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Jefferson County, Texas, Commissioners Approve Tax Incentive to Build Refinery

Posted on: Tuesday, 3 January 2006, 21:00 CST

By Beth Gallaspy, The Beaumont Enterprise, Texas

Jan. 3--BEAUMONT -- A tax incentive agreement designed to help coax Motiva Enterprises to build a new $3.5 billion refinery in Port Arthur won unanimous approval from Jefferson County Commissioners Court on Monday.

Tom Purves, manager of Motiva's existing Port Arthur refinery, said the 20-year tax break was critical as Motiva leadership weighs the advantages of Port Arthur versus Convent, La., for the project.

"It is the cornerstone of making sure our company understands that Texas is behind this project, more specifically Jefferson County," Purves said.

The project would mean an estimated 3,000 to 4,000 jobs during construction and add 300 new permanent jobs. Motiva's refining capacity would more than double from 275,000 barrels a day to 600,000 barrels a day.

"We think it would be the biggest refinery in the country," Danny Harris, tax representative for Motiva, told the court.

Purves said that if Motiva decides to build in Port Arthur, the project should provide work for everyone in the area who wants to work and has the needed skills.

"It's a very large project and we're going to need all the help we can get," Purves said.

Under the agreement, the county would keep just a portion of Motiva's tax payment on the new refinery each year for 20 years. The remainder would be refunded to the company.

The county would net no new tax money from Motiva during three years of construction. In years four and five, the county would see an extra $555,000 a year. Payments would rise to $3.13 million in 2011 and to $4.16 million a year for 2012 to 2026, according to the agreement.

Motiva will attempt to use local and historically underutilized vendors, suppliers and subcontractors under the agreement.

In Louisiana, a 100 percent tax abatement for 10 years would be almost automatic, Harris told the court.

Harris and Purves said they now will approach other taxing entities in the county about tax breaks with hopes they follow the county's lead. Those include the Port of Port Arthur, Drainage District 7 and the Jefferson County Navigation District. An agreement with the city of Port Arthur is in place and talks have begun with the Port Arthur school district, Harris said.

Purves said he expects Motiva leaders to make a decision by the end of January about a location for the new refinery.

Commissioner Waymon Hallmark thanked Purves for "working so hard to get this project to come here and not just sitting back and letting it go to Louisiana." Other court members echoed the sentiment.

In other business, the court discussed a $1.1 million bill from Daniels Construction for repairs at Southeast Texas Regional Airport related to Hurricane Rita damage.

Less than two weeks after the storm, the court approved hiring Daniels to make emergency repairs. However, Assistant District Attorney Tom Rugg said the work Daniels performed at the request of the county engineer went beyond the scope of an emergency as envisioned under exceptions to state purchasing requirements.

An emergency repair would cover a temporary roof, Rugg said. Instead, the airport roof was replaced with one designed to withstand higher wind speeds.

County Engineer Jose Pastrana said he tried to contact several area contractors in the days after the storm, but Daniels was the only one to submit a proposal. He said he believes the charges are reasonable, especially considering the scarcity of labor and supplies at the time.

Several county officials will meet to try to determine how the county can legally pay the Daniels bills since a contract was never signed.

Also on Monday, the court approved a $1.19 million payment to DRC Emergency Services for debris removal. FEMA grants will be used to pay the bill.

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To see more of The Beaumont Enterprise, or to subscribe to the newspaper, go to http://www.southeasttexaslive.com.

Copyright (c) 2006, The Beaumont Enterprise, Texas

Distributed by Knight Ridder/Tribune Business News.

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RD, SC, SHEL,

Source: The Beaumont Enterprise

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