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Greater Maricopa Foreign Trade Zone, Inc.

Zone #277

Contents

Frequently Asked Questions: Communities Page 2

Frequently Asked Questions: Business Page 6

Frequently Asked Questions: Site Locators Page 9

Manufacturing Example Page 14

Distribution Example Page 15

Application Process Page 16

Activation Process Page 19

Contact Information Page 21

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Frequently Asked Questions - Community Leaders

Q. What steps must be taken to qualify? (Application Procedures)

A. A prospective site or company must be located (or looking to locate) within the GMFTZ Service Area.

1. The prospective Company should contact the City’s/Town’s Economic Development Office to determine if there are sites available and what the City’s/Town’s tax policy is comprised of.

2. The prospective landowner and/or user will need to contact the Grantee/WESTMARC regarding their desire to be part of the Zone project.

3. The major taxing entities must all submit letters for inclusion within the application, reflecting their support of the proposed FTZ site. This may take time and require meetings and formal agreements, while in other cases it may simply require a pre-approved letter.

4. An application must be submitted to the FTZ Board for review and approval along with the proper corresponding fee, depending on application type.

The Grantee has created 2 simple step-by-step procedural documents for Applying for an FTZ and Activation of a Zone, which explains all of the necessary steps to take, and the timeline and chronology of those steps for any company wanting to become an FTZ site/user.

Q. What is WESTMARC’S role in the FTZ # 277 in relation to the Grantee, Greater Maricopa FTZ, Inc.?

A. WESTMARC provides staff support and marketing support for FTZ # 277. WESTMARC’s offices are the official offices of the Zone, and WESTMARC’S President, Michelle Rider overseas the marketing efforts on behalf of the Grantee. Greater Maricopa FTZ, Inc. is made up of 2 boards: the Board of Directors, which are volunteer citizens, having been previous WESTMARC board members and officers, and an Advisory Council made up of the economic development directors from the West Valley communities and the current land-owners within the Zone.

Q. What if an existing business in my community wants to apply for FTZ status? How does that work?

A. Businesses already located within your community can participate in the FTZ # 277 projects. Many have done so already. This is how it works:

• If a business wants to become a Zone User in FTZ # 277, they should determine the costs, benefits and operational issues by contacting their own zone consultant, or by using the Grantee’s marketing consultant to determine those Cost-Benefit Issues.

• If the business is already located in the community, there will be no “re-classification” of taxes on assets (both real and personal property assets within the proposed zone site) as a result of the zone approval/activation. The company will have to execute a Payment in Lieu of Tax Agreement (PILOT Agreement) from the City/Town, which will dictate how the payment (making up the difference between what the company would pay without an FTZ and what it will pay under the re-classification) so that all existing taxes are paid the current taxes on the property.

• Then, for all other assets added after the date of requesting official FTZ sponsorship by the Grantee (this “date” may differ for each city/town), the added assets (building expansions and/or new plant and equipment added) will be taxed at the re-class rate for FTZs, once the site is “activated” by US Customs (CBP).

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• This process allows existing businesses in your city/town to take advantage of the FTZ Program, while fully protecting the existing local tax base at 100% of what it would be before the FTZ program. This clever process creates a “win-win” situation for the company and the local taxing entities. It is a policy of FTZ 277 and is maintained within the Zone Schedule of the Grantee (the official document sent to the FTZ Board on how this zone operates) and is mandated within each Operator Agreement.

Q. How does FTZ # 277 protect the existing local tax base?

A. The local tax base is protect by FTZ # 277 by its Zone Schedule, the official Federal document on the rates, rules and charges imposed by the Grantee. It is also protected by the local (city/town) Tax Policy that is approved, via city/town ordinance in most cases that outlines the city’s/town’s policies on this issue.

Existing Building before FTZ $20M Land & Building Investment & $5M of New Investment FTZ allows for full protection of existing Tax Base

Q. What is the difference between a Usage-Driven and Magnet Site?

A. A Usage-Driven Site is a location that is designated as an FTZ for a specific company and can be located within any community within the GMFTZ Service Area. The company applying for FTZ status must commit to activating and utilizing the FTZ within 3 years or the site will become de-zoned. This application process is fast-tracked, but will require that each major taxing jurisdiction provide a letter of support [there are typically 4-5

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letters needed: the city/town, county, community college district, and the school district(s)]. Having an established tax policy within a community can provide companies without Magnet Sites with the ability to utilize the Usage-Driven site option for those committed to activating and utilizing an FTZ. An existing company can apply for Usage Driven site status, or it can be for a build-to-suit relocation. Approval is usually three months for the tax process and two to three months for local and Federal approval.

