WORLD TRADE
ORGANIZATIONG/SCM/N/95/USA
31 October 2003
(03-5811)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
UNITED STATES
The following communication, dated 29 October 2003, has been received from the Delegation
of the United States.
_______________
Enclosed please find the new and full notification from the United States, pursuant to
Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing
Measures, for the 2002 fiscal year (1 October 2001 through 30 September 2002).  Information on
programmes granted or maintained at sub-federal levels in the United States is included in
Attachment I.  This notification also includes information regarding federal domestic agricultural
support programmes for 1999.  Information with respect to federal domestic agricultural support
programmes for 2000 through 2002 is not yet available.G/SCM/N/95/USA
Page 2
The following notification constitutes the United States’ new and full notification.  In general,
the period to which the following information applie s is the 2002 fiscal year (1 October 2001 through
30 September 2002).  Information on programmes granted or maintained at sub-federal levels in the
United States is included in Attachment I.  Th is notification also includes information regarding
federal domestic agricultural support programs for 1999.  Information with respect to federal domesticagricultural support programmes for 2000 through 2002 is not yet available.
As noted in previous US notifications, insofar as the notification obligation is a transparency-
orientated provision that, pursuant to Article 25.7 of  the Agreement, carries no legal weight as to the
actual identification or measurement of a subsidy, it s action ability status, or its trade effects, the
United States has included certain activities in this notification which arguably are not (or are not
always) “specific subsidies” within the meaning of the Agreement.
_______________
AEROSPACE & AERONAUTICS
1
Title:  The Spacecraft Technology Development Programme
Period covered by the notification
The period covered is fiscal year 2002 (September 2001–October 2002).
Policy objective and/or purpose
The Spacecraft Technology Development Programme is aimed at developing long-term
advanced spacecraft technology that benefits both NASA programmes and the satellite
communications industry.  Key technology areas incl ude phased array antennas, batteries, solar cells,
travelling wave tubes, solid state power amplifiers, satellite propulsion and satellite network
technology.
Background and authority
The Spacecraft Technology Development Progra mme is administered by NASA’s Office of
Aerospace Technology.  Legislative authority for the programme derives from the National
Aeronautics and Space Act of 1958, as amended, a nd the US Government’s annual budget and
appropriations legislation.
Form
The technology is developed at NASA laboratories, participating universities and
participating industrial facilities.
To whom and how assistance is provided
Assistance to industry is provided through cost-share contracts and technology know-how
transfer from NASA laboratories.  Assistance to universities is provided through grants.
                                                     
1 As indicated in last year’s notification, the following programmes have been terminated: (1) the
Advanced Subsonic Technology Programme;  (2) the X-33 Programme;  (3) the X-34 Programme;  and (4) the
High Speed Research Programme.G/SCM/N/95/USA
Page 3
Amount
The amount budgeted for fiscal year 2002 was $19.4 million.
Duration
Although this activity was notified as the Spacecraft Technology Development Programme
for ease of identification, the subject research and technology activities are actually sponsored under
the Enabling Concepts and Technology and the Computing, Information, and Communications
Technology Programmes. The duration of the programme is contingent upon annual appropriations of
Congress. This programme has been re-authorized and funded for fiscal year 2003.
Trade effects
In light of the scope and nature of the R&T activity being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
AGRICULTURE
Domestic Assistance Measures (covering fiscal year 1999)
Title: Agriculture Income Support, Marketing Assistance for Wheat, Feed Grains (Corn,
Grain Sorghum, Barley, Oats, and Rye), Upland and Extra Long Staple (ELS) Cotton,
Rice, Oilseeds (Soybeans, Sunflower Seed , Flaxseed, Canola, Rapeseed, Safflower,
Crambe, and Mustard Seed), and Price Support for Peanuts, Milk, Sugar, and Tobacco
Programmes
Period covered by notification
The period covered is fiscal year 1999.
Policy objectives
• Stabilize, support, and protect farm income and prices.
• Help ensure adequate supplies of quality food, feed and fibre.
• Assist in the orderly marketing of farm commodities.
Background and authority
These programmes were authorized by the Commodity Credit Corporation (CCC) Charter
Act, the Agriculture Adjustment Act of 1938, as amended, the Agricultural Act of 1949, as amended,
and the Federal Agriculture Improvement and Reform Act of 1996 ("The 1996 Act").  The
programmes were financed by the CCC and admi nistered by the Farm Service Agency (FSA).
The agricultural appropriations bill for fiscal year 1999, (other legislation where noted)
contained special emergency provisions for crop and economic losses in 1998 and 1999, which are set
out separately below.G/SCM/N/95/USA
Page 4
Programme Descriptions and Actual Expenditures for Period of Notification
(a) Production Flexibility Contract (PFC) Payments.
No changes were made to this programme in the period under notification.Total maximum annual PFC payments were established and fixed by law at the national level
for each of the 7 years of the contract period (see table below).
Table 1
Production Flexibility Contract Payments by Fiscal Year, 1996-1999 (Billion US$)
Year 1996 1997 1998 1999
Amount 5.141 6.320 5.672 5.476
(b) Nonrecourse Marketing Assistance Loans and Lo an Deficiency Payments (LDPs) for Wheat,
Feed Grains, Upland and ELS Cotton, Rice, and Oilseeds.
Nonrecourse commodity loan programmes and repa yment provisions remained in effect for
wheat, feed grains, upland and extra long staple (ELS) cotton, rice, oilseeds (soybeans, sunflower
seed, flaxseed, canola, rapeseed, safflower, and mustard seed).  Loan and LDP programs were added
for crambe (1999).  Except in the case of ELS cotton, producers of loan commodities could forgo
obtaining a loan for the commodity in return for a loan deficiency payment (LDP).  Alternative loan
repayment provisions were also not available for ELS cotton.
Actual total expenditures (combined LDPs, marketing loan gains, and certificate exchange
gains) for 1999 crops totaled $8.0 billion.
Marketing assistance loans for each commodity have a term of 9 months beginning on the
first day of the first month after the month in which the loan is made.  For ELS and upland cotton, the
loans have a term of 10 months beginning on the first day of the month in which the loan is made.
Because the final loan availability date was as late as 31 May 2000 for some 1999-crop
commodities, loan repayments and debt write-off may occur as late as February 2001.  Thus, LDP andmarketing loan program costs may span three fiscal years for a given year's crop.
(c) Peanuts.
No changes were made to the way in which this programme was administered in the period
under notification.
For 1999, the national poundage quota was set at 1,180,000 short tons.
Loan rates for 1999-crop quota and additional peanuts were $610 per short ton ($0.305 per
pound) and $175 per short ton ($0.088 per pound), respectively.
(d) Dairy Products.
No changes were made to the programme in the period under notification.G/SCM/N/95/USA
Page 5
The support price of milk was $9.90 per hundredweight (cwt) for calendar year (CY) 1999.
Actual net expenditures were $182.8 million in FY 1999.
(e) Sugar.
During fiscal year 1999, sugar loans continued to be issued as nonrecourse commodity loans.
Sugar loans were unchanged at 18 cents per pound for raw cane sugar, and 22.90 cents per pound for
refined beet sugar.  In the event of forfeiture, processors are assessed a penalty of 1 cent per pound in
the case of raw cane sugar and 1.364 cents per pound for refined sugar, thus essentially reducing the
effective level of price support by about 1 cent per pound.
First processors of sugar paid marketing assessments to CCC at rates of 0.2475 cents per
pound of raw cane sugar and 0.3376 cents per pound of refined beet sugar for fiscal year 1999.
The sugar program operates under a “ no-cost” provision.  Actual net expenditures on this
program were  –$50.7 million in 1999.
(f) Tobacco.
National avg. loan level ($/lb) National marketing quota ( mil.lb.)
1999-crop            1999-crop
Flue-cured $1.63/lb 668Burley $1.79/lb 453
The tobacco support programme is statutorily mandated to operate at "no net cost" to the
government, and a no-net-cost assessment is imposed on every pound of tobacco marketed.
Actual net expenditures on this program for the 1999-crop were - $113 million.  The negative
sign (-) indicates net revenues from the program.
(g) Special Emergency Provisions of the Ag riculture, Rural Development, Food and Drug
Administration, and Related Agencies, Appropriatio ns Act, 2000 (Pub. L. 106-78), enacted October
 1999.
Crop Loss Assistance
Emergency financial assistance was provided to producers on farms that incurred losses in a
1999 crop due to a disaster in the same manner as assistance provided for losses under the agricultural
appropriations bill for fiscal year 1999.  The losses covered include quantity losses, quality losses, and
severe economic losses due to damaging weather or related condition.
The agricultural appropriations bill for fiscal year 2000, $1.2 billion for this assistance and
later increased by $186 million under the 2000 Omnibus Appropriation Act (Public Law 106-113,
enacted 29 November 1999).  Outlays totaled $1.251 billion.
Mohair Recourse Loans
Recourse marketing assistance loans are continued for mohair produced before or during
fiscal year 2000 in the same manner as under the agricultural appropriations bill for fiscal year 1999.G/SCM/N/95/USA
Page 6
All loans must be repaid, and mohair may not be delivered to CCC in satisfaction of the loan
obligation.
Honey Recourse Loans
Recourse marketing assistance loans are continued for the1999-crop of honey in the same
manner as for the 1998 crop.  Because the loan availability period ends at the end of March following
the end of the crop year, program costs for a single crop year extend over 3 fiscal years.  Net
expenditures for the 1998 - 2000 honey loan programmes were $2.4 million in fiscal year 1999.
Repayment of interest is due when the loan is repaid.  All loans must be repaid, and honey may not be
delivered to CCC in satisfaction of the loan obligation.
Emergency Supplemental Income Support for PFC Contract Holders
Market loss assistance (MLA) was provided to PFC contract holders (individuals or entities)
for the 1999 crop year as a post-hoc programme.  Like with PFC payments, no production of any kind
was required as a condition to receive the MLA payments.
Payments were issued in November 1999 to PFC contract holders who were eligible for fiscal
year 1999 PFC payments. The payments were made proportional to the amount of PFC payments
received by such PFC contract holders in fiscal year 1999.  To receive market loss assistance, an
individual or entity must have been enroll ed in the 7-year PFC programme by 1 August 1996.
The 2000 Act appropriated $5.544 billion for these payments.  Actual payments totalled
$5.466 billion.
Oilseed Payments
Makes payments available to producers of oilseeds that are eligible to receive marketing
assistance loans for the 1999 crop to assist oilseed producers suffering from reduced farm incomes as
a result of large supplies and low prices.  Payments were prorated on the basis of production volumes.
The agricultural appropriations bill for fiscal year 2000, $475 million for these payments, but
this was reduced by $12.425 million to cover administrative costs, bringing the funding level to$462.57 million.  Actual payments totaled $459.96 million in fiscal year 2000.
Livestock Assistance Programme
The agricultural appropriations bill for fiscal year 2000, $200 million (the 2001 fiscal year
Act, subsequently added $10 million) in assistance to livestock producers for losses, due to drought or
other natural disasters, incurred in 1999.  The funds were used to implement a Livestock Indemnity
Program (LIP) and a Livestock Assistance Program (LAP).  The programme level for LAP was
$190.2 million and outlays totaled $188.1 million.  The programme level for LIP was $11 million and
outlays totaled $1.9 million.
Dairy Market (Income) Loss Assistance Programme
Dairy indemnity payments were made available to provide assistance to dairy farmers for
1999 losses.
The agricultural appropriations bill for fiscal year 1999, $125 million for these payments with
$2.3 million deducted for administrative expenses.  Actual payments were $122.7 million.G/SCM/N/95/USA
Page 7
Upland Cotton User Marketing (Step 2 and Step 3) Payments
Amended provisions allow Step 3 import quotas to trigger with greater responsiveness to the
need of US textile manufacturers.
User marketing payments totaled $445 million in FY 2000.
Cottonseed Market Loss Assistance Payments
Made payments available to producers and first-handlers of cottonseed for the 1999 crop.
Funding of $79 million was provided from a portion of residual funds authorized for Public Law
106-78 and Public Law 105-277. These payments totaled $79 million in fiscal year 2000.
Amount
Actual expenditures for each program are presented at the end of each section.
Duration
The policies described were in effect for fiscal year 1999.
Trade effects
It is difficult to determine to what extent, if any, these programs have affected trade, given the
existence of other policy instruments that affect agricultural trade.  Moreover, no-net-cost provisions
and/or payment limitations are in effect for all programmes.
Export Assistance Measures
Title: The Export Enhancement Program (EEP)
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
In June 1991, the US Department of Agriculture (USDA) published programme criteria
governing the selection of proposed sales initiatives under the EEP.  All EEP initiatives are evaluatedbased on five criteria:
(1) Trade Policy Effect B the expected contributions of the initiative in furthering the US
trade policy objectives.
(2) Export Effect B  the potential to develop, expand, or maintain markets for US
agricultural commodities;
(3) Effect on Non-subsidizers B possible effects, if any, on non-subsidizing exporters of
agricultural products;
(4) Subsidy Requirements B the expected benefits compared with expected costs of the
initiative;  andG/SCM/N/95/USA
Page 8
(5) Market Development B EEP can be used for market development purposes.
The overall programme level for EEP, as well as bonus awards under individual EEP
initiatives, will be maintained at the minimum levels  necessary to achieve the expected benefits of the
programme's export expansion objectives, as well as the anticipated long-term benefits frommultilateral agricultural trade reform.  Together, th ese criteria are considered in the selection of
initiatives targeting specific commodities and countries that will best meet the program's trade policy
and export expansion objectives.
Effective 1 July 1995, the terms of the Uruguay Round Agreement on Agriculture established
annual ceilings by commodity with respect to maximum quantity and budgetary expenditures
permitted for export subsidies.
Background and authority
The EEP has operated under various authorities since May 1985.  Terms and conditions
applicable to all export initiatives are contained in the U.S. Code of Federal Regulations at7 CFR 1494.
Form
Cash bonuses paid to participating agricultural exporters.
To whom and how assistance is provided
The EEP works as follows:
(1) The General Sales Manager, acting as Vice President of the Commodity Credit
Corporation (CCC), issues a press rele ase (Program Announcement) announcing an
EEP initiative for a specific country or countries or regions. The Programme
Announcement is followed by an invitation for offers from exporters to obtain a
specific dollar and cents bonus in connection with the sale of an eligible commodity
to the target countries.
(2) Interested exporters submit information to qualify as participants under the
programme.
(3) The exporter must make a commercial sale of the eligible commodity under either a
world-wide tender or a US-origin tender, or a negotiated sale with a buyer as a resultof a tender
(4) The exporter then makes an offer to the CCC to establish the amount of the CCC
bonus in dollars and cents necessary to make the eligible commodity competitive
with the same commodity bein g offered for sale from other exporting countries under
a world-wide tender, and furnishes a performance certificate to the CCC.
(5) The General Sales Manager determines  if the CCC bonus makes the exporter's
commercial sale of the eligible comm odity competitive with the same commodity
offered for export from other exporting countries and if the offer meets therequirements of the programme.
(6) The General Sales Manager notifies successful exporters and sends a written
acceptance of the offer.G/SCM/N/95/USA
Page 9
(7) The exporter exports the eligible commodity against the sales contract.
(8) The exporter furnishes proof of export and requests payment of the CCC bonus.
(9) The CCC issues payment to the exporter for the exact amount of the CCC bonus by
multiplying the CCC bonus specified in the agreement by the net quantity of the
commodity exported.
(10) The General Sales Manager agrees to a cancellation of the performance security, in
whole or in part, provided the exporter has furnished evidence that the exports arrived
in the designated country.
Amount
No disbursements were made in fiscal year 2002.
Duration
Section 301 of the Agricultural Trade Act of 1978, as amended, authorizes spending through
30 September 2007.
Trade effects
The CCC bonuses offered are intended to enable US exporters to compete at commercial
prices in selected foreign markets.  The effect of the programme is to enable exporters to offer prices
that are competitive with those being offered by ot her countries' exporters in these selected foreign
markets.
Title: The Dairy Export Incentive Program (DEIP)
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
In June 1991, USDA published programme criteria governing the selection of commodities
and countries under the DEIP.  These criteria take into account:
(11) Trade Policy Effect -- the expected contribution of the initiative in furthering the US
trade policy objectives.
(12) Export Effect -- the potential to develop, expand, or maintain markets for US
agricultural commodities;
(13) Effect on Non-subsidizers B the possible effects on non-subsidizing exporters of
agricultural products;  and
(14) Subsidy Requirements -- the expected benefits compared with the expected costs of
the initiative.G/SCM/N/95/USA
Page 10
Effective 1 July 1995, the terms of the Uruguay Round Agreement on Agriculture established
annual ceilings by commodity with respect to maximum quantity and budgetary expenditures
permitted for export subsidies.  Section 148 of the Federal Activities Inventory Act authorized the use
of DEIP to any destination in the world for th e purpose of market development provided those
shipments are not otherwise restricted by US law.
Background and authority
The Farm Security and Rural Investment Act of 2002 amended Section 153 of the Food
Security Act of 1985 to mandate the CCC operate the DEIP through 31 December 2007.
To whom and how assistance is provided
Payments may be made in cash, CCC-owned commodities, or generic certificates on a bid
basis to entities that sell US dairy products for export.  Export sales under the programme must be in
addition to, and, to the extent practicable, not displa ce, commercial export sales of US dairy products.
Eligible dairy products, in bulk, are butter, butter oil, anhydrous milk fat, nonfat dry milk, whole milkpowder, cheddar cheese, mozzarella cheese, cream cheese, feta cheese, and Gouda cheese.
Amount
2
In fiscal year 2002, the budgetary outlay for nonfat dry milk was $53,683,495, based on a
quantity of 68,201 metric tons and the budgetary outlay for cheese was $931,775, based on a quantity
of 3,031 metric tons.
Duration
Section 153 of the Food Security Act of 1985, as amended, authorizes the program through
31 December 2007.
Trade effects
The CCC bonuses offered are intended to enable US exporters to compete at commercial
prices in selected foreign markets.  The effect of the programme is to enable exporters to offer prices
that are competitive with those being offered by ot her countries' exporters in these selected foreign
markets.
Title: Mandated Export Sales of Dairy Stocks
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose; Background and authority; Form; To whom and how assistance is
provided
Section 1163 of the Food Security Act of 1985 created a mandated minimum annual level of
export sales of CCC-owned dairy stocks.  Mandated minimum sales were eliminated by the Uruguay
                                                     
2 Please note that notifications to the Committee on Agriculture report quantity on a July-June year
basis and budgetary outlays on a fiscal year basis.G/SCM/N/95/USA
Page 11
Round Agreements Act of 1994.  The Secretary of Agriculture maintains discretionary authority to
sell CCC-owned dairy stocks into the export market.
Amount
There were no export sales of CCC-owned dairy products in fiscal year 2002.
Duration
As indicated above, this programme is no longer mandatory.  However, the Secretary has the
discretionary authority to sell CCC-owned dairy stocks into the export market.
Trade effects
There have been no sales under this programme in recent years.
Other Agricultural Programmes3
Title: Expensing of Certain Capital Outlays Related to Agriculture
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To promote soil and water conservation.
Background and authority
Section 175 of the Internal Revenue Code (covering soil and water conservation expenses),
enacted as part of the Revenue Act of 1954, and section 180 (covering fertilizer expenses), enacted in
1960 as part of Public Law 86-779.
Form
Income tax concession.
To whom and how assistance is provided
Farmers, except for certain farm corporations and partnerships, are allowed to deduct certain
expenditures for fertilizer and other materials used to enrich or condition farmland, as well as for soil
and water conservation measures.  Expensing is allowed, even though these expenditures are for
inventories held beyond the end of the year, or for capital improvements that would otherwise be
capitalized.  The deduction for conservation expenses is limited annually to 25 per cent of thetaxpayer's gross income from farming.
Amount
The revenue loss was $170 million in 2002.
                                                     
3 All the programmes in this section are tax-related,  authorized under the US Internal Revenue Code.G/SCM/N/95/USA
Page 12
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
Title: Expensing of Multiperiod Livestock and Crop Production Costs
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To ease record-keeping for small farm businesses.
Background and authority
Section 263A of the Internal Revenue Code, enacted as part of the Tax Reform Act of 1986.
Form
Income tax concession.
To whom and how assistance is provided
The production of livestock and crops with a production period of two years or less is
exempted from the uniform capitalization rules.  Farmers producing any goods for sale with a
production period of two years or less may elect not to capitalize costs.
Amount
The revenue loss was $130 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/95/USA
Page 13
Title: Treatment of Loans Forgiven Solvent Farmers as if Insolvent
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To address certain consequences of farm credit crises.
Background and authority
Sections 108 and 1017 of the Internal Revenue Code, enacted as part of the Tax Reform Act
of 1986.
Form
Income tax concession.
To whom and how assistance is provided
Farmers are granted special tax treatment by being forgiven the tax liability on certain
forgiven debt.  Normally, the amount of loan forgiveness is accounted for as a gain (income) of the
debtor, who must either report the gain or reduce his recoverable basis in the property to which the
loan relates.  If the debtor elects to reduce basis and the amount of forgiveness exceeds his basis on
the property, the excess forgiveness is taxable.  However, in the case of insolvent (bankrupt) debtors,
the amount of loan forgiveness never results in an income tax liability.  Farmers with forgiven debt
are considered insolvent for tax purposes, and thus qualify for income tax forgiveness.  This relief
applies only if at least 50 per cent of the taxpayer's gross receipts for the three tax years preceding the
tax year in which the discharge of indebtedness occurs is attributable to farming.
Amount
The revenue loss was $10 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title:  Capital Gains Treatment of Certain Agricultural Income
Period covered by the notification
The period covered is the fiscal year 2002.G/SCM/N/95/USA
Page 14
Policy objective and/or purpose
To ensure that when farmland is sold, any immature, unharvested crops growing on the land
are treated for tax purposes as part of the land and not as personal property ready for sale to
customers.
Background and authority
Section 1231 of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Certain agricultural income, which would normally be taxed as ordinary income, such as
receipts from the sale of unharvested crops sold together with farmland, can be treated as capital
gains.  Income tax rates for individuals on ordinary income ranged from 10 percent to 38.6 per cent in
2002.  For individual taxpayers, long-term capital gains are taxed separately from other income,
generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least five years and
otherwise eligible for the 10 per cent tax rate are taxed at an 8 percent rate in 2002.
Amount
The revenue loss was $1,010 million in 2002.
Duration
Indefinite; this has been a permanent provision since at least 1954.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Exemption from Excise Tax for Tobacco Products Supplied to Their Employees by
Tobacco Product Producers
Period covered by notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To permit producers of tobacco products to supply their workers with free cigarettes and other
tobacco products.
Background and authority
Section 5704(a) of the Internal Revenue Code.G/SCM/N/95/USA
Page 15
Form
Exemption from otherwise applicable excise tax.
To whom and how assistance is provided
Producers of tobacco products may furnish limited quantities of tobacco products for use or
consumption by employees without payment of tax.
Amount
The subsidy per unit amounts to the following: (I ) for cigarettes, $19.50 per thousand; (ii) for
cigars, $1.828 to $48.75 per thousand (depending on size); (iii) for snuff, $0.585 per pound; (iv) for
chewing tobacco, $0.195 per pound; and (v) for pipe tobacco and roll-your-own tobacco,  $1.0969 per
pound.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
ENERGY & FUELS
(ENERGY DEVELOPMENT, STORAGE AND TRANSPORTATION
& OTHER RELATED SECTORS)
Title: Renewable Energy Resources (2002)
Period covered by the notification
The period covered by the notification is fiscal year 2002.
Policy objective and/or purpose
To lead the national effort to develop renewable energy technologies, to accelerate acceptance
and use of renewable energy technologies and to improve the Nation’s overall economy, energy
security, and environmental health through the development of clean, competitive power
technologies.
Background and authority
This programme is administered by the Department of Energy’s (DOE) Office of Energy
Efficiency and Renewable Energy (EERE).  Legislative authority derives from:
P.L. 93-409,   “Solar Heating and Cooling Demonstration Act” (1974)
P.L. 93-410,   “Geothermal Energy Research, Development and Demonstration Act” (1974)
P.L. 94-163,   “Energy Policy and Conservation Act” (EPCA) (1975)
P.L. 94-385,   “Energy Conservation and Product Act” (ECPA) (1976)G/SCM/N/95/USA
Page 16
P.L. 95-91,     “Department of Energy Organization Act” (1977)
P.L. 95-618,   “Energy Tax Act of 1978"
P.L. 95-619,   “National Energy Cons ervation Policy Act” (NECPA) (1978)
P.L. 95-620,   “Powerplant and Industrial Fuel Use Act of 1978"
P.L. 96-294,   “Energy Security Act” (1980)P.L. 100-12,   “National Appliance Energy Conservation Act of 1987"
P.L. 100-615, “Federal Energy Management Improvement Act of 1988"
P.L. 101-218, “Renewable Energy and Energy Effici ency Technology Competitiveness Act of 1989"
P.L. 101-549, “Clean Air Act Amendments of 1990"
P.L. 101-575, “Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990"
P.L. 104-271, “Hydrogen Future Act of 1996"
P.L. 106-224, “Biomass Research and Development Act of 2000"
Annual appropriations are contained in the Energy and Water Development Appropriations
Act for Fiscal Year 2002 and the Department of the Interior and Related Agencies Appropriations Act
for Fiscal Year 2002.
Form
Grants, cooperative agreements, cooperative research and development agreements
(CRADAs)4 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programme is determined through various competitive procedures, which
are open to all eligible private parties.
Amount
Fiscal year 2002 annual appropriations (approximate dollars in millions)
Total, Renewable Energy Resources                 357.4
Sub-Programmes
Biomass/Biofuels Energy Systems        88.0
Wind Energy Systems         38.6
Solar Energy         89.4
Geothermal Technology Development Programme          27.3
Hydrogen Research         29.2
Hydropower             5.0
Electric Energy Systems and Storage         70.6
                                                     
4 The term “CRADA” has a specific meaning as a result of legislation and regulations developed to
implement a variety of US technology promotion and co mmercialization programs.  Generally, a CRADA is a
negotiated, contractual agreement between a federal agency or agency laboratory and a private sector partner or
partners (including universities and independent resear ch institutions) in which the parties agree on the
designation of personnel, facilities, equipment and other resources to a collaborative R&D activity, as well as tothe disposition of any intellectual property which the R&D yields.  A CRADA is just one of several legalinstruments or mechanisms through which government agencies work in partnership with business andacademia in pursuit of shared or complementary R&D objectives.  Examples of other such instruments are
“cooperative agreements,” contracts and grants.G/SCM/N/95/USA
Page 17
High Temperature Superconducting R&D
Energy Storage Systems
International Renewable Energy Programme          2.8
Renewable Energy Production Incentive Programme        3.7
Renewable Indian Energy Resources        2.8
Duration
The Renewable Energy Resources program is not subject to any fixed completion date.  Its
continuation is contingent upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: Energy Conservation Programmes - Transportation Sector
Period covered by the notification
The period covered by the notification is fiscal year 2002.
Policy objective and/or purpose
To support development and use of advanced vehicle technologies and fuels which reduce
demand for petroleum, decrease emissions of criteria air pollutants and greenhouse gases, and toenable the US transportation industry to sustain a strong, competitive position in domestic and world
markets.
Background and authority
This programme is administered by DOE’s Office of Energy Efficiency and Renewable
Energy Office of Transportation Technologies (EER E-OTT).  Legislative authority derives from:
P.L.93-275,    “Federal Energy Administration Act of 1974"
P.L. 93-577,   “Federal Nonnuclear Energy Research and Development Act of 1974"
P.L. 94-163,   “Energy Policy and Conservation Act” (1975)
P.L. 94-413,   “Electric and Hybrid Vehicle Research, Development and Demonstration Act of 1976"P.L. 95-91,     “Department of Energy Organization Act” (1977)
P.L. 95-238,   “Title III - Automotive Propulsi on Research and Development Act of 1978"
P.L. 96-512,   “Methane Transportation Researc h, Development and Demonstration Act of 1980"
P.L. 100-494, “Alternative Motor Fuels Act of 1988"
P.L. 102-486, “Energy Policy Act of 1992"
Annual appropriations are contained in the Depa rtment of the Interior and Related Agencies
Appropriations Acts for Fiscal Year 2002.G/SCM/N/95/USA
Page 18
Form
Assistance under the programme is provided through grants, cooperative agreements,
CRADAs5 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programme is determined through various competitive procedures, which
are open to all eligible private parties.
Amount
Fiscal Year 2002 Annual Appropriations (approximate dollars in millions)
Total, Energy Conservation, Transportation Sector         242.5
Sub-Programmes
Vehicle Technologies R&D         155.1
Hybrid Systems R&D
Fuel Cell R&DAdvanced Combustion Engine R&D
Electric Vehicle R&D
Heavy Vehicle Systems R&D
Cooperative Automotive Research for Advanced Technologies
Fuels Utilization           25.9
Advanced Petroleum Based Fuels (APBF)
Alternative Fuels
Materials Technologies           40.3
Propulsion Materials Technology
Automotive Lightweight MaterialsHigh Temperature Materials Laboratory
Technology Deployment           15.2
Cooperative Programs with States 2.0
Energy Efficiency Science Initiative 4.0
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
                                                     
5 See footnote 4, above.G/SCM/N/95/USA
Page 19
Title:  Energy Conservation Programs – Buil ding Technology, State and Community Sector
Period covered by the notification
The period covered by the notification is fiscal year 2002.
Policy Objective and/or purpose
In partnership with industry and government, the Office of Energy Efficiency and Renewable
Energy, Office of Building Technology, State, a nd Community Programmes (EERE-BTS) develops,
promotes, and integrates energy technologies and practices that make buildings more efficient,
productive, and affordable.
Background and Authority
Legislative authority derives from:
P.L. 94-163,   “Energy Policy and Conservation Act” (1975)
P.L. 94-385,   “Energy Conservation and Production Act” (1976)
P.L. 95-91,     “Department of Energy Organization Act (1977)
P.L. 95-618,   “Energy Tax Act of 1978"
P.L. 95-619,   “National Energy Conservation Policy Act” (1978)P.L. 95-620,   “Power Plant and Industrial Fuel Use Act of 1978"
P.L. 96-294,   “Energy Security Act” (1980)
P.L. 100-12,   “National Appliance Energy Conservation Act of 1987"
P.L. 100-615, “Federal Energy Management Improvement Act of 1988"
P.L. 102-486, “Energy Policy Act of 1992"
Annual appropriations are contained in the Department of the Interior and Related Agencies
Appropriations Act for Fiscal Year 2002.
Form
Assistance under the programmes is provided through grants, cooperative agreements,
CRADAs6 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programmes is determined through various competitive procedures, which
are open to all eligible parties.
Amount
Fiscal Year 2002 Annual Appropriations (approximate dollars in millions)
Total, Building Technology, State and Community Sector            365.2
Sub-programmes
Building Research and Standards              62.4
                                                     
6 See footnote 4 above.G/SCM/N/95/USA
Page 20
Technology Road Maps & Competitive R&D
Residential Buildings Integration Programme
Commercial Buildings Integration Programme
Equipment, Materials, and Tools Programme
Building Technology Assistance         296.8
Weatherization Assistance Programme
State Energy Programme
Community Energy Programme
Energy Star Programme
Cooperative Programmes with the States 2.0
Energy Efficiency Science Initiative 4.0
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: Energy Conservation – Industry Sector
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To improve the energy efficiency, environmental performance, and productivity of
energy-intensive industries by developing and delivering advanced science and technology options.
Background and Authority
These programmes are administered by the Department of Energy, Office of Energy
Efficiency and Renewable Energy, Office of Industrial Technologies (OIT).  Legislative authorityderives from:
P.L. 102-486, "Energy Policy Act of 1992"
P.L. 94-163,   "Energy Policy and Conservation Act" (EPCA) (1975)
P.L. 94-385,   "Energy Conservation and Production Act" (ECPA) (1976)
P.L. 95-91,     "Department of Energy Organization Act" (1977)
P.L. 95-618,   "Energy Tax Act of 1978"
P.L. 95-619,   "National Energy Cons ervation Policy Act" (NECPA) (1978)
P.L. 95-620,   "Powerplants and Industrial Fuel Use Act of 1978"
P.L. 96-294,   "Energy Security Act" (1980)P.L. 100-12,   "National Appliance Energy Conservation Act of 1987"
P.L. 100-615, "Federal Energy Management Improvement Act of 1988"
P.L. 101-218, "Renewable Energy and Energy Efficiency Technology Competitiveness Act of 1989"
P.L. 101-549, "Clean Air Act Amendments of 1990"G/SCM/N/95/USA
Page 21
P.L. 101-575, "Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990"
P.L. 93-577,   "Federal Non-Nuclear Ener gy Research and Development Act of 1974"
P.L. 106-224, "Biomass Research and Development Act of 2000"
Annual appropriations are contained in the Depa rtment of the Interior and Related Agencies
Appropriations Act for Fiscal Year 2002.
Form
Assistance under the programmes is provided through grants, cooperative agreements,
CRADAs7 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programmes is determined through various competitive procedures, which
are open to all eligible private parties.
Amount
Fiscal Year 2002 Annual Appropriations (approximate dollars in millions)
Total, Industrial Sector 131.7
Sub-programmes
Industries of the Future (Specific)   72.6
Forest and Paper Products
Steel Vision
Aluminum Vision
Metal Casting Vision
Glass Vision
Chemicals Vision
Petroleum VisionMining Vision
Agriculture Vision
Supporting Industries
Industries of the Future (Crosscutting)   53.1
Engineered Ceramics/CFCC’s
Advanced Industrial Materials
Industrial Materials for the Future
Combustion
Sensors & ControlsInventions and Innovation
NICE  3
Industrial Technical Assistance
Cooperative Programmes with States   2.0
Energy Efficiency Science Initiative   4.0
                                                     
7 See footnote 4 above.G/SCM/N/95/USA
Page 22
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: Fossil Energy Research and Development
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
The programme’s goal is to ensure that economic benefits from moderately priced fossil fuels
and a strong domestic industry, which creates domestic jobs, are compatible with the expectation for
exceptional environmental quality and reduced energy security risks.
Background and authority
The programme is administered by the DOE Office of Fossil Energy.  Legislative authority
for the programme derives from Title XX, Section 2011 of the Energy Policy Act of 1992 and theDepartment of the Interior and Related Agencies Appropriation Act for Fiscal Year 2002.
Form:  to whom and how assistance is provided
To ensure that Federally funded research and development technologies and analyses are
relevant to market and public needs, and transferred to commercial applications, the Office of Fossil
Energy participates in joint partnerships with in dustry utilizing mechanisms such as cost-shared
contracts and CRADAs.8
Amount
Fiscal Year 2002 Appropriations (approximate dollars in millions)
Total, Fossil Energy Research and Development 497.9
SubprogrammesPresident’s Clean Research Initiative 333.0
Clean Coal Power InitiativeCentral Systems
Sequestration
Fuels
Advanced Research
                                                     
8 See footnote 4, above.G/SCM/N/95/USA
Page 23
Other Power Systems  56.7
Distributed Generation Systems
Natural Gas Research  44.0
Petroleum – Oil Technology  56.2
Cooperative Research and Development    8.0
Duration
While it is not subject to any fixed completion date, the programme’s continuation is
contingent upon ongoing annual appropriations by the Congress.
Trade effects
In light of the scope and nature of the activities being assisted, it is not possible to determine
what, if any, trade effects may ever result from this programme.
Title: The Clean Coal Technology Demonstration Programme
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
The general purpose of the Clean Coal Technology Demonstration Programme is to
demonstrate a new generation of advanced coal-based technologies which significantly advance the
efficiency and environmental performance of either new or existing facilities such that the most
promising technologies can successfully be applied toward commercial and operational uses.
Background and authority
This programme is implemented by the Office of Fossil Energy at the DOE.  The legislation
authorizing the programme is found in Public Law 99-190, the Joint Resolution Making Further
Continuing Appropriations for Fiscal Year 1986 and for Other Purposes (19 December 1985).  Annual
funding has been available under appropriations laws for the Department of the Interior and Related
Agencies enacted in various years since 1985.  The programme is authorized by the Department of
Energy Organization Act.
Form
Participation in the programme is primarily implemented through cost-shared cooperative
agreements.  The DOE reimburses participants for a fixed percentage of allowable costs, as specifiedin each agreement.  DOE’s contribution to a projec t cannot exceed 50 per cent of allowable costs, and
the DOE cost share of each successful demonstration project is later repaid through a 20-year
recoupment plan based on future commercial sales of the technology.
To whom and how assistance is provided
Assistance to coal mining/processing/refining firms and related equipment/technology
suppliers is determined on the basis of competitively assessed proposals.  The 38 active projects in the
Program have a total cost of $5,203,707,000, of which DOE has committed $1,755,832,000.  By law,G/SCM/N/95/USA
Page 24
the DOE cost share is restricted to no more than 50 percent of total project costs.  However, the
program has achieved significantly greater leverage of the Federal investment with an overall average
non-DOE cost share of 66 per cent.
Amount
In fiscal year 2002, programme funding for operating expenses was $42,463,000.  The
programme operates with previously appropriated funding.
Duration
Programme assistance for the last project authorized by this program was awarded in fiscal
year 1996. R&D activities conducted under all projects are scheduled to be completed by 2007.
Trade effects
In light of the scope and nature of the technology activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
OTHER ENERGY AND FUELS9
Title: Expensing of Exploration and Development (E&D) Costs for Oil, Gas and other Fuels
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the development of domestic oil, gas and coal resources.
Background and authority
In the case of successful investments in domestic oil and gas wells, intangible drilling costs,
such as wages, the costs of using machinery for grading and drilling and the costs of unsalvageable
materials used in constructing wells, may be expensed for tax purposes rather than amortized over the
productive life of the property.  Integrated oil companies may currently deduct only 70 per cent of
such costs and amortize the remaining 30 percent over five years.  The same rule applies to the
exploration and development costs of surface stripping and the construction of shafts and tunnels for
other fuel minerals.  The expensing provision is authorized under sections 263(c), 291, 616-617,57(2), and 1254 of the Internal Revenue Code of 1986.  The expensing of intangible drilling costs was
originally established in a 1916 Treasury regulation with the rationale that such costs were ordinary
operating expenses.  Limitations on expensing for integrated oil companies were applied in 1976 and
later years.
Form
Income tax concession.
                                                     
9 The programmes in this section are tax-related, authorized under the US Internal Revenue Code.G/SCM/N/95/USA
Page 25
To whom and how assistance is provided
Fuel mineral producers are permitted accelerated deductions from taxable income.
Amount
The revenue loss was $150 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Excess of Percentage Over Cost Depletion for Oil, Gas and Other Fuels
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To stimulate the supply of oil and gas, compensate producers for the high risks of
prospecting, and relieve the tax burdens of small-scale producers.
Background and authority
Independent ( i.e., non-integrated) fuel mineral producers and royalty owners are generally
allowed to take percentage depletion deductions rather than cost depletion on limited quantities of
output for tax purposes.  Under cost depletion, outlays are deducted over the productive life of theproperty based on the fraction of the resource extracted.  Under percentage depletion taxpayers deduct
a percentage of gross income from mineral production at rates of 15 per cent for oil, gas and oil shale,
and 10 per cent for coal.  The deduction is limited to 50 per cent of net income from the property,
except for oil and gas where the deduction can be 100 percent of net property income.  For domestic
production from marginal wells, the 100 per cent of net income limitation has been suspended fortaxable years before 1 January 2004.  Additionally, the percentage depletion deduction for all oil and
gas properties may not exceed 65 per cent of the taxpayer's overall income and is limited to 365,000
barrels per year per taxpayer.  Production from geothermal deposits is eligible for percentage
depletion up to 65 per cent of net income, but with no limit on output and no limitation with respect to
qualified producers.  Unlike depreciation or cost depletion, percentage depletion deductions canexceed the cost of the investment.
Percentage depletion is authorized under sections 611-613, 613A, and 291 of the Code.
Percentage depletion for oil and gas goes back to 1918 or before and was extended to coal and most
other minerals in 1932.  The Tax Reduction Act of 1975 eliminated the percentage depletionallowance for major oil and gas companies and reduced the rate for independents to 15 per cent for
1984 and beyond.G/SCM/N/95/USA
Page 26
Form
Income tax concession.
To whom and how assistance is provided
Independent fuel mineral producers and royalty owners are permitted deductions from taxable
income for percentage depletion.
Amount
A deduction from income is allowed for the greater of cost or percentage depletion.
Percentage depletion is 15 per cent of revenue for independent (smaller) oil and gas producers and
10 per cent for coal producers.  The revenue loss was $610 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Alternative Fuel Production Credit
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To provide incentives for the private sector to increase the development of alternative
domestic energy resources because of concern over oil import dependence and national security.
Background and authority
A tax credit of $3 per barrel (in 1979 dollars) of oil-equivalent production is provided
for several forms of alternative fuels. The credit begins to phase out if the annual average unregulated
wellhead price per barrel of domestic crude oil exceeds $23.50 (in 1979 dollars).  The credit is
authorized under section 29 of the Internal Revenue Code and was instituted as part of the Crude Oil
Windfall Profit Tax Act of 1980.
Form
Income tax concession.
To whom and how assistance is provided
Producers and royalty owners of qualifying production are permitted credits against federal
income tax.G/SCM/N/95/USA
Page 27
Amount
The revenue loss was $1.6 billion in 2002.
Duration
For most qualifying fuels, the production tax credit was available through 2002, provided that
the wells were drilled before 1993.  For gas produced from biomass, and synthetic fuels produced
from coal or lignite, the credit is available through 2007, provided that the facility is placed in service
before July 1998.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Capital Gains Treatm ent of Royalties on Coal
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the development of the domestic coal industry.
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Internal
Revenue Code.   When the capital gain rate is below the re gular tax rate, the owner is not entitled to
percentage depletion provided in section 613 of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Sales of certain coal under royalty contracts can be treated as capital gains for tax purposes.
Income tax rates for individuals on ordinary income ranged from 10 per cent to 38.6 per cent in 2002.
For individual taxpayers, long-term capital gains are taxed separately from other income, generally at
10 per cent and 20 per cent rates.  Gains on assets that are held at least five years and otherwise
eligible for the 10 per cent tax rate are taxed at an 8 per cent rate in 2002.
Amount
The revenue loss was $100 million in 2002.
Duration
Indefinite.G/SCM/N/95/USA
Page 28
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Enhanced Oil Recovery (EOR) Credit
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To increase the domestic supply of oil and to enhance the energy security of the
United States.
Background and authority
An EOR tax credit is provided equal to 15 percent of the taxpayer's costs for tertiary oil
recovery on projects in the United States.  Qualifying costs include tertiary injectant expenses,
intangible drilling and development costs on a qualified enhanced oil recovery project, and amountsincurred for tangible depreciable property.  Thus, this credit encourages use of tertiary methods in
situations where it would not be profitable otherwise.  The EOR credit may not exceed taxpayer's net
income tax in excess of 25 percent of net regular tax liability above $25,000 or the tentative minimum
tax.  The EOR tax credit is authorized under section 43 of the Code and was enacted as part of the
Omnibus Budget and Reconciliation Act of 1990.
Form
Income tax concession.
To whom and how assistance is provided
Petroleum producers and royalty holders applying approved tertiary petroleum recovery
methods receive a credit against federal income tax.
Amount
The revenue loss was $330 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/95/USA
Page 29
Title: New Technology Credit: Solar and Geothermal Energy Facilities
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To reduce US consumption of oil and natural gas by encouraging the commercialization of
renewable energy technologies and to enhance national security.
Background and authority
A tax credit of 10 per cent of the basis of each energy property placed in service during any
taxable year is available for investment in solar and geothermal energy facilities.  The tax credit is
authorized by sections 46 and 48 of the Internal Revenue Code.  Business tax credits were part of the
Energy Tax Act of 1978 and were altered in subsequent legislation.  The Energy Policy Act of 1992made the credit permanent.
Form
Income tax concession.
To whom and how assistance is provided
The credit reduces income taxes for non-utility taxpayers that invest in qualifying equipment.
Amount
The annual revenue loss was less than $100 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Alcohol Fuel Credit and Partial Exemption from Federal Excise Tax on Gasoline
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the substitution of alcohol fuels produced from renewable sources for gasoline
and diesel fuel.G/SCM/N/95/USA
Page 30
Background and authority
This provision exempts gasohol, a motor fuel composed of at least 10 percent alcohol
(including methanol) which is not produced from petroleum, natural gas, coal, or peat, from 5.3 cents
(6.0 cents for methanol) of the 18.4 cents per gallon Federal excise tax on gasoline.  Smallerexemptions are allowed for motor fuel with lower alcohol content.  There is a corresponding income
tax credit for alcohol used as a fuel in applications where the excise tax is not assessed.  This credit is
equal to 53 cents per gallon for alcohol (60 cents for methanol) used as a  fuel.  In addition, small
producers of ethanol are eligible for a 10 cent per gallon income tax credit.  The credit is included in a
taxpayer’s income.
