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5. Foreign Trade Zone Background: A foreign -trade zone (FTZ) in the United States is a geographical area, in (or adjacent to) a Unit- ed States Port of Entry where commercial merchandise, both domestic and foreign, receives the same Cus- toms treatment it would if it were outside the commerce of the United States. Merchandise of every descrip- tion may be held in the Zone without being subject to Customs duties and other taxes. This tariff and tax re- lief is designed to lower the costs of U.S.-based operations engaged in international trade and thereby create and retain the employment and capital investment opportunities that result from those operations. These spe- cial geographic areas - Foreign -Trade Zones - are established "in or adjacent to" U.S. Ports of Entry and are un- der the supervision of the U.S. Customs and Border Protection under the United States Homeland Security Council. For a number of years Indian River County has been interested in being included in a foreign trade zone. The benefits include (a) a reduction of duties for manufacturers if they use foreign components in their finished prod- ucts, (b) a duty exemption on imported goods that are later re-exported, (c) a delayed payment of duties for goods until they enter the U.S. Market, (d) an elimination of duties on waste, scrap and rejected or defective parts, and (e) a possible reduction in merchandise processing fees (U.S. Customs Processing fees). Currently, the Treasure Coast Foreign Trade Zone No. 218 is designated as a Traditional Site Framework or gen- eral purpose zone, which is a warehouse, industrial park or port that has been designated as an FTZ. Multiple companies can use general purpose zones simultaneously for the purpose of storing merchandise, equip- ment, parts and other goods. These sites include, Treasure Coast International Airport and Industrial Park, Crossroads Commerce Park, Kings Highway Industrial Park, and the St. Lucie West Commerce Park. Recently, the US Department of Commerce has developed another zone purpose known as the Alternative Site Framework (ASF). The ASF allows grantees to establish additional sites geared towards specific compa- nies either as a "Subzone" or a "Usage -Driven" site. These sites enable grantees to locate zone designation where companies' needs actually arise. By bringing zone designation to firms, Subzones/Usage-Driven sites help grantees respond to growth opportunities in the local economy and diminish the need to try to antici- pate where future activity may occur. A Subzone (or Usage -Driven site) under the ASF can be added, removed, or modified using a quick and simple minor action rather than the longer and more complex reorganization/ expansion or Subzone application process that is required under the Traditional Site Framework. Position: Indian River County BCC SUPPORTS the expansion of the Treasure Coast Foreign Trade Zone #218 to include the geographic area of St. Lucie, Martin and Indian River Counties. County Staff continues to work with St. Lucie County to expand the existing Foreign Trade Zone No. 218 to include portions of Indian River County. St. Lucie County is working through this process with the Department of Commerce. 85 6