Refinery Refunds Would Hit El Paso Hard

Potential tax refunds to Texas refineries totalling in the millions could hit El Paso hard, if an appeal to the Texas Commission on Environmental Quality by one Texas refinery is successful.

The refunds are based on a 1993 constitutional amendment passed by voters promoting tax relief for companies installing pollution-control equipment. And over the past four years, that equipment has been purchased by Western Refining, although a spokesman for Western Refining said the company is not seeking refunds, at least not at this time.

“Oh my gosh,” El Paso County Judge Veronica Escobar said. “This is another example of where communities and schools and local taxing entities are getting the short end of the stick.”

Local leaders reacted with shock this week when ABC-7 told them El Paso taxing entities could be forced to refund nearly $18 million to Western Refining.

“Now you have a politically appointed body saying, ‘OK, counties, school districts and communities, we may retroactively take money from you to help refineries.'”

The El Paso Independent School District, already hit hard by state cuts, faces the possiblity of having to refund $8.6 million, the City of El Paso $3.7 million, the County of El Paso $2.5 million, University Medical Center $1.3 million and El Paso Community College more than $750,000.

“We’ve been cut to the bone,” Escobar said. “There’s nowhere else to cut.”

Gary Hanson, a spokesman for Western Refining, told me the company did install the pollution-controlling equipment in question in 2007, 2009 and 2010. Despite that, he says they are not currently seeking refunds.

“We’ve already paid our taxes,” Hanson said. “Based on the info we have today, we don’t anticipate seeking any retroactive tax refunds from these taxing entities.”

But all of it appears to hinge on a pending ruling by the TCEQ on an appeal by Valero refineries, which had its initial request for refunds for this pollution-controlling equipment denied.

“These other applications are on hold until we take care of the Valero applications and determine whether or not they are eligible for a tax exemption or not,” said Minor Hibbs, TCEQ assistant to the chief engineer.

The TCEQ said there is no timeline for a decision on Valero’s appeal. When asked by ABC-7 whether the company would get in line for a tax refund if Valero gets them, Western Refining’s Hanson said: “It’s hard to speculate on what’s going to happen. There are lots of issues out there.”