WORLD TRADE  
ORGANIZATION  G/SCM/Q2/USA/37 
1 February 2010 
 (10-0470) 
Committee on Subsidies and  
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions Posed by CANADA Regarding the New and Full  
Notification of the UNITED STATES1 
 
  The following communication, dated 25 January 2 010, is being circulated at the request of the 
Delegation of Canada.    
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Question 1 
 US R&D programmes for renewable and fossil fuel energy sources (various programmes 
on pages 14-21)  
Canada would like to know if the eligibility for each programme is restricted to US 
organizations and companies only.  Also, what is the nature of the processes related to applying for 
support from these programmes?   
 
Question 2 
 Excess of Percentage over Cost Depletion for Oil, Gas and Other Fuels (page 23) 
 
 In the "Background and authority" section, it is stated that 100 per cent of net income 
limitation has been suspended for domestic productio n from marginal wells for taxable years ending 
before 1 January 2008, or in 2009.  Canada would be interested in having more details on the reasons 
of the suspension.  Also, could the United States e xplain what is considered to be a small-scale 
producer?    Question 3  Alternative fuel promotion programmes (e.g. Alcohol Fuel Credit on page 28 and Biodiesel Credit on page 29)  
 Canada notes that certain US programmes designe d to promote the use of alternative fuels are 
sometimes used in ways that are unintended and have the potential to significantly distort trade 
(e.g. US pulp producers recent use of "black liquor" fu el mixtures to qualify for the Alternative Fuel 
Mixture Credit).  Canada is interested to know if th e US has considered ways in which to prevent or 
limit the effect of similar practices under the notif ied programmes and/or new programmes such as the 
                                                     
 
1 G/SCM/N/155/USA.   G/SCM/Q2/USA/37 
Page 2  
 
  Biomass Crop Assistance Programme and the Renewable Electricity Production Credit (e.g. strict 
eligibility criteria, defined spending caps).    
Question 4 
 
Saltonstall-Kennedy Grant Programme:  Fisheries R&D (page 38) 
 
In an answer to Canada's question regarding the previous US notification, the United States 
mentioned that duties on fishery imports have incre ased over the past five years, meaning that the 
funding from other sources was not necessary.  Canada woul d like to know if it is still the case, i.e. is 
duty revenue still sufficient to fund the programme?   
 
Question 5 
 Empowerment Zones, Enterprise, Enterpri se Communities and Renewal Communities 
(page 54)  
Canada would be interested in knowing wh ere these empowerment zones are located and 
have the number of empowerment zones increased or decreased?  Also, as it is stated that the 
programme is supposed to end in December 2009, Canada would like to know if there was an 
extension.   
 
Question 6 
 Several sub-national programmes 
  Canada would be interested in having either  the subsidy per unit, the total amount of the 
grant, or the annual amount budgeted for the following programmes:    
o Alabama's Delta Regional Authority (page 60) 
o Delaware Strategic Fund (page 89) 
o Florida's Quick Response Training Programme (page 96) 
o Florida's Rural Community Development Revolving Loan (page 99) 
o Illinois' Coal Development Programme (page 105) 
o Kentucky's High-tech construction & investment pool (page 112) 
o One North Carolina Fund (page 156) 
o Utah's Corporate Loan Programme (page 183) 
o Utah's Industrial Assistance Fund (page 183) 
o Virginia's Solar Photovoltaic Manufacturing Grants (page 190) 
 
Question 7 
 Alabama ThyssenKrupp Steel Plant Project (page 65) 
 
Canada notes that the US federal governme nt frequently expresses concern in various 
international for a, including the OECD, with subs idies to the steel sector, particularly those that 
expand capacity.  Canada shares this concern.  Gi ven the size and ongoing nature of this incentive 
package, as well as the number of additional state-leve l steel subsidies included in this notification, 
Canada is interested to know if the federal govern ment has made, or plans to undertake, efforts to 
inform its states about the rationale underlying the federal position on subsidies to this sector and to 
discourage such support whenever possible.    G/SCM/Q2/USA/37 
 Page 3 
 
 
  Question 8 
 Alaska's Commercial Fishing Revolving Loan Fund (page 65) 
 
While it is stated that this fund provides long- term, low interest loans to commercial fishing 
businesses, details are not provided as to the exac t type of fishing activities financed by this 
programme.  Please provide details or examples.    
Question 9 
 
California's Old Growth Diversification Revolving Loan Fund (page 74)  
According to the notification, this programme was discontinued on 30 June 2003.  Canada 
would like to know if any disbursements were made since 2003.  If so, could the US provide details in 
that regard?    Question 10  New York's Qualified Emerging Technology Company (QETC) Tax Credits (page 154) 
 
For this programme, it is mentioned that Part  3 QETC Facilities, Operations, Training Credit 
will expire at the end of 2011.  Ca nada would be interested in knowi ng when the two other parts, i.e. 
Part 1 QETC Employment Credit and Part 2 QETC  Capital Tax Credit, are supposed to end.   
 
Question 11  
Tax Credit and Tax Exemption programmes by  North Dakota for agricultural processing 
industries (page 157) 
 
Canada would be interested in having more deta ils with respect to the exact amount of money 
given under each programme.  Also, could the US specify how many businesses have benefited from these programmes?   
 
Question 12 
 Ohio's Enterprise Zones (page 158) 
 
According to the details provided in the notifi cation, this programme was supposed to sunset 
in October 2009. Canada would like to know if there was an extension.  If not, are there applications 
pending under this programme and could the US pr ovide details as to any o ngoing disbursements?   
 
Question 13 
 
Oregon's Strategic Reserve Fund (page 167)  
Canada would be interested in knowing wh ich "key industries" benefited from this 
programme.  Also, could the US provide the exact cond itions that must be met in order to be able to 
benefit from this programme?   G/SCM/Q2/USA/37 
Page 4  
 
  Question 14 
 Tax Refund programme by South Dakota for ag ricultural processing facilities (page 173) 
 
Canada would be interested in knowing the to tal amount refunded under this programme, and 
who were the beneficiaries.   
 
Question 15 
 Several Vermont's programmes (page 185 and 186) 
 
Several programmes simply state "eligible comp anies" or "eligible facilities" as being the 
beneficiaries.  Canada would like to have more deta ils about the sectors in wh ich they operate for the 
following Vermont's programmes:    
o Economic Advancement Tax Incentive 
o Industrial Development Bonds 
o R&D Sustainable Technology Tax Credits 
o Vermont Employment Growth Incentive 
  
 
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