Request for Manufacturing Authority within Proposed Foreign-Trade Zone, Caterpillar Inc. (Construction Equipment), Waco, Texas

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the City of Waco (Texas), which has an application pending for Foreign-Trade Zone status, requesting authority on behalf of Caterpillar Inc. (Caterpillar) for the manufacture/processing of off-road articulated dump trucks under FTZ procedures within Site 2 of the proposed FTZ. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on December 12, 2000.

Caterpillar operates a 103-acre facility (110 employees projected) within the proposed foreign-trade zone for the manufacture/processing of off-road articulated dump trucks (imported duty-free under HTSUS heading 8704.10.50). Currently, components purchased from foreign sources comprise up to 48 percent of the finished product's value. The company indicates that the following foreign components will be admitted initially under FTZ procedures: cabs, axles, radial tires, and dump bodies (duty rates on these imported components currently range from 2.5 to 4.0 percent). Caterpillar also indicates that other components will be purchased from abroad as the company progresses with its planned transfer of additional production stages to the Waco site.

This application requests authority to allow Caterpillar to conduct the activity under FTZ procedures, which would exempt the company from Customs duty payments on the foreign components used in export activity. On its domestic sales, the company would be able to choose the duty rate that applies to finished dump trucks (duty free) for foreign components, such as those noted above. The company would also be exempt from duty payments on foreign merchandise that becomes scrap/waste. FTZ procedures would also exempt certain merchandise from certain ad valorem inventory taxes. The application indicates that the savings would help improve the facility's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment on the application is invited from interested parties. Submissions (original and three copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is February 26, 2001. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to March 13, 2001.

A copy of the application and the accompanying exhibits will be available for public inspection at each of the following locations:

Office of the Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce, Room 4008, 14th and Pennsylvania Avenue, NW., Washington, DC 20230

Greater Waco Chamber of Commerce, 101 South University Parks Drive, Waco, TX 76701