Consider Commission approval for Mayor to enter into the Property Tax Refund Agreement with Valero Refining-Texas, L.P., as a result of the Agreed Final Judgment on the 2005-2008 Lawsuits.

In 2005, Valero Refining-Texas, L.P. (Valero) sued Galveston Central Appraisal District (GCAD), contesting the property’s appraised value for ad valorem tax purposes, with suits being filed for the 2005, 2006, 2007 and 2008 tax years. These lawsuits are collectively referred to as the “2005-2008 Lawsuits”. Since the City of Texas City is a taxing unit that is authorized to impose ad valorem taxes on the property, it is a party to the judgment and must abide by the terms of the “Property Tax Refund Agreement”. 

On April 6, 2009, an Agreed Final Judgment was entered in the “2005-2008 Lawsuits” and follows:  

The value reductions stated above reduce Valero’s tax liability and entitle Valero to a refund from the City under Texas Tax Code § 42.43 totaling $805,157.78 (Refund). 

Per the Agreement, the City shall pay the Refund to Valero according to the following schedule of payments: 

 Valero shall not recover interest, and releases the City from any and all claims for interest, which would otherwise be owed on the Refund under Texas Tax Code § 42.43. In the event the City fails to make any payment required by the Agreement, Valero shall be entitled to recover interest on the amount due and owing at an annual rate of twelve (12) percent, calculated from the 60th day after the date GCAD’s chief appraiser certifies the corrections to the appraisal roll arising out of the 2005-2008 Lawsuits until the date the refund is made as provided in Texas Tax Code § 42.43.

The Property Tax Refund Agreement is attached for your review.