G/SCM/Q2/USA/75  
 
29 October 2018  
(18-6786) Page: 1/17 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES  
REPLIES TO QUESTIONS1 FROM CHINA REGARDIN G THE  2015 
NEW AND FULL NOTIFIC ATION  OF THE UNITED STATES2 
The following communication, dated 24 October 201 8, is being circulated at the request of the 
Delegation of the United States . 
 
_______________  
 
 
I. On the Subsidies not included in the Notification  
 
i. On the Subsidy Policies on New Energy Vehicles  
 
1. Subsidy of the Federal Government of the United Stat es on New Energy Vehicles  
 
2. New Energy Vehicle Subsidies Provided by Local Governments in the United States  
 
China's questions:  
 
Question 1  
 
The Notification of the United States contained energy vehicle subsidy programs at 
neither federal government nor  state government level. Could the United States explain 
the reason thereof?  
 
Answer : 
 
The 2015 notification of the United States includes several subsidy programs related to new 
energy or advanced technology vehicles.  These programs include: Advanced Technology Vehicles 
Manufacturing Loan Program (ATVM) administered by the US Department of Energy; Certified 
Technology Park (CTP) Designation (Indiana state program); Alternative Fuel Vehicle Incentives 
(Louisiana state program); MEGA High -Tech Tax Credit s (Michigan state program); Alternative 
Fuel Development Property Tax Exemption (Michigan state program); Alternative Energy Product 
Manufacturers Tax Credit (New Mexico state program); and the Ohio Incumbent Workforce 
Training Voucher Program (IWTVP) (Ohi o state program) . 
 
Question 2  
 
Can the United States explain when these subsidies will be notified?  
 
Answer : 
 
As noted above, the United States has notified several new energy or advanced technology vehicle 
programs.  A similar range of programs can be found in the 2017 subsidy notification of the 
United  States.  
 
                                              
1 G/SCM/Q2/USA/73.  
2 G/SCM/N/284/USA.  G/SCM/Q2/USA/75  
 
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  Question 3  
 
Please provide full and complete information about the subsidy programs provided to 
the new energy vehicle sector by the Federal Government and state governments.  
 
Answer : 
 
If China could provide the specific names of the programs in which it is interested, we would be 
pleased to provide further information.  
 
ii. On the Subsidy Policies on Industrial Energy Efficiency  
 
Question 4  
 
As far as we know, the federal energy departments and other departments provide 
funds, personnel training and technical services to improve industrial energy efficiency 
through implementing the Industrial Technology Program (ITP), building Industrial 
Assessment Centers (IAC) and implementing other projects. P lease provide detailed 
information on this.  
 
Answer : 
 
This program provides support to a broad array of industries (as the name implies).  We do not 
consider it to be specific under Article 2.  
 
Question 5  
 
As far as we know, California and other states have adopted a series of supportive 
policies to promote alternative energy sources and improve energy efficiency. In 
addition to the tax deductions and exemptions mentioned in the Notification, there are 
also direct subsidies, credit supports and loan risk compensation mechanisms. Please 
give detailed information on those above.  
 
Answer : 
 
If China could provide the specific names of the programs in which it is interested, we would be 
pleased to provide further  information.  
 
II. On Federal Programs of the United States in the Notification  
 
i. Program 1. Agricultural Domestic Support  
 
1. Program 1.2.1 Agriculture Income Support and Marketing Assistance for Covered 
Commodities  
 
In "To whom and how is subsidy provi ded", the description of "Counter -Cyclical 
Payments are available to covered commodities whenever the effective price was less 
than the target price. The effective price is equal to the sum of 1) the higher of the 
national average farm price for the market ing year, or the national loan rate for the 
commodity and 2)  the direct payment rate for the commodity" indicates that the 
effective price of the counter -cyclical payments program is related to the current market 
price, but "Payments were not tied to curre nt or future production of specific crops, the 
amount of production, or the price of the crop. Eligible producers were not confined to 
producing crops for which they were receiving payments, and could choose not to 
produce any crop." later indicates that t he counter -cyclical payments program is not 
related to current crop prices.  
 
Question 6  
 
Please explain whether the program is tied to current prices.  
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  Answer : 
The Counter -Cyclical Payment program provided a payment on historical production of a covered 
commodity when the effective price was less than the target price. The effective price was 
calculated as the sum of the direct payment rate for the covered commodity and the higher of the 
national loan rate or the average marketing year farm price for the covered commodity. The 
Agricultural Act of 2014 repealed this measure and it is no longer in effect.  
 
2. Program 1.3.2 Treatment of Loans Forgiven Solvent Farmers as if Insolvent  
 
Question 7  
 
As far as we know, 40% of US farmers' incomes are government subsidies or loans from 
financial institutions and businesses. Does the "loans" in this program refer to 
government appropriations or loans borrowed by farmers from financial institutions or 
businesses? What is the specific content of "loan forgiveness treatment"?  
 
