WORLD TRADE  
ORGANIZATION  G/SCM/Q2/USA/39 
6 April 2010 
 (10-1793) 
Committee on Subsidies and  
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Replies to Questions Posed by the EUROPEAN UNION1 
Regarding the New and Full Notification   
of the UNITED STATES2 
   The following communication, dated 30 March 2010, is being circulated at the request of the Delegation of the European Union.   
 
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Energy and Fuels
 
 
Energy conservation programmes – Transportation Sector page 17 
 
Question 1 
 
 As the car industry is very concentrated in the US the EC presume that only few 
companies benefited from this programme.  Could the US therefore indicate the companies 
which benefited from this progra mme and the amount provided?   
 
Reply  
  We note that this information is not required by Article 25, nor does the EU or other Members 
provide this type of information in their notifi cations.  Furthermore, the presumption made in the 
question is incorrect.  Programmes in this area work in partnership with a broad range of 
organizations including industry, such as both light- and heavy-duty vehicle manufacturers and their suppliers;  small businesses;  universities;  nationa l laboratories;  state and local governments;  and 
non-profit organizations.   
 
Other Energy and Fuels
 
 
Alternative Fuels Production Credit page 24 
 
Question 2 
 
 Which kind of alternative fuels benefit from th is programme.  In view of the significant 
increase of alternative fuel production, (e.g. bio diesel) has this programme been enhanced, 
revised, or otherwise changed since the p eriod covered by this notification?   
                                                      
1 G/SCM/Q2/USA/36.   
2 G/SCM/N/155/USA.   G/SCM/Q2/USA/39 
Page 2  
 
  Reply
 
 
 Section 45K of the US Internal Revenue Code provided a tax credit of $3 per barrel 
(in 1979 dollars) of oil-equivalent production for se veral forms of alternative fuels.  Qualifying fuels 
included oil produced from shale or tar sands, synt hetic fuels (either liquid, gaseous, or solid) 
produced from coal, and gas produced from either  geopressurized brine, Devonian shale, tight 
formations, or biomass, and coalbed methane.  For most qualifying fuels, the production tax credit was available through 31 December 2002.  For gas produced from biomass, and synthetic fuels produced from coal or lignite, the credit was av ailable through 31 December 2007 for qualifying 
facilities.   
 
 Section 45K also provides a tax credit of  $3 per oil-equivalent barrel of production 
(in 2004 dollars) for coke and coke gas during a fo ur-year period.  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).  Qualified facilities are facilities pl aced in service before 1 January 1993, or after 
30 June 1998 and before 1 January 2010.  The cred it was instituted as part of the Crude Oil Windfall 
Profit Tax Act of 1980.  The Energy Policy Act of  2005 extended the credit to facilities that produce 
coke and coke gas.     Although not part of the Section 45K credit, a refundable excise tax credit is available for 
alternative fuels including liquefied petroleum gas,  P Series fuels, compressed or liquefied natural 
gas, liquefied hydrogen, liquefied fuel derive d from coal through the Fischer-Tropsch process, 
compressed or liquefied gas derived from biomass, or liquid fuel derived from biomass.  For coal-to-
liquids produced after 30 September 2009 through 30 December 2009, the fuel must be certified as 
having been derived from coal produced at a gasifi cation facility that sequesters 50 per cent of such 
facility's total carbon dioxide emissions.  The seque stration percentage increases to 75 per cent for 
fuel produced after 30 December 2009.  The alternativ e fuel credit is 50 cents per gallon of alternative 
fuel or gasoline gallon equivalents.  The excise  tax credit was enacted as part of the Safe, 
Accountable, Flexible, Efficient Transportation Act of  2005.  The credit is authorized in sections 6426 
and 6427(e) of the Internal Revenue Code.    
Biodiesel Credit page 29  
 
Question 3 
 
 Could the US indicate the companies which benefited from this programme with the 
three major beneficiaries and the amount provided to them?   
 
Reply
 
  No.  The Internal Revenue Code prohibits disclos ure of tax return information.  Additionally, 
we note that this information is not required by Article 25, nor does the EU or other Members provide 
this type of information in their notifications.   
 
Medical
 
 
Orphan Drug Tax Credit page 44 
 
Question 4 
 
 It is stated that 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 this drug.  Please explain how  G/SCM/Q2/USA/39 
 Page 3 
 
 
  the condition "no reasonable expectation" is evaluated.   How is it taken into account, if at all, if 
the disease occurs massively elsewhe re rather than in the US?   
 
Reply  
 
 Determinations with respect to any drug are ma de on the basis of the facts and circumstances 
as of the date such drug is designated as a drug for a rare disease or conditi on under section 526 of the 
Federal Food, Drug, and Cosme tic Act (21 U.S.C. 360bb).   
 
Metals, Minerals and Extraction (Non-Fuel)  
 
Emergency Steel Loan Guarantee Programme page 49 
 
Question 5 
 
 The programme guaranteed loans provided to qualified steel companies by private 
banking and investment institutions.  Have these  guarantees ever been drawn on by creditors.  
If so, could the US indicate the companies a nd the amount provided by the guarantor?   
 
Reply  
 
 Yes, on one occasion.   Geneva Steel defaulted on its loan and the creditor subsequently 
exercised its guarantee.  The US government paid the creditor $93.5 million.  That amount was repaid 
in full in 2007 as part of Geneva Steel's bankruptcy proceeding.    
Alabama
 
 
ThyssenKrupp Steel Plant Project page 65 
 
Question 6 
 
ThyssenKrupp Steel Plant has been awarded grants in the year 2007 by Alabama in the 
course of the site selection.  The indication "awa rded in 2007 and Ongoing" is not fully clear.  
Does it mean that there might be provided further grants in the course of the projects?   
 
Reply  
 
 There were and are no further grants beyond th ose announced in 2007.  The entire amount is 
set out in a single project agreement and is not "ongoing" subsidy.  The incentives were paid out as reimbursements as actual capital expenditures in curred for construction of the facilities.   
 
Delaware
 
 
Non-targeted industry locating in a targeted area page 91 
 
Question 7 
 
 Please indicate the industry which is benefiting from this programme?   G/SCM/Q2/USA/39 
Page 4  
 
  Reply
 
  Targeted businesses are defined as:  manufactur ers;  wholesalers;  laboratories used for 
scientific, agricultural, or industrial research, de velopment or testing;  computer processors;  
engineering firms, consumer credit reporting services;  wholesale of computer software;  
telecommunications and aviation services.  Other businesses are considered non-targeted.   
   
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