RESTRICTED
WORLD TRADE G/SCM/Q2/USA/11
5August 1997
ORGANIZATION(97-3315)
Original: English Committee onSubsidies
andCountervailing Measures
SUBSIDIES
Request from theEUROPEAN COMMUNITY
totheUNITED STATES Pursuant toArticle 25.10 oftheAgreement
Thefollowing communication, dated 10July1997, hasbeenreceived from thePermanent
Delegation oftheEuropean Community.
_______________
TheEuropeanCommunityhasobtainedinformationconcerninganumberofactionsandpractices,
described intheAnnex attached herewith, which theEuropean Community considers might besubject
tonotification totheCommittee under Article 25.2oftheAgreement and/or Article XVIofGATT.
TheEuropean Community requests thatthose actions andpractices benotified totheCommittee on
Subsidies andCountervailing Measures inaccordance withArticle 25.10 oftheAgreement onSubsidies
andCountervailing Measures. Should anotification notbemade promptly, theEuropean Community
reserves itsright toraise thealleged subsidies fordiscussion atthenextregular meeting ofthe
Committee.G/SCM/Q2/USA/11
Page2
Subsidy 1-Export Assistance inFlorida
1. Title
Florida: Export Assistance andFinancing Programme
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Theobjective istoencourage Florida firms toexport theirproducts. TheDepartment provides
assistance intwoways: export counselling andfinancial assistance through loanguarantees, loans
andtaxexemptions.
4. Background andauthority
Theprogramme isadministered bytheFlorida Department ofCommerce.
5. Form
Loan guarantee, loans andtaxexemptions.
6. Towhom andhowthesubsidy isprovided
Theprogramme isopentoallFlorida companies which export. Thissubsidy iscontingent
upon export performance andistherefore specific.
7. Subsidy perunitortotalbudget
Theamount oftheloans andloanguarantees depends onthevalue ofthegoods which are
exported.Asregardsthetaxexemption,dependingonacompany'sprofitmargin,theincomeexemption
canallow forataxsaving of15to30%.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page3
Subsidy 2-Enterprise Zones inGeorgia
1. Title
Georgia: Enterprise Zones Programme.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Statelegislation which waspassed in1983enabled thecityofAtlanta tocreate enterprise zones.
Three zones havebeendesignated.
4. Background andauthority
Theprogramme isadministered bytheAtlanta Economic Development Corporation.
5. Form
Companies receive 100% ofexemption oninventory taxfor25years. Inaddition, allreal
estate intheZone isexempted fromlocalproperty taxes, withthisexemption beginning at100% and
decreasing in20%increments attheendofeach5-year period.
6. Towhom andhowthesubsidy isprovided
Theprogramme isopen toallcompanies located inthedesignated zones. Theprogramme
islimited tocertain enterprises within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
Theamount ofthesubsidy depends ontheleveloftaxes which ispayable ifthecompany was
notlocated inthezone.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
Since 1983, 44companies representing $95million incapital investment havereceived benefits
under theEnterprise Zone legislation.G/SCM/Q2/USA/11
Page4
Subsidy 3-TaxExemption forAlcohol inKentucky
1. Title
Kentucky: TaxExemption forFuelAlcohol Production.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Theobjective istoprovide anincentive totheproduction offuelalcohol.
4. Background andauthority
Theprogramme isadministered bytheKentucky Revenue Cabinet.
5. Form
Taxexemption fromsalesandusetaxesforaperiod ofeightyears. Exemption isalsoprovided
from localproperty taxation.
6. Towhom andhowthesubsidy isprovided
Theprogramme isopen tofuelalcohol production facilities. Theprogramme islimited to
certain enterprises within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
n.a.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page5
Subsidy 4-Loans forSeafood Production inMaryland
1. Title
Maryland: Seafood andAquaculture Loan Fund.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Theobjective istoencourage innovation, expansion andmodernization oftheaquaculture and
seafood processing industries within thestate.
4. Background andauthority
Theprogramme isadministered bytheMaryland Department ofEconomic andEmployment
Development.
5. Form
Loans atbelow market interest ratestofinance aportion ofthefunds needed forfixed asset
acquisition.
6. Towhom andhowthesubsidy isprovided
Anyapplicant mustbelocated inMaryland andengage inaquaculture orseafood processing.
Theprogrammeislimitedtocertainenterpriseswithintheterritoryofthegrantingauthorityandtherefore
specific.
7. Subsidy perunitortotalbudget
TheFund gives direct loans inanamount upto$250,000 perproject.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page6
Subsidy 5-Enterprise Zones inMinnesota
1. Title
Minnesota Enterprise Zone Programme.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Enterprise zones areintended toencourage neweconomic growth indistressed areas. According
tothelevelofdevelopment ofthecity,Minnesota identified 32types ofzones: competitive enterprise
zones, border citytarget zones andborder cityzones.