Answer : 
 
Taxpayers are permitted to exclude from income any qualified farm debt that has been forgiven.  
Qualified debt may arise from loans (or similar credit) provided either by privat e lenders or by 
federal, state, or local government agencies.  
 
ii. Program 2 Energy & Fuels  
 
1. The "To whom and how assistance is provided" of Programs 2.1, 2.2, 2.3 and 2.4 
all mentioned "Participation in the program is determined through various competi tive 
procedures, which are open to all eligible private parties".  
 
Question 8  
 
Please introduce in detail the competitive procedures and the conditions of eligible 
private parties mentioned here.  
 
Answer : 
 
It is the policy of the Department of Energy (DOE ) to use competition in the award of grants and 
cooperative agreements to the maximum extent feasible. This policy conforms with the legal 
requirements of 31 USC 6301(3) which encourages the use of competition in awarding all grants 
and cooperative agreeme nts. “Contracting Officers” must use merit -based, competitive procedures 
to award grants and cooperative agreements to the maximum extent feasible.  More specifically, it 
is DOE policy that all discretionary financial assistance, competitive or noncompetiti ve, be awarded 
through a merit -based selection process. Merit review means a thorough, consistent, and objective 
examination of applications based on pre -established criteria by persons independent of those 
submitting the applications and knowledgeable in the field of endeavor for which support is 
requested. Each “Program Office” conducting reviews must ensure (1) their merit review 
implementation policies require an objective merit review of noncompetitive as well as competitive 
applications, and (2) the p olicy is implemented for all discretionary financial assistance activities 
under their cognizance whether conducted in headquarters or at a field activity.  Eligibility is based 
on the pre -established criteria for all applicants for each individual award.  For further information 
please see the DOE “Guide to Financial Assistance” which can be found at: 
https://energy.gov/sites/prod/files/GuidetoFinancialAssistance.pdf.  
 
Question 9  
 
Please brief on the industries and businesses that have already benefited from  the 
above -mentioned subsidy programs.  
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  Answer : 
 
The types of industries that have benefitted are described in the notification itself.  The Agreement 
on Subsidies and Countervailing Measures (Subsidies Agreement) does not require the 
identification of spec ific companies that have benefitted from a program.  
 
2. Program 2.7 Advanced Technology Vehicles Manufacturing Loan (ATVM)  
 
Question 10  
 
Please introduce which businesses have received financial assistance since the 
beginning of this program, and what are the advanced technologies assisted?  
 
Answer : 
 
The ATVM loan program supported President Obama's goal to create green jobs in the automot ive 
and component manufacturing industries and to help ensure that new advanced technology 
vehicles (ATVs) meet a higher standard (125 per cent of the 2005 base year CAFE fuel efficiency 
standards) than similarly classed conventional technology vehicles. I n fiscal year 2010, Section 
136 of the relevant legislation was amended to include ultra -efficient vehicles within the definition 
of advanced technology vehicles. The Subsidies Agreement does not require the identification of 
the specific companies that ha ve benefitted from a program.  
 
iii. Program 3 Other Energy and Fuels  
 
1. Program 3.4 Energy Efficient Appliance Credit  
 
Question 11  
 
A tax credit is provided to manufacturers for the production of energy efficient 
dishwashers, clothes washers and refrigera tors, and the objects of this program are 
confined to manufacturers for dishwashers, clothes washers and refrigerators. Please 
specify the conditions for enterprises to enjoy tax credit under this program, the annual 
list of the said enterprises and the am ounts of tax credit.  
 
Answer : 
 
As noted, to be eligible, a company must produce energy efficient dishwashers, clothes washers 
and refrigerators.  A list of recipients of the tax credit and the amount each has received is not 
information required under the S ubsidies Agreement.  
 
2. Program 3.6 Biodiesel and Renewable Diesel Credit  
 
Question 12  
 
Small -scale biodiesel production involves many stages and needs to be completed by 
cooperation among different producers. The producers can enjoy 10 cent  per gallon 
income tax credit. Please indicate the income tax credit refer to corporate income tax or 
personal income tax? Is the 10 cent per gallon credit enjoyed by the producers in each 
stage or shared by the producers of all the stages? In the case of the latter, what is the 
credit percentage and credit amount enjoyed by the producers in each stage?  
 
Answer : 
 
This credit can be applied against corporate income tax liability or against personal income tax 
liability on income earned through a passthrough business.  The credit is applied at a single stage 
in the supply chain.  Standard tax economics suggest that the tax will be passed forward and 
backward through the supply chain according to market forces.  
 
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  3. Program 3.9 Advanced Energy Property Credit  
 
Question 13  
 
Please brief on the industries and sectors that have already benefited from the above -
mentioned program and the proportion in exports of the products benefited from this 
program.  
 
Answer : 
 
As noted in our notification, a qualified project re -equips, expands, or establishes a manufacturing 
facility for the production: (1) property designed to be used to produce energy from renewable 
resources; (2) fuel cells, microturbines, or an energy storage system for use with electric or 
hybrid -electric vehic les; (3) electric grids to support the transmission of intermittent sources of 
renewable energy; (4) property designed to capture and sequester carbon dioxide; (5) property 
designed to refine or blend renewable fuels or to produce energy conservation techn ologies; 
(6) qualified plug -in electric drive motor vehicles, qualified plug in electric vehicles, or components 
which are designed specifically for use with such vehicles; and (7) other advanced energy property 
designed to reduce greenhouse gas emissions.  The proportion of products exported by the 
recipients is not information required under the Subsidies Agreement.  
 
