WORLD TRADE
ORGANIZATIONG/SCM/N/48/USA
G/SCM/N/60/USAG/SCM/N/71/USA
2 July 2002
(02-3683)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Updating and New and Full Notification Pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the SCM Agreement
UNITED STATES
The following communication, dated 27 June 2002, has been received by the WTO
Secretariat from the Permanent Mission of the United States.
_______________
Enclosed please find the notification from the United States, pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures, including
updating notifications for calendar years 1999 and 2000, and a new and full subsidies notification for
calendar year 2001.  Information on programmes granted or maintained at sub-federal levels in the
United States is included in Attachment III.  Information regarding certain federal programmes for
some years – most notably, domestic agricultural support programmes – is not yet available.  We
expect to be able to provide this information in the near future.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 2
The following notification constitutes the United States’ updating notifications for calendar
years 1999 and 2000, as well as its new and full subsidies notification for calendar year 2001.
Information on programmes granted or maintained at sub-federal levels in the United States isincluded in Attachment III.  Information regarding certain federal programmes for some years – most
notably, domestic agricultural support programmes – is not yet available.  We expect to be able to
provide this information in the near future.
As noted in previous US notifications, insofar as the notification obligation is a transparency-
oriented provision that, pursuant to Article 25.7 of the Agreement, carries no legal weight as to the
actual identification of a subsidy, its action ability status, or its trade effects, the United States hasincluded certain activities in this notification which arguably are not (or are not always) “specific
subsidies” within the meaning of the Agreement.
* * * * *
AEROSPACE & AERONAUTICS
Title: Advanced Subsonic Technology Programme
Period covered by the notification
The period covered is fiscal year 1999.
Policy objective and/or purpose
The Advanced Subsonic Technology Programme had the specific aim of generating, by 2001,
promising technologies for the possible future development by private enterprises of a new generation
of environmentally compatible and economic subsonic aircraft and a safe, highly productive global air
transportation system.
Background and authority
The Advanced Subsonic Technology Programme was administered by the National
Atmospheric and Space Administration’s (NASA) Office of Aerospace Technology.  Legislative
authority for the programme derived from the National Aeronautics and Space Act of 1958, as
amended, and the US Government’s annual  budget and appropriations legislation.
Form
Up to three-quarters of the appropriated funding for this programme was applied to grants,
contracts, or other cooperative-type agreements with private sector partners for the purpose ofachieving the programme’s stated goals.
To whom and how assistance is provided
Participating companies were selected through an open process and worked jointly with
NASA in the research and technology (R&T) program.  Due to the nature of the R&T activity, these
contracts, grants and other cooperative-type agreements continued to be awarded to large civil aircraft
and engine manufacturers, general aviation aircraft and engine manufacturers, advanced aerospaceG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 3
material manufacturers, and other major subsystem developers for aircraft, engine and air traffic
management systems.
Amount
The amount budgeted for fiscal year 1999 was $89.6 million.
Duration
This programme was discontinued at the end of fiscal year 1999 as NASA refocused its
programme activities from an emphasis on strengthening industrial competitiveness to research
investments focused on the public good.
Trade effects
It is not possible to determine what, if any, trade effects resulted from this programme.
Title: The X-33 Programme
Period covered by the notification
The period covered is fiscal years 1999-2000.
Policy objective and/or purpose
The X-33 Programme was intended to develop and demonstrate technologies and operations
that would yield significant reductions in the cost of access to space.  It aimed to integrate and expand
the achievements of related efforts to produce an experimental vehicle that would demonstrate the
feasibility of a cost-effective, operational reusable launch vehicle.  The X-33 test vehicle was planned
to demonstrate key technology, operations and reliability requirements for next-generation launch
systems, including those required for a single stage-to-orbit launch system.
Background and authority
The X-33 Programme was administered by NASA’s Office of Aerospace Technology.
Legislative authority for the programme derived from the National Aeronautics and Space Act of1958, as amended, and the US Government’s annual budget and appropriations legislation.
Form
Participation in the programme was achieved through the use of a cooperative agreement.
Submission of proposals was open to all categories of organizations, both domestic and foreign.  The
X-33 Programme was premised on cost-sharing, requiring the partners to the cooperative agreement
to contribute to the programme’s funding.
To whom and how assistance is provided
Participating companies were selected through an open process and worked jointly with
NASA in the development programme.  In exchange for some of the work performed on the
programme by the non-NASA partner, NASA paid the partner on the basis of the terms negotiated inG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 4
the cooperative agreement.  However, these payments did not and were not intended to cover all of
the costs associated with the programme that were incurred by the partner.  Such residual costs were
borne fully by the partner itself.
Amount
The amount budgeted for this programme for fiscal year 1999 was $277.3 million, and for
fiscal year 2000 was $111.6 million.
Duration
The X-33 Programme was initiated in fiscal year 1995.  The programme was discontinued in
fiscal year 2000.
Trade effects
It is not possible to determine what, if any, trade effects resulted from this programme.
Title: The X-34 Programme
Period covered by the notification
The period covered is fiscal years 1999-2001.
Policy objective and/or purpose
The X-34 Programme was restructured in the spring of 1996.  This restructuring eliminated
the original intention of the programme to support development of a commercially viable small
launcher.  The programme was then limited to the construction of a flight demonstrator that would test
a number of new launch vehicle technologies including composite structures and advanced thermal
protection systems.  As noted in previous notifications, this restructuring rendered the X-34Programme a non-notifiable measure.  However, the United States continued to provide information
about this programme in the interest of transparency.
Background and authority
The X-34 Programme was administered by NASA’s Office of Aerospace Technology.
Legislative authority derived from the National Aeronautics and Space Act of 1958, as amended, and
the US Government’s annual budget and appropriations legislation.
Form
The programme was implemented through the use of a contract.
To whom and how assistance is provided
The participating company was selected through an open contracting process.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 5
Amount
The amount budgeted for fiscal year 1999 wa s $35.5 million, fiscal year 2000 was $40.5
million, and fiscal year 2001 was $17.9 million.
Duration
Funding for this programme began in fiscal year 1995, and the programme was discontinued
in fiscal year 2001.
Trade effects
It is not possible to determine what, if any, trade effects resulted from this programme.
Title: High Speed Research Programme
Period covered by the notification
The period covered is the fiscal year 1999.
Policy objective and/or purpose
The High Speed Research Programme had the specific aim of improving, by 2005, the
technology base for the possible future development of an economically viable and environmentallyfriendly high speed civil transport by private aerospace companies.
