Travis County Commissioners Court
February 16, 2010,
Item 27
27.
consider and take appropriate action on letter requesting that Travis County be included within the service area of foreign trade zone number 183, sponsored by the foreign trade zone of central Texas, inc.
>> I'll lay this out quickly based on information I had received previously on this item.
the united states version of -- this is essentially a foreign trade zone is the u.s.
version of the freeport kempings the state of Texas has.
foreign trade zones are design to increase american labor and increase capital investment in the united states but allowing activity to occur in the united states prior to the application of the u.s.
customs laws thereby equalizing the customs treatment of activities with similar activities occurring offshore or overseas.
whether we agree to be included in this or not, businesses can still, on an ad hoc basis, request this designation.
essentially, whether we choose to participate in this expedited process or not, the federal -- the federal law can preempt ad valorem taxes by the state or the locality on an industry that is engaged at least partially entirely in foreign trade.
so in having researched this, I think that it is represent for us to agree to be included.
the important thing to bear in mind is that, even by inclusion in this expedited process, any industry that wants to be designated still has to come to this body for approval by us.
and, further, there are federal requirements for inclusion that are appropriately stringent that I think we would do well to take under advisement in terms of our overall economic development strategy for the county, and I think that we should perhaps -- if we do vote to participate in this expedited process, that we should also take a look at how we could utilize what amounts to a utility, these various chambers of commerce are you nateing for a non--- uniting for a nonprofit entity, the foreign trade zone of central Texas, inc., which will probably essentially as a utility.
and I think we should further discuss how we could utilize that utility with regard to our economic development and workforce development goals.
one thing I want to be cautious about is, once this thing gets created, it's very difficult to uncreate it.
it has to -- you can only uncreate it by petition to the federal government.
so I want to be mindful, going into this.
but mindful, also of the fact that foreign foreign trade zones is available on a slow boat process, whether we choose to participate in this speedier process or not.
>> let me ask a couple ofo -- of questions.
one of my concerns is that, if this particular free-trade zone is approved by the court, of course, it will affect add add -- ad valorem taxes.
that's part of, if you heard this morning, we have 80% of our revenue that comes in, comes in through property taxes.
that's what the budget office told us this morning.
so I want to be very careful in what we're dealing with here, especially if we are making a proposal, I guess, to maybe decrease that tax participation, as far as this is concerned.
and then my second question is that designated -- just like you have an enterprise zone or different areas of this, is this a designated free-trade zone, or is it something that covers the overlay of the entire county, and I really don't know that.
but if it's specific -- designated specifically, then it may be -- I guess this other forward thinking participation by the county to make sure things are focused in a certain direction under that designation.
however, I'm still -- I don't know enough about it, I guess, to -- especially under the siege right now under ad valorem taxes -- let's face it, that's where we get our money from more than anything else is through our property tax base, which includes industry, commercial, residential.
that's where we get the money from.
so I kind of maybe want to see a little bit in depthwise, if I can get more specific questions out there, especially if we're going to make take money off the table that we so desperately need here in Travis County.
>> all right.
i agree.
i would agree with you that we have to be the watchdogs at the gate on this.
>> yes.
>> and that my understanding is that the foreign trade zone of central Texas, incorporated, seeks to establish a foreign trade zone that covers williams, travis and hays, and the foreign trade zone of Texas currently includes the chambers of commerce of Round Rock, george town, city of Austin and san marcos.
i need to double back with them.
they anticipated expanding the stvcti to include bastrop, fliewrgville, elgin, lockhart, taylor --
>> and caldwell county now.
>> and a portion of called -- caldwell county as well.
>> my understanding is a broad-based trade zone not in specific pockets across the county.
also my understanding through the requirement under federal regulations that it be approved through the taxing entity, that the inclusion of the specific business entity be approved by the taxing entity, that we could, sort of as guardians of the gate, de facto establish where our industrial zone was.
>> right, I see what you're saying.
>> so that is why I think it would be imperative for us, if we do agree to be included in this expedited process, that we further look toward a disciplined and focused approach for utilizing it.
>> well, I guess -- you bring up real good points, and thank you for asking that for me.
however, I'm just thinking about, the zone itself, you mentioned the other counties and, of course, county government is a lot different than the municipalities that are included here.
we all have a very limited source of generating revenue.
i'm just wondering if -- apparently, there has to be an individual effort made by those counties' governments or the government in itself looking at this trade zone.
i'm wondering has caldwell and Williamson county signed off?
i don't know about the municipalities how they signed off and how favorably are they looking at something like this.
i guess the other last question is when is the deadline for this as far as us making a decision?
