09-10-12 Regular Meeting of La Porte City Council

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REQUEST FOR CITY COUNCIL AGENDA ITEM Appropriation Agenda Date Requested:9/10/12 Source of Funds: Requested By:Stacey Osborne Account Number: Department:CMO Amount Budgeted: Report:Resolution:Ordinance: Amount Requested: Budgeted Item:YES NO Exhibits:A.Gulf Winds FTZ Agreement B.Letter of Non-Objection C.Foreign Trade Zone Benefits SUMMARY & RECOMMENDATION The City of La Porte is located within a foreign trade zone (FTZ), and properties within a trade zone can be granted foreign trade zone status by the designated grantee for that zone. The City falls within Foreign Trade Zone No. 84, and the Port of Houston is our Foreign Trade Zone Grantee. Port Crossing has already been granted FTZ status by the Port of Houston, and Gulf Winds International, Inc. also desires to participate in the FTZ program. In order to participate Gulf Windsmust file an application for activation with the U.S. Customs and Border Protection CBP to activate a portion of the building within the Houston Foreign Trade Zone No. 84. A letter of non-objection from the City will aid in their efforts to obtain the required sponsorship letter from the Port of Houston, the grantee. Gulf Winds International, Inc. is the operator of a building located within the 289.94 +/-acre Port Crossing Industrial Park, Zone Site 20, which it will be leasing from PORT CROSSING A4 LP, a Texas limited partnership. The specific building at which the company will be operating the FTZ is located at 1842 South 16th Street, La Porte, Texas 77571. Gulf Winds is requesting a letter of non-objection from the City, to be used in their efforts to be a part of the foreign trade zone program. An agreement between the City and Gulf Winds International, Inc.is attachedas Exhibit A, and following is a brief explanation of why the companyneeds this letter and how the foreign trade zone program works. About the Foreign Trade Zone(FTZ) FTZstatus provides a federal exemption from state and local ad valorem taxes on tangible personal property importedfrom outside the United States, and held in a foreign trade zone for the purpose of storing, sale, exhibition, repackaging, assembly, distribution, sorting, grading, cleaning, mixing, display, manufacturing or processing and tangible personal property produced in the United States and held in a foreign trade zone for exportation, either in its original form or as altered by anyof the above processes. Inventory qualifyingunder the law and held at the facility in FTZspace that is activated by U.S. Customsis exempt from state and local ad valorem taxes.