Background and authority
The High Speed Research Programme was administered by NASA’s Office of Aerospace
Technology.  Legislative authority for the programme derived from the National Aeronautics and
Space Act of 1958, as amended, and the US Government’s annual budget and appropriationslegislation.
Form
Up to three-quarters of the appropriated funding for this programme was applied to grants,
contracts, or other cooperative-type agreements with private sector partners for the purpose of
achieving the programme's stated goals.
To whom and how assistance is provided
Participating companies were selected through an open process and worked jointly with
NASA in the R&T programme.  Due to the nature and focus of the R&T activity, these contracts,
grants and other cooperative-type agreements were awarded to large civil aircraft and engine
manufacturers, advanced aerospace material manufacturers, and other major subsystem developers for
aircraft, engine and air traffic management systems.
Amount
The amount budgeted for fiscal year 1999 was $180.7 million.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 6
Duration
This programme was discontinued at the end of fiscal year 1999.
Trade effects
It is not possible to determine what, if any, trade effects resulted from this programme.
Title: The Spacecraft Technology Development Programme
Period covered by the notification
The period covered is the fiscal years 1999-2001.
Policy objective and/or purpose
The Spacecraft Technology Development Programme is aimed at developing long term
advanced spacecraft technology that benefits both NASA programmes and the satellitecommunications industry.  Key technology areas incl ude phased array antennas, batteries, solar cells,
travelling wave tubes, solid state power amplifiers, satellite propulsion and satellite network
technology.
Background and authority
The Spacecraft Technology Development Progra mme is administered by NASA’s Office of
Aerospace Technology.  Legislative authority for the programme derives from the National
Aeronautics and Space Act of 1958, as amended, a nd the US Government’s annual budget and
appropriations legislation.
Form
The technology is developed at NASA laboratories, participating universities and
participating industrial facilities.
To whom and how assistance is provided
Assistance to industry is provided through cost-share contracts and technology know-how
transfer from NASA laboratories.  Assistance to universities is provided through grants.
Amount
The amount budgeted for fiscal year 1999 was $30 million, for fiscal year 2000 was
$32.5 million, and for fiscal year 2001 was $35.0 million.
Duration
Although this activity was notified as the Spacecraft Technology Development Programme
for ease of identification, the subject research and technology activities are actually sponsored underG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 7
the Enabling Concepts and Technology and the Computing, Information, and Communications
Technology Programmes.
Trade effects
In light of the scope and nature of the R&T activity being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
AGRICULTURE
Export Assistance Measures
Title: The Export Enhancement Programme (EEP)
Period covered by the notification
The period covered is fiscal years 1998-2001 (October 1997-September 2001).
Policy objective and/or purpose
In June 1991, the US Department of Agriculture (USDA) published programme criteria
governing the selection of proposed sales initiatives under the EEP.  All EEP initiatives are evaluatedbased on five criteria:
(1) Trade Policy Effect – the expected contributions of the initiative in furthering the US
trade policy objective of countering competitors' subsidies and other unfair trade practices by
displacing such countries' subsidized exports in targeted countries;
(2) Export Effect – the potential to develop, expand, or maintain markets for US
agricultural commodities;
(3) Effect on Non-subsidizers – possible effects, if any, on non-subsidizing exporters of
agricultural products;
(4) Subsidy Requirements – the expected benefits compared with expected costs of the
initiative;  and
(5) Market Development – EEP can be used for market development purposes.
The overall programme level for EEP, as well as bonus awards under individual EEP initiatives, will
be maintained at the minimum levels necessary to achieve the expected benefits of the programme's
export expansion objectives, as well as the anticipated long-term benefits from multilateral
agricultural trade reform.  Together, these criteria are considered in the selection of initiatives
targeting specific commodities and countries that will best meet the programme's trade policy andexport expansion objectives.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 8
Effective 1 July 1995, the terms of the Uruguay Round Agreement on Agriculture established
annual ceilings by commodity with respect to maximum quantity and budgetary expenditures
permitted for export subsidies.
Background and authority
The EEP has operated under various authorities since May 1985.  Terms and conditions
applicable to all export initiatives are contained in the US Code of Federal Regulations at  7 CFR
1494.
Form
Cash bonuses paid to participating agricultural exporters.
To whom and how assistance is provided
The EEP works as follows:(1) The General Sales Manager, acting as Vice President of the Commodity Credit
Corporation (CCC), issues a press rele ase (Programme Announcement) announcing
an EEP initiative for a specific country or countries or regions. The Programme
Announcement is followed by an invitation for offers from exporters to obtain a
specific dollar and cents bonus in connection with the sale of an eligible commodity
to the target countries.
(2) Interested exporters submit information to qualify as participants under the
programme.
(3) The exporter must make a commercial sale of the eligible commodity under either a
world-wide tender or a US-origin tender, or a negotiated sale with a buyer as a result
of a tender
(4) The exporter then makes an offer to the CCC to establish the amount of the CCC
bonus in dollars and cents necessary to make the eligible commodity competitive
with the same commodity bein g offered for sale from other exporting countries under
a world-wide tender, and furnishes a performance certificate to the CCC.
(5) The General Sales Manager determines  if the CCC bonus makes the exporter's
commercial sale of the eligible comm odity competitive with the same commodity
offered for export from other exporting countries and if the offer meets the
requirements of the programme.
(6) The General Sales Manager notifies successful exporters and sends a written
acceptance of the offer.
(7) The exporter exports the eligible commodity against the sales contract.
(8) The exporter furnishes proof of export and requests payment of the CCC bonus.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 9
(9) The CCC issues payment to the exporter for the exact amount of the CCC bonus by
multiplying the CCC bonus specified in the agreement by the net quantity of the
commodity exported.
(10) The General Sales Manager agrees to a cancellation of the performance security, in
whole or in part, provided the exporter has furnished evidence that the exports arrived
in the designated country.
Amount
Note – Notifications to the Committee on Agriculture report quantity on July-June year basis
and budgetary outlays on fiscal year basis.
Fiscal Year 2001
Poultry Meat Quantity 11,090 MT  Budgetary Outlays $6,823,325
FY 2000
Poultry Meat Quantity 2,529 MT  Budgetary Outlays $1,643,430
FY 1999
Poultry Meat Quantity 2,446 MT Budgetary Outlays $1,399,762
FY 1998
Coarse Grain Quantity 25,000 MT Budgetary Outlays $1,205,000
Poultry Meat Quantity 1,500 MT Budgetary Outlays $862,500
Duration
EEP was re-authorized until year 2001 in th e Uruguay Round Agreement Act of 1994.  The
Federal Agricultural Improvement and Reform Act of 1996 (FAIR Act) further extends funding
through year 2002.
