JAY — The Board of Assessors voted unanimously Thursday to reduce the valuation of Verso Androscoggin’s paper mill and associated property from $572.7 million to $424.3 million for the 2015 tax year.
The board also granted the company a tax abatement of $886,157, Town Manager Shiloh LaFreniere wrote in an email.
The abated amount will be reduced from the second half of Verso’s tax bill for 2015-16, due April 1.
In conjunction with the reduction in value, the assessors, in their role as selectpersons, will apply to the state tax assessor for an adjustment of the town’s state valuation.
According to law, a municipality that has experienced a sudden and severe disruption in its municipal valuation may request an adjustment to the equalized valuation determined by the state tax assessor for the purposes of calculating distributions of education funding and municipal revenue-sharing.
Verso Androscoggin filed a tax abatement request in February for the 2015 tax year to have the valuation of the mill, associated property and hydroelectric facilities reduced by at least $296.66 million, collectively, and to be valued at no more than $340 million.
The town valued the real estate and personal property at about $636.99 million as of April 1, 2015, according to Verso’s abatement application.
The town had 60 days to respond to the request.
Verso now has 60 days to appeal the assessors’ decision to the town’s Board of Assessment Review.
As part of reviewing the ongoing abatement appeals, the town’s industrial appraisers noted that the data Verso Androscoggin had submitted to the town in November, as requested by town officials, identified the need to re-examine the previous obsolescence applied to the 2015 valuation, according to LaFreniere.
The town’s appraisal concluded that the fair market value of the total mill property as of the assessment date was $512.5 million.
After a review of the 2015 commitment data and tax rate calculation work paper, it was determined that Verso would have paid $8.89 million in taxes, and received a tax-increment financing payment of $869,807 for a net tax of about $8 million had the reduced value been in place at the time of commitment, LaFreniere wrote.
That amount exceeds the taxes actually assessed by $886,157, resulting in the abated amount.
Jay’s tax rate for 2015-16 is $17.25 per $1,000 of property valuation.
The 2015 appraisal valuation does not take into account the shutdown of a paper machine and a pulp dryer, and the permanent elimination of 300 jobs in late 2015. It also does not factor in the sale of hydroelectric facilities in January to a New Jersey company for $62 million. Those changes will be reflected in this year’s tax assessment.
Town officials anticipate further reductions in valuation will be recognized in the April 1, 2016, tax year.
The 2015 abatement request is the third one the company has filed in the past two years. The company has requested abatements of valuation for the tax years 2013 and 2014.
Verso asked for a continuance Monday from the state on a hearing scheduled for May 9 and 10 on the 2013 tax year. Verso informed town officials it plans to ask the U.S. Bankruptcy Court in the District of Delaware to determine the value of the mill and associated property for 2013 and 2014.
The town received notice Thursday from the state board’s chairwoman, Rebecca H. Farnum, that Verso’s motion to continue the May hearing has been granted. It has been rescheduled for June 16 and 17.
According to the state order, the board will consolidate the 2013 and 2014 appeals and hear both at the same time, unless an objection to consolidate them is filed by either party within 10 days.
The company also wants the court to determine Verso’s entitlement to related property tax refunds from Jay under the Bankruptcy Code.
Verso Corp. and 26 subsidiaries, including Verso Androscoggin, filed voluntary petitions on Jan. 26 with the court to reorganize under Chapter 11 bankruptcy protection.
The town did not oppose the request to continue the hearing but plans to oppose Verso’s motion to have the Bankruptcy Court determine the valuations of both tax years, according to a motion filed with the state by the town’s attorney, Gerald Petruccelli.
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