Question 14  
 
The document pointed out that "the credit reduces federal income taxes for taxpayers 
investing in qualified projects". Please sp ecify the scope of "qualified projects", and 
confirm whether the qualified projects must be produced in the United States. Besides, 
do the taxpayers investing in advanced domestic and imported facilities enjoy the same 
preferential tax policies?  
 
Answer : 
 
To qualify, a taxpayer must be an eligible U.S. taxpayer.  The manufacturing facility or proposed 
manufacturing facility must be in the U.S.  For a list of other criteria for a project to be qualified, 
see the statute and https://www.irs.gov/pub/irs -drop/n -09-72.pdf as well as subsequent IRS 
notices.  
 
4. Program 3.13 Energy Grant in Lieu Of the Energy Production Credit or the Energy 
Investment Credit  
 
Question 15  
 
Please brief on the relationship between this program and Energy Production Credit 
(Program  3.12) and Energy Investment Credit (Program 3.12), and the actual 
operations.  
 
Answer : 
 
In general, projects that were eligible for the Energy Production Credit or Energy Investment 
Credit were eligible for a grant in lieu of the credit for proper ty placed in service in 2009 or 2010 
or for which construction began in 2009, 2010, or 2011, subject to conditions on when the 
property was finally placed in service.  
 
iv. 10 Regional Programs  
 
1. Program 10.1 Empowerment Zones  
 
Question 16  
 
This policy ex pired on 31 December 2014. As the program has expired, has it been 
extended? The document mentioned "a credit for 20 percent of the first $15,000 of 
qualifying wages paid to employees who live and work in the empowerment zone". In 
order to enjoy this polic y, should an employee both live and work in the employment G/SCM/Q2/USA/75  
 
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  zone, or he just needs to meet either of the conditions? Are incomes other than wages 
not eligible to the credit?  
 
Answer : 
Empowerment zone designations were extended for two years and expired on D ecember 31, 2016.  
Employees must both live and work in the empowerment zone to be eligible for the credit.  Only 
wages paid or incurred by the employer for services performed by a qualified zone employee are 
eligible for the credit.  For the sake of the cred it, certain educational and training benefits paid or 
incurred by the employer are included in wages.  
2. Program 10.2 New Markets Tax Credit  
Question 17  
Which types of equity investment are eligible to enjoy the tax credit? What is a 
competitive applicatio n process? Is the policy currently still effective?  
Answer : 
Only qualified equity investments in a qualified Community Development Entity (CDE) are eligible 
for the credit.  The CDE must in turn invest substantially all of  the cash from the equity investment 
to make qualified low -income community investments.  A qualified CDE is any domestic firm that 
has been certified by the Department of the Treasury as having a primary mission to serve or 
provide investment capital for l ow-income communities or individuals.  The Department of the 
Treasury designates authority to qualified CDEs to receive equity investment eligible for the credit.  
This designation occurs through a competitive application process, where a fixed amount of 
designated equity investment is allocated by the Department of the Treasury to CDEs that have 
applied for a designation.  Details on the allocation process can be found at:  
 https://www.cdfifund.gov/programs -training/Programs/new -markets -tax-
credit/Pages/default.aspx.  The last year for which designations are allowed is 2019 . 
v. Other questions  
Question 18  
Please explain whether subsidy programs involving corporate income tax are equally 
applicable to non -resident businesses? Are there any other requirements and thresholds 
for non -resident companies to enjoy these preferentia l treatments?  
Answer : 
We cannot provide an accurate answer to this question in the abstract without reference to a 
specific program.  If there is a particular program of concern, we would be pleased to answer this 
question with respect to that program.  
III. On Sub -Federal Programs  
i. Integrated Questions  
We have discovered from the 2015 Notification of the United States that there are many "specific" 
subsidy policies in the states in the United States that are only targeted at part of industries or 
businesse s, such as the Innovation Accelerator Fund Program in Arizona, the Targeted Business 
Incentive in Arkansas, the Targeted Jobs Incentive Fund (TJIF) Program of Miami -Dade County, 
the Capital Investment Tax Credit, the High Impact Business Performance Incent ive (HIPI), the 
Qualified Target Industry Tax Refund Program (QTI), and the Semiconductor, Defense, or Space 
Technology Sales and Use Tax Exemption (SDST) in Florida, the Broadband Telecom Tax Credit in 
Idaho, the High Technology Investment Tax Credit in M aine, the Enterprise Investment Fund in 
Maryland and the Data Center Incentive Program in Mississippi.  G/SCM/Q2/USA/75  
 
