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SSISD Approves Application, Tax Agreement With Ashoka Steel Mills

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Ashoka Steel Mills, LLC, this week cleared another hurdle toward locating the company’s first US plant in Sulphur Springs. The business received approval from Sulphur Spring ISD Board of Trustees for what is often referred to as a Chapter 313 Tax Agreement, referring to Texas Tax Code Chapter 313, which allows businesses to apply for a tax break on all or part of school district maintenance and operations taxes. Ashoka Steel Mills will still be required to pay the full I&S (interest and sinking or debt service) portion of school taxes, however.

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Sulphur Springs ISD conducted a public hearing as is required for an amended application for an “appraised value limitation on qualified property” from Ashoka Steel. Then, after all seven board members acknowledged the had “no conflict of interest” with the application from Ashoka. The SSISD trustees adopted findings of fact in connection with the application submitted in April and completed the first week of May with a supplement to and approved as qualifying by the state Comptroller’s Office and agreed to the request to limit the amount of appraised value Ashoka must pay in M&O taxes to the school district.

Ashoka Steel Mills LLC is being developed in collaboration with Melwa group, an international conglomerate headquartered in Sri Lanka that operates 3 steel mills in Asia and Africa, and and Ashoka Capital Group, which is headquartered in the United States and working with Melwa group to establish steel mills across the United States.

Sulphur Springs competed against other cities across the country to be one of the first two mills the company establishes in the USA. The mill is expected to produce 350,000 tons of rebar annually, using an electric arc furnace with an electric arc furnace to heat an estimated 402,500 tons of scrap metal which would be brought in by rail car, tying into an existing track that runs through the old Thermo/Luminant mine property. An electric arc furnace is considered a “green” production method, incorporating recycling steel to reduce carbon emissions.

SSISD Board of Trustees, joins the county, hospital district and city in signing agreements granting tax incentives to Ashoka Steel Mills, LLC. Hopkins County Commissioners Court Monday morning, Oct. 24, 2022, approved a 10-year tax abatement for the company. Then, on Oct. 25, 2022, Hopkins County Hospital District Board of Directors granting a tax abatement to Ashoka Steel Mills, LLC. Both the the county and hospital district agreed to waive 70% of taxes the first five years of the agreement and 50% the remaining five years of the agreement. The abatement would begin after Ashoka is issued a certificate of occupancy, according to the agreement between the county and Ashoka.

The Sulphur Springs City Council also passed a resolution authorizing a tax abatement with Ashoka Steel during the Nov. 1, 2022. The City Council over the summer agreed to a deal for the business to use and eventually attain property in the old mine that facility is built on and authorized the city manager to deal with details. The city and Ashoka were still working out some details as of the Nov. 1 City Council meeting.

The company anticipates the project will take 2 years to complete on a portion of the old Thermo coal mine property owned by the City of Sulphur Springs. The business would only be taxed on $30 million of the total investment for 10 years.

Ashoka Steel also plans propose development and installation of a solar farm on mine property. They system would be 60 MWs on land leased by Vistra (TXU) from the city. Company representatives are “in discussions with Vistra (TXU) to purchase solar power from a solar farm they would develop and own.”

Company officials as of May 4, 2022, when attorneys sent supplemental information to the Comptroller’s office, were reported to be:

 "working with Luminant environmental to identify the exact location of the proposed facility to make sure the land is released from bond before we would need to start construction. The PPA term would be ten years will an optional extension.  We would tie into your substation and the agreement would have Ashoka Steel receiving the full production of the solar facility. We would provide monthly production schedule for the facility in the Term sheet. Luminant would work with Oncor on the interconnect agreement and Ashoka Steel would receive credits for any power that outflows to the grid. Ashoka Steel would receive all Renewable Energy Credits (RECS). Luminant is a Green E provider and can certify the RECS under this program. There would need to be a REP agreement to purchase power from the GRID when not receiving enough power from the solar facility."

From 2023-2024, the rebar manufacturer anticipates creating 10 new qualifying jobs, and 300 non-qualifying jobs.

Author: Faith Huffman

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