Trade effects
The CCC bonuses offered are intended to enable US exporters to compete at commercial
prices in selected foreign markets.  The effect of the programme is to enable exporters to offer prices
that are competitive with those being offered by ot her countries' exporters in these selected foreign
markets.  (See Attachment I for statistics).
Title: The Dairy Export Incentive Programme (DEIP)
Period covered by the notification
The period covered is fiscal years 1999-2001(October 1998-September 2001).
Policy objective and/or purpose
In June 1991, USDA published programme criteria governing the selection of commodities
and countries under the DEIP.  These criteria take into account:G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 10
(1) Trade Policy Effect -- the expected contribution of the initiative in furthering the US
trade policy objective of countering competitors' subsidies and other unfair trade
practices by displacing such countries' subsidized exports in targeted countries;
(2) Export Effect -- the potential to develop, expand, or maintain markets for US
agricultural commodities;
(3) Effect on Non-subsidizers – the possible effects on non-subsidizing exporters of
agricultural products; and
(4) Subsidy Requirements -- the expected benefits compared with the expected costs of
the initiative.
Effective 1 July 1995, the terms of the Uruguay Round Agreement on Agriculture established
annual ceilings by commodity with respect to maximum quantity and budgetary expenditurespermitted for export subsidies.  Section 148 of the FAIR Act authorizes the use of DEIP to any
destination in the world for the purpose of market development provided those shipments are not
otherwise restricted by US law.
Background and authority
Section 153 of the Food Security Act of 1985, as amended, mandates that the CCC operate
the DEIP through 31 December 2002.
To whom and how assistance is provided
Payments may be made in cash, CCC-owned commodities, or generic certificates on a bid
basis to entities that sell US dairy products for export.  Export sales under the programme must be in
addition to, and, to the extent practicable, not displa ce, commercial export sales of US dairy products.
Eligible dairy products, in bulk, are butter, butter oil, anhydrous milk fat, nonfat dry milk, whole milk
powder, cheddar cheese, mozzarella cheese, cream cheese, feta cheese, and Gouda cheese.
Amount
Note – Notifications to the Committee on Agriculture report quantity on July-June year basis
and budgetary outlays on fiscal year basis.
Fiscal Year 2001
Nonfat Dry Milk Quantity 55,451 MT Budgetary Outlays $6,727,480
Cheese Quantity 3,030 MT Budgetary Outlays $1,760,700
FY 2000
Butter & Butteroil Quantity 5,298 MT Budgetary Outlays $7,318,465
Skim Milk Powder Quantity 67,862 MT Budgetary Outlays $45,333,000
Cheese Quantity 6,012 MT Budgetary Outlays $5,564,383
Other Milk Products Quantity 15,832 MT Budgetary Outlays $20,304,243
FY 1999
Butter & Butteroil Quantity 395 MT Budgetary Outlays $451,956
Skim Milk Powder Quantity 127,808 MT Budgetary Outlays $133,284,327
Cheese Quantity 2,779 MT Budgetary Outlays $4,164,216G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 11
Other Milk Products Quantity 5,340 Budgetary Outlays $7,407,673
FY 1998
Butter & Butter oil Quantity 6,959 MT Budgetary Outlays $8,852,246
Skim milk powder Quantity 100,070 MT Budgetary Outlays $88,798,424
Cheese Quantity 4,017 MT Budgetary Outlays $3,905,189
Other milk products Quantity 7,028 MT Budgetary Outlays $8,603,833
Duration
DEIP was re-authorized until year 2001 in the Uruguay Round Agreements Act of 1994.  The
1996 FAIR Act further extends funding through calendar year 2002.
Trade effects
See Attachment I for statistics.
Title: Mandated Export Sales of Dairy Stocks
Period covered by the notification
The period covered is the fiscal year 1997 (October 1996-September 1997).
Policy objective and/or purpose; Background and authority; Form; To whom and how assistance is
provided
Section 1163 of the Food Security Act of 1985 created a mandated minimum annual level of
export sales of CCC-owned dairy stocks.  Mandated minimum sales were eliminated by the Uruguay
Round Agreements Act of 1994.  The Secretary of Agriculture maintains discretionary authority to
sell CCC-owned dairy stocks into the export market.
Amount
There were no export sales of CCC-owned dairy products during fiscal years 1998, 1999,
2000 or 2001.
Duration
As indicated above, this programme is no longer mandatory.  However, the Secretary has the
discretionary authority to sell CCC-owned dairy stocks into the export market.
Trade effects
See Attachment I for statistics.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 12
Agricultural Support Programmes
Title: Agriculture Income Support and Marketing Assistance for Wheat, Feed Grains
(Corn, Grain Sorghum, Barley, Oats, and Rye), Upland and Extra Long Staple
(ELS) Cotton, Rice, Oilseeds (Soybeans , Sunflower Seed, Flaxseed, Canola,
Rapeseed, Safflower, Crambe, and Mustard Seed), and Price Support for
Peanuts, Milk, Sugar, and Tobacco Programmes.
Period covered by notification
The period covered is fiscal years 1997 and 1998.
Policy objectives
• Stabilize, support, and protect farm income and prices.
• Help ensure adequate supplies of quality food, feed and fibre.
• Assist in the orderly marketing of farm commodities.
Background and authority
These programmes were authorized by the Commodity Credit Corporation (CCC) Charter
Act, the Agriculture Adjustment Act of 1938, as amended, the Agricultural Act of 1949, as amended,
and the Federal Agriculture Improvement and Reform Act of 1996 (“The 1996 Act”).  Theprogrammes were financed by the CCC and admi nistered by the Farm Service Agency (FSA).
The FY 1999 Agricultural Appropriations bill also contained special emergency provisions
for 1998 which are set out separately below.
Programme Descriptions and Actual Expenditures for Period of Notification
(a) Production Flexibility Contract (PFC) Payments.
No changes were made to this programme in the period under notification.Total maximum annual PFC payments were established and fixed by law at the national level
for each of the 7 years of the contract period (see table below).G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 13
Table 1. Production Flexibility Contract Payments by Fiscal Year, 1996-2002, Billion
US$
Amount 1996 1997 1998 1999 2000 2001 2002
StatutoryAmount
15.570 5.385 5.800 5.603 5.130 4.130 4.008
Actual
Amount5.141 6.320 5.672 NA NA NA NA
(b) Nonrecourse Marketing Assistance Loans and Lo an Deficiency Payments (LDPs) for Wheat,
Feed Grains, Upland and ELS Cotton, Rice, and Oilseeds.