4. Background andauthority
Theprogramme isadministered bytheMinnesota Department ofTrade andEconomic
Development.
5. Form
Aproperty taxcredit, anincome taxcredit foraportion ofthecostofdebtfinancing inthe
construction offacilities, anincome taxcredit of$3,000 peradditional employee andanexemption
ofthestatesalestaxes.
6. Towhom andhowthesubsidy isprovided
Theprogramme isopentoallMinnesota companies which arelocated inthedesignated zones.
Theprogrammeislimitedtocertainenterpriseswithintheterritoryofthegrantingauthorityandtherefore
specific.
7. Subsidy perunitortotalbudget
n.a.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page7
Subsidy 6-Export TaxCredits inOhio
1. Title
Ohio Export TaxCredit Programme.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Thepurpose ofthisprogramme istoincrease exports fromOhiocompanies toforeign markets.
4. Background andauthority
Theprogramme isadministered bytheOhio Department ofTaxation andtheDepartment of
Development.
5. Form
Anexporting company isabletoclaim acredit intheamount of10%ofpre-tax profit from
increase inexport sales, aslongaseither Ohio payroll orproperty values increased by10%overthe
previous three years. Thecredit islimited to$250,000 peryear.
6. Towhom andhowthesubsidy isprovided
Ohiocompanies meeting theexport requirement. Thisprogramme iscontingent upon export
performance andtherefore specific.
7. Subsidy perunitortotalbudget
Maximum $250,000 peryear.
8. Duration ofthesubsidy
Thescheme isscheduled toterminate by31December 1999.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page8
Subsidy 7-PortRevolving Fund inOregon
1. Title
Oregon PortRevolving Fund.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Thepurpose ofthisprogramme istoassist private firms located onselected portindustrial
properties.
4. Background andauthority
Theprogramme isadministered bytheOregon Economic Development Department.
5. Form
Aneligible company canobtain aloanofmaximum $500,000 ataninterest ratewhich is1%
lessthantheyield onUStreasury securities.
6. Towhom andhowthesubsidy isprovided
Allcompanies located in(orrelocating to)aportindustrial zone. Theprogramme islimited
tocertain enterprises within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
n.a.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page9
Subsidy 8-Enterprise Zones inPennsylvania
1. Title
Pennsylvania: Enterprise Zone TaxCredit.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Thepurpose ofthisprogramme istoprovide anincentive forcompanies which invest within
anenterprise zone.
4. Background andauthority
Theprogramme isadministered bythePennsylvania Department ofRevenue.
5. Form
Taxcredit.
6. Towhom andhowthesubsidy isprovided
Companies located intheenterprise zone. Theprogramme islimited tocertain enterprises
within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
A20%taxcredit isgiven, or$250,000, whichever isless.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page10
Subsidy 9-TaxExemption forLumber inWashington
1. Title
Washington: TaxExemption onForm Lumber.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Thisprogramme aimstopromote thesaleanduseofformlumber inthestateofWashington.
4. Background andauthority
Theprogramme isadministered bytheWashington State Department ofRevenue.
5. Form
Taxexemption onsaleandusetax.
6. Towhom andhowthesubsidy isprovided
Companies producing orselling formlumber. Theprogramme islimited tocertain enterprises
within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
Afulltaxexemption onsaleandusetax.Thenormal salestaxrateis6.5% based ontheretail
selling price.
8. Duration ofthesubsidy
Thescheme isongoing.
9. Trade effects
n.a.G/SCM/Q2/USA/11
Page11
Subsidy 10-Enterprise Zones inVirginia
1. Title
Virginia -Enterprise Zones.
2. Period covered
Theperiod covered is1994.
3. Policy objective andpurpose ofthesubsidy
Thepurpose ofthisprogramme istoprovide ataxincentive forcompanies which invest within
anenterprise zone.
4. Background andauthority
Theprogramme isadministered bytheVirginia Office ofPlanning andDevelopment.
5. Form
Taxcredit against thestateincome taxandtaxexemption onsalesandusetax.
6. Towhom andhowthesubsidy isprovided
Companies located intheenterprise zone. Theprogramme islimited tocertain enterprises
within theterritory ofthegranting authority andtherefore specific.
7. Subsidy perunitortotalbudget
Qualified businesses areallowed ataxcredit amounting to80%oftheirincome taxthefirst
year, 60%thesecond year, 40%thethird yearand20%thefourth andfifthyear. Companies are
alsoallowed ataxcredit atthesame annual percentages forstateemployment taxes.
8. Duration ofthesubsidy
Thescheme isongoing. Thelegislation wasenacted in1982andsubstantially revised in1992.
9. Trade effects
n.a.