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HomeMy WebLinkAboutPR 14665: PUBLIC HEARING RE: PORT OF PT ARTHUR NAVIGATION DISTRICT EXEMPT FACILITIESREVENUE BONDS (TOTAL PROJECT)Memo To: Mayor, City Council, City Manager From: -Mark T. Sokolow, City Attorney f 'L~,: t ~;~.~-<<~ Date: Apri13, 2008 Re: P. R. No. 14665; April 8, 2008 City Council Meeting Attached is P. R. No. 14665 authorizing the Mayor and/or City Manager to attend and conduct a public hearing at the offices of the Port of Port Arthur, 221 Houston Avenue, Port Arthur, on April 18, 2008 at 9:00 a.m. regarding the issuance and approval of Port of Port Arthur Navigation District of Jefferson County, Texas Exempt Facilities Revenue Bonds (TOTAL Petrochemicals USA, Inc. Project) Series 2008 in the aggregate principal amount of 550,000,000, as per 26 USCS Section 1.47. MTS/ts Attachment cc: VIA FACSIMILE (40 918 3 5-3 83 8 Scot Sheldon Sheldon, Dunham & Edwardson, L.L.P. VIA FACSIMILE (512)472-0671 Gregory Salinas McCall; Parkhurst & Horton, L.L.P. 600 Congress Avenue 1250 One American Center Austin,. TX 78701-3248 INCOME TAXES Z6 USCS § 147 of the proceeds of such issue is to be used to provide any airplane, skybox or other private luxury box, health club facility, facility primaril}• used for gambling, or store the principal business of - which is the sale of alcoholic beverages for consumption off premises. (Q Public approval required for private activity bonds. (p In general. A private activity bond shall not be a qualified bond unless such bond satisfies the requirements of paragraph (2). (2) Public approval requirement. (A) In general. A bond shall satisfy the requirements of this paragraph if such bond is issued as a part of an issue which has .been approved by- (i) the govemmental unit (i) which issued such bond, or - (II) on behalf of which such bond was issued, and (ii) each governmental unit having jurisdiction over the area in which any facility, with respect to which financing is to he provided from the net proceeds of such issue, is located (except that iC more than I govemmental unit within a State has jurisdiction over _ the entire area within such Sm[e in which such facility is located, only I such unit need approve such issue). (B) Approval by a governmental unit. For purposes of subparagraph (A), an issue shall be treated as having been approved by anv governmental unit if such issue is approved- : (i) by the applicable elected representative of such governmental unit after a public hear- . ing following reasonable public nonce, or (ii) by voter referendum of such governmental unit. (C) Special roles for approval of facility. If-.there has bzen public approval under s subparagraph (A) of the plan for financing a facility, such approval shall eonsutute approvnl under subparagraph (A) for anv issue- (i) which is issued pursuam to such plan within 3 years after thz date of the. Ist issue pursuant to the approval, and (ii) all or substantially all of the proceeds of which are to be used to finance such facil- ity or ro refund previous financing under such plan. - - _ (D) Refunding bonds. No approval under subparagraph (A) shall be necessary with respect to any bond which is issued to refund (other than to advance refund) a bond approved under subparagraph (A) (or treated, as approved under subparagraph (C)) unless the average mammy dale of the issue of which thz refunding bond is a. pan is later than the average maturity date of the bonds to be refundzd by such issuz. For purposes of the preceding sentence, overage maturity shall be detzrmined in accordance with subsection (b)(2)(A). 