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TEXAS CITY (AP) — Con
struction of a $280 million copper
smelter by Tokyo-based Mitsubi
shi Metal Corp. was announced
Monday for Texas City if federal
environmental standards can be
met and if the plant can be profit
able, officials said.
The plant, the first significant
industrial addition to T exas City
in 22 years, would offer perma
nent employment for about 250
icople and generate an estimated
5 million annual payroll.
More than 1,000 construction
jobs would be created during the
two-year construction period.
And once in operation, the plant
would generate another 700 indi
rect jobs, add $23,6 million in
personal income and $100.3 mil
lion to the gross state product, of
ficials estimated.
The plant initially would pro
duce about 150,000 metric tons
of copper, plus sulfuric acid and
other byproducts to be marketed
in the United States and Europe.
The smelting process is used by
the Mitsubishi at other plants in
Japan and Canada and would re
fine copper ore from South
America.
The company had narrowed
the selection of the plant site to
between Texas City — about 40
miles southeast of Houston —and
Unde Sam, La., a small Missis
sippi River town between New
Orleans and Baton Rouge.
“The final decision to proceed
is subject to the project offering a
satisfactory financial return and
being technically feasible and en
vironmentally acceptable,” Izumi
Sukekawa, general manager of
Mitsubishi’s U.S. Copper Project
Department, said. “Now we will
dedicate our energies and effort
to try to actually make this plant
happen.”
No final site has been deter
mined although several locations
in the Texas City port area are
under consideration. One of the
criteria for the site was a 40-foot-
deep ship dock.
U.S. Sen. Phil Gramm said he
was confident the plant would be
built and environmental consid
erations would be met.
“These are conservative Japa
nese business people,” Gramm
said. “If I was investing $280 mil
lion, I’d be cautious too. We have
every reason to believe the tech
nology will be the best in the
world ecologically.”
Gramm said the U.S. Environ
mental Protection Agency has
been involved in the negotiations
and he was certain the agency
would approve the project.
He also said he assured Mitsu
bishi officials that there was “no
one who had made a long-term
investment in our state and had
not made money.”
Texas shows
compete with any
“Our success
Texas can
other area of the United States
and any other area on earth.”
Asked why he had selected
Texas, Tokio Yanagida, senior
managing director for Mitsubishi,
said, “People have been very
good here. People in this state
have been very good.”
Texas City Mayor Emmett
Lowry said the day would go
down as an exciting and impor
tant date.“We stand ready to join
Mitsubishi Metal Corp. in a long,
prosperous and successful future
relationship,” he said.
Among economic incentives
offered the company were local
and state tax breaks that could
amount to some $5 million a year
for up to five years.
Mitsubishi touts its copper
processing system as compact,
pollution-free and highly effi
cient. Similar plants already are
in operation in Naoshima, Japan
and Ontario, Canada, the com
pany said. Officials said they
would apply for environmental
and construction permits by April
and hoped to start construction in
November. The plant should be
commercially operating by Sep
tember 1991.
Copper produced in the plant
would be used for production of
wire and rods for use in construc
tion and electrical equipment and
for housing and industrial sup
plies.“Business is discovering that
Texas is in fact the land of oppor
tunity,” Gov. Bill Clements said in
a statement from Austin. “Mitsu
bishi Metal today becomes an im
portant participant in the Texas
economic recovery.”
Funding proposal follows trend
AUSTIN (AP) — Proposals to use
bonds to build 11,000 prison beds
are part of a trend in state govern
ment in the 1980s to build govern
ment facilities by borrowing against
future tax revenues, something the
state had all but avoided since 1915.
According to a report Monday by
the Houston Chronicle, Gov. Bill
Clements’ call to borrow $343. mil
lion for prison construction didn’t
disclose that interest on that debt
would cost nearly $330 million, or
that about $9 million would be paid
to lawyers, financial advisers, invest
ment bankers and underwriters to
issue the bonds.
The Chronicle’s review of Texas
Bond Review Board and comptrol
ler’s office records showed that
when this decade opened, Texas had
$16 million in taxpayer-supported
debt.
At the close of the last fiscal year,
the state had $704.7 million in tax
payer-supported debt, mostly to pay
for prisons, mental health and uni
versity construction, the newspaper
said.
Lawmakers also have authority
from voters to issue another $1.2 bil
lion in debt, primarily for the super
conducting super collider and new
prisons and state office buildings.
This legislative session alone is
“locked into using about $200 mil
lion in taxpayer dollars to service the
debt already accrued in this decade,”
the Chromcfe reported.
In 1980, no taxpayer dollars were
used for state debt service. By the
year 2009, Texans will have spent
more than $350 million of their tax
dollars in interest on already existing
debt, the Chronicle said. Clements’
prison plans would double that
amount, according to numbers pro
vided by the bond review board.