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  Question 19  
How do the state governments in the United States ensure that these subsidy policies 
are fairly applicable to domestic and foreign -invested e nterprises, and are there any 
foreign -invested companies that are eligible for these subsidy programs? If there are 
foreign -funded enterprises that have received these subsidies, please provide the 
company names, the subsidy programs, the subsidy amounts a nd other details. If no 
foreign -funded enterprises have received these subsidies, please explain the reason.  
Answer : 
State governments decide the eligibility for state programs.  The Subsidies Agreement does not 
require the identification of individual subsidy recipients.  
ii Questions Relevant to Notified Sub -Federal Programs  
Arizona  
--Foreign Trade Zones  
Question 20  
Arizona authorizes Arizona Department of Commerce to provide an 80% reduction in 
state real estate tax and personal property taxes for bus inesses located in a foreign 
trade zone or a sub -zone, but the notification did not mention the required eligibility 
criteria on the businesses in the zones that may enjoy tax reductions or exemptions. 
Please explain.  
Answer : 
All businesses that are involv ed in the assembly, manufacturing and storage of merchandise may 
locate in the foreign trade zone.  
--Renewable Energy Tax Incentive Program  
Question 21  
This program also provides reduction or exemption in individual income taxes. How are 
individual income  taxes reduced or exempted, and what are the specific conditions?  
Answer : 
As stated in our notification, this program provides refundable tax credits equal to ten percent of 
the qualified investment in a project.  The program also provides up to a 75  percen t reduction in 
personal and property taxes for either 10 or 15 years, as applicable.  To be eligible, a company 
must offer high quality employment and be in the solar, wind, geothermal or another non -fossil 
fuel renewable energy industry.  
--Defense Restruct uring Program  
Question 22  
The "Policy Objective" and the "Amounts" columns show that it mainly provides a credit 
for corporate income taxes. However, it also contains "… individual income tax credits 
for increases in net employment above an established ba seline". May newly employed 
people enjoy individual income tax credits? What is the main objective of this policy?  
Answer : 
The main objective of the program is to encourage qualified defense contractors in the state to 
diversify into commercial markets and  consolidate facilities into this state. Individual employees 
are not eligible to receive the income tax credits, as such benefits only apply to qualified defense 
contractors. These include manufactures, assemblers, fabricators or any other private company  
that is a qualified defense contractor.  G/SCM/Q2/USA/75  
 
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  California  
--Sales and Use Tax Exclusion (STE) Program  
Question 23  
Can the United States provide a list of the main sectors benefiting from this policy? For 
example, what do the "advanced manufacturers and manufacturers of alternative source 
energy and advanced transportation products, components or systems" mentioned in 
the "To Whom" column specifically refer to?  
Answer : 
 
During the notification reporting period the following projects were approved: Biogas Capture & 
Production, Biomass Processing and Fuel Production, Demonstration Hydrogen Fuel Production, 
Electric Vehicle Manufacturing, Energy Efficient LED Manufacturing, Geothermal Brine Extraction, 
Landfill Gas Capture & Production, Lithium Ion and Batter y Material Manufacturing, Solar Fuel 
Generators, Solar Photovoltaic Manufacturing, Solid Oxide Fuel Cell Systems Manufacturing.  
 
Connecticut  
 
-- Small Business Express Program  
 
Question 24  
 
The program provides loans and grants to Connecticut's small bus inesses to improve 
employment and growth, and Department of Economic and Community Development has 
been authorized to provide loans and matching grants to the businesses with operations 
in Connecticut, registered to conduct business for no less than twelve  months, in good 
standing with all state agencies, and employing no more than 100 employees. Please 
explain what "in good standing with the government" is.  
 
Answer : 
 
All companies must have no outstanding payment of all state taxes.  
 
--Manufacturing Assist ance Act  
 
Question 25  
 
The Manufacturing Assistance Act provides businesses in Connecticut with financing and 
loan services, and State of Connecticut Department of Economic and Community 
Development has been authorized to provide financing and loan servic es to any business 
that is part of an economic cluster, or any establishment or auxiliary or operating unit 
thereof, as defined in the North American Industrial Classification System Manual 
prescribed by the Manufacturing Assistance Act. But the notificati on did not specify the 
qualification requirements for businesses to meet the conditions. Please specify.  
 
Answer : 
 
Eligible businesses are classified as manufacturers under NAICs (North American Industrial 
Classification). The manufacturer’s six -digit code  starts with the number 3. Given the limited 
amount of funds, priority in funding is given to high performance work organizations. Such 
organizations are committed to continuous improvement, training front -line workers, providing a 
safe and healthful workp lace, and providing wages and benefits that exceed industry averages.  
 
--Information Technology Projects Grants  
 
Question 26  
 
This program authorizes Connecticut Development Authority to provide grants and 
subsidies to companies engaged in information technology projects and located within G/SCM/Q2/USA/75  
 
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  an enterprise zone, urban communities, or distressed areas. But the notification did not 
clarify the qualification conditions of "companies" and the Amounts column shows 
"the amount varies". Please explain.  
Answer : 
Any business that engages in information technology projects and is located within an enterprise 
zone, urban community, or distresse d area qualify for the incentives. The amounts dispersed, and 
authorized budgets vary between projects and fiscal years.  
Delaware  
 
--Non-targeted industry locating in a targeted area  
 
Question 27  
 
The program is implemented by Department of Finance of De laware. In order to 
encourage commercial and retail activities in targeted areas, designated commercial and 
retail enterprises are provided with tax reductions and exemptions. Who is empowered 
to designate? And what are the conditions to be met?  
 
