Consider and take appropriate action on the draft Travis County Foreign Trade Zone Policy and Guidelines for Consideration of Requests for Support for site activation. (Judge Brown)

Staff Report & Agenda Item Details

FTZ is a federally authorized customs program that allows companies to import, store, assemble, or manufacture goods under U.S. Customs and Border Control (CBP) supervision. FTZ’s offer deferred, reduced, or eliminated duties on qualifying goods. While FTZ designation does not eliminate tariffs on most goods entering the U.S. market, it improves cash flow, provides access to lower tariff rates on finished goods, enhances supply chain efficiency, and supports global competitiveness. In Texas, imported inventory located in an activated FTZ qualifies for a tax exemption on business personal property (Inventory), which can impact local taxing jurisdictions.<br data-pasted="true">Foreign Trade Zone (FTZ) #183, administered by the Foreign Trade Zone of Central Texas, Inc., was established in 1991 with support from Travis County. Currently there are three active sites in the county, with recent requests from four companies for additional site activations. Applications to the CBP for new site activations must include “Letters of Non-Objection” (Letter) from the largest local taxing entities. Travis County is included as a local governmental entity that must provide a Letter to support activation requests. Since the FTZ’s establishment, the County has provided Letters to facilitate FTZ site activations and modifications, including support for the Alternative Site Framework in 2010 and subsequent company activations.<br>The attached draft Policy establishes a structured framework for evaluating requests for FTZ activation support. The Policy aligns with the County’s Comprehensive Economic Development Strategy by targeting critical industry clusters and supporting locally owned small businesses, while requiring fiscal neutrality to the County through a Payment in Lieu of Taxes (PILOT) agreement to offset any foregone inventory tax revenue. The Policy defines eligibility categories, outlines review procedures for support requests, includes considerations for economic resilience, and dictates that final approval to provide Letters remains subject to Commissioners Court consideration on a case-by-case basis.