The alcohol fuel credits are authorized by sections 38 and 40 of the Internal Revenue Code.
The excise tax exemptions are authorized by sections 4041, 4081, and 4091 of the Code.  The alcohol
fuels mixture credit and the pure alcohol fuels credit were enacted as part of the Crude Oil Windfall
Profit Tax of 1980, at the rate of 40 cents per gallon for alcohol that was 190 proof or more, and
30 cents per gallon for alcohol between 150 and 190 proof.  The credits were increased in 1982 and
1984.  The Omnibus Reconciliation Act of 1990 reduced the credits to 54 cents and 40 cents forethanol and ethanol blends and introduced the 10-cent-per-gallon income tax credit for small ethanol
producers. In 1998, the Transportation and Equity Act for the 21 st Century reduced the alcohol fuel
credit and excise tax exemption, as described above.
Form
Income tax concession and reduced excise tax rates on fuels containing alcohol.
To whom and how assistance is provided
The credits reduce federal income tax of qualifying producers and blenders.  The seller of
alcohol fuels containing at least 85 per cent alcohol derived from natural gas pays the applicable,
lower motor fuel excise tax rate.  The blender of ethanol-based fuels (and methanol not produced from
petroleum, natural gas, coal or peat) who mixes ethanol or another qualified alcohol with gasoline or
diesel fuel to produce gasohol or diesohol may purchase gasoline or diesel fuel from a seller at a
terminal rack at excise tax-reduced rates or receive a refund if he later mixes fully taxed fuels with
alcohol; these mixtures must contain at least 5.7 per cent alcohol to enjoy the favorable excise taxtreatment.
Amount
The alcohol mixture (or blender’s) credit and the pure alcohol fuel credit is 53 cents per
gallon of ethanol (60 cents for methanol) of at least 190 proof, and 39.26 cents per gallon of alcohol
between 150 and 190 proof (45 cents for methanol).  The 53 cents credit for ethanol is reduced to
52 cents for the period 2003-2004 and the 39.26 cents credit for ethanol is reduced to 38.52 cents for
the period 2003-2004.  The small ethanol producer credit is 10 cents per gallon of ethanol.  The
annual revenue loss was $30 million in fiscal year 2002.
In lieu of the blender’s credit, fuel ethanol bl enders may claim an excise tax exemption.  The
annual revenue loss for the excise tax exemption was $1,070 million in fiscal year 2002.
Duration
The credits expire at the end of the year 2007; the reduced excise tax rates expire
30 September 2007.G/SCM/N/95/USA
Page 31
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title :Credits for Electricity Production from Wind, Biomass, and Poultry Waste
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the development and utilization of electric generating technologies that use
specified renewable energy resources, as opposed to conventional fossil fuels.
Background and authority
Taxpayers are allowed a 1.5 cents credit (adjusted for inflation) per kilowatt hour for
electricity produced from qualified wind energy, "closed-loop" biomass and poultry waste.  The creditis indexed for inflation after 1992 and was 1.8 cents per kilowatt hour in 2002.  The electricity must
be produced from a facility owned by a taxpayer and it must be sold to an unrelated third party.  The
credit is allowed for the first ten years of production from a new facility.  The credit applies to
electricity produced by a wind energy facility placed in service after 31 December 1993, and before
1 January 2004, to electricity produced by a closed-loop biomass facility placed in service after31 December 1992, and before 1 January 2004, and to a poultry waste facility placed in service after
31 December 1999, and before 1 January 2004.  The provision for wind and biomass was adopted as
part of the Energy Policy Act of 1992 and was extended to poultry waste in the Tax Relief Extension
Act of 1999.  This provision is authorized in section 45 of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
The credit reduces federal income taxes for taxpayers producing electricity from wind,
biomass and poultry waste.
Amount
The amount of the credit is $ 0.015 per kilowatt hour (adjusted for inflation), produced from
qualified wind, biomass or poultry waste.  The credit equalled $0.018 per kilowatt hour in 2002.  The
annual revenue loss was less than $100 million in 2002. 
Duration
The tax credit applies to new facilities placed in service before 2004.G/SCM/N/95/USA
Page 32
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
FISHERIES10
Title:  Fisheries Finance Program (FFP)
Prior to 1996, this programme was known the Fisheries Obligation Guarantee (FOG)
Programme.
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
The purpose of FFP is to provide fixed-rate financing with a term equal to the estimated
useful life of the equipment financed.  The predecessor programme – the FOG Programme –  which
operated from 1972 through 1990, provided government-backed loan guarantees to the US
commercial fishing sector for the construction, reconstruction, replacement and, under certain
circumstances, the purchase of fishing vessels.  Since 1991, the programme has been barred byNOAA policy and Congressional directives from financ ing any project that could be construed to lead
to overcapitalization of any fishery.  In 1994, the programme’s regulations were amended to reflect
this change in policy.
In 1996, the FOG Program began providing direct loans, and the name of the programme was
changed to the Fisheries Finance Programme.  At this time, FFP lending authority was extended to
include aquaculture, vessel buybacks, Individual Fishing Quota (IFQ) purchases (limited to the
Halibut and Sablefish fishery) and Community Development Quota loans.
Background and authority
Background is provided above.  The statutory authority for the FOG Programme and FFP is
the Merchant Marine Act of 1936, as amended.  This programme is administered by the National
Marine Fisheries Service (NMFS).
Form
The FFP programme provides direct loans to the fishing industry.  The interest rates charged
on FFP loans are 2 percentage points above comparable maturity Treasury Bond yields as of the date
of the loan closing.
                                                     
10 Because no “buy-back” programmes were executed in fiscal year 2002, this notification does not
include a section on US buy-back programmes.  However, as indicated below, and as indicated in the USnotification submitted in June 2002, loans provided und er earlier buy-back programmes are still outstanding.
Additionally, for transparency purposes, under the Fishery Financing Program, we have provided information
regarding certain buy-back programmes which have been authorized for fiscal year 2003.G/SCM/N/95/USA
Page 33
To whom and how assistance is provided
Under the FFP, loans are provided directly to fishermen to finance any of the activities listed
above.
Amount
In light of the many loans currently outstanding, and variations in amortization schedules and
interest rates, the calculation of any subsidy amount, and especially the subsidy per unit, is not readily
attainable.  Below is a table showing the total amount of loans  that have been authorized since 1997.
(If this programme provided a subsidy, the bene fit would be based on the difference between the
interest rate charged under the programme and the amount the firm would pay on a comparablecommercial loan.)
FFP LOAN CEILINGS (IN MILLIONS OF DOLLARS)
TYPE OF LOAN FY'97 FY'98 FY'99 FY'00 FY'01 FY'02 FY'03
Traditional $25 $24 $24 $24 $19 $19 $59
Halibut/Sablefish IFQ $0 $0 $5 $5 $5 $5 $5
Community Development Quota $0 $0 $25 $0 $0 $0 $0
NE Multispecies $23 $0 $0 $0 $10 $0 $0
Pollock Buyback $0 $0 $75 $0 $0 $0 $0
Crab Buyback $0 $0 $0 $0 $0 $0 $100
Pacific Groundfish  Buyback $0 $0 $0 $0 $0 $0 $36
NE Multispecies  Buyback $0 $0 $0 $0 $0 $0 $45
It is important to note, that due to the relatively high interest rates charged on these loans and
the relatively low default rate, FFP is a self-financing programme.  In other words, the programme
historically has not resulted in a net outflow of government funds.
Duration
Indefinite.
Trade effects
Since 1991 , the FFP has been barred by NOAA policy and Congressional directives from
financing any project that could be construed to lead to overcapitalization of any fishery.  Because of
this policy, and because any subsidy element that might be attributable to this programme is small ornonexistent, the trade effects from this program are likely to be minimal, if any.
Title: Saltonstall-Kennedy Grant Program:   Fisheries Research and Development
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
This programme uses funds derived from duties collected on fishery imports to fund a wide
range of research and development grants that mostly support effective conservation and managementG/SCM/N/95/USA
Page 34
of US fisheries and fisheries communities by increasing the biological, economic, and social
information needed for sound management.
Background and authority
The legislative authority for this program goes back to the Saltonstall-Kennedy Act of 1954.
However, the current grant programme was established by the American Fisheries Promotion Act of
1980, which amended the Saltonstall-Kennedy Act (15 U.S.C. 713c-3(c)).  The National Marine
Fisheries Service administers the programme.
Form
Grants are awarded annually on a competitive basis.
To whom and how assistance is provided
This programme is open to: citizens or nationals of the US; citizens of the Northern Mariana
Islands (NMI), Republic of the Marshall Islands, Republic of Palau, or the Federated States of
Micronesia, corporations, partnerships, associations, or other non-Federal entities, non-profit or
otherwise (including Native American tribes) within the meaning of section 2 of the Shipping Act of
1916, as amended.  Federal employees and Fishery Management Councils and their employees are
ineligible.  Projects are selected for funding through a competition/call for proposals announced in theFederal Register .
Amount
It is difficult to estimate a subsidy per unit for a diverse R&D grant programme. Forty-six
proposals were recommended for funding in fiscal year 2002 totalling approximately $7.6 million,
about half of which, or $3.5 million, was recommended for aquaculture projects.
Duration
Indefinite.
Trade effects
The trade effects if any, of this programme are negligible, due to the programme’s emphasis
on the reduction of incidental catch (bycatch), re duction of pressure on over-fished stocks, product
quality/safety and promotion of  progress toward sustainable fisheries.  Moreover, much of the resultsof research conducted with Saltonstall-Kennedy funds is in the public domain.
Title:  Sea Grant
Industry assistance is provided under the National Sea Grant College Programme.
Period covered by the notification
The period covered by this notification is fiscal year 2002G/SCM/N/95/USA
Page 35
Policy objective and/or purpose
The Sea Grant programme provides grants to selected universities to carry out research that
addresses many aspects of the long-term economic  development, environmental stewardship, and
responsible use of marine and inland resources, including fish and shellfish.  A majority of thesegrants is intended to support effective conservation and management of US fisheries, rather than to
assist commercial activities.  However, a small number of Sea Grant projects benefit industry, and, for
that reason, in the interests of transparency, this programme has been included in this notification.
Background and authority
In 1965, Sea Grant Colleges were first identified through an amendment to the National
Science Foundation Act of 1950, and, in 1966, the programme was formally established with passage
of the National Sea Grant College and Program Act.  More than 200 individual colleges and
universities in thirty state Sea Grant programs currently participate in this programme.
Form
Direct federal grants are normally paid to an academic institution or other organization.
To whom and how the assistance is provided
The grant is provided to any individual; any public or private corporation, partnership, or
other association or entity (including any sea grant college, sea grant institute or other institutions); or
any state political subdivision, or agency or officer thereof.  Each Sea Grant institution administers a
“request for proposal” (RFP) process to address local and state concerns.  The National Marine
Fisheries Service headquarters administers a separate  RFP process to elicit proposals with a nationalscope.
Amount
The large majority of grants under this programme support research in subject areas ( e.g.,
aquatic nuisance species; coastal economic development; coastal habitat enhancement; coastal
hazards; and education), that do not directly provide economic benefits to the fishing industry.Therefore, it is difficult to determine the value of any subsidy that may be provided under this
programme. Total programme expenditures were $102.90 million for fiscal year 2002.  (This total
represents both federal government funds – appr oximately 67 per cent – and matching funds from
state partners – approximately 33 percent.)
Duration
Federal grants for research and development under the Sea Grant programme are provided
annually, although some of the projects are multi-annual.  The duration of the programme itself is
indefinite.
Trade effects
Like the Saltonstall-Kennedy Grant Programme, the Sea Grant Programme is not an industry
or trade promotion programme.  Very little of the funds provided directly impact the US fishingindustry.  Additionally, much of the results of research conducted with Sea Grant funds is in the
public domain.  In light of these considerations, the trade effects of this program, if any, are likely to
be minimal.G/SCM/N/95/USA
Page 36
Title: Columbia River Hatcheries
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
The Mitchell Act (16 USC 755-757; 52 Stat. 345)  authorizes the Secretary of Commerce to
carry on activities for the conservation of fishery resources in the Columbia River Basin.  The
Mitchell Act specifically directs establishment of salmon hatcheries, the conduct of engineering andbiological surveys and experiments, and the installation of fish protective devices.  It also authorizes
agreements with state fishery agencies and construction of facilities on state-owned lands.  The major
objective of this program has traditionally been to mitigate the negative effects of lost salmon habitat
caused primarily by the building of dams for hydroelectric power, and also by other factors, such as
agricultural runoffs, logging, and urban development.  Over the years, Mitchell Act hatcheryproduction has changed to meet two other objectives.  First, some hatchery production has shifted to
areas above the Bonneville Dam in order to provide harvestable salmon under the Columbia River
Treaty Indian Trust. Second, a portion of the hatchery production is being shifted to fulfill a
conservation role in preserving endangered salmon stocks (captive breed) and supplementing their
recovery.  With the application of the Endangered Species Act throughout the Columbia River Basin,substantial changes have been, and will continue to be, required of the Mitchell Act Program.
Background and authority
The Mitchell Act salmon hatcheries program has received federal appropriations since 1950,
and is funded by general appropriations legislation.
Form
The US Government provides operating grants to Columbia River Fisheries Development
Program salmon hatcheries run by the Oregon Department of Fish and Wildlife, the Washington
Department of Fish and Wildlife, the Confederated Tribes and Bands of the Yakama Nation and theUS Fish and Wildlife Service, Department of Interior.
To whom and how assistance is provided
The funds are provided to the Oregon Department of Fish and Wildlife, the Washington
Department of Fish and Wildlife, and the Confed erated Tribes and Bands of the Yakama Nation
through Cooperative Agreements.  Funds are also provided to the US Fish and Wildlife Service
through an intergovernmental transfer.
Amount
In fiscal year 2002, the appropriation under the Mitchell Act programme was $16.53 million,
including about $11.46 million to fund the operations and maintenance of the hatchery programme in
Oregon and Washington.
Duration
Indefinite.G/SCM/N/95/USA
Page 37
Trade effects
The basic purpose of salmon hatcheries is to mitigate habitat and other losses associated with
other federally-supported activities, and to restore depleted salmon resources, especially certain runs
of chinook and coho salmon.  It is not possible to determine precisely the contribution of Columbiahatchery-reared fish to the commercial harvests in either waters off Washington, Oregon, and
California or off Alaska, but it is generally accepted that they have no discernible trade effect.
LUMBER & TIMBER
Title: Capital Gains Treatment of Certain Timber Income
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To encourage domestic timber production.
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Internal
Revenue Code.  The provision was originally enacted in 1943.
Form
Income tax concession.
To whom and how assistance is provided
Certain timber sold under a royalty contract can  be treated as capital gains for income tax
purposes.  Income tax rates for individuals on ordinary income ranged from 10 per cent to 38.6 percent in 2002.  For individual taxpayers, long-term capital gains are taxed separately from other
income, generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least five years
and otherwise eligible for the 10 per cent tax rate are taxed at an 8 percent rate in 2002.
Amount
The revenue loss was $100 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/95/USA
Page 38
Title: Expensing of Multiperiod Timber Growing Costs
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
The original ability to expense indirect costs of timber growing was apparently part of a
general perception that these costs were maintenance costs, and thus deductible as ordinary costs of a
trade or business.  Following a series of revenue rulings and court cases over the years distinguishing
between what expenses might be deductible and what expenses might be capitalized, the Tax ReformAct of 1986 included uniform capitalization rules which required indirect expenses to be capitalized
in most cases.  Where the application of these rules was deemed to be unduly burdensome, exceptions
were provided.
Background and authority
Generally, costs must be capitalized when goods are produced for inventory used in one's own
trade or business, or under contract to another party.  Timber production, however, was specifically
exempted from these multiperiod cost rules and pe rmitted to subject such costs to current expensing.
This expensing is authorized by sections 162 and 263A(c)(5) of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Timber owners can expense, rather than capitalize, certain deductions from taxable income.
Amount
The revenue loss was $360 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Investment Credit and Seven-Year Amortization for Reforestation Expenditures
Period covered by the notification
The period covered is the fiscal year 2002.G/SCM/N/95/USA
Page 39
Policy objective and/or purpose
To promote reforestation on private timberlands.
Background and authority
A special 10 per cent investment tax credit is allowed for up to $10,000 invested annually in
clearing land and planting trees for the ultimate production of timber.  The same amount of forestation
investment may also be amortized over a seven- year period.  Without this preference, the amount
would have to be capitalized and could be recovered (deducted) only when the trees were sold or
harvested 20 or more years later.  Moreover, the amount of forestation investment that is amortizable
is reduced by one-half of the investment credit that is allowed.  These provisions are authorized bysections 48(b) and 194 of the Internal Revenue Code. They were originally enacted in the
Recreational Boating Safety and Facilities Improvement Act of 1980.
Form
Income tax concession.
To whom and how assistance is provided
Applies to taxpayers on the reforestation costs incurred during the year as allowances against
federal income taxes.
Amount
The revenue loss was less than $10 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
MEDICAL
Title: Orphan Drug Tax Credit
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To encourage research on drugs for rare diseases or conditions.G/SCM/N/95/USA
Page 40
Background and authority
The provision provides a 50 per cent tax credit for qualified clinical testing expenses incurred
in testing of certain drugs for rare diseases or conditions, referred to as “orphan drugs”.  Qualified
testing expenses are costs incurred to test an orphan drug after the drug has been approved for humantesting by the Food and Drug Administration (FDA), but before the FDA approves it for sale.  A rare
disease or condition is one that affects less than 200,000 persons in the United States, or affects more
than 200,000 persons, but for which there is no reasonable expectation that businesses could recoup
the costs of developing a drug for such disease or condition from U.S. sales of the drug.  The credit
originally was enacted as a temporary provision in 1983 under the Orphan Drug Act, and was
extended on several occasions.  The credit expired after December 31, 1994, and later was reinstated
for the period July 1, 1996, through May 31, 1997.  The Taxpayer Relief Act of 1997 made the creditpermanent.  The orphan drug credit is authorized under section 45C of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Taxpayers undertaking qualified research on orphan drugs receive a credit against federal
income tax.
Amount
The revenue loss was $140 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: The Office of Isotopes for Medicine and Science
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
The mission of the programme is to serve the national need for a reliable supply of isotope
products, services and related technology used in medicine, industry and research, and support
advanced research exploring the use of isotopes to advance medical technology.
Background and authority
The DOE Office of Nuclear Energy, Science and Technology, Office of Isotopes for
Medicine and Science administers the programme.  The Atomic Energy Act of 1954, Public LawG/SCM/N/95/USA
Page 41
No. 101-101 and Public Law No. 103-316, authorize DOE to sell isotope products, related services,
and surplus material.  Appropriations are contained in the Energy and Water Development
Appropriations Act for fiscal year 2002.
Form
Assistance is provided through the manufacture and sale of isotope products.
To whom and how assistance is provided
Isotopes are sold to a variety of commercial and research institutions in the medical,
industrial, and research communities of both a comm ercial and non-commercial orientation, both in
the United States and abroad.  DOE sells commercial isotopes at full-cost recovery.   Starting in fiscal
year 2002 with full implementation in fiscal year 2003, DOE is applying a more formal, peer-review
structure to the selection of research isotopes for production and distribution.
Amount
Production expenses associated with processing and distributing isotopes are offset by
revenue generated from sales.  The programme obligated $24 million in fiscal year 2002.
Duration
The activity is of indefinite duration; the program operates with a revolving fund and
maintains financial viability through its revenues from sales.
Trade effects
Even if it were possible to quantify trade effects which might ensue from a programme of this
nature, it is doubtful that this particular program has led to any meaningful trade effects.  The isotopes
made available have been sold throughout the world to over 300 customers, primarily for medical
research.
METALS, MINERALS AND EXTRACTION (NON-FUEL)
Title: Excess of Percentage over Cost Depletion for Non-fuel Minerals
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the development of the domestic non-fuel mineral industry.
Background and authority
The provisions permit most non-fuel mineral extractors to make use of percentage depletion
rather than cost depletion, with percentage depletion rates ranging from 22 percent for sulphur to 5 per
cent for sand and gravel.  Percentage depletion is authorized by sections 611-613 and 291 of the Code.
Percentage depletion similar to its current form was provided in 1932 at 23 percent for sulphur and
15 per cent for metal mines.  From 1932 to 1950, percentage depletion was extended to most otherG/SCM/N/95/USA
Page 42
minerals.  The Revenue Act of 1951 granted it to more minerals.  In 1954, still more minerals were
granted the allowance.  In 1969, the top depletion rates were reduced.  The Tax Equity and Fiscal
Responsibility Act of 1982 reduced the allowance for corporations that mined iron ore by 15 per cent.
The Tax Reform Act of 1986 raised the cutback in corporate allowances of iron ore from 15 to 20 per
cent.
Form
Income tax concession.
To whom and how assistance is provided
Non-fuel mineral extractors are permitted deductions from taxable income for depletable
expenditures equal to the larger of percentage or cost depletion.
Amount
The revenue loss was $260 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
Title: Expensing of Exploration and Development Costs for Non-fuel Minerals
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the development of domestic non-fuel mineral industry.
Background and authority
These provisions permit certain capital outlays associated with exploration and development
of nonfuel minerals to be expensed rather than depreciated over the life of the asset.  These provisions
are authorized by sections 263, 263A, 291, 616-617, 56 and 1254 of the Internal Revenue Code.Expensing of mine development expenditures was enacted in 1951 to reduce ambiguity in the
then-existing treatment of, and to encourage, mining.  The provision for mine exploration was added
in 1966.  The Tax Equity and Fiscal Responsibility Act of 1982 limited expensing for corporations to
85 per cent; the remaining 15 per cent must be depreciated.
Form
Income tax concession.G/SCM/N/95/USA
Page 43
To whom and how assistance is provided
Non-fuel mineral producers and royalty owners  are permitted expensing of certain capital
outlays associated with the development of nonfuel minerals rather than amortization over the life of
the mine for federal income tax purposes.
Amount
The annual revenue loss was $30 million in 2002.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
Title :Capital Gains Treatment of Iron Ore
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose
To encourage the mining of domestic iron ore.
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Code.  As
with coal, percentage depletion is not allowed when the capital gains tax rate is below the regular taxrate.
Form
Income tax concession.
To whom and how assistance is provided
Certain iron ore and timber sold under a royalty contract may be treated as capital gains for
income tax purposes.  Income tax rates for individuals on ordinary income ranged from 10 per cent to38.6 per cent in 2002.  For individual taxpayers, long-term capital gains are taxed separately from
other income, generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least five
years and otherwise eligible for the 10 per cent tax rate are taxed at an 8 percent rate in 2002.
Amount
The annual revenue loss was less than $2.5 million in 2002.G/SCM/N/95/USA
Page 44
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Special Rules for Mining Reclamation Reserves
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
In allowing the current deduction of mine reclamation and similar expenses, the provisions
encourage reclamation and prevent adverse economic effects on mining firms that might result from
the application of general tax rules regarding deduction for future costs.
Background and authority
The provisions permit taxpayers to establish reserves to cover certain costs of mine
reclamation and of closing solid waste disposal properties.  Net increases in reserves may be taken as
a deduction against taxable income.  The provisions are authorized by section 468 of the InternalRevenue Code and were enacted in 1984.
Form
Income tax concession.
To whom and how assistance is provided
Taxpayers with mining and solid waste disposal properties receive deductions from taxable
income based on the accrual of liabilities rather than the realization of costs.
Amount
The annual revenue loss was less than $5 million.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/95/USA
Page 45
Title: Emergency Steel Loan Guarantee Programme
Period covered by the notification
This period covered is calendar year 2002.
Policy objective and/or purpose
The overall purpose of this programme is to assist steel companies injured by the import
crisis.
Background and authority
The Emergency Steel Loan Guarantee Act of 1999  was signed into law on 17 August 1999.
The Guarantee Board, consisting of representatives of the Federal Reserve System, the Securities and
Exchange Commission, and the Department of Comme rce, administer the programme and have the
authority to guarantee loans until December 31, 2003.
Form
The programme guarantees loans up to 95 percent of the principal amount of loans provided
by private banks.
To whom and how assistance is provided
The programme may guarantee loans provided to qualified steel companies by private
banking and investment institutions in accordance with the rules established by the Guarantee Board.The Board has the authority to make commitments for guarantees of loans up to $1 billion.  The
amount guaranteed to any single qualified steel company cannot exceed $250 million.
Amount
The Board received an application for guarantee of a $250 million loan in September 2002
that was approved for guarantee in March 2003.
Duration
The Board’s authority to issue guarantees expires in 31 December 2003, so the deadline for
applications was 30 June 2003.  The Board received two additional applications by the 30 Junedeadline that are in the process of being evaluated.
Trade Effects
It is not possible to estimate what trade effects, if any, may result from this program.G/SCM/N/95/USA
Page 46
TEXTILES11
Title: The Textile/Clothing Techno logy Corporation Programme (TC2)
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
The Textile/Clothing Technology Corporation is a non-profit membership organization
designed to stimulate economic growth in the US textile and apparel sector.  It has programmes to
demonstrate advanced equipment and techniques, to educate participants in the sector, and to do basic
research.  Only the basic research element is funded by the federal government through a grant fromthe US Department of Commerce (DOC).  The basic research is performed internally by the
organization and, in part, by external entities on a contractual basis.  The results of the basic research
are made available throughout the textile and apparel sector of the United States.  No production
subsidies are provided under this programme.
Background and authority
The programme is administered by the DOC’s Office of Textiles and Apparel.  Authorization
and funding for the programme is provided for as part of the annual budget and appropriations process
for the DOC.
Form
Assistance is provided under this programme in the form of grants.
To whom and how assistance is provided
A grant is provided to the Textile/Clothing Technology Corporation following the
presentation of a proposal describing the research projects that will be undertaken.
Amount
Approximately $2.9 million was appropriated in fiscal year 2002.
Duration
Grants were first distributed under the programme in 1981.  Funding must be reauthorized by
the US Congress on an annual basis.
Trade effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result  from this programme.  While it is anticipated that
successful research projects may lead to the development of technologies that would enable
companies in the textile and apparel sector to improve their productivity, TC2 assistance does not
directly benefit the production or export of particular companies or products.
                                                     
11 The American Textile Partnership (AMTEX) Programme was completed in 2001.G/SCM/N/95/USA
Page 47
TIMEPIECES AND JEWELLERY
Title: The Insular Possessions Watch and Jewellery Programme .
Period covered by the notification
The period covered is calendar year 2002.
Policy objective and/or purpose
The insular watch and jewellery programme is designed to encourage watch and jewellery
production in the US insular possessions and thereby stimulate development of the insular economies.
Background and authority
The US Department of Commerce and the US De partment of the Interior jointly administer
the Insular Possessions watch portion of the programme under Public Law 97-446, as amended by
Public Law 103-465.  The watch portion provides for duty exemptions and duty refunds in the form of
negotiable production incentive certificates.
Public Law 106-36 amended additional US notes to chapter 71 of the Harmonized Tariff
Schedule of the United States (“HTS”) to provide a duty-refund benefit for any article of jewellery
within heading 7113 that is a product of the US Virgin Islands, American Samoa, Guam and the
Northern Mariana Islands in accordance with the new provisions of the note in chapter 71 and
additional US Note 5 to chapter 91.  The new jewellery portion of the programme is also administeredby the US Department of Commerce and the US Depa rtment of the Interior.  The jewellery portion of
the programme, like the watch portion, provides for duty refunds in the form of negotiable production
incentive certificates, but does not provide for duty exemptions.
To whom and how assistance is provided
The assistance is provided to watch and jewellery producers located in the US Virgin Islands,
American Samoa, Guam and the Northern Mariana Islands.  At present, there are producers only in
the US Virgin Islands.
The watch portion of the program establishes an annual allocation for watches and watch
movements assembled in these areas to enter the United States free of duty.  Both the watch andjewellery portions of the programme provide production incentive certificates which authorize a duty
refund from Customs on (HTS non-column 2) watch movements, watches and parts thereof that have
entered the United States duty-paid.  The subsidy amount is based on the duty foregone on the
finished watches and watch movements, as well as the value of the production certificates issued to
watch and jewellery companies.  Since the watches, the watch movements and jewellery producedunder the program already receive duty-free treatment, the certificate is negotiable and may be
transferred to another company having a record of duty-paid watch imports.  The value of the
certificate is based on the producer’s average creditable wages per unit shipped free of duty into the
United States multiplied by a factor of 90 per cent for the first 300,000 units and by declining
percentages in additional increments up to a maximum of 750,000 units.G/SCM/N/95/USA
Page 48
Amount
Production Incentive Certificate (“PIC”)
Year (1)                                  Product                                           Total Amount (2)
2002                                       Watches                                            $2,701,0672002                                       Jewelry                                              $1,244,231
(1) The PIC is based on the wages and shipments made during the above mentioned
calendar year.
(2) 1 per cent is deducted from the total amount of the duty refund shown above to cover
the administrative costs of processing by Customs.
Duty Exemption                                      Amount (3)
2002                   $298,422
(3) We calculated the amount of the duty paid by using an approximate total trade ad
valorem equivalent rate of 6 per cent multiplied by the total yearly amount of the
invoices billed to customers.
Duration
Under differing programmes, general duty suspensions for insular products appear to date
back to US acquisition of the territories  - 1917, in the case of the US Virgin Islands.  The criteriawere made uniform in 1954, and a limit was placed on watches in 1967.  The jewellery portion of the
program does not contain a limit.  The production incentive certificates were authorized for watches
in 1983 for a 12-year period, and preauthorized for an additional 12-year period in 1995. The
certificates for jewellery were authorized in 1999 for the duration of the watch authorization.
Trade Effects
Although the precise trade effects cannot be determined, producers benefitting from this
programme  account for less than 1 per cent of US annual domestic consumption and do not ship to
non-US customers.
OTHER
Title:  Advanced Technology Programme
Period Covered by the Notification
The period covered is fiscal year 2002
Policy objective and/or purpose
The Advanced Technology Program (ATP) of the US Department of Commerce’s National
Institute of Standards and Technology is a partnership between government and private industry to
accelerate the development of high-risk technologies that promise significant commercial payoffs and
widespread benefits for the US economy.  In sharing the relatively high development risks ofG/SCM/N/95/USA
Page 49
technologies that potentially enable a broad range of new commercial opportunities, possibly across
several industries, ATP fosters projects with a high payoff for the US economy as a whole.  The
nature of ATP projects, risky but broadly applicable, stimulates joint research ventures that link small
suppliers with users or link several firms together to solve a generic problem common to all.  The
ATP holds annual competitions open to proposals in all areas of technology, and has providedcost-shared financial assistance for the development of a wide span of advanced technologies.
Because there are no de jure limitations on who may participate in ATP as a whole, and given
the wide variety of technologies and industrial sectors that have participated, the United States has
routinely considered that there is no readily available evidence to suggest that this program should fall
within the scope of our notification.  However, recogn izing that this is an exercise in transparency, we
have provided available information about the programme.
Background and authority
The programme is operated by the National Institute of Standards and Technology under the
auspices of the Technology Administratio n of the US Department of Commerce.
Form
The ATP does not fund product development.  It supports enabling technologies that are
essential to the development of new products, processes, and services across diverse application areas.Private industry bears the costs of product development, production, marketing, sales, and
distribution.  Moreover, ATP awards are made strictly on the basis of rigorous peer-reviewed
competitions designed to select the proposals that are best qualified in terms of the technological
ideas, the potential economic benefits to the nation (not just the applicant), and the strength of the plan
for eventual commercialization of the results.  Expert reviewers (without conflicts of interest) drawnfrom the business community, government, and academia carefully examine and rate each proposal
according to published selection criteria that focus on both business and technical potential.
ATP projects are expected to make significant contributions to scientific and technical
knowledge, produce new technologies that will be developed and introduced into the marketplace by
the project awardees (using their own funds), and, in  the long run, yield substantial benefits to the
economy beyond those accruing directly to the award recipients.  This is a lengthy process. ATPprojects typically run from 2 to 5 years, the commercialization phase could add several more years,
and the full economic impact may not be realized for some years after commercial introduction.  It
also is costly, because companies must spend additional time, effort, and money on their own to
pursue product development and marketing.  Regardless of whether initial commercialization takes
place before an ATP project ends, or long after, the company must invest its own money to designspecific products incorporating the technology and to pay any other costs associated with
commercialization.
To whom and how assistance is provided
The ATP has strict cost-sharing rules.  Joint ventures must pay at least half of the project
costs. Single companies working on ATP projects must pay all indirect costs associated with the
project, or, if they are large companies, they must cost-share at least 60 per cent of total project costs.
(This provision encourages small companies to part icipate in the program, particularly start-ups,
which often have much lower overhead rates than large firms).  ATP support does not become aperpetual subsidy or entitlement - each project has goals, specific funding allocations, and completion
dates established at the outset.  Projects are monitored and can be terminated for cause before
completion.G/SCM/N/95/USA
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The ATP benefits companies of all sizes.  To date, over s60 per cent of 665 ATP awards have
gone to individual small businesses or to joint ventures led by a small business, a large majority of
which have fewer than 49 employees.  Large firms can work with the ATP, especially in joint
ventures, to develop critical, high-risk technologies that would be difficult for any one company to
justify, because, for example, the benefits are spread across the industry as a whole.  Universities andnon-profit independent research organizations also play significant roles as participants in ATP
projects.  Approximately 166 different universities across 44 states are involved in ATP-funded
projects.
Amount
2002 - $184.5 million
Duration
On-going.
Trade Effects
The trade effects, if any, cannot be determined.
Title: Empowerment Zones, Enterprise Communities and Renewal Communities
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
The purpose of this assistance is to encourage revitalization of distressed areas.  Nominated
areas must meet population, distress, size, and poverty rate criteria in order to be eligible, ensuring
that assistance is targeted to areas experiencing high economic distress.  The use of tax incentives
reflects a desire to encourage the private sector, guided by market forces and supported in anon-bureaucratic fashion through government assistance, to be a driving force behind the increased
economic activity.  Some restrictions on the types of business activities and investments were
imposed in order to limit potential abuses.
Background and authority
The Omnibus Budget Reconciliation Act of 1993 provided for the designation of nine
empowerment zones (3 rural and 6 urban) and 95 enterprise communities (30 rural and 65 urban).
The Taxpayer Relief Act of 1997 added 22 empowerment zones (5 rural and 17 urban), and the
District of Columbia Enterprise Zone (DC Zone).  The Community Renewal Tax Relief Act of 2000added 9 empowerment zones (2 rural and 7 urban) and authorized the designation of 40 renewal
communities (12 rural and 28 urban).   State and local governments jointly nominated distressed areas
and proposed strategic plans aimed at economic and social revitalization.  Rural enterprise
communities and empowerment zones were designated by the Secretary of the Department of
Agriculture, while urban enterprise communities, urban empowerment zones and all renewalcommunities were designated by the Secretary of the Department of Housing and Urban
Development.  The tax provisions for enterprise communities, empowerment zones, renewal
communities, and the DC Zone are found in sections 1391 through 1400J of the Internal Revenue
Code.G/SCM/N/95/USA
Page 51
Qualified businesses located in empowerment zones are eligible for the following federal tax
incentives:  (i) an employment tax credit for 20 per cent of the first $15,000 of qualifying wages paid
to employees who live and work in the empowerment zone; (ii) an additional $35,000 per year of
expensing, instead of depreciation, of capital investments by small businesses; and (iii) a newcategory of tax-exempt private activity bonds.  In addition, taxpayers may elect to defer capital gains
from certain sales and re-investments in qualified empowerment zone assets and the exclusion on the
gain from the sale of qualified small business stock th at is held for more than five years is increased
from 50 to 60 per cent for empowerment zone businesses.  Businesses located in enterprise
communities are only eligible for the new category of tax-exempt bonds.
Qualified businesses located in renewal communities are eligible for the following federal tax
incentives:  (i) an employment tax credit for 15 per cent of the first $10,000 of qualifying wages paid
to employees who live and work in the renewal community;  (ii) an additional $35,000 per year of
expensing, instead of depreciation, of capital investments by small businesses; (iii) a commercial
revitalization deduction; and (iv) an exclusion for capital gains on qualified community assets held
more than 5 years.
Incentives for the DC Zone include the employment tax credit, increased expensing and tax
exempt financing incentives available in empowerment zones, plus an exclusion for capital gains on
qualified assets held more than 5 years.
Form
Income tax concession.
To whom and how assistance is provided
The employment tax credit and an additional $35,000 per year of expensing are provided
when the recipient business completes its tax return.  No registration is needed to qualify for the tax
incentives.  The new category of tax-exempt private activity bonds requires a local initiation and State
offering of the bonds. The subsidy is reflected in the lower interest rate charged on the bonds because
interest income on them is excluded from federal taxable income.  The capital gains incentives are
provided to investors in qualified zone or community assets by reducing the amount of capital incomesubject to tax.
To qualify for the employment credit, substantially all of the employees's services must be
provided in the zone or community.  The $35,000 of additional expensing is targeted to assist small
businesses because the benefit of expensing begins to phase out when investment exceeds $200,000.To qualify for the expensing, businesses must also meet other criteria, such as having at least 35 per
cent of employees who reside in the zone or community.  Businesses located in enterprise
communities and empowerment zones are eligible for the new category of tax-exempt bonds.  Up to
$3 million per business per zone in bond funding and $20 million per business for all zones is
available.  The exclusion of capital gains from qualified DC Zone assets held more than 5 years doesnot apply to gains earned before 1998 or after 2008.  The exclusion of capital gains from qualified
renewal community assets held more than 5 years does not apply to gains earned before 2002 or after
2014.
Amount
The revenue loss was $730 million in 2002.G/SCM/N/95/USA
Page 52
Duration
Tax incentives have been available since the first zones and communities were designated on
21 December 1994.  Empowerment zone and renewal community tax benefits are due to expire on
31 December 2009, with the exception of the DC Zone tax benefits, which expire on31 December 2003.  Enterprise community tax benefits are scheduled to expire on 31 December 2004.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: The Export Credit Programmes of the Export-Import Bank of the United States
Period covered by the notification
The period covered is fiscal year 2002.
Policy objective and/or purpose; background and authority
The Export-Import Bank of the United States (Ex-Im Bank) is authorized by the
Export-Import Bank Act of 1945 to provide credits, guarantees and insurance, including commercial
and political risks, to support exports of US goods and services.  The financial support is to be at rates
and on terms that are competitive with government-supported rates and terms available from other
countries whose exporters compete with US exports.  All Ex-Im Bank programs are in full conformity
with the OECD guidelines on export credit practices and, concomitantly, the Agreement on Subsidiesand Countervailing Measures.  Inasmuch as other official authorities offer official financing in
support of exports from their countries, Ex-Im Bank has offered similar financing.
Form; amount
The US Federal Credit Reform Act of 1990 (Credit Reform) made fundamental changes in
the budgetary treatment of direct loans, loan guar antees and insurance.  Credit Reform, which became
effective in fiscal year 1992, shifted the accounting basis for federally provided or guaranteed credit
from the amount of cash flowing into or out of th e Treasury for a credit programme, to the estimated
net financial costs of the loans, guarantees an d insurance.  Credit Reform requires an annual
appropriation that is used to set aside a loan-loss reserve to cover any expected financial losses in
recognition of the cost to the US government of  running an official export credit programme.
Under the accounting procedures required by Credit Reform, the cost of Ex-Im Bank
programmes is calculated as the difference between the amount committed and the present value of
the expected cash inflows, each discounted by the interest rate on marketable Treasury securities of
like maturity.  This includes the cash flows specified in the contract financed by Ex-Im Bank, as wellas “expected” deviations from contract terms, including delinquencies, defaults, prepayments, and
other factors.  This calculation is performed on a transaction-specific basis, and for those transactions
showing a positive cash flow on a net present value ba sis, the transaction cash flow is zero-ed out for
Credit Reform purposes.
For direct loans, cash outflows include loan disbursements, and cash inflows include exposure
fees and repayment of principal and interest net of expected defaults.  For loan guarantees and
insurance, cash outflows include payments to cover default claims and interest supplements, and cashG/SCM/N/95/USA
Page 53
inflows include fees and recoveries.  The expected costs are calculated using a model developed by
the Office of Management and Budget.
The following tables show the US government budget authority value for Ex-Im Bank direct
loan, loan guarantee and insurance programmes.  Due to the unique nature of US credit reformcalculations, the numbers presented in the tables are not comparable with short-term cash-flow data
presented by other government export credit agencies.
TABLE I
Direct Loan Budget Authority
($ millions)
Fiscal Year Direct Loan Levels Budget
Authority%
1999 902.7 53.0 5.9%
2000 932.6  11.7 1.3%
2001 871.2 93.8 10.8%
2002 309.0 36.7 11.9%
TABLE II
Loan Guarantee and Insurance Budget Authority
($ millions)
Fiscal Year G'tee & Insurance LevelsBudget
Authority%
1999 12,164.9 602.8 5.0%
2000 11,704.5 890.4 7.6%
2001 8,370.3 729.7 8.7%
2002 9,724.9 676.9 7.0%
Duration
Ex-Im Bank activities are subject to periodic renewal under US law.  Congress  reauthorized
Ex-Im Bank until the end of September 2006.
Trade Effects
It is not possible to estimate what, if any, trade effects may result from the use of this
programme.
Title: New Markets Tax Credit
Period covered by the notification
The period covered is the fiscal year 2002.G/SCM/N/95/USA
Page 54
Policy objective and/or purpose
To encourage capital investment in businesses located in economically distressed areas.
Background and authority
The Community Renewal Tax Relief Act of 2000 created the new markets tax credit under
section 45D of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
A tax credit is applied to taxpayers who make an equity investment in a Community
Development Entity (CDE).  The credit amount is equa l to 5 percent of the investment for each of the
first three years and 6 per cent for each of the follo wing 4 years.  A CDE is any domestic firm whose
primary mission is to serve or provide investment capital for low-income communities or individuals.
A fixed amount of equity investment is eligible each year for the credits, which is apportioned to
CDEs through a competitive application process.  Th e total amount of equity investment eligible for
the credit is $15 billion from 2001 to 2007.
Amount
The revenue loss was $90 million in 2002.
Duration
This credit first became effective in 2001, and credit allocations to qualified CDEs will be
made through 2007.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: New York Liberty Zone
Period covered by the notification
The period covered is the fiscal year 2002.
Policy objective and/or purpose
To encourage the redevelopment of the area surrounding the World Trade Center in New
York City in the aftermath of the terrorist attack on 11 September 2001.
Background and authority
Section 1400L of the Internal Revenue Code, enacted as part of the Job Creation and Worker
Assistance Act of 2002.G/SCM/N/95/USA
Page 55
Form
Income tax concession.
To whom and how assistance is provided
The New York Liberty Zone is the area imme diately surrounding the World Trade Center in
New York City.  The following tax incentives are provided: (i) qualified small businesses are allowed
a wage credit equal to 40 percent of the first $6,000 of qualifying wages paid annually to each
qualifying employee; (ii) an additional $35,000 per year of expensing, instead of depreciation, of
capital investments by small businesses within the Zone; (iii) 30 per cent expensing, instead ofdepreciation, of certain property placed in service within the Zone; (iv) accelerated depreciation of
qualified leasehold improvement property placed in service within the Zone; (v) authorization for
New York State and New York City to issue an additional $8 billion in tax-exempt private activity
bonds to finance property placed in service within the Zone; (vi) an additional advance refunding of
tax-exempt bonds up to an aggregate limit of $9 bil lion for facilities located in New York City; and
(vii) extension of the replacement period from 2 to 5 years for certain property involuntarily converted
due to the 11 September 2001 terrorist attack.
Amount
The revenue loss was $484 million in 2002.
