Verso Mill Purchase Bill Passes Wisconsin Legislature

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WISCONSIN RAPIDS – If there are two things Wisconsin lawmakers agree on in central Wisconsin, it’s that they want to help restart the paper mill that was closed for a year in Wisconsin Rapids, and members of the other party are playing games.

The State Senate on Wednesday sent a bill to Gov. Tony Evers that would provide up to $ 50 million in federal pandemic assistance loans to a forestry co-op seeking to buy and operate the factory that Verso closed in Wisconsin Rapids last year. The bill also authorizes a loan of up to $ 15 million for a co-op to buy a second stationery that has closed in Park Falls. The Senate passed the law this week.

But it’s not clear whether the loan – from funds made available to the state through the American Rescue Plan Act of 2021 – would apply to a third party purchasing stationery that went out of business in due to the COVID-19 pandemic.

And this question has been at the heart of the political battle over measurement.

These funds were designed to “deal with economic harm resulting from or exacerbated by the public health emergency”. Recipients should explain the economic blow to the loss of income or income due to the COVID-19 public health emergency.

When Verso announced last June that it plans to shut down paper mills in Wisconsin Rapids and Duluth, Minnesota, the company said the move stemmed from a drop in demand for graphic paper due to the COVID-pandemic. 19.

Applicants will also need to show how the funding would help address these issues, but the program is primarily aimed at helping ongoing businesses.

While the two sides agreed on the need to help the co-op, they argued over the wording of the bill and what amendments the Democrats would have given the Wisconsin Economic Development Corp. more latitude in the way of structuring a loan and opening the door to alternative financing. sources if the US Treasury Department decides that third-party borrowers are not eligible for the funds.

Mayor Shane Blaser said he sees pros and cons both in the bill as originally drafted and also in the amendments. The changes allowed the co-op more flexibility when it came to financing the purchase of the mill, while the bill itself required the co-op to guarantee other funds before being eligible for the federal ARPA loan. .

“Either way, regardless of the version, it’s still support for our factory,” Blaser said. “Madison can understand what they’re doing and how they want to do it, but the important thing is that there are opportunities.”

During the Assembly session last week, Representative Katrina Shankland, D-Stevens Point said the governor and a group of Democrats had put in place the amendments in a bid to strengthen the bill and give it more security in the face of uncertainty as to whether the co-op would qualify for the loan.

At the time, Shankland also referred to a June 16 memo from the Wisconsin Legislative Fiscal Bureau, which stated that the US Treasury Department had the final say on whether a loan to the co-op would be a qualifying use. federal funds. If the project was ineligible, the State would have to reimburse the treasury for the amount of the loan.

“It should also be noted that a loan or grant to a third party, such as the Consolidated Cooperative, to purchase the distressed assets of another company is not directly discussed in the rule or guidelines,” the memo reads. . “For this reason, it is not clear whether the proposed loan would be an authorized use of the FRS funding.”

Among the concerns, the state may have to reimburse the federal government for the amount it lends to the co-op if it is later determined that the project is ineligible. The cooperative would then continue to reimburse the State.

The memo then suggested amendments to the bill to give WEDC more flexibility.

The suggested changes, which Republican lawmakers rejected, included allowing the WEDC to make the loan repayable or to set an interest rate below the market rate.

“Without (these amendments) it doesn’t seem like we are able to get the support (for the co-op) that we need,” Shankland said at the time.

However, Republican Representative Scott Krug from Nekoosa, who sponsored the bill, said he was not worried about the project’s eligibility, as the language allowed affected industries and small businesses to receive the loans to help. to rebuild the economies affected by the pandemic. Krug said the amendments were only presented at the last minute and that he did not anticipate President Joe Biden or the Treasury to deny funding for a local co-op working on restarting a closed paper mill.

“I wouldn’t have drafted the bill if I hadn’t thought the federal government would support me,” Krug said.

Tim Pavlik, president of United Steelworkers Local 2-94, said union members were encouraging other local Steelworkers to contact their state senators, asking them to support the bill with the addition amendments.

Pavlik said he hopes the bill’s authors have made sure he qualifies for federal loans, but no one can say for sure whether that will be the case.

Blaser said municipalities and states across the country have received varying amounts of ARPA funding, and many are wondering which projects are eligible. The city, for example, is waiting to find out whether road projects are eligible, or whether the money is only allowed to be used for water and sewer projects. Blaser said some of the rules for using early silver rounds for pandemic recovery have been relaxed over time, and he hopes the same will happen with this round.

RELATED: Wisconsin lawmakers approve $ 50 million for co-op to buy unused Wisconsin Rapids paper mill

RELATED: Consolidated Cooperative’s plans for the Wisconsin Rapids Verso plant are moving forward. What could it look like?

Dennis Schoeneck, president of the Timber Professionals Cooperative, said the cooperative would accept any help they could to buy and operate the plant, regardless of the form of aid.

The final version of the bill passed by the Assembly and Senate would allow WEDC to make loans to the Consolidated Cooperative or other eligible borrower for the Wisconsin Rapids plant and the Park Falls Mill Multi-Party Cooperative or to another eligible borrower. the Wood Professionals created the two cooperatives.

Schoenek said opening the loans to other eligible borrowers could attract other companies and groups who want to take advantage of the loan and the low interest rates, and the cooperative would then compete to buy the factories.

As lawmakers continue to discuss the details of the bill and proposed amendments, they all shared a sense of urgency to get the plant back up and running a year after Verso announced plans to slow down. Many lawmakers at last week’s ground session highlighted the ripple effect the shutdown has had not only on more than 900 employees and their families, but also on adjacent communities and industries like operations. forestry and forestry.

Pavlik said the conversion operation is still ongoing in the Wisconsin Rapids, with the sheet of paper coming from the two Verso mills in Michigan, but if the pulp and paper operations can be restarted it will bring back many jobs that have supported families in central Wisconsin for generations.

“Steelworkers are ready to support anyone who could restart the plant,” Pavlik said. “I look forward to the day when plumes of white smoke rise from the chimneys and the smells of papermaking return to Wisconsin Rapids.”

Contact Caitlin at cshuda@gannett.com or follow her on Twitter @CaitlinShuda.



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