Incentives for Wacker customers weighed

Incentives for Wacker customers weighed

June 9th, 2009 by Andy Sher in Politics State

NASHVILLE - The Bredesen administration wants lawmakers to approve new economic incentives designed to encourage companies that use polycrystalline silicon for solar panels and semiconductors to locate factories next to plants now planned by Wacker Chemical Corp. in Cleveland, Tenn., and Hemlock Semiconductor LLC in Clarksville, Tenn.

State Revenue Commissioner Reagan Farr said Monday the concept is based on the "intergrated supplier" incentives the state created to lure major suppliers to the $1 billion Volkswagen plant in Chattanooga.

"In dealing with Volkswagen, one thing that made Tennessee a very attractive site was that we not only targeted Volkswagen, we provided an incentive for their Tier I suppliers to locate on the facility footprint," Mr. Farr said.

He said in the case of Wacker and Hemlock, which announced plans last year to build respectively $1 billion and $1.2 billion facilities, the companies manufacture the raw material.

"We want the customers of Hemlock and Wacker who actually make the solar panels or the semi-conductors that purchase the polycrystalline silicone to locate in the footprint of those two facilities," he said.

The provisions are included in the administration's "technical corrections" bill, an annual hodgepodge of tax increases and economic incentives.

Sen. Dewayne Bunch, R-Cleveland, said at first blush, the idea "sounds intriguing. I hope it works."

The technical corrections bill says an "integrated customer" that purchases materials "integral" to the customer's manufacturing process is eligible for state job tax incentives.

Mr. Farr said it should be "worth a lot in terms of helping us recruit" additional manufacturers.

It gives the state "something very particular that we can point to that no other state has," he said.

The integrated supplier provision, enacted last year, allows the state to offer $30,000 in job-tax credits over a five-year period for each job created by an "integrated" supplier to a company with an investment of $1 billion or more.

Meanwhile, the Bredesen administration and county clerks said they have come to an agreement about another provision of the technical corrections bill that allows the Revenue Department to collect business taxes now handled by the 95 county clerks.

The state figures it can reap an additional $21 million for the state and another $25 million for counties, primarily from smaller counties, because of the Revenue Department's ability to cross-reference taxes.

"We've had three meetings with the commission of revenue," Hamilton County Clerk Bill Knowles said. "I think we've ironed out any problem that may have existed."

Mr. Knowles said he didn't think the state would collect more taxes from Hamilton County than his own office has, but he said it could prove helpful in rural areas with less staff.

"I told the commissioner I didn't think he could do as good a job as we do," Mr. Knowles said.