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Texas senator seeks info on Valero's tax request

October 7, 2011

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FORT WORTH, Texas—A state senator said late Friday that she has filed a legislative inquiry into a tax refund request by a San Antonio-based refinery company.

Sen. Wendy Davis, D-Fort Worth, said she filed the legislative request for documents, emails and other evidence related to Valero Energy Corp.'s 2007 request for a tax exemption. Valero argues that it qualifies for a tax exemption under an amendment to the Texas Constitution that says industrial plants don't have to pay taxes on equipment purchased to reduce on-site pollution.

Valero's initial request was denied by the Texas Commission on Environmental Quality. The company appealed, and the panel's chairman said last April that the Legislature probably intended a broader interpretation of the law. He instructed his staff to research whether they could award partial exemptions to Valero. There is no timeline for a decision.

Valero is among the nation's largest oil refineries seeking huge tax refunds that could cause school districts and local governments across Texas to return tens of millions of dollars. The refineries want the tax breaks in exchange for buying pollution controlling equipment.

Schools alone could be forced to hand over $62.8 million, according to data compiled by The Associated Press.

"Our school districts have already been underfunded by more than $5 billion over the next two years while outdated corporate tax loopholes were protected by those in charge in the Legislature," Davis said. "We cannot afford political maneuvering that bleeds even more resources from our classrooms. Taking care of our schoolchildren should take priority over political cronyism."

The TCEQ, a three-member commission appointed by Republican Gov. Rick Perry, is evaluating 16 refund requests that could add up to more than $135 million, according to county tax data and application documents analyzed by the AP. If the commission grants the requests, at least 12 other refineries that have not sought a refund also could qualify.

Valero could potentially get a refund of more than $92 million, but a company spokesman has said executives believe the final refund would be much smaller.