Answer : 
 
The program is administered by the Department of Finance, Division of Revenue. Commercial 
Activity is defined as all services except: amusement conductor, amusement park operator, 
auctioneer, automobile race operator, bowling alley operator, circus exhibit or, entertainment 
agent, finance or small loan agency, floor show operator, health spa or health club, junk dealer, 
motion picture theater, outdoor music festival promoter, pawnbroker, pool table operator, public 
bath keeper, salvage yard operator, and sel f-service laundry or dry cleaner.  Retail activity is 
defined as all retail trade except: eating and drinking places, automobile sales, or providing 
recreation or entertainment.  
 
Colorado  
 
--Community Development Block Grant Program  
 
Question 28  
 
The prog ram authorizes Office of Economic Development and International Trade to 
provide loans/guarantees for businesses in certain regions. But the notification did not 
specify the qualification conditions of "businesses" and the Amounts column shows "the 
amount varies". Please explain.  
 
Answer : 
 
Eligible businesses must be located in low - and moderate -income areas within the state of 
Colorado to qualify.  Please see the following link for further details - 
https://www.colorado.gov/pacific/dola/community -development -block -grant -cdbg.  The amounts 
dispersed and authorized budgets vary between projects and fiscal years.  
 
Florida  
 
--High Impact Business Performance Incentive  
 
Question 29  
 
This program authorizes  Office of Tourism, Trade and Economic Development of Florida 
to provide local high -impact businesses with performance grants. But the notification 
did not specify the objective standards or conditions of the subsidy amount, and the 
Amounts column shows "t he amount varies". Please explain.  
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  Answer : 
 
The objective of the High Impact Business Performance Incentive Grant program is to attract and 
grow major high impact facilities in Florida. Grants are provided to pre -approved applicants in 
certain high -impact  sectors as designated by the Department of Economic Opportunity (DEO). 
Once recommended by Enterprise Florida, Inc. (EFI) and approved by DEO, the high impact 
business is awarded 50 percent of the eligible grant upon commencement of operations and the 
balance of the awarded grant once full employment and capital investment goals are met. 
The amounts dispersed and authorized budgets vary between projects and fiscal years.  
 
Louisiana  
 
-- Customized Computer Software Development Tax Credit  
 
Question 30  
 
Please specify which specific custom computer software companies are the main 
beneficiaries of this taxation policy. The program has a four -year period, and should 
have expired after 2005. Has the program been extended within the period of this 
notification, a nd are there any changes of the policy?  
 
Answer : 
 
The " four-year" period referenced was the “phase -in” period.  The program did not expire in 2005.  
The Subsidies Agreement does require the identification of specific subsidy recipients.  
 
-- New Markets Tax Credit  
 
Question 31  
 
May state governments in the United States reduce or exempt individual income taxes?  
Answer : 
 
The program allows individual and corporate taxpayers to receive a credit against federal income 
taxes for making qualifi ed equity investments in Community Development Entities. Please see the 
following link for further details:  
http://revenue.louisiana.gov/LawsPolicies/NOI_LAC61_I_1911.pdf . 
 
Main e 
 
-- Sales Tax Exemptions – Biotechnology  
 
Question 32  
 
In order to enjoy sales tax exemption, which conditions should businesses engaged in a 
biotechnology application meet? May foreign -invested businesses enjoy the same 
preferential treatment?  
 
Answer : 
 
Any business involved in the purchasing of machinery, equipment, instruments and supplies used 
directly and primarily in a biotechnology application is eligible for a sales tax exemption.  Please 
see the following link for further details:  
http://www.maine.gov/decd/start -grow/tax -incentives/technology_tax_credits.shtml . 
 
Michigan  
 
--The Michigan Next Energy Authority (MNEA)  
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  Question 33  
 
How the "Alternative energy technology companies located in the AEZ may also be 
eligible for a refundable payroll credit on their SBT." described in the document is 
operated?  
 
Answer : 
The SBT or single business tax is equivalent to a corporate income tax.  Businesses engaged in  
qualifying activities and located within the Alternative Energy Zone or AEZ can receive a 
refundable payroll credit on their SBT.  
 
Minnesota  
 
--Farm Machinery Sales and Use Tax Exemptions  
 
Question 34  
 
What is the scope of farm machinery that may enjoy s ales and use tax exemptions? How 
to define whether farm machinery is used principally in agricultural production? How 
should used farm machinery obtain the subsidy?  
 
Answer : 
 
New and used farm machinery is exempt from sales tax. To qualify for the exemption, the 
machinery must meet the definition of farm machinery and must be used directly and principally in 
agricultural production. Principally means the equipment must be used 50 percent or more of its 
operating time in agricultural production. To c laim the exemption, you must give the seller a 
completed Form ST3, Certificate of Exemption and specify the farm machinery exemption. Please 
see the following link for further details:  
http://www.revenue.state.mn.us/businesses/sut/factsheets/fs106.pdf  
 
Mississippi  
 
--Motion Picture Production Incentive Program  
 
Question 35  
 
The document mentioned that "This program provides a cash rebate equal to 25% of the 
production company's base investment expended in the state, 25% of non -resident 
payroll and 30% of state resident payroll". Please explain why the rebate rate for non -
resident payroll is lower than that for the resident payroll. Would these provisions result 
in unequ al preferential treatments between residents and non -residents?  
 