9, (E) Applicable elected representative. For purposes of this paragaph- :. (i) In general The term "applicable elected representative" means with respect to any ~. govemmental unit- (I) an elected legislative body o(such unit or ~~ (II) the chief elected executive officzr, the chiefelected Stale legal officer of the e executive branch. or anv other elected official of such unit designated for purposes of this paragraph by such chief elecizd executive officer or by State law. - i If the office of any elected official described in subdause (I]) is vacated and an individual ~- rs appointed by the chief elected executive officer of the governmental unit and confirmed ~~ ~ by the elected legislative body of such unit (if any) to sen•e the remaining term of the g elected official, the individual so appointed shall be treated as the elected official for such L remaining term. ~.. (ii) No applicable elected representative. If (but for this clause) a governmental unit has ` ~~ no applicable elected representative, the applicable elected representative for purposes of - clause (i) shall be the applicable elected representative of the govemmental unit- ' (I) which is [he next higher govemmental unit with such a representative, and (II) from which the authority of [he govemmental unit with no such representative is derived. (3) Special rule for approval of airports or high-speed intercity rail facilities. 1(- (A) the proceeds of an issue are to be used to finance a facility or facilities located xt an auport or high-speed intercity rail facilities, and (B) the govemmental unit issuing such bonds is the owner or operator of such airport or high-speed intercity rail facilities, - such govemmental unit shall be deemed to be the only govemmental unit having jurisdiction over such airport high-speed intercity rail facilities for purposes of this subsection. (4) Special rulesSor scholarship funding bond issues and volunteer fire department bond issues. (A) Scholarship funding bonds. In the case of a qualified scholarship funding bond, any govemmental unit which made a request described in section I50(d)(2)(B) [26 USCS § I50(d)(2)(B)] with respect to the issuer of such bond shall be treated for purposes of 1077 P. R. No. 14665 04/02/08 RESOLUTION NO. A RESOLUTION AUTHORIZING THE MAYOR AND OR THE CITY MANAGER TO ATTEND AND CONDUCT A PUBLIC HEARING AT THE OFFICES OF THE PORT OF PORT ARTHUR, 221 HOUSTON AVENUE, PORT ARTHUR, ON APRIL, 18, 2008 AT 9:00 A.M. REGARDING THE ISSUANCE AND APPROVAL OF PORT OF PORT ARTHUR NAVIGATION DISTRICT OF JEFFERSON COUNTY, TEXAS . EXEMPT FACILITIES REVENUE BONDS (TOTAL PETROCHEMICALS USA, INC. PROJECT) SERIES 2008 IN THE AGGREGATE PRINCIPAL AMOUNT OF $50,000,000, AS PER 26 USCS SECTION 147 WHEREAS, the City Council of the City of Port Arthur finds it to be in the best interests of the citizens of the City of Port Arthur to authorize the Mayor and/or the City Manager to attend and conduct a public hearing at 9:00 a.m. on April 18, 2008, regarding the issuance and approval of Port of Port Arthur Navigation District of Jefferson County, Texas Exempt Facilities Revenue Bonds (TOTAL Petrochemicals USA, Inc. Project) Series 2008 in the aggregate principal amount of $50,000,000, as per 26 USCS Section 147, as-more fully discussed in the memorandum attached hereto as Exhibit "A". NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: .: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council herein authorizes the Mayor and/or the City Manager to attend and conduct a public hearing at 9:00 a.m. on April 18, 2008, at the offices of the Port of Port Arthur, regarding the issuance and approval of Port of Port Arthur Navigation District of Jefferson County, Texas Exempt Facilities Revenue Bonds (TOTAL Petrochemicals USA, Inc. Project) Series 2008 in the aggregate principal amount of $50,000,000, as per 26 USCS Section 147. Section 3. That the City, by its approval of these bonds, shall not lie liable for the payment thereof and that the sole parties liable therefore shall be TOTAL Petrochemicals USA, Inc. and/or TOTAL, S.A. Section 4. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. ~ . READ, ADOPTED AND APPROVED on this day of April, 2008, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor ,City Council NOES: MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM: MARK T. SOKOLOW, CITY ATTORNEY APPROVED FOR ADMINISTRATION: STEVE FITZGIBBONS; CTI'Y MANAGER EXHIBIT "A" LAW OFFICES M`CALL, PARKHURST & NORTON L.L.P. 71]NORTH HARWOOD ., 600 CONGRESS AVENUE NINTH FLOOR 1800 ONE PMERICAN CENTER DALLAS, TEAS ]5201-658] - AUSTIN, TEXAS ]8]01-3248 TELEPHONE: 214750-9200 TELEPHONE: 512478-3605 FACSIMILE: 214 ]50-9250 FACSIMILE: 512 472-0871 MEMORANDUM To: Mark Sokolow City Attorney, City of Port Arthur, Texas Cc: Scot Sheldon Sheldon, Dunham & Edwardson, L.L.P. From: Gregory B. Salinas