A Magnet Site is a piece of land (industrial park) within a community that is designated with FTZ status for the purpose of attracting business and accommodating demand for Zone designation. The FTZ Board is now only approving Magnet Sites that have a current user willing to commit, or an existing building for lease, and space for future zone users. A Magnet Site is often an industrial park or larger tract of land which can provide opportunities for multiple companies to utilize a Zone site. In addition to tax jurisdiction support, this process requires a longer application and a much more robust justification process and approval timeframe.

NOTE: Only companies that qualify federally and locate within an FTZ Magnet Site may activate and take advantage of the state tax benefits. Other firms may locate within a Magnet site, but unless qualified federally, they cannot activate and take advantage of the zone. As of September of 2012, the U. S. FTZ Board is making it very difficult to add Magnet Sites in AZ and therefore only certain, specific fact-situations can be approved. Contact WESTMARC or IMS for more details.

Q. What costs are associated with being part of an FTZ?

A. There are several types of Zone Applications and even more steps necessary to become “an activated zone operator,” with various costs for consulting, software and Grantee costs; so the answer to this question is relatively complicated. However, the Grantee has created a short step-by-step process; Application Process and Activation Process, along with a Fee Schedule which is now also posted on this website. Each company that wants to get approved and use the zone, for both the Federal and State benefits, must go through the steps outlined in the Application and Activation Appendices attached to this website.

Q. How can WESTMARC and the Grantee (GMFTZ) help me with the Zone?

A. GMFTZ and WESTMARC act as advocates for the FTZ, having a committed and thorough marketing agenda to promote and market the use of Zone # 277 (the West Valley Zone). Furthermore, GMFTZ retains a full-time zone marketing consultant, IMS, to answer any and all technical marketing and zone operational questions about how firms qualify under the Federal and state laws and regulations. IMS personnel can assist any of the WESTMARC City/Town Economic Development leaders with “project leads” that are looking to locate in the West Valley. These services from IMS are all paid for by the Grantee through Zone Grantee fees. The services include:

• Technical zone marketing via conference calls, on-site meetings, Webex presentations, etc. to prospective zone users (prospects) and/or their site location consultants.

• Assistance with whether or not a certain prospect could qualify under the Federal and State requirements.

• Understanding the relationship between the prospect, US Customs (CBP) and the local taxing authorities.

• Providing Cost-Benefit Analysis to any prospect. • Operational questions that are posed by the prospect.

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• All of these services are paid for by the Grantee, and are available to all West Valley communities and their EDC or city staff.

Q. What steps must our community take to be part of the FTZ project?

A. In order to be part of the FTZ No. 277 project, a community located within the Service Area will need to work with the Grantee (Greater Maricopa FTZ, Inc.) and WESTMARC to prepare FTZ tax policies for each city/town and conduct community-led marketing efforts to educate businesses and land-owners in the community. The Grantee and WESTMARC keep drafts of Council Resolutions, tax policy documents, and can help any city/town with this process. Due to the tax reclassification statute existing in Arizona, it will be imperative that the community and all major taxing jurisdictions within the community establish an FTZ tax policy in order to quickly expedite Application processing for businesses interested in utilizing the FTZ Program.

Q. Does the GMFTZ project serve our community?

A. The Greater Maricopa Foreign Trade Zone (FTZ No. 277) serves the Western Valley of Maricopa County, Arizona. The service area for FTZ No. 277 includes, but is not limited to, the following communities: Avondale, Buckeye, El Mirage, Gila Bend, Glendale, Goodyear, Litchfield Park, Peoria, Sun City, Sun City West, Surprise, Tolleson, Wickenburg and Youngtown and the unincorporated areas that exist west of the Phoenix City boundary.