Nonrecourse commodity loan programmes and repa yment provisions remained in effect for
wheat, feed grains, upland and extra long staple (ELS) cotton, rice, oilseeds (soybeans, sunflower
seed, flaxseed, canola, rapeseed, safflower, and mustard seed).  Except in the case of ELS cotton,
producers of loan commodities could forgo obtaining  a loan for the commodity  in return for a loan
deficiency payment (LDP).  Alternative loan repa yment provisions were also not available for ELS
cotton.
Actual total expenditures under this programme for 1997 and 1998  totaled $161.3 million
and $3.8 billion, respectively.
Marketing assistance loans for each commodity have a term of 9 months beginning on the
first day of the first month after the month in which the loan is made.  For ELS and upland cotton, the
loans have a term of 10 months beginning on the first day of the month in which the loan is made.
Because the final loan availability date was as late as 31 May 2000 for some 1999-crop
commodities, loan repayments and debt write-off may occur as late as February 2001.  Thus, LDP and
marketing loan programme costs may span three fiscal years for a given year’s crop.
(c) Peanuts.
No changes were made to the way in which this programme was administered in the period
under notification.
For 1997, the national poundage quota was set at 1,133,000 short tons.  For 1998, the national
poundage quota was set at 1,167,000 short tons.
Loan rates for 1997-crop quota and additional peanuts were $610 per short ton ($0.305 per
pound) and $132 per short ton ($0.066 per pound), respectively.  The loan rates for quota peanuts didnot change for the 1998 crop.  The loan rates for 1998-crop additional peanuts were $175 per short ton
($0.0875 per pound).
                                                     
1 Excludes adjustments for deficiency payments for the 1994 and 1995 crops.  Amounts are those
specified in section 113 of the Federal Agriculture Improvement and Reform Act of 1996.
NA = final amount not yet available.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 14
A marketing assessment of 1.15 per cent of the applicable quota or additional peanut loan
rates was collected for the 1997 crop.  For the 1998 crop the marketing assessment was 1.20 per cent.
Actual net expenditures on this programme were negligible for the period under notification.
(d) Dairy Products.
No changes were made to the programme in the period under notification.
The support price of milk was $10.20 per hundredweight (cwt) for calendar year (CY) 1997,
and $10.05 per cwt for CY 1998.
Actual net expenditures on this programme were $29.7 million in FY 1997, and $160.9
million in FY 1998.
(e) Sugar.
During fiscal years 1997-98, sugar loans continued to be issued as nonrecourse commodity
loans.  Sugar loan rates were unchanged at 18 cents a pound, raw value, for raw cane sugar, and22.90 cents per pound for refined beet sugar.  In the event of forfeiture, processors are assessed a
penalty of 1 cent per pound in the case of raw cane sugar (1.072 cents per pound for refined beet
sugar), thus essentially reducing the effective level of price support by about 1 cent per pound.
First processors of sugar paid marketing assessments to CCC at the rates of 0.2475 cents per
pound of raw cane sugar and 0.2654 cents per pound of refined beet sugar.
The sugar programme operates under a “no-cost” provision.  Actual net expenditures on this
programme were -$33.7 million in 1997, and -$29.6 million in 1998.  The negative sign (“-“)
indicates net revenues from the programme.
(f) Wool and Mohair.
By law, the wool and mohair payment programme was terminated on 31 December 1995.The 1999 Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act authorized a mohair recourse loan programme for mohair producedduring or before FY 1999 (see below).  The loan rate was $2.00 per pound.
(g) Honey.
Statutory authority that provided honey pr oducers with a nonrecourse price support loan
programme for the 1995 crop year was not renewed under the 1996 Act.  No changes were made to
reinstate this programme in the period under notification.  However, a recourse loan programme for
honey was implemented for the 1998 and 1999 crops (see below).
(h) Tobacco.
No changes were made to the way in which this programme was implemented in the period
under notification, except that the marketing assessment ended with the 1998 crop of tobacco given
that the legislative authority for those assessments expired at the end of 1997.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 15
National avg. loan level National marketing quota ( mil.lb.)
1997-crop 1998-crop 1997-crop 1998-crop
Flue-cured $1.621/lb $1.628/lb 973.8 807.6Burley $1.760/lb $1.778/lb 704.5 637.8
The tobacco support programme is statutorily mandated to operate at “no net cost” to the
government, and a no-net-cost assessment is imposed on every pound of tobacco marketed.  Until the
1998 crop, an additional marketing assessment of 1 per cent of the loan rate was collected on every
pound of leaf tobacco marketed.
Actual net expenditures on this programme for the 1997- and 1998-crops were - $42.7 million
and - $55.1 million, respectively.  The negative sign (-) indicates net revenues from the programme.
(i) Special Emergency Provisions of the Ag riculture, Rural Development, Food and Drug
Administration, and Related Agencies, Appropriations Act, 1999 (Pub. L. 105-277), enacted
October 1998.
• Emergency Supplemental Income Support for PFC Contract Holders
Market loss assistance (MLA) was provided to PFC contract holders (individuals or
entities) for the 1998 crop year as a post-hoc programme.  Like with PFC payments,
no production of any kind was required as a condition to receive the MLA payments.
Payments were issued in November 1998 to PFC contract holders who were eligible
for fiscal year 1998 PFC payments. The payments were made proportional to the
amount of PFC payments received by such PFC contract holders in fiscal year 1998.
To receive market loss assistance, an individual or entity must have been enrolled inthe 7-year Production Flexibility Contra ct (PFC) programme by 1 August 1996.
The 1999 Act appropriated $2.857 billion for these payments.  Actual payments
totaled $2.811 billion.
• Dairy Income Loss Assistance Programme
Under the 1999 Act, dairy indemnity payments were made available to provide
assistance to dairy farmers.  Producers qualified for the direct cash payments if their
dairy operation marketed milk commercially in the United States anytime during the
fourth quarter of 1998 (1 October 1998 through 31 December 1998).
Eligible dairy producers were able to receive a direct payment per hundred weight
(cwt) on the first 26,000 cwt for milk marketed commercially from the dairy
operation during the 1997 or 1998 calendar year.
The 1999 Act appropriated $200 million for these payments.  Actual payments were
$200 million.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 16
• Emergency Single- and Multi-Year Natural Disaster Relief Payments
The 1999 Act included provisions for emergency financial assistance to farmers who
suffered losses due to natural disasters.  Farmers were eligible for compensationeither for losses suffered to the 1998 crops (single year) or losses in any three or more
crop years between 1994 and 1998 (multi-year).  Farmers could receive payments
under either the single-year or multi-year provisions, but not both.