Duration
The wage credit expires at the end of 2003, the two tax-exempt financing benefits expire at
the end of 2004 and the other provisions expire at the end of 2006.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/95/USA
Page 56State Program
TitleProgram
AuthorityForm of
SubsidyPolicy Objective To Whom Amounts Duration of
the
Program
Alabama Appalachian
RegionalCommission
GrantAlabama
Department ofEconomic and
Community
AffairsGrant The Appalachian Regional
Commission (ARC) providessupplemental funding for
economic development projects
under its Area Economic andHuman Resources DevelopmentProgram.Appalachian Regional Commission
(ARC) region consisting of 37counties in North Alabama in a line
just north of Montgomery. New or
expanding businesses includingmanufacturing and warehousing.$200,000 maximum or 50 percent of
total project cost spent on servingmore than one industry.  Can bring
federal participation up to 80 percent
of eligible project cost.Ongoing
Alabama Capital
InvestmentTax CreditAlabama
Department ofRevenueTax Credit The program allows qualifying
companies to claim a tax creditagainst Alabama income tax
liability generated by or arising
out of a qualifying Alabamaproject.Favored Geographic Area: defined
as one of the 28 Alabama EnterpriseZones or either one of the less
developed counties as determined
by the Department of IndustrialRelations based on statutorycriteria.  Small Business Addition:addition to existing facility,company must have 100 or fewer
employees in Alabama prior to the
date addition is placed in service.A capital credit is available to the
income tax liability generated byincome from a project approved by
the Alabama Department of Revenue
(ADOR).  The capital credit isavailable each year, for 20 years.  Thecapital credit is calculated at fivepercent of the total capital costs of thequalifying project and the credit
begins in the year the qualifying
project is 'placed in service'.Ongoing
Alabama Community
Facility Loanand GrantProgramUSDA Rural
DevelopmentMixed
FinancingTo promote development in rural
communities.Rural communities with a
population of 20,000 or less.'Priority is given to applicants inrural communities with populationsof 5,000 or less and areas with the
lowest median household income.Interest rates for direct loans are
based on current market yields formunicipal obligations.  Themaximum term for all loans is 40years.  However, the repayment
period is limited to the useful life of
the facility or equipment or anystatutory limitation on the applicant'sborrowing ability.Ongoing
Alabama Enterprise
Zone TaxCreditAlabama
Department ofRevenueTax Credit Enterprise Zone Act is a job
creation program.  It is aperformance driven program and
provides credits for specific
accomplishments of the company.28 Designated enterprise zones.
Economic development withindepressed communities.  Enterprise
zone residents especially those
unemployed for at least 90 daysprior to employment.Maximum credit of $2500 per new
permanent employee.  Credits are tobe used in the year earned with any
remainder available to be applied
against income or business privilegetax liabilities for he succeeding twoyears. There are three ways to makeup the $2500 maximum credit fornew permanent employee.  1) credit
based on income tax liability from
EX project operations: 5 year taxcredit incentive, taken in increments:OngoingG/SCM/N/95/USA
Page 57year 1=80 percent, year 2=60 percent,
year 3=40 percent, year 4&5=20percent.  Must be certified annuallyby the Alabama Department ofEconomic and Community Affairs
that requirements have been met. 2)
Credit from new capital investment:10 percent of the first $10,000; 5percent of the next $90,000; 2 percentof the remaining investment.
Minimum job creation of 5 new
permanent employees.  3) Training:Company may claim a credit of up to$1000 for training new permanentemployees in new skill areas.
Alabama Intermediary
RelendingProgramUSDA Rural
DevelopmentLoan A loan program funded by the
Rural Economic and CommunityDevelopment (REDC) to
strengthen the economy of rural
communities.Priority scoring is given to
applications located in areas of highunemployment, areas experiencing
trauma, and areas where the
population has declined.  Allterritory of a state that is not withinthe outer boundary of any cityhaving a population of 25,000 or
more, according to the latest
decennial census.Loans to intermediaries are scheduled
for repayment over a period of up to30 years with an interest rate of one
percent per annum.  The intermediary
sets the term of the loans and sets theinterest rate that they will charge toultimate recipients.  The maximumloan to an intermediary is
$750,000.00.Ongoing
Alabama Property Tax
Exemptionsfor IndustrialProjectsAlabama
Department ofRevenueTax
Abatement/ReductionBoth non-exempt real property
and personal property are subjectto ad valorem property taxation.To encourage the development ofnew industry in the state, as well
as to encourage the expansion of
existing industry, an abatementfrom property taxation is providedin some cases.  Certain industriesmay be exempted from the state,county, and city tax levies, except
for taxes levied for education.Statutory Requirements:  1) The
qualifying project must constitutean "industrial, warehousing, orresearch activity" defined as anytrade or business described in the
1987 Standard industrial
Classification (SIC) code,promulgated by the U.S.Government Office of Managementand Budget as: Major Groups 20-39, inclusive; 50 or 51; Industrial
Group Number 737; or Industry
Numbers 0724, 4613, 8731, 8733,or 8734.   2) Expansion projectsmay qualify for an abatement undera "major addition", provided theproject meets an additional
investment threshold requirement ofIndustrial projects may be exempted
from ad valorem (property) taxes forup to 10 years (except school taxes)with a fixed assessment ratioestablished at 20 percent of appraised
market value for businesses.OngoingG/SCM/N/95/USA
Page 58the lesser of 30 percent of the
original cost of the industrialdevelopment property, or $2Million.
Alabama Regional
RevolvingLoan FundsAlabama
Association ofRegionalCouncilsLoan Revolving loan funds are locally
controlled. Capital may be used tofinance start-up and existingbusinesses whose projects willcreate permanent jobs.Financing for small manufactures,
manufacturing-related serviceslocated in the Southeast.Equity requirement, which is
established locally,  usually fallsbetween 5 percent and 25 percent.The interest rate is normally belowprime and can be fixed or variable.Program requires conventional lender
participation.Ongoing
Alabama Renewal
Community
(RC)ProgramAlabama
Development
OfficeMixed Tax The RC Program is a federal tax
incentive program created to
assist in the economicdevelopment and expansion of 40communities throughout theUnited States.  In January 2002,
three areas received federal
designation as RCs in the State ofAlabama.  Those designatedinclude areas of nine counties inSouthern Alabama, Greene andSumter counties, and East Mobile
and Prichard.Must be located in RC as
designated by the program.
Generally, an RC business isdefined as a corporation,partnership, or sole proprietorshipthat for each taxable year actively
conducts every trade or business of
the entity in a RC; at least 50percent of the total gross income ofthe entity is derived from the activeconduct of business within a RC; asubstantial portion of the use of the
tangible property of the entity is
within a RC; a substantial portion ofthe intangible property of thebusiness is used in the activeconduct of the business; asubstantial portion of the services
performed for the employer by its
employees occur within a RC; atleast 35 percent of the employeesAvailable incentives include wage
credits for employing RC residents;
increased Section 179 deduction;commercial revitalization deduction;and zero capital gains rate for RCassets.OngoingG/SCM/N/95/USA
Page 59reside in a RC; no more than 5
percent of the property isnonqualified financial propertyexcept for reasonable amounts ofworking capital held in cash, cash
equivalents, or debt instruments;
and no more than 5 percent of theproperty is works of art or othercollectibles unless held for sale tocustomers.
Alabama Rural
BusinessEnterpriseGrantsUSDA Rural
DevelopmentGrant A grant program funded by Rural
Economic and CommunityDevelopment (REDC) tostrengthen the economy.Any area other than an incorporated
city or town with greater than50,000 population and theurbanized area contiguous andadjacent to such city or town.Must assist small and emerging
private business (50 or lessemployees and less than $1,000,000in projected gross income).Ongoing
Alabama Rural
BusinessOpportunity
GrantUSDA Rural
DevelopmentGrant To promote development in rural
communities.Any area other than an incorporated
city or town with greater than10,000 population and the
urbanized area contiguous and
adjacent to such city or town.Priority communities--thoseexperiencing trauma due to naturaldisasters or that are undertaking
fundamental structural changes,
have remained persistently poor orhave experienced long-termpopulation decline or jobdeterioration.$50,000 limit on unearmarked funds
per applicant per state.Ongoing
Alabama Venture
Capital
FundsAlabama
Development
OfficeTax Credit House Bill 627 authorizes the
establishment of CAPCOs
certified capital companies to
manage such funds.Small technology businesses Credits are limited to $12.5 million in
any year.OngoingG/SCM/N/95/USA
Page 60Alabama Tennessee
ValleyAuthorityEconomicDevelop-
ment Loan
FundTennessee
ValleyAuthorityLoan A multimillion dollar revolving
loan program established tostimulate industrial developmentand leverage capital investment inthe TVA power service area.  An
indirect financing loan program
promotes economic expansion,encourages job creation andfosters the increased sale ofelectricity by TVA and its power
distributors.All companies within the TVA
power service area.Loans are typically below market
rate, with specific rates to bedetermined on a case-by-case basisafter considering the loan evaluationcriteria (project’s financial viability,
management quality, community
economic impact, funds leverage andincreased power sales).  Maximumlength of terms is 10 years for newplants, plant expansion and plant
retention.  7 years for service industry
loans and 6 years for infrastructureloans.  Repayment schedules will bedetermined on a project by projectbasis.  No TVA loan is likely toexceed $2 million.  Real estate and
equipment can be used for collateral.Ongoing
Alabama Water and
Waste
DisposalFundsUSDA Rural
DevelopmentLoan Indirect financing for public
bodies and nonprofit corporations
in unincorporated ruralcommunities with a population ofno more than 10,000.  Rates forloans may be made at poverty,
intermediate or market interest
rates and are subject to changequarterly.  Term of the loan maybe for up to 40 years.  Loans andgrants are limited to applicantsserving rural areas and towns with
populations not in excess of
10,000.  Applicants must not beable to obtain the financing fromother sources and/or their ownresources at rates and terms theycan afford.  Funds may be used to
construct and develop water and
waste disposal systems-includingsolid waste disposal and stormdrainage.Loans and grants are limited to
applicants serving rural areas and
towns with populations not inexcess of 10,000. Term of the loan may be for up to 40
years.OngoingG/SCM/N/95/USA
Page 61Alabama Business and
IndustryGuaranteedLoansUSDA Loan Objective is to bolster existing
private credit structure throughthe guarantee of quality loans thatwill provide lasting communitybenefits by increasing
employment and improving the
economic and environmentalclimate of rural communities.Priority given to 25,000 population
or less.Loan program funded by Rural
Economic and CommunityDevelopment (REDC) to strengthenthe economy of rural communities.Indirect financing/loan to commercial
or other authorized lenders in any
area other than an incorporated city ortown with greater than 50,000population and urbanized areacontiguous and adjacent to such city
or town.Ongoing
Alaska Commercial
Fishing
RevolvingLoan FundDepartment of
Commerce
and EconomicDevelop-mentLoan The Commercial Fishing
Revolving Loan Fund provides
long-term, low interest loans tocommercial fishing businesses.Statewide The interest rate is 2 percent above
the prime rate, not to exceed 10.5
percent.   Interest rate will be fixed attime of loan approval.  Maximumloan term is 15 years.Ongoing
Alaska Rural
Develop-ment
Assistance
GrantsDepartment of
Communityand Regional
AffairsGrant Competitive grants to
communities.Communities with fewer than 900
people or a lack of centralized waterand sewer systems serving the
majority of residents, a lack of
organized police of fire protection,or a lack of medical and dentalservice other than those provided bythe Indian Health Service.Each grant can provide a maximum
of $50,000 per community.Ongoing
Alaska Rural
Develop-
ment
AssistanceMini-grantProgramDepartment of
Community
and Regional
AffairsGrant Grants for economic development
projects for planning or
implementation of business start-
up or expansion, manufacturing,tourism development or othereconomic enterprises that increasejobs, income or services in ruralAlaska communities.Communities with fewer than
10,000 people.  Grants are provided
to native village councils, and
regional or local nonprofitcorporations which serve eligiblecommunities.  With Department'sapproval, a community may submitan application with a public or
private for-profit entity if the
community will receive a specifiedbenefit.Maximum $30,000 per community
per fiscal year.
Funding level during FY 98 was
approximately $200,000.OngoingG/SCM/N/95/USA
Page 62Arizona Defense
Restructuring ProgramDepartment of
CommerceTax
Credit/TaxIncentiveTo assist defense contractors in
the state in maintaining andattracting contracts with theDepartment of Defense (DOD);and to encourage defense
contractors to diversify into
commercial markets, adopt newmanufacturing processes andtechnologies, and consolidatefacilities into this state.Defense contractors (manufacturer,
assembler or fabricator).  No newcertifications to the Department ofRevenue after June 30, 2001.A credit allowed against corporate
income taxes for up to 40 percent ofthe real and personal property taxespaid based on jobs retained andcreated; corporate and individual
income tax credits for increases in net
employment above an establishedbaseline.  The credit is a dollaramount allowed for each newemployee equaling $7,500 over five
years; and depreciation or
amortization costs of capitalinvestments may be subtracted fromArizona gross income equal to one-half of the time period allowed underthe U.S. Internal Revenue Code.Ongoing
Arizona Enterprise
Zone
ProgramArizona
Department of
CommerceTax Credit  To improve the economies of
areas in the state with high
poverty or unemployment rates by
enhancing opportunities forprivate investment in certain areascalled "enterprise zones".Benefits apply to businesses located
in disadvantaged areas designated a
as state enterprise zone, creating
new full-time jobs that pay at least adesignated "county wage" andprovide health insurance coveragefor which the company pays at least
50 percent. Thirty-five percent of
the jobs for which the tax credits areclaimed must be filled by zoneresidents.Provides an income tax credit for net
increases in qualified employment
positions.  These credits may be up to
$3,000 per qualified employmentposition over three years.  In addition,qualified manufacturing businesseslocating or expanding within these
zones can apply for a class six
property tax classification (5 percentof full-cash value) for a period of 5years.  (Primary portion of propertytax is reclassified).Ongoing
Arizona Military
Reuse Zone
ProgramArizona Department of
CommerceEases the restrictions on the
designation and renewal of a
closed military facility as a
military reuse zone by allowingthe Governor to designate thezone upon either the execution ofa long-term lease or title transfer.Manufacturers, assemblers, or
fabricators of aviation or aerospace
products, as well as providers of
aviation or aerospace services,located within a Military ReuseZone.Companies will have their real and
personal property classified as class
six property with an associated
assessment ratio of 5 percent,normally at 25 percent, for a period offive years.  In addition, tax credits arebased upon net new employees.  Thecredit is a dollar amount allowed for
each new employee up to $7,500 (up
to five years).  There is also anexemption of the (5.6 percent stateportion) Transaction Privilege Taxavailable for a prime contractorhaving a contract with a qualified
MRUZ business for work in the zone.OngoingG/SCM/N/95/USA
Page 63Arizona Motion
PictureProductionStateTransaction
Privilege
Tax RefundArizona
Department ofCommerceTax
RefundFilm incentives Only purchased tangible goods and
leased property can be claimed forrefund.  To be eligible feature films,telefeatures, music videos,documentaries, episodic television
series and other television
production must meet the $1 millionexpenditure threshold of qualifiedspending over any consecutive 12-month period for one or more
productions or portions thereof shot
in Arizona.  Commercialadvertising production must meetthe $250,000 expenditure thresholdin qualified spending with the sametime parameters as features.A 50 percent transaction privilege
(sales) tax refund to qualifyingproduction companies for projectsfilmed in Arizona.  SpecificDepartment of Revenue (DOR) rules
must be followed to both apply and
qualify for this rebate against the 5.6percent state sales tax.Ongoing
Arkansas Arkansas
Economic
Developmen
t ActArkansas
Department of
Economic
DevelopmentTax Credit The Arkansas Economic
Development Act is a
discretionary incentive that is only
used for large projects for whichArkansas has significantcompetition.  The Act requires atleast a $5,000,000 investment and
the creation of at least 100 jobs.
Employee wages must be abovethe state or county average wagesfor the company to be eligible.Currently, the Act allows theDepartment of Economic
Development to negotiate a tax
credit based on the totalinvestment a company makes inbuilding or expanding a project inArkansas.  The amount of the taxcredit is dependent on the wages
paid by the company which must
be at least equal to the county orstate average wage.  The creditcan be used to offset from 50percent to 100 percent of the
employer’s state income tax
liability.(A)  Manufacturers classified in
federal Standard Industrial
Classification codes 20-39,
including semiconductor andmicroelectronic manufacturers;(B) Computer businesses primarilyengaged in providing computer
programming services, the design
and development of prepackagedsoftware, businesses engaged indigital content production andpreservation, computer processingand data preparation services,
information retrieval services, and
computer and data processingconsultants and developers.  (C)Businesses primarily engaged inmotion picture production;  (D)Businesses primarily engaged in
commercial physical and biological
research as classified by StandardIndustrial Classification code 8731;(E)  A distribution center with noretail sales to the general public,
unless seventy-five percent of the
sales revenue is from out-of-statecustomers;   (F)  An office sectorCompany must invest at least $5
million and create at least 100 jobs in
order to qualify.  The tax credit
ranges from 50 percent of totalinvestment to 100 percent of totalinvestment, depending upon thewages paid.OngoingG/SCM/N/95/USA
Page 64business with no retail sales to the
general public; and  (G)  Acorporate or regional headquarterswith no retail sales to the general p
Arkansas Arkansas
EmergingTechnologyDevelop-ment ActArkansas
Department ofEconomicDevelop-mentTax Credit This Act provides an economic
incentive to manufacturers ofhigh-growth technologies that areon the verge of full entry into theworld market.  It offers a stateincome tax credit equal to 50
percent of the cost of purchasing
or constructing a facility thatdesigns, develops or producesphotovoltaics (solar cells), fuelcells, electric vehicle componentsfor electric vehicles licensed for
use on Interstate highways,
Stirling engines, microturbines ornanotechnology.  The tax creditprovided by this Act may becarried forward for 14 yearsbeyond the year in which it was
earned.Statewide. Manufacturers of fuel
cells, photovoltaic cells, electricvehicle components for electricvehicles licensed for use onInterstate highways, Stirlingengines, microturbines and
nanotechnology.Company that earns income tax
credits under this incentive may carryforward unused credits for up to 14years beyond the year in which theywere initially earned.OngoingG/SCM/N/95/USA
Page 65Arkansas Biotechnolo
gy Develop-ment andTraining TaxCreditsArkansas
Department ofEconomicDevelop-mentTax Credit The Arkansas Biotechnology
Development and Training Act of1997 offers three different incometax credits to Arkansas taxpayersfurthering biotechnical business
development.  (1) a five percent
income tax credit applied to coststo build and equip eligiblebiotechnical facilities.  (2) A 30percent income tax credit both for
eligible employee training costs
and for contracts with state-supported institutions of highereducation to conduct qualifiedcooperative research projects.  (3)An income tax credit for qualified
research involving the purchase,
license, develop or protectintellectual property.  This creditis equal to 20 percent of theamount by which-the cost ofqualified research exceeds the
cost of such research in the base
year.  (4) A 30 percent income taxcredit for investments in advancedbiofuels facilities.Biotechnology companies Income tax credits shall be used to
offset the first $50,000 of income taxliability arising during the credit yearand fifty percent of any remainingincome tax liability for the year.  Any
unused credit may be carried forward
for a maximum of fourteen taxableyears after the credit year in whichthe credit originated.OngoingG/SCM/N/95/USA
Page 66Arkansas Enterprise
Zones(AdvantageArkansas)Department of
EconomicDevelop-mentTax
CreditsThe entire state of Arkansas is
designated as an Enterprise Zoneunder the Advantage ArkansasProgram.  The program providesincome tax credits and sales and
use tax refunds to qualifying
businesses that create new jobs asa result of location, expansion, orfacility modernization projectsanywhere in Arkansas.Manufacturers in SIC codes 20-39
and businesses primarily engaged incommercial physical or biologicalresearch as classified by SIC code8731 that create one or more net
new full-time permanent jobs; or
eligible computer firms with noretail public sales that derive at least75 percent of their revenue fromout-of-state sales and create five or
more net new full-time permanent
jobs; or businesses primarilyengaged in motion pictureproduction with no retail publicsales that derive at least 60 percentof their revenue from out-of-state
sales and create 25 or more net new
full-time permanent jobs; ordistribution centers, including e-commerce distributors, that deriveat least 75 percent of their resourcesfrom out-of-state sales; office sector
businesses; corporate or regional
headquarters; ortrucking/distribution terminals withno retail public sales that create 25or more net new full timepermanent jobs.Advantage Arkansas provides a credit
on state income tax equal to theaverage hourly wage of each newworker times 100, with a $3,000 capper employee. The multiplier
increases from 100 to 400, with a
$6,000 cap per employee, when abusiness locates in a “high-unemployment” county.  Themultiplier also increases from 100 to
400 when a county has experienced a
sudden loss of jobs due to closing ofone or more businesses and isapproved by the Arkansas EconomicDevelopment Commission as a “highunemployment” county.  Employees
must be Arkansas taxpayers to
qualify for the credit. The income taxcredit begins in the  year in which thenew employees are hired. Any unusedportion of the credit may be appliedagainst income tax for the succeeding
nine years.
Advantage Arkansas participants arealso eligible for a refund of sales anduse taxes for building materials andtaxable equipment connected with theeligible project.Ongoing
Arkansas Motion
PictureIncentiveActArkansas
Department ofEconomicDevelop-mentTax
RefundThis Act provides motion picture
companies that spend at least$500,000 in the state within sixmonths, or $1 million within 12months, a refund of all sales anduse taxes paid during the
production of the film, telefilm,
music video, documentary,episodic television show orcommercial advertising project.Motion picture industry No limits.  Spending beyond the
required threshold allows for a refundof all sales and use taxes paid inconnection with the filming orproduction.OngoingG/SCM/N/95/USA
Page 67Arkansas Tax Increment Financing Bond
ProgramIn November 2000, voters
approved an amendment to theArkansas Constitution thatenables local governments toissue bonds to finance
improvements in a redevelopment
district. The bonds will be securedand paid back from the increasedtax revenue generated as a resultof the improvements.A redevelopment district must be in an area that is co nsidered blighted,
deteriorated or underdeveloped.Ongoing
California Enterprise
ZonesTechnology,
Trade and
Commerce
AgencyTax Credit California's Enterprise Zone
program is an innovative
partnership comprised of state
government, local governmentand private businesses.  TheEnterprise Zone program spursbusiness development in 39designated areas through special
zone incentives.  Companies
already located or  that locate in
Enterprise Zones can takeadvantage of state and localincentives and programs not
available to businesses outside the
Enterprise Zone.  California taxlaw allows businesses thatexperience a loss for the year tocarry this loss forward to the nextyear in order to offset income in
the following years. Businesses
within LAMBRA (Local AgencyMilitary Base Recovery Area) andEZs can carry over for 15 years.California tax law allowsbusinesses that experience a loss
for the year to carry this loss
forward to the next year in orderto offset income in the followingyears. Businesses withinLAMBRA and EZs can carry over
for 15 yearsThere are 39 designated areas.
Designations are made based on
proposals from cities and counties
containing areas meeting thesecriteria.  These areas are thenevaluated competitively on the basisof local economic developmentincentives designed to complement
state incentives.Tax credits and benefits available to
companies locating in Enterprise
Zones include: (1) tax credits for
sales or use taxes paid on up to $20million of qualified machinerypurchased per year; (2) a hiring creditfor wages paid to qualified employeesduring the employees' first 60 months
on the job; (3) a 15 year carryover of
up to 100 percent of net operatinglosses; (4) expensing up to $40,000 ofcertain depreciable property; (5)lender interest income deductions for
loans made to zone businesses; and
(6) preference points on statecontracts.In addition, local incentives may beavailable that include reduction orelimination of local permit and
construction-related fees, expeditious
processing of plans and permits,reduced utility rates, reduced landcosts, assistance in employee hiring,low-cost financing and low-interestrevolving loans.  For LAMBRA, new
businesses can carryover 100 percent
of their losses over eight years if theloss is in their first year of operation,100 percent over seven years ifOngoingG/SCM/N/95/USA
Page 68California Local
AgencyMilitaryBaseRecovery
AreaCalifornia
Trade andCommerceAgencyTax Credit Local Agency Military Base
Recovery Area (LAMBRA)legislation (AB 693) was draftedto stimulate job creation in areasexperiencing military base
downsizing and closure.  It was
signed into law in 1993 inresponse to severe job loss amongCalifornia military and civilianpersonnel as a result of base
closures.  Per legislation, the state
has been geographically dividedinto five regions. Communitiescompeted for the LAMBRA Zonedesignation which is limited toone per region.  A LAMBRA may
consist of only the former base or
a specified portion of it. ALAMBRA designation is bindingfor eight years.
LAMBRA designations are
similar to Enterprise Zones.In 1995 the first th ree military site
designations under the state'sLAMBRA program included MareIsland Naval Shipyard in Vallejo,Castle Air Force Base in Merced
and George Air Force Base in
Victorville.  In 1997, AlamedaNaval Air Station in Alameda andthe Tastin Marine Corps Air Stationreceived their designationsThe designations allow communities
to extend California Enterprise Zonetax credits to companies locating in aLAMBRA Zone.  As with EnterpriseZone communities, LAMBRA
communities also have community
incentives as a part of the businessattraction package.Ongoing
California Old Growth
DiversificationRevolvingLoan FundCalifornia
Trade andCommerceAgencyLoan With funding from the U.S. Forest
Service, the Old GrowthDiversification program provideslow cost capital to businesses tocreate and retain jobs in areas ofNorthern California affected by
timber harvest reductions and
sawmill and related plant closures.Emphasis will be placed on value-added wood products and otherresource-related manufacturing,and on business ventures which
diversify the local economy.
Where possible, preference willbe given to those projects whichemploy displaced timber workers.Expanding businesses as well as
start-up ventures will be
considered.Statewide Businesses may borrow from $25,000
to $100,000. Loan terms may go upto 10 years for real estate orequipment, and up to five years forworking capital. Lines of credit witha one-year maturity are also available.
The interest rate may be fixed or
variable, depending on the borrower'sindividual circumstances and will beset at the time of loan approval.Discontinued
as of June30, 2003G/SCM/N/95/USA
Page 69California Recycling
MarketDevelop-ment ZoneProgramCalifornia
IntegratedWasteManagementBoard (part of
CalEPA)Mixed
FinancingThe Recycling Market
Development Zone Program wasdeveloped by the CaliforniaEnvironmental ProtectionAgency, Integrated Waste
Management Board.  Businesses
locating within the 40 designatedzones can take advantage of low-interest loan packaging, localpermit streamlining, technical
assistance and information
sharing.  In addition, RMDZ loansare available for recyclingprojects.Any business or local government
agency located in a Recycling Zoneutilizing post-consumer orsecondary waste material in itsproduction process may apply for a
recycling loan.  Private businesses
and not-for-profit organizationsmay borrow funds for real property,equipment, working capital, orrefinancing of onerous debts.Each eligible business or local
government agency may borrow up to50 percent of the cost of any project,with a maximum of $1 million.Ongoing
Colorado Enterprise
ZoneOffice of
Econ. Dev &Int'l TradeTax Credit Tax credits granted for investment
and employment which takesplace within 16 designatedenterprise zones.  Companies
must invest in equipment used
exclusively in the zone; they musthire new full-time employees;conduct R&D activities in thezone; invest in the rehabilitation
of a building that is over 20 years
old and vacant; or make acontribution to approved zonedevelopment projects or child carein zones.There are currently 16 zones in the
state, 8 of which are in rural areas.Legislation provides for amaximum of 16 zones.  Any
business locating or expanding
anywhere within a designatedenterprise zone is potentiallyeligible.An investment credit of 3 percent is
for investments in equipment usedexclusively in the enterprise zone.There is a 25 percent income tax
credit (not to exceed $50,000) to
rehabilitate vacant buildings. There isa 10 percent credit for employer jobtraining expenses. There is a $500 taxCredit for each new full-time
employee, and an additional $500
credit for each full-time agriculturalprocessing or manufacturingemployee.  A 3 percent tax credit isgranted for increases in R&Dexpenditures.  There is also a tax
credit of 25 percent (not to exceed
$100,000) for private contributions tolocal zone administrators forenterprise zone development projectsand for promoting child care withinzones.  Localities also have the option
of refunding local property tax and/or
sales and use tax on equipment andsupplies.OngoingG/SCM/N/95/USA
Page 70Colorado Biotech
Sales TaxRefundDepartment of Revenue To promote business within the
state."Qualified taxpayer" means a C
corporation, as defined in section39-22-103 (2.5), a partnership, asdefined in section 39-22-103 (5.6),a limited liability company that is
not a C corporation, an S
corporation, as defined in section39-22-103 (10.5), or a soleproprietorship that purchases,stores, uses, or consumes tangible
personal property to be used in
Colorado directly andpredominately in research anddevelopment of biotechnology.For the calendar year commencing
January 1, 1999, and for eachcalendar year thereafter, eachqualified taxpayer shall be allowed toclaim a refund of all state sales and
use tax paid by the qualified taxpayer,
on the sale, storage, use, orconsumption of tangible personalproperty to be used in Coloradodirectly and predominately in
research and development of
biotechnology during that calendaryear.To claim the refund a qualifiedtaxpayer must submit a refundapplication to the Department of
Revenue on a form provided by the
Department. The application must besubmitted by January 1 and no laterthan April 1 of the calendar yearfollowing the calendar year for whichthe refund is claimed. The application
must be accompanied by proof of
payment of state sales and use taxespaid by the qualified taxpayer in theimmediately preceding calendar year.Ongoing
Connec-
ticutApprenticesh
ip Training
Tax CreditConnecticut
Department of
LaborTax Credit This is a tax credit granted under
Gen. Stat. 12-217g and amended
by P.A. 97-295.The manufacturing trades of
machine tools, plastics, or metals.A firm may apply for a credit of up to
$4800 per apprenticeship.  The
amount of the credit is limited to the
lesser of 50 percent of the actualwages paid or the total number ofworking hours during the yearmultiplied by $4.00, or $4,800.Ongoing
Connec-
ticutConnecticut
Capital
Access
Fund:  UrbanConnecticut
Develop-ment
AuthorityLoan Access to bank lending through
use of portfolio loan insurance.
Loss reserves up to 29.5 percent
used to induce bank lending intargeted areas.  Up to 9.5 percentcash reserve deposited for othersmall business loans.  Direct loansup to $250,000 for buildings,
equipment and working capital forBusinesses located in New London
or Windham counties or one of 25
designated municipalities are
eligible for targeted business loans.Special emphasis on minority andwomen-owned businesses.  Smallbusiness Assistance loans availablefor businesses with 100 pr fewer
full-time employees.No prior CDA approval is  required
for new bank loans up to $250,000.
Maximum loan $500,000.  Maximum
15 year term.OngoingG/SCM/N/95/USA
Page 71specialized projects.
Connec-
ticutConnecticut
Growth FundConnecticut
Develop-mentAuthorityLoan Direct state loans and equity
investments administered by theConnecticut DevelopmentAuthority to small businesses forfixed asset financing, workingcapital, and start-up capital for
those businesses vital to the
economic base of the state.
Special purpose financing loans
available for certain businessesunable to obtain conventional
financing, including small
contractors, minority businesses,water facilities, enterprise zonebusinesses or other impactedbusinesses.Any for-profit small business whose
gross sales, including those ofaffiliates, did not exceed $25million in the most recent fiscalyear.Loans are made in amounts from
$50,000 to $4 million within whichreal property loans cannot exceed 90percent of their cost or 20 years interm; machinery and equipmentcannot exceed 80 percent of cost nor
10 years in term; and working capital
cannot exceed those amountsdetermined to be necessary by theauthority for a maximum term ofseven years.  The rate of interest is.50 percent over the latest 30-year
U.S. Treasury rate outstanding as of
the first day of each calendar quarter.Limit of $4 million to any oneborrower or SBIC and up to $1million to state or local developmentcorporations.Ongoing
Connec-
ticutConnecticut
InnovationsConnecticut
Innovations,
Inc.Equity The goal of these efforts is the
creation and sustainable growth of
a community of high technologycompanies vital to Connecticut'sfuture.To be considered as a Connecticut
Innovations portfolio client, a
company must have a proprietarytechnology, since this is typicallythe collateral for providing funds.Product development financing is
available for  a minimum of 40
percent of the project funds between$50,000 and $1,000,000 in funds.Companies may apply for up to$500,000 under CTP.  Investmentsare structured using a variety of
vehicles, including debt, equity,
quasi-equity and royalties.  Generally,the fund expects a compoundedannual rate of return of 25-40 percent.The structure of the investment terms
depends upon the risk assessment
made by Connecticut Innovations'staff, and the needs of the business.OngoingG/SCM/N/95/USA
Page 72Connec-
ticutElectronic
DataProcessingEquipmentProperty Tax
CreditDepartment of
RevenueServicesTax Credit Property tax credit for electronic
data processing equipment.Statewide Property tax credit that provides a
100 percent credit for property taxpaid on electronic data processingequipment.  Unused credits may becarried forward for five income years.Ongoing
Connec-
ticutEnterprise
CorridorZonesDepartment of
Economic andCommunityDevelopmentMixed Tax Enterprise Corridor Zones are
located along Route 8 in thestate's Naugatuck Valley andInterstate 395 in the eastern regionof the state.  The benefitsavailable in an enterprise corridor
zone are the same as in an
enterprise zone, subject to thesimilar qualifying terms andconditions.The communities located in the
corridor zones are: Ansonia, BeaconFalls, Derby, Griswold, Killingly,Lisbon, Naugatuck, Plainfield,Putnam, Seymour, Sprague,Sterling and Thompson.
Municipalities in the enterprise
corridor zones are not classified astargeted investment communities,and are therefore not eligible toextend urban job benefits.In the case of an Enterprise Corridor
Zone, for the purposes of obtainingthe enhanced 50 percent level ofcorporate credits, the hiring level fornew full time positions remains at 30percent of those positions being filled
by residents of the community in
which the project takes place, whoare JTPA eligible.Ongoing
Connec-
ticutEnterprise
Zone or
Entertainme
nt DistrictTax CreditState of
Connecticut
Department of
Economic AndCommunityDevelopmentTax Credit Tax credit for relocating or
expanding a facility within a
designated enterprise zone or
entertainment district.Enterprise zones or entertainment
districts.  Manufacturers, R&D,
warehousing and certain services
and entertainment relatedbusinesses as defined byregulations.Allows a business 25 percent or 50
percent of their allocable State
Corporate business tax as a credit.
Corporations may claim this creditfor 10 years beginning with the firstyear following certification.Ongoing
Connec-
ticutEnterprise
ZoneProgramState of
ConnecticutDepartment ofEconomic and
Community
DevelopmentMixed Tax Connecticut's  Enterprise Zone
Program represents a state andlocal partnership for thepromotion of good business
development, residential
development, and the creation andretention of jobs. It targets avariety of state and localincentives for specific areas of 17
Connecticut municipalities.Manufacturers and certain
qualifying service sectors firms inthe targeted  investmentcommunities. Program geared
toward manufacturing and certain
service sector businesses as well asresearch and development related tomanufacturing and distributors ofmanufactured products. Eligible
facilities include newly constructed
facilities, older facilities idle for atleast one year prior to beingacquired through lease or purchase,and facilities that are substantiallyrenovated or expanded. Also,
facilities must have a standard
industrial code 2000 to 3999.Manufacturing facilities located
within the zones are eligible for thefollowing assistance: 1) Five-year, 80percent abatement of local taxes on
real estate improvements and
personal property acquisitions: 2)Ten-year, 25 percent credit oncorporate business taxes, 50 percent ifat least 5 percent of all new
employees are from the enterprise
zone or from the municipality'sdisadvantaged population. 3) Low-cost loans and free technicalassistance; 4) Job-training andplacement assistance; 5) Exemptions
on both state real estate conveyance
taxes and sales taxes on machineryreplacement parts. Both commercialOngoingG/SCM/N/95/USA
Page 73businesses and residential facilities
(where tenants satisfy maximumincome level criteria) are eligible fora seven-year graduated tax deferralon increased assessments for
improvements to property,
exemptions on state real estateconveyance tax, and local incentives.
Connec-ticutFinancial
InstitutionsTax CreditDepartment of
Economic andCommunityDevelopmentTax Credit This credit is available to financial
institutions which construct a newfacility of at least 900,000 squarefeet and create a minimum of1,200 new jobs.Statewide Credit levels of 30 percent, 40
percent or 50 percent are based on thenumber of qualified employees.  Thiscredit may be taken for up to tenyears.Ongoing
Connec-
ticutManufacturi
ng
AssistanceActState of
Connecticut
Department ofEconomic andCommunityDevelopmentLoan The most comprehensive of the
Department's financing programs,
this act allows for the provision offinancing for a variety of projects.Statewide- Manufacturing or
economic base business.Funds 50 percent of total project
costs; up to 75 percent for joint
ventures between two or moremunicipalities, up to 90 percent intargeted investment communities, andup to 100 percent for defensediversification projects.Ongoing
Connec-
ticutManufacturi
ng Credits toFacilities
Located in
DistressedMunicipalities andEnterpriseZonesDepartment of
RevenueServicesTax Credit Tax Credits up to 50 percent are
available through the Departmentof Economic and Community
Development (DCED) for
corporations (includingmanufacturing facilities) that arelocated in designated distressedmunicipalities and enterprisezones within Connecticut.Statewide OngoingG/SCM/N/95/USA
Page 74Connec-
ticutManufacturi
ng Facility ina HighUnemployment Area Tax
CreditState of
ConnecticutDepartment ofEconomic andCommunity
DevelopmentTax Credit A credit may be applied against
the portion of the corporationBusiness tax allocable to amanufacturing facility located in adistressed municipality.Operating in a designated area of
high unemploymentThe credit period lasts for ten years
beginning with the first yearfollowing certification.Ongoing
Connec-
ticutTax Credits
forManufacturers Located inConnecticut's Targeted
Investment
CommunitiesState of
ConnecticutDepartment ofEconomic andCommunityDevelopmentTax Credit A ten year tax credit for
businesses relocating to orexpanding in one of Connecticut'sTargeted InvestmentCommunities.Targeted Investment Communities-
'Eligible activities includeinvestments in manufacturingfacilities or in research anddevelopment activities related tomanufacturing.25 percent corporate tax credit for 10
years.Ongoing
Connec-
ticutTax
Increment
FinancingConnecticut
Development
AuthorityBond Tax-exempt and taxable bonds for
special economic development
projects using incremental statetax revenues as partial security forthe bonds.Large-scale economic development
projects approved by the Authority
prior to 7/1/96 and determined to beself-sustaining through thegeneration of incremental taxescollected under the sales,admission, cabaret and dues taxes.Negotiated sale or competitive bid
with bond purchasers developed in
conjunction with the State Treasurer.Terms generally 10 and 30 years.Ongoing
Connec-
ticutUrban Jobs
ProgramDepartment of
Economic and
Community
DevelopmentMixed Tax The Urban Jobs Program provides
incentives to manufacturing
businesses to encourage the
location and expansion ofindustrial facilities in targetedinvestment communities withinthe state.  The incentives are
primarily tax incentives.There are presently 17 targeted
investment communities.  'Facilities
must have a standard industrial code
2000 to 3999.Businesses located within the targeted
areas are eligible for the following
assistance: 1) An 80 percent local
property tax abatement for five yearsfor both real and personal property; 2)A corporate business tax reduction of25 percent for ten years; 3) Working
capital loans for small business; 4) A
0.5 percent reduction in charges forstate industrial mortgages guarantees.Facility owners are entitled to theproperty tax incentives; all otherincentives are reserved for facility
occupants.OngoingG/SCM/N/95/USA
Page 75Delaware Corporate
Income TaxCreditsDepartment of
FinanceTax
CreditsTo encourage new and expanded
facilities within targeted industriesin Delaware.Firms within targeted industries,
including: manufacturers;wholesalers; laboratories used forscientific, agricultural, or industrialresearch, development or testing;
computer processors; engineering
firms, consumer credit reportingservices; wholesale of computersoftware; telecommunications andaviation services.Firms within targeted industries
qualify for corporate income taxcredits of $400 for each newemployee and $400 for each new$100,000 investment. Firms within
targeted industries who also locate in
a targeted area qualify for $650 foreach new employee and $650 foreach new $100,000 investment. Firmsmust invest a minimum of $200,000
and create a minimum of five new
positions. Total credits in any taxableyear cannot exceed 50 percent of thepre-tax liability. Unused credits canbe carried forward during the ten-yearProgram. Selected commercial and
retail businesses which locate in one
of the 30 targeted census tracts andmeet the minimuminvestment/employment criteria,qualify for credits of $400/newemployee and $400/$100,000
investment.Ongoing
Delaware Corporate
Income TaxCredits(TargetedIndustry &Targeted
Areas )Delaware
EconomicDevelopmentOfficeTax Credit Delaware has identified targeted
industries and targeted areas foreconomic development purposesand provides tax credits forqualifying new and expandedfacilities for up to ten years.  This
program has a requirement of job
creation associated with it.Targeted areas are defined as: a)
real property that is owned by anylevel of government or any of theiragencies; b) real property owned bya non-profit organization which isorganized and operated solely for
the purpose of fostering economic
development; c) real property whichhas been approved as a DelawareForeign Trade Zone; and d) 30 lowincome Census Tracts throughoutthe State.Firms within targeted industries
qualify for corporate income taxcredits of $400 for each newemployee and $400 for each new$100,000 investment. Firms withintargeted industries who also locate in
a targeted area qualify for $650 for
each new employee and $650 foreach new $100,000 investment. Firmsmust invest a minimum of $200,000and create a minimum of five newpositions. Total credits in any taxable
year cannot exceed 50 percent of the
pre-tax liability. Unused credits canbe carried forward during the ten-yearprogram. Selected commercial andretail businesses which locate in one
of the 30 targeted census tracts and
meet the minimuminvestment/employment criteria,OngoingG/SCM/N/95/USA
Page 76qualify for credits of $400/new
employee and $400/$100,000investment.
Delaware Delaware
VenturePartnersTriad
InvestorsCorporationLoan Delaware Venture Partners has
the ability to fund seed stage,early stage, and later stagecompanies in both technologyrelated and non-technology fields.All computer-related, high
technology, biotechnology, medical,communications, environmental andmanufacturing.Investments can range from $150,000
for seed stage companies up to $2million or more for later stagecompanies.Ongoing
Delaware Public
Utility Tax
Rebates forIndustrialUsersDepartment of
FinanceTax
RefundThis program provides rebates of
public utility tax for industrial
firms meeting the criteria fortargeted industry tax credits.All industrial users of gas and
electricity.Qualifying industrial users are
eligible for a rebate of 50 percent of
the Public Utilities Tax imposed onnew or increased consumption of gasand electricity for five years.Ongoing
Florida Capital
InvestmentTax ProgramEnterprise
Florida, Inc.Tax Credit The Capital Investment Tax
Credit is an annual credit againstthe corporate income tax for up to
20 years.In order to qualify for consideration
under the program, an applicantmust be in a designated high impact
sector (currently silicon technology;
transportation equipmentmanufacturing-SICs 372, 376 and3711; or information technology—SICs 357, 366, 367, 481, 482 and737). Other industries are expected
to be designated in the future.The amount of the annual credit is up
to five percent of the eligible capitalcosts generated by a qualifying
project or a specified percentage of
the annual corporate income taxliability generated by the project,whichever is lower. Thosepercentages are:
One hundred percent, for a project
with a cumulative capital investmentof at least $100 million;
Seventy-five percent, for a project
with a cumulative capital investment
of at least $50 million but less than
$100 million; and
Fifty percent, for a project with a
cumulative capital investment of at
least $25 million but less than $50
million.OngoingG/SCM/N/95/USA
Page 77Florida Enterprise
Zone JobsTax Credit(CorporateIncome Tax)Office of
Tourism,Trade andEconomicDevelopmentTax Credit Business located in a state-
designated Enterprise Zone, whopay corporate income tax andcreate a new full-time job, areeligible to receive a corporate
income tax credit for wages paid
to new employees who have beenemployed by the business for atleast three months and areresidents of a Florida Enterprise
Zone.State-designated enterprise zones.
Firms must earn more than $5,000to take advantage of the credit.The credit amounts to 20 percent of
wages paid to new employees whoare residents of a Florida enterprisezone.  If 20 percent or more of thepermanent, full-time employees are
residents of a Florida enterprise zone,
the credit is 30 percent.  The credit isavailable for up to two years per newemployee.  In "Rural EnterpriseZones" businesses will receive a
credit of 30 percent paid to new
eligible employees in a full-time jobwho are residents of a "RuralCounty".  If 20 percent or more of thepermanent, full-time employees areresidents of a zone, the credit is 45
percent.Ongoing
Florida Enterprise
Zone Jobs
Tax Credit(Sales andUse Tax)Office of
Tourism,
Trade andEconomicDevelopmentTax Credit Business located in a state-
designated Enterprise Zone, who
collect or pay Florida sales anduse tax and create a new full-timejob, are eligible to receive amonthly credit against their tax
due on wages paid to new
employees who have beenemployed by the business for atleast three months in a full-timejob and are residents of a FloridaEnterprise Zone.State-designated enterprise zones The credit amounts to 20 percent of
wages paid to new employees who
are residents of a Florida enterprisezone.  If 20 percent or more of thepermanent, full-time employees areresidents of a Florida enterprise zone,
the credit is 30 percent.  The credit is
available for up to two years per newemployee.  In "Rural EnterpriseZones" businesses will receive acredit of 30 percent paid to neweligible employees in a full-time job
who are residents of a "Rural
County".  If 20 percent or more of thepermanent, full-time employees areresident of a zone, the credit is 45percent.Ongoing
Florida Enterprise
Zone
Property Tax
CreditEnterprise
Florida, IncTax Credit New or expanded businesses
located in a state -designated
enterprise zone are eligible for a
corporate income tax credit equalto 96 percent of ad valorem taxespaid on the new or improvedproperty.State-designated enterprise zones.
