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Lawmakers approve economic development...

Lawmakers approve economic development project for North Mississippi

By: Sarah Ulmer ,    Jeremy Pittari - January 18, 2024

Mississippi House Ways and Means Committee meets in special session on January 18, 2024 (Photo: Jeremy Pittari/Magnolia Tribune)

During a Special Session called by Governor Tate Reeves lawmakers approved a nearly $2 billion economic development project in North Mississippi in which the state will provide financial incentives.

The Mississippi House and Senate entered a special session simultaneously at 9:30 a.m. on Thursday to finalize details for an economic development project announced on Tuesday by Governor Tate Reeves.

The nearly $2 billion project will be located in Marshall County and provide 2,000 jobs with an average salary of $66,000 in addition to an employee benefits package. The development will produce and transport electric batteries intended to power commercial vehicles.

The project was presented to lawmakers through three bills, one in the House and two in the Senate. Prior to passage, the names of the three companies involved in the project were not disclosed. However, they were confirmed in a press conference following adjournment.

During a media event held after both legislative bodies passed the necessary bills, it was announced the companies involved will be Accelera by Cummins, Daimler Trucks and Buses, and PACCAR. Accelera by Cummins is the zero-emissions arm of Cummins Inc. Each of those companies has 30 percent stock in this venture. The remaining 10 percent belongs to the owner of the technology involved in the production of the lithium ion batteries, EVE Energy, a company based out of China.

This joint venture has the goal to localize and accelerate the EV battery supply chain in the United States.

Governor Reeves confirmed EVE Energy is a company out of China, but it is privately owned, not owned by the Chinese government.

When asked about the fact a foreign company is involved in this joint venture, Reeves said that America needs to work towards providing more jobs to Americans.

“At the end of the day, this is what America ought to be doing. For far too many years technology was developed in the United States and that technology was taken to China and manufactured in China. The reality is we need to bring jobs back to America and the way that you do that is the technology is owned by a private Chinese company, not one owned by the government… where we bring these jobs to America to make America great again through manufacturing excellence,” Reeves said.

While Reeves couldn’t give a concrete date, he did opine that construction of the facility will start as soon possible.

The final approval of the project rests with the federal government, Mississippi Development Authority Director Bill Cork said.

The Legislation

Handout on the site layout for the Poppy Project

The House bill outlines the complete capital investment and job report for the project. Coined “Project Poppy,” the proposed package does include grant funding from the state. Mississippi was one of 24 states that bid on the project.

The package includes a $186.7 million grant to the company or companies, which were initially disclosed to the public. That breaks down to $120 million of “inside the fence” reimbursements, $40.7 million for land stabilization and pad construction, $24 million for training, and $2 million for Mississippi Development Authority implementation and state agency expediting fund. This includes $250,000 in mandatory State Auditor fees.

The state will also commit to a 10-year, 100% corporate income tax exemption, sales and use tax incentive on goods for construction made 12 months post-construction, $123.4 million value of local public infrastructure commitment, and $127.4 million for Phase II of the Mississippi Department of Transportation’s Eastern interchange work plus access road, if traffic justifies it.

The Senate legislation – SB 2001 – established the “Project Poppy Fund” which is how the grant funding will be maintained for the economic development project. It will be housed within the Mississippi Development Authority. SB 2002 was the direct appropriation to be placed into the fund upon the effective date of the bill. That amount comes to $117,614,000.

Next year in FY 2025, there would be roughly $133 million in appropriations.

In total, the project will receive $482 million in bonded money.

State Senator Briggs Hopson, Senate Appropriations Chairman, indicated that the state must guarantee through the bond process that the money is there.

“As we pay these dollars upfront the bonding amount will go down,” said Hopson. “Next year we will come back if we choose to fund $133 million; it will go down even further.”

Both SB 2001 and SB 2002 passed nearly unanimously with Senators Angela Hill and Kathy Chism, both Republicans, voting no. The bills were immediately released to the House early Thursday morning.

