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Foreign-Trade Subzone 124B; Application for Expansion; North American Shipbuilding, LLC (Shipbuilding), Houma, LA


An application has been submitted to the Foreign-Trade Zones Board (the Board) by the South Louisiana Port Commission, grantee of FTZ 124, on behalf of North American Shipbuilding, LLC (NAS), operator of Subzone 124B at NAS' shipbuilding facilities in Larose, Houma, and Port Fourchon, Louisiana, requesting authority to expand the subzone include a new site in Houma. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the Board's regulations (15 CFR part 400). It was formally filed on April 8, 2011.

Subzone 124B was approved by the Board in 1991 with authority granted for the construction and repair of oceangoing vessels at NAS' shipyard (Site 1) (14 acres) located at 800 Industrial Park Road on the Intercoastal Waterway in Larose (LaFourche Parish), Louisiana (Board Order 539, 56 FR 56627, 11-6-2001). The subzone was subsequently expanded to include two additional shipbuilding facilities: Site 2 (27 acres)—208 North American Court (“North American Fabricators, LLC”), Houma (Terrebonne Parish); and, Site 3 (26 acres)—106 9th Street (“C-Port, LLC”), Port Fourchon (LaFourche Parish) (Board Order 1021, 64 FR 7854, 2-17-1999). The facilities (1,437 employees) are used to construct, convert, and repair oceangoing vessels for commercial, research, and government customers. Components sourced from abroad include propulsion units, controllable pitch propellers, dynamic positioning systems, safety and firefighting equipment, centrifuges, compartment doors, electronic equipment, and guide rollers (duty rate range: Free-6.0%).

The applicant is now requesting authority to expand the subzone to include a new shipbuilding facility (proposed Site 4) located at 352 Dickson Road (“LaShip, LLC”) in Houma. The application indicates that the facility will conduct production activity similar to that which occurs at NAS' existing subzone facilities. The applicant also requests that the scope of FTZ manufacturing authority be expanded to include additional foreign-sourced components to be used in FTZ production activity. New components to be sourced from abroad (representing 45% of the value of the finished vessels) include: winches, steering gears, motors, generators, structural components of iron, doors, tefrotex (ethylene-vinyl acetate), floor coatings, rock wool/mineral wool, wooden furniture, seal rings, pressure reduction valves, man holes, ladders, pumps, and vibration control dampeners (duty rate range: Free-6.5%). The application indicates that the company will not admit any foreign-origin steel mill products to the proposed subzone site for use in FTZ manufacturing activity. Expanded FTZ procedures could continue to exempt NAS from customs duty payments on the additional foreign-origin components used in production for export. On its domestic shipments, the company would be able to elect the duty rate that applies to finished oceangoing vessels (free) for the additional foreign-origin inputs noted above. Customs duties also could possibly be deferred or reduced on foreign status production equipment. NAS would also be exempt from duty payments on foreign inputs that become scrap during the production process. The production activity under FTZ procedures would continue to be subject to the “standard shipyard restriction” applicable to foreign-origin steel mill products (e.g., angles, pipe, plate), which requires that all applicable duties be paid on such items.

In accordance with the Board's regulations, Pierre Duy of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the Board.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the following address: Office of the Executive Secretary, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230-0002. The closing period for receipt of comments is June 17, 2011. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to July 5, 2011.

A copy of the application will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at the address listed above and in the “Reading Room” section of the Board's Web site, which is accessible via For further information, contact Pierre Duy at or (202) 482-1378.

Dated: April 8, 2011.

Andrew McGilvray,

Executive Secretary.

[FR Doc. 2011-9325 Filed 4-15-11; 8:45 am]


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