'Firms must earn more than $5,000
to take advantage of the credit.The corporate income tax credit is
available for a period up to five years,
up to a maximum of $25,000
annually, and may be carried forwardfor five years. If 20 percent of thepermanent employees of the businessare residents of the zone, themaximum amount of the credit is
increased to $50,000 a nnually.  NewOngoingG/SCM/N/95/USA
Page 78or expanded businesses must create at
least five new jobs.
Florida Florida
EnterpriseZoneProgramEnterprise
Florida, IncTax Credit Florida's Enterprise Zone Program
offers financial investmentopportunities to businesseslocated in designated areas foundin both urban and rural
communities.Tax savings are offered to
businesses who are located within adesignated Enterprise Zone whoemploy zone residents, rehabilitatereal property or purchase business
equipment.  Tax investments are
also available to businesses whopay either the Florida CorporateIncome Tax or the Florida Sales andUse Tax.The following state investments are
offered to encourage privateinvestment in the zones as well asemployment opportunities for thearea's residents:
Enterprise Zone Jobs Tax Credit
(Sales & Use Tax),Enterprise Zone Jobs Tax Credit(Corporate Income Tax), Sales Taxrefund for building materials, sales
tax refund for business machinery
and equipment, and sales taxexemption for electrical energy, andhumanity contribution tax credit.Ongoing
Florida High Impact
BusinessPerformanceIncentiveEnterprise
Florida, IncGrant The High Impact Business
Performance Incentive (HIPI) is anegotiated inactive grant providedto pre-approved applicants in
certain high-impact sectors.In order to qualify for consideration
under the program, an applicantmust be in a designated high impactsector (currently silicon technology
or transportation equipment
manufacturing).  Applicants mustalso create at least 100 new full-time jobs in Florida in a three-yearperiod and make a cumulative
investment of at least $100 million
in the same time-frame.  Forresearch and development facilities,the requirements are lower.Seventy-five full-time jobs need tobe created and there should be a
cumulative capital investment of at
least $75 million over a three yearperiod.Section 288.108 (3)(b), Florida
Statutes, provides guidelines on theamount of grant to be given to aneligible high impact business.OngoingG/SCM/N/95/USA
Page 79Florida Qualified
DefenseContractorTax RefundProgramEnterprise
Florida, IncTax
RefundThe Qualified Defense Contractor
Tax Refund Program provides atax refund of up to $5,000 per jobcreated or saved in Floridathrough the conversion of defense
jobs to civilian production, the
acquisition of a new defensecontract, or the consolidation of adefense contract which results inat least a 25 percent increase in
Florida employment, or a
minimum of 80 jobs.All- In order to qualify for
consideration under the program anapplicant must:  pay an averageannual wage that is at least 115percent of the state or local average
wages; have in the last year derived
at least 70 percent of its Floridagross receipts from Department ofDefense contracts and not less that80 percent over the preceding five
years; create at least a 25 percent
increase in Florida employment or80 new jobs if a consolidationproject; show that the jobs make asignificant economic contribution tothe area economy; demonstrate that
the tax refund is necessary for the
business to compete for the newcontract or make the consolidation;and provide a resolution from thecity or county commissionrecommending the applicant for the
incentive.Once certified by the OTTED, the
applicant may receive funds up to theproject cap on the taxes it paysincluding corporate income, sales andexcise, ad valorem, and documentary
stamp taxes, subject to the following:
1) up to 25 percent of the total refundmay be taken per year as long as thebusiness in maintaining projectemployment and wage levels, 2) up to
$2.5 million may be refunded to a
single defense contractor in any year,3) up to $7.5 million may be refundedto a single defense contractor in allthree years under the program.  Thelocal community provides a  match
equaling 20 percent of the tax refund.
If located in a Rural EconomicDevelopment Initiative (REDI)county, the business may elect to beexempt from the local match andaccept a refund equal to 80 percent of
the refund for which they would
otherwise qualify.Ongoing
Florida Quick
ResponseTrainingProgramWorkforce
Florida, Inc.Grant Quick Response's customer-
driven training programs providerapid, effective training which isspecifically tailored and designedto meet the needs of Florida
business.Special consideration will be given
to applicants located in a distressedurban or rural area or EnterpriseZone.  Funding priority given tobusiness creating high skill/high
wage jobs, in qualified targeted
industries· jobs located in adistressed Urban Inner City Area orRural Area, jobs located in anEnterprise Zone or BrownfieldArea, whose grant proposals have
the greatest potential for economic
impact, that contribute in-kind andcash matches.Once approved, a grant agreement is
signed and the applicant is eligible forreimbursement of direct training costsI.e. instructors' salaries, curriculumdevelopment and manuals.  Payments
are made monthly on a
reimbursement and performance basisas per terms of the grant agreement.The maximum grant term is 24months.OngoingG/SCM/N/95/USA
Page 80Florida Qualified
TargetIndustry TaxRefundEnterprise
Florida, Inc.Tax
RefundTo encourage quality job growth
in targeted high value-addedbusinesses.Qualified Target Industries:
Corporate headquarters;manufacturers of food, apparel,furniture, paper, printing andpublishing, chemicals, rubber,
primary/fabricated metals, industrial
machinery, electronic equipment,transportation equipment;communications,security/commodity brokers;
insurance carriers; business
services.Tax refunds to pre-approved
applicants of up to $5,000 per newjob created; $7,500 in an EnterpriseZone. New or expanding businessesin selected targeted industries or
corporate headquarters are eligible.
The applicant may receive refunds ontaxes it pays including corporateincome, sales, ad valorem, intangiblepersonal property, insurance premia,
and certain other taxes. There is a cap
of $5 million per single qualifiedapplicant in all years, and no morethan 25 percent of the total refundapproved may be taken in any singlefiscal year.   The local community
provides a  match equaling 20 percent
of the tax refund. If located in a RuralEconomic Development Initiativecounty, the business may elect to beexempt from the local match andaccept a refund equal to 80 percent of
the refund for which they would
otherwise qualify.Ongoing
Florida Qualified
TargetIndustry TaxRefundProgram
(QTI)Enterprise
Florida, IncTax
RefundThe Qualified Target Industry
(QTI) Tax Refund Program is atool available to Floridacommunities to encourage qualityjob growth in targeted high value-
added businesses.Manufacturing facilities, Finance &
Insurance Services, WholesaleTrade, Information Industries,Professional, Scientific & TechnicalServices, Management Services,
Administrative & Support Services.Pre-approved applicants who create
jobs in Florida receive tax refunds of$3,000 per new job created; $6,000 inan Enterprise Zone or Rural County.For businesses paying 150 percent of
the average annual wage, add $1,000
per job; for businesses paying 200percent of the average annual salary,add $2,000 per job.  New orexpanding businesses in selectedtargeted industries or corporate
headquarters are eligible.Ongoing
Florida Rural Job
Tax CreditProgramEnterprise
Florida, Inc.Tax Credit The Rural Job Tax Credit is a
$1,000 tax credit per qualifiedemployee to be taken againsteither the Florida CorporateIncome Tax or the Florida Salesand Use Tax.Florida’s 33 rural counties.  The list
of eligible industries includes:Manufacturers, Printing andPublishing Firms, and Mining,Agriculture, Hotels, CustomerService Centers.New businesses must create at least
10 new jobs. Existing businessesmust increase its employment base by20 percent, if the business has fewerthan 50 employees.  Existingbusinesses with 50 or more
employees must create at least 10OngoingG/SCM/N/95/USA
Page 81new jobs.
Florida Sales and
Use Tax
ExemptiononMachineryandEquipmentEnterprise
Florida, Inc.Tax
ExemptionThe Sales and Use Tax Exemption
on Machinery and Equipment is
an incentive made available tonew and expanding businesseswho use such equipment at a fixedlocation to manufacture, process,compound, or produce tangible
personal property for sale, or for
exclusive use in spaceportactivities.Manufacturing machinery and
equipment (MME) bought or used
for manufacturing, compounding, orproducing items of tangiblepersonal property.New manufacturing operations are
fully exempt. Expanding businesses
pay sales or use tax of $50,000 foreach calendar year of the expansionproject before the exemption orrefund is available.Ongoing
Florida Sales Tax
Exemptionfor ElectricalEnergy Used
in an
EnterpriseZoneOffice of
Tourism,Trade andEconomic
DevelopmentTax
ExemptionBusinesses located in an
enterprise zone may receive 50percent exemption from themunicipal utility tax, if the
municipality has enacted an
ordinance for the exemption of theutility taxes in an enterprise zone.In addition, businesses areexempted from 50 percent of thestate sales tax on utilities. If 20
percent of the firm's employees
are zone residents, the business istotally exempt from the tax.State-designated Enterprise Zones
with local ordinance exempting 50percent of the municipal utility tax.These exemptions are available for up
to five years.Ongoing
Florida Sales Tax
Refund forBuildingMaterials
Used in an
EnterpriseZoneOffice of
Tourism,Trade andEconomic
DevelopmentTax
RefundBusinesses or homeowners
located in an enterprise zone mayreceive a sales tax refund for salestaxes paid on building materials
used to rehabilitate real property
located in the zone.Enterprise Zones Pollution control equipment is also
exempt from sales and use tax.Ongoing
Florida Sales Tax
Refund for
BusinessMachineryandEquipment
Used in an
EnterpriseZoneOffice of
Tourism,
Trade andEconomicDevelopmentTax
RefundBusinesses located in an
enterprise zone may receive a
sales tax refund on sales taxespaid to purchase new and usedbusiness property (e.g. tangiblepersonal property such as office
equipment, warehouse equipment,
and some industrial machineryand equipment) which is usedState-designated Enterprise Zones Beginning July 1, 2002, the sales tax
on labor charges for the repair of, and
parts and materials used in the repairof and incorporated into, industrialmachinery and equipment that qualifyfor the sales tax exemption is also
fully exempt.OngoingG/SCM/N/95/USA
Page 82exclusively in an enterprise zone
for at least three years.
Florida Semiconduct
or, Defense,or SpaceTechnologySales and
Use Tax
Exemption(SDST)Enterprise
Florida, Inc.Tax
ExemptionThis is an exemption of sales and
use taxes that would otherwise bepaid by the semiconductor,defense or space technologybusiness on machinery and
equipment used in production and
research and development.Semiconductor, Defense, or Space
technology based facilities.Semiconductor Technology
Industrial machinery and equipmentused in semiconductor technologyfacilities to manufacture, process,compound, or produce semiconductor
technology products for sale or for
use by these facilities are exemptfrom 100 percent of the tax imposed.Machinery and equipment usedpredominately in semiconductorwafer research and development
activities in a semiconductor
technology research and developmentfacility are also fully exempt from thetax imposed.
Defense or Space Technology
Industrial machinery and equipment
used in defense or space technologyfacilities to manufacture, process,compound, or produce defensetechnology products or space
technology products for sale or for
use by these facilities are exemptfrom 25 percent of the tax imposed.Machinery and equipment usedpredominately in defense or spaceresearch and development activities
in a defense or space technology
research and development facility arealso exempt from 25 percent of thetax imposed.OngoingG/SCM/N/95/USA
Page 83Florida Silicon
TechnologySales TaxRefundProgramEnterprise
Florida, Inc.Tax
RefundTo reduce the tax liability
associated with the purchase ofreplacement research anddevelopment equipment employedby silicon technology-based
industries.Silicon technology-based facilities. For silicon technology-based
facilities, any sales and use taxes paidfor replacement and researchequipment purchased are eligible fora full refund.  A certified silicon
technology-based company may elect
to receive all or a portion of therefund or, at the option of thecompany and with the agreement ofthe university or community college,
a portion of the refund may be
directed to a state university orcommunity college.  If the universityor community college agrees toreceive the funds, it must furtheragree to match them equally and use
the proceeds to de liver educational
and research services that providedirect benefit to the company and itsemployees.Ongoing
Georgia Appalachian
RegionBusiness
Developmen
t RevolvingLoan FundDepartment of
CommunityAffairsLoans To attract businesses to the
Appalachian region.Private, for profit businesses in the
Appalachian region.$3m pool.  Loans equal $200,000 per
qualifying business, or 50 percent oftotal project cost.  Loans are usually
made “below market rate.”Ongoing
Georgia Enterprise
ZoneProgramGeorgia
Department ofIndustry,Trade and
TourismTax Credit State legislation was enacted in
1983, pertaining to Atlanta only.It was later extended to providefor statewide enterprise zone
designations in 1997.  Companies
locating within the zones receive100 percent exemption oninventory for 25 years.Legislation allows othercommunities to create
"development districts" which are
similar to Atlanta's EnterpriseZones.'Areas of poverty, unemployment,
and general distress.  Zone areascan not be less than: Industrial-25acres; commercial-8 acres; housing-
5 acres.Industrial: Ad valorem tax reductions
on property taxes on Freeport-eligibleinventory for 25 years, with a 100percent property tax reduction in the
first five years and 80, 60, 40, and 20
percent reductions in subsequent fiveyear periods; a 100 percentexemption exists for inventory for 25years.   Housing and Commercial:Zone created for ten years with
exemptions for real property being
100 percent for 5 years; 80 percent 6and 7 years; 60 percent for 8 years;40 percent for 9 years; 20 percent for10 years.  Non-exempt real propertyis taxed by the City.OngoingG/SCM/N/95/USA
Page 84Georgia Foreign
Trade ZonesGeorgia
Department ofIndustry,Trade andTourismMixed Tax Three FTZs (and several sub-
zones) provides tax advantagesfor companies importing foreigngoods, which may be bro ught into
zones without formal entry
payment of duties, excise taxes, or
payment of property taxes. Insidethe zones, goods may beprocessed, consolidated,assembled, repacked, exhibited,
manipulated, re-labeled, used in
manufacture, stored until needed,or shipped back into the UnitedStates, at which time duties wouldbe paid.Manufacturers, importers.  Manufacturers using both domestic and foreign
components.Ongoing
Georgia Headquarters
Tax CreditGeorgia
Department ofIndustry,
Trade and
TourismTax Credit Companies establishing their
headquarters or relocating theirheadquarters to Georgia may be
entitled to a tax credit if the
criteria are met (See Rates, Terms,Limits).All The following criteria must be met to
be eligible  -- New jobs created at anew headquarters must be full-time
(as defined by the law and regulation)
and must pay above the average wagefor Tier 1 counties, at least 105percent of the average wage for Tier2 counties, at least 110 percent of the
average wage of Tier 3 counties, and
at least 115 percent of the averagewage for Tier 4 counties.  -- Withinone year, a company must invest $1million and create 100 jobs at a newheadquarters facility.  -- The
company must elect not to take the
job or investment tax credits.  Thecredit is equal to $2,500 annually pernew full-time job or $5,000 if theaverage wage of the new full-timejobs is 200 percent or more of the
average wage of the county in which
the new jobs are located.  The creditsapply for five years beginning withthe year in which jobs are placed inservice. The credit may be taken
against Georgia income tax liability
and a company's withholding taxes.Credits may be carried forward for 10OngoingG/SCM/N/95/USA
Page 85years.
Georgia Investment
Tax CreditGeorgia
Department ofIndustry,Trade andTourismTax Credit Part of Georgia's Business
Expansion and Support Act of1994 which allows manufacturersand/or support facilities inoperation for 3 years a tax credit.Counties (census tracts) ranked by
unemployment rate, income, wage,and poverty level. Eligible use canbe investment, recycling, pollutioncontrol, and defense conversion
activities.  All manufacturing and
telecommunications companies areeligible to receive the tax credit.Based on the same tiers as the Job
Tax Credit program.  Allows ataxpayer that has operated an existingmanufacturing or telecommunicationsfacility or manufacturing or
telecommunications support facility
in the state for the previous five yearsto obtain a credit against income taxliability.   -- Companies expanding inTier 1 counties must invest $50,000to receive a 5 percent credit.  That
credit increases to 8 percent for
recycling, pollution control, anddefense conversion activities.  --Companies expanding in tier 2counties must invest $50,000 toreceive a 3 percent tax credit.  That
credit increases to 5 percent for
recycling, pollution control, anddefense conversion activities.  --Companies expanding in Tier 3 orTier 4 counties must invest $50,000
to receive a 1 percent credit.  That
credit increases to 3 percent forrecycling, pollution control, anddefense conversion activities.OngoingG/SCM/N/95/USA
Page 86Georgia Job Creation
Tax CreditGeorgia
Department ofIndustry,Trade andTourismTax Credit Part of Georgia's Business
Expansion and Support Act of1994 which allows statewide taxcredits for businesses locating orexpanding in the state.     Also,
Job Tax Credit for Joint
Development Authorities providesfor an additional $500 job taxcredit for a business locatingwithin the jurisdiction of a joint
authority of two or more
contiguous counties.Counties (census tracts) are ranked
according to the rate ofunemployment, income, wages, andpoverty level.  Industries includemanufacturing, warehousing and
distribution, processing, tourism,
and research and developmentindustries.The four Tiers are as follows:  Tier 1
counties that are ranked 1st through71st represent the state's leastdeveloped counties. Companiescreating 5 or more new jobs in a Tier
1 county may receive a $3,500 tax
credit; Tier 2 counties are ranked72nd through 106th.  Companiescreating 10 or more jobs in a Tier 2county may receive a $2,500 tax
credit; Tier 3 counties are ranked
107th through 141st.  Companiescreating 15 or more new jobs in aTier 3 county may receive a $1,250tax credit; Tier 4 counties are ranked142nd thro ugh 159th.  Companies
creating 25 or more new jobs in a
Tier 4 county may receive a $750 taxcredit.  Credits similar to the creditavailable in Tier 1 counties arepotentially available to companies incertain "less developed" census tracts
in the metropolitan areas of the state.
At least 30 percent of the new jobscreated in these census tracts must beheld by residents of the eligiblecensus tracts or a Tier 1 county.Ongoing
Georgia Ports
Activity Job
Tax &
InvestmentTax CreditGeorgia
Department of
Industry,
Trade andTourismTax Credit Businesses or the headquarters of
any such businesses engaged in
manufacturing, warehousing and
distribution, processing,telecommunications, tourism, orresearch and development thatincrease their port traffic tonnagethrough Georgia ports by more
than 10 percent over their 1997
base year port traffic, or by morethan 10 percent over 75 net tons,five containers or 10 20-footequivalent units (TEU's) during
the previous 12 month period are
qualified for increased job taxcredits or investment tax credits.Businesses or the headquarters of
any such businesses engaged in
manufacturing, warehousing and
distribution, processing,telecommunications, tourism, orresearch and development thatincrease their port traffic tonnagethrough Georgia ports by more than
10 percent over their 1997 base year
port traffic, or by more than 10percent over 75 net tons, fivecontainers or 10 20-foot equivalentunits (TEU's) during the previous
12 month period are qualified for
increased job tax credits orinvestment tax credits.Companies that increase their port
traffic tonnage through Georgia ports
by more than 10 percent over the
1997 port traffic base year, or 75 nettons, five containers, or ten 20-footequivalent units (TEU) during theprevious 12-month period, and meetBusiness Expansion and Support Act
criteria for the county in which they
are located, are qualified forincreased job tax credits orinvestments tax credits. Base yearport traffic must be at least 75 net
tons, five containers or 10 TEUs.
Companies that create 400 or morenew jobs, invest $20 million or moreOngoingG/SCM/N/95/USA
Page 87in new and expanded facilities, and
increase their port traffic by morethan 20 percent above their porttraffic base year may take both jobtax credits and investment tax credits.
Job Tax Credits—Companies may
qualify for tax credits based on thetier level of the county in which theylocate.
Georgia Sales Tax
ExemptionGeorgia
Department ofIndustry,
Trade and
TourismTax
ExemptionA tax exemption for machinery
replaced, upgraded, orincorporated into a manufacturing
plant.  A sales and use tax
exemption on purchases ofprimary material handlingequipment.  A sales tax exemptionfor electricity purchased thatinteracts directly with a product
being manufactured.  Tax
exemption provided by Georgialaw for new machinery andequipment. Other exemptions:purchase for resale; machinery
used directly in making a product
for sale; Raw materials that willbecome a component of a finishedproduct, i.e., paint onautomobiles; machinery andequipment used for pollution
control.Manufacturing, remanufactures of aircraft engines, parts, and components,
and government contractors for DOD or NASA.Ongoing
Hawaii Enterprise
ZoneProgramDepartment of
Business,EconomicDevelopmentand TourismMixed Tax Businesses within a designated
enterprise zone and qualifyingunder the Program(manufacturing, wholesaling,maintenance or repair) are eligiblefor General Excise Tax
exemptions and are eligible for
two different types of income taxcredits.  These include a seven-year exemption from generalexcise taxes on gross proceeds; an80 percent first-year income tax
abatement (decreasing 10 percentEnterprise Zones-  Qualifying businesses include manufacturing,
wholesaling, aviation and maritime repair, telecommunications, medicalresearch, data systems and international executive training.OngoingG/SCM/N/95/USA
Page 88each year thereafter during the
next six years), and an income taxcredit equal to 80 percent ofunemployment taxes paid duringthe first year (decreasing 10
percent during the next six years).
Counties also contribute one ormore incentives for each zonedesignated under its jurisdiction.Each county designates areas as
special enterprise zones, such as
agricultural enterprise zones, toprovide tax breaks, incentives,and other advantages tobusinesses in the area.
Hawaii High Tech
BusinessInvestment
Tax CreditDepartment of
TaxationTax Credit The high-technology business
investment tax credit provides anonrefundable income tax credit
to encourage Hawaii taxpayers to
invest in "qualified hightechnology businesses (QHTBs)."The tax credit is up to a maximumcredit of $2 million per single-
year's investment, per business,
claimed over a 5-year period. Thecredit can be taken against theincome tax for tax years 2000through 2005.  If the tax creditexceeds the taxpayer's liability,
the excess of the tax credit may be
carried over to subsequent yearsuntil exhausted.High technology businesses. (1) From 2001 to 2003, a QHTB can
sell a maximum of $500,000 of its netoperating loss per year for any net
operating loss occurring in the two
previous taxable years.  The saleprice must be 75 percent or more ofthe tax benefit sold, and the amountreceived by the seller is not taxed as
income.   (2) A maximum of $2
million per year per business non-refundable income tax credit withcarryover in a qualified hightechnology business. (3) Capital losscan be carried forward by a QHTB.Ongoing
Hawaii Motion
Picture andFilmProduction
Income Tax
CreditDepartment of
Business,EconomicDevelopment
and TourismTax Credit Each taxpayer subject to Hawaii's
net income tax, who incursproduction costs and transientaccommodations costs in Hawaii
while producing a motion picture
or television film that benefitsHawaii's economy, may claim amotion picture and filmproduction income tax credit forthe taxable year.Motion picture and film industry. The tax credit is comprised of two
parts: (1). An amount up to 4 percentof the costs incurred in Hawaii in theproduction of motion picture or
television films. (2). An amount up to
7.25 percent of the costs incurred inHawaii in the production of motionpicture or television films for actualexpenditures for transientaccommodations.  This tax credit is
also refundable.OngoingG/SCM/N/95/USA
Page 89Hawaii Revolving
VentureCapital FundHawaii
StrategicDevelopmentCorporationEquity The Corporation invests public
funds in professionally managedventure capital limitedpartnerships.High-technology and innovation
businesses are given priority.Corporation has committed $14
million, pooled with private capital ,into seven venture capital funds.Ongoing
Hawaii Royalties
TaxExemptionDepartment of
TaxationTax
ExemptionEffective January 1, 2000,
amounts received by an individualor a qualified high technologybusiness as royalties and otherincome derived from patents andcopyrights owned by the
individual or qualified high
technology business, anddeveloped and arising out of aqualified high technologybusiness, will be exempt from
income tax.High technology industry Royalties and other income derived
from patents and copyrights ownedby the individual or qualified hightechnology business, and developedand arising out of a qualified hightechnology business, will be
exempted from income tax.Ongoing
Hawaii Stock
Options Tax
ExemptionDepartment of
TaxationTax
ExemptionAll income received from stock
options from a qualified high
technology business by anemployee that would otherwise betaxed as ordinary income or ascapital gains is exempt fromincome tax.  "Qualified high
technology business" refers to a
business performing qualifiedresearch.  "Qualified research"means (1) the same as in section41 (d) of the Internal Revenue
Code or (2) developing,
designing, modifying,programming, and licensingcomputer software.High technology industry All income received from stock
options from a qualified high
technology business is exemptedfrom income tax.Ongoing
Idaho Broadband
EquipmentInvestment
Tax CreditDepartment of
Revenue andTaxationTax Credit Statewide program with emphasis
in rural areas on telecom industries.The broadband equipment investment
tax credit allows a credit up to$750,000.  The credit can be
transferred.  There is a 14 year carry
forward provision.  There is currentlya 5 year sunset on the credit.OngoingG/SCM/N/95/USA
Page 90Idaho Idaho
WorkforceDevelopment TrainingFundDepartment of
Commerce &Department ofLaborGrant The Workforce Development
Training Fund (WDTF) wascreated to provide worker trainingfor specific economicopportunities and industrial
expansion initiatives; provide
training to upgrade the skills ofcurrently employed workers atrisk of being permanently laid off;and help communities attract and
retain appropriate businesses.
Training may be provided by statetechnical colleges, colleges, otherpublic or private trainingorganizations, by the employer,and through partnerships among
the above entities.  A statewide
network of training providers iscoordinated by the Division ofProfessional-Technical Education.This network can delivercustomized job training for new
and expanding industries
anywhere in the state and canprovide uniform trainingsimultaneously at multiplelocations.Basic industries sell products and
services outside of Idaho, therebybringing new revenue into the stateand creating new jobs.  Non-basicindustries sell products and services
in the local area recirculating
existing revenues and are eligibleonly if a compelling economicbenefit to the state can be shown.New guidelines adopted in 2001
provide a rural component thatincreases training funds from $2,000to $3,000 per employee, eliminatedthe matching requirement and
simplified the application process if
the business is in a distress ruralcounty.  Idaho basic industries will begiven priority over other industries.Ongoing
Idaho Rural Community Block
GrantLoans To finance and facilitate business
development in select areas.Public owned land, buildings,
infrastructure.  Requires job
creation within communities that
have a population of 10,000 or less.Large cities are not eligible.  Theproject must address the needs ofthe residents of their jurisdiction orimport area.Grants up to $500,000. Ongoing
Idaho Rural
Rehabilitatio
n LoanProgramIdaho State
Department of
AgricultureLoans To offer financing and assistance
for rural development. Individuals and organizations in Idaho whose agricultural projects provide
rural development.Ongoing
Idaho Sales Tax
ProductionExemptionDepartment of
Revenue andTaxationTax Credit Manufacturing; Processing; Mining;
Fabrication; Logging;Semiconductor Clean Rooms100 percent exemption from sales and
use taxOngoingG/SCM/N/95/USA
Page 91Illinois Capital
AccessProgramIllinois
Department ofCommerceand EconomicOpportunityIncentive
to lendersProvides portfolio insurance to
lenders on loan defaults.Higher match is available to lenders
who provide financing to businesseslocated in a Federally designatedEmpowerment Zone or EnterpriseCommunity (200 percent match); or
minority-, women-, and disabled-
owned companies.The lender sets the rate and terms for
loans to businesses.  Reservepremiums range to 150 percent of thebank's non-refundable fee of 3-7percent.Ongoing
Illinois Coal
Demonstration ProgramIllinois
Department ofCommerceand EconomicOpportunityMixed
FinancingFinances state-of-the-art
development and demonstrationprojects for advanced coalsystems with utility and industrialapplications.Coal mining companies and electric
power producers.Program provides partial funding;
nearly all demonstration projects haveleveraged other public or privatefunds.  Grants typically range from$1-30 million.Ongoing
Illinois Coal
Developmen
t ProgramIllinois
Department of
Commerceand EconomicOpportunityGrant Provides funds to advance
promising new coal research
technologies through the proof ofconcept state to the commercialdemonstration stage.  Includestechnology maturation,
technology transfer and related
studies.Companies employing clean coal
technologies.50/50 cost share. Ongoing
Illinois Enterprise
ZoneFinancingProgramDepartment of
CommerceandCommunityAffairsLoan Program is designed to promote
growth and development withinthe enterprise zone.Any for-profit entity with less than
500 employees locating in anIllinois Enterprise Zone.DCCA may participate in an eligible
loan for no less than $10,000, normore than $75,000.  In no case shallthe amount of DCCA’s subordinatedparticipation exceed 25 percent of the
total project.  DCAA’s rate will be
200 basis points below the WallStreet Journal Prime rate, but in noevent will the rate be less than 3percent.Ongoing
Illinois Coal
Infrastructure ProgramIllinois
Department ofCommerce
and Economic
OpportunityGrant Encourages communities and
businesses to improve the coalextraction, preparation, and
transportation systems in order to
remedy barriers to the economicemployment of coal.Coal mining companies,
transportation companies, localcommunities.Grants typically range from $50,000
to $900,000.OngoingG/SCM/N/95/USA
Page 92Illinois Coal Revival
ProgramIllinois
Department ofCommerceand EconomicOpportunityGrant Provides incentives for the
construction of base load coal-fired electricity generation plants.Electric power producers. Grants to be based on sales taxes paid
on Illinois coal purchases up to amaximum of $100 million over 25
years.Ongoing
Illinois High Impact
BusinessProgramIllinois
Department ofCommerceand EconomicOpportunityCorporate
Incomeand SalesTaxCreditsProvides investment tax credits,
sales tax exemptions for buildingmaterials and items consumed in amanufacturing or assemblyprocess, and a utility tax
exemption.To be designated a business must
intend to invest $12 million andcreate 500 jobs or invest $30million and retain 1,500 jobs.A high impact designation is made
for 20 years, but the sales tax andutility tax exemptions are granted forfive years with provision for renewal.Ongoing
Illinois Enterprise
Zone
ProgramIllinois
Department of
Commerceand EconomicOpportunityCorporate
Income
and SalesTaxCreditsProvides investment tax credits, a
jobs tax credit, dividend
deduction, interest incomededuction to financial institutions,contribution deduction to aqualified zone organization, a
sales tax exemption on building
materials, utility tax exemptions,telecommunication excise taxexemptions, and sales taxexemptions for items consumedduring a manufacturing or
assembling process.  Local
governments within a zone mayabate local utility taxes andproperty taxes.Hired workers must be either
dislocated or disadvantaged to
qualify the employer for the jobstax credit.Enterprise zones are designated by
the state for a term of 30 years.  The
sales tax or consumed items andutility and telecommunications excisetax exemptions are granted for fiveyears with renewal provisions but
cannot exceed termination date of
zone.Ongoing
Illinois Illinois Film
OfficeTechnical
AssistanceIllinois
Department ofCommerce
and Economic
OpportunityBusiness
AssistanceProvides technical assistance to
film television and commercialproduction companies to
encourage development of the
film industry in Illinois.  Servicesinclude location scouting, pre-production and productioncoordination, liaison assistance,and information hotlines.Film industry N.A. -- in-kind assistance. OngoingG/SCM/N/95/USA
Page 93Illinois Film Wage
CreditIllinois
Department ofRevenueCorporate
IncomeTax CreditProvides corporate income tax
incentive to motion picture,television, and productioncompanies, based on wages paid,to promote filmmaking in Illinois.Film industry 25 percent of wages paid to Illinois
residents (non-refundable).Ongoing
Illinois Rail Freight
ProgramIllinois
Department of
TransportationMixed
financing,
mostlyloansProvides loans and grants to
communities and businesses to
construct or improve rail facilities.Rail transportation companies, rail
transportation customers, local
communities.Terms of loans are negotiable, but the
average rate is 3 percent and the
average repayment period is 10 to 20years.  Collateral is required.Ongoing
Illinois Used Tire
RecoveryProgramIllinois
Department ofCommerce
and Economic
OpportunityMixed
financingProvides grants and loans to
projects that produce marketablematerials from used tires and
projects that use tire-derived
materials in product manufactureor energy production.Manufacturing/processing and
research/development projects.Grants and loans are available for
manufacturing/processing projects upto $500,000, grants for procurement
or demonstration projects and
research/development up to$200,000, and grants for marketingup to $75,000.Ongoing
Illinois Property Tax
IncentivesIllinois
Department ofCommerce
and Economic
OpportunityTax
exemptions,
abatementsOnly realty is subject to property
taxes.  Taxing districts may abatepartial abatements to commercial
or industrial development
Enterprise zones may offer totalproperty tax abatement.Enterprise zone abatement are
limited to Illinois' 93 enterprisezones.Property tax abatement are limited to $4 million
over 10 years, except in Illinois' 93 enterprisezones.
Illinois Sales Tax
IncentivesDepartment of
CommerceandCommunity
AffairsTax
ExemptionSales tax exemptions are provided
for farm machinery, farmchemicals, pollution controls,manufacturing machinery,
replacement parts for
manufacturing machinery,computers used to controlmanufacturing machinery,  andenterprise zone purchases.Purchasers of manufacturing
machinery receive a credit equal
to 50 percent of what the sales taxwould have been if manufacturingmachinery was taxed, making itpossible for manufacturers to usethese credits to offset any other
sales tax liability they incur.The enterprise zone incentives are limited to Illinois' 93 enterprise zones. OngoingG/SCM/N/95/USA
Page 94Illinois Tax
IncrementFinance(TIF)DistrictsIllinois
Department ofCommerceandCommunity
AffairsLoan Tax increment financing allows a
community to use the increases invarious local taxes that result froma redevelopment project to pay forcosts involved in the project.Deteriorated areas with declining
tax bases are targeted.  Bothcommercial and industrial sectorsare eligible.TIF districts have a lifetime of 23
years.Ongoing
Indiana Community Revitalization
Enhancement Districts
(CRED)Tax Credit Provides tax credits to encourage
business development in
economically distressed areas ofcertain Indiana counties.The area must have an aggregate of
at least 50,000 square feet of vacant
floor space.  - Significant obstaclesto redevelopment must exist.  -There must be significantly feweremployees in the area than therewere 10 years earlier.The county's annual rate of
unemployment must have been above
the average statewide rate during atleast three of the preceding five years;- the county's median income musteither have declined over thepreceding 10 years of grown at a
lower rate that the statewide average
during at least three of the precedingfive years; - The population of thecounty must have declined over thepreceding 10 years; and - Certain
other criteria (size of empty
buildings, job loss and specifiedobstacles to redevelopment) must bemet.    Amounts:  The tax credit issimilar to, but more restrictive than,the Industrial Recovery Site
Credit/Dinosaur Program.  It is based
on 25 percent of the qualifiedinvestment.Ongoing
Indiana Economic
Revitalization AreaDepartment of
LocalGovernmentFinanceTax
AbatementTo revitalize economic growth
and development in designatedurban areas.All taxpayers making improvements
to real property located indesignated urban developmentareas.The abatement is actually a deduction
equal to 100 percent of the increasedassessed value of the property due tothe improvement in the first year.
The abatement drops to 95 percent in
the second year and 80 percent in thethird year, reaches 50 percent in thefifth year, and is down to 5 percent bythe tenth year.Ongoing
Indiana Enterprise
Zone
ProgramDepartment of
CommerceTax Credit This program provides tax credits
to improve the cash-flow position
of a business and improve its
access to capital.  The programalso provides grants for Phase Iand Phase II environmental siteBusinesses that operate or will
operate in an Indiana Enterprise
Zone, lenders who make qualified
loans within the Enterprise Zoneand employees of businesseslocated in an Enterprise Zone.Applicants must complete an
Enterprise Zone Business
Registration annually to receive tax
credits.  Applicants for a brownfieldgrant must be submitted through thelocal Urban Enterprise Association.OngoingG/SCM/N/95/USA
Page 95assessments for brownfields
located in the Enterprise Zone.Amounts:  Personal property tax
credit for inventory and various othercredits; amounts vary.  Brownfieldgrant maximum is $35,000.
Indiana Loan
Guaranty
ProgramsIndiana
Development
FinanceAuthorityGuarantee The Indiana Loan Guaranty
Program is administered by the
Indiana Development FinanceAuthority (IDFA).  Loanguarantees are available to financeland acquisition; buildingacquisition or improvements;
structures; machinery; equipment;
facilities; and some workingcapital.Eligible firms are high-tech/high-
growth companies, agribusiness and
some manufacturing companies.Must create or retain Indiana jobs.If security is real property, guaranty
up to 90 percent of loan balance or 90
percent of appraised fair marketvalue, whichever is less. - If securityis personal property, guaranty up to75 percent of loan balance or 75percent of fair market value, which
ever is less.  Limited working-capital
guarantees available for high-techcompanies.  Amounts:  vary. For ruraldevelopment and value-addedagricultural projects, the maximum
guaranty is $300,000.  The guaranty
may be larger for high-growth/high-tech companies and manufacturingprojects.Ongoing
Indiana The TECH
FundIndiana
Department ofCommerce,
Business
DevelopmentDivisionGrant Training activities eligible for
reimbursement must result in afull-time employee receiving a
portable certification in systems
administration, systemsengineering, or softwaredevelopment; a professionalcertification; or other certificationin advanced e-business enabling
applications.Indiana companies or nonprofit
corporations that employ Indianaresidents (U.S. citizens only) in
advanced information-technology
occupations.  Non-resident,contractual or part-time employeesare not eligible.  Companies musthave been in operation for at leastone year prior to the application
date and be in good standing with
the State of Indiana.Funds are available on a
reimbursement basis.  The businessmust submit quarterly reports on the
status of the employees' training.
Amounts: Up to 50 percent of eligibletraining costs.  Awards for traininghave a maximum of $50,000.  30 orfewer employees - up to 50 percent ofeligible training costs; 30 to 100 - up
to 40 percent of eligible training
costs; 100-200 - up to 30 percent ofeligible training costs; 200 and up -up to 10 percent of eligible trainingcosts.Ongoing
Indiana DeKalb
CountyTax
Credits/
BondsThe purpose of this program was
to assist in the start-up of a new
$370 million minimill in Butler,
Indiana.  This subsidy took theform of tax credits, tax abatement,bonds, and county economicdevelopment income tax revenuesSteel Dynamics DeKalb County tax incentives of
$77.84 million; DeKalb County
bonds of $11.1 million; DeKalb
County bonds to be repaid byproperty taxes of $5.6 million;DeKalb County grant from economicdevelopment income tax revenue of10 years.G/SCM/N/95/USA
Page 96applied toward project (November
1995).  On going tax incentivesprograms previously notified.$12.5 million.  The total is $107.4
million.
Indiana Spencer
CountyTax
AbatementThe purpose of this program was
to aid in the construction of a new$285 million structural mill inWhitley County.  Spencer Countytax abatements.Steel Dynamics Up to $59 million in tax abatements. 10 years.
Iowa Enterprise
ZonesDepartment of
Economic
DevelopmentMixed Tax Twenty eight counties and 18
cities may establish enterprise
zones for manufacturers and other
businesses expanding orestablishing new operations.  Theenterprise zones provide thefollowing benefits for qualifying
businesses:
1) Property tax exemptions for upto 10 years.2) Investment Tax Credit for up to10 percent on corporate incometaxes.
3) Refunds of sales or use taxes
paid to contractors duringconstruction.4) A 13 percent research anddevelopment activities credits oncorporate income taxes.
5) Additional withholding tax
credit of 1.5 percent (total 3percent for the business’ jobtraining program).Businesses located in economically distressed areas of Iowa.  To receive
the benefits, businesses must invest at least $500,000, hire at least 10
persons at target wage and benefit levels, and not be retail establishments.Ongoing
Iowa Entrepreneur
ial VenturesAssistance
Program
(EVA)Department of
EconomicDevelopmentLoan The Entrepreneurial Ventures
Assistance Program (EVA)provides up to $20,000 in
financial assistance funds and up
to $5,000 in technical assistancefunds for a business in a sector ofthe Iowa economy with thegreatest start-up and growthpotential for Iowa.Biotechnology; recyclable
materials; software developmentand computer related products;
advanced materials; advanced
manufacturing; medical andsurgical instruments.Up to $50,000 may be awarded to a
single applicant in the form offinancial assistance.  Repayment of
the funds may be in the form of a
royalty investment or low interestloan, which is determined uponapproval.  Up to $10,000 may beawarded to a single applicant in theform of technical assistance.
Technical assistance funds will beOngoingG/SCM/N/95/USA
Page 97considered a grant and do not require
repayment.
Iowa State of Iowa Tax
incentives.The incentives were provided by
the State of Iowa to Ipsco for theconstruction of a new plate mill,which cost $360 million.Ipsco Fixed amount of $73 million.  Of this
amount, $3 million was in the form ofa state grant and $70 million is in theform of tax incentives.20 years.
Kansas Enterprise
ZoneDepartment of
Commerce &HousingMixed Tax The Enterprise Zone Act as
amended in 1992 establishes anon-metropolitan regional
business incentive program and
provides for business expansionand development incentives on astate-wide basis. The type andamount of the incentive available
is dependent on 1) the location of
the business; 2) the type ofbusiness, i.e. retail,manufacturing, or non-manufacturing; and 3) the numberof net new jobs created through a
qualified building, expansion, or
renovation project.  Under theamended law, various credits andexemptions are available tobusinesses throughout the state.There can be a maximum of 99
"non-metropolitan regions" or zonesdesignated under the current
legislation.  Six counties are labeled
by statute as "metropolitancounties" and are ineligible for theenhanced incentives indicatedbelow.The incentives are:  (1) Sales tax
exemption on the purchase ofmachinery, equipment, or services
associated with any construction,
expansion, or renovation project thatcreates net new jobs. (2) Job creationtax credit ($1,500 basic, $2,500enhanced) against State income tax
liability for each net new job created.
(3) Investment tax credit ($1,000)against State income tax liability foreach $100,000 or major portionthereof. This is a one-time credit withunlimited carry-forward provisions.
The maximum credit in any given
year is 100 percent of the tax liabilityin qualified business facilityinvestment.Ongoing
Kansas Sales Tax
ExemptionsDepartment of
Commerce &
HousingTax
ExemptionElectricity, gas, and water
consumed during manufacturing
is exempt from the Kansas sales
tax.  Sales tax paid on thepurchase of machinery, equipmentand certain other tangible propertymay be exempted if the applicant'sbusiness qualifies for Job and
Investment Tax Credits and is
located within a state designatedEnterprise Zone.  Companies thatqualify for the High PerformanceBusiness Incentive Program areStatewide OngoingG/SCM/N/95/USA
Page 98eligible to receive this exemption
without being tied to the jobcreation requirement.  Thisexemption extends tomanufacturing machinery and
equipment as well as to any
quality control and pollutioncontrol equipment installed.  Allsales of manufacturing machineryand equipment are exempt from
sales taxes.  This exemption
extends to machinery andequipment purchased primarilyfor use in the assembly,processing, finishing, storing,warehousing, or distribution of
tangible personal property
intended for resale.