Assistance was also made available for farmers whose land was flooded for an
extended period of time and for those whose crops suffered multiple outbreaks of
fusarium head blight (scab).
A payment limitation of $80,000 was in effect. No one with an annual gross income
of $2.5 million or more was eligible for this programme.
The 1999 Act appropriated $2.375 billion for this assistance, of which $400 million
was allocated to encourage farmers to buy higher levels of crop insurance in the
future.  Actual expenditures were $1.913 billion.
• Mohair Recourse Loans
A recourse marketing assistance loan was instituted for mohair produced before or
during FY 1999.  The national average loan rate was $2.00/lb, and the loan term was
for one year.  All loans must be repaid, and mohair may not be delivered to CCC in
satisfaction of the loan obligation.
• Honey Recourse Loans
A recourse marketing assistance loan was instituted for the1998-crop of honey.  The
national average loan rate for the 1998 crop was $0.56 per pound for all eligible
honey.  The producer must also pay a loan service fee of $0.9 per pound for honey
pledged as collateral to cover administrative costs to operate the programme.
Repayment of interest is due when the loan is repaid.  All loans must be repaid, andhoney may not be delivered to CCC in satisfaction of the loan obligation.
• Livestock Feed Assistance
Under this provision, $200 million was appropriated for cost-share assistance for
livestock growers who lost to a natural di saster a significant amount of feed grown on
the farm.
Amount
Actual expenditures for each programme are presented at the end of each section.
Duration
The policies described were in effect for 1997 and 1998.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 17
Trade effects
It is difficult to determine to what extent, if any, these programmes have affected trade, given
the existence of other policy instruments that affect agricultural trade.  Moreover, no-net-cost
provisions and/or payment limitations are in effect for all programmes.  See Attachment II for general
production and trade data.
Other Agricultural Programmes
Title:  Expensing of Certain Capital Outlays Related to Agriculture
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To promote soil and water conservation.
Background and authority
Section 175 of the Internal Revenue Code (covering soil and water conservation expenses),
enacted as part of the Revenue Act of 1954, and Section 180 (covering fertilizer expenses), enacted in
1960 as part of Public Law 86-779.
Form
Income tax concession.
To whom and how assistance is provided
Farmers, except for certain farm corporations and partnerships, are allowed to deduct certain
expenditures for fertilizer and other materials used to enrich or condition farmland, as well as for soil
and water conservation measures.  Expensing is allowed, even though these expenditures are for
inventories held beyond the end of the year, or for capital improvements that would otherwise be
capitalized.  The deduction for conservation expenses is limited annually to 25 per cent of thetaxpayer's gross income from farming.
Amount
The revenue loss was $70 million in 1999, $160 million in 2000, and $170 million for 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 18
Title: Expensing of Multiperiod Live stock and Crop Production Costs
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To ease record-keeping for small farm businesses.
Background and authority
Section 263A of the Internal Revenue Code, enacted as part of the Tax Reform Act of 1986.
Form
Income tax concession.
To whom and how assistance is provided
The production of livestock and crops with a production period of two years or less is
exempted from the uniform capitalization rules.  Farmers producing any goods for sale with a
production period of two years or less may elect not to capitalize costs.
Amount
The revenue loss was $85 million in 1999, $110 million in 2000, and $120 million for 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Treatment of Loans Forgiven Solvent Farmers as if Insolvent
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To address certain consequences of the farm credit crisis of the 1980s.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 19
Background and authority
Sections 108 and 1017 of the Internal Revenue Code, enacted as part of the Tax Reform Act
of 1986.
Form
Income tax concession.
To whom and how assistance is provided
Farmers are granted special tax treatment by being forgiven the tax liability on certain
forgiven debt.  Normally, the amount  of loan forgiveness is accounted for as a gain (income) of the
debtor, who must either report the gain or reduce his recoverable basis in the property to which the
loan relates.  If the debtor elects to reduce basis and the amount of forgiveness exceeds his basis onthe property, the excess forgiveness is taxable.  However, in the case of insolvent (bankrupt) debtors,
the amount of loan forgiveness never results in an income tax liability.  Farmers with forgiven debt
are considered insolvent for tax purposes, and thus qualify for income tax forgiveness.  This relief
applies only if at least 50 per cent of the taxpayer's gross receipts for the three tax years preceding the
tax year in which the discharge of indebtedness occurs is attributable to farming.
Amount
The revenue loss was $10 million annually for years 1999, 2000 and 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Capital Gains Treatment of Certain Agricultural Income
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To ensure that when farmland is sold, any immature, unharvested crops growing on the land
are treated for tax purposes as part of the land and not as personal property ready for sale to
customers.
Background and authority
Section 1231 of the Internal Revenue Code.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 20
Form
Income tax concession.
To whom and how assistance is provided
Certain agricultural income, which would normally be taxed as ordinary income, such as
receipts from the sale of unharvested crops sold together with farmland, can be treated as capital
gains.  The maximum income tax rate for individuals was 39.6 per cent in 1999 and 2000 and 39.1 per
cent in 2001.  Long-term capital gains of individual taxpayers are taxed separately from other income,generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least five years and
otherwise eligible for the 10 per cent rate are taxed at an 8 per cent rate starting in 2001.  An 18 per
cent rate will apply to gains otherwise taxable at 20 per cent for assets acquired on or after
1 January 2001 and held for at least five years.
Amount
The revenue loss was $635 million in 1999, $700 million in 2000, and $990 million for 2001.
Duration
Indefinite; this has been a permanent provision since at least 1954.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Exemption from Excise Tax for Tobacco Products Supplied to Their Employees
by Tobacco Product Producers
Period covered by notification
The period covered is the fiscal year 2001.
Policy objective and/or purpose
To permit producers of tobacco products to supply their workers with free cigarettes and other
tobacco products.
Background and authority
Section 5704(a) of the Internal Revenue Code.
Form
Exemption from otherwise applicable excise tax.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 21
To whom and how assistance is provided
Producers of tobacco products may furnish limited quantities of tobacco products for use or
consumption by employees without payment of tax.
Amount
The subsidy per unit amounts to the following: (i) for cigarettes, $17.00 per thousand; (ii) for
cigars, $1.125 to $30.00 per thousand (depending on size); (iii) for snuff, $0.51 per pound; (iv) for
chewing tobacco,  $0.17 per pound; and (v) for pipe tobacco and roll-your-own tobacco,  $0.9567 perpound.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
AUTOMATIZES/ENGINES/MOTORS
Title: Partnership for a New Generation of Vehicles (PNG)
Period covered by the notification
The period covered is fiscal years 2000 and 2001.
