NEW YORK Tenaris SAs new seamless oil country tubular goods mill in Bay City, Texas, has been approved for an incentive package by the states Matagorda County.
Under the agreement, the company wont have to pay property tax on the plant, including "machinery, equipment, inventory and supplies installed, added, replaced, upgraded or used on the premises by or for (the) company" beyond "the assessed value of such land for the 2013 tax year" for the first 10 years after the start of plant construction.
The base value for the land is given as roughly $3.89 million. The tax abatement is subject to the company employing 600 people by the end of 2017, paying combined wages of $39.6 million annually and spending more than $1.31 billion in project outlays, according to the agreement.
The county can claw back taxes if the Luxembourg-based pipe and tube maker fails to meet its employment goal, as well as employment marks along the way.
Tenaris also will get all ad valorem taxes on inventory and base year taxes, as well as 50 percent each of replacement asset taxes and new asset taxes, rebated by the county for a further 15 years if it continues to meet employment marks, according to county attorney Denise Fortenberry.
The county also has committed to apply for infrastructure grants to the tune of $2.5 million that "will support and benefit the project," the agreement says.
Matagorda County also has opted to exempt from export duties goods that stay within the state in the "short term," Fortenberry said.
Tenaris, which has committed to finishing the 600,000-tonne-per-year operation by the end of 2017, declined to comment.