McCall, Parkhurst & Horton L.L.P. Date: March , 2008 700 N. ST. MARYS STREET 1225 ONE RNERWALK PLACE SAN ANTONIO, TE%A578206J503 TELEPHONE: 210 225-2800 FACSIMILE: 210 2252984 Re: $50,000,000 Port of Port Arthur I~Tavigation District of Jefferson County, Texas Exempt Facilities Revenue Bonds (TOTAL Petrochemicals USA, Inc. Project), Series 2008 (the "Bonds") The following memorandum describes the federal tax law provisions requiring the City of Port Arthur, Texas (the "City") to hold public hearings with respect to the above captioned bonds as well as obtaining the approval of such Bonds by the Mayor of the City. The memorandum also discusses the necessary steps to hold such hearings. The federal tax law requirements and the process, however, are substantially identical to the actions required of the City in April of 2003 (as well as similar actions held in 1998, 2000 and 2002) relating to the issuance of bonds by the Port of Port Arthur Navigation District of Jefferson County, Texas (the "District") for the benefit of BASF Corporation ("BASF") and ATOFINA Petrochemicals, Inc. (now known as TOTAL Petrochemicals USA, Inc. [the "Company"]). The major difference is that the Bonds being issued now are for a new project, a major plant expansion of the Company, including the construction of a new state-of--the-art Coker. The District will approve and authorize the Bonds pursuant to action to be taken by the District on March 19, 2008. The Bonds will be issued to finance the costs of major improvements to the Company's existing plant complex, as described above, adjacent to the boundary of the District, but within the extra-territorial jurisdiction of the City . Also on Mazch 19, 2008 and prior to the issuance and de]ivery of the Bonds, the District will hold a public hearing regarding such bonds and d the projects to be financed and refinanced with such.bonds. The public hearing is a requirement of the federal Tax Equity and Fiscal Responsibility Act of 1984, now codified as Section 147(f) of the Internal Revenue Code of 1986, as amended ("Section 147(f)"). Section 147(f) requires that a public hearing be held within the jurisdiction of the issuer of private activity bonds, in this case the District, and, if such facilities lie outside the boundaries of the issuer, within the jurisdiction (including extra-territorial jurisdiction) of a political subdivision where the facilities to be financed or refinanced with such bonds are located. Notice of the public hearing is required to be published in a newspaper of general circulation not less than fourteen days prior to the hearing. hi addition, Section 147(f) requires that the highest governmental official of the jurisdiction holding the hearing, after considering the comments made at such hearing, approve the bonds. The approval is only for purposes of Section 147(f) and does not create any liability on the part of such official or the related political subdivision. Therefore, the District, on behalf of the Company is requesting that the City authorize the holding of the appropriate public hearings and authorize the Mayor of the City to approve such bonds after due consideration of any testimony at such public hearings. As stated above, Section 147(f) requires that the hearing to be held not less than 14 days after published notice of such hearing. For other federal tax reasons, the Bonds are scheduled to close on April 23-24, 2008. Because of the time frame in which to get the required notices published, it would be preferable that a time and date for the public hearings be determined prior to the City Council meeting of the City on , 2008. However, if such a time and date must be determined at that meeting, the publication deadlines for the Port Arthur News would permit timely hearings early to mid-April. The location of the public hearings is currently blank in the forms of notices (although the address to the District's offices are bracketed). The hearings held in May of 2000, April of 2002 and April of 2003 by the City were held at the District's offices and the hearings this year could also be held there, but the hearings can be held anywhere within the City. As for the City Council meeting on , 2008, the only action of the City