Policy objective and/or purpose
The PNG will be terminated on or before 30 September 2002.  It was a cooperative R&D
programme between various agencies of the US Federal Government and, primarily, the United States
Council for Automotive Research (USAR), the members of which are the Daimler Chrysler
Corporation, the Ford Motor Company and General Motors Corporation.  The programme had threemain goals:  (1) to significantly improve US manufacturing competitiveness; (2) to implement
commercially viable innovation from ongoing research on conventional vehicles; and (3) ultimately,
to develop a vehicle which would achieve up to three times the fuel efficiency of today’s comparable
vehicles while maintaining or improving current levels of performance, size, utility and total cost of
ownership, and while meeting or exceeding US Federal safety and emissions requirements.
As opposed to being a discrete, self-contai ned "programme," the PNG was (in both its
conception and its implementation) more of a mechanism for policy coordination of the numerous
partnerships among federal laboratories, automobile manufacturers, universities and various suppliers
to the automotive industry, in which the participants  jointly and cooperatively apply resources to meet
the three programme goals described above.  The variety and complexity of the partnership activities
are such that, in many instances, there may be  no subsidy within the meaning of the Subsidies
Agreement under this programme.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 22
Background and authority
The background and authority for the PNG pr ogramme as a whole is embodied in a
Declaration of Intent entered into in September 1993 between the President of the United States and
USAR and its membership.  Authority for the individual partnership activities which comprise the
PNG stems from a variety of appropriations bills and other laws which support the varied R&D
activities of the participating federal agencies.
Form
Due to the broad and diverse nature of the programme, assistance is provided through a
variety of mechanisms negotiated between the US Government and private sector participants.  Such
mechanisms include contracts, subcontracts, understandings, grants, awards, cooperative research and
development agreements and shared research arrangements.
To whom and how assistance is provided
As noted above, the primary non-governmental participants in the PNG programme are
USAR and its membership.  Assistance was primarily provided to US government laboratories,
universities and other independent research establishments which, for their own research interests,wish to participate in some of the PNG activities.  Moreover, in many of the sponsored R&D
activities, private sector participants represent a wide variety of upstream industries which supply or
have other commercial relationships with the automotive sector, including some firms of foreign
ownership.  The method by which assistance is provided is described above.
Amount
In fiscal year 2000, a total of $150 million was funded for the various PNG-related projects
across the eight participating federal agencies, which determine on an individual basis how and to
which projects monies will be allocated.  In FY 2001, a total of $163  million was funded.
Duration
The PNG initiative commenced in September 1993 and will end on 30 September 2002 .
Trade effects
Insofar as the primary objective of the PNG was the development of a new, exceptionally
fuel-efficient vehicle, it remains at most premature to speculate as to whether the programme would
produce any quantifiable trade effects.  Moreover, given the diversity of knowledge and potential
applications which may arise out of the research conducted under this initiative, the diffuse nature of
the programme’s benefits is apt to make the identification of tangible trade effects at any point in timehighly theoretical.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 23
ENERGY & FUELS
(ENERGY DEVELOPMENT, STORAGE AND TRANSPORTATION
& OTHER RELATED SECTORS)
Title: Solar and Renewable Energy Resources Technologies (1999-2001)
Period covered by the notification
The period covered by the notification is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The mission of the Renewable Energy Resources programme, previously referred to as the
Solar and Renewable Resources Technologies programme, is to lead the national effort to develop
renewable energy technologies and to accelerate their acceptance and use.  The purpose of theprogramme is to improve the Nation’s overall economic, energy security, and environmental health
through the development of clean, competitive power technologies for the 21st century.
The programme’s activities include prototype evaluation and system field tests where
appropriate, to establish a basis for predicting operation and maintenance costs.  Since programmesuccess depends on industry’s ultimate commercialization of the program’s technologies under
development, partnership with industry is e ssential.  These partnerships include industry
co-investment at increasing levels as technologies near the pre-commercialization stage.
The programme utilizes the talents found at the National Laboratories and within the state,
university, and other research organizations across the United States in order to achieve its research
and development objectives.  The programme partners with a number of universities across the
country to conduct both fundamental and applied research.
The notification for 1998 included the Superconductivity Programme, the Geothermal
Programme, the Hydrogen Research progra mme, the Hydropower programme, the Biomass
programme and the Energy Storage Systems programm e.  Since that notification, the activities have
been restructured and renamed, and new activities have been added to the programme.
Sub-programmes are:
Solar Building Technology Research
Photovoltaic Energy Systems
Concentrating Solar Power
Biomass/Biofuels Energy Systems
Wind Energy Systems
Renewable Energy Production Incentive ProgrammeInternational Solar Energy Programme
Geothermal
Hydrogen Research
Hydropower
Renewable Indian Energy Resources
Electric Energy Systems and StorageFederal Building/Remote Power Initiative
Background and authority
This programme is administered by Department of Energy’s (DOE) Office of Energy
Efficiency and Renewable Energy (EERE).  The EERE Office of Power Technologies (OPT)implements most of the programme activities, while the EERE Office of Transportation Technologies
administers the transportation biofuels programme.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 24
Legislative authority derives from:
P.L. 94-163, Energy Policy and Conservation Act (1975)
P.L. 94-385, Energy Conservation and Product Act (1976)
P.L. 95-91,   Department of Energy Organization Act (1997)
P.L. 95-618, Energy Tax Act of 1978
P.L. 95-619, National Energy Conservation Policy Act (1978)
P.L. 95-620, Powerplant and Industrial Fuel Use Act of 1978
P.L. 96-294, Energy Security Act (1980)P.L. 100-12, National Appliance Energy Conservation Act of 1987
P.L. 100-615, Federal Energy Management Improvement Act of 1988
P.L. 101-218, Renewable Energy and Energy Efficiency Technology Competitiveness Act
of 1989
P.L. 101-549,  Clean Air Act Amendments of 1990P.L. 101-575,  Solar, Wind, Waste, and Geotherm al Power Production Incentives Act of 1990
Annual appropriations are contained in:The Energy and Water Development Appropriations Acts for FY 1999, 2000 and 2001The Department of the Interior and Related Agencies Appropriations Acts for FY 1999, 2000,
and 2001
Form
Assistance under the programme is provided through grants, cooperative agreements,
cooperative research and development agreements (CRADA)2 and other forms of collaboration
accomplished through consortium-based activities between government laboratories and private
industry.
