Gov. John deJongh, Jr. on Thursday resubmitted to the 30th Legislature the Fourth Amendment Agreement to the Hovensa Concession Agreement, together with certain clarifications requested by the Senate.
The original Fourth Agreement was rejected by the Senate Aug. 7. The Senate sent a resolution to the governor with suggestions for making the deal more palatable to lawmakers.
The submission, announced Friday afternoon by Government House, would govern a sales process for the facility.
In his letter of submission to Senate President Shawn-Michael Malone, which can be read here, the governor said executives representing Hovensa have agreed to the requested assurances and clarifications.
The bill would require Hovensa and its owners to initiate a bona-fide process to sell the oil refinery on the south shore of St. Croix, which de Jongh said was “our best chance to jump start the economy and create jobs in the territory.”
DeJongh said that, following weeks of discussions with the owners of Hovensa, he obtained formal document setting forth the requested assurances and clarifications.
In that document, Hovensa and its owners specifically confirmed that:
• The temporary adjustment in property tax payments under the agreement is only a deferral of the unpaid amounts until the refinery is sold, or ceases to operate an oil storage facility, or until Aug. 15, 2019, whichever occurs first. Upon any of those taking place, Hovensa will make a lump sum payment to the government of all amounts deferred, plus interest at the statutory rate.
• In the event the refinery is sold, Hovensa will pay the government the greater of either the amount of property taxes deferred, plus interest, or 20 percent of the gross sales proceeds up to $50 million.
• Hovensa will consider purchase offers by potential buyers interested in utilizing the refinery for non-refining industrial or commercial purposes, subject to the approval of the government.
• Hovensa will operate and continue to make fuels available to the government and the public at the fuel loading rack for so long as Hovensa is operating an oil storage terminal at the site, with fuel supplied by Hovensa or a third-party supplier approved by the Government.
• If the refinery is not sold within a year, Hovensa will agree to open up the Limetree Bay Channel to commercial vessels en route to the St. Croix Container Port, subject to any necessary approvals by the U.S. Coast Guard or U.S. Department of Homeland Security and receipt of indemnification and proof of acceptable insurance coverage by transiting vessels.
• Hovensa has no objection to the government taking over exclusive control of the nearly $5 million in Supplemental Environmental Project funds, plus interest, that Hovensa has paid as part of its Clean Air Act Consent Decree.
• The agreement does not cause a loss of legal rights by either party if the refinery does not sell.
DeJongh said Friday that the document, which has been executed by Hovensa and each of its owners, confirms that the clarifications included in the document are, if the Fourth Amendment Agreement is ratified and enacted into law, binding on the company.
In addition, the governor announced that, at the request of several senators, he had secured a commitment from Hovensa to provide health insurance to all the employees of contractors working at the Hovensa site, at a cost to the company estimated at more than $1 million annually.
“I am pleased that, by working together, we were successful in achieving these commitments and clarifications which I hope will now pave the way for ratification of the Fourth Amendment Agreement and the beginning of the bona fide sales process," deJongh said. "This is our best chance of getting the refinery restarted and getting our economy moving again."