Council would be the authorization for the holding of the public hearings, designation of a hearing officer, presumably the Mayor, if available, (and an alternate hearing officer in case the hearing officer is unavailable for some reason) and authorizing the Mayor's approval of the subject bonds for purposes of Section 147(f). The following is suggested agenda language: "Approval of holding certain. public hearings relating. to certain private activity revenue bonds to be issued by the Port of Port Arthur Navigation District for the benefit of TOTAL Petrochemicals USA, Inc., appointing hearing. officers therefor and authorizing the Mayor to approve such bonds for certain federal tax purposes only." 2 Scot Sheldon of Sheldon, Dunham & Edwardson, L.L.P., the District's general counsel, and/or Gregory Salinas of McCall, Parkhurst & Horton L.L.P., the District's bond counsel, will be available at the 2008 City Council meeting to answer any questions. Also attached are the forms of the approval certificates of the Mayor with respect to the Bonds which, after the required City public hearings, the Mayor shall be asked to execute. If you have any questions or comments, please do not hesitate to call Scot Sheldon or Grogory Salinas. PUBLIC HEARING NOTICE The City of Port Arthur, Texas (the "City") will hold a public hearing at 9:00 a.m. on April 18, 2008, at the administrative offices of the Port of Port Arthur Navigation District of Jefferson County, Texas (the "District"), 221 Houston Avenue, Port Arthur, Texas 77640. Among the items to be discussed will be the proposal for the issuance by the District of its revenue bonds to finance the acquisition and construction of certain solid waste disposal and sewage facilities related to a refinery expansion, including a new Coker (the "Project"), which are located at the TOTAL Petrochemicals USA, Inc.'s plant site complex at 7600 32nd Street in Port Arthur, Texas (the "Project"). The maximum aggregate face amount of the bonds to be issued in one or more series is anticipated to be $50,000,000. The bonds and the interest thereon shall never constitute and shall not be considered as general obligations of the District, the City, Jefferson County or the State of Texas. All interested parties are invited to attend the public hearing, or submit written comments prior to the hearing, and express any comments they may have regarding the Project and the issuance of the bonds. City of Port Arthur, Texas P.O. Box 1089 Port Arthur, Texas 77641 Attention: City Attorney PORT OF PORT ARTHUR/BASF-ATOFINAU]: CITY.HEARING.NOTICE. WPD MAYOR'S CERTIFICATE Port of Port Arthur Navigation District of Jefferson County, Texas 221 Houston Avenue Port Arthur, Texas 77640 RE: Port of Port Arthur Navigation District of Jefferson County, Texas Exempt Facilities Revenue Bonds (TOTAL Petrochemicals USA, Inc. Project) Series 2008 in the aggregate principal amount of $50,000,000 Ladies and Gentlemen: Pursuant to Section 147(f) of the United States Internal Revenue Code of 1986, as amended (the "Code"), I hereby certify that I have been duly elected as Mayor of the City of Port Arthur, Texas (the "City") and as such constitute the chief elected executive officer of the City. I have been informed by you that the Port of Port Arthur Navigation District of Jefferson County, Texas has adopted a Resolution authorizing the issuance of the captioned bonds (the "Bonds") under the provisions of Chapter 197, Acts of the 58th Legislature of the State of Texas, Regular Session, 1963, as amended, for the purpose of financing the acquisition, construction and improvement of certain solid waste disposal and sewage facilities owned by TOTAL Petrochemicals USA, Inc. (the "Company") located at the Company's plant site complex in Port Arthur, Texas. I have been informed that a public hearing regarding the issuance of the Bonds was held by the Issuer on , 2008 at a.m. CDT. I hereby approve the issuance of the Bonds for the purpose of Section 147(f) of the Code. Such approval is solely for purposes of such Section 147(f) and the City shall have no liability for payment of the Bonds or otherwise nor shall any of its assets be pledged to the payment of the Bonds. Very truly yours, Mayor DATE: , 2008