To whom and how assistance is provided
Participation in the programme is determined through various competitive procedures, which
are open to all eligible parties.
                                                     
2 The term “CRADA” has a specific meaning as a result of legislation and regulations developed to
implement a variety of US technology promotion and commercialization programmes.  Generally, however, a
CRADA is a negotiated, contractual agreement between a federal agency or agency laboratory and a private
sector partner or partners (including universities and independent research institutions) in which the parties
agree on the designation of personnel, facilities, equipment and other resources to a collaborative R&D activity,as well as to the disposition of any intellectual property which the R&D yields.  A CRADA is just one of severallegal instruments or mechanisms through which government agencies work in partnership with business andacademia in pursuit of shared or complementary R&D objectives.  Examples of other such instruments are
“cooperative agreements,” contracts and grants.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 25
Amount
Programme
Appropriations (approximate dollars in milli ons) including programme direction and funding
of the National Rene wable Energy Laboratory
Total, Solar and Renewable Resources Technologies1999 - 336 2000 - 306 2001 - n/a
Total, Renewable Energy Resources
1999 - n/a 2000- n/a 2001 - 373
Sub-Programmes and Activities
1. The Office of Solar Energy Technologies  sponsors research and development (R&D) that
improves the performance and reliability while reducing the cost of solar technologies that can
harness the sun's energy.  With their inherent flexibility and scalability, the solar programmes supporta tremendous range of applications including large-scale power production, on-site electricity
generation, and thermal energy for space heating and hot water.
Appropriations (approximate dollars in millions)
Solar Building Technology Research
1999 - 3.6  2000 - 1.968 2001 - 3.9
Photovoltaic Energy Systems
1999 - 72.2 2000 - 65.9 2001 -75
Concentrating Solar Power
1999 - 17 2000 - 15.1 2001 - 13.7
2. The Biomass Programme  (also referred to as the Biopower Energy Systems Programme)
and the Biofuels Energy Systems Programme  are major elements that support the Biomass R&D
Act of 2000 by providing baseload renewable electricity and transportation fuel options which offer
substantial environmental benefits to the United States.  The programmes result in technologies which
work toward integrated feedstock and conversion systems that will make biomass energy competitivewith conventional fossil-based options.  The Biomass Power Programme was launched in 1989, and
was notified for fiscal year 1998.
Appropriations (dollars in millions)
Biomass/Biofuels Energy Systems Power Systems
1999 -73.2  2000 - 70.72 2001 - n/aG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 26
Biopower/Biofuels Energy Systems
1999 - n/a 2000 - n/a 2001- 86.2
3. The Wind Energy Systems Programme  helps the United States attain the substantial
economic, environmental, and energy security benefits of expanding the domestic and worldwide use
of wind energy, and of fostering a world-class,  domestic wind energy industry.  The programme
focuses on completing the research, testing, and field verification needed by US industry to fully
develop advanced wind energy technologies, and on coordinating with partners and stakeholders to
overcome barriers to wind energy use.
Appropriations (approximate dollars in millions)
Wind Systems
1999 - 34.8 2000 - 32.5 2001 - 39.5
4. The Renewable Energy Production Incentive  encourages state and local governmental
entities (usually public power electric utilities) and non-profit electric cooperatives to acquire
renewable energy generation resources.  For thes e tax-exempt owners of new renewable energy
generation systems, the programme provides, under the authority of the Energy Policy Act of 1992,
financial incentives that are comparable to the value of either production tax incentives or investment
tax credits available to the private-sector owners of certain types of new renewable energy generation.
Appropriations (approximate dollars in millions)
Renewable Energy Production Incentive Programme
1999 - 4 2000 - 1.5 2001 - 3.9
5. The International Solar Energy Programme  mission is to develop fair and competitive
markets for US companies, by utilizing public/private partnerships, and by establishing mechanismsto increase commercial financing resources for major foreign purchases of US technologies.
During the notification period, the International Renewable Energy Programme  provided
regionally focused technical assistance and information dissemination assistance to energy decision
makers in the developed and developing world.  These efforts promoted the use of US renewableenergy technologies and services.  The programme furthered international discussion and
collaboration with regard to emission and environmental issues.
Appropriations (approximate dollars in millions)
International Solar Energy Programme
1999 - 6.35 2000 - n/a 2001 - n/a
International Renewable Energy Programme
1999 - n/a 2000 - 3.8 2001 - 4.9G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 27
6. The Geothermal Technology Development Programme  works in partnership with US
industry to establish geothermal energy as an econom ically competitive contributor to the US energy
supply, capable of meeting a large portion of US heat and power needs.  In helping to meet thepriority needs of industry, the Programme will focus primarily on exploration and drilling research.
R&D activity under the authority of this programme was commenced as early as 1975, and it was
notified for fiscal year 1998 as the Geothermal Energy Programme.
Appropriations (dollars in millions)
Geothermal
1999 - 28.5 2000 - 23.6 2001 - n/a
Geothermal Technology Development
1999 - n/a 2000 - n/a 2001 - 26.9
7. The Hydrogen Programme  includes research and validation projects for the development of
safe, cost-effective hydrogen energy technologies that support and foster the transition to a hydrogen
energy economy.  DOE works with fuel cell manufacturers to develop hydrogen-based electricitystorage and generation systems that will enhance the introduction and penetration of distributed,
renewables-based utility systems.  This programme was created in its current form following the
enactment of legislation in 1990 and was notified for fiscal year 1998.
Appropriations (dollars in millions)
Hydrogen Research/ Hydrogen Research and Development
1999 - 22.25 2000 - 24.5 2001 - 26.8
8. The Hydropower Programme  improves the technical, economic, and environmental
performance of the Nation's abundant, in-place hydropower resources through collaborative researchand development with industry and other Federal agencies.  Working with industry and other Federal
agencies, the Hydropower Programme's R&D activities support the development of a new generation
of more environmentally-friendly hydropower turb ines.  This programme was created in 1977 and
was notified for fiscal year 1998.
Appropriations (dollars in millions)
Hydropower/Hydropower Development
1999 - 3.25 2000 - 4.9 2001 - 5
9. The mission of the Tribal Energy Programme  is to enable American Indian Tribal
Governments and their entities to gain expertise in energy planning capabilities, particularly for
remote settings, and in developing conventional and renewable energy resources.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 28
Appropriations (dollars in millions)
Renewable Indian Energy Resources
1999 - 4.8 2000 - 3.9 2001 - 6.6
10. The Electric Energy Systems and Storage  programme conducts research and development
of advanced technologies to enhance the reliability of electric power transmission and distribution and
to significantly improve efficiency, reliability, capacity, and power quality of electric generation,
delivery, and end-use in the United States.  The programme activities included transmissionreliability, high temperature superconducting R&D, and energy storage systems.