“Em not sure the generous use of
bonding is consistent with our tradi
tional fiscal conservatism,” said Sen.
Kent Caperton, D-Bryan, chairman
of the Senate Finance Committee.
“Em afraid a lot of people are
looking over there and saying, ‘Wait,
wait, we don’t have to pay for every
thing right now. We can put it off,’”
Caperton said. “That’s true. It gets
us through the short-term crisis, but
it doesn’t do anything for the future
to put it off.”
The Texas Constitution says “no
debt will be created by or on behalf
of the state.” However, the constitu
tion has been amended by voters
many times to create debt for spe
cific programs.
But up until the 1980s, those
amendments involved bonded in
debtedness for self-sustaining pro
grams such as the Veterans Land
Program or the Water Development
Fund. Those programs use the
credit of the state to borrow low-in
terest money, which is lent to indi
viduals or local governments. The
state debt is repaid as the loans are
repaid, rather than by taxpayer dol
lars.
The total amount of bonded debt
for the state stands at $7 billion, and
debt service accounts for 6 percent
of all state spending, the Chronicle
reported. Most of that debt will not
be repaid with taxpayer dollars.
The trend changed in the 1980s
as the state’s economy declined and
lawmakers found themselves faced
with tighter budgets.
Clements said he sees no point in
forcing taxpayers to pay for a prison
facility now thafwill be in use for 30
years. He wants his prison bond is
sue before voters by May.
“If there ever was anything that
was proper for us to bond, it’s our
prison system, where those facilities
will be on line and in use for a 25- or
30-year period,” the governor said.
“It’s absurd, and that’s my opinion,
to pay for a program that involves
$300 million all in one year when
we’re going to be using it for 25 or
30 years.”
House Appropriations Commit
tee Chairman James Rudd, D-
Brownfield, calls it deficit financing.
“Yeah, a prison lasts, a highway
lasts, whatever you bond is going to
last,” Rudd said. “All we’re doing is
postponing, having a longer pay
with interest. It’s not a savings for
the state. It’s just not facing up to
realities.”
AEC hires lawyer, lobbyist;
hopes to avoid pension debt
KILLEEN (AP) — The American Educational Com
plex is paying $97,000 to a prominent Austin lawvei to
press several key issues during the legislative session, in
cluding relieving the college of a potential multimillion
dollar liability and permitting its out-of-state teachers to
draw state retirement contributions, the Houston
Chronicle reported Monday.
College records obtained by the Chronicle under
state open records laws show that the Killeen-area col
lege recently hired attorney Jack Gullahorn to advance
its position on thorny issues pending before the T ea
cher Retirement System of Texas and the Texas Higher
Education Coordinating Board.
Some state officials criticized Gullahorn’s hiring, sav
ing that it is not the best way to resolve complex prob
lems.
“He’s one of the hired-gun lobbyists up there, one ol
tfje bright and shining stars of lobbyists, but what he's
been asked to do is going to take a miracle,” said Rep.
Talmadge Heflin, R-Houston, a member of the House
Committee on Retirement and Aging.
Reports have stated that the college would lobbv for
legislation to help it circumvent a 1979 state law requit
ing it t6 seek federal contributions toward stale retire
ment funds for workers hired under federal contracts.
The stale has been making most of these contributions,
and officials have estimated the college’s liability at $7
million. The college has acknowledged no liability.
“I think they owe the money, and it’s not a good
thing to use college money for lobbyists, especially
when you’re trying to get out of what you’re supposed
to do,” Heflin said.
AEC Chancellor James R. Anderson denied any
wrongdoing. “There is nothing insidious in hiring an
attorney,” he said. “I don’t have to alibi for it. The pope
has an attorney. The governor has an attorney. Whv is
it so bad that the American Educational Complex has
an attorney?”
He said the lawyer is being paid from college operat
ing funds.
Gullahorn said in a letter to Anderson that he would
pursue “activity at these agencies and other branches of
state government” for the $97,000 fee but that am liti
gation would be billed extra “on a traditional bout h ba
sis.”
Gullahorn also suggested in the letter that the trou
bled community college hire “an outside media-grass
roots consultant” to help solve the difficulties with die
state.
University
awards cash
to informant
University News Service
Texas A&M and its Association of
Former Students have presented the
first monetary award in a new pro
gram designed to reward individuals
for providing information concerning
criminal activity on campus.
Robert Smith, Texas A&M’s vice
president for finance and administra
tion, recently announced that a
$2,500 award had been made by the
University and its alumni association
to an individual who provided the
name of the man ultimately arrested
and charged with the Oct. 20 abduc
tion, sexual assault and attempted
murder of a female student.
The reward fund, jointly main
tained by Texas A&M and the alumni
association, was authorized by Texas
A&M President William H. Mobley
shortly after he assumed the presi
dency in August and offered its first
cash award for information on the
Oct. 20 incident.
Rother’s
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