Senate bill would recoup $15 million in seed money for aluminum plant

Money would have to be repaid this year

FRANKFORT, Ky. (WTVQ) — Legislation that seeks to recover $15 million in incentive funds from a stalled industrial project in eastern Kentucky received approval Wednesday from the full Senate.

Senate Bill 48 would recoup taxpayer money designed to help Braidy Industries, now known as Unity Aluminum, establish a $1.3 billion, 2.5 million-square-foot aluminum mill in Greenup County near Ashland.

The bill would direct the Kentucky Cabinet for Economic Development to recover the money via Commonwealth Seed Capital LLC, an independent fund that invests in developing businesses in Kentucky.

“Senate Bill 48, very simply cleans up an issue which has been a thorn in the side of the commonwealth for quite a while,” said the bill’s primary sponsor, Sen. Christian McDaniel, R-Taylor Mill.

The legislation would require that the incentive money be returned by the end of 2022, and it would prevent any extensions to the agreement, he said.

“You’ll recall that five years ago we were here and the previous administration encouraged us to pass some economic development incentives specifically related to a new type of aluminum manufacturing that was going to go somewhere in the state,” McDaniel said. “We did with some confidence in them. The resulting transaction, though, was different from any economic development incentive we’ve ever seen.”

McDaniel said the standard incentive for the commonwealth has to be earned after performance.

“As we have subsequently seen, that organization has absolutely and fundamentally failed to meet any of the dates required in law. They’ve had regular extensions, all of which they have missed and, the fact is that’s $15 million of taxpayer money which is owed back to the commonwealth,” he said.

The measure was amended on the Senate floor Wednesday to move the effective date from March to mid-July.

Sen. Phillip Wheeler, R-Pikeville, said eastern Kentucky has had many “gut punches” during the last decade or so with the devastation of the coal industry, and the situation with Unity Aluminum appears to be another one.

“To see what’s been done to Ashland and Russell and that part of the area that used to be one of the great steel making areas in the United States of America has been very heartbreaking. So I do support this measure,” Wheeler said.

However, he remains hopeful and praised Wednesday’s amendment – filed by Sen. Stephen West, R-Paris – for providing additional time.

“I really hope that this project succeeds, and I want to thank Senator West for his amendment to give the folks additional time to try to get the funding together to make this project succeed in northeastern Kentucky,” he said.

The bill received approval with a 35-0 vote.