April 26--PORTLAND, Maine -- The town of Jay has agreed to lower three prior years of disputed property taxes for paper mill owner Verso Corp. and set a cap on its gross tax bills through 2020, delivering the bankrupt papermaker at least $4 million in future tax credits.
The settlement approved Monday night calls for the town to credit the company for $4 million for its disputed tax bills in 2013, 2014 and 2015. The credits will be given in six installments of $666,667.
Verso, which filed for Chapter 11 bankruptcy in January, had asked a federal bankruptcy judge in Delaware to step in and decide whether the town owed as much as $11.4 million in taxes levied in those years.
Both sides agreed April 13 to continue a hearing on the matter while settlement discussions advanced about three years of tax disputes being heard before various local panels and state appellate boards. The agreement ends those appeals.
The agreement also lowers the company's gross tax contribution for future years, noting that since the 2015 tax year the company has shut down paper machines, laying off about 300 employees, and sold four hydropower generators, two of which are subject to property taxes in Jay.
The company was given a tax bill in 2015 of about $8.9 million, before certain local and state reductions.
In addition to the $4 million in past credits, the settlement calls for the town to give the company credits to reduce Verso's tax bill to $6.75 million in 2016; $6.25 million in 2017; $5.75 million in 2018, $5.25 million in 2019; and $4.75 million in 2020.
Those amounts for future years do not include reimbursements the company stands to receive through local tax increment financing deals or the state-run business equipment tax reimbursement program, which returns to Verso the cost of some investments it has made in certain manufacturing equipment.
Those future amounts are subject to any major, or material, changes to the company's real estate or machinery and equipment used for production in Jay.
Troubles for the paper industry in recent years have put many towns in conflict with their largest taxpayers, who argue that assets in the troubled paper industry are a fraction of their past worth. In its bankruptcy auction last fall, the Lincoln Paper and Tissue Mill sold for about 11 percent of the assessed value of its personal property.
With the settlement, Verso also agreed to withdraw a public records request it filed with the town on March 31.
That request sought the entire work files of appraisers or consultants that did valuation work on the mill property, all documents showing how past abatements were calculated and all documents prepared since Jan. 1, 2013, that relate to the value of Verso's property in Jay.
Members of Jay's Board of Selectmen signed the agreement after an executive session meeting Monday, according to Jay's town manager, Shiloh LaFreniere.
See the full settlement agreement below.
(c)2016 the Bangor Daily News (Bangor, Maine)
Visit the Bangor Daily News (Bangor, Maine) at www.bangordailynews.com
Distributed by Tribune Content Agency, LLC.
© Tribune Content Agency, source Regional News