The Senate passed with little debate Wednesday a bill that would authorize the Madison County Economic Development Authority to issue up to $100 million in bonds for an expansion of the Nissan plant in Canton.
The bonds would not be general obligation, but would be classified as revenue-only. Nissan would service the bonds via lease payments for the buildings. Neither the state nor Madison County would be on the hook should that fail to happen, said Sen. Will Longwitz, R-Madison, the bill’s principal author.
Longwitz said on the floor of the Senate last week that the bonds would pay for three buildings for suppliers related to an upcoming expansion at Nissan, the details of which Mississippi Development Authority and legislative officials would not share. Longwitz said the project would create several hundred jobs.
The bill passed the Senate unanimously, but not before an amendment that would set a time limit for the bonds to be issued. Sen. Hob Bryan, D-Amory, proposed the amendment that would give the MCEDA until March 31, 2014, to issue the bonds.
The bill now goes to the House.
Bills that employed standard general obligation financing have not fared well since the beginning of the 2012 legislative session. Last year was the first session in several that lawmakers did not pass a general bond bill for things like infrastructure projects and upgrades to state buildings. Lt. Gov. Tate Reeves, who could not come to terms with House leadership last year on a bond bill, has said several times he’ll support one this year that is “reasonable and rational in size.”
Bryan, who generally leads the charge in scrutinizing incentives the state offers to new and existing businesses, said the Nissan bill’s use of revenue-only bonds that held the state harmless is something that “folks are generally comfortable with.”
This is the fourth consecutive year Nissan has unveiled some kind of expansion in Canton. In 2010 the company announced it was starting production of commercial vans at the facility. In 2011, news broke of the Xterra SUV and Frontier pickup’s lines moving to Canton from the company’s plant in Smyrna, Tann. Last summer, Nissan announced it would start making the Sentra compact sedan in Canton. All told, the three expansions have represented an investment of more than $200 million and have pushed Nissan’s total employment figures to more than 5,000.