Q. What can an FTZ project do for my community?

A. An FTZ project can benefit a community by offering businesses “world-class” financial incentives that are seeking a new site for expansion, relocation or new operations. Not all business can utilize Zone benefits, but for those that can, the cost savings make FTZ designation a prerequisite for many corporate site selection teams. A Zone-approved site offers communities with an advantage in terms of successfully attracting new economic development opportunities and the corresponding jobs to their community.

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Frequently Asked Questions - Businesses

Q. What steps must be taken to qualify? (Application Procedures)

A. A prospective site or company must be located (or looking to locate) within the GMFTZ Service Area.

1. The prospective Company should contact the City’s Economic Development Office to determine if there are sites available and what the City’s tax policy is comprised of.

2. The prospective landowner and/or user will need to contact the Grantee/WESTMARC regarding their desire to be part of the Zone project.

3. The major taxing entities must all submit letters for inclusion within the application, reflecting their support of the proposed FTZ site. This may take time and require meetings and formal agreements, while in other cases it may simply require a pre-approved letter.

4. An application must be submitted to the FTZ Board for review and approval along with the proper corresponding fee, depending on application type.

The Grantee has created 2 simple step-by-step procedural documents for Applying for an FTZ and Activation of a Zone, which explains all of the necessary steps to take, and the timeline and chronology of those steps for any company wanting to become an FTZ site/user.

Q. Can we manufacture products within an FTZ?

A. Yes, products can be manufactured within an FTZ.

FTZs are considered to be outside “Customs territory” for the purpose of entering goods into US commerce, which allows the operator the ability to choose whether it will pay the duty rate on the finished product or the part, whichever is lower. This means that if a company manufactures or assembles within an FTZ, they do not pay duty on the “value added” to the product and duty is not paid at all until the product is removed from the Zone for consumption. All exported products are removed from the FTZ without duty liability. In an FTZ, companies can be granted special privileges including “direct delivery” and “weekly entry”, which can substantially reduce the costs of importation and increase supply-chain efficiency. When the manufacturing or assembly activity takes place at the same facility, the FTZ will provide an improved and controlled process; this can more accurately describe to Customs what is entered.

In addition, if a company needs to import capital equipment when setting up the Zone facility, no duty on payments will be required on that equipment until the factory is in production. FTZs were developed to assist businesses in the US compete with foreign manufacturers and suppliers. Because our USA system of tariffs is full of parts duty rates that are higher than most finished goods duty rates, “inverted tariff benefits” (those opportunities that allow the use of FTZ procedures) are being used in almost all types of US manufacturing. Cell phones, oil refineries, appliances, pharmaceuticals, solar panels, automotive, steel, pipe and tubes and many other manufacturers are currently using the FTZ program, saving hundreds of thousands each year!

Q. What will the corporate responsibilities be in order to remain compliant and designated as an FTZ?

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A. To remain designated as an FTZ, a company must conduct “bona-fide Customs business” inside the zone. FTZs must be monitored for accuracy of inventory, goods received and goods shipped. Customs has become much more user friendly in the last decade and fully electronic filing of forms is now standard. A combination of the company’s customs broker, their internal accounting systems and a fully authorized set of “bolt-on” FTZ software systems are available to keep tabs on the information required by Customs. Annual reporting to the FTZ Board and Customs is also required.

Q. Is an FTZ program a good fit for our company?

A. If either of these statements matches your company’s operation, you may likely benefit from an FTZ:

• Your company is conducting manufacturing or assembly using imported components (plus domestic if applicable), or

• Your company utilizes a warehouse/distribution center that is larger than 300,000 square feet, as the base for your regional/national distribution hub.

GMFTZ offers a FREE Cost Benefit Analysis to determine how much an FTZ can impact your bottom-line. (Cost Benefit Analysis)

Q. How can WESTMARC and the Grantee (GMFTZ) help me with my Zone?

A. GMFTZ and WESTMARC act as advocates for the FTZ, having a committed and thorough marketing agenda to promote and market the use of Zone # 277 (the West Valley Zone). Furthermore, GMFTZ retains a full-time zone marketing consultant, IMS, to answer any and all technical marketing and zone operational questions about how firms may operate within an FTZ under the Federal and state laws and regulations. IMS personnel can assist any Company that is looking to locate in the West Valley understand the FTZ process, benefits, costs and operational issues. These marketing services from IMS are all paid for by the Grantee through Zone Grantee fees. The services include:

• Technical zone marketing via conference calls, on-site meetings, Webex presentations, etc, to companies or their site location consultants/brokers.

