Valero announced a $1.4 billion dollar expansion, but the company won’t be able to use Go-Zone bond money.
That’s because Gov. Kathleen Blanco put forth an executive order that adds a ranking system to determine which companies are qualified to receive tax breaks and other incentives as part of the program.
Valero failed to meet the standards.
“Originally, under Gov. Blanco’s administration, the program was on a first come first serve basis from February 2006 to June 2007,” Whitman Kling, state bond director, said. “Then they (Governor’s committee) decided they wanted to develop a ranking process and that ranking process is based on job generation, economic development and area in which the project is located.”
Kling says the company needed to score a 15 according to the Governor’s ranking system and Valero scored below an 8.
The Go Zone Act covers parishes in Louisiana that currently operate or are considering expanding in areas that were affected by Hurricanes Katrina and Rita and provides significant economic incentives to rebuild and restore the Gulf Coast region.
Kling says although Valero doesn’t qualify for Go-Zone money, as determined at the Oct. 24 meeting under Blanco’s administration, Gov. Bobby Jindal’s administration could come in and put things back to the original format, allowing businesses another opportunity to apply for the program without the ranking system in place.
“Companies need to apply before the program expires in the early part of 2008,” Kling said. “Regardless of the application process Valero failed to meet the ranking required to be eligible for the program.”
Ron Guillory, CEO for Valero says he knows the company didn’t qualify for the Go-Zone funds but plans to follow through with the expansion.
“We will go on with our expansion using conventional loan methods,” he said. “It won’t stop us from starting the expansion project at Valero.”
U.S. Rep. Richard Baker has introduced legislation to extend expiring tax breaks to businesses that are located in Gulf Opportunity Zones, like St. Charles Parish.
Baker’s bill calls for Congress to grant the extension so that businesses will reap the benefits of much needed tax breaks and incentives.
The measure would keep alive low-interest bond financing provisions that help GO-Zone companies that need financing for buildings, machinery and equipment.
Be the first to comment