Approval of an amendment to the Tax Equivalency Payment Agreement between Valero Refining-Texas L.P., ("Valero Refining"), the Texas City Foreign Trade Zone Corporation ("Grantee"), the City of Texas City (('City"), and the Texas City Independent School District ('TCISD").

The Texas City Foreign Trade Zone has had a long standing Tax Equivalency Payment Agreement with Valero Refining and its parent companies dating back to 1995.  The current existing agreement obligates Valero Refining to make a Tax Equivalency Payment with respect to inventory located within the Subzone to all applicable taxing jurisdictions, including TCISD.  With approval of the proposed amendment, Valero will no longer be required as of tax year 2022, to provide the Tax Equivalency Payment to TCISD.  

In lieu of the Tax Equivalency Payment, Valero is entering into a separate agreement with TCISD that will provide TCISD a supplemental payment.  By doing so, TCISD will not be adversely affected by state formula funding. 

At the June 8, 2021, TCISD Board Meeting, the Board unanimously approved the Foreign Trade Zone Exemption and supplemental Valero/TCISD Payment Agreement. 

The proposed amendment only affects TCISD and will not adversely affect the Texas City Foreign Trade Zone or adversely affect the City of Texas City and therefore, the proposed amendment to Tax Equivalency Payment Agreement is recommended for approval.