Kentucky Coal Income
Tax CreditKentucky
RevenueCabinetTax Credit A credit is allowed for up to 4.5
percent of the purchase price ofKentucky coal (excludingtransportation costs) used forindustrial heating or processing.For purposes of the Coal Income
Tax Credit, "qualifying coal" is coalthat is subject to the Coal Severancetax, which is levied on everytaxpayer in Kentucky engaged in
processing coal.The credit is allowed for 10 years
following either the installation orconversion to coal burning units.  Thecredit in any year cannot exceed thecorporation's tax liability, minus other
credits.  Unused credits cannot be
carried forward.Ongoing
Kentucky Enterprise
ZoneKentucky
EconomicDevelopmentCabinet,Department of
Financial
IncentivesTax Credit State and local tax incentives are
offered to businesses located orlocating in zones, and someregulations are eased to makedevelopment in the area more
attractive.  A zone remains in
effect for 20 years after the date ofdesignation.To qualify, businesses must meet the following criteria, 50 percent of their
employees must perform substantially all of their services within theenterprise zone- and to apply as a new business (companies which beganoperations in the enterprise zone after the date the zone was designated),25 percent of the company's total full-time workforce must meet the
targeted criteria as long as the busines s is enterprise zone certified.  To
apply as an existing business (companies which were in operation in theenterprise zone prior to the designati on of the zone) the company has the
option of (a) 20 percent increase in capital investment, or (b) 20 percentincrease in total workforce 25 percent of these new employees must meetthe targeted workforce criteria.  Ta rgeted workforce criteria are Kentucky
residents who (a) reside within the enterprise zone, or (b) were
unemployed 90 days prior to being hired by the enterprise zone business,or (c) were receiving public assistance benefits for at least 90 days prior toemOngoingG/SCM/N/95/USA
Page 99Kentucky High-tech
construction& high-techinvestmentpoolsKentucky
Cabinet forEconomicDevelopmentLoan The Office of the Commissioner
for the New Economy, in theCabinet for EconomicDevelopment, shall administertwo (2) pools of funds:  1.The
high-tech construction pool shall
be used for projects with specialemphasis on the creation of high-tech jobs and knowledge-basedcompanies. The commissioner
shall recommend funding of
companies to KEDFA forapproval; and  2.The high-techinvestment pool shall be used tobuild and promote networks totechnology-driven industries and
research-intensive industries with
the goal of creating clusters ofinnovation-driven industries inKentucky. The commissionershall recommend funding ofcompanies to KEDFA for
approval.Technology-driven, research-intensive, and knowledge-based companies,
clusters, or networks.Ongoing
Kentucky Kentucky
EqualOpportunityZoneKentucky
Cabinet forEconomicDevelopmentTax Credit A qualified zone consists of one
(1) to five (5) contiguous censustracts located entirely within acounty, urban county government,or city of the first class. KREDA-certified counties are exempt from
census tract criteria and may have
the entire county certified as azone. Only one (1) qualified zoneis allowed per county. Eligiblecompanies include new orexpanded manufacturing, service,
or technology industries, which
must invest at least $100,000 inthe project and create at least ten(10) new full-time jobs forresidents of the zone.  An
approved company may receive
up to one hundred (100) percentcredit against Kentucky incomeThe Kentucky Economic Opportunity Zone Act (KEOZ) focuses on
development of areas with high unemployment and poverty levels.OngoingG/SCM/N/95/USA
Page 100tax liability on taxable income
generated by the project (s). Thecompany may carry forwardcredits during the agreement term,which shall be ten (10) years.
Kentucky Kentucky
Industrial
Develop-ment Act(KIDA)Kentucky
Economic
DevelopmentCabinet,Department ofFinancialIncentivesTax Credit Investments in new and
expanding manufacturing projects
may qualify for tax credits.Companies that create at least 15new full-time jobs and invest atleast $100,000 in projectsapproved under KIDA may
receive state income tax credits
for up to 100 percent of annualdebt service costs (principal andinterest) for up to 10 years onland, buildings, site development,building fixtures and equipment
used in a project, or the company
may collect a job assessment feeof 3 percent of the gross wages ofeach employee whose job iscreated by the approved projectand who is subject to Kentucky
income taxes.All new and expanding
manufacturing projects are eligible
for KIDA.Financing may be provided by any
source, typically banks or industrial
revenue bonds, except debt servicepaid in connection with other stategrant programs.  Unused credits maybe carried forward for the term of theagreement.Ongoing
Kentucky Kentucky
RuralEconomicDevelopment Act(KREDA)Kentucky
EconomicDevelopmentCabinet,Department ofFinancial
IncentivesTax Credit Companies with projects
approved under KREDA receivestate income tax credits and jobassessment fees.Projects must create new jobs in
counties with unemployment ratesabove the state average in each ofthe preceding 5 years.Manufacturing industries are theprimary target of this program.Companies with projects approved
under KREDA may potentiallyreceive state income tax credits andjob assessment fees for up to 100percent of annual debt service costsfor up to 15 years on land, buildings,
site development, building fixtures
and equipment used in a project.Total benefits can approach oneyear's gross wages per job.  Thecompany may collect a job
assessment fee of 4 percent of the
gross wages of each employee whosejob is created by the approved projectOngoingG/SCM/N/95/USA
Page 101and who is subject to Kentucky
income taxes. The employee receivescredits for the fee against stateincome taxes.
Kentucky Local
Government
Economic
Develop-ment FundKentucky
Cabinet for
Economic
Develop-mentGrant The program is funded through an
allocation of coal severance tax
receipts. Grants are provided to
eligible coal producing counties toassist in diversifying localeconomies beyond a dependenceon coal.  The Regional BusinessPark Program is funded under the
LGEDF program and designed to
develop large blocks of available,accessible, and marketable land asregional business parks. Theparticipating counties share in thetax revenues, and all other
proceeds generated from the
project, through interlocalagreements between theparticipating counties and theformation of regional authorities.
These legally established
authorities own, maintain, andmarket the available acreage withguidance from the Cabinet forEconomic Development.Workforce training costs under
the Job Training Fund are
available to companies locating ina coal county or one of theRegional Business Parks that hireresidents from participatingcounties.  The company must
meet eligibility criteria under the
LGEDF Program and one of theKEDFACoal producing counties. OngoingG/SCM/N/95/USA
Page 102Louisiana Biomedical
Research andDevelopment Park(NORMC)
IncentivesDepartment of
EconomicDevelopmentMixed Tax Qualified medical concerns may
be granted exemptions for statecorporation income and franchisetaxes.  The total amount of statetax rebates and/or exemptions
granted for any fiscal year shall
not exceed thirty (30) percent ofthe corporate income, franchiseand state sales/use tax liability ofthe medical concern during the
fiscal year preceding the fiscal
year for which the exemptions aregranted, unless another amount isestablished by contract.Qualified medical concerns mayalso be granted tax credits against
state corporate income and
franchise tax liabilities.  Suchcredits, which may be carriedforward up to five years, shall notexceed the cost of purchase by theconcern of machinery and
scientific equipment used on
premises of a medical concernlocated in the park district, whichis the area known as the NewOrleans Regional Medical Center(NORMC).New Orleans Regional Medical
CenterAnnual tax exemptions, rebates
and/or credits are subject to thefollowing limitations:  The totalamount of state tax exemptionsand/or rebates granted for any fiscal
year shall not exceed thirty percent of
the corporate income, franchise, andstate sales/use tax liability of themedical concern during the fiscalyear preceding the fiscal year for
which the exemptions and/or rebates
are granted, unless another amount isestablished by contract.  The totalamount of rebates of local sales/usetaxes granted for any fiscal year shallnot exceed one hundred percent of the
local sales/use taxes liability due to
that authority from the medicalconcern during the fiscal yearpreceding the fiscal year for whichthe rebates are granted, unless anotheramount is established by contract.Ongoing
Louisiana Biotechnol-
ogy TaxCreditLouisiana
Department ofEconomicDevelopmentTax Credit Excludes biotechnology
companies from paying state orlocal sales and use taxes oncapital expenditures for newresearch equipment.Biotechnology Companies Ongoing
Louisiana Customized
Computer
Software
Develop-ment TaxCreditLouisiana
Department of
Economic
DevelopmentTax Credit Phases in a state sales and use tax
exclusion for certain custom
computer software over a four-
year period.Technology Companies The current 4 percent sales tax rate
will decrease 1 percent per year until
it reaches 0 percent on 7-1-2005.OngoingG/SCM/N/95/USA
Page 103Louisiana Economic
Develop-ment AwardProgramDepartment of
EconomicDevelopmentGrant Grant awards to public or quasi-
public state entities and localgovernments to finance publicly-owned infrastructure for industrialor business development projects.Preference will be given to projects
located in areas of the state withhigh unemployment levels and toprojects intended to expand,improve or provide basic
infrastructure supporting mixed use
by the company and thesurrounding community.  Noassistance may be provided forLouisiana companies relocating
their operations to another labor
market area (as defined by the U.S.Census Bureau) within Louisiana,except when company givessufficient evidence that it isotherwise likely to relocate out of
Louisiana.The minimum award request size
shall be $25,000.  Projects mustcreate or retain at least 10 permanentjobs in Louisiana.  The portion of thetotal project cost financed by the
award may not exceed 90 percent for
projects located in parishes with percapital income below the median forall parishes; 75 percent for projects inparishes with unemployment rates
above the statewide average; or 50
percent for all other projects.Ongoing
Louisiana Enterprise
Zone
ProgramDepartment of
Economic
DevelopmentTax Credit The program provides one-time
tax credit of $2,500 for each net
new permanent job created forbusinesses that locate or expand indesignated enterprise zones.Credits may be applied against a
company's Louisiana state income
or corporation franchise taxliability.  A new 2002 addition tothe program:  The Enterprise Zoneprogram offers double the usual$2,500 tax credits to automotive
and airplane manufacturers,
giving them $5,000 per job.   TheEnterprise Zone program alsoprovides rebates on applicablestate and local sales/use taxes(except where local sales taxes are
encumbered toward payment of
bond indebtedness or are schooltaxes), on purchases of buildingconstruction materials, machinery,and equipment by businesses that
build or renovate facilities in
Louisiana Enterprise Zones.There are 1,670 enterprise zones
statewide, in both urban and rural
parishes.  Job credits are $5,000 forSIC Code Numbers 3721, 3724,3728, 3761, 3764, and 3769.Sales tax benefits (rebates) are only in
effect for the duration of the initial
construction period (2 yearmaximum).OngoingG/SCM/N/95/USA
Page 104Louisiana Film &
VideoInvestor TaxCreditLouisiana
Department ofEconomicDevelopmentTax Credit To attract business to Louisiana. Film/Video Industry Lowers from $1 million to $250,000
the amount a movie or TV companymust spend to qualify for anexemption from the state sales tax.Ongoing
Louisiana Film &
Video Jobs
Tax CreditLouisiana
Department of
Economic
DevelopmentTax Credit To attract business to Louisiana. Film/Video Industry Gives film producers with a $300,000
LA payroll a 10 percent tax credit on
that payroll.  If the payroll is $1
million or more, the credit is 20percent.Ongoing
Louisiana Film &
Video Sales& Use TaxExemptionLouisiana
Department ofEconomicDevelopmentTax
ExemptionTo attract business to Louisiana. Film/Video Industry Allows LA residents who invest
$300,000 in a movie or TVproduction a 10 percent tax credit onthat investment.  The credit is 15
percent if the investment is $1 million
or more.Ongoing
Louisiana Film and
VideoSales/UseTax RefundProgramDepartment of
EconomicDevelopmentTax
RefundThis program rebates all of
Louisiana state sales/use taxespaid out by motion pictureproduction companies that film inthe state and pay sales/use taxes
on a minimum of $1 million of
annual purchases in the state.Film/Video Industry Ongoing
Louisiana Film and
VideoSales/UseTax RefundProgramDepartment of
EconomicDevelopmentTax
RefundTo attract business to Louisiana. Film/Video Industry Rebates all of Louisiana state
sales/use taxes paid out by motionpicture production companies thatfilm in the state and pay sales/usetaxes on a minimum of $1 million ofannual purchases in the state.Ongoing
Louisiana Restoration
Tax
AbatementDepartment of
Economic
DevelopmentTax
Abatement
/ReductionThe Restoration Tax Abatement
Program was created for
municipalities and localgovernments to offer as anincentive to encourage theexpansion, restoration,improvement and development of
existing commercial structures
and owner-occupied residences inDowntown DevelopmentDistricts, Economic DevelopmentDistricts, or Historic Districts.Buildings must be located in a
Downtown Development District,
an Historic District, an EconomicDevelopment District or be listed onthe National Register for HistoricPlaces.Property taxes may be abated on the
amount of improvements to existing
structures, for a five year period andmay be renewed for an additional fiveyears.OngoingG/SCM/N/95/USA
Page 105Louisiana University
Research andDevelop-ment ParksIncome and
Franchise
TaxExemptionsand CreditsDepartment of
EconomicDevelopmentMixed Tax Firms located in university
research and development parksmay be granted exemptions forstate corporation income andfranchise taxes.  The total amount
of state tax rebates and/or
exemptions granted for any fiscalyear shall not exceed thirty (30)percent of the corporate income,franchise and state sales/use tax
liability of the firm during the
fiscal year preceding the fiscalyear for which the exemptions aregranted, unless another amount isestablished by contract.  Firmslocated in university research and
development parks may be
granted tax credits against statecorporate income and franchisetax liabilities.  Such credits, whichmay be carried forward up to fiveyears, shall not exceed the cost of
purchase by the concern of
machinery and scientificequipment used on the firm'spremises.University research and development parks. Ongoing
Louisiana University
Research andDevelop-
ment Parks
Sales andUse TaxRebatesDepartment of
EconomicDevelopmentTax
RefundQualified firms located in
University Research andDevelopments Parks may be
granted rebates for state and/or
local sales/use taxes on machineryand equipment to be used by theapplicant, on materials andbuilding supplies to be used in therepair, reconstruction,
modification, or construction of
facilities and on materials andsupplies necessary for or used inthe production of the applicant'sproduction of the applicant's
product.  Additionally, sales/use
tax rebates may be granted on anyother goods and services used orUniversity research and
development parks.Annual tax exemptions, rebates
and/or credits are subject to thefollowing limitations:  The total
amount of state tax exemptions
and/or rebates granted for any fiscalyear shall not exceed thirty percent ofthe corporate income, franchise, andstate sales/use tax liability of themedical concern during the fiscal
year preceding the fiscal year for
which the exemptions and/or rebatesare granted, unless another amount isestablished by contract.The total amount of rebates of local
sales/use taxes granted for any fiscal
year shall not exceed one hundredpercent of the local sales/use taxesOngoingG/SCM/N/95/USA
Page 106consumed by the applicant. liability due to that authority from the
medical concern during the fiscalyear preceding the fiscal year forwhich the rebates are granted, unlessanother amount is established by
contract.
Louisiana Workforce
Develop-ment andTrainingProgramDepartment of
EconomicDevelopmentGrant Funding for eligible training
activities includes:  (1) NewEmployee Training. Thissubprogram provides trainingassistance for companies seeking
prospective employees who
possess sufficient skills toperform the jobs to be created bythe companies.  (2) Workplace-Based Retraining. Thissubprogram provides training
assistance for companies seeking
to upgrade the skills of existingemployees in response totechnological advances orimproved production processes, orthe need to ensure compliance
with accepted international and
industrial quality standards (e.g.ISO standards, proprietarytechnology).Preference will be given to
applicants in industries identified bythe state as target industries, and toapplicants located in areas of thestate with high unemployment
levels.The New Employee Training award
may cover up to 100 percent of theeligible training costs, not to exceed$500,000.  The Workplace-basedRetraining award may cover up to 50
percent of the eligible training costs,
not to exceed $500,000.  Funds areavailable on a reimbursement basisfollowing submission of approvedinvoices to DED.Ongoing
Maine Jobs and
InvestmentTax CreditMaine
RevenueServicesTax Credit This program provides a 10
percent credit against Maineincome taxes for investment in
most types of personal property
that generates at least 100 newjobs within two years of the datethe investment is placed inservice, as long as the investment
is at least $5 million for the
taxable year.Statewide.  This tax credit is
available to any business (other thanregulated utilities) making a
personal property investment of at
least $5 million and creating at least100 qualifying jobs, regardless ofindustry sector, location, market,raw materials source or product
content.The amount of the credit is tied to the
federal investment tax credit and islimited to $500,000 per year with
carry forwards available for seven
years.  Thus, the credit can be up to$3.5 million, based upon taxableincome.  Businesses are prohibitedfrom receiving the Maine Jobs and
Investment Tax Credit and
Employment Tax IncrementFinancing concurrently.OngoingG/SCM/N/95/USA
Page 107Maine Tax
IncrementFinancing(TIF)DistrictDepartment of
Economic andCommunityDevelopmentLoan A Tax Increment Financing (TIF)
District is an area within amunicipality that is designated asa development district to allow themunicipality to financially support
a business development program
using the revenue stream of newproperty taxes that will resultfrom improvements made to theproperty.  When forming a TIF
district, a community may either
fund a portion of the necessaryimprovements or return apercentage of the incremental taxrevenue to the company to helpoffset project costs.The maximum term for a TIF district is 30 years, except in instances where
the municipality issues bonds to finance a project, in which case themaximum term is 20 years.Ongoing
Maryland Challenge
Investment
ProgramMaryland
Department of
Business and
EconomicDevelopmentEquity  The Challenge Investment
Program is authorized by Article
83A, sections 2-102 through 2-
105, and codified at COMAR24.05.17.01-02.Technology Companies This program provides early-stage
technology companies with capital
investments of up to$50,000 with
each $50,000 investment requiring a1:1, $50,000 co-investor match. TheState  seeks a return of up to$300,000 over a ten-year period,
based on royalties of up to $150,000
on sales and on capital formationabove certain threshold levels.  TheState’s investment, which may alsoinclude milestone investments of upto an additional $50,000, is
convertible to equity under certain
terms and conditions.  Liability of theState is limited to the initialinvestment.  The program requires a1:1 match of the each contingentroyalty investment. This match is
normally made by a third party
investor, and the State’s commitmenthelps to facilitate such investment.Liability to the State is limited to thefull amount of the States investment.OngoingG/SCM/N/95/USA
Page 108Maryland Empower-
ment ZoneIncentivesEmpower
BaltimoreManagementCorporationMixed Tax A federally designated
Empowerment Zone in Baltimoreencompasses 6.8 square miles inthree distinct areas of the City,two of which include sites zoned
for heavy industrial use. The
Empowerment Zone is also a stateenterprise zone. Empowermentzone incentives include: Federalincome tax credits,  Increased
depreciation on equipment, Tax
exempt bond financing and Jobtraining resources.All companies located within the Empowerment Zone. Ongoing
Maryland Enterprise
InvestmentFundMaryland
Department ofBusiness andEconomicDevelopmentEquity This program makes direct equity
investments in emergingtechnology companies withpatented or proprietary productsor manufacturing processes and a
marketing strategy in place.  The
Enterprise Investment Fund workswith emerging companies to movethem into their next stage ofdevelopment as a viable business.Applicants must be in a technology
industry.  Areas of technologyinclude biotechnology,telecommunications, informationtechnology, life sciences and
advanced materials.The amount of investment ranges
from $150,000 to $500,000.Enterprise investments are generallyin the form of equity, but it may beanother type, e.g. debt issues, as
initiated by the lead investor.Ongoing
Maryland Enterprise
Zone Tax
CreditsMaryland
Department of
Business and
EconomicDevelopmentTax Credit Maryland was a pioneer in the
development of enterprise zones.
It was the third state to enact its
own enterprise zone program, andone of the first states to designatezones. Enterprise zones in thestate offer an attractive locational
alternative for industrial and
commercial businesses. Areaswithin enterprise zones that meetmore stringent standards ofeligibility may be declared focusareas.All businesses located in a
Maryland enterprise zone.Real property tax credits; Income tax
credits; Enhanced Job Creation Tax
Credits; Priority access to Maryland's
financing programs Enhanced FocusArea Benefits;  Real property taxcredits;  Personal property tax credits;Income tax credits; In addition to 34
state-designated zones, Maryland has
three Federal Empowerment Zoneareas that have enterprise zone status.These zones represent different mixesof industrial and commercial activitythat will meet the circumstances and
preferences of new or expanding
businesses.OngoingG/SCM/N/95/USA
Page 109Maryland Job Creation
Tax CreditMaryland
Department ofBusiness andEconomicDevelopmentTax Credit The Job Creation Tax Credit
remains in effect until January 1,2007, subject to extension by theGeneral Assembly.Business services firms may also
qualify in priority funding areas,which the state defines as: stateenterprise zones, federalempowerment zone, state
Department of Housing and
Community Development (DHCD)designated neighborhoods,incorporated municipalities, areasinside the I-495 and I-695 beltways,
or a single growth area designated
by each county for the purpose ofthis credit.  It also grants the creditfor operation of entertainment,recreation, cultural or tourismrelated activities in a multi-use
facility located within a
revitalization area if the facilitygenerates a minimum of 1,000 newfull-time equivalent filled positionsin a 2-year period.Credit granted will be the lesser of
$1,000 or 2-1/2 percent of a year'swages for each new, full-time jobcalculated on an aggregate basis. Ifthe new or expanded facility is
located in a state enterprise zone, a
federal empowerment zone or aDHCD designated neighborhood,then the credit is increased to thelesser of $1,500 or 5 percent of a
year's wages for each new, full-time
job. The maximum credit allowedduring any credit year for a singlefacility is $1 million. If during 3 yearssucceeding the credit years, theaverage number of qualified positions
falls below the applicable threshold
number, all credits shall berecaptured. If the number of qualifiedpositions falls more than 5 percent,but not below the applicablethreshold number, then the credit is
recaptured in proportion to the
decline in certified employees.Unused credits may be carriedforward for up to five tax yearsfollowing the year in which the creditcould first be used to reduce tax
liability. The credit may not be used
to reduce taxeOngoing
Maryland Maryland
EconomicAdjustmentFund(MEAF)Department of
Business andEconomicDevelopmentLoan The program is codified in Article
83A Subsections 6-501 through 6-512.   MEAF was established as anon-lapsing revolving fund tomake loans to new or existing
companies in communities
suffering dislocation due todefense adjustments to enable thecompanies to modernize theirmanufacturing operations,
develop commercial applications
for technology, or enter into andcompete in new economicThe fund may make grants to local or regional Maryland government or
non-profit economic development revolving loan funds and make loans toeligible companies in the State.  In making loans under this sub-title,priority will be given to defense contractors and companies started byformer defense workers who lost their jobs with defense contractors.OngoingG/SCM/N/95/USA
Page 110markets
Maryland Maryland
EconomicDevelop-mentAuthorityand
Assistance
Fund(MEDAAF)Department of
Business andEconomicDevelopmentMixed
Financ-ingArticle 83-A, subsection 5-1401
through 5-1411 of the AnnotatedCode of Maryland.  In accordancewith the Joint Chairman’s Reportof 1999, a study panel reviewedthe existing DBED financing
funds.  The review identified
programs that were duplicative,inefficient and deficient.  As aresult of the joint efforts of theDepartment’s staff and panelmembers, legislation was
developed that consolidated 20
business and economicdevelopment funds into 10programs.  MEDAAF is asurvivor program thatincorporated the capabilities of
several different former programs
and now possesses much of theDepartment’s direct lendingcapabilities.   MEDAAFaccomplishes several purposes by
providing below-market
incentives to specific growthindustry sector businesses (or tojurisdictions on behalf of theseentities), which are locating orexpanding in a Priority Funding
Area.   The program provides
incentives to five specific majorcapabilities:1.Significant StrategicEconomic DevelopmentOpportunities    2.Local EconomicDevelMachinery & equipment, land,
infrastructure.·Loans, Conditional Loans,
Conditional Grants, Grants, andInvestments (only in conjunction witha loan or grant).  The programprovides financing for fixed assetacquisition, machinery & equipment,
land, infrastructure and it also may
provide working capital withinspecific guidelines.OngoingG/SCM/N/95/USA
Page 111Maryland One
MarylandEconomicDevelop-ment Tax
CreditsDepartment of
Business andEconomicDevelop-mentTax Credit The business project must be
located in Baltimore City orAllegany, Caroline, Dorchester,Garrett, Somerset or WorcesterCounty.  'The business entity must
be primarily engaged at the facility
in one or more eligible industries:manufacturing,  agriculture, testing,computer programming, mining,fishing,  research,  computer-related
services,  transportation,  forestry,
development,  data processing,central insurance services,biotechnology, communications,company headquarters, centralfinancial services, business services,
public utility, central administrative
offices, central real estate services,warehousing, filmmaking andresort/recreational business.A qualified business entity may claim
both a start-up tax credit and a projecttax credit.  Tax credits may beclaimed against State income,insurance premium, or financial
institution franchise tax.
Project tax credits of up to$5,000,000 are based on qualifyingcosts and expenses incurred by thebusiness entity in connection with the
acquisition, construction,
rehabilitation, installation, andequipping of an eligible economicdevelopment project. The businessentity must incur at least $500,000 ineligible project costs and must create
at least 25 new qualified positions.
Start-up tax credits of up to $500,000are based on a business' cost tofurnish and equip a new location forordinary business functions and tomove to a qualified distressed county
from outside Maryland. (50 qualified
new positions are required to qualifyfor the full $500,000 credit.)Ongoing
Maryland Smart
GrowthEconomicDevelop-
ment
Infrastruct-ureDepartment of
Business andEconomicDevelopmentLoan/Grant The Fund is codified in Article 83
A, Subsection 5-701 of theAnnotated Code of Maryland.   Afund to provide direct term loans,
grants and equity investment to
local jurisdiction qualifying aseconomically distressed (and toMEDCO as a conduit).  Fundscould be used for infrastructuredevelopment, real estate
acquisition, construction,
renovation, demolition etc. Lending will be to eligible
borrowers located in priorityfunding areas as defined by SmartGrowth legislation.  Loans and
grants to local jurisdictions which
are economically distressed.Eligible recipients include a local(county) government and MEDCO.A qualified distressed county isdefined as a county, including
Baltimore City, with an approved
local strategic economicdevelopment plan. The jurisdictionmust also have an unemploymentrate, for the most recent 18 months,
of at least 150 percent of the State's
unemployment rate for the sameperiod; and an average per capitaThe program was created in 1999, but
had a slow start.  At the end of fiscalyear 2001, over $20 million was stillin the fund.  However, due to
increased activity during the first half
of fiscal year 2002,  $25.6 million was
either disbursed or approved against$25.9 million of available funds.  Thestate legislature approved $7.7million for the fund for fiscal year
2003.  No projects are currently under
consideration.The fund
will expire inJune 30,2004, unless
extended.G/SCM/N/95/USA
Page 112personal income, for the most
recent 24 months, at or below 67percent of the State's per capitapersonal income for the sameperiod. The site must be located in a
Priority Funding Area.
Maryland The
EnterpriseFundDBED
Division ofFinancingProgramsEquity Article 83A, sections 4, 5-501
through 5-503. The EnterpriseFund was created by the GeneralAssembly, House Bill 1586, toprovide the State with the means
to make equity investments in
early stage technology-basedcompanies with very goodprospects of being successful.This capability requires a 1:1match of the each contingent
royalty investment. This match is
normally made by a third partyinvestor, and the State’scommitment helps to facilitatesuch investment.  Liability to theState is limited to the full amount
of the States investment.
Enterprise Equity investmentprograms, though risky, providethe State with a mechanism tofoster the growth of development
technologies. The emerging
technology-driven firms at thisstage of development havesubstantial growth potential, andwill create a highly-skilled workforce. The potential benefit to the
State and counties in which theseTechnology Companies This capability requires a 1:1 match
of the each contingent royaltyinvestment. This match is normallymade by a third party investor, andthe State’s commitment helps to
facilitate such investment.  Liability
to the State is limited to the fullamount of the States investment. TheEnterprise Department  makes anequity investment through the directpurchase of equity, (i.e. purchasing
stock in  company).  By Statute,
DBED’s investments are limited to25 percent of total equity, and maynot be held for more than 15 years.By policy, a minimum 3:1sophisticated co-investor match is
required.  Return on investment is
provided through capital gains.Liability to the State is limited to thefull amount of the investment.Effective October 1, 1997, the
maximum investment limit was raised
from $250,000 to $500,000.OngoingG/SCM/N/95/USA
Page 113businesses reside is very
significant.
Maryland Dept. of
Business andEconomicDevelopment/BaltimoreCountyGrants The purpose of this program was
to support a new $300 millioncold rolling mill.Bethlehem Steel The amount of the subsidy was
funded as follows: EconomicDevelopment Opportunity ProgramGrant of $5.5 million; Department ofBusiness and EconomicDevelopment/Baltimore County
funded a $300,000 workforce training
grant;  Baltimore County RevolvingLoan Fund Grant of $200,000.  Thetotal was $6 million.Ongoing
Massachus
ettsEconomic
Develop-ment
Incentive
Program(EDIP)Massachusetts
Office ofBusiness
DevelopmentTax Credit Designed to stimulate job creation
in distressed areas, attract newbusinesses, encourage existing
businesses to expand and increase
the overall economic developmentawareness and readiness of the185 participating cities and townsacross the Commonwealth.Administered through the Office
of Business Development, the
EDIP represents the cooperativeefforts of communities, businessesand the state.  Through the EDIP,businesses and communitiesnegotiate a local real estate tax
incentive agreement.  In turn,
these businesses become eligiblefor the state's enhanced 5 percentInvestment Tax Credit and, whereapplicable, the state's 10 percent
Abandoned Building Tax
Deduction.  In addition, theDesignated Economic Target Areas. OngoingG/SCM/N/95/USA
Page 114program also targets and
prioritizes capital spending,including such programs as PublicWorks for EconomicDevelopment (PWED) monies
and Community Development
Action Grants, to communitieswithin Economic Target Areas.
Massachus
ettsInvestment
Tax CreditMassachusetts
Office of
BusinessDevelopmentTax Credit Massachusetts gives businesses a
3 percent Investment Tax Credit
against corporate excise tax forthe construction of manufacturingfacilities.  The credit also appliesto the purchase or lease ofequipment.Companies involved in
manufacturing, research and
development, agriculture orcommercial fishing in designatedEconomic Target Areas.Unused portions of the tax credit may
be carried over to subsequent years.
An enhanced 5 percent investmentcredit is available.Ongoing
Massachus
ettsEmerging
Technology
FundMassDevelop
mentLoan The Emerging Technology Fund
provides loan guarantees to
leverage private debt financing for
specialized research anddevelopment or manufacturingfacilities.Two types of projects are eligiblefor financing:  1) The fund can be
used to leverage private financing
for the construction of state of theart manufacturing, research anddevelopment facilities. 2) Thefund can be used to providematching grants to universities
and private institutions for
advanced research anddevelopment of new andemerging technologies in theCommonwealth.Technology Companies The maximum guarantee amount is
$1,500,000 or 50 percent
participation of the aggregate debt,
whichever is less.  The maximumloan amount for facilities is$2,500,000 or 33 1/3 percentparticipation of the aggregate debt,whichever is less.  The maximum
loan amount for equipment is
$500,000 or 33 1/3 percentparticipation of the aggregate debt,whichever is less.Ongoing
Massachus
ettsSeafood
Loan
ProgramMass
DevelopmentLoan The Seafood Loan Program was
created to enhance the
competitiveness of Massachusetts
$1 billion seaf ood processing
industry.  The program providesdirect loans for fixed assetSeafood processing industry. The maximum amount is $200,000,
with a 10-year term for real estate
loans and a 7-year term for equipment
loans.  Loans may be amortized for amaximum of 20 years and have afixed or floating interest rate at primeOngoingG/SCM/N/95/USA
Page 115financing needs including the
purchase of land, buildings,equipment and for theconstruction or renovation offacilities.  Funds cannot be used
for revolving working capital or
for the purchase of vessels.plus a premium.
Massachus
ettsSeafood
RevolvingLoan FundMass
DevelopmentLoan/
Non-tradit-ionalfinancingThe Seafood Revolving Loan
Fund provides financing incooperation with private lenders,to fishing vessels and shore sidefacilities.  To be eligible, a
business must demonstrate that it
has been adversely affected by thefederal fishing regulations enactedto rebuild the depleted stocks ofcod, haddock and flounder.  Thefund is capitalized through the a
grant from the Economic
Development Administration withmatching funds provided byMassDevelopment.Seafood industry. The loan fund uses two types of
financing.  The first is a micro loanwith a max of $50,000 to assistbusinesses that are unable to securetraditional bank financing.  The
second loan provides gap financing of
up to $100,000.  Loans have a fixedrate of 8 percent for the initial lendingperiod.  Under the terms of the grant,business must be located inBarnstable, Bristol, Nantucket,
Norfolk, Plymouth or Suffolk
counties.  Start-up ventures are noteligible.Ongoing
Massachus
ettsUrban
InitiativeFundCommunity
DevelopmentFinance
CorporationLoan To help support minority owned
businesses.Minority owned businesses with
less than $500,000 in a nnual sales
in targeted urban communities.Loans up to $200,000. Ongoing
Massachus
ettsVenture
Capital FundCommunity
DevelopmentFinanceCorporationLoans/
EquityFinancingTo help create and support
employment in low incomecommunities.Firms in low income communities
which have a communitydevelopment corporation, to enablethem to expand or retainemployment for local residents.$100,000 to $300,000 per project, up
to 1/3 of total financing.Ongoing
Massachus
ettsEmerging
Technology
FundMassachu
setts Develop-
ment Finance
Agency (MassDevelopment)Loan The Emerging Technology Fund
provides loan guarantees to
leverage private debt financing for
specialized research anddevelopment or manufacturingfacilities.Two types of projects are eligiblefor financing:  1) The fund can be
used to leverage private financing
for the construction of state of theart manufacturing, research andTechnology Companies The maximum guarantee amount is
$1,500,000 or 50 percent
participation of the aggregate debt,
whichever is less.  The maximumloan amount for facilities is$2,500,000 or 33 1/3 percentparticipation of the aggregate debt,whichever is less.  The maximum
loan amount for equipment is
$500,000 or 33 1/3 percentparticipation of the aggregate debt,OngoingG/SCM/N/95/USA
Page 116development facilities. 2) The
fund can be used to providematching grants to universitiesand private institutions foradvanced research and
development of new and
emerging technologies in theCommonwealth.whichever is less.
Michigan Economic
Develop-ment JobTrainingMichigan
EconomicDevelopmentCorporationGrant This program is a major feature of
the state's economic developmentincentive package. Under thisprogram, the employer designs the
customized training and works
with private or public educationproviders. Employers are at thefront end, designing their owncustomized employee trainingprograms and working in
partnership with schools,
government agencies and othercommunity resources.Advanced Manufacturing,
Information Technology, and LifeScience/Bio Technology.Michigan's Economic Development
Job Training (EDJT) Programprovides approximately $30 millionin competitive grants to companies
that need to train or retrain workers to
meet marketplace needs. Grantsaverage $500 per employee. Theemployer must match 25 percent ofthe state grant.  Match can be in-kind.Ongoing
Michigan Job Creation
Tax CreditsMichigan
EconomicGrowthAuthorityTax Credit In 1995 Michigan enacted the
Michigan Economic GrowthAuthority (MEGA). Firms that arefinancially sound and have
financially sound proposed plans
might be eligible to receive a taxcredit against the Michigan SingleBusiness Tax (SBT). This credit isfor the incremental SBT liability
attributable to an expansion/new
location project and/or the amountof personal income taxattributable to new jobs beingcreated.To promote high quality economic
growth and job creation. EligibleCompanies engaged inmanufacturing, research and
development, wholesale and trade,
or office operations.Each credit may be awarded for up to
20 years and 100 percent of theincremental SBT liability and/orpersonal income tax attributable to
the project.  Beginning March, 2000,
the application fee was increased to$5,000 for companies applying forMEGA tax credits.  This fee iscollected at the time the company
submits its final application for a
credit.  In addition, a one-time onlyadministrative fee of 1/2 of onepercent of the estimated value of theincentive will be collected.  This feeis payable at the time the company is
certifying its eligibility to receive
awards and is limited to no more than$100,000.OngoingG/SCM/N/95/USA
Page 117Michigan Life Science
CorridorMichigan
EconomicDevelopmentCorporationGrant Forty percent of the fund
(Category I) is allocated for basicresearch, to be distributed on acompetitive basis to Michiganuniversities or Michigan non-
profit research institutes for basic
research in health-related areaswith not less than $5 millionallocated to research related toaging diseases and health
problems.  Fifty percent of the
fund (Category II) is allocated forcollaborative applied research,specifically, peer reviewedcollaborative awards amongMichigan universities, Michigan
companies, and/or private and
non-profit research facilities, withemphasis on testing or developingemerging discoveries.  Tenpercent of the fund (Category III)is allocated to support
commercialization opportunities
for life science research inMichigan for Michigan for-profitand non-profit entities.Statewide Funding of new projects is limited to
the amount appropriated each year.Funds projects up to three years.Ongoing
Michigan Michigan
Smart ZonesMichigan Economic
Development CorporationTo stimulate the growth of
technology-based businesses andjobs by aiding in the creation of
recognized clusters of new and
emerging businesses, thoseprimarily focused oncommercializing ideas, patents,and other opportunitiessurrounding university or private
research institute R&D efforts.The SmartZone program has
identified 11 locations throughoutthe State of Michigan with
necessary resources to nurture
technology business growth rangingfrom research and developmentwith universities to entrepreneurialtraining.  The Smart Zones are in:Ann Arbor/Ypsilanti (University of
Michigan), Battle Creek (Western
Michigan University), Detroit(Wayne State University), GrandRapids (Grand Valley StateUniversity/Van Andel Institute),
Houghton/Hancock (Michigan
Technological University),Kalamazoo (Western MichiganEach SmartZone has the ability to
capture tax increments resulting fromnew development within the zone to
support zone activities for a period of
15 years.OngoingG/SCM/N/95/USA
Page 118University), Lansing/E. Lansing
(Michigan State University), Mt.Pleasant (Central MichiganUniversity), Muskegon (GrandValley State University), Oakland
County (Oakland University), and
Pinnacle Aeropark.
Michigan Renaissance
ZonesMichigan
EconomicDevelopmentCorporationTax Credit Michigan's Tax-Free Renaissance
Zones are 23 regions of the statedesignated as virtually tax free forany business or resident presentlyin or moving to a zone. The zonesare designed to provide selected
communities with a powerful
market based incentive--no taxes--to spur new jobs and investment.Each Renaissance Zone can becomprised of up to ten smaller
zones (sub zones), which are
located throughout the communityto give businesses more optionson where to locate.23 designated zones By law, Renaissance Zones waive the
following local and state taxes:Michigan Single Business Tax;Michigan Personal Income Tax;Michigan's 6 mil State EducationTax; Local Personal Property Tax;
Local Real Property Tax; Local
Income Tax; and Utility Users Tax.These taxes represent nearly all stateand local taxation on a Michiganbusiness.Ongoing
Michigan Technology Park
Development ActTax
Abatement(propertytax)To promote business within the
technology parks.New facilities locating in
technology parks (e.g., research anddevelopment, hightechnologyindustrial activities, business
activity related to development or
improvement of existing productsor creation of new products).The abatement is equal to a 50
percent reduction in property taxesand may be granted for periods of 1to 12 years.Ongoing
Michigan Urban Land
AssemblyProgramMichigan
EconomicDevelopmentCorporationLoan The Urban Land Assembly
Program is a revolving funddirected toward revitalizing theeconomic base of cities
experiencing distress and decline.
Priority is given to proposedprojects that have the greatestProjects located in cities that have
experienced a local unemploymentrate more than 70 percent of theannual average state unemployment
rate; a growth in local population
that is less than 75 percent of thestate's population growth rate; or aDetermined on a case-by-case basis. OngoingG/SCM/N/95/USA
Page 119immediate economic impact.
Cities that receive land acquisitionloans under the program arerequired to repay loan funds.change in local state equalized
value that is less than 50 percent ofthe state's five-year average.
Minnes
otaEnterprise
Zone
ProgramDepartment of
Trade and
EconomicDevelopmentTax Credit The Zone program provides
business tax credits (income,
property, sales) to qualifyingbusinesses which createinvestment, development, jobcreation or retention in theEnterprise Zone Tax credits are
allocated by the State to
Enterprise Zone cities.Businesses apply for tax creditsthrough the city Enterprise Zonecoordinator. Tax credits include:property tax credits, debt
financing credit on new
construction, sales tax credit onconstruction equipment andmaterials, and new or existingemployee credits.The cities of Breckenridge, Dilworth, East Grand Forks, Moorhead,
Ortonville and Duluth.Ongoing
Minnesota Rural
Challenge
Grant
ProgramDepartment of
Trade and
Economic
DevelopmentLoan The Office of Regional Initiatives
has a partnership with each of the
six Minnesota Initiative Funds to
provide low-interest loans to newor expanding businesses in ruralMinnesota.Eligible applicants include
businesses located, or intending to
locate, in rural Minnesota.  "Rural"
is defined as the 80 counties ofMinnesota other than the TwinCities metropolitan area.Maximum loan available is $200,000
up to 50 percent of start-up or
expansion costs.  Most loans will be
smaller due to the high demand forfunds compared with the fundsavailable. The interest rate is between3 percent and 10 percent, and theterms will be consistent with other
sources of project financing.  Each
Initiative Fund will determine thespecific interest rate and collateralrequirements. Each dollar ofChallenge Grant funds must be
matched by at least one dollar of non-
public funds, usually owners' equityand/or private financing.OngoingG/SCM/N/95/USA
Page 120Minnesota Urban
InitiativeProgramDepartment of
Trade andEconomicDevelopmentBusiness
AssistanceUrban Initiative Board enters into
partnerships with local nonprofitorganizations, who provide loansand technical assistance to start-up and expanding businesses.Eligible applicants include minority businesses and others creating jobs for
low income people in Minneapolis, St. Paul, Hopkins, Columbia Heights,Hilltop, South St. Paul, West St. Paul, St. Anthony, Mendota andLauderdale.Ongoing
Missis-
sippiJobs Tax
CreditMississippi
Develop-ment
AuthorityTax
CreditProvides a five-year tax credit to the
company's state income tax bill for
each new job created by a new orexpanding business, effective foryears two through six after thecreation of the job.Eligible businesses include
manufacturers, processors,
distributors, wholesalers,warehouses, research anddevelopment facilities, airtransportation and maintenancefacilities, final destination or resort
hotels having a minimum of 150
rooms and movie industry studios.The amount of credit depends on the
development status of the county in
which the business is located: (1)$2,000 per new job for less developedcounties, (2) $ 1,000 per new job formoderately developed counties, and(3) $500 per new job for developed
counties.  A minimum number of new
jobs must be created to be eligible forthis credit.  In less developedcounties, businesses must create atleast 10 new jobs to be eligible for thecredit; in moderately developed
counties, 15 new jobs; and in
developed counties, 20 new jobs.The county status will be re-assessedannually by the Mississippi State TaxCommission, according to each
county's unemployment rate and per
capita income averages over the priorthree years.  Limited to an amount notgreater than 50 percent of thetaxpayer's state income tax liabilityfor the year in which the credits are
taken.  Any excess credit may be
carried forward for five successiveyears.Ongoing
Missis-
sippiMajor
EconomicImpactAuthorityMississippi
DevelopmentAuthorityBond This program allows the State,
through the issuance of generalobligation bonds, to assist localcommunities in meeting the
development requirements inherent in
large capital projects, therebygenerating an investment in thequality of life in such communities.Eligible projects include industrial
or commercial projects, researchand development, warehousing,distribution, transportation,
processing, mining establishments,
U.S. Government projects, andtourism facilities.Major Impact Authority projects can
be new projects or expansions ofexisting facilities which have aminimum initial investment of $300
million by the private sector or the
U.S. Government.OngoingG/SCM/N/95/USA
Page 121Missis-
sippiMinority
Surety BondGuarantyProgramMississippi
DevelopmentAuthorityGuarant
eeThis program was created to enable
minority contractors, not meeting thesurety industry's standardunderwriting criteria, to obtain bidand performance bonds on contracts
with state agencies and political
subdivisions within Mississippi.Statewide Maximum bond guaranty is 75
percent of contract bond amount or$112,500, whichever is less.  Acontractor may have more than oneguaranteed bond as long as total ties
do not exceed $112,500.Ongoing
Missis-
sippiMississippi
State PortIncome TaxCreditMississippi
DevelopmentAuthorityTax
CreditProvides an income tax credit to
taxpayers who utilize the portfacilities at state, county, andmunicipal ports in Mississippi.  Thetaxpayer receives a credit in an
amount equal to certain charges paid
by the taxpayer on export cargo.Ports Allowable Credit: the following are
charges which a taxpayer may claimas a credit; receiving into a port,handling to a vessel, wharfage.Amount of Credit: credit may not
exceed 50 percent of the tax imposed
upon the taxpayer for the taxable yearreduced by the sum of all creditsallowable to the taxpayer.; anyunused portion of the credit may becarried forward for the succeeding
five years; the maximum cumulative
credit which may be claimed by thetaxpayer is limited to $1milliondollars for the period January 1, 1994through December 31, 1998.Ongoing
Missis-
sippiSales and
Use Tax
ExemptionMississippi
Development
AuthorityTax
Exempt
ionManufacturers pay a 1.5 percent sales
tax on machinery and parts used
directly in manufacturing and port
operations (purchase or rental) andindustrial electricity, natural gas, andfuels.  Manufacturers pay a 3.5percent contractor's fee for all costs
(exceeding $10,000) included in a
contractor's construction contract,including the costs of constructionlabor and the purchases ofconstruction component materialsmade by the contractor on behalf of
the manufacturer.New or expanding manufactures
located in less developed counties.New or expanding manufacturers
located in less developed counties
pay no sales taxes for: (1) building
construction materials, or (2)purchases of machinery or equipmentassociated with a location orexpansion, if the building materials or
equipment are purchased directly
from a supplier (purchases ofconstruction materials made througha contractor incur the 3.5 percentcontractor's fee.)  New or expandingmanufacturers located in either
moderately developed or developed
counties pay a: (1) 3.5 percent salestax for purchases of buildingconstruction materials and newmachinery or equipment not useddirectly in the manufacturing process,
and (2) 0.75 percent sales tax onOngoingG/SCM/N/95/USA
Page 122purchases of all machinery and
equipment that is used directly in themanufacturing process.
