The Huntington County Council approved a recommended tax abatement for a planned $9.4 million investment by Gladieux Processing, LLC,
for improvements to their Huntington facility. The Council voted 5-0 to approve the maximum enhanced abatement terms per Indiana Code 6-1.1-12.1-18 as recommended by the Council's Tax Abatement Advisory Committee.
The $9.4 million project involves the purchase and installation of a kerosene hydrotreater, required to reduce sulphur emissions in fuels. The project would create 4 new jobs supported by a new investment in payroll totaling $160,000.00 annually. 14 existing jobs would be retained, currently supported by an annual payroll of $938,779.00.
Mark Wickersham, executive director of the Huntington County Economic Development Corporation, serves as the recording secretary for the Committee and presented the recommendation to the County Council. "The Committee recommended the Council offer to fully abate the investment to the maximum extent allowed, a period of twenty years at an annual rate of 100%," Wickersham said.
Gladieux Processing, LLC, is doing the project to become compliant with new, unfunded mandates by the Obama Administration's Environmental Protection Agency. The measure takes effect in 2017.
Wickersham explained there are legal precedents, in particular a 1990 case involving Amax Coal
, and a subsequent case in 2010 involving Amoco's Lake County, Indiana facility (dismissed on a technical issue favoring Amoco) which, if applied to the Gladieux situation, would exempt the investment from property taxation. The equipment would be considered tax exempt as equipment subject to the Indiana Pollution Control Exemption.
"The project may be tax exempt anyway under other laws. If so, the abatement approved by County Council would be irrelevant because obviously no property tax can be assessed on something determined to be exempt," Wickersham remarked.
"County Council is very supportive of Gladieux's Huntington operations and willing to help them prepare in case the pollution control exemption does not apply," Wickersham said. "The Company would definitely need the abatement under those circumstances because the property tax liability on an investment of that size would create a real burden for the Company. If they chose not to make the investment, there is a real possibility that their diesel fuel product could not be sold in the U.S., effectively putting the company out of business. That would be very unfortunate for everyone and it isn't like the property could easily be re-purposed." he told Council.
The effective date for the EPA mandate is firm. The Company cannot delay installation and operation of the kerosene hydrotreater without tremendous risk to the future of the facility. "Approval of the recommended abatement provides Gladieux with the assurance they need to move ahead with the project," Wickersham said.
The County's Tax Abatement Advisory Committee concluded, and Council ultimately agreed, that an enhanced abatement is appropriate in this specific case.