Several property tax abatements for an oil refinery in St. John the Baptist Parish owned by Marathon Petroleum Co. LP were deferred to the next meeting of the Louisiana Board of Commerce and Industry after activists alleged the applications for the economic incentives were purposefully altered to obtain a lower tax burden.
Together Louisiana, a faith-based activist organization, which has railed against the Industrial Tax Exemption Program for years, claims Marathon doctored an old application to get the board to approve the tax break under older and more lax rules.
Representatives of Ohio-based Marathon submitted the application and attested to the accuracy of the documentation with signatures and a $15,000 check for consideration of its Industrial Tax Exemption Program request, according to the board meeting agenda packet.
The company was seeking a 10-year property tax abatement worth $43 million based on completion of a $275 million installation of coker drums, used in refining oil, that began Jan. 1, 2018. The project is listed under Advance Notification No. 2014-1606 and the application was filed on Dec. 30, 2014.
Together Louisiana in 2017 downloaded a copy of the Louisiana Economic Development’s entire database of applications. As the activists looked over Friday’s board agenda, they checked the older list of projects and found, under the same number, 2014-1606, a $386 million project begun on Jan. 1, 2015, to install a U311 natural gasoline hydrotreater, said Broderick Bagert, an official with the group.
The difference is that if the tax exemption was submitted in 2014, it would be eligible under the old rules, which means the company could be eligible for up to 100% property tax abatement. Under new rules, if the notification was submitted after June 24, 2016, then local government would vote on whether to award the tax break of up to 80% of the property taxes over two five-year time frames.
"There was a material misrepresentation that appears to have been made for private gain, and the board relies on the truthfulness of the applications in front of them," said Joel Waltzer, attorney for Together Louisiana. "Somebody needs to be looking at how this happened, and that's part of our problem. The Board of Commerce and Industry has operated for decades without investigating the basic facts of the applications for exemptions."
Despite repeated requests, Marathon did not respond to comment for this story. It was not immediately clear if the application included mistakes that were not purposefully attempting to obtain a lower tax bill.
Marathon officials certified in the incentive application that it "meets all constitutional, statutory and regulatory provisions applicable to the program." Any false information or omissions means the company is subject to civil and potentially criminal penalties for filing false public records and forfeiture of any tax benefits.
Louisiana Economic Development's attorney told the board she would investigate the issue and did not have enough time to do so before the meeting, which had been postponed due to the active hurricane season.
"Nobody should question how seriously LED takes its responsibility to administer programs for the rules of this board and the laws of the state of Louisiana," agency Secretary Don Pierson said. "That unwavering belief encompasses all of LED's 100 employees, no matter if they are classified as civil servants or unclassified as political appointees.
"I'm not aware that we've ever claimed perfection in our department though it is our daily pursuit. For anyone to suggest that LED employees are participating in activities that run counter to that steadfast belief is an affront to everyone at LED and all public servants to use to kind of rhetoric."
The board meeting stretched on for more than six hours, which appears to be one of the longest meetings of the organization. Dozens of other economic incentive applications were either approved or renewed throughout the meeting, with heated debate among the board members, residents, activists and corporate representatives.
The next board meeting is set for February.
Staff writer Mark Ballard contributed to this report.