Answer : 
 
The objective of the program is to increase business activity and increase employment within the 
state. The 25% cash rebate is applied to both non -residents and residents of the stat e. The lower 
rebate rate was a policy choice made by the state government.  
 
Nevada  
 
--Property Tax Abatement  
 
Question 36  
 
What are the provisions on the basis of exempting personal property taxes and on the 
tax rates?  
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  Answer : 
 
To qualify under this program, there are several requirements: (1) Wage Requirement - the 
company’s average hourly wage at the Nevada facility must equal or exceeds 100% of the county 
average hourly wage or statewide average hourly wage. (2) Number of Jobs  Required - for 
counties/cities with a population of more than 100,000/60,000, a minimum of 75 full -time 
permanent jobs in Nevada is required by the fourth quarter of operation, which must continue 
beyond the fourth quarter.  For counties/cities with a popu lation of less than 100,000/60,000, a 
minimum of 15 full -time permanent jobs in Nevada in required by the fourth quarter of operation. 
(3) Capital Investment Requirement - for counties/cities with a population of more than 
100,000/60,000, the business must  make a capital investment of $50 million if the business is an 
industrial or manufacturing business or at least $5 million if the business is not an industrial or 
manufacturing business.  Please see the following link for further details:  
http://www.diversifynevada.com/  
 
New Jersey  
 
--Edison Innovation Clean Energy Manufacturing Fund (CEMF)  
 
Question 37  
 
The document pointed out that the objects of this program are "are qualified 
manufacturers of Class I ren ewable energy or energy efficiency systems, products or 
technologies". Please explain how to obtain relevant "qualifications". Are there any 
differences between provisions on American businesses and foreign -funded businesses? 
Please provide the list of com panies that have already benefited from this subsidy 
program.  
 
Answer : 
 
To be qualified, a company must be capable of manufacturing renewable energy or energy 
efficiency systems, products or technologies.  The Subsidies Agreement does not require that a 
listing of the program beneficiaries be included in a subsidy notification.  For further details, 
including eligibility, please see:  
https://www.njeda.com/about/Public -Information/Inactive -EDA-Programs/edison_clean_energy.  
 
New Mexico  
 
--New Mexico Propert y Tax Abatement  
 
Question 38  
 
Please explain which businesses have benefited from this subsidy program? To which 
sectors do these businesses belong?  
 
Answer : 
 
Any business entity with land, buildings and equipment associated with an eligible project to 
promote economic developme nt qualifies for this program. There are various types of abatements. 
Eligibility is generally based on the businesses’ ability to create economic growth.  The sectors that 
benefit are diverse and vary.  
 
Pennsylvania  
 
Keystone Oppo rtunity Zone (KOZ)  
 
Question 39  
 
Where are the KOZs? Which businesses and sectors may benefit from this subsidy 
program?  
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  Answer : 
 
As of 2015, KOZs are located in the following regions: Lycoming, Clinton, Centre, Mifflin, Juanita, 
Snyder, Union, Montour, North Umberland and Columbia.  Any business located in the state is 
eligible for this program. To become a qualified Keystone Opportunity Zone (KOZ/KOEZ) business, 
a business must: (1) own or lease real property in a Keystone Opportunity Zone (KOZ) Subzone or 
a Keystone Opportunity Expansion Zone (KOEZ) Expansion Subzone from which it actively 
conducts a trade, profession, or business, and (2) obtain annual certification by program criteria 
from the Department of Community and Economic Development (DCED).  Pennsylvania businesses 
relocating to a KOZ/KOEZ must either: increase their full -time employment by 20% within the first 
full year of operation or make a 10% capital investment in the KOZ/KOEZ property based on their 
prior year’s gross revenues. Eligibility  for benefits is based upon annual certification. In order to 
receive benefits, any entity applying must be compliant with all local and state taxes and building 
and zoning codes. Please see the following link for further details:  
http://www.revenue.pa.gov/GeneralTaxInformation/IncentivesCreditsPrograms/KOZ/Pages/default.a
spx 
 
Texas  
 
--Product Development Fund & Small Business Incubator Fund  
 
Question 40  
 
The document pointed out that "The program will support, through financing, the 
development of small businesses or eligible products with a statutory preference to be 
given in the advanced technology areas of semiconductor, nanotechnology, 
biotechnology and biomedicine". Please explain how to determine whether a product is 
"eligible" or not. Can products of foreign -funded businesses be determined as being 
"eligible"? Are there any differences among American businesses? Please provide the 
list o f companies that have already benefited from this subsidy program.  
 
Answer : 
 
Eligibility for this program is determined by where the business is located and the commercial 
viability of the enterprise. The business must be domiciled in Texas or have at least 51% of 
employees located within the state.  There must also be fewer than 100  full-time employees and if 
for profit, the entity must be independently owned and operated. Based on an application and 
review process, a determination is made on the award of funds. See the following website for 
further details:  
https://gov.texas.gov/business/page/product -development -and-small -business -incubator -fund. 
 