• Assistance with whether or not your firm could qualify under the Federal and State requirements. • Understanding the relationship between the Company, US Customs (CBP) and the local taxing

authorities. • Providing Cost-Benefit Analysis to any Company at no charge. • Provide answers to FTZ Operational questions.

All of these services are paid for by the Grantee, and are available to all West Valley communities and prospective Companies.

Q. What are the costs/benefits associated with an FTZ?

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A. Benefits from locating within a Zone include: improved cash flow, reduced paperwork and expenses, reduction in Arizona real and personal property taxes by 75% land, new buildings and qquipment, as well as increased security and increased supply chain speed.

The costs from the Grantee include a one-time application and activation fee, and an annual Zone fee to the Grantee, and any necessary internal costs needed to maintain the security and IT systems required to track FTZ status goods within your company. Some internal systems can be modified to meet these requirements, and bolt-on FTZ solution systems are available and adaptable to most corporate systems. The majority of companies use an outside consultant to assist them in the application and activation processes (the local Customs process necessary to “operate” officially as a Zone-status company).

Q. What types of businesses utilize an FTZ?

A. The Zone program is utilized by many different industries including: importers, exporters, manufacturers (both large and small) distributors, retailer in the following industry sectors; footwear, apparel, tile and stone, solar panel producers, refrigerated warehouses and environmental manufacturing, to name a few. FTZs were developed to assist businesses in the US compete with foreign manufacturers and suppliers. Because our U.S. system of tariffs is full of parts duty rates that are higher than most finished goods duty rates, “inverted tariff benefits” (those opportunities that allow the use of FTZ procedures) are being used in almost all types of US manufacturing. Cell phones, oil refineries, solar panels, plastics manufacturing, appliances, pharmaceuticals, automotive, steel, pipe and tubes and many other manufacturers are currently using the FTZ program, saving hundreds of thousands each year!

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Frequently Asked Questions - Site Selectors

Q. What steps must be taken to qualify? (Application Procedures)

A. A prospective site or company must be located (or looking to locate) within the GMFTZ Service Area.

1. The prospective Company should contact the City’s/Town’s Economic Development Office to determine if there are sites available and what the City’s/Town’s tax policy is comprised of.

2. The prospective landowner and/or user will need to contact the Grantee/WESTMARC regarding their desire to be part of the Zone project.

3. The major taxing entities must all submit letters for inclusion within the application, reflecting their support of the proposed FTZ site. This may take time and require meetings and formal agreements, while in other cases it may simply require a pre-approved letter.

4. An application must be submitted to the FTZ Board for review and approval along with the proper corresponding fee, depending on application type.

The Grantee has created 2 simple step-by-step procedural documents for Applying for an FTZ and Activation of a Zone, which explains all of the necessary steps to take, and the timeline and chronology of those steps for any company wanting to become an FTZ site/user.

Q. Can companies manufacture products within an FTZ?

A. Yes, products can be manufactured within an FTZ.

FTZs are considered to be outside “Customs territory” for the purpose of entering goods into US commerce, which allows the operator the ability to choose whether it will pay the duty rate on the finished product or the part, whichever is lower. This means that if a company manufactures or assembles within an FTZ, they do not pay duty on the “value added” to the product and duty is not paid at all until the product is removed from the Zone for consumption. All exported products are removed from the FTZ without duty liability. In an FTZ, companies can be granted special privileges including “direct delivery” and “weekly entry”, which can substantially reduce the costs of importation and increase supply-chain efficiency. When the manufacturing or assembly activity takes place at the same facility, the FTZ will provides an improved and controlled process, this can more accurately describe to Customs what is entered.

In addition, if a company needs to import capital equipment when setting up the Zone facility, no duty on payments will be required on that equipment until the factory is in production. FTZs were developed to assist businesses in the US compete with foreign manufacturers and suppliers. Because our USA system of tariffs is full of parts duty rates that are higher than most finished goods duty rates, “inverted tariff benefits” (those opportunities that allow the use of FTZ procedures) are being used in almost all types of US manufacturing. Cell phones, oil refineries, appliances, pharmaceuticals, solar panels, automotive, steel, pipe and tubes and many other manufacturers are currently using the FTZ program, saving hundreds of thousands each year!

