One silver lining to the Bayou Corne sinkhole disaster is this: millions of dollars in back taxes being paid by companies operating on the salt dome where the sinkhole appeared nearly three years ago.
Assumption Parish officials settled a property tax dispute this week with the fifth of seven companies operating underground caverns in the Napoleonville Salt Dome.
This and recent settlements with other companies have meant not only the additional back taxes to parish taxing jurisdictions, but added future tax revenues from long-standing industrial operations that had not previously been on the tax rolls.
In early 2014, a state district judge ordered the companies to pay a combined $15.6 million in back taxes and penalties, which they did under protest for the 2010 to 2013 tax years. The money was held in escrow until the dispute could be settled.
Under the settlements, the total the parish will receive will be less than that, but how much is not known at this point.
So far, $4.3 million has been paid by four of the companies. The Sheriff’s Office and parish School Board received the largest payouts from that pot: $1.2 million and $1.6 million, respectively, after they paid their share of about $230,000 in expenses to pursue the taxes.
Assumption Parish Assessor Wayne “Cat” Blanchard began investigating the caverns and their absence from the tax rolls after the Bayou Corne sinkhole emerged in August 2012 and resulting media attention shed light on the large cavern storage and mining complex in the nearby salt dome. Despite the image the name conjures, the salt dome is a vast, solid deposit of salt stretching tens of thousands of feet underground.
Blanchard later hired a special auditor, who found millions in assessed value left off the parish rolls.
But the companies contended their caverns, which were created by mechanically pumping water into the dome and dissolving salt thousands of feet down, were natural features of the land that the assessor, by law, was obligated to find and assess.
Blanchard and Sheriff Mike Waguespack claimed the caverns were commercial improvements that the companies were obligated to report.
On Friday, Blanchard and Waguespack said the settlements support their reading of how state tax law applies to the caverns.
“We have negotiated some fairly fair values for these things,” Blanchard said. “It’s something we can hang our hat on from here on out now.”
EnLink Midstream of Dallas, formerly Crosstex Energy, signed the latest settlement Thursday. The amount due was not immediately available under the terms of the confidential settlement, but Brian Eddington, tax attorney for Blanchard, said the amount will eventually become public record.
Megan Wright, EnLink spokeswoman, said Friday it is not company policy to comment on pending litigation.
After the 2014 district court ruling and other favorable court rulings for Assumption and other parishes, Blanchard and Waguespack said Friday, the companies began negotiating and providing information about the caverns’ useful lives and industrial exemptions that reduced the caverns’ taxable assessed values. All sides were able to agree on reduced tax bills based on that information.
Under the settlements, Waguespack and Eddington said, they could not disclose how much the bills for the back taxes had been reduced from earlier tax assessments. But Waguespack said funds paid and escrowed in 2014 but not ultimately used for back taxes were refunded to the companies.
But the four companies that settled earlier this year, Dow Hydrocarbons and Resources, K/D/S Promix, Bridgeline Holdings and Pontchartrain Natural Gas System, paid about $4.3 million in back taxes combined.
A spreadsheet Waguespack provided the parish Police Jury in February details how much was paid but not who paid it.
Cheryl Kornick, an attorney for the companies, declined comment Friday.
Negotiations are underway with the last two companies, Occidental Chemical Corp. and Axiall Corp.
“We’re close to terms with Occidental,” Waguespack said.
Jay Adams, Occidental’s and Axiall’s attorney, could not be reached for comment late Friday.
Follow David J. Mitchell on Twitter, @NewsieDave.