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S'111'111�1� �an�� XA D o .,. ntf�0 q,�,i Ms. Hammond explained that a Foreign Trade Zone (FTZ) is a federally designated area considered outside of the US Customs zone and noted that the primary benefactors of an FTZ were manufacturers and distributors. She noted that the PEDC would be applying for the role of Local Grantee, under the direction of the Foreign Trade Zone Board and US Customs and Border Protection. She explained the PEDC's role as a Local Grantee would be the administration and marketing of the FTZ and providing an annual compliance report to the FTZ Board. She further explained that her understanding from Ernst and Young was that these duties would not be time intensive for the PEDC staff. Ms. Hammond continued by outlining a number of potential benefits of an FTZ for local manufacturers and distributors. She noted that the PEDC had contacted a number of primary employers in the area, and that currently two employers had shown interest in the program. Additionally, she expressed the value in an FTZ as a marketing tool for business attraction, noting that within the past 30 days, the PEDC had received two Requests for Information from potential prospects that had established the location's designation as an FTZ as a requirement for submittal. Ms. Hammond opened the floor to questions regarding Ernst and Young LLP's proposal. Mr. Coleman asked a question regarding other FTZs in the state of Texas and whether their Economic Development Corporations normally acted as Local Grantee. Ms. Hammond confirmed that EDCs traditionally act as Local Grantee for FTZs. She further noted that in the United States, Texas has the most FTZs at approximately 35 across the state. Additionally, she noted that an FTZ was traditionally expected to be within 60 to 90 miles of a port of entry and that, were the PEDC to establish an FTZ in Paris, they would be working with the Customs port in Dallas. Dr. Hashmi voiced his concern regarding the transportation costs to move goods from a port of entry to Paris, noting that locations with immediate access to a port of entry do not suffer the same transportation costs. He further noted that having access to a seaport makes importing and exporting goods substantially easier. He continued by stating that businesses would still have to pay import taxes on goods, which will include tariffs. Ms. Hammond responded, agreeing that designations such as the Port of Houston have greater benefit as a seaport but noted that businesses in Lamar County could find this designation advantageous, as many landlocked businesses are attached to seaports or airports for merchandise. She further noted that some companies have provided feedback, stating that the delayed requirement for paying import taxes would benefit them. Ms. Hammond continued by reviewing the cost of Ernst and Young LLP's proposal, noting that the cost was broken into three phases, and that the PEDC would only be liable for any phase of the proposal that had been completed. She further noted that the process of establishing an FTZ was expected to take approximately 12 to 18 months, which would split the cost between two fiscal years. Ms. Hammond noted that the PEDC has contacted two additional firms that provided the same services, and that Ernst and Young provided the best rate available, as well as being the most qualified to assist the PEDC with the establishment of an FTZ. Page 3 of 5