Valero Refining would get tax breaks through a state program, if its recent nomination by city officials passes muster with the state.

The company was nominated last week to receive state financial assistance through the Texas Enterprise Zone Program, which gives tax breaks and refunds to businesses that provide jobs to economically distressed parts of Texas.

The company plans a $215 million site and equipment improvement project in District I, which includes much of East and Southeast Houston and part of the LaPorte Freeway. Now it's up to Gov. Rick Perry's division of Economic Development and Tourism to decide whether Valero will qualify for the state program.

The nomination by the City Council prompted concerns from Councilman Peter Brown, who said Valero's plans might warrant "a second look."

Companies with industrial land have improved or added onto their property, then argued against higher property appraisals in the past, said Robert Fiederlein, Brown's chief of staff.

"We don't want them getting an incentive, investing $200 million on the one hand, then going to the appraisal district later and saying that (the property) should be appraised at a lower value," Fiederlein said. A lower value results in lower property taxes paid by a property owner.

A Valero spokesman said the property improvements wouldn't significantly change its value and would not be visible outside the building.

"It's like, if you have a car that's worth $1,000, and you put new tires on it for $500, the car is not now worth $1,500," said spokesman Fred Newhouse.

KHOU-TV has also reported on the nomination of the refinery, citing criticism of the tax-break program:

Democrats in the Texas Legislature have long criticized the plan, often referring to it as a slush fund with lax requirements. State Rep. Sylvester Turner (D-Houston) said the Valero request is an example of why the Enterprise Fund needs to be reined in.

Contact Ann Raber at news@texaswatchdog.org or 713-980-9777.

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