Q. What will the corporate responsibilities be in order to remain compliant and designated as an FTZ?

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A. To remain designated as an FTZ, a company must conduct “bona-fide Customs business” inside the zone. FTZs must be monitored for accuracy of inventory, goods received and goods shipped. Customs has become much more user friendly in the last decade and fully electronic filing of forms is now standard. A combination of the company’s customs broker, their internal accounting systems and a fully authorized set of “bolt-on” FTZ software systems are available to keep tabs on the information required by Customs. Annual reporting to the FTZ Board and Customs is also required.

Q. Is an FTZ program a good fit for my Customer?

A. If either of these statements matches your customer’s operation, you may likely benefit from an FTZ:

• Your customer’s is conducting manufacturing or assembly using imported components (plus domestic if applicable), or

• Your customer utilizes a warehouse/distribution center that is larger than 300,000 square feet, as the base for your regional/national distribution hub.

GMFTZ offers a FREE Cost Benefit Analysis to determine how much an FTZ can impact your bottom-line. (Cost Benefit Analysis)

Q. What are the costs/benefits associated with having my customer established as an FTZ?

A. Benefits from locating within a Zone include: improved cash flow, reduced paperwork and expenses, reduction in Arizona real and personal property taxes by 75% on land, new businesses and equipment, as well as increased security and increased supply chain speed.

The costs from the Grantee include a one-time application and activation fee, and an annual Zone fee to the Grantee, and any necessary internal costs needed to maintain the security and IT systems required to track FTZ status goods within your company. Some internal systems can be modified to meet these requirements, and bolt-on FTZ solution systems are available and adaptable to most corporate systems. The majority of companies use an outside consultant to assist them in the application and activation processes (the local Customs process necessary to “operate” officially as a Zone-status company).

Q. What types of businesses utilize an FTZ?

A. The Zone program is utilized by many different industries including: importers, exporters, manufacturers (both large and small) distributors, retailer in the following industry sectors; footwear, apparel, tile and stone, solar panel producers, refrigerated warehouses and environmental manufacturing, to name a few. FTZs were developed to assist businesses in the US compete with foreign manufacturers and suppliers. Because our U.S. system of tariffs is full of parts duty rates that are higher than most finished goods duty rates, “inverted tariff benefits” (those opportunities that allow the use of FTZ procedures) are being used in almost all types of US manufacturing. Cell phones, oil refineries, solar panels, plastics manufacturing, appliances, pharmaceuticals, automotive, steel, pipe and tubes and many other manufacturers are currently using the FTZ program, saving hundreds of thousands each year!

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Q. What types of incentives (in terms of tax exemptions) are available at each site?

A. All of the currently designated FTZ sites offer prospective users 100% of the benefits available within an FTZ location in the State of Arizona. This includes the State of Arizona’s benefit of reclassification of the property to Class 6, along with the federal benefits. These benefits are listed below:

• State Tax Re-Class on Real and Personal Property: From Class 1 to Class 6,which is a reduction of 75% (in 2012) on the “normal” commercial real and personal property taxes. On a typical 500,000 sq ft building (new) with $30 Million in personal property, this “benefit” would yield approximately $.80-$.95 reduction in Gross Rental Rates.

• Federal weekly entry benefits, on the same size example facility above (500,000 sq ft) would normally yield the average import/retailer with a Federal savings in the $250,000 to $450,000 range. (Annually?)

• For manufacturers, inverted tariff benefits can reduce upwards of $2.00 to $3.65 per foot of benefit to a typical Zone User (i.e. reduces occupational costs by this much).

• Taken together, the FTZ status on a “new location” in FTZ # 277 is the most beneficial incentive in the Western USA. Arizona Commerce Authority uses the FTZ benefit in Arizona as the most available and worthwhile incentive (to firms that qualify) in their arsenal of state-wide incentives.

Q. How does the Zone # 277 protect my client’s confidentiality?

A. It is the stated policy of GMFTZ and WESTMARC to protect all potential customers and to give sponsorship approval and even “tax support letters” under the name of “Project X” instead of the corporate name. All best practices are employed by the Grantee and WESTMARC to protect corporate identity. In the last 4 relocations to the west valley, where the FTZ was involved (up to Q 2, 2012) the Grantee and WESTMARC have maintained 100% confidentiality.