Missouri Community
Bank TaxCreditsDepartment of
EconomicDevelopmentTax
CreditState tax credits will be provided to
contributors or investors of acommunity bank.  Contributions to anon-profit bank may also be eligiblefor a federal tax deduction. Thecommunity bank may, in addition to
its other authority, use the
contributed/invested funds to makeunsecured or secured loans or equityinvestments in eligible projects.There is no restriction on the
community bank to determine the
term, rate, collateralization, type ofownership of their borrowers.At least 80 percent of these tax
credits will be approved for projectsin targeted areas.  A targeted area isany area designated by thecommunity bank which includestwo or more contiguous blocks ( as
designated by the U.S. Census)
where the rate of poverty in the areaexceeds 26.2 percent.This program is intended for smaller
projects that will average about$30,000 to $60,000.  Although thelegal maximum tax credits allowedfor a single business/project by acommunity banks is $300,000, the
community bank should contact DED
prior to investing in any one projectthat exceeds $100,000.  Themaximum amount of tax creditsprovided to any one community bank
or target area will be $1 million in
any fiscal year.  The credits may betransferred, sold, or assigned (inincrements no less than $150), orused up to eleven (11) years from theissuance of the credits.
From August 28, 1994 to August 27,
1995, $1.5 million in tax credits areavailable.  On August 28, 1995, anadditional $1.5 million was added,then on August 28, 1996, anadditional $2.0 million will be added.OngoingG/SCM/N/95/USA
Page 123Missouri Enterprise
ZonesDepartment of
EconomicDevelopmentTax
CreditThe Department of Economic
Development may recommend theestablishment of enterprise zones ineconomically depressed areas that arenot likely to achieve development
otherwise.  The recommendations are
made to the Joint LegislativeCommittee on EconomicDevelopment Policy and Planning,which may designate the area an
enterprise zone.  Enterprise zones
offer many types of tax credits,exemptions, abatements and refundsto taxpayers who establish new orexpanding, facilities in anydesignated enterprise zone.The statute permits governing
authorities to petition theDepartment of EconomicDevelopment to have theboundaries of an existing, enterprise
zone expanded.  The expansion may
be approved if there have been nomore than three expansions.Areas designated as federalempowerment zones or enterprise
communities are automatically
granted state enterprise zone status.In order to qualify for either theincome exemption or theinvestment credit, the taxpayer mustin addition to the above criteria,
meet the "30 percent Test." To meet
the test, at least 30 percent of thenew employees at the new orexpanded facility must be eitherresidents of the enterprise zone, orhave been unemployed for at least
90 days prior to being employed at
the new or expanded facility, oreligible for AFDC or GeneralRelief, or some combination thereofThe Department of EconomicDevelopment may waive or reduce
this requirement for one year if
there are 20 or fewer personsemployed at the facility.Tax benefits may include: $400 for
each new job created, and $400 foreach qualified employee who is aresident of the enterprise zone, and$400 for each qualified employee
who was either unemployed for at
least 90 days prior to the time he/shewas hired at the new or expandedfacility or who was eligible for AFDCor General Relief at the time he/she
was employed at the new or expanded
facility, and up to $400 for eachqualified employee who is trainedfrom the employer's own funds, and apossible exemption equal to one-halfof the income attributed to the new or
expanded portion of the facility, and a
possible investment tax credit equalto 10 percent of the first $10,000 ofnew investment, 5 percent on the next$90,000 of new investment and 2percent on all investment over
$100,000, and up to a $75,000 refund
for unused tax credits earned by anew facility, and a real property taxabatement of at least 50 percent forten years if the facility is used formanufacturing, mining, wholesale
distribution or wareOngoingG/SCM/N/95/USA
Page 124Missouri Missouri
"Build"ProgramDepartment of
EconomicDevelopment/MissouriDevelopment
Finance BoardTax
CreditMissouri Business Use Incentives for
Large-Scale Development (BUILD)provides a financial incentive for thelocation or expansion of largerbusiness projects.  The program
provides Missouri state income tax
credits to the business in the amountof debt service payments forindustrial revenue bonds related to aportion of project costs.The bonds may be used to finance
public or private infrastructure usedto support the project, or the newcapital improvements of thebusiness at the project location.
Bond proceeds may not be used for
working capital, inventory or otheroperating costs of the business orother entity.Eligible businesses are:  (1)
Manufacturing, processing,
assembly, research anddevelopment, agriculturalprocessing or services in interstatecommerce which will invest aminimum of $15 million in capital
improvements for a project and
create at least 100 new jobs withinthree years.(2) Office projects (regional,national or internationalheadquarters, telecommunications
operations, computer operations,
insurance companies or credit cardbilling and processing centers) arealso eligible if the capitalimprovements exceed $10 millionand at least 500 new jobs are
created within three years.  Retail,
health or professional services,intra-state relocations orreplacement facilities are noteligible.The bonds must be sold on the basis
of the business' credit.  The optionsare (a) the business purchases a bankletter of credit or bond insurance; (b)the business has an investment bond
rating; (c) the business arranges for a
private placement purchase of thebonds; or (d) the business purchasesthe bonds.  The political subdivisionbenefiting from the project or other
local entities must commit significant
local incentives.  Such incentives mayinclude tax abatement, discountedutility fees or others.OngoingG/SCM/N/95/USA
Page 125Missouri Real
Property TaxIncrementAllocationRedevelopm
ent (TIF)Department of
EconomicDevelopmentLoan Tax increment financing can be used
in any city or county in the State ofMissouri.  It is helpful to smallcommunities in order to finance theconstruction of necessary public
improvements such as sewers and
roads as an incentive for investmentin areas to be redeveloped,rehabilitated or revitalized. Toencourage such development, real
property tax revenues and 50 percent
of tax revenues are diverted into aspecial allocation fund which can beused to defray redevelopment costs.The tax revenues diverted to the fundare attributed to the increased
valuation of improvements made to
real property within the designatedareas. Upon the implementation ofTIF for a particular area, up to 100percent of the increased amount ofreal property taxes and 50 percent of
other taxes generated by new
development in the area (primarilysales tax) are set aside in a SpecialAllocation Fund. These funds may beused by the municipality or a privatedeveloper for Redevelopment Project
Costs.An area, as defined by a
municipality, that benefits from theimprovements.  There are noparticular limitations on districtboundaries, except that the area
must be determined by the city or
county to be blighted or aconservation area.Beginning January 1, 1998, certain
blighted areas of municipalities withapproved plans and projects toreceive appropriated amounts, fromthe newly created Missouri
supplemental tax increment financing
fund, of up to 50 percent of "newstate revenues," defined as either 1)state sales taxes, except those whichare constitutionally dictated, School
District Trust Fund taxes, sales and
use taxes on motor vehicles, trailers,boats and outboard motors, and futuresales taxes earmarked by law, or 2)state income tax withholding.  Anaggregate annual appropriation of
new state revenues for super
redevelopment areas is limited to $15million.  The duration ofredevelopment projects shall notexceed 23 years.Ongoing
Missouri Wine and
GrapeProductionTax CreditProgram Department of
EconomicDevelopmentTax
CreditsTo attract business into the state of
Missouri.Vineyards and wine producers. State income tax credit to an
individual, partnership or corporationin an amount equal to 24 percent ofthe purchase price of all newequipment and materials used directlyin the growing of grapes or the
production of wine in Missouri.OngoingG/SCM/N/95/USA
Page 126Montana Aerospace
andTechnologyInfra-structure
Develop-
mentProgramOffice of the
GovernorBond The state would own the
improvements funded and wouldlease the infrastructure to the localgovernment tax increment financingdistrict or the business being assisted.
The lease amount would be set at a
nominal fair value taking intoconsideration job creation and overalltax revenue generated by the project.The statute provides for the principal
and interest payback of the bonds
from increased state taxes generatedby the projects funded.Aerospace and Technology The State of Montana may issue and
sell up to $20 million  in generalobligation bonds for aerospacetransportation and technologyinfrastructure development projects.Ongoing
Montana Local Option
Property TaxExemptionsDepartment of
RevenueTax
ExemptionExemption for Business Incubators
(Local Option) If approved by thelocal governing body, a businessincubator owned or leased andoperated by a local economic
development organization is eligible
for an exemption from property taxes.(MCA 15-24-18)  Industrial Parks(Local Option) If approved by thelocal governing body, an industrial
park owned and operated by a local
economic development organizationor port authority is eligible for anexemption from property taxes.(MCA 15-24-19) Suspension,Cancellation of Delinquent Taxes
(Local Option)
If approved by the local governingbody, delinquent property taxes oncommercial property may besuspended to facilitate the purchaseand continued operation of a business
utilizing the commercial property.
(MCA 15-24-17)Statewide There are numerous specialized tax
incentives, which can be researchedwith the Department of Revenue on acase by case basis.Ongoing
Montana Property Tax
AbatementsDepartment of
RevenueTax
AbatementExpanding "Value-Added"
Machinery and Equipment (StateDetermined, Local Option). Ifapproved by the local governingbodies, an existing value added
industry that expands to include'Expanding "Value-Added"
Machinery and EquipmentMachinery used in canola seed oil
processing is eligible for a taxablevaluation rate of 2 percent in tax year2001, 1 percent in tax year 2002, and0.0 percent thereafter.OngoingG/SCM/N/95/USA
Page 127value-added equipment is entitled to
receive a decrease in the tax rate onvalue-added machinery andequipment. Canola Seed OilProcessing Equipment (State
Determined).
Nebraska Community
Improve-mentFinancingDepartment of
EconomicDevelopmentLoan Community Improvement Financing
is Nebraska's version of TaxIncrement Financing (TIF).  This is amethod of financing publicimprovements associated with aprivate development project in a
blighted area by using the projected
increase in the property tax revenuewhich will result from the privatedevelopment.This tax revenue increase is used to pay for the public improvements or is
pledged to repay bonds issued by the local government or loans used tofinance these improvements.  Revenue bonds can be issued to finance allor part of a site's public pre-construction improvements.  Publicimprovements include land purchase, clearance and sale, construction ofstreets, sidewalks, utilities, parks or other similar public spaces necessary
in site preparation.  CIF, in effect, can reduce developer capitalization to a
level that makes investment feasible.Ongoing
Nebraska Employment
andInvestment
Growth ActDepartment of
RevenueMixed
TaxThe goal of Nebraska's Employment
and Investment Growth Act (LB775)is the creation of jobs and business
investment and expansion through the
provisions of performance-basedincentives to qualified businesses.Businesses such as manufacturers,
processors, research anddevelopment facilities, insurance
and financial companies,
telecommunications companies andadministrative headquartersfacilities of such firms, are eligiblefor the tax incentives by meetingminimum thresholds for
employment and investment.
Qualifying businesses are eligiblefor credits attained over a sevenyear period and accumulated creditsmay be used during a 15 year
period.  If required levels of
investment and employment are notmet within or maintained for aperiod of seven years, all or part ofthe incentives shall be disallowed orrecaptured.Three levels of incentives are
available to qualifying businesses.OngoingG/SCM/N/95/USA
Page 128Nebraska Enterprise
Zone ActDepartment of
EconomicDevelopmentTax
CreditThe Enterprise Zone Act provides tax
credits for qualifying businesseswhich, during any tax year, increaseinvestment by at least $75,000 andincrease net employment by an
average of two full-time positions.
Credits may be used to reduce aportion of the taxpayer's income taxliability or to obtain a refund of salesand use taxes paid.  Initial expansion
must occur in one taxable year, but
additional credits may be obtained forincreasing employment by two ormore full-time employees during thenext five years.  An additionalinvestment of a required amount
during this subsequent time is not
required. In addition, a qualifiedbusiness, under provisions of theEmployment Expansion andInvestment Incentive Act, may beallowed an enhanced credit against
taxes imposed by the Nebraska
Revenue Act of 1967 for locating andinvesting in an Enterprise Zone, whileemploying Zone residents.Locations within Alda,
Chadron/Crawford, NewmanGrove/Meadow Grove, Omaha andScotts Bluff County have beendesignated by the State of Nebraska
as Enterprise Zones.The amount of the credit, not to
exceed $75,000 per year, shall be: (1)$4,500 for each new employee and$3,000 per $75,000 of investmentprovided at least 50 percent of the
new employees are Zone residents;
(2) $4,500 for each new employeewho is a Zone resident, $1,500 fornon-Zone residents, and $ 1,000 per$75,000 of investments; or (3) the
normal provisions for tax credits
provided by the EmploymentExpansion and Investment IncentiveAct - $1,500 per employee and $1,000 per $75,000 of investment.Credits not used in the first year may
be carried over and used against
liabilities incurred in the next fivetaxable years.  Failure to maintainrequired levels of investment andemployment for at least two yearsafter creation of the credits will result
in recapture of allowed benefits and
loss of carryovers.Ongoing
Nebraska Ethanol Tax
CreditDepartment of
RevenueTax
CreditsSupport of ethanol producers. Tax credit available to ethanol
producers.$0.20 per gallon. Ongoing
Nebraska Industrial
Develop-mentBonds/Locally IssuedNebraska
InvestmentFinanceAuthorityBond Industrial Development Bonds
(IDBs) may be issued by counties,incorporated cities, and villages toprovide tax-exempt financing forprivate businesses.  The local
governing body may issues bonds for
projects outside as well as within apolitical jurisdiction.Except as specified with respect to
blighted areas, eligibility for IDBfinancing is limited tomanufacturing or industrialfacilities.  Selection criteria used by
local governing bodies to screen
eligible applicants may vary amonglocalities.The maximum issue period is 30
years, however, projects typicallyaverage 15 to 20 years in duration.The company using the facility isresponsible for all taxes levied by
state and local governments.  The
arrangements between the issuer andthe company using the facility may bein the form of a lease.  Loans andinstallment sales contracts arepermissible only if the project is
located in blighted area.OngoingG/SCM/N/95/USA
Page 129Nebraska Invest
NebraskaActDepartment of
RevenueTax
CreditThis law provides wage benefit tax
credits to companies meeting certainminimum levels of investment, jobcreation, and wages for newemployees.The credits can be earned by
businesses in the followingindustries:  research anddevelopment; data processing,telecommunications, or insurance
services; financial services;
manufacturing; warehousing; andadministrative and headquartersfacilities.For projects located in counties with
populations of less than 100,000, theminimum thresholds to qualify for thetax credits are 25 new jobs, $10million in new investment, and pay
for the new jobs that is at least equal
to Nebraska’s average annual wage.For projects located in counties withpopulations of more than 100,000, theminimum thresholds are 500 new
jobs and $50 in new investment, or
250 new jobs and $100 million innew investment, and pay for the newjobs that is at least 110 percent of thestate’s average annual wage. If theaverage compensation for the new
employment is under $20,000
annually, no credit is available.  If itis between $20,000 and $30,000, thecredit is three percent; if it is between$30,000 and $40,000, it is fourpercent; and if it is over $40,000, it is
five percent.Ongoing
Nebraska Nebraska
Redevelop-ment ActDepartment of
EconomicDevelopmentLoan The program allows cities to declare
land within ten miles of their citylimits blighted, thus property taxes onthe subsequently improved propertycan then be used to reimbursecompanies for land purchase and
project development.  This legislation
authorizes Community ImprovementFinancing, also known as TaxIncrement Financing, for real estateand equipment in a project that addsat least 500 new jobs and $50 million
of new investment.The location would apply to
designated blighted and substandardareas, if located within thefollowing ranges: up to ten milesoutside a metropolitan or primaryclass city; up to six miles outside a
first class city; and up to three miles
outside of cities of second class or avillage or villages.This type of financing allows new
property taxes from the newinvestment to go back to the projectto help finance rehabilitation,acquisition and redevelopment coststhrough bonds.  Such financing would
apply for 15 years.  Existing property
taxes continue to go for local generalfund purposes.Ongoing
Nebraska Rural
IncentivesDepartment of
EconomicDevelopmentTax
CreditThis is a new program aimed at
providing tax credits to qualifyingbusinesses in rural areas of the state.For businesses expanding in
counties with populations of 25,000or less.The program provides tax credits to
companies that generate at least 5new jobs and $250,000 of newinvestment in counties withpopulations of 25,000 or less.  Inorder to qualify, the jobs created must
pay at least $8.25 per hour.  The wageOngoingG/SCM/N/95/USA
Page 130requirement will be indexed annually
according to the average ruralNebraska weekly wage.
Nebraska Rural
EconomicOpportunit-ies ActDepartment of
EconomicDevelopmentTax
CreditThis law provides incentives for
employment and investment in thestate’s mid and small-sized counties.The credits can be earned by
businesses in the followingindustries:  research anddevelopment; data processing,telecommunications, or insuranceservices; financial services;
manufacturing; warehousing; and
administrative and headquartersfacilities.Projects qualify by meeting and
maintaining all three of the followingcriteria:  1) adding full-timeequivalent employment equal to atleast 0.5 percent of the county laborforce in the county or counties in
which the project is located, 2)
paying higher than average wages(wages paid new employees mustaverage at least 125 percent of theaverage annual wage in the county or
state and be above a regional average
wage), and 3) investing a minimumof $100,000 for each requiredemployee ($100,000 x requiredminimum employment).  In a fewcounties a business can earn the tax
credits by adding no more than two
new jobs and $100,000 in investment.The credits available are five percentof the total paid for new employmenteach year for seven years and tenpercent of new investment made until
the end of the seven years.Ongoing
Nevada Revolving
Loan FundCommission
on EconomicDevelopmentLoan The Nevada Revolving Loan Fund
(NRLF) was created to assist forprofit businesses in need of "gap"financing to complete their businessprojects.  The Revolving Loan Fundderives its funds from the CDBG
Program.Low-to moderate income
households in rural Nevada.Up to $100,000 is available for
Nevada businesses to use to expandor start a business. The NRLF is afixed, generally below prime ratelending program. Payback terms canbe amortized up to 15 years. The rate
and term are set according to the
business’ ability to repay fromprofits.OngoingG/SCM/N/95/USA
Page 131Nevada NRS
374.322Department of
TaxationTax
ExemptionCertain aircraft, aircraft engines and
component parts used intransportation are exempted fromgross receipts from the sale, storageor other consumptionManufacturing/remanufacturing of
aircraft enginesCurrent state sales tax rate (rates
fluctuate by county)Ongoing
New
HampshireGuarantee
AssetProgram(GAP)Business
FinanceAuthorityGuarant
eeGAP provides incentives to financial
institutions of up to a 90 percentguarantee on loans considered to havemore than conventional risk.Capital intensive businesses. Rates and terms negotiable with bank.
Borrower must have 25 employeesand provide collateral with marketappraisal of 1.25 times originalprincipal amount.Ongoing
New
HampshireWorking
Capital AssetGuarantee
Program
(WAG)Business
FinanceAuthorityLoan WAG provides incentives to financial
institutions to provide working capitalup to $2 million with up to 75 percent
guaranteed on loans considered to
have more than conventional risk.Statewide Interest rates and terms negotiable
with bank.Ongoing
New
HampshireNew
HampshireCapitalConsortiumBusiness
DevelopmentCorporationEquity Established in November 1994, the
New Hampshire Capital Consortium(NHCC) is a venture capitalpartnership organized by the NHBDCfor the purpose of funding early-
stage, high-potential growth
companies in New Hampshire.  TheNHCC is funded by the NHBDC, theState of New Hampshire, CFX Bank,Energy North, First NH Bank, Fleet
Bank, the New Hampshire Charitable
Foundation, Public Service of NewHampshire, and Shawmut Bank.  It ispart of the $30 million SmallBusiness Investment Company,which is managed by Zero Stage
Capital Company, Inc., Cambridge,
Massachusetts.Rapidly expanding businesses with
revenue potential of at least $20million.The NHCC makes investments of
between $250,000 and $2,000,000 inhigh-potential companies with five-year sales forecasts of $20-$50million.  Investment normally made
in equity with appropriate risk-
adjusted return.Ongoing
New Jersey Advanced
TechnologyCentersNew Jersey
Commissionon Science andTechnology(NJCST)Grant The Advanced Technology Center
(ATC) program made targetedinvestments in R&D areas that weredetermined to be of importance to themajor industry clusters in New
Jersey.  ATC are multidisciplinary
facilities on the campuses of ourresearch universities, and are engagedStatewide OngoingG/SCM/N/95/USA
Page 132in research and development
activities around a specifictechnology area. Each ATC has anindustrial advisory board and enjoysindustry sponsorship. New Jersey's
Advanced Technology Centers
include: Center for AdvancedBiotechnology & Medicine; Centerfor Advanced InformationProcessing; Center for Ceramics and
Materials Engineering; Center for
Photonic and OptoelectronicMaterials; Hazardous SubstanceManagement Research Center; Centerfor Advanced Food Technology;Biotechnology Center for Agriculture
and the Environment; Fiber Optic
Materials Research Program.
New Jersey Business
EmploymentIncentiveProgram(BEIP)New Jersey
EconomicDevelopmentAuthorityGrant Legislation directs the New Jersey
Economic Development Authority(EDA) to make direct payments in theform of grants to expanding orrelocating businesses that will create
new jobs in New Jersey.  Businesses
must be economically viable, anddemonstrate that the incentive grant isa material factor in their decision tolocate or expand in New Jersey.Statewide- Point of final purchase
retail facilities are not eligible forincentive grants. In the base year,the company must create at least 75new jobs in a non targeted
municipality or at least 25 jobs in a
targeted area.   Qualifyingbusinesses must maintain a projectin New Jersey for at least 1.5 timesthe number of years of the grant.The incentive grant, which may be
for up to 10 years, will equal 10percent to 80 percent of the totalamount of state income taxeswithheld by the business during the
calendar year for the new employees
hired.  No grant monies will bedisbursed until the Treasurer certifiesthat the amount of withholdingsreceived from the business at leastequals the grant amount.  Businesses
receiving relocation grants are not
eligible unless approved by the StateTreasurer.  Grant assistance from thisand other programs may not exceed80 percent of a business' withholdingsunless approved by the Treasurer.Ongoing
New Jersey Community
Lending
ProgramNew Jersey
Economic
DevelopmentAuthorityGuarant
eeAdministered in cooperation with the
Federal Home Loan Bank of New
York and its New Jersey members.Loans are made by a participatingbank or consortium of banks.  EDAprovides a 25 percent guarantee of theloan amount for the term of the loan.Businesses that have been in
operation at least two years and are
located in neighborhoods where atleast 50 percent of the residents areof low or moderate income or therequested financing will benefitsuch residents are eligible.Loans range from $100,000 to $6
million.  The maximum loan is $6
million for fixed assets and $4 millionfor working capital.  EDA also mayissue tax-exempt bonds formanufacturing companies ornonprofit organizations.  The bonds
will be backed by a letter of creditOngoingG/SCM/N/95/USA
Page 133from a participating bank and then by
the FHLB to guarantee payment.EDA will provide a 25 percentguarantee of the entire bond amount.
New Jersey Direct Loans Casino
Reinvestment
DevelopmentAuthorityLoan Casino Reinvestment direct loans for
fixed assets are available to
businesses in targeted municipalities.Urban areas in the state with an
emphasis on Atlantic City.Rates are negotiable, current rates as
of 12/97 are six percent.Ongoing
New Jersey Direct Loans New Jersey
Economic
Development
AuthorityLoan Businesses that are unable to get
sufficient bank credit on their own or
through the Statewide Loan Pool or
EDA guarantee are eligible to applyfor  fixed assets and working capital.Preference is given to enterpriseslocated in an economically targetedarea or representing a targeted
business sector.Statewide Loans are made for up to $500,000
for fixed assets and up to $250,000
for working capital for a maximum
term of 10 years.  The interest rate isequal to the federal discount rate atthe time of approval or closing, butno lower than 5 percent.Ongoing
New Jersey Hazardous
DischargeSiteRemediationLoan andGrant
ProgramNew Jersey
EconomicDevelopmentAuthorityMixed Businesses may qualify for loans of
up to $1 million for up to 10 years forsite investigation and clean up.Municipalities owning or holding atax sale certificate on a property mayapply for grants and loans of up to $2
million per year for investigation and
remedial activities.Grants may be used for preliminary
assessments, site investigation andremedial investigations of eligiblesites.  Loans may be used for thesepurposes and for clean up of thesite.  Industrial businesses that are
required to perform remediation
activities due to a closure ofoperations or transfer of ownershipor operations and do not have afunding source; persons who have
discharged a hazardous substance or
are responsible for such a substanceand do not have a funding source;and municipalities and persons whovoluntarily undertake remediationare eligible to apply.Interest shall be equal to the Federal
Discount Rate at time of approval orclosing, whichever is lower, with aminimum of 5 percent.  DEP chargesadministrative and oversight fees.OngoingG/SCM/N/95/USA
Page 134New Jersey Loan
GuaranteesNew Jersey
EconomicDevelopmentAuthorityGuarant
eeGuarantees of conventional loans for working capital can be made for up
to $1 million.  Guarantees of conventional loans or bond issues for fixedassets can be made for up to $1.5 million.Guarantees can be arranged for a
maximum of 10 years, although theloan may be for longer periods.Generally, guarantees are limited to30 percent - 50 percent of the loan
amount but cannot exceed the dollar
limitations above.  Guarantee fee atclosing is ½ of 1 percent of initialguaranteed portion of the loan timesthe number of years the guarantee is
in effect.Ongoing
New Jersey Local
Develop-
mentFinancingFund(LDFF)New Jersey
Economic
DevelopmentAuthorityLoan Loans ranging from $25,000 to $2
million may be made for commercial
and industrial projects in targetedcommunities.  Financing is in theform of a permanent subordinatedmortgage loan made at a belowmarket rate of interest.  The
municipality in which the business is
located must sponsor the request forfinancial assistance.Projects must be located in state
designated Urban Aid communities.There is a required minimum 1:1
public/private dollar match but
generally the financing is limited tono more than 25 percent of theproject costs.Ongoing
New Jersey Neighbor-
hoodDevelop-ment
Corporation
(NDC)Urban
DevelopmentCorporationMixed
FinancingProvides loans, loan guarantees and
equity investments to any for-profitneighborhood developmentcorporation to undertake projects that
will create jobs, add capital assets and
provide other direct benefits to theneighborhood.  All available financialsources must be approached prior toapplying for the NDCP, and project
must have local support.Project (s) must be located in an
eligible municipality, i.e., onewhich has at some time beeneligible for Urban Aid or Depressed
Rural Centers Aid as determined
annually by the New JerseyDepartment of Community Affairs.Maximum direct loan is the lesser of
$500,000 or 50 percent of totaleligible project costs.  Maximum loanamortization is 20 years.Ongoing
New Jersey Underground
Storage Tank
LoansNew Jersey
Economic
DevelopmentAuthorityLoan The EDA and Department of
Environmental Protection jointly
administer a fund to make loans andgrants available to eligible ownersand operators of regulated oil tanks tohelp finance costs associated with theupgrade, closure and remediation of
tanks.  Hardship grants not to exceed
$250,000 are available toowners/operators for 100 percent ofthe project costs.  Grant amount isEligible business owners are those
who own or operate less than 10
petroleum underground storagetanks in New Jersey; have a networth of less than $2 million, andcan demonstrate the inability toobtain a commercial loan for all or a
portion of the eligible costs.
To qualify for hardship grants, theapplicant must have a taxableincome of less than $100,000 or netUp to 100 percent of eligible costs.
Loans cannot exceed $1 million per
facility.  The interest rate isdetermined by EA and may rangefrom 2 percent to the Primate Rate.Loan term may not exceed 10 years.OngoingG/SCM/N/95/USA
Page 135based on the portion of costs EDA
determines the applicant cannotreasonable expect to pay.worth, exclusive of applicant's
primary residence, of less than$100,000.  A business grant mustrecipient must stay in business 15years after the award or a prorated
portion of the grant must be repaid.
New Jersey Urban
CentersSmall LoanProgramNew Jersey
EconomicDevelopmentAuthorityLoan Existing retail and commercial
businesses located in the commercialdistrict of an urban targetedmunicipality may obtain financing tofix up their properties.Existing retail and commercial
businesses located in thecommercial district of an urbantargeted municipality.Loans range from $5,000 - $50,000
for a maximum term of 10 years at aninterest rate of 1 percent below thefederal discount rate with a floor of 4percent and a ceiling of 10 percent.Ongoing
New Jersey Urban
Enterprise
Zone
ProgramDepartment of
Commerce
and Economic
DevelopmentMixed
TaxNew Jersey has 27 Urban Enterprise
Zones which provide significant
incentives and benefits to businesses
that locate within the zones.Qualified retailers may charge 50percent of New Jersey sales tax on "inperson" purchases; sales taxexemptions for materials and for
tangible personal property.  Other
zone benefits include:  a one-timecorporation tax credit of $1,500 forthe full-time hiring of residents of acity where a Zone is located whohave been unemployed or dependent
upon public assistance for at least 90
days, or a corporation tax credit of$500 for hiring residents within theZone, within another Zone or within aqualifying municipality; subsidized
unemployment insurance costs, for
certain new employees an incentivetax credit of 8 percent of investmentin the Zone by an approved "in lieu"agreement for certain eligible firms;and priority for financial assistance
from New Jersey Local Development
Financing Fund and Job TrainingNew Jersey has 27 Urban Enterprise Zones which provide significant
incentives and benefits to businesses that locate within the zones.OngoingG/SCM/N/95/USA
Page 136Program.
New
MexicoAerospace
Research andDevelop-mentDeductionNew Mexico
Taxation andRevenueDepartmentTax
Abatement/ReductionThe Aerospace Research and
Development tax deduction wasimplemented to stimulate economicdevelopment by providing anincentive for research and
development service providers to
operate in New Mexico.Aerospace Industry Maximum Program Benefits: A
portion of gross receipts tax isdeductible increasing over four yearsto 100 percent by 1999.Ongoing
New
MexicoEnterprise
ZonesEconomic
DevelopmentDepartmentMixed
TaxMunicipalities, counties and Indian
reservations can designate an eligiblearea as an enterprise zone.  The areamust exhibit general distress such as:high levels of unemployment,
deterioration of residential and
commercial structures, poverty andother distress criteria.  Before ajurisdiction can designate an area, acomprehensive strategic plan must bedeveloped with grassroots
involvement.  The program is non-
competitive.Statewide, distressed areas. Maximum Program Benefits:$50,000
tax credit to property owners for therehabilitation of qualified businessfacilities; Fast tracking of-infrastructure projects; Tax increment
method of financing local enterprise
zone projects; Local property taxabatement for 10 years on selectedproperty; Building rehabilitation taxcredit up to $50,000;Special CDBGfunds for infrastructure grants and
low-interest economic development
loans; Technical assistance isavailable through workshops and oneon-one meetings to assist  localgovernments in coordinating theirtargeted development efforts; and 65
percent in-plant training
reimbursement for qualifiedbusinesses.Ongoing
New
MexicoFilmmaker's
GrossReceipts TaxIncentiveTax
InformationOfficeTax
ExemptionQualified production companies
filming in New Mexico may purchasecertain services and materials and notpay the State's gross receipts tax on
such services and materials.Film Industry A qualified production company may
execute nontaxable transactioncertificates with its suppliers fortangible personal property or
services.  The suppliers may then
deduct their receipts from the grossOngoingG/SCM/N/95/USA
Page 137receipts tax.
New
MexicoIndustrial
Develop-mentTrainingProgramNM Economic
DevelopmentDepartmentGrant The Industrial Development Training
Program pays up to 50 percent (or 65percent rural) of employee trainingcosts and wages for an expanding orrelocating business for up to a sixmonth period.  Training may be
provided by a state educational
institution or tailored to meet specificbusiness needs.  Trainees must beresidents of New Mexico andguaranteed full-time employmentafter training.  The program is a
cooperative effort of the Economic
Development Department, theDepartment of Public Education, theDepartment of Labor, theCommission on Higher Educationand private industry.In rural areas, wages are reimbursed
at a higher rate (60 percent).Maximum Program Benefits: Trainee
wages are reimbursed to the companyat 50 percent during hours of training.Trainee hours will not exceed 1,040hours per trainee based on thebusiness work week, not to exceed 40
hours per week. Trainer costs,
excluding business employees, arereimbursed to the business at 50percent of the trainer's travel and perdiem. Instructional costs involvingclassroom training will be reimbursed
to the educational institution at 100
percent of all costs outlined in thetraining contract.  Costs may includeinstructional salaries, fringe benefits,supplies and materials, textbooks,expendable tools and other costs
associated with conducting the
training.  All costs must be necessaryand reasonable.Ongoing
New
MexicoNew Mexico
Property TaxAbatementTax
InformationOfficeTax
ExemptionReal and tangible personal property is
assessed and taxes are collected at thelocal levelStatewide- Land, buildings and
equipment associated with aneligible project to promoteeconomic development.Maximum Program Benefits: Land,
buildings and equipment associatedwith an eligible project are exemptfrom ad valorem tax, generally to
promote economic development.
Term: Up to 30 years.Rate: Varies by community.Ongoing
New
MexicoPreferential
Tax Rate forSmallWineries and
BreweriesNew Mexico
Taxation andRevenueDepartmentTax
Abatement/ReductionPreferential tax rate for small
wineries and breweries.Winery/brewery Maximum Program Benefits: Wine
produced by a small winery carries atax of 10 cents per liter on the first80,000 liters; 20 cents on production
over that level.  The basic tax rate for
wine is 45 cents per liter.  Beerproduced by a microbrewery is taxedat 25 cents per gallon.  The basic taxrate for beer is 41 cents per gallon.OngoingG/SCM/N/95/USA
Page 138New
MexicoRural
Develop-ment DirectBusiness andIndustry
Loan
ProgramRural
DevelopmentLoan Loans to private entrepreneurs Rural communities under 50,000
population.  Funding is targeted toprojects located in New Mexico'sChampion Communities and the LaJicarita Enterprise Community.Maximum Program Benefits:
$500,000 budget. Interest: Currently8.25 percent and subject to change ona quarterly basis.Ongoing
New
MexicoTax
IncrementFinancingNew Mexico
Taxation andRevenueDepartmentLoan Tax increment financing is a
mechanism for raising funds foreconomic development purposes.  Atthe beginning of a project, thevaluation of the project properties is
summed.  As the project proceeds,
these properties are developed orotherwise improved, increasing theirvaluations.  The tax proceeds flowingfrom the increase in valuation may bediverted to finance the project.Tax increment financing in New Mexico is available only in a designated
enterprise zone.Ongoing
New York Direct Loan
ProgramJob Develop-
ment
AuthorityLoan This program, funded through the
sale of state guaranteed bonds and
notes, provides tax-exempt (if eligiblepursuant to applicable federal law) ortaxable bond proceeds. These bondproceeds provide financing for thegrowth of manufacturing and other
private businesses in New York State,
in cooperation with LocalDevelopment Corporations (LDCs)and other Federal and State agencies.Financing may be used for the
acquisition of land, structures,
machinery and equipment;construction, modernization, andrenovation of existing facilities andsites; Loans may be used to purchasenew or used machinery and
equipment used in New York State;
Fixed and variable interest rates ondirect loans for machinery andequipment secured by a first prioritylien (may be co-equal with aparticipating lender) on the
underlying assets, and secondEligible recipients include small
and medium-sized businesses in
manufacturing, distribution,warehousing, and certain serviceindustries.  Retail, hotel, orresidential facilities, real estate andmedia/film organizations,
professional corporations, personal
service,  medical organizations, andloans for rolling stock, motorvehicles, or waterborne craft are noteligible.  Projects must show that
they anticipate creating or retain
one job for every $35,000 ofprogram assistance.A typical JDA assisted financing
structure is: 50 percent private or
public participating co-lender, 40percent JDA, and 10 percent equitycontribution of loan recipient.  Loansare secured by a second lien on thecommercial property (but subordinate
to no more than 50 percent of project
cost) and a proportionally co-equalfirst lien position with other lendersfor machinery and equipment.  Directloans of $50,000 to $1,500,000 or no
more than 40 percent of total eligible
project cost (up to 60 percent in somecases, including projects ineconomically distressed areas)OngoingG/SCM/N/95/USA
Page 139mortgage loans for real estate
acquisitions, construction, orrenovations; No interim orconstruction financing; Real estateloans for terms up to 20 years, and
machinery and equipment loa
New York Empire Zone
Real
Property TaxExemption(RPTL485-e)New York
StateTax
Exempt
ionIf allowed by local option, real
property that (1) is located in a
designated empire zone (formerlyknown as an economic developmentzone) and (2) is constructed orimproved after the zone is designatedis partially exempt from taxation and
special ad valorem levies for up to 10
years, but is liable for specialassessments.  The amount ofexemption is limited to a percentageof the increase in assessed valueattributable to the construction or
improvement as determined in the
first year of exemption. The increasein assessed value ("base amount")used to calculate the amount ofexemption remains constantthroughout the term of exemption,
except (1) where there is subsequent
construction or improvement duringthe term of exemption or (2) wherethere occurs in the assessing unit anoverall change in the level of
assessment of 15 percent or more; in
either case the base amount must beadjusted.Property must be located in an
empire zone identified as such by
the State Empire Zones DesignationBoard (administered by the NewYork State Department ofEconomic Development).The amount and duration of the
exemption depends upon whether the
taxing jurisdiction has adopted afixed 10-year term for the exemption(see Local Option below). If thetaxing jurisdiction has adopted afixed 10-year term, then 100 percent
of the base amount is exempt during
the first 7 years of the exemption, 75percent is exempt in the 8th year, 50percent is exempt in the 9th year, and25 percent is exempt in the 10th year.If the taxing jurisdiction has not
adopted a fixed 10-year term, then the
exemption will end in the 10th yearof the zone's life, and the exemptionpercentages will likewise be tied tothe zone's life.OngoingG/SCM/N/95/USA
Page 140New York Empire
ZonesProgramEmpire State
DevelopmentMixed
TaxEmpire Zones (EZs) of one to two
square miles each have beendesignated in 56 distressedcommunities around the state.  Eachof these zones has tax credits
available to businesses for the
duration of the zone designation.Zone Equivalent Areas are defined bythe census tract as locations with highpoverty and high unemployment that
have not been designated as Empire
Zones.  Businesses locating in theseareas have special benefits.Businesses that expand or locate inEmpire Zones or Zone EquivalentAreas of New York State may be
eligible to receive substantial
financial incentives for investmentand/or job creation.Property must be located in an
empire zone identified as such bythe State Empire Zones DesignationBoard (administered by the NewYork State Department of
Economic Development).Within Empire Zones, financial
incentives include:  (1) Investmenttax credit  (2) Wage tax credit (3)Zone capital tax credit (4) New YorkState sales tax refund (5) Utility rate
reduction (6) Real property tax
exemption (7) Local sales tax refund(8) Energy incentives are available toeligible businesses that locate or areestablished in EZs. These include gas
and electric utilities rate reductions.
Many utilities offer certain EZcertified businesses rate reductions of3 percent to 60 percent for new load.Telephone rate reductions of 5percent for the life of the EZ on
intrastate-intralata charges are
available to certified businesses thatuse NY Telephone or GTE; ratereductions of 5 percent are alsoavailable to certified businesses fromNYNEX and Citizens Telecom.
Within Zone Equivalent Areas,
financial incentives which mayextend to December 31, 2004, includethe wage tax credit.Ongoing
New York Empowerme
nt ZoneProgramNew York
EmpowermentZone
Corporation
(NYEZC)Mixed
FinancingEstablished by the Revenue
Reconciliation Act ( 1993), this is a
Federal initiative to stimulate
economic growth in severely
distressed areas through taxincentives and incentive financing.The New York State EmpowermentZone (EZ) consists of East, Centraland West Harlem, portions of
Washington Heights, and the South
Bronx. New York State and NewYork City each have committed $100million over the next 10 years tomatch the Federal commitment for a
total of $300 million. Financing is
available for the purchase of qualifiedzone property and land used forQualified businesses are generally
any trade except those consistingprimarily of the development or
holding of intangibles for sale or
license, golf courses, country clubs,massage parlors, hot tub or suntanfacilities, racetrack/gamblingfacilities, liquor stores, or farmswith assets greater than $500,000 at
close of tax year.Triple tax exempt enterprise zone
facility bond financing at lower thanmarket interest rates; Total
outstanding EZ facility bonds
allocated to any person cannot exceed$3 million per zone or $20 million forall zones nationwide; At least 95percent of the net proceeds of thebond issue must be used to finance
qualified zone property.OngoingG/SCM/N/95/USA
Page 141related purposes in the zones.
New York Energy
Products
CenterNew York
State Energy
R&DAuthorityMarketi
ng
Assistance andFinancialAssista
nceTo promote more efficient and clean
supplies of energy.Businesses involved with a
technology, product, or service that
generates new supplies of energymore efficiently and cleanly.  Inorder to receive a loan, personsshould be a customer of one of thefollowing utility companies: Central
Hudson Gas & Electric
Corporation, Consolidated EdisonCompany of New York, New YorkState Electric & Gas Corporation,Niagara Mohawk Power
Corporation, or Orange and
Rockland Utilities, Inc.  Customersmust have identified an eligibleimprovement project, have thenecessary documentation and a loancommitment from a participating
lender.Up to $500,000 of project cost may
be funded, with 50 percent co-
funding.  Project funding is budgetedin advance by program topic andspecific in each "ProgramOpportunity Notice".  The programmoney is allocated among the chosen
projects.  New York State lenders
provide loans with an interest rate of4.5 percent.  The average cost of aproject being funded is up to$200,000.Ongoing
New York Enterprise
Communi-tiesEmpire State
DevelopmentMixed
FinancingSixty-five Federal Enterprise
Communities ("ECs") weredesignated by the U.S. Department ofHousing and Urban Development(HUD) at the end of 1994, throughthe Revenue Reconciliation Act
(1993).  Four ECs are located in New
York State: Buffalo, Rochester,Albany-Schenectady-Troy, Kingston-Newburgh. To stimulate economicgrowth in distressed areas, eachcommunity receives $2,947,368 over
two years in Federal Social Security
Block Grants.  New York Statecommitted to match the Federalawards, for a total of $5,894,736 perEC.Qualified businesses must be
located within an EnterpriseCommunity.  Sixty-five FederalEnterprise Communities ("ECs")were designated by the U.S.Department of Housing and Urban
Development (HUD) at the end of
1994, through the RevenueReconciliation Act (1993).  FourECs are located in New York State:Buffalo, Rochester, Albany-Schenectady-Troy, Kingston-
Newburgh.Financing is also available for the
purchase of qualified enterprise zoneproperty through qualified EnterpriseZone Facility Bonds: Triple tax-exempt enterprise zone facility bondfinancing at lower than market
interest rates; At least 95 percent of
the net proceeds of the bond issuemust be used to finance qualified ECproperty; Total outstandingEnterprise Zone Facility Bondsallocated to any business cannot
exceed $3 million per EC or $20
million for all ECs.OngoingG/SCM/N/95/USA
Page 142New York General
Develop-mentFinancingEmpire State
Develop-mentLoan Assistance for projects that create or
retain jobs or increase businessactivity undertaken by manufacturing,non-retail service firms, headquartersfacilities of firms engaged in retail
industries, retail firms located in
distressed areas, and businesseswhich develop recreational, cultural,or historical facilities for touristattraction. (For a list of designated
distressed areas in NYS, contact ESD
Economic Revitalization).Eligible projects create or retain
jobs or increase business activityundertaken by manufacturing, non-retail service firms, headquartersfacilities of firms engaged in retail
industries, retail firms located in
distressed areas, and businesseswhich develop recreational,cultural, or historical facilities fortourist attraction.Loans of $75,000 to $2,000,000 for
up to 40 percent of total project costat interest rates no lower than 3percent and terms up to 20 years forreal property and up to 7 years for
machinery and equipment.  Interest
rates on loans will be set at the timeof Directors' approval of projectapplication; rates will reflect marketconditions, applicant's ability to
repay, and requirements necessary to
make the project feasible, but will notgenerally be lower than 3 percent.Loan guarantees of $75,000 to$2,000,000 or up to 60 percent of thetotal credit facility, whichever is less.
