WORLD TRADE  
ORGANIZATION  G/SCM/Q2/USA/31 
30 January 2008 
 (08-0444) 
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 28 January 2 008, is being circulated at the request of the 
Delegation of Canada.    
 
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1 G/SCM/N/123/USA.   G/SCM/Q2/USA/31 
Page 2  
 
  Re. Renewable Energy Resources  pages 12-13 
Re. Energy Conservation Programs (Transportat ion Sector Building Technology, State and 
Community Sector Industry Sector) pages 14-19 
 
Question 1 
 
What are the various competitive procedures used  to determine participation in these energy 
programs?    
Re. Energy Conservation Programs (Transportat ion Sector Building Technology, State and 
Community Sector Industry Sector) pages 18  
Question 2  
Canada would be interested in  having more details with r espect to the amount given under 
each part of the sub-programs, i.e., under total indus trial sectors and each of the industries of the 
future.    
Re. Energy Conservation Industry Sector pages 17-18 
 
Question 3 
 
The stated objectives of the Energy Conservation Industry Sector Program  includes:  to 
improve the productivity of energy-intensive i ndustries through the development and delivery of 
advanced science and technology options.  Would th is assistance extend to the acquisition of new and 
more production-efficient machinery/equipmen t (with consequentially better environmental 
performance) for use in recipients industrial operations?   
 
Re. Fossil Energy Research and Development - pages 19-20  
 
Question 4  
Are the results of any federal funded research and development technologies and analyses 
made publicly available or are they limited to th e industries with which the Office of Fossil Energy 
has participated in a joint partnership?    Question 5 
 
While it is stated that the Office of Fossil Energy  participates in joint partnerships with certain 
industry utilizing mechanisms, details are not provide d as to how industries qualify or apply for such 
partnerships?  Please provide details.    
Re. Expensing of Exploration and Developm ent Costs for Oil, Gas and Other Fuels  
Excess of Percentage Over Cost Depletion For Oil, Gas and Other Fuels 
Alternative Fuel Production Credit pages 20-23 
 
Question 6 
 
In view of the significant increases in the cost of  crude oil in the past several years, have any 
of these programs been enhanced, revised, or otherwise changed?    G/SCM/Q2/USA/31 
 Page 3 
 
 
  Re. Capital Gains on Royalties on Coal pages 23-24 
 
Question 7  
Please describe the relationship, if any, between the tax treatment of royalties on coal and the 
Alternative Fuel Production Credit, as notified by the United States in 1998 and then available under 
the Crude Oil Windfall Profit Tax Act of 1980.  Do es the United States have any information on the 
impact of this and any previous programs of the like on US coal exports in particular?   
 
Re. Fisheries Finance Program (FFP) pages 28-30  
 
Question 8  
It is stated that since this program provides loans at relatively high interest rates and has a 
relatively low default rate, it has not resulted in a net outflow of government funds.  If so, it is 
apparent that recipients could obtain loans from commercial lending institutions.  Accordingly, has 
the program been consequently terminated?  Question 9  
It is also stated that FFP is barred from fina ncing any project that could be construed as 
leading to overcapitalization of any fishery.  How is this defined?   
 
Re. Saltonstall-Kennedy Grant Program: Fish eries Research and Development  page 30  
 
Question 10 
 
This program is funded by duties on fishery impor ts. Given that duties have declined over the 
years, has funding for this program been augmented from other sources?     
Re. Columbia River Hatcheries pages 32-33  
 
Question 11  
Describes the changes to the Mitchell Act and th is program prompted by the application of 
the Endangering Species Act in the Columbia River Basin?   
 
Re. Excess of Percentage Over Cost Depletion for Non-Fuel Minerals Page 38 
 Expensing of Exploration and Developmen t Costs for Non-Fuel Minerals Pages 38-39 
 
Question 12  
Please provide an explanation for the wide diffe rences in revenue lost in 2003 as compared 
to 2004 for both programs.    
Re. Capital Gains Treatment of Iron Ore Pages 39-40  
 Question 13 
 
Why is the revenue loss for this program so low?   G/SCM/Q2/USA/31 
Page 4  
 
  Re. Emergency Steel Loan Guarantee Program page 41-42  
 
Question 14  
As regards the Emergency Steel Loan Guarantee Program , while we understand that the 
Board's authority to issue guarantees expired Dece mber 31, 2005 and that there are no applications 
pending under this program, c ould the United States please provide particulars as to any ongoing 
disbursements anticipated under the th ree already approved guarantees?   
 
Re. The Textile/Clothing Technology Co rporation Program (TC2) Pages 42-43  
 
Question 15  
Is the Textile/Clothing Technology Corpor ation a government body and does it provide 
services to any US textile or clothing enterprise which applies?   
 
OTHER 
 
Tobacco Payments 
 
In November 1998, the attorney generals of 46 states signed an agreement (referred to as the 
Master Settlement Agreement) with the tobacco companies requiring them  to make payments to states 
to perpetuity as reimbursement for past tobacco-rela ted costs.  This settlement commits the tobacco 
companies to pay approximately $206 billion over the fi rst 25 years of the agreement.  This is in 
addition to an additional settlement for $40 billion over 25 years to the other 4 states governments. 
Governments can spend this money as they wish.   
 
Question 16  
• It is reported by the US General Accounting Office that several Tobacco states allocate a 
portion of their Master Settlement Agreemen t (MSA) payments for assistance to tobacco 
growers.  Are MSA payments distributed to tobacco growers included in the United States' 
notification?  Could the United States elaborate on the amounts and use of such 
disbursements to tobacco growers?   
 Question 17  
• The National Tobacco Grower Settlement Trust Agreement (commonly referred to as 
Phase II) is a separate agreement between tob acco-growing states and tobacco companies.  
Under this agreement, tobacco growers ar e required to make payments totalling over 
$5 billion in a trust for distribution to tobacco gr owers.  Are Phase II payments distributed to 
tobacco growers included in the United States ' notification?  Could the United States 
elaborate on the amounts disbursed to tobacco growers?    
 
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