Q. Which Sites offer buildings available for space immediately?

A. Site 1 is preparing to build (summer of 2012) a “spec” building inside the designated Zone. Approximately 600,000 to 800,000 ft. is being planned now.

Proposed Site 5 – Goodyear Crossing Industrial Park (applied for but not yet approved) has immediately available space for FTZ users (smaller space in the 20,000-60,000 ft range)

Q. Which Sites offer build-to-suit opportunities?

A. Site 1 – Goodyear Gateway South – www.airportgateway.com

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Site 2 – Surprise Pointe – www.surprisepointe.com

Site 3 – Goodyear Palm Valley 303 – www.palmvalley303.com

Site 4 – 10 West Logistics Center

Proposed Site 5 – Goodyear Crossing Industrial Park (applied for but not yet approved)

Proposed Site 7 – Buckeye Industrial Park (applied for but not yet approved)

Site 2 – is served by Burlington Northern Santa Fe Rail

Proposed Site 5 – can be served by Union Pacific Rail

Proposed Site 7 – served by Union Pacific Rail

Q. What designated FTZ Sites are available within the Zone project?

A.

Site 1 – Goodyear Gateway South – www.airportgateway.com

Site 2 – Surprise Pointe – www.surprisepointe.com

Site 3 – Goodyear Palm Valley 303 – www.palmvalley303.com

Site 4 – 10 West Logistics Center -

Q. What are the differences between establishing Magnet Sites and Usage-Driven Sites in terms of processing approvals and tax support?

A. See Answer to this question under Community Leaders regarding the differences between these two Sites.

Q. How can WESTMARC and the Grantee (GMFTZ) help my Customer?

A. GMFTZ and WESTMARC act as advocates for the FTZ, having a committed and thorough marketing agenda to promote and market the use of Zone # 277 (the West Valley Zone). Furthermore, GMFTZ retains a full-time zone marketing consultant; IMS, to answer any and all technical marketing and zone operational questions about how firms may operate within an FTZ under the Federal and state laws and regulations. IMS personnel can assist any Company that is looking to locate in the West Valley understand the FTZ process, benefits, costs and operational issues. These marketing services from IMS are all paid for by the Grantee through Zone Grantee fees. The services include:

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• Technical zone marketing via conference calls, on-site meetings, Webex presentations, etc. to companies or their site location consultants/brokers.

• Assistance with whether or not your firm could qualify under the Federal and State requirements. • Understanding the relationship between the Company, US Customs (CBP) and the local taxing

authorities. • Providing Cost-Benefit Analysis to any Company at no charge. • Provide answers to FTZ Operational questions.

All of these services are paid for by the Grantee, and are available to all West Valley communities and prospective Companies.

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Procedures for Sponsorship of Applications to the Foreign-Trade Zones Board Through

Greater Maricopa Foreign Trade Zone, Inc. # 277

Submitting an Application to the Foreign-Trade Zones (FTZ or Zone) Board involves a Four-Step process.

• First, all of the letters from the taxing entities required to “sign-off” on the zone request must be received by the applicant and submitted to the Grantee along with the Sponsorship Request letter.

• Second, a Sponsorship Request Letter request must be submitted to the Grantee. • Third, the request must be reviewed for Grantee sponsorship to make sure that the applicant’s

site and operations meets the Federal and Grantee Policy requirements. • Fourth, the Application must be prepared for submission, submitted, and preparations for

Activation must begin.

Step 1: The Sponsorship Request Letter

Requests to submit any kind of Application to the FTZ Board, including requests for Subzone Sponsorship, Production Authority/Notification (Manufacturing or Activity Permit) Magnet Site, Usage Driven Site (Minor Boundary Modification or MBM), must be made to the Grantee in a simple, letter format, including the following information:

1. Name of applicant, address, phone number, facsimile number, and name and title of person responsible and authorized for the Application preparation.

2. Type of designation sought, i.e., Subzone, Usage Driven Site, Magnet Site, Production Notification for manufacturing, Expansion of any of the above types, or Scope Request from the FTZ Board.

