A group of faith and community-based activists alleged Thursday that Marathon Petroleum Company LP improperly changed an application to get a better deal on tax breaks worth $43 million.
By doctoring an old Advance Notification Application, Together Louisiana claims Marathon wanted the state Commerce and Industry Board on Friday to approve the tax break under older and more lax rules. Before Gov. John Bel Edwards in June 2016 changed its conditions, Industrial Tax Exemption Program allowed the state to forgive local property taxes for up to 10 years for manufacturers willing to locate or expand a facility, thereby creating jobs.
Edwards’ changes allowed local governments to veto, under certain conditions, deals the state cut with the corporations, and limited the tax break for eight years with some money being released to local governments earlier. But all Advance Notification Applications filed before June 24, 2016, are to be considered under the old rules, not the new.
The state Commerce and Industry Board on Friday is scheduled to consider Marathon’s ITEP application for tax breaks 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 nearly 18 months before the deadline on Dec. 30, 2014.
Together Louisiana in 2017 downloaded a copy of the Louisiana Department of 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, pointing to the entries on the documents.
There could be an innocent explanation for two different projects using the same number, but that's not supposed to happen, so that’s a question four of the board members said would be asked at Friday's meeting. But they would withhold comment until after having a chance to look into the situation.
“We need more time to review the issue raised,” LED Communications Director Gary Perilloux said Thursday night.
Marathon, on the other hand, said the advanced notifications for the projects were filed as required under the program's guidelines. "We are submitting the applications in full compliance with the rules of the program,” Jamal T. Kheiry wrote in an email Thursday night. He is head of corporate communications at Marathon’s headquarters in Findlay, Ohio.
“What appears to be happening here is that Marathon has re-packaged a new exemption request, which should be subject to the Governor's reforms and local input, into an old, unrelated advance notice submitted prior to the Governor's reforms, in order to evade the local input process,” Bagert said Thursday.
The plant is in Garyville and St. John the Baptist Parish has refused to grant several ITEP applications under the new rules, said Bagert.
If accepted under the old rules, officials with the parish council, school board and other local taxing agencies would have no input on whether the state can grant the tax exemption.
“Maybe the most troubling thing here is that it’s hard to imagine how this could have happened without the active participation of someone at LED,” Bagert said.