--Property Tax Abatement  
 
Question 41  
 
What are the specific conditions for property tax exemption?  
 
Answer : 
 
A taxing unit may not enter into a tax abatement agreement and the governing body of a 
municipality or county may not designate an area as a rein vestment zone unless the governing 
body has established guidelines and criteria governing tax abatement agreements by the taxing 
unit and a resolution stating that the taxing unit elects to become eligible to participate in tax 
abatement. The guidelines fo r property must provide for the availability of tax abatement for both 
new facilities and structures, and for the expansion or modernization of existing facilities and 
structures. There are also requirements that vary depending on local governments. Feasib ility 
studies are required to determine the potential impact of projects that apply for property tax 
exemptions. Please see following website for further details:  
https://statutes.ca pitol.texas.gov/Docs/TX/htm/TX.312.htm . 
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  Utah  
 
--Sales and Use Tax Exemption (59 -12-104(55))  (59-12-104(55)) and Sales and Use Tax 
Exemption (59 -12-104(56))  
 
Question 42  
 
Renewable energy production factory or waste energy production factory enjoys sales 
and use tax exemption when buying certain machinery or equipment. Is there a scope or 
list of tax exemptions? If not, would the purchased machinery or equipment be 
exempted  from sales and use tax no matter it is applied in renewable or waste energy 
production?  
 
Answer : 
 
Section 104 of the Sales and Use Tax Exemption provides a range of certain types of equipment 
that are exempted from the Sales and Use Tax. Please see following website for further details: 
https://le.utah.gov/xcode/Title59/Chapter12/59 -12-S104.html?v=C59 -12-
S104_2015051220150701 . 
 
Virginia  
 
--Common -wealth's Development Opportunity Fund  
 
Question 43  
 
The program authorizes Virginia Economic Developm ent Partnership to provide 
subsidies to industrial development projects that create new jobs and investment. 
But the notification did not specify the objective standards or conditions of the subsidy, 
and the Amounts column shows "the amount varies". Please  explain.  
 
Answer : 
All projects must meet the following eligibility requirements:  
• The project must be affiliated with a basic employer, meaning 51% or more of the facility’s 
revenue must be generated outside the Commonwealth.  
• The project must be an act ive and realistic competition between Virginia and another state 
or country for attracting the project.  
• Matching local financial participation is required on a dollar -for-dollar basis (cash or in -kind).  
• Public announcement of the project must be coordi nated by VEDP and the Governor’s Office.  
Each project must meet thresholds for capital investment and job creation. If located in certain 
localities, projects may qualify for Single Distressed or Double Distressed Eligibility Thresholds 
instead of the Gene ral Eligibility Thresholds.  
General Eligibility Thresholds:  
• 50 new jobs and $5 million capital investment, or 25 new jobs and $100 million capital 
investment.  
• The average annual wage for the new jobs must be at least equal to the prevailing average 
annual wage in the locality, excluding fringe benefits.  
• If the average annual wage is at least twice the prevailing average annual wage, the 
Governor may reduce the new jobs threshold to as low as 25.  G/SCM/Q2/USA/75  
 
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  Single Distressed Eligibility Thresholds:  
• For a loc ality with an unemployment rate above the average statewide unemployment rate 
or with a poverty rate above the statewide average poverty rate.  
• 25 new jobs and $2.5 million capital investment.  
• Jobs must pay at least 85% of the prevailing average annual wage in the locality, excluding 
fringe benefits.  
Double Distressed Eligibility Thresholds:  
• For a locality with an unemployment rate above the average statewide unemployment rate 
and with a poverty rate above the statewide average poverty rate.  
• 15 new j obs and $1.5 million capital investment.  
• Jobs must pay at least 85% of the prevailing average annual wage in the locality, excluding 
fringe benefits.  
For most performance agreements, minimum capital investment, new job, and wage thresholds 
must be met wi thin 36 months.  
• "Capital investment " means an investment in real property, tangible personal property, or 
both at a manufacturing or basic nonmanufacturing facility within the Commonwealth.  
• "New job" means employment of an indefinite duration for which  the company pays wages 
and standard fringe benefits for its employee, requiring a minimum of either (i) 35 hours of 
the employee's time a week for the entire normal year of the company's operations, which 
"normal year" must consist of at least 48 weeks or  (ii) 1,680 hours per year. If there are 
existing jobs at the company’s facility, it is expected that the COF grant performance 
agreement will state the number of existing jobs and will require that the new jobs be in 
addition to the existing jobs.  
Loans a nd grants are made available to companies under this program. However, no grant or loan 
can be made above $2,000 per new job created. Total amounts for the fund vary based on yearly 
budget appropriations.  
Washington  
--Distressed Area Sales and Use Tax Deferral/Exemption program  
Question 44  
The program authorizes Department of Revenue of Washington to provide subsidies for 
new or remodelled building and/or equipment used in manufacturing or research in 
rural countries  or economically distressed areas. But the notification did not specify the 
objective standards or conditions of the subsidy, and the Amounts column shows 
"the amount varies". Please explain them.  
Answer : 
To qualify for this program, investments must be ma de in new or remodelled buildings or 
equipment used in manufacturing or research in rural countries or economically distressed areas.  
The total absolute amount of the exemption depends on the value of what is purchased. In order 
for a county to qualify for  this program, they must have an unemployment rate that is twenty 
percent above the state average. Every two years, the Washington State Department of Revenue 
will determine eligible counties for the program. Further information on this program can be foun d 
at: http://apps.leg.wa.gov/WAC/default.aspx?cite=458 -20-24001 . G/SCM/Q2/USA/75  
 