Interest subsidy grants of $75,000 to
$500,000 for up to 5 years; grantsmay not reduce the effective interestrate below 3 percent.  Capital Grantsmay also be available for hard costsand related soft costs, as well as for
working capital.  Working capital
loans for amounts to be determinedon a case-by-case basis for capital-related expenses such as accountsreceivable and inventory. Loans andloan guarantees for terms up to fourOngoing
New York Long-Term
Economic
Develop-ment FundJob Develop-
ment
AuthorityLoan This program provides fixed asset
financing to eligible projects in rural
areas of the state experiencing longterm economic decline or sudden andsevere job losses.Applicants must be private
businesses located in rural or
distressed areas of the state and incommunities with population under25,000, or in counties that are notwithin a Standard MetropolitanStatistical Area, or in counties with
fewer than 150 people per square
mile. Exceptions may be made on acase-by-case basis.Loans of up to one-third of total
project cost or a maximum loan of
$150,000 per project.  Interest rate onloans is the prime rate minus 3percent, fixed at the time of closing,with a minimum rate of 5 percent andmaximum rate of 10 percent.OngoingG/SCM/N/95/USA
Page 143New York Metropolitan
EconomicRevitaliza-tion FundEmpire State
DevelopmentLoan Financing for projects that retain or
create significant numbers of privatesector jobs in economically distressedareas.   Applicants may be both for-profit and not-for-profit businesses or
village, town, city, or county
governments that invest ineconomically distressed areas of NewYork State that fall within the servicearea of the Port Authority of New
York and New Jersey. These areas
include New York City and parts ofNassau, Westchester, and Rocklandcounties.Eligible businesses should retain or
create significant numbers ofprivate sector jobs in economicallydistressed areas.   Applicants maybe both for-profit and not-for-profit
businesses or village, town, city, or
county governments that invest ineconomically distressed areas ofNew York State that fall within theservice area of the Port Authority of
New York and New Jersey. These
areas include New York City andparts of Nassau, Westchester, andRockland counties.Loans of up to a maximum of
$5,000,000, or 10 percent of totalproject cost, whichever is less, foracquisition or improvement of landand/or buildings, construction and
renovation, and for machinery and
equipment purchases.  A minimum of10 percent borrower equity required.Interest rates will be determined bymarket conditions, applicant's ability
to repay, and project requirements,
and set at the time of ESD Directors'approval.  Terms for project loanswill not exceed 20 years for realestate and 7 years (or useful life ofcollateral) for machinery and
equipment.Ongoing
New York Motion
Picture and
TelevisionDevelop-mentAssistanceGovernor's
Office for
Motion Pictureand TelevisionDevelopmentBusines
s
assistanceThe Governor's Office for Motion
Picture and Television Development
promotes and encourages the locationand expansion of motion picture,television, commercial, video andrelated pre- and post-production and
distribution businesses in New York
State. In addition, the Office workswith the theatre and New Mediaindustries. This is accomplishedthrough a variety of businessassistance and marketing programs,
and review of regulatory and tax
policy.   Free services offered by thisunit include: Marketing and servicingfor the whole state. MP/TV not onlyprovides complete service andsupport, but also coordinates with a
network of local film offices, Visitors'
and Convention Bureaus, andindustry liaisons; Location services:scouting, research and access to alocation library with over 10,000
images of locations.  The program
promotes and encourages the locationand expansion of motion pictures,Film Industry OngoingG/SCM/N/95/USA
Page 144television, commercial, video and
related projects.
New York New York
State
Technology
EnterpriseCorporation(NYSTEC)NYS Office of Science
Technology and
Academic ResearchNYSTEC is a state supported, non-
traditional Technology Transfer
organization that is co-located with
the Air Force's Rome Laboratory inRome, New York.  ThroughNYSTEC, New York StateCompanies can access technologiesdeveloped through the lab as well as
laboratory staff and facilities.
NYSTEC's particular mission is toaccelerate bringing new products tothe non-military marketplace byleveraging the federal research and
development investment of billions of
dollars over the past 40 years inRome Laboratory.   Rome Laboratoryis the Air Force super lab forinformation technology developmentreferred to as C4I--Command,
Control, Communications, Computers
and Intelligence technologies. Thelaboratory's specialties includesensors, telecommunications,communications networks,distributed information processing
and data bases, software, artificial
intelligence, electromagnetics, signalprocessing, photonics and electronicreliability.Technology Companies Rome Laboratory has a staff of about
800 and an annual budget of about
$400 million.  The specific nature of
assistance is determined by the needsof the company and the capacities ofNYSTEC and Rome Laboratory andis generally determined on a case-by-case basis.OngoingG/SCM/N/95/USA
Page 145New York Qualified
EmergingTechnologyCompany(QETC) Tax
CreditsNew York
StateTax
CreditTwo new credits for emerging
technology companies:  1.  QualifiedEmerging Technology EmploymentCredit  2.  Qualified EmergingTechnology Company Capital Tax
CreditA qualified emerging technology company is, pursuant to section 3102-e
of the Public Authorities Law (PAL), a company located in New YorkState that has total annual product sales of $10 million or less, and meetseither of the following criteria: (1) its primary products or services areclassified as emerging technologies under section  3102-e(1)(b) of the
PAL; or (2) it has research and development activities in New York State
and its ratio of research and development funds to net sales equals orexceeds the average ratio for all surveyed companies classified (asdetermined by the National Science Foundation (NSF) in the most recentlypublished results from its Survey of Industry Research and Development,
or a comparable successor survey as determined by the Tax Department).Ongoing
New York Qualified
Empire Zone
EnterpriseIncentivesEmpire State
Development/
New YorkStateDepartment ofTax andFinanceTax
CreditEmpire Zone- certified businesses
locating and increasing employment
in Empire Zones ("Qualified EmpireZone Enterprises" or QEZEs) may beeligible for enhanced sales, propertyand business tax credits which maypermit them to operate on a virtual
"tax-free" basis for up to 10 years,
with additional savings available on adeclining basis in years 11 through14.  These enhanced benefits include:Sales Tax Exemptions; QEZE Credit
for Real Property Taxes;  QEZE Tax
Reduction Credit.All qualified businesses located in a New York enterprise zone. Ongoing
New York Rural
Develop-ment LoanFundJob Develop-
mentAuthorityLoan ESD provides financing for small
new and existing businessdevelopment in rural and distressedareas of the state.Applicants must be private
businesses located in rural anddistressed areas of the state, incommunities with population under25,000, or in counties that are not
within a Standard Metropolitan
Statistical Area, or in counties withfewer than 150 people per squaremile.Loans of $20,000 to $50,000 or up to
20 percent of total project cost,whichever is less.  Interest rate onloans is the prime rate minus 3percent and fixed at the time of
closing, with a minimum 5 percent
and maximum of 10 percent.OngoingG/SCM/N/95/USA
Page 146New York Tax
Exemptionson RealProperty inNew York
City
IndustrialandCommercialIncentive
Program
(ICIP)New York
CityDepartment ofFinanceTax
ExemptionUnder New York City's Industrial and
Commercial Incentive Program(ICIP), industrial or commercialconstruction or reconstruction indesignated areas of New York City
may be eligible for an exemption or
an abatement from the payment ofreal property taxes.Designated areas of New York City. Exemption: Renovation and new
construction of industrial propertiescitywide are eligible to receive a 25-year real estate tax exemptionconsisting of a full exemption on
increases in the assessed value solely
attributable to the improvementsmade for the first 16 years, decliningby 10 percent per year for theremaining nine years. These projects
may also receive protection against
future increases on the improvementdue to inflation for the first 13 yearsof the benefit period. The minimumrequired expenditure is 10 percent ofthe assessed value of the project.
Abatement: In addition to the
exemption program described above,renovation and new construction ofindustrial properties citywide are alsoeligible to receive a 12-year realestate tax abatement based on the pre-
existing real estate taxes of the
assessed value of both the land andthe building for the tax yearpreceding the issuance of the buildingpermit; or, if no building permit isrequired, the start of construction for
the first four years. ThOngoing
New York Zone
EquivalentAreasEmpire State
DevelopmentTax
CreditBusinesses employing individuals in
areas that meet EZ eligibility criteria,but were not so designated (zoneequivalent areas, or ZEAs), may takethe Wage Tax Credit for wages paidfor full-time employment in jobs
created in the ZEA. The credit is the
same as the EZ-Wage Tax Credit:$3,000 per targeted employee; $1,500per non-targeted employee; availablefor one 5-year period.  Taxpayers
may carry unused credits forward
indefinitely. The ZEA programexpires in 2004.Businesses employing individuals
in areas that meet EZ eligibilitycriteria, but were not so designated(zone equivalent areas, or ZEAs),may take the Wage Tax Credit forwages paid for full-time
employment in jobs created in the
ZEA.For tax years 2001 and beyond, the
credit amounts increase to $3,000 fortargeted employees and $1,500 fornontargeted employees, and theseamounts remain the same throughoutthe entire five-year duration of the
credit. Also starting in 2001,
taxpayers may take the credit during aten-year period following designationas a ZEA. The total wage tax creditcannot exceed 50 percent of tax due
before credits. Corporation franchise
taxpayers, banks, insurancecompanies, and personal incomeOngoingG/SCM/N/95/USA
Page 147taxpayers may claim this credit.
North
CarolinaJobs
Creation Tax
CreditDepartment of
CommerceTax
CreditNorth Carolina provides a Tax Credit
for creating jobs in all 100 counties.
Counties are arranged by EnterpriseTier Areas, and the credit is valuedaccording to the area tier factor.Eligible companies must maintain athreshold of at least 5 jobs before any
firm begins counting jobs for credit.
Credit is taken in equal installmentsover the four years following thetaxable year in which a job is created.The jobs tax credit is available to
firms in the NAICS categories of
manufacturing and processing (31-33),  warehousing (493110),wholesale trade and distribution(42), data processing (54151), aircourier service (492110), electronic
mail order (454110), customer
service center (561422) and centraladministrative office (551114).NAICS codes are designated by theEmployment Security Commission.The size of the tax credit is based on
the location of the firm.  Enterprise
Tier Areas are designated eachDecember by the Secretary ofCommerce based on the rankings ofall areas by unemployment, per capitaincome and population growth. The
credit for Tier 1 counties (23 most
distressed counties) is $12,500; Tier 2counties (next 15 counties) is $4,000;Tier 3 counties (next 25 counties) is$3,000; Tier 4 counties (next 17counties) is $1,000 and Tier 5
counties (next 20 counties) is
$500.There is a 5 year carry forwardavailable for any unused credits.  TheJobs Tax Credit (including carryforwards) may not exceed 50 percentof the tax  against which it is claimed,
reduced by the sum of all other
credits allowed against that tax,excluding payments made by thetaxpayer.  Either the income tax orfranchise tax may be elected, but not
both.OngoingG/SCM/N/95/USA
Page 148North
CarolinaMachinery
andEquipmentInvestmentTax CreditDepartment of
CommerceTax
CreditThis tax credit is available to eligible
companies that invest in machineryand equipment.  The tax credit isequal to the investment amount ofmachinery and equipment minus the
applicable threshold, multiplied by 7
percent.  The credit is taken in 7equal installments following thetaxable year in which the machineryand equipment is placed in service.Eligible Companies are
manufacturing, processing,warehousing, distribution, dataprocessing, air courier service,electronic mail order, central
administrative office as defined in
NAICS codes.  A company'sNAICS code must be in one of thecategories listed above.  NAICScodes are designated by the
Employment Security Commission.The size of the tax credit is based on
the location of the firm.  Thethreshold for Tier 1 counties is $0;Tier 2 counties is $100,000; Tier 3counties is $200,000; Tier 4 counties
is $500,000 and Tier 5 counties is
$1,000,000.  A five-year carryforwards is available for any unusedcredits.  The credit (including carryforwards) may not exceed 50 percent
of the tax  against which it is claimed,
reduced by the sum of all othercredits allowed against that tax,excluding payments made by thetaxpayer.  Either the income tax orfranchise tax may be elected, but not
both. If the machinery and equipment
are moved out of the state during theseven year period, future credits areforfeited.  If the machinery andequipment are moved to a differenttier during the seven year period,
remaining installments allowed to
extent which would have beenallowed if initially placed in servicein the new tier.Ongoing
North
CarolinaNorth
CarolinaBiotechnolo
gy CenterNorth Carolina
BiotechnologyCenterGrant The NC Biotechnology Center
promotes biotechnology research,development, job training and
commercialization for statewide
economic benefit.  The Center hasfour grant programs that supportbasic research, information sharing,educational enhancement and jobtraining and infrastructure
development at the state's
universities.  Academic ResearchInitiation Grants provide seed fundingfor biotechnology-related researchprojects that promise practical
benefits. The Center has two loan
programs that encourage technologytransfer and research andAwards are made to North Carolina
academic institutions, nonprofitorganizations, or businesses.  In the
case of awards to businesses, the
awardee must agree to maintain asignificant presence in NorthCarolina for five years from theeffective date of the award or torepay the Center in full.Economic Development Finance
Program loans are available for up to$250,000 for 18 months of support.
The SBIR Matching Fund Program
provides up to $50,000 for researchand development activities that refinePhase I research and initiate work onPhase II project objectives.OngoingG/SCM/N/95/USA
Page 149development efforts in the state's
biotechnology companies.  TheEconomic Development FinanceProgram provides financial assistanceto companies to promote the initiation
and expansion of commercial
applications of biotechnology.  TheSmall Business Innovation Research(SBIR) Matching Fund Programprovides financial assistance to small
biotechnology companies that have
successfully competed for fundingunder the federal SBIR program.
NorthCarolinaWorker
Training TaxCreditDepartment of
CommerceTax
CreditFirms eligible for the jobs creation
tax credit or the machinery andequipment tax credit can take a creditof 50 percent (up to $500 credit valuefor each employee trained in Tier 2-5
counties) against eligible training
expenses if the firm provides trainingfor 5 or more employees.  If the firmis located in Tier 1, the maximumcredit is $1000 per employee.Eligible Companies are
manufacturing, processing,warehousing, distribution, dataprocessing, air courier service,electronic mail order, central
administrative office as defined in
NAICS codes.  A company'sNAICS code must be in one of thecategories listed above.  NAICScodes are designated by the
Employment Security Commission.There is a 5 year carry forward
available for any unused credits.  Thecredit (including carry forwards) maynot exceed 50 percent of the taxagainst which it is claimed, reduced
by the sum of all other credits
allowed against that tax, excludingpayments made by the taxpayer.Either the income tax or franchise taxmay be elected, but not both.Ongoing
North
DakotaRegional
Rural
Develop-mentRevolvingLoan FundNorth Dakota
Development
FundMixed
Financi
ngProgram provides flexible "gap
financing " to make projects bankable
through subordinated debt, equity andpartnerships.This fund is allocated equally
among the state’s eight economic
regions for projects located morethan five miles outside the limits ofa city with a population less than8,000.Maximum investment $300,000.
Debt and equity investments are
priced based upon the appropriaterisk/return. Debt averages: workingcapital 3-5 years,machinery/equipment 5-7 years,
commercial real estate 10-25 years.
Equity averages: 5-10 years. Internalrate of return negotiated on case bycase basis.Ongoing
Ohio Community
Reinvest-ment AreasDepartment of
DevelopmentTax
Abatement/ReductionLocal tax incentives for businesses
that expand or locate in designatedareas of Ohio.  Program highlightsinclude substantial real estate
property tax reduction.Designated areas. Up to 100 percent exemption of the
improved real estate property taxvaluation for up to 15 years.  In someinstances, local school board approval
may be required.OngoingG/SCM/N/95/USA
Page 150Ohio Enterprise
ZonesDepartment of
DevelopmentMixed
TaxLocal and state tax incentives for
businesses that expand or locate indesignated areas of Ohio.Businesses must finalize an
Enterprise Zone Agreement prior toproject initiation, agree to retain orcreate employment and establish,expand, renovate, or occupy a
facility in an Enterprise Zone.Up to 75 percent exemption in
incorporated areas and up to 60percent in unincorporated areas of theimproved real estate or new tangiblepersonal property tax valuation for up
to 10 years.  In some instances, local
school board approval may berequired.Ongoing
Ohio Governor's
Office ofAppalachiaGrantsDepartment of
DevelopmentGrant The Governor's Office of Appalachia
(GOA),  involved with both short-and long-term planning,  facilitatesdevelopment and serves as an
advocate for the region by developing
policy and promoting specificprojects and proposals that originatefrom the region's residents.GOA receives approximately $4
million annually from theAppalachian Regional Commission(ARC) to administer the state ARC
program and fund special project
development.GOA receives approximately $4
million annually from theAppalachian Regional Commission(ARC) to administer the state ARC
program and fund special project
development.Ongoing
Ohio Local
Economic
Develop-mentProgram ofCDDDepartment of
DevelopmentGrant The grant program provides
incentives for projects to take place in
distressed areas where private sectordevelopers are reluctant to invest,including grants of up to $50,000with as much as $25,000 of grantbeing used for project development
costs.Low and moderate income
communities.At least 50 percent of the grant must
be used for project implementation
costs.  Requires at least 2:1 ratio ofother funds.  As much as $25,000 ofgrant may be used for projectdevelopment (professional servicesplanning and administration).Ongoing
Ohio Pioneer
Rural LoanProgramDepartment of
DevelopmentLoan Provides direct loans for businesses
locating or expanding in Ohio's ruralareas. Businesses must demonstratethat they will create new jobs forOhio citizens in rural areas. Loanmay be used for acquisition of land
and buildings, new construction,
renovation and expansion of existingbuildings and acquisition ofmachinery and equipment.Eligible areas include counties with
labor surplus, distressed countiesand situationally distressedcounties. The program seeks tofinance projects that willcreate/retain at least one job for
every $35,000 of state investment
during the first three years of theproject.The maximum loan amount is
$750,000. Participation by thePioneer Rural Loan Program for anyone project cannot exceed 75 percentof the total fixed-asset costs. Theannual interest rate for the Pioneer
Rural Loan financing will be fixed at
not greater than half the prime rate,which shall be determined solely bythe State Development Director. Theterm of the Pioneer Rural Loan willbe based on the useful life of the
assets being financed and the term of
the bank loan in the project. The termon a Pioneer Rural Loan cannotexceed 15 years for real estateOngoingG/SCM/N/95/USA
Page 151financing or seven years for
machinery financing.
Ohio Rural
Industrial
Park LoanDepartment of
DevelopmentLoan Provides direct loans and loan
guarantees to rural, distressed local
communities and other eligibleapplicants committed to creatingwell-planned industrial parks.Nonprofit organizations that
promote economic development in
rural areas; Local governmentalunits are eligible to apply for thefinancing of off-site publicinfrastructure improvements (i.e.,water, sewer, roads).Maximum loan available is $1
million and cannot exceed 75 percent
of total eligible costs.Ongoing
Ohio Scrap Tire
Loan andGrant
ProgramOhio
Department ofNatural
ResourcesGrant Loans and grants are available to
scrap tire recyclers who locate orexpand in Ohio and who demonstrate
that they will create new/reuse scrap
tire products.Companies locating or expanding in
designated "distressed" areas.ODOD has $2 million available for
qualifying loans and grants, withadditional funds earmarked to
continue the program through the
year 2000.  Loans and grants aredistributed to qualifying companieson a first-come, first-served basis.Financing is designated as "take-out"financing wherein a business must
complete its project utilizing interim
financing from a conventional lenderas its equity.  Upon completion of theproject, the state funds will bedisbursed.  Preferential interest rates
and terms are provided for qualifying
companies locating or expanding in"distressed" areas.OngoingG/SCM/N/95/USA
Page 152Ohio Steel
Develop-mentInitiative:166 Direct
Loan or
LoanGuarantee &OhioEnterprise
Bond FundDept. of
DevelopmentLoan Support the steel industry. Steel makers, processors, and
foundries (SIC 3300 & 3400)making new capital investments;eligible investments include fixedasset investment in building,
machinery, and equipment. To date,
ten companies have benefited fromthis program.Up to $30 million available ( up to
$10 million per comp any) under two
programs : 1) Direct Loan or LoanGuarantee-provides up to 30-40percent of eligible project costs,
$15,000 of state money loaned per
job retained or created in non-distressed areas; $35,000 of statemoney loaned per job retained orcreated in distressed areas; 10 percent
equity requirement; interest rate fixed
at 3 percent; term of 5-15 years basedon life of fixed assets; 2) OhioEnterprise Bond Fund- provides up to90 percent of fixed rate financing ofeligible project costs; $75,000 of
bond money loaned per job retained
or created; 15-20 year term based onlife of fixed assets.  Up to $60 millionin tax-exempt financing is availablefor eligible pollution controlequipment.Ongoing
Ohio Steel
Develop-
mentInitiative:Infra-structureGrantsDept. of
DevelopmentGrant To develop infrastructure.
Infrastructure grants are allocated for
public infrastructure improvementsnecessary to move a project forwardor make key equipment acquisitions.Steel makers, processors, and
foundries (SIC 3300 & 3400)
making new capital investments.Conditions for receiving a grant arejob creation and retention.Up to $5 million over three years.
The total amount granted since 2001
is $600,120Ongoing
Ohio Steel
Develop-
mentInitiative:TargetedIndustriesTraining
Grant
ProgramOhio Board of
RegentsGrant To support the steel industry. Steel makers, processors, and
foundries.Up to 75 percent of the instructional
and related costs of a training
program.  Maximum of $50,000 inbenefits to a single company during afiscal year-cost per trainee pertraining project cannot exceed $650.Ongoing
Ohio Third
FrontierAction Fund(TFAF)Department of
DevelopmentGrant The Technology Action Fund has
been renamed the Third FrontierAction Fund (TFAF). TFAFcontinues the mission of theThis initiative will link major
existing businesses, educationalinstitutions, venture capitalists,entrepreneurs, emerging high-tech The initial purpose of the fund,
established with a budget of $3million, was to increase the amountof federal research dollars leveragedOngoingG/SCM/N/95/USA
Page 153Technology Action Fund in providing
financial support to projects thatcontribute to technology-basedeconomic development in Ohio.TFAF grant awards are made on a
competitive basis.
In this funding cycle proposals aresought in three focus areas. The firstfocus area is to increase theavailability of professionally
managed, early-stage capital to Ohio
start-up or early-stage technologycompanies. The second focus areaprovides support for collaborationsformed to commercialize a near-termspecific or platform technology or
capability. The third focus area
supports the Governor’s Fuel CellInitiative.Requestenterprises, and the broader
community in capitalizing on theregion's strengths to foster, connect,leverage, and promote the variednew economy clusters that have
emerged there.into the state. In 2000 and 2001 the
Fund was increased to $15 millioneach year and the focus of supportchanged to support entrepreneurialactivity in technology sectors in Ohio.
Ohio Technology
InvestmentTax CreditDepartment of
DevelopmentTax
CreditOhio's Technology Investment Tax
Credit program offers a variety ofbenefits to Ohio taxpayers who invest
in small, research and development
and technology-oriented firms.Through this innovative program,Ohio investors may reduce their statetaxes by up to 25 percent of theamount they invest in qualified,
technology-based Ohio companies.The Technology Investment Tax
Credit can benefit investors whomeet a variety of requirements
specified by Ohio law. First,
investors must invest in Ohiocompanies which are eligible for taxcredit investments and are engagedin qualified trades or businesses, i.e.technology oriented businesses.The program's maximum credit of
$90,000 per investment may beapplied to personal income tax,
corporation franchise tax, public
utility excise tax or the tax on dealersin intangibles.Ongoing
Oklahoma Enterprise
ZonesDepartment of
CommerceMixed
FinancingThe state has designated Enterprise
Zones which can be either depressedcounties or inner cities.  These zonesprovide three major inducements forbusiness.  Double theInvestment/New jobs tax credit is
allowed and low interest loans may
be made available through theenterprise district loan fund. Theenterprise district managementauthorities created in each enterprisedistrict are empowered to establish
venture capital loan programs and toAny type of manufacturing
company locating in low income,high out-migration, or highunemployment areas.These loans can be for up to 100
percent of the estimated cost of thebuilding and equipment.OngoingG/SCM/N/95/USA
Page 154solicit proposals from enterprises
seeking to establish or expandfacilities in the zones.  By statute,funds for these programs would comefrom the issuance of general
obligation bonds by the district
involved.
Oklahoma Investment
New JobsIncome TaxCreditOklahoma Tax
CommissionTax
CreditThe Investment New Jobs Income
Tax Credit allows manufacturers orqualified aircraft maintenancefacilities the greater credit of onepercent per year of the investment inqualified depreciable property the
year the property is placed in service,
or a credit of $500 per year peradditional new jobs engaged only inmanufacturing or processing.  Toqualify, the depreciable property musthave a floor cost of at least $50,000.
New jobs credit shall be for each full
time equivalent manufacturingemployee earning at least $7,000during each year the credit is claimed.The taxpayer that invests inqualifying property and also adds
new employees should figure the tax
credit both ways (total capitalexpenditures if over $50,000 or netincrease in full time equivalentemployees) and take the larger credit.
In Enterprise Zones the credit is
doubled.  Firms that take advantageof the Investment/Jobs Income TaxCredit Package are ineligible for theQuality Jobs 10-Year Cash BackIncentive.Manufacturing, aircraft
maintenance facilities and variouscomputer service industries.The credit allowable in any year is
limited to the employer's tax liability;any credit not used may be carriedforward and claimed in any of thefive years following the initial five-year period.  It may be necessary to
retain up to ten years of records to
property document the credit.OngoingG/SCM/N/95/USA
Page 155Okla-homa Quality Jobs
10-YearCash BackIncentiveDepartment of
CommerceTax
RefundThe program is targeted to
manufacturers and certain servicecompanies which utilize the newOklahoma Quality Jobs program byhaving a new payroll investment of
$2.5 million or more.  It is an easy-
access program which provides directpayment incentives (based on newwages paid) to companies for up toten years.  The program provides
quarterly cash payments of up to 5
percent of new taxable payrolldirectly to qualifying companies forup to ten years.  Beginning in 2003,jobs included in the $2.5 millionthreshold must be paid at lease equal
to the average county wage where the
company is located, not required toexceed $25,000.Firms cannot utilize the jobs orinvestment tax credit, sales taxexemptions for construction, or a
variety of additional tax credits and
exemptions.Fast growing businesses within the
SIC Codes 20-39.Payments are generally limited to 5
percent of payroll and for mostbusinesses will be in the 4 percent to5 percent range.Ongoing
Oklahoma Sales Tax
Refunds forComputer-relatedProductsOklahoma Tax
CommissionTax
RefundOklahoma offers a sales tax refund on
computers, data processingequipment, related peripherals,telegraph or telecommunicationsservices or equipment.Qualifying companies include:
a. New or expanded aircraft maintenance and manufacturing facilities thatcreate 250 or more jobs, with construction investment of $5 million andpurchases of at least $2 million worth of computers and other listed items.b. Research and development or computer services companies (SIC 7372-
7375, 8731-8734). (SIC 7374 must attain minimum of $100,000
purchases), when at least 50 percent of the annual gross revenue of thebusiness is generated by sales of product or service to an out-of-state buyeror consumer (includes the federal government);  75 percent of annual grossincome results from computer services/data processing or research anddevelopment activities; and the business employs at least 10 new workers
at an average salary of $35,000 for at least three years.OngoingG/SCM/N/95/USA
Page 156Oregon Business
Develop-ment FundOregon
EconomicDevelop-mentDepartmentLoan The Oregon Business Development
Fund is a revolving loan fundadministered by the Department.  TheOBDF can provide loans tobusinesses for acquisition,
construction, and operation of
property, real or personal.  Theprogram is designed to provideleverage for private financing.Preferred project is a business with
fewer than 50 employees located inrural areas and enterprise zones.Maximum of 40 percent OBDF
participation.  Maximum loan size is$500,000.  The term of the loancannot exceed the useful life of theproject or 20 years, whichever is less.
The interest rate is one point above
the current yield of U.S. Treasurysecurities of a comparable term.  Thecommission's security interest may besubordinated to a senior lender;
however, all loans must be secured by
good and sufficient collateral exceptfor projects located in economicallydistressed areas.Ongoing
Oregon Business
RetentionServicesOregon
EconomicDevelopmentDepartmentBusines
sassistanceThe Oregon Business Retention
Service is a statewide managementconsulting service that contracts withOregon businesses that have a
national or international customer
base.  The program assists Oregonbusinesses that either are havingfinancial problems or are goingthrough a difficult transitions with
growth, market shifts, or an
ownership change.  In addition,OBRS has provided partial fundingfor feasibility studies of potentialemployee buyouts, and partialfunding for studies that examine the
feasibility of reopening closed
industrial facilities.  The technicalassistance to transitional companies isprovided by private sector consultantswho have been screened and selectedby the Oregon Economic
Development Department.  The
consultant's function is to analyze thecompany including management,operations, marketing, and thefinancial situation of the firm, and
make specific recommendations and
work with owners/managers toimplement improvements.  TheThe goal of the program is to retain
industrial jobs in Oregon'scommunities. Only companiesinvolved in a traded sector industry,
primarily manufacturing or
processing, can qualify for technicalassistance or employee buy outfeasibility studies.  Preference willbe given to firms in forestry,
fishing, and agriculture; although,
strategically placed firms in ruralareas will be considered.The consultant's fees are paid by the
department, but the company isobligated to repay the cost of servicewithin two years.  No interest will be
charged, and the ability to repay will
be taken into consideration.Participating businesses receive up to$4,000, or approximately 40 hours, ofmanagement counsel.  The applicant
for a feasibility study of a closed
industrial facility must provide 25percent of the cost of the study in acash match.  The department'scontribution, which is in grant form,cannot exceed $30,000.OngoingG/SCM/N/95/USA
Page 157OBRS is financed with lottery
proceeds.
Oregon Enhanced
EnterpriseZonesOregon
Economic &CommunityDevelopmentDept.Tax
Abatement/ReductionThe Oregon Legislature created this
incentive in 1997 to spur majorindustrial investments in rural areasof the state with highest rates ofunemployment.  The incentiveprovides 7-15 consecutive years of
full relief from assessment of all local
property taxes at the investment site.Rural areas of the state with high
unemployment.Credit equal to 62.5 percent of gross
payroll is applied against statecorporate income tax liabilitiesrelating to the facility, over and abovethe first 41 million in annual incometaxes.Ongoing
Oregon Enterprise
ZoneProgramOregon
EconomicDevelopmentDepartmentTax
Abatement/ReductionThe Oregon Enterprise Zone Program
was created by the Legislature in1985 as a business incentive to createnew jobs by encouraging businessinvestment in economically lagging
areas of the state. Oregon has 44
enterprise zones with at least one invirtually every region of the state.Current statutory authority allows forup to 48 zones to exist at one time.Forty-four areas in Oregon have
been designated as enterprise zones.Eligible business firms providegoods, products or services to otherbusiness operations.  This includes
not only conventional
manufacturing and industrialactivities, but also processingplants, distribution centers,maintenance facilities, warehouses,corporate headquarters and most
call centers.Construction of new facilities in an
enterprise zone entitles a business to a100 percent property tax abatementfor three years on new plant and mostof the equipment installed in the
plant.Ongoing
Oregon Industrial
Develop-mentRevenueBondsOregon
EconomicDevelopmentDepartmentBond The Economic Development
Commission issues industrialdevelopment revenue bonds formanufacturing, processing, andtourism related facilities in Oregon.Proceeds of bond issues may be
used to purchase land, constructnew buildings, purchase existingbuildings, purchase new or usedequipment, and expand or improve
existing plants, as well as to cover
architectural fees, bond counsel,underwriting, and administration ofbond issues.  Only manufacturingprojects, certain facilities such as
docks or solid waste facilities, andIndustrial development bonds can be
used for up to 100 percent of theestimated cost of the project.  Thecompany will enter a lease, loan, orconditional sale agreement with the
Economic Development Commission.
Bonds may be sold publicly orprivately.  Interest rates are subject tonegotiation between the company andbond purchasers.OngoingG/SCM/N/95/USA
Page 158bonds for nonprofit organizations
are federally tax exempt.Specifically excluded are retailbusinesses, shopping centers, officebuildings, and recreational facilities,
as well as projects in which ground
breaking, construction, or purchaseof equipment has started before thegranting of project eligibility.
Oregon Port
RevolvingLoan FundOregon
EconomicDevelopment
DepartmentLoan The Oregon Port Revolving Fund
provides long-term loans to ports atbelow market interest rates.  The fund
provides loans to port districts for
improvements to port facilities or toassist private firms located on portindustrial properties.  Loans maymatch grants from federal, state, andlocal agencies.Legally formed Oregon port
districts are the only entities eligiblefor Port Revolving Fund loans.Maximum loan size is $500,000, with
no more than $1.5 millionoutstanding to any one port at any
one time.  The term of loans may not
exceed 20 years or the useful life ofthe project, whichever is less.Interest rates on PRF loans are set at1 percent less than the current yieldon U.S. Treasury securities of a
similar maturity for business
development projects and not lessthan 5 percent for port developmentloans.  All loans must be backed bycollateral.Ongoing
Oregon Strategic
Investment
ProgramOregon
Economic
Development
DepartmentBond For approved projects that benefit
Oregon's key industries, the
Department can issue industrial
development revenue bonds.Properties developed under theprogram are exempt during the termof the bond from property taxes on
assessed value in excess of a cap that
begins at $100 million and is adjustedannually.  A project does not need tobe fully bonded to be eligible for thetax exemption.  Participatingcompanies make a payment directly
to local governments to support
community costs of meetingadditional service requirements.  Thispayment is equal to 25 percent ofexempted property taxes but not morethan $2 million per year.  Local
jurisdictions have broad discretion toOregon key industries OngoingG/SCM/N/95/USA
Page 159negotiate conditions that offset the
impact a project may have on aregion or community.
Oregon Strategic
ReserveFundOregon
EconomicDevelopmentDepartmentLoan The Department and Governor
allocate monies from the StrategicReserve Fund to leverage otheravailable public, industry, or businessresources for projects which have
positive long-term regional or
statewide economic impact.  Wherepossible, funding has been targetedtoward projects related to keyindustries, distressed timber-dependent communities, economies
affected by salmon-related
environmental restrictions, or innercity areas.Oregon key industries. Ongoing
Penn-
sylvaniaEnterprise
ZoneProgramDepartment of
Communityand EconomicDevelopmentGrant Designed to assist financially
disadvantaged communities inpreparing and implementing businessdevelopment strategies within
municipal Enterprise Zones.Private sector-driven program
designed to increase the quantityand quality of available jobopportunities within an Enterprise
Zone.Planning grants to municipalities up
to $50,000; basic grant up to $50,000;grants-to-loans for businesses up to$250,000.Ongoing
Penn-
sylvaniaEnterprise
Zone TaxCredit -CommunityInvestmentDepartment of
Communityand EconomicDevelopmentTax
CreditProvides tax credits to businesses
investing in Enterprise Zones.Businesses located within
Enterprise Zones.Tax credits equal 20 percent of
amount invested. Up to $250,000 perproject.Ongoing
Pennsylvan
iaKeystone
OpportunityZone (KOZ)Department of
Communityand Economic
DevelopmentTax
Abatement/Red
uctionProvides state and local tax
abatement to businesses, propertyowners and residents locating in one
of the 12 designated zones as of
January 1, 1999.Businesses, property owners or
residents located in one of the 12designated zones as of 1/1/1999.Projects in KOZ are given priority
consideration for assistance undervarious community and economic
building initiatives.  Applications for
assistance should be clearly markedKOZ activity when appropriate.Qualified businesses, residents, orproperty owners must be current with
all state and local taxes and building
codes in order to receive benefitsOngoingG/SCM/N/95/USA
Page 160and/or annual certification.  Existing
PA business relocating to a zone mustmeet one of two provisions increasefull-time employment by 20 percent(based on operations being moved),
or make a capital investment in the
property equivalent to 10 percent ofgross revenues from prior year.Length of program varies per subzone ending in 2008, 2010, or 2013.
Penn-sylvaniaPennsylvania Community
Development Bank (PCD
Bank) – LoansLoan Debt financing for Community
Development Financial Institutions
(CDFIs); Public funds (25 percent)
matched with private sector funds (75percent) to create a loan pool foreligible CDFIs.State accredited community
development financial institutions
are eligible; CDFI must meet state
accreditation standards and programunderwriting guidelines; Minimum2 years lending experience; Focuson economic development and jobcreation.3-, 5-, and 7-year loans of amounts
from $250,000 to $5 million.
Principal and interest repaid
quarterly; interest rate is a blendbetween public rate of 50 basis pointsand private rate of U.S. Treasury rateplus 100 basis points; Collateralrequired.  Monitoring covenants are
established for each borrower.Ongoing
Penn-
sylvaniaPennsylvania
IndustrialDevelop-mentAuthority(PIDA)Pennsylvania
EconomicDevelopmentFinancingAuthorityLoan Low-interest loan financing through
Industrial Development Corporationfor land and building acquisition,construction, and renovation,resulting in the creation or retentionof jobs.PIDA funds may be used for land
and building acquisition, buildingconstruction and renovation,industrial park development, andmulti-tenant spec buildingconstruction, acquisition and
renovation.  Job creation loans are
for manufacturing, industrialresearch and development,agricultural processors, or firmsestablishing a national or regional
headquarters or computer/clerical
operation centers.  Job retentionloans are for manufacturing firmsthat meet certain quality standardsand wage thresholds in that county.Loans up to $1.25 million (within an
Enterprise Zones, Act 47 IndustrialCommunities, Brownfield Sites, andKeystone Opportunity Zones,  $1.75million).  No more than 30 to 50percent of total eligible project costs
depending upon firm size and area
unemployment rate.  Brownfield sitesand those in an Act 47, EnterpriseZone or Keystone Opportunity Zonequalify for 3.75 percent interest rate;
Advanced Technology projects
qualify for an interest rate of 3.75percent or 4.25 percent.   Interest rateis 3.75 percent to 6.75 percent,depending upon local unemploymentrate; up to 15-year term on land and
buildings; no less than a second
mortgage on financed assets;disbursement to applicant based uponreimbursable expenses; $25,000 costper job to be created or retained.OngoingG/SCM/N/95/USA
Page 161Penn-
sylvaniaPTIA
(Penns-ylvaniaTechnologyInvestment
Authority) -
InvestmentDepartment of
Communityand EconomicDevelopmentEquity Financing available as direct
investment to or on behalf oftechnology-oriented businesseslocated in or maintaining a substantialoperating presence in Pennsylvania.For-profit businesses that must fall
within SIC or NAICS codes.Amounts are variable.  Financial
return to PTIA and PTIA investmentis not to exceed 20 percent of totalinvestment.Ongoing
Penn-
sylvaniaUnderground
Storage TankUpgradeLoanProgram
(USTULP)Department of
Communityand EconomicDevelopmentLoan Low-interest loan financing to
business owners of regulatedunderground storage tanks to meetfederal Environmental ProtectionAgency upgrade requirements.Business owners of regulated
underground storage tanks to meetFederal EPA upgrade requirements.Amounts of $500,000 or 75 percent
of the total eligible cost, whichever isless.  10 years maximum term.  Theinterest rate is fixed for the term ofthe loan and shall equal the interest
rate for a 5-year U.S. Treasury note
as determined by the Department. 2percent loan commitment fee due atloan commitment.  10 percent of thetotal eligible project cost must becash equity; the remaining 15 percent
may be bank or vendor financed.  All
loans will be guaranteed by theprincipals of the borrower.Ongoing
Rhode
IslandCorporate
Income TaxRateReductionRhode Island
EconomicDevelopmentCorporationTax
Abatement/ReductionThe Rhode Island Jobs Development
Act grants incremental income taxreductions to companies that createnew employment in Rhode Island
between January 1, 1995 and July 31,
2004.Statewide The incremental income tax reduces a
company's corporate income tax rate(currently 9 percent) by a quarterpercentage point (0.25) for each 50
new jobs created during a three-year
period.  For companies with fewerthan 100 employees, the tax reductionoccurs if at least ten jobs are addedduring a three-year period. The
maximum reduction is 6 percent
allowing the present state income taxto be reduced to as low as 3 percent.Ongoing
Rhode
IslandEnterprise
ZonesRhode Island
EconomicDevelopmentCorporationTax
CreditA taxpayer who owns a certified
business facility within an areadesignated by the Enterprise ZoneCouncil may qualify for severalincentives to expand facilities and
employment in these areas.Designated Areas: The State of
Rhode Island has designated elevenEnterprise Zones.  These zonesinclude parts of Bristol, CentralFalls, Cranston, Cumberland, East
Providence, Lincoln, Pawtucket,
Portsmouth, Providence, Tiverton,Warren, Woonsocket, and WestWarwick.  Federal enterprise zonesIncentives to employ enterprise zone
residents: A tax credit is allowed forqualified enterprise zone businessesfor employing persons domiciled inan enterprise zone.  Firms qualifying
for enterprise zone tax credits by
increasing total companyemployment by 5 percent within anR.I. enterprise zone may take a creditOngoingG/SCM/N/95/USA
Page 162or enterprise communities qualify
for all benefits afforded stateenterprise zones as of July 1, 1998.equal to 75 percent of the total wages
paid to enterprise job employeesliving in an enterprise zone.  Themaximum credit is $15,000 peremployee.
RhodeIslandRhode Island
Employer'sApprenticeship Tax CreditRhode Island
EconomicDevelopmentCorporationTax
CreditTo promote growth in the metal and
plastic industries.The credit applies to the following
trades in the metal and plasticindustries: machinist, toolmaker,modelmaker, gage maker,patternmaker, plastic process
technician, tool & machine setter,
diesinker, moldmaker, tool & diemaker, machine tool repair.The annual credit allowed is 50
percent of the actual wages paid tothe qualifying apprentice or $4,800,whichever is less.Ongoing
South
CarolinaCorporate
Income TaxMoratoriumin Distressed
CountiesSouth Carolina
Department ofRevenueCorpor
ateIncomeTax
Morato
riumTo encourage growth in economically
distressed counties.Companies located in South
Carolina’s most economicallydistressed counties.Corporate income tax moratorium.
Length of moratorium dependentupon number of new jobs created:100 new jobs over 5 years results in a
10 year moratorium; 200 new jobs
results in a 15 year moratorium.Ongoing
South
CarolinaEconomic
Impact ZoneInvestmentTax CreditSouth Carolina
Department ofCommerceTax
CreditTo help offset the impact of federal
downsizing in the state and spurgrowth in areas surroundingCharleston Naval Base, Myrtle BeachAir Force Base, and the Savannah
River Site.Manufactures located in “Economic
Impact Zones.”One-time credit against a company’s
corporate tax of between 1 percentand 5 percent of a company’sinvestment in new productionequipment. Credit percentage
depends on the applicable recovery
period for property under the InternalRevenue Code.Ongoing
South
CarolinaFee-in-lieu
of LocalPropertyTaxesLocal Govern-
mentsTax
Abatement/ReductionA company can negotiate a Fee-in-
Lieu of property taxes agreementwith a county if certain investmentcriteria are met.  The advantages to acompany include: (1) savings as
payments to local government are
reduced significantly throughnegotiation of a lower assessmentratio and negotiation of an applicablemileage rate; (2) planning as
payments to local government are
stabilized for the term of theQualifying investments of $5
million or moreSavings will occur by reducing the
assessment ratio from 10.5 percent toa minimum of 6.0 percent andpotentially locking in the millage ratefor the life of the agreement up to 20
years.  All terms are negotiated with
Counties.OngoingG/SCM/N/95/USA
Page 163agreement (up to twenty years); and
(3) scheduling, as the payment streamcan be negotiated to meet thefinancing needs of the company.  Acompany can qualify to negotiate a
FILOT with an investment as low as
$5 million.
SouthCarolinaJobs Tax
Credit forNew JobCreationSC
Department ofRevenueTax
CreditProvides a credit to corporate income
tax or premium tax based upon newjobs created by a company locating orexpanding a facility in any county inthe state.  The dollar credit is based
on each new full-time job created
with the credit value and minimumrequired annual job creation varyingby county.Credits for Least Developed
counties are $4,500; UnderDeveloped counties are $3,500;Moderately Developed counties are$2,500; and Developed Counties are
$1,500.The credit is available for a five-year
period beginning with Year 2 of theProject.  (Year 1 is used to establishthe created job levels).  The numberof new jobs is calculated as the
increase in the average monthly
employment from one year to thenext.  The credit can be appliedagainst corporate income tax orpremium tax, not to exceed 50percent of the year's tax liability.
