkansas Program. The Advantage Arkansas Program provides an income tax credit against a portion of State income tax liabilities based upon a percentage of the annual payroll paid to the new full time permanent employees hired as a result of an approved project. To receive the income tax credit of the Advantage Arkansas Program, the Sponsor must enter into a Financial Incentive Agreement. The tier of the county in which the approved project is located determines the qualifying payroll threshold, as well as the income tax benefit calculation. Counties are segmented into four (4) tiers based on poverty rate, population growth, per capita income, and unemployment rate. Based on the location of the Project Site, the Sponsor may be entitled to an income tax credit up to four percent (4%) of the total taxable wages paid to new full time permanent employees hired after the date of the Financial Incentive Agreement. The annual payroll thresholds of the new employees must be met within twenty-four (24) months following the date the Financial Incentive Agreement is signed by the Commission. Employees must be taxpayers of the State to qualify for the credit. The income tax credit begins in the year in which the new employees are hired and is earned each tax year for a period of five (5) years. Any unused credits can be carried forward for nine (9) years beyond the year in which they were earned. The Sponsor may apply the credit to its State income tax liability, not to exceed fifty percent (50%) of the total income tax liability for a reporting period. The income tax credit provided by the Advantage Arkansas Program is also conditioned upon the satisfaction of the requirements of the Consolidated Incentive Act. 9.2. Tax Back Program . The Sponsor may be eligible for a refund of state and local sales and use taxes provided pursuant to the Tax Back Program. The Tax Back Program provides for a refund of a portion of state and local sales and use taxes paid on certain purchases of material used in the construction of a building or buildings and on purchases of taxable machinery or equipment to be located in or in connection with such building or buildings. To qualify for the refund provided by the Tax Back Program, the Sponsor must: (a) invest a minimum of One Hundred Thousand Dollars ($100,000.00); (b) execute the Advantage Arkansas Agreement within the appropriate time as required by applicable law; and (c) submit a completed application accompanied by a local endorsement resolution from the city, county or both where the Project Site is located and which authorizes the refund of its local taxes to the Sponsor. The refund shall not include the portion of the sales tax dedicated to the Educational Adequacy Fund described in A.C.A. § 19-5-1227 and the Conservation Tax Fund as described in A.C.A. § 19-6-484 . These two (2) exceptions reduce the refund by one percent (1%). Currently, the State sales tax rate is six percent (6%), and therefore, the refund of State taxes shall be based upon five percent (5%) of the eligible taxable purchases. The refund of local taxes shall be based on the sales tax rate for the city and county where the Project Site is located. The refund provided by the Tax Back Program is also conditioned upon the satisfaction of the requirements of the Consolidated Incentive Act. 9.3. Recycling Equipment Tax Credit Program . The Sponsor may be eligible for an income tax credit provided pursuant to the Recycling Equipment Tax Credit Program. The Recycling Equipment Tax Credit Program provides for an income tax credit for thirty percent (30%) of the cost of eligible equipment and installation costs and expenses. Eligibility for the Recycling Equipment Tax Credit Program is determined by the Arkansas Department of Environmental Quality. If the Sponsor otherwise qualifies for the Recycling Equipment Tax Credit it may also qualify under the Recycling Credit Legislation to extend the carry-forward of the income tax credit pursuant to the Recycling Equipment Tax Credit Program from three (3) years to fourteen (14) years for steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) and create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00). 9.4. Utility Tax . The Sponsor may be eligible for a reduced rate of sales taxes with respect to purchases of electricity and natural gas used directly in the manufacturing process. The Utility Tax Legislation will provide a full exemption of sales taxes associated with the sale of natural gas and electricity for use directly in the manufacturing process of steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) and create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00). 9.5. Machinery & Equipment Tax Exemptions . The Sponsor may be eligible for an exemption from state and local sales and use taxes with respect to purchases of machinery and equipment used directly in manufacturing for a new manufacturing facility or to replace existing machinery and equipment for a manufacturing facility. Machinery and equipment required by the State's laws to be purchased for air or water pollution control shall be also exempt. 10. Joint Marketing Agreement . The Commission and the Sponsor shall enter into the Joint Marketing Agreement whereby each shall commit to spend up to One Hundred Fifty Thousand Dollars ($150,000.00) per calendar year for each of three (3) years beginning no later than twelve (12) months after the Closing Date, to market and advertise steel companies based in the State to out-of-state suppliers, vendors, and customers for the purpose of marketing the State as the right place for out-of-state suppliers, vendors, and customers to locate their business or to market or consume the products produced by steel companies based in the State. The expenditures by the Commission with respect to the Joint Marketing Agreement shall be in addition to the Amendment 82 Financing described in this Agreement. 11. Consequences of Unsatisfied Obligations . 11.1. Generally . The Sponsor shall pay to the State certain amounts to be determined by the applicable Repayment Calculations set forth in this Section 11 in the event the Sponsor shall fail Excerpt shown. Open the full section in Lexace.
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