Tax Abatements, Rebates and other incentives

Published 8:21 am Wednesday, March 13, 2019

By Dawn Burleigh

The Orange Leader


There are two types of abatements on the county level, Chapter 381 and Chapter 312. For a city, there is Chapter 380.

But abatements are not the only type of incentive the county can offer, there are also tax rebates.

For example, Commissioners Court and Orange County EDC approved a Chapter 381 abatement agreement, in February 2018, with Jefferson Gulf Coast Energy Partners, LLC to invest $150,000,000 in the expansion of its trans-load facility in Orange County.

The parties have agreed to 10-year, 100-percent property tax abatement on the improvement value on the investment, along with a payment in lieu of taxes to Orange County.

Jefferson Energy and affiliates have invested over $350 million dollars in the facility since 2012.

Earlier this year, Jefferson Energy Companies presented a check to the court and said it would not have been possible without the abatements.

The City of Orange entered into an agreement with International Paper. The city also approved a resolution in support of International Paper for the Enterprise Zone fund through the state of Texas, which was approved in September 2013.

The mill made a $200 million dollar investment in the plant and agreed to retain 369 jobs during the course of the abatement.

“Most people think of Chemical Row and not about International Paper to the north of the county,” Orange County Economic Development Director Jessica Hill said. “They are one of the largest employers in the area.”

Currently, the company is seeking another Enterprise Zone for a $50 million investment and retaining 355 jobs.

According to International Paper Mill Manager Ed Barr, the company has over 400 employees at this time.

Those employees are the same ones, who in December with the first ever Angel Tree at the plant, provided for 85 children. Originally, it was anticipated for 25 children, according to a previously published article in The Orange Leader. The first 75 Angels were provided through the Salvation Army office and when the demand was still high to want to help, they then drove around town to other public trees to find another 15 Angels.

Tax Rebates are not considered abatements.

“With a rebate, they still pay their taxes by the deadline,” Hill explained. “We evaluate on job creation and capital investment. If they meet the parameters of the agreement, then the payment is rebated back to them.”

All of which are used as incentives to bring more business to the area.

“The EDC has to be aggressive to get business to come to Orange,” Commissioner Pct. 2 Theresa Beauchamp said. “We have to be welcoming and return phone calls.”

Beauchamp stated when she was running for office that she supports economic growth in the area.

“We must focus on economic development by reaching out to businesses and networking to find new innovative industry by offering incentives such as tax abatements to entice them to stay or locate in Orange County.  This would provide jobs and boost our economy,” Beauchamp said in a previously published article. “If the economy grows everyone will be better served.”

Beauchamp also said an abatement is on the expansion or building.

“We still receive tax on the property,” Beauchamp said. “It spawns new businesses as well, which we receive taxes from.”