Riley Eyes VW Session

Gov. Bob Riley is considering calling a special session of the Legislature in late July if Volkswagen selects a location in Alabama to build a $1 billion vehicle assembly plant that could bring up to 2,000 jobs with it.

The German automaker also is considering sites in Tennessee and Michigan and is expected to announce its preferred site in mid-July.

Alabama’s special session would focus on raising the general obligation bond capacity of the Capital Improvement Trust Fund to finance incentives promised by the state to Volkswagen. So far, there’s been no official word on how much those incentives would be worth.

Last May, Alabama voters in a special referendum raised the trust fund’s bond capacity to $750 million from $350 million in order to support economic development initiatives. That was after ThyssenKrupp AG, a German steelmaker, announced it would build a $3.7 billion plant in northern Mobile County.

Alabama pledged $811.5 million, partly financed with bonds, to the ThyssenKrupp incentive package. The plant is under construction and expected to employ 2,700 full-time workers upon opening in 2010.

The Capital Improvement Trust Fund was created about eight years ago when voters amended Alabama’s constitution and authorized using 28% of offshore oil and gas royalties to secure up to $350 million of bonds for economic development projects. Lawmakers may have to increase the percentage of royalties to increase the bond cap.

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