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TCEQ Says No to Millions of Dollars in Tax Breaks for Valero

Area school districts and cities had to be breathing a big sigh of relief today as news came out that the executive director of the Texas Commission on Environmental Quality said "no" to handing out large tax breaks to Valero that would have made things even worse for cash-strapped government bodies.

Mark Vickery, in letters first obtained by the Associated Press, said that the oil company had not made its case that its special hydrotreating equipment was enough of a boon to the environment that Valero should receive a tax exemption for installing it.

Valero is one of the nation's largest oil refiners. School districts and municipalities had been fighting the Valero effort for months. Today, Houston ISD school board member Harvin Moore said: "Valero was trying to use a tax loophole that clearly never applied to their situation, and if they had prevailed, HISD and other school districts would have lost millions of dollars a year in legitimate and sorely needed funds."

Vickery sent out the letters of "Notice of Negative Use Determination" on December 14 to Valero refineries in Houston, Corpus Christi, Port Arthur, Dumas and Texas City. The company has the right to appeal the ruling to the TCEQ within 20 days.

According to Vickery's letter, the information Valero supplied to make its case "does not demonstrate that the hydrotreating equipment [which removes sulfur dioxide from crude oil] provides a partial environmental benefit at the site."

David Hodgins, attorney from Thompson & Horton LLP, who serves as legal counsel to several school districts and community colleges directly affected by the exemptions, had this response:

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"If upheld on appeal, the TCEQ Executive Director's recent denial of Valero's requests for tax exemptions related to hydrotreaters at Texas refineries will provide significant financial benefit to all affected school districts, junior colleges, municipalities and counties."

"The citizens of Texas also benefit by not having potentially some $100 million dollars worth of property tax burden shifted to them," Hodgins said. "The TCEQ's decision is appropriate and legally supported by the applicable statue and agency rules."

Hodgins also passed on a written statement from La Porte ISD Superintendent Lloyd Graham -- who was just appointed by the TCEQ Commission to serve as the school district/junior college representative for the TCEQ Tax Relief for Pollution Control Property Advisory Committee.

"The Executive Director's decision to limit multi-million dollar property tax exemptions to only those times when exemptions are fully supported by the statutes and rules is greatly appreciated especially at a time when schools, junior colleges, cities, and counties have already had to face and manage severe budget short falls that directly affect the citizens of this state," Graham said.

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