3. Letters to and from City staff where you intend this zone to be located demonstrating their understanding of your project.

4. Brief description of proposed site (acreage, square footage, number of buildings). Include an electronic and hard copy layout/diagram of site.

5. For any site request including Production Notification (for a Manufacturing Permit), whether connected with or separate from a site approval request; provide a short description of the company including:

A. product lines that are being applied for, B. the types of imported items to be used, C. prior experience with FTZ by staff, if any.

6. For Magnet Site requests, please include the following specific information: A. A description of the initial activity at or planned for the site, B. A building site plan, showing current and/or future buildings planned for the Park. C. A description of what makes this site unique, including international transportation,

users, use-types, location, etc. 7. Completed Cost-Benefits Analysis or an explanation of definitive benefits the company or site

will yield by receiving Zone status. (Not necessary for Magnet Sites)

8. The letter should include a statement by the applicant that all fees for Application shall be paid promptly, and that the applicant fully intends on activating and/or executing a

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Grantee/Operator or Developer agreement, whichever is applicable.

Step 2: The Review

All requests to submit Applications will go through a review and approval process which uses the following criteria:

1. Operation “qualifies” to become a Zone site or Subzone under federally-established criteria. Operation has also met the “tax entity information” criteria as established by each of the included cities within the Service Area of FTZ 277.

2. Applicant demonstrates ability and commitment to comply with applicable regulations and activate and operate a Zone site/Subzone.

3. Operation demonstrates a clear Foreign-Trade Zone need; and for Production

notification/Manufacturing Permits, the activity meets the minimum public interest criteria, such as sufficient investment, jobs, import substitutions, exports, etc.

4. Operations involving trade-sensitive merchandise must show how FTZ benefits outweigh other

trade considerations on a national and local scale. Any operations with trade sensitive merchandise or a negative comment (as ascertained by the FTZ Board after the first 40 days of the comment period) will be required to submit an additional list of questions answered for a Full Review by the FTZ Board. Some operations may not be viable (due to Commerce Department Policy) and may not qualify for sponsorship.

5. Other criteria as may be set by the Grantee.

The review process will take approximately 30 days and the Sponsorship Request will be approved by the Executive Director (for minor changes) or the full Board (for major additions/modifications) of GMFTZ, the Grantee of FTZ # 277 or a letter will be sent explaining otherwise. The review process shall be conducted as follows:

Applicant submits letter request (Step 1 above) for sponsorship to FTZ Grantee’s Executive Director.

1. Ex. Director reviews and informs the Board of his recommendation within 30 days. Applicant is contacted with results, and if positive, the Grantee will issue an appropriate Letter and an invoice for the Application fee will be sent to the applicants. Applicant must pay the fee prior to the Grantee reviewing the application (Step 3 below).

Step 3: Application Submission

Submission of an Application to the FTZ Board and Activation preparation is a complex process and close attention must be paid to the relevant regulations.

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1. The Application must be prepared consistent with FTZ Board regulations, which have recently changed and are effective 5-1-2012. This Grantee strongly suggests that all Applications should be professionally prepared according to the guidelines established by the FTZ Board. The Grantee recommends that applicants have experienced staff to complete the Application or seek professional expertise in preparation. This will save time and expense. The Grantee can provide a list of qualified firms to any applicant upon request.

2. Grantee will assist in obtaining government support at federal, state, and local levels.

3. Grantee shall review the application and, if complete, submits Application to Foreign-Trade Zones Board in Washington, D.C. on behalf of the applicant. If an additional technical and/or legal review is required, the Grantee will inform the applicant of said cost. If Application is not complete, Grantee will return the Application to the applicant for revision to meet FTZ Board guidelines or strengthen justification arguments.

4. Grantee provides resolution and Application Letter in support of Application.

5. FTZ Board will review the application for 30 days and issue a request for

additional information that will be the responsibility of the applicant to provide the Grantee for review, and then revising the application to meet the FTZ Board’s request for additional information.

6. Approval and designation by FTZ Board.

7. Company prepares for Activation. (See procedures for Activation of Zone sites)

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Procedures for Activation of Zone Sites Greater Maricopa Foreign Trade Zone # 277

In the interest of making Activation as easy as possible for all involved parties, the Grantee established the following procedures for Activation of a Zone site or Subzone site. The procedures involve three steps; Request to the Grantee, Approval by the Grantee and Approval by Customs and Border Protection (CBP).