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  --Fishing Boat Fuel  
Question 45  
The program authorizes Department of Revenue of Washington to provide subsidies for 
local vessels engaged in commercial deep sea fishing or in the operation of commercial 
chartered fishing boats. But the notification did not specify the objective standards  or 
conditions of the subsidy, and the Amounts column shows "the amount varies". Please 
explain.  
Answer : 
To qualify for the RCW 82.08.0298 and 82.12.0298 exemptions, the business must:  
• Be a commercial deep sea fishing operation or a commercial passenger fishing operation 
(i.e., provide charter boats for sport fishing), and  
• Regularly engage in the business of such operations (i.e., gross receipts from its operations 
must be at least $5,000 annually) outside the territorial waters of Washington.  
In 2016, the approximate value of the benefit under this program was $2.769 million  
--High Technology Sales and Use Tax Deferral/Exemption Program  
 
Question 46  
 
Please provide the list of main sectors that benefit from this policy.  
 
Answer : 
 
The eligible technology categories are: Advanced computing, Advanced materials, Biotechnology, 
Electronic device technology and Environmental technology.  
 
--Rural County Business and Occupation (B&O) Tax Credit for New Employees  
 
Question 47  
 
Please explain what condi tions should be met to enjoy this tax subsidy.  
 
Answer : 
 
The business must be conducting manufacturing, research and development activities, or 
commercial testing (excluding light and power business) and locate or expand in a rural county or 
CEZ. Businesses located in a CEZ will only receive credit for persons who at the time of hire are 
residents of the CEZ.  Businesses must create a new work force or expand the existing work force 
by a 15 percent average increase (full -time employment positions) o ver the preceding four 
calendar quarters. All positions created by a new business will qualify for the credit for the four 
consecutive quarters following the quarter in which the positions are filled.  New full -time 
employment positions must be maintained f or four consecutive calendar quarters. A full -time 
employment position is one that is filled by one or more employees who: work 35 hours per week 
for 52 weeks; work 455 hours each quarter (excluding over time) of the year; work 1,820 hours 
annually (exclud ing over time) during a period of four consecutive quarters.  For seasonal 
employers, qualified employment position also includes the equivalent of a full -time employee in 
work hours for four consecutive full calendar quarters.  Please see the following link  for further 
information:  
https://dor.wa.gov/sites/default/files/legacy/Docs/pubs/excisetax/incentprogs/employbocred.pdf  
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  --B&O Tax Credit for Bi odiesel Sellers and Distributers  
 
Question 48  
 
Are foreign -funded businesses also entitled to enjoy this tax subsidy program?  
 
Answer : 
 
Retail sellers and distributors of biodiesel fuel and E85 motor fuel are eligible for this program. This 
program does not require an application or extra reports to the Washington State Department of 
Revenue because it can only be claimed through filing of taxes.  For further detail, including 
eligibility criteria, please see: https://dor.wa.gov/find -taxes -rates/tax -incentives/incentive -
programs . 
 
West Virginia  
 
--Coal Loading Facilities Credit  
 
Question 49  
 
Please further explain which facilities "coal loading facilities" specifically r efer to? Are 
there any similar subsidy programs for petroleum, natural gas or other fossil fuel 
energies?  
 
Answer : 
 
For purposes of determining eligibility for the tax credit, a coal facility includes any building or 
structure specifically designed and sol ely used to transfer coal from a coal processing or 
preparation facility, or from a coal storage facility, or both, or from any means of transportation, to 
any means of rail or barge transportation used to move coal. The credit applies only when the 
transf er of coal is to any means of rail or barge transportation and is not applicable when the 
transfer is to any other form of transportation. The cost of land, if directly associated and solely 
used for the loading of coal, is eligible for the credit. A coal loading facility also includes any device 
or combination of machinery and equipment that is directly associated with and solely used for the 
loading of coal. Such items as the coal loading tipple, conveyors, coal storage facilities, weighing 
equipment and rail trackage, if they are directly associated with and solely used for the loading of 
coal, are included within the definition. Eligible investment in a coal loading facility does not 
include the cost of any coal processing, preparation, blending or sizin g equipment facility. Such 
equipment and facilities are not included even though the equipment may physically be part of the 
coal loading facility and necessary or essential to the loading of commercially usable or marketable 
coal. There are not similar pr ograms for other fossil fuel energies.  
 
iii Other Questions  
 
Question 50  
 
Please explain which qualifications criteria should be met for a business to be approved 
to receive a property tax related subsidy? Are there any thresholds for foreign -invested 
businesses?  
 
Answer : 
 
This question cannot be answered in the abstract, witho ut reference to a particular program.  
 
 
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