Bloomington Oil refinery

The Barge Canal in Victoria County that could be the future site of an oil refinery near Bloomington.

Victoria County’s top elected official said he’s willing to grant two multimillion-dollar tax abatements to see a $5.6 billion oil refinery built in Bloomington.

County Judge Ben Zeller said the Commissioners Court is willing to give energy company Prairie Energy Partners the two tax break incentives it requested. Both incentives are legal under the state tax code.

  • One incentive, known as a Chapter 312 agreement, provides a 10-year property tax break.
  • The other incentive, the Chapter 381 agreement, would allow the company to receive a 75% rebate on local sales tax paid during facility construction.

Also under the Chapter 381 agreement, after the 10-year property tax break expires, Prairie Energy would be fully taxed for the next $500 million worth of property tax. Then, it would receive a 75% rebate from the county for property taxes paid in the following 20 years.

Zeller said the tax break agreement between Victoria County and Prairie Energy would be the “strongest abatement offer ever done” by the county.

Victoria County can grant Prairie a Chapter 381 incentive, but the final agreement does not have to include everything the energy company originally requested, Zeller said.

“In situations like this we weigh the requests that are made alongside the best interest of our taxpayers, along with the options available to us under the law,” Zeller said. “We are open to, and will agree to grant a 381 agreement, but its terms will not exactly mirror the specific requests made.”

The terms of the arrangement could be finalized “within the next week,” Zeller said.

A public hearing on the tax abatement agreement was scheduled for Monday, but the Commissioners Court postponed it because they were not prepared to agree to both incentives at the same time.

“It is our intent to approve the 312 agreement Monday and finalize the possibility of additional abatements and incentives, but the request was made that it all be done in a single action, so that’s what we’re looking at doing,” Zeller said before Monday’s meeting. “We always try to be as accommodating as possible.”

Victoria County does not have its own policy for Chapter 381 agreements, but Zeller said officials are working with the Victoria Economic Development Corporation to come up with one. The county is also receiving assistance from Prairie Energy’s legal team from Baker Botts.

“It qualifies as a significant mega-project for the region, and one that, if it comes to full fruition, will have phenomenal impacts for all of us,” Jonas Titas, president of the VEDC, said at a Tuesday morning meeting of the Victoria Partnership business group. “There’s a process that you have to follow, and these don’t always work exactly as you lay out at the beginning.”

He said because the Chapter 381 application was filed after the Chapter 312 application there are different dates and thresholds to meet regarding public hearings and other matters. But the county wants to move them forward together, so the Chapter 312 application was paused briefly.

A copy of the term sheet Victoria County and Prairie Energy Partners would need to sign for the proposed tax incentives to begin.

“So that’s what necessitated us hitting pause on the tax abatement application process,” he said.

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Commissioner Gary Burns, who attended the Tuesday morning business meeting, said, “It’s going to need a lot of negotiating because they’re asking for the moon, and that’s hard to swallow.”

Steven Ward, who leads Prairie, said he was frustrated because the county was not ready to agree to a Chapter 381 request in the seven weeks between Monday and when the public hearing was first announced on Jan. 30.

In January, Ward received from Victoria County a term sheet, which included both the Chapter 312 and 381 agreements. He said that at the time, he thought the commissioners would approve both incentives simultaneously.

“Unfortunately it was a lack of communication that backed things up,” Ward said.

Victoria County is not the only place in the running for Prairie’s refinery project. Ward said he toured sites in Cushing, Oklahoma last week.

“(Victoria County) is aware that we’re engaged with Oklahoma,” Ward said. “Oklahoma has done a tremendous job of providing stakeholder support.”

Diane Wilson, an environmentalist from Port Lavaca, attended Monday’s Commissioners Court meeting, thinking the public hearing for the oil refinery would take place.

Wilson said she will not support the project until she reads the environmental permits and assessments issued by government agencies.

“My experience with corporations is that what they say and what they do is different,” Wilson said.

Ward said data for air and wastewater permits is being collected, but there is a another step he must take before filing paperwork.

“I don’t want to move forward with the permits until a site is chosen,” Ward said.

Ward and Wilson met in person last month to discuss how the oil refinery would operate.

“He’s a good salesman, but I don’t buy it,” Wilson said.

Leo Bertucci is a Report for America corps member who covers energy and environment for the Victoria Advocate.

Energy and Environment Reporter

Before moving to the Crossroads, Leo Bertucci studied journalism and political science at Western Kentucky University.

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