I. Request Letter to the Grantee for Activation

Before an Activation request can be made to CBP, the Operator must have the Grantee’s concurrence for Activation. The process is for the Applicant to submit a letter to the Grantee, which describes the following:

1. Information about the Applicant and the Zone Processes to take place: 1. Facility size and address. 2. Description of the area to be activated. 3. Activities to be conducted, specifying what products and/or manufacturing HTs

numbers are being used/approved by the FTZ Board (if applicable). 4. Statement that Operator has or will have a system in place to manage the Zone

inventory according to CBP regulations. 5. The letter should include a statement that all fees for Activation shall be paid promptly,

and that a Grantee/Operator agreement will be executed prior to Activation.

2. The Grantee reviews the request and if the Operator has provided all of the information required above, the Grantee will issue an Operator’s Agreement to the applicant, along with an initial invoice for the Grantee’s Activation Fee. Once both are returned to the Grantee ready for signature, the Grantee will allow an Operator desiring to activate to receive the Grantee concurrence letter to the Operator, so that the Operator can begin the Activation process of submitting the background investigation forms to CBP. If the request is rejected for cause, Grantee will advise the reason(s).

3. Letter to the Grantee should be copied to the City/Town EDC Director in the community that the activation will take place, so that the taxing entities can be notified of the Activation request.

II. Approval by Grantee for Activation

The process for executing the Grantee/Operator agreement takes approximately 30 days. The process for having a Grantee/Operator agreement executed and approved by the Grantee, which results in a Final Grantee concurrence letter as well as the signed Operator Agreement is as follows:

1. Applicant submits Request Letter (Step 1 above), 2. Applicant executes the Grantee/Operator Agreement and sends it back to the Grantee, along

with the fee for Activation. 3. Executive Director/President completes his review within 30 days once satisfied that the

agreement is properly executed and the fee(s) have been paid. The Grantee will then issue the

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Grantee Concurrence letter to the Operator.

III. Application to Customs for Activation

1. The applicant must submit an Application to the Port Director for Activation, which, according to 19CFR Part 146.6, should include:

1. A description of all sites included to be activated. 2. A description of any operation to be conducted therein 3. A statement of the general character of the merchandise to be admitted. 4. Completed CBPF5106 5. Customs bond form CBPF301. 6. Physical and procedural security survey. 7. A detailed blueprint of the FTZ site with the area to be activated outlined

in red. 8. A procedures manual detailing the inventory control and recordkeeping

system that will be used in the Zone, including a description of any special procedures.

9. Grantee concurrence letter. 10. Special Request Letter, for any approvable procedures sought. 11. Background check forms on all officers and managing officials. (these

forms may be completed and submitted in advance of the Activation Request)

2. The complete Application requesting Activation of a site in Foreign-Trade Zone No. 277 should be forwarded to the Port Director of CBP. A copy of the Activation Request letter only (and the site outlined in red showing activation area requested) should be emailed to the Grantee upon submission to CBP.

IV. Activation Approval

1. Notification, in writing, from CBP with approval/denial of request will be sent directly to the Operator. At this time, CBP will specify the amount of Operator Bond. Annual fee to the Grantee is due when the CBP letter is received by the Operator.

2. Operator will then obtain the Operator Bond and file with CBP.

Grantee Annual Fee is due and payable upon filing of the Grantee Bond. 3. Operator shall email a copy of the Activation Approval Letter to the Grantee, and to the City/Town EDC Director that has been involved with the applicant from the beginning.

The Grantee will provide support for the applicant in obtaining all approvals necessary to commence Zone operations, which could include interfacing with the CBP and other agencies, as requested by the Applicant.

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For additional information, please contact:

Regional Marketing Facilitator WESTMARC Michelle Rider 14100 North 83rd Avenue, Suite 150 Peoria, AZ 85381 mrider@westmarc.org 623.435.0431, Ext. 204

Zone Technical Marketing Consultant IMS Worldwide Curtis Spencer 309 Henrietta Webster, TX 77598 admin@imsw.com 281.554.9099