February 12, 2016
A $1.14 trillion omnibus spending bill that was approved by Congress and signed into law in December contains a provision that will impact FTZ Board operations and individual FTZ grantees.
Along with other requirements, the appropriations bill language directs the FTZ Board to survey all current and past business models used by FTZ grantees and to determine the impact that the Part 400.43 Uniform Treatment provision has or may have on the various business models. The language in the spending bill withholds $5 million in funding from the U.S. Commerce Departmentâ€™s International Trade Administration until 15 days after the FTZ Board delivers its report to the House and Senate Committees on Appropriations. Here is the full text of the provision:
Foreign Trade Zones (FTZ). Of the amounts provided for ITA [the International Trade Administration, U.S. Department of Commerce] in this Act, $5,000,000 shall not be available until 15 days following the delivery of a report and certification from the FTZ Board to the Committees on Appropriations. The report shall include: (1) a survey of all current and past business models utilized by FTZ grantees for zone management and administration activities; (2) specific impacts 15 CFR 400.43 has or may have on these various business models; (3) the specific activities and components of current and past business models that are allowed under partial and full waivers granted by the FTZ Board, as of the date of enactment of this Act pursuant to this regulation; and ( 4) the specific steps the FTZ Board will take to ensure that all FTZ grantees are in compliance with the regulation. The FTZ Board shall simultaneously provide a certified list of the specific business practices and business models that a FTZ grantee would need to achieve in order to qualify for a waiver under the regulation.
The language was placed in the bill by Sen. Richard Shelby (R-AL). NAFTZ was not involved in the initiation, writing or enactment of this provision, nor did the association have knowledge of the language until two days prior to the final vote on the omnibus bill.
The NAFTZ Board of Directors, staff, and advisors are currently studying this provision to determine its potential impact on the FTZ program and NAFTZ members. The provision will be a subject of discussion at the NAFTZ Legislative & Regulatory Seminar in Washington D.C. on February 9, 2016, along with ACE implementation, scope of authority, and other issues important to the FTZ community.