When asked why she voted against the bill, Hill said, “I try to make sure that I practice what I preach.”

House members also passed their related House Bill by a vote of 117 to 2, after an attempt at a few amendments to alter the bill failed. One of the amendments would have mandated that 70 percent of the facility’s employees would be Mississippi residents while another sought to move the project to a different location.

During discussion of House Bill 1 on the House floor, State Representative Trey Lamar, chairman of the House Ways and Means Committee, said the project shows the state is working with major players in the automotive industry that will result in the largest investment by way of capital coming into the state, and the largest commitment of payroll by an employer in economic impact in the state’s history.

“It is a big deal, ladies and gentlemen. Not only that, it sends a message to the world
that Mississippi is not just ready for business, that we are in business,” Lamar stated.

He also addressed the fact that a foreign company is involved in the deal.

“We live, whether we like it or not, in a global economy. It affects us every single day. And the fact that companies or business interests outside the United States are willing to come to the state of Mississippi to invest their money and hire Mississippians at high paying, high wage, in advanced jobs of the future, says a lot about our state and the hardworking people that we have living here,” Lamar added.

Details laid out during the Senate’s Finance meeting on the deal reflect the joint companies are the world leader in lithium ion battery manufacture. The plan is for the facility to be operational by 2027, but leeway was added to the bill to allow for a final deadline of December 31, 2029, to avoid enacting the clawback agreements, said MDA Director Cork.

While the initial goal is to produce batteries for the trucking industry, Cork said there are avenues to expand the use of the batteries as backup power supplies for industries, among other uses.

To ensure there is a pipeline of employees for this endeavor, $6 million has been set aside for community colleges and K-12 education programs. Cork added that the goal of the facility is an effort for the state to enter be a carbon free mobility environment.

“I think it’s a monumental occasion for the state of Mississippi and it says not only to ourselves that we can do projects of this size and magnitude, but also it says to the world that major fortune 200 companies across this globe are willing to invest their capital because of our people. And that’s something that makes me proud to be a Mississippian,” Governor Reeves said during a press conference held after the bills passed both legislative bodies.

After the bills passed, House District 94 State Representative Robert Johnson and Senate District 12 State Senator Derrick Simmons, both Democratic leaders in their chambers, expressed their concern for the lack of projects being conducted west of I-55 to provide higher paying jobs for residents in the Mississippi Delta.

When asked about the possibility of projects west of I-55 to the Mississippi Delta during the press event, Governor Reeves didn’t make any promises, but did say that he expects more economic development projects to be introduced as his new term progresses.

“It is my expectation that we will continue to see wins both east of I-55, west of I-55, north of I-20, South of I-20, cause we got good people in every region of our state,” Reeves said.

About the Author(s)
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Sarah Ulmer

Sarah is a Mississippi native, born and raised in Madison. She is a graduate of Mississippi State University, where she studied Communications, with an emphasis in Broadcasting and Journalism. Sarah’s experience spans multiple mediums, including extensive videography with both at home and overseas, broadcasting daily news, and hosting a live radio show. In 2017, Sarah became a member of the Capitol Press Corp in Mississippi and has faithfully covered the decisions being made by leaders on some of the most important issues facing our state. Email Sarah: sarah@magnoliatribune.com
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Jeremy Pittari

Jeremy Pittari is a lifelong resident of the Gulf Coast. Born and raised in Slidell, La., he moved to South Mississippi in the early 90s. Jeremy earned an associate in arts from Pearl River Community College and went on to attend the University of Southern Mississippi, where he earned a bachelor's of arts in journalism. A week after Hurricane Katrina, he started an internship as a reporter with the community newspaper in Pearl River County. After graduation, he accepted a full-time position at that news outlet where he covered the recovery process post Katrina in Pearl River and Hancock Counties. For nearly 17 years he wrote about local government, education, law enforcement, crime, business and a variety of other topics.
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