Unused credits may be carried
forward for 15 years from the yearearned.  Credit value ranges from$1,500 to as high as $5,500 per jobfor 5 years.Ongoing
South
CarolinaTax
Increment
Financing
forRedevelop-mentProjectsLocal Govern-
mentsLoan Incorporated municipalities are
authorized to issue obligations for the
purpose of redevelopment within
their boundaries.  The debt service forsuch obligations is to be funded fromthe added increments of tax revenuesresulting from the projects.Obligations must mature within 30
years, and interest rates are
determined by the governing body ofthe municipality.Areas eligible for redevelopment
projects include vacant or improved
areas that, according to
specifications, are classified asblighted areas or conservation areas.Areas that are deteriorating anddeclining and threatening to becomeblighted areas if such decline is not
checked are eligible.  Eligible
projects can be buildings,improvements (e.g., street, water, orsewer), parking facility, orrecreational facilities owned by the
municipality.Total aggregate area within any one
municipality may not exceed 5
percent of the total acreage of the
municipality.  The area designated forredevelopment may not be less than atotal of 1.5 acres.OngoingG/SCM/N/95/USA
Page 164Tennessee Economic
Develop-ment LoanFundTennessee
ValleyAuthorityLoan TVA Economic Development
Investment Funds are designed toprovide capital to finance companiesin the Tennessee Valley, generatehigh-value jobs, and make new
capital investment.  The TVA
Economic Development Loan Fund isa $100 million revolving loanprogram that provides low interestloans to established companies
relocating or expanding their
operations in the Tennessee Valley.Businesses must be located in the
TVA power service area.Manufacturing and distributionbusinesses are the primary targets.Specifically targeted are
automotives, plastics, metals and
metal fabrication, and electronics.To be eligible, the loan must beused for buildings, plant equipment,infrastructure, or property, based on
the capital investment leveraged,
the number of jobs created, powergenerated and geographic diversity.The maximum loan investment is $2
million for a single project. Loans aregenerally awarded for five to tenyears - from five to seven years forequipment and eight to ten years for
real property.  Terms and rates are
determined on a project by projectbasis.Ongoing
Tennessee Jobs Tax
CreditTennessee
Department ofEconomic andCommunityDevelopmentTax
CreditTo create jobs and increase
investment in the SpecialEnhancement Counties.Businesses located in economically
distressed areas.Up to $3,000 applied against the
amount of increase in thecorporation’s franchise tax liabilitycaused by its expansion.Ongoing
Tennessee Minority
Business
Develop-ment LoanFundTennessee
Valley
AuthorityLoan TVA's Minority Business
Development Loan fund is a
revolving loan fund established tosupport the start, growth, andexpansion of minority and othersocially and economicallydisadvantaged business owners in the
Valley.Business must be located in the
TVA power service area.  '"Social
and economical disadvantage" havethe meanings described in the SmallBusiness Act (15 U.S.C. Section637 (a)).Loans range from $50,000 up to
$500,000.  Loans are generally
awarded for a period of three to tenyears - from five to seven years forequipment and eight to ten years forreal property.  Terms and rates aredetermined on a project by project
basis.  Loans are typically below
market rate with specific ratesdetermined on a case by case basis.OngoingG/SCM/N/95/USA
Page 165Tennessee Sales and
Use TaxExemptionsTennessee
Department ofRevenueTax
ExemptionThe sales tax applies to any person or
company who manufactures,distributes or retails tangible personalproperty within the state.  The salestax places the legal incidence of tax
upon the seller.  The Tennessee state
sales tax is 6 percent and the localoption sales tax ranges from 1 percentto 2.75 percent.Statewide Tennessee offers the following sales
tax incentives and exemptions:  Nosales tax on purchases, installationand repairs of qualified industrialmachinery.  No sales tax on
purchases of material handling and
racking equipment associated withthe require capital investment of $10million by a distribution orwarehouse facility.  No sales tax on
raw materials for processing.  No
sales tax on pollution controlequipment of manufacturers.  Otherpollution control equipment may beeligible for sales tax credit.  Reducedsales tax rates for manufacturers' use
of energy fuel and water; tax-exempt
if used directly in the manufacturingprocess.  Credit of 5.5 percent forstate sales and use taxes paid onbuilding materials, machinery andequipment new or expanded
corporate headquarters (regional,
national or international) meetingcapital investment requirement of $50million.  Refund on taxes paid ongoods and services by motion pictureproduction companies filming or
producing in Tennessee that meet
expenditures reqOngoing
Tennessee Special
Opportuni-ties Counties(SOC)ProgramTennessee
ValleyAuthorityLoan The TVA Special Opportunities
Counties (SOC) fund is a $15 millionrevolving loan program that provideslow interest loans targeted tocompanies expanding or relocating in
the Tennessee Valley's most
economically distressed communities.Only the 50 counties in the Valley
with the lowest per capita incomeranked by the percent of residentsbelow the poverty level are eligiblefor the program.  This list is
updated on an annual basis.  TVA
maintains a current listing ofeligible Tennessee counties.The maximum loan investment is
$300,000.  Funding is provided to thelocal government/developmentorganization to be loaned by them atthe TVA long-term borrowing rate
(established at the time the loan is
closed).  Equipment loans aregenerally five to seven years andloans for real property are made forup to I0 years.   All funding is subject
to availability of funds.OngoingG/SCM/N/95/USA
Page 166Texas Enterprise
ZoneProgramTexas
EconomicDevelopmentTax
RefundThe Enterprise Zone program
provides communities with aneconomic development tool throughwhich they can offer state and localincentives and program priority to
new or expanding business located in
these designated areas.  TexasEconomic Development (TxED)administers, coordinates local, stateand federal development efforts,
provides community and business
assistance, approves applications, andevaluates and reports the program’seffectiveness to the Texas StateLegislature.  Businesses located in anenterprise zone may be eligible for
local and/or state benefits.  Every
place in the state constituting a USCensus block group where 20 percentor more of the residents are below theUS poverty level is an enterprisezone.To establish a zone, a city and/or
county must nominate a specificgeographic area within theirjurisdiction to TxED.  The areamust meet certain size and distress
criteria, reflect the economic
objectives of the community, andspecify local incentives that may beoffered to a business in the zone.Zone designation is effective for a
period of seven years.  The size and
distress criteria are as follows: Anenterprise zone must have acontinuous boundary; be at leastone square mile and may be up tothe larger of 10 square miles or five
percent of the applicant's
jurisdiction, but not greater than 20square miles, excluding waterwaysand transportation arteries. Theproposed area must have anunemployment rate of at least 1.5
times the state average
unemployment rate for thepreceding 12 months; or have had apopulation loss of at least 12percent during the most recent sixyears, or four percent during the
most recent three years. The
proposed area must meet at leastone other distress factor, including:povEnterprise projects are eligible for a
refund of state sales or use taxes paidon machinery and equipment,building materials, labor for therehabilitation of existing buildings,
and electricity and natural gas
purchased for use in the enterprisezone.  The refund is based on $5,000for each permanent job the projectcreates or retains during the five year
designation period.  The maximum
number of  jobs for which a refundmay be received is based uponcommitments made in the projectapplication.  Each project is limited toa maximum refund of $1.25 million
or $250,000 per year over the five-
year period.Ongoing
Texas Franchise Tax Credits for
Research & Development,Job Creation and Capital
InvestmentTax
Credit The R&D credit is available to
corporations making certain researchand development expenditures for
research activities conducted
anywhere in the state.  In addition tothe research and development credits,the legislation also provided forfranchise tax credits for corporations
creating jobs or making capital
investments in "Strategic InvestmentAreas" (SIA) across the state. The R&D credit is available to
corporations making certainresearch and development
expenditures for research activities
conducted anywhere in the state.Research and Development Credit;
Job Creation Credit; CapitalInvestment CreditOngoingG/SCM/N/95/USA
Page 167Furthermore, there is a provision for
an enhanced franchise tax credit forcorporations engaged in research anddevelopment within StrategicInvestment Areas. Based on their
relative unemployment rate and per
capita income, certain countiesqualify as full-purpose SIAs.  Thisdesignation allows businesses toapply for job creation and investment
credits, as well as the research credit
bonus. Another group of countiesqualify only for the limited-purposeSIA designation based on theirpopulation.
Texas Property Tax
AbatementTexas
Comptroller ofPublic
AccountsTax
Abatement/Red
uctionProperty taxes are levied by local
governments and special tax districtson all real and tangible personal
property.  Intangible property, with
certain exceptions, is not taxed.Local municipalities and counties candesignate areas within theirjurisdiction as reinvestment zones.Statewide Designation of a reinvestment zone
may be for five-year, renewableperiods.  Tax abatement agreements
have a maximum term of 10 years
and provide for the exemption of realproperty and tangible personalproperty located on the real property,only to the extent that its value for
that year exceeds its value for the
year in which the agreement isexecuted.Ongoing
Texas Rural
Develop-mentFinance
ProgramTexas
Department ofAgricultureLoan
GuarantyThe Texas Agricultural Finance
Authority (TAFA) provides financialassistance to businesses andgovernmental entities located in the
state's rural regions.  Applicants must
be located in a rural area; provideeconomic benefits for rural area;show evidence of creation orretention of employment; and provetheir ability to repay the loan.  The
program provides financial assistance
to enhance and diversify the state'srural economic development efforts.Applicants located in the state who
can provide significant benefits fora rural area, show evidence ofcreation or retention of
employment, and provide evidence
of reasonable equity in the project.Businesses must be interested inlocating in Texas, or expandingtheir operations, adding newlocations, and putting in new
equipment or hiring new
employees. The program alsoassists rural communities interestedin attracting new businesses orretaining existing businesses, orworking to  improve
telecommunications infrastructure,Business Loans: from $100,000 to
$1,000,000.  The maximum will notexceed the lesser of 90 percent of theloan, 90 percent of the total project or
$5,000,000.  Terms are determined on
a case-by-case basis, with amaximum of 20 years, not to exceedthe life of the assets being financed.The program will finance no morethan 80 percent of the land and
improvements, no more than 70
percent of machinery, equipment andfixtures, and no more than 75 percentof the cost of an existing business.Loan must be secured by collateralsufficient to provide reasonable
assurance of repayment. IndustrialOngoingG/SCM/N/95/USA
Page 168housing or health car in an area to
improve the "livability" of thecommunity.Revenue Bonds: the program may
issue qualified tax-exempt smallmanufacturing facility or otherrevenue bonds in support ofagricultural or rural businesses in
Texas. Municipal Finance Loans: the
program can provide loans or otherfinancial assistance to localgovernmental and related entities forthe purpose of maintaining or
enhancing economic development in
rural areas of Texas. From 1999-2001, 46 companies benefited fr
Texas Tax
IncrementFinancingOffice of
AttorneyGeneralLoan The Tax Increment Financing Act
gives authority to municipalities todesignate reinvestment zones for thepurpose of providing for taxincrement financing of project costsfor public works or public
improvements in the zone.  This also
includes other costs incidental tothose expenditures and obligationsnecessary to promote developmentthat would not solely occur throughprivate investment in the reasonably
foreseeable future. In order for a
community to offer tax incrementfinancing or property tax abatement, ageographic area known as areinvestment zone must be createdand the business benefiting from
these incentives must be located
within the zone.  A municipality maydesignate an area as a reinvestmentzone.  The area must meet specificcriteria for designation.  Designation
of a reinvestment zone by a
municipality  must contribute to theretention or expansion of primary A community that has a geographic
area known as a reinvestment zone.Businesses benefiting from theincentives must be located withinthe zone.  A municipality maydesignate an area as a reinvestment
zone.A municipality creating a
reinvestment zone may issue taxincrement bonds or notes, theproceeds of which may be used topay project costs.  Tax incrementbonds and notes are payable, as to
both principle and interest, solely
from a tax increment fund that mustbe established in connection with thecollection of taxes and projectexpenditure payments.   A bond ornote is fully negotiable and is not a
general obligation of the municipality
issuing the bond or note.OngoingG/SCM/N/95/USA
Page 169employment or must attract major
investment in the zone that would bea benefit to the property and thatwould contribute to the eco
Texas Texas
Capital FundReal EstateDevelop-ment
ProgramTexas
Department ofAgricultureGrant The Texas Capital Fund Real Estate
Development Program is designed toprovide financial resources to non-entitlement communities.  Fundsmust be used for real estate
development to assist a business
which commits to create and/or retainpermanent jobs, primarily for low andmoderate income persons.  Thisprogram encourages new businessdevelopment and expansions located
in non-entitlement communities.
Eligible applicants are non-entitlement communities only.Businesses or individuals may notdirectly submit applications.  Projectsmust demonstrate project feasibility
and financial capability.In addition to the research and
development credits, the legislationalso provided for franchise taxcredits for corpor ations creating
jobs or making capital investments
in "Strategic Investment Areas"
(SIAM) across the state.Furthermore, there is a provision foran enhanced franchise tax credit forcorporations engaged in researchand development within Strategic
Investment Areas.  The grants are
not made directly to companies, butare federal funds provided by HUDto municipalities for the creation ofpermanent jobs.  An applicant mustdemonstrate that jobs will be
created from the project; $25,000 is
awarded for each job created.Matching funds must also beprovided by the applicant.A total of $3 million is awarded each
year.  The minimum award is $50,000and the maximum award amount is$750,000.  The award may not exceed50 percent of total project costs.  A
minimum equity injection the
business is required:  10 percent ifoperating for more than three yearsand 33 percent if operating for lessthan three years.Applicant must not dilute ownership
for a minimum period of five years.
The business must remit to theapplicant a monthly lease paymentequal to the award amount dividedover a maximum 240 month period.Applicant may elect to deposit lease
payments in a Revolving Loan Fund
for use at the local level, and receiveone award per program year; or returnpayments to the State for use in aState Revolving Loan Fund which
allows the applicant to be eligible for
as many awards per program year asit has eligible projects.  The leaseagreement with the business must befor at least three years or until thecontract between the applicant and
the Texas Department of Agriculture
is satisOngoingG/SCM/N/95/USA
Page 170Texas HB 1200 Texas
legislatureTax
ExemptionTax relief for large capital investments. The bill works by capping the appraised value of
capital investments that qualify based on a slidingscale tied to the total property wealth of the schooldistrict where the investment is made.  The scaleranges from a cap of $100 million for school
districts with total property value of $10 billion or
more to $20 million for school districts withproperty value less than $100 million.  A separatesliding scale is used for certain rural counties with apopulation of less than 50,000, and those that
qualify as Strategic Investment Areas (SIA's).  The
investment amount is determined over a two-yearperiod.
Utah Corporate
LoanProgramDepartment of
Communityand EconomicDevelopmentGrant This program is reserved for
extraordinary expansions whichinvolve heavy capital investment,large numbers of new jobs, and highaverage salary.  Most of these
applicants are expanding on the
Wasatch Front.Medium to large businesses. Set by Division of Business and
Economic Development Board basedon Fiscal Impact analysis.Ongoing
Utah Industrial
AssistanceFundDepartment of
Communityand EconomicDevelopmentGrant
orLoansTo foster and develop industry to
assure the welfare of citizens,economic growth and employment.Companies that establish, relocate
or develop industry in aneconomically disadvantaged ruralarea.  Companies must fall within aTargeted Market or a Corporate
Expansion, which must have
$10,000,000 in Utah expenditureand spend $5.7 to every dollarawarded.The ranges of incentive awards vary
from company to company dependingon the type of incentive being appliedfor how many jobs are being created,financial history , and what a
company is requesting.  Typically,
awards range from $100,000to$1,000,000.Ongoing
Utah Targeted
IndustryLoan
ProgramDepartment of
Communityand Economic
DevelopmentGrant The term "targeted industry" refers to
the industry identified each year as atarget for growth in the state of Utah.
Applicants must conduct business
within the targeted industry definitionand usually meet criteria similar tothe Corporate Loan Program.Information technology, biomedical
and aerospace industries aretargetedSet by Division of Business and
Economic Development Board basedon Fiscal Impact analysis.OngoingG/SCM/N/95/USA
Page 171Utah Utah
EnterpriseZoneProgramDepartment of
Communityand EconomicDevelopmentTax
CreditThe Utah Enterprise Zone Program
was established in 1988. Anenterprise zone comprises an areaidentified by local elected andeconomic development officials and
designated by the state.Any area of the state of Utah which
is not part of a U.S. Census BureauMetropolitan Statistical Area(MSA) located wholly within thestate may be eligible for enterprise
zone designation (see map).
Application for designation must bemade by a city with 10,000 or lesspopulation located in a county with50,000 or less population and not
part of an MSA as previously
stated, a county with 50,000 or lesspopulation and not part of an MSA,or an Indian Tribe for tribal lands.Applications will be reviewed andapproved on the basis of economic
development need, its quality, and
other considerations based on avariety of economic distress factors,local planning, etc.The following tax credits may be
claimed by eligible businesseslocating or expanding in enterprisezones on state income tax forms:Ongoing
Virginia Clean Fuel
Vehicle JobCreation Tax
CreditVirginia
EconomicDevelopment
PartnershipTax
CreditBusinesses manufacturing or
converting vehicles to operate onclean fuel and manufacturers of
components for use in clean fuel
vehicles are eligible to receive anincome tax credit for each new full-time job created, over and above theprevious year's employment level.Clean fuel manufacturing
businesses.The credit is equal to $700 in the year
the job is created, and in each of twosucceeding years if the job is
continued, for a maximum of $2,100
per job.  Unused credits may becarried forward for five years.  Thecredit is available for taxable yearsbeginning on or after January 1, 1996through December 31, 2006.
Businesses receiving this tax credit
are not eligible to receive the MajorBusiness Facility Job Tax Credit.Ongoing
Virginia Enterprise
ZoneProgramVirginia
Department ofHousing andCommunity
DevelopmentTax
CreditVirginia's Enterprise Zone Program is
designed to stimulate businessdevelopment in distressed urban andrural areas.  Fifty-six out of a possible
60 Zones have been designated
statewide.  Virginia's Enterprise Zoneprogram offers several special stateincentives for qualified businesseslocating or expanding in a Zone.Sixty Enterprise Zones are
authorized statewide.(1)  General Tax Credit (2)
Refundable Real PropertyImprovements Tax Credit (3) LargeProject Investment Tax Credit (4)
Job Grants.OngoingG/SCM/N/95/USA
Page 172Virginia Governor's
OpportunityFundVirginia
EconomicDevelopmentPartnershipGrant The Governor's Opportunity Fund
supports industrial developmentprojects that create new jobs andinvestment in accordance with criteriaestablished by state legislation.  Grant
requests are made by the locality and
awarded at the discretion of theGovernor.Funds can be used for site
acquisition and development;transportation access; training;construction or build-out ofpublicly-owned buildings; or grants
or loans to Industrial Development
Authorities.  Eligible projects mustmeet the following conditions: (1)projects of a minimum privateinvestment of $10 million and
create at least 100 jobs.  In localities
with a population of 50,000 to100,000, a minimum privateinvestment requirement is $5million and the minimum jobcreation requirement is 50 jobs.  In
localities with a population under
50,000, a minimum privateinvestment requirement is $2.5million and the minimum jobcreation requirement is 25 jobs.Local financial participation is
required on a dollar for dollar basis.Ongoing
Virginia Loan/Grant
ProgramVirginia
Coalfield
Economic
DevelopmentAuthorityMixed The Virginia Coalfield Economic
Development Authority (VCEDA) is
designed to enhance the economic
base of the seven counties and onecity of far southwestern Virginia(Buchanan, Dickenson, Lee, Russell,Scott, Tazewell, and Wise countiesand the City of Norton). The
Authority provides low interest loans
or grants to qualified new orexpanding industries through itsfinancing program.  Program fundingis derived from the local coal and gasroad improvement tax and the natural
gas severance tax.The loans may be used for real estate purchases, construction or expansion
of buildings, and the purchase of machinery and equipment. To be eligible
for the VCEDA loans, private businesses must be basic employers who
will bring new income to the area .  Priority will be given to loansrequiring $10,000 or less per permanent job created, and the averageminimum hourly wage should equal or exceed 1.5 times the current federalminimum wage rate at the end of one year of employment.  Any projectproviding at least 25 jobs within 12 months of start-up will be given
priority.OngoingG/SCM/N/95/USA
Page 173Virginia Major
BusinessFacility JobTax CreditVirginia
EconomicDevelopmentPartnershipTax
CreditQualifying companies locating or
expanding in Virginia receive a$1,000 corporate income tax creditfor each new full-time job createdover a threshold number of jobs.Companies locating in Enterprise
Zones or economically distressedareas.  Components of the job tax credit
include: (1) companies locating inEnterprise Zones or economicallydistressed areas are required to meet a50 job threshold, all other locations
have a 100 job threshold; (2) the
$1,000 credit is available for each jobin excess of the threshold and is takenin equal installments over three years(i.e. $333 per year); (3) credits are
available for taxable years beginning
on and after 1 / 1 /95, but before1/l/05; and (4) unused credits may becarried over 10 years.Ongoing
Virginia Solar
PhotovoltaicManufactu-ring GrantsDepartment of
Mines,Minerals andEnergyGrant The Solar Photovoltaic
Manufacturing Grant program isdesigned to encourage the full value-added product development and
manufacture of a high technology,
renewable energy source in Virginia.Any manufacturer who sells solarphotovoltaic panels, manufactured inVirginia, is entitled to receive an
annual grant of seventy-five cents per
watt of the rated capacity of panelssold.Manufactures of high-technology
and renewable energy sources.After January 1,  2002, new
companies beginning or expandingmanufacturing of solar photovoltaicpanels can receive an annual solar
photovoltaic manufacturing incentive
grant for six years.Ongoing
Virginia Technology
ZonesVirginia
EconomicDevelopmentPartnershipMixed Virginia cities, counties and towns
have the ability to establish byordinance, one or more technologyzones to attract growth in targeted
industries.  Qualified businesses
locating or expanding operations in azone may receive local permit anduser fee waivers, local tax incentives,special zoning treatment, orexemption from ordinances.Technology Industries Once a local technology zone has
been established, incentives may beprovided for up to ten years.  Eachlocality designs and administers its
own program.OngoingG/SCM/N/95/USA
Page 174Virginia Virginia
InvestmentPartnershipGrant FundVirginia
EconomicDevelopmentPartnershipGrant The Virginia Investment Partnership
Grant Fund is a discretionaryperformance incentive program inwhich grants are negotiated and madeto special projects that invest in
Virginia and promote stable or
growing employment opportunities.All companies that have been in
business in VA for at least fiveyears.Companies must have operated in
Virginia for at least five years andpropose projects that fall into one ofthe following two categories:  Tierone - Virginia manufacturers that
make a capitalized investment of at
least $25 million to increase theproductivity of a Virginiamanufacturing facility or to utilize amore advanced technology while at
least maintaining stable employment
levels.  Tier two - Virginia basicemployers that make a capitalizedinvestment of at least $100 millionand create at least 1,000 new jobs.Ongoing
Virginia Governor's
MotionPicture
Opportunity
FundSection 2.2-2320 of the
Code of VirginiaThis fund is to be used, in the sole
discretion of the Governor, to supportthe film and video industries in
Virginia by providing the means for
attracting production companies andproducers who make their projects inthe Commonwealth using Virginiaemployees, goods and services.The types of projects eligible for
consideration will be feature films,children's programs, documentaries,
television series or other television
programs designed to fit a thirty-minute or longer format slot.Projects not eligible are industrial,corporate or commercial projects,
education programs not intended for
rebroadcast, adult films, musicvideos and news shows or reports.The fund shall be used by the
Governor to assist productioncompanies or producers that meet the
eligibility requirements set forth in
the guidelines.  The Authority shallassist the Governor in thedevelopment of guidelines for the useof the Fund.  The guidelines should
include provisions for geographic
diversity and a cap on the amount ofmoney available for a certain project.Ongoing
Washing-
tonCoastal Loan
ProgramWashington
State Office ofTrade andEconomic
DevelopmentLoan This fund provides business and
technical assistance loans to createeconomic opportunities in Jefferson,Clallam, Grays Harbor, Pacific, and
Wahkiakum counties.  Business
borrowers must demonstrate jobcreation and private investment toqualify for loans.  Technicalassistance loans for public agenciesbusinesses are available for feasibility
studies and planning projects that
benefit the community and createjobs, especially for dislocatedworkers.Jefferson, Clallam, Grays Harbor,
Pacific, and Wahkiakum countiesVariable.  Loans up to $150,000.
Technical assistance loans up to$50,000 for public agencies and$20,000 for businesses for feasibility
studies.OngoingG/SCM/N/95/USA
Page 175Washing-
tonDistressed
AreaBusiness andOccupationalTax CreditWashington
State Office ofTrade andEconomicDevelopmentTax
Credit;TaxExemptionUnder the Revised Code of
Washington (RCW) 82.62.030 andRCW and 82.62.045 certain areas inthe state are eligible for a creditagainst the B&O tax liability at the
rate of $2,000 or $4,000 per new job
created by manufacturing, researchand development or computersoftwarefirms.This tax break applies to 1) Counties: Adams, Asotin, Benton, Chelan,
Clallam, Columbia, Cowlitz, Ferry,  Franklin, Grant, Grays Harbor,
Kittitas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit,Skamania, Steven, Whitman and Yakima; 2) Metropolitan Statistical Area:Whatcom; and 3) Community Empowerment Zones: Bremerton, Tacoma,
White Center, Yakima, Marysville, Snohomish, Sultan, Acme, Deming,
Everson, Maple Falls, Sumas, Clearwater, Queets and Quilcene.Ongoing
Washing-
tonRural
Washington
Loan FundWashington
State Office of
Trade and
EconomicDevelopmentLoan The Development Loan Fund
provides gap financing for businesses
that will create new jobs or retain
existing jobs, particularly for lower-income persons, in non-entitlementareas of the state experiencing highunemployment. Priority is given todistressed area projects.Primarily for distressed and timber
impacted areas.RWLF may lend up to $350,000, in
participation with private lenders, and
in special cases up to $700,000.Ongoing
Washing-
tonDistressed
Area Sales
and Use TaxDeferral/ExemptionProgramDepartment of
RevenueTax
Exempt
ionDistressed Area Sales and Use Tax
Deferral/Exemption Program falls
under RCW 82.60.040 and 82.60.049and is available for new or remodeledbuilding and/or equipment used inmanufacturing or research anddevelopment activities in rural
countries or economically distressed
areas.This tax break applies to 1) Counties: Adams, Asotin, Benton, Chelan,
Clallam, Columbia, Cowlitz, Ferry,  Franklin, Grant, Grays Harbor,
Kittitas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit,Skamania, Steven, Whitman and Yakima; 2) Metropolitan Statistical Area:Whatcom; and 3) Community Empowerment Zones: Bremerton, Tacoma,White Center, Yakima, Marysville, Snohomish, Sultan, Acme, Deming,Everson, Maple Falls, Sumas, Clearwater, Queets and Quilcene.Ongoing
Washing-
tonFishing Boat
FuelDepartment of
RevenueTax
ExemptionDiesel fuel used by vessels engaged
in commercial deep sea fishing or inthe operation of commercial charter
fishing boats is exempt from retail
sales & use tax, if such vesselsregularly operate outside of stateterritorial waters and if the grossincome from such fishing activities ismore than $5,000 per year.Vessels engaged in commercial deep sea fishing or in the operation of
commercial charter fishing boats.OngoingG/SCM/N/95/USA
Page 176Washing-
tonHigh
TechnologyBusiness andOccupationTax Credit
ProgramDepartment of
RevenueTax
CreditThe High Technology Business and
Occupation Tax Credit Programallows high technology businessesperforming research and developmentin Washington a business and
occupation tax credit.The eligible high technology
businesses include: advancedcomputing, advanced materials,biotechnology, electronic devicetechnology and environmental
technology.An annual credit of up to $2 million
is allowed for each business thatperforms the required activities andmeets the minimum expenserequirements.  The credit cannot
exceed the amount of the business
and occupation tax due for thatcalendar year.  The rate for the creditis .515 percent for nonprofitcorporations and associations and 2.5
percent for profit businesses.Ongoing
Washing-
tonHigh
Technology
Sales andUse TaxDeferral/ExemptionProgramDepartment of
RevenueTax
Exempt
ionThe High Technology Sales and Use
Tax Deferral/Exemption Program
was enacted in 1994 to stimulategrowth in certain high technologyindustries.A sales and use tax
deferral/exemption is allowed for
research and development pilotscale manufacturing in the areas ofadvanced computing, advancedmaterials, biotech nology, electronic
device technology and
environmental technology.If the project is used for qualifying
purposes for eight years, deferred
taxes will be forgiven.  If the projectis used for non-qualifying purposesduring the eight year period, taxesplus interest are due on a pro-ratedbasis.  Even if the deferral is
disallowed, no sales and use tax will
be due on exempt manufacturing andequipment (i.e. Manufacturing TaxIncentive Program).Ongoing
Washing
tonIndustrial
Machineryand
EquipmentDepartment of
RevenueTax
Exemption
(sales
and usetaxes)New or replacement manufacturing
machinery and equipment is exemptfrom retail sales/use tax if it is used in
a manufacturing operation. Both
materials and installation labor areincluded for machinery, equipment,pollution control equipment and theinternal use portion of cogeneration
equipment.Aircraft, rolling stock, and
watercraft; motor vehicles andtrailers used by nonresidents.Total revenue foregone to the state in
fiscal year 2003 is estimated to be$9.7 million.  There is also a sale and
use tax exemption.  State tax
foregone is fiscal year 2003 isapproximately $141 million.  Pleasenote that the estimated tax lossrevenue would not be realized if the
exemption were repealed because
deliveries would simply be made outof state and avoid the sales tax.Ongoing
Washing-
tonPrototype of
AircraftPartsDepartment of
RevenueTax
Exemption(retailsales &
use tax
exemption)Purchases of materials used to
develop prototypes of aircraft partsare exempt from sales/use tax, if thefirm that develops the prototype hastaxable sales of less than $20 million
annually. Further, the statute limits
the maximum amount of sales taxexemption to $100,000 per firm.Small manufactures of aircraft
parts.The statute limits the maximum
amount of sales tax exemption to$100,000 per firm.OngoingG/SCM/N/95/USA
Page 177Washing-
tonShips and
VesselsUnderConstructionDepartment of
RevenueTax
Exemption(property tax)To improve competitive position of
the state's shipyards.Provided to vessels under construction that are 1,000 tons or more burden
upon completion.Ongoing
Washing-
tonSmall
Timber
HarvesterDepartment of
RevenueTax
Exempt
ion(B&O)To reduce tax burden on small tree
harvests.Provide to the roughly 2, 640 individuals and small businesses that qualify
as small timber harvesters.Ongoing
West
VirginiaAerospace
IndustrialFacilityInvestment
CreditWest Virginia
Department ofTax andRevenueTax
CreditThe purpose of this tax credit is to
encourage the establishment of newindustry, the expansion of existingindustry, and the growth and
revitalization of aerospace industrial
facilities in West Virginia.Eligibility for this tax credit is
limited to taxpayers who operatefacilities used for themanufacturing, rebuilding or
physical refurbishment of : (1)
Aircraft (engines, engine parts,other parts, auxiliary equipment;and or (2) Guided missiles, spacevehicles, vehicle propulsion units,guided missile parts, propellers,
space vehicle parts, or guided
missile and space vehicle auxiliaryparts).The tax credit shall be limited to 15
percent (1.5 percent for each of theten consecutive years) of the totalqualified investment in a qualified
aerospace industrial facility.  The
amount of credit utilized in any givenyear shall not reduce the taxpayer'sliability for Business Franchise Taxand Corporation Net Income Tax (incombination with all other allowable
investment credits) by more than 60
percent.  Any unused credit for aparticular year is forfeited.Ongoing
West
VirginiaBusiness
Investmentand JobsExpansion
Tax Credit
(Super TaxCredit)West Virginia
DevelopmentOfficeTax
CreditThe State of West Virginia offers a
Super Tax Credit program that canprovide substantial tax credits forcompanies that create jobs.  This
program is based upon a formula
which is calculated using a qualifiedinvestment factor and a job creationfactor.Statewide- Manufacturing,
information processing,warehousing, goods distribution anddestination-oriented tourism.
Company must create 50 new jobs
over 3 years.The amount of qualified investment is
based on the useful life and cost ofreal and personal property.  Forinvestment with a useful life of 1-4
years, the cost percentage is 0
percent; for 4-6 years of useful life,the cost percentage is 33.3 percent;for 6-8 years, the cost percentages is66.7 percent; and for 8 years or more,the cost percentage is 100 percent.
The Super Tax Credit is applied at the
rate of one-tenth per year for tenyears beginning with the first taxableyear the investment is placed intoservice or use.Ongoing
West
VirginiaConsumer
Ready Tax
CreditWest Virginia
Development
OfficeTax
CreditA tax credit for wood product
manufacturers that create jobs after
June 30, 1997.  A consumer-ready
wood product includes any value-added wood product that does notWood products industry. A $250 credit for each new job
created between June 1997 and June
2002.  Credit is taken against
business franchise and corporate netincome tax or personal tax.OngoingG/SCM/N/95/USA
Page 178require further manufacturing before
it may be used and/or purchased.
West
VirginiaCorporate
Headquarters
CreditWest Virginia
Development
OfficeTax
CreditA credit is available to a company
that relocates its corporate
headquarters to West Virginia.Manufacturing, information
processing, warehousing, goods
distribution and destination-orientedtourism.If at least 15 new jobs are created, the
allowable credit is 10 percent of
adjusted qualified investment.  If thecorporate headquarters relocationresults in 50 or more new jobs, theallowable credit is 50 percent (or suchother allowable new jobs percentage)
of adjusted qualified investment.Ongoing
West
VirginiaEconomic
Infrastructur
e Bond FundWest Virginia
Development
OfficeBond The West Virginia Economic
Infrastructure Bond Fund, a financial
assistance program, provides fundingfor projects likely to foster andenhance economic growth anddevelopment.  Emphasis will be
placed on Business and/or Industrial
Parks.Statewide with an emphasis on
business / industrial parks.Repayment of a loan in full or in part
may be made at any time without
penalty.  Credit decisions will bebased on the applicant's ability torepay the loan and collateral offeredto secure the loan.
Interest Rates for a for-profit sponsor
is a minimum of the prime rate minus3 percent (to be fixed at closing).Interest rates for public or not-for-profit sponsor will not exceed primeminus 3 percent.  The length of the
loan will be negotiated on each
project and will not exceed the usefullife of the assets being financed or 20years, whichever is less.  The WestVirginia Infrastructure and JobsDevelopment Council may defer the
repayment of principal and interest up
to 5 years.  The maximum loanamount for a private or public sectorproject is $3 million.  The maximumparticipation rate for each project is
70 percent for private sector projects
and 90 percent for public sectorprojects.Ongoing
West
VirginiaFive for Ten
ProgramWest Virginia
DevelopmentOfficeTax
CreditA tax credit for companies that make
qualified investment of at least $50million to an existing base of $100million or more.Manufacturing Establishes the value of asset
improvements at salvage value forproperty tax evaluations for 10 years.OngoingG/SCM/N/95/USA
Page 179West
VirginiaIndustrial
RevenueBondsWest Virginia
EconomicDevelopmentAuthorityBond $47,250,000 of the state's industrial
bond allocation is reserved for smallmanufacturing projects.  Thisprovides for customized financingthrough federal tax exempt industrial
revenue bonds.  Available January
through November 15 of each year,50 percent of the unused revenues aredistributed to qualified businesseslocating in an enterprise
community/enterprise zone and 50
percent is available for other eligibleprojects.Statewide Determined by market.  Capital
expenditure limit of $10 million.Ongoing
West
VirginiaNew Steel
Manufactu-ringOperationsTax Credit
(Value-
Added SteelProducts)West Virginia
Department ofTax andRevenueTax
CreditTo encourage job creation in the
manufacture of "Value-added steelproduct"- any product that adds to,increases or enhances the value ofany raw, bare or unimproved steel
product.Manufacturer of "value added steel
products".The maximum amount of the one-
time credit is $250 for each new jobfilled by a full time employee at sucha facility during the tax year.  Full-time jobs created by a taxpayer in a
short tax year during the taxpayer's
first year of operation, or filled in theyear in which this credit expires, areprorated.Ongoing
Wisconsin Community-
BasedEconomic
Developmen
t Program-LocalEconomicDevelop-
ment Project
GrantsDepartment of
CommerceGrant Community-Based Economic
Development Program-LocalEconomic Development Project
Grants are intended to enable eligible
organizations to conduct localeconomic development projects.Eligible uses include the
development of project-specificplans for industrial parks, for
downtown business districts or for
public infrastructure projects thatfocus on water, sewer and/ortransportation. Funds may also beused to implement training
programs for local economic
development professionals; and todevelop implementation plans thatsupport local economicdevelopment projects.Awards are made as grants, with a
maximum grant amount of $30,000per recipient. Recipients must provide
a 25 percent match of total project
costs, except in cases of extremehardship.Ongoing
Wisconsin Corporate
Exemptionfor Activities
of Out-Of-
StatePublishersand CertainDepartment of
RevenueTax
ExemptionForeign corporations engaged in
certain business activities are nolonger required to file a Wisconsin
tax return.  An exemption has been
granted to out-of-state publishingcompanies that contract withWisconsin printing firms for theStatewide OngoingG/SCM/N/95/USA
Page 180Other
ForeignCorporationsprinting, storage and distribution of
books, magazines and otherpublications.  The legislature acted torevise the definitions of whatconstitutes taxable activities in order
to remove a disincentive for
publishers to contract with stateprinters.  The legislature exemptedseveral other transactions from statenexus standards such as the
temporary storage of inventory on the
premises of Wisconsin firms whenthe intent is to distribute all of thegoods outside the state.
Wisconsin Dairy 2020
Early GrantProgramDepartment of
CommerceLoan To provide support to dairy producers
in designated areas.Existing and start-up dairy
producers whose farms are, or willbe, located in a city, town or villagewith a population of less then 6,000.Up to 75 percent of eligible project
costs up to a maximum of $3,000.Actual amount of funds awarded isbased on viability of the project, the
project's economic impact, and fund
availability.Ongoing
Wisconsin Deduction
forCorporateDividendsReceivedDepartment of
RevenueTax
CreditA deduction is allowed for dividends
received from subsidiaries in whichthe parent company owns at least 70percent of the voting stock.  In thecase of dividends received from
unitary subsidiaries, the transactions
do not constitute the realization ofincome, but merely the transfer offunds among branches of a unitarybusiness entity.Statewide Ongoing
Wisconsin Small Cities
Community
Develop-
ment BlockGrantProgram-BlightElimination
and
BrownfieldRedevelop-mentDepartment of
CommerceGrant Small Cities Community
Development Block Grant Program-
Blight Elimination and Brownfield
Redevelopment Program providesfinancial assistance to communities inassessing or remediatingenvironmental contamination onabandoned, idle or underused, and
blighted commercial or industrial
sites to promote development of thosesites.Most cities, villages and towns with
populations under 50,000 and all
counties except Waukesha, Dane
and Milwaukee Counties.Entitlement municipalities are noteligible.Awards are made as grants to eligible
local governments. The local
government may loan or grant the
funds to local businesses or non-profit organizations to conduct anenvironmental audit or environmentalremediation. The maximum award is$100,000 for environmental audits
and $500,000 for environmental
remediation projects. The localgovernment must contribute at least25 percent of the total project costOngoingG/SCM/N/95/USA
Page 181Program from other sources. Municipalities
that receive grants must make acommitment to pursue recovery ofenvironmental remediation costs fromparties causing the contamination and
to reimburse the Department a
proportional share of CDBG funds. Inaddition, all program income receivedin connection with loans tobusinesses or nonprofit corporations
must be paid to the Department
within 30 days.
Wisconsin Small Cities
CommunityDevelop-ment BlockGrantProgram-
Economic
Develop-mentProgramDepartment of
CommerceGrant Small Cities Community
Development Block Grant Program-Economic Development Programprovides grants to local governmentsthat assist businesses in investingprivate funds to create or retain jobs
in the state.Eligible applicants for grants under
the economic development andpublic facilities components includemost cities, villages and towns withpopulations under 50,000 and allcounties except Dane, Waukesha
and Milwaukee counties.
Municipalities ineligible forprogram funding are termed"entitlement communities"(generally, cities with populations
of at least 50,000 and urban
counties). Entitlement communitiesare eligible to receive CDBG fundsdirectly from the federalgovernment through the block grantentitlement program.Funds are granted to local
governments that provide loans tocompanies to supplement otherfinancing for projects that involvebusiness startups, expansions orretentions. The maximum grant that a
community may receive is $1 million
per year. The maximum amount ofeconomic development assistance abusiness may receive from one ormore local governments is $1.0
million in a five-year period.  To be
eligible, 50 percent of the totalproject cost must be providedprivately. Economic developmentawards from CDBG funds are madeon a continuous basis during the year.Ongoing
Wisconsin Small Cities
Community
Develop-ment BlockGrantProgram-Public
Facilities for
EconomicDevelop-mentProgramDepartment of
CommerceGrant Small Cities Community
Development Block Grant Program-
Public Facilities for EconomicDevelopment Program providesfunding for the expansion orimprovement of public facilitysystems which directly benefit
individual businesses that will create
or retain jobs and expand the taxbase.Most cities, villages and towns with
populations under 50,000 and all
counties except Waukesha, Daneand Milwaukee Counties.Entitlement municipalities are noteligible.This program provides grants to
communities. The total amount
received by a local government maynot exceed $1,000,000 in a calendaryear. Funding to benefit a singlebusiness is limited to $750,000.Funding for this program includes
funds provided through a revolving
loan fund that consists of moniesgenerated by earlier CDBG economicdevelopment awards. The businessinvestment must be equal to theCDBG funding provided.
Applications are accepted year-round,OngoingG/SCM/N/95/USA
Page 182subject to the availability of funding.
Wisconsin Tax
Incremental
FinancingDepartment of
RevenueLoan Tax Incremental Financing (TIF) can
help a municipality undertake a
public project to stimulate beneficialdevelopment or redevelopment thatwould not otherwise occur.  It is amechanism for financing localeconomic development projects in
underdeveloped and blighted areas.
Taxes generated by the increasedproperty values pay for landacquisition or needed public works.A city or village can designate a
specific area within its boundaries
as a TIF district and formulate aplan to develop it.  TIF projectsmust be approved by themunicipality's planning commissionand legislative body.  At least 50
percent of the TIF district's property
area must be blighted, in need ofrehabilitation or be suitable as anindustrial site.TIF is based on two working
principles: (1) new private
development expands themunicipality's tax base, therebyincreasing property tax revenues; and(2) if the municipality must providepublic improvements to attract the
development, the overlying tax
districts that benefit from theresulting increase in the community'stax base should share in the costs ofimprovement.Ongoing
Wisconsin The
Wisconsin
Develop-
ment Fund-TechnologyDevelop-ment Grantsand Loans
and
TechnologyDevelop-mentCommercialization LoansDepartment of
CommerceMixed
Financi
ngThe Wisconsin Development Fund-
Technology Development Grants and
Loans and Technology Development
Commercialization Loans is aprogram designed to encouragecooperation between businesses anduniversities in the research anddevelopment of new products.  The
Fund offers matching grants for
technology, research anddevelopment leading to newbusinesses or consortiums to assistinfrastructure development andcommercialization of new products or
processes.Awards are made to consortia of
businesses and institutions of higher
education.  Consortia may be
composed of a company and aninstitution in the University ofWisconsin system or another in-state institution offering post-B.A.or professional degrees.Awards are in the form of grants or
loans.  Recipients must contribute at
least 25 percent of project costs as a
match.  Loans for successful venturesmust be repaid, including areasonable return on the initialinvestment as determined on a case-by-case basis.Ongoing
Wisconsin Wisconsin
Develop-ment ZoneProgramDepartment of
CommerceTax
CreditThe Department of Commerce funds
Development Zones for the purposeof attracting and retaining businessesto the state, and to promote economicgrowth and development through jobcreation and investment in
economically distressed areas.  AreasBusinesses locating in distressed
areas.Eligible businesses which conduct
economic activity in development orenterprise development zones mayclaim the development zone taxcredit. The credit is based on amountsspent on environmental remediation
and the number of full-time jobsOngoingG/SCM/N/95/USA
Page 183are designated development zones by
the Department of Commerce, andare effective for up to 20 years.  TheDepartment allocates the totalstatewide authorization of
development zone credits, and
businesses which locate, expand,invest and conduct certain economicactivities in the zones are eligible toclaim these credits.created or retained.  In 2001, $38.155
million in tax credits were authorizedstatewide.
Wisconin Wisconsin
Technology
Develop-
ment ZonesDepartment of
CommerceTax
CreditThe technology zone program will
address several areas of need to
ensure Wisconsin’s short- and long-
term economic vitality and success,including: Combating the state’s‘brain drain’ by increasing high techjobs; Linking Wisconsin’s researchexpertise with Wisconsin firms to
grow clusters of high-tech jobs.;
Linking economic strategies acrossregions for power throughcollaboration.High-technology businesses Eight zones across the state will be
designated, and will remain in effect
for up to 10 years.  Each zone will
receive a total of $5,000,000 in taxcredits for the duration of theirdesignation.Ongoing
Wyoming Taxpayer
RemediesW.S. 39-17-
109(d)Tax
CreditSupport of ethanol producers. Producers of ethanol in Wyoming. Credit of 40 cents per gallon. Ongoing
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