Title
Foreign-Trade Zone Application Process Improvements (Resolution 21870)
Description
Request to authorize the City Manager, or his designee, to submit all future applications to the Foreign-Trade Zones Board of the U.S. Department of Commerce to streamline the Foreign-Trade Zone (FTZ) application process and provide a more efficient delivery of service for applicants not requesting property tax reclassification for FTZ property located within the City of Phoenix. Also request authorization for the City Manager, or his designee, to enter into Foreign-Trade Zone Operations Agreements and any other necessary documentation with future applicants. Further request authorization for the City Treasurer to accept funds related to this item. There is no expense impact to the General Fund with this action.
Report
Summary
The City of Phoenix ("Zone Grantee") received a Grant (Board Order No. 185, dated March 25, 1982) from the Foreign-Trade Zones Board (the "Board") to establish FTZ No. 75; the alternative site framework format for FTZ No. 75 was approved by the Board on Oct. 7, 2010, in Board Order No. 1716, and published on Oct. 20, 2010 in 75 Fed. Reg. 64708.
A Grant of authority is a document issued by the Board that authorizes a zone grantee to establish, operate and maintain a zone, subject to limitations and conditions specified in 15 Code of Federal Regulations (“CFR”) part 400-FTZ Regulations and in 19 CFR part 146. The authority to establish a zone includes the responsibility to manage it. The service territory for FTZ 75 includes Maricopa County, and portions of Pinal and Yavapai Counties. FTZ provides valuable incentives for companies to manufacture and operate in the U.S., rather than in foreign countries.
Currently, each new FTZ application is brought to a City Council Formal meeting for authorization to submit an application and enter into all necessary legal documentation. Adding each application request to a City Council meeting agenda adds unnecessary delay for the client and puts Phoenix at a competitive disadvantage. The request for this action to streamline the FTZ application process is a standard practice as other national grantees have blanket approval to sponsor new applications without having to obtain individual City Council/Board approvals and provides efficient delivery of service for applicants not requesting property tax reclassification benefit for FTZ property located within Phoenix.
If property tax reclassification for activated Foreign-Trade Zones pursuant to Arizona law (A.R.S. 42-12006) is requested for any site within the City of Phoenix boundaries, a request will be placed on a City Council meeting agenda for consideration and authorization.
If approved, City staff will process future applications assuring all necessary requirements are completed by the client prior to submission of each application to the Foreign Trade Zones Board including tax concurrence letters for sites outside of Phoenix, when applicable.
Contract Term
Each new contract term will be 20 years unless the FTZ designation terminates sooner.
Financial Impact
The City will incur no costs associated with this request. FTZ Operators pay annual fees to the City of Phoenix to administer the FTZ.
Department
Responsible Department
This item is submitted by Deputy City Manager Jeff Barton and the Community and Economic Development Department.