>> the foreign trade zone of central Texas incorporated was asking for us to take action by July 1, I think.
>> okay.
>> let me go back and take a look at their letter, but I think it was July 1.
>> I'm glad to hear that portion because there's still a few things that I would like to get clear in my head, especially with so many (inaudible) involved and under the scarcity of resources as we are in now.
>> I just got a news flash on my screen that we believe -- my staff believes that every county -- any county in which any municipality wishes to participate, the county also has to accept it.
so staff believes that every county, so far, has adopted it , with the exception of travis.
i'm looking at the letter, and I believe they were asking for a response by July 10th, and, also, they have sent some additional information, which --
>> when did it come in?
>> when did it come in?
no, I haven't --
>> okay --
>> you want a copy of it?
>> I'll make copies of everything that we've pulled.
>> Commissioner Huber, then mr.
priest.
>> I want to tell you, I have worked in the past with foreign trade zones, and this is really, as I understand it, just a cut to the chase process, like Commissioner Eckhardt was saying.
they can go through the process without this entity in place.
it takes longer, and I don't see this as having any kind of signature -- significant impact on our revenues in the future.
we have a choice on an item by item basis when it comes through the court for approval from our perspective, it's a huge economic development tool, which, indeed, could, in turn, increase our revenues by the ability to attract industries, because we have this as part of our package.
my understanding, though I'm not 100% certain on this, is it's probably something worth looking at.
we wouldn't have necessarily large areas necessarily set aside that would be taken off the tax rolls.
it may be something as small as a corner of a warehouse for inventory for parts that came in.
so it's -- and there again, we would look at it on an individual basis.
i see no down side.
if you look at areas that have large areas of trade zone, like the dfw airport, it's a huge economic stimulus to the entire area which translates into more revenue.
>> mr.
priest.
>> thank you, judge.
i want to encourage the court -- of course, I've heard a lot of people saying they're not really sure about everything, they don't have all the facts, but I've researched this quite a bit and another individual that's researched this is jerome, dr.
coursey wrote the book a book.
and here a while back you had a pharmacy card where they wanted a seal and all of a sudden it became very clear -- and I would hope our county wouldn't put its seal or signature or write any other letter except making sure they're not involved in anything like this.
this is another nasco disaster.
i disagree with some of the things I've heard.
one thing I agree with is it's so much harder to get out of, and I would say next to impossible.
so I would strongly encourage you to be sure you know the facts before you enter into this agreement.
other than the property tax thing, there's other things I don't think the court was aware of.
i don't remember the gentleman that spoke to you on this item previously, but one of the things the gentleman didn't write up to you when he was talking about taking products off the shelf and that's when they'd actually pay the tax, these agreements are some are controlled by treaties.
some of these agreements have conditions in them, if they have a company -- and their company is in china, and if they, like, make rockets.
and we pay our rocket scientist $150,000 a year, when they come over on a visa and work in these places, if they make $10,000 or $15,000 in their country, then that's what they will be paid here.
and that -- and not only the property tax issue.
when they talk about bringing these jobs -- oh, these are well-paying jobs -- this is double speak.
if there were people here in our country being hired for these jobs, then that may be the case.
but if they do bring their people, in they're allowed to pay under these foreign agreements what they pay those people in those countries, and they will, and they have done it, and there's other situations that are too numerous to mention.
i'm just strongly opposed to it and I hope that y'all will not do this.
thank you.
>> Commissioner Davis.
>> at least one week, judge, and maybe two.
>> Commissioner, is there any information along those lines?
>> in the information I pulled up, I haven't seen any indication of it having a bearing on the labor market with regard to wages.
i've only seen information of it having a bearing on the labor market with regard to the maintenance of domestic jobs as opposed to -- it was designed in the 30s.
it's a federal act that was created in the 1930s to keep corporations at home rather than moving overseas for manufacture.
so I have seen indication of its positive impact on maintaining and creating domestic jobs.
i haven't seen any indication of it having a suppression effect on wage.
but I will take a look.
>> I would like to see if anything comes up.
>> first Tuesday in March, March 2, back on the aagenda.
two weeks from today.
>> thank you.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, February 16, 2010 2:15 PM