Appropriations (dollars in millions)
Electric Energy Systems and Storage
1999 - 40.1 2000 - 38.4 2001 - 51.7
High Temperature Superconducting R&D
1999 - 32.1 2000 - 31.4 2001 - 36.8
Energy Storage Systems
1999 - 4.4 2000 - 3.4 2001 - 6.0
11. The  building portion of the Federal Building/Remote Power Initiative  provided financial
cost-sharing assistance to Federal agencies that are seeking to incorporate renewable energy
technologies into their power supply portfolio.  Activities are now conducted under other programmes
including, the Photovoltaic, Wind, Biomass and Solar programmes.
Appropriations (dollars in millions)
Federal Building/Remote Power Initiative
1999 - 4.0 2000 - n/a 2001 - n/a
Duration
The Renewable Energy Resources programme is not subject to any fixed completion date.  Its
continuation is contingent upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: Energy Conservation Programmes -- Transportation Sector
Period covered by the notification
The period covered by the notification is fiscal years 1999, 2000 and 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 29
Policy objective and/or purpose
The DOE EERE Transportation Programme partners  with industry, research organizations,
State governments, and other Federal agencies to support development and use of advanced vehicle
technologies and fuels which reduce demand for petroleum, decrease emissions of criteria air
pollutants and greenhouse gases, and enable the US transportation industry to sustain a strong,
competitive position in domestic and world markets.
The National Energy Policy (May 2001) describes the need to promote renewable energy and
energy efficiency.  The Office of Transportation Technologies (OTT) supports the National EnergyPolicy and EERE strategic goals by conducting long-term research, development, and deployment
programmes which will enable reduced oil consumption.
The transportation programme assists industry through a variety of high-risk research and
development activities, and provides a neutral, third-party platform to help competitors, suppliers, andgovernment organizations reach consensus on programme directions and plans.
Activities under this programme notified for fiscal year 1998 were the Electric Hybrid
Propulsion Programme, the Transportation Materials Programme, the Alternative Fuel Vehicle
Development Programme and the Motor Challenge Program.  Research and development associatedwith the Electric Hybrid Propulsion Programme began in 1974, the Alternative Fuel Vehicle
Development programme began as early as 1976, the Transportation Materials programme began in
1992, and the Motor Challenge programme was initiated in 1993.  These programmes have been
restructured and re-named since the 1998 noti fication.  The sub-programmes within the
Transportation programme are listed and described below.
Background and authority
This programme is administered by DOE’s Office of Energy Efficiency and Renewable
Energy Office of Transportation Technologies (EERE-OTT).
Legislative authority derives from:P.L.93-275,  Federal Energy Administration Act of 1974
P.L. 93-577, Federal Nonnuclear Energy Research and Development Act of 1974
P.L. 94-163, Energy Policy and Conservation Act (1975)
P.L. 94-413, Electric and Hybrid Vehicle Rese arch, Development and Demonstration Act of
1976
P.L. 95-91,  Department of Energy Organization Act (1977)
P.L. 95-238, Title III - Automotive Propulsion  Research and Development Act of 1978
P.L. 96-512, Methane Transportation Research, Development and Demonstration Act of 1980
P.L. 100-494, Alternative Motor Fuels Act of 1988P.L. 102-486, Energy Policy Act of 1992
Annual Appropriations are contained in:Department of the Interior and Related Agenci es Appropriations Acts for FY 1999, FY 2000
and FY 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 30
Form
Assistance under the programme is provided through grants, cooperative agreements,
CRADAs3 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programme is determined through various competitive procedures, which
are open to all eligible parties.
Amount
Programme
Appropriations (approximate dollars in millions)
Total, Energy Conservation, Transportation Sector, including management and planning1999 - 202  2000 - 228.7 2001 - 251.5
Sub-Programmes and Activities
I. Vehicle Technologies R&D
The Vehicle Technologies R&D  sub-programme comprises six areas that are focused on
enabling high-fuel-efficiency and low-emissions advanced vehicles.  The areas of research include
Hybrid Systems R&D, Fuel Cell R&D, Advanced  Combustion Engine R&D, Electric Vehicle R&D
(high-energy batteries), Heavy Vehicle Systems R&D, and programmes for small businesses and
universities called CARAT (Cooperative Automotiv e Research for Advanced Technologies) and
GATE (Graduate Automotive Technology Education), respectively.  All six activities are focused on
advancing enabling technologies and eliminating the barriers to commercialization.
Appropriations (approximate dollars in millions)
Total, Vehicle Technologies R&D
1999 - 125.9  2000 - 138.4 2001 - 159.6
(1) The Hybrid Systems R&D  activity includes research in high power energy storage, advanced
power electronics, ancillaries, and propulsion technol ogy. Hybrid Systems R&D is overarching in that
it sets performance targets for all vehicle technology areas and validates achievement of those targets
in a systems context.
Appropriations (dollars in millions)
1999 - 42.1  2000 - 41.8 2001 - 49.7
(2) The key research and development areas for the automotive  Fuel Cell R&D activity are the
fuel cell stack subsystem, the on-board fuel processing and storage subsystem, the balance-of-plant
                                                     
3 See footnote 2, above.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 31
components (compressors, humidifiers, heat exchangers, sensors, controls), and the fuel infrastructure
(off-board fuel processing, purification and dispensi ng).  These activities are closely coordinated with
DOE/EERE’s Hydrogen Programme.
Appropriations (approximate dollars in millions)
1999 - 33.5 2000 - 36.6 2001 - 41.3
(3) The Advanced Combustion Engine R&D  activity encompasses research on improved
engine and related technologies in these primary areas:  combustion and emissions controls R&D,light-truck engine R&D, heavy-truck engine R&D, and off-highway heavy vehicles.
Appropriations (approximate dollars in millions)
1999 - 37.7 2000 - 46.6 2001 - 53.0
(4) The Electric Vehicle R&D activity is focused on developing lithium-based technologies to
enable 200 mile range electric vehicles.  Current vehicle range is still limited by battery performance
and life, and battery cost remains high.  The Un ited States Advanced Batt ery Consortium (USABC),
under a cost-shared Cooperative Agreement with DOE, continues to work on lithium-based batteries,with goals that will extend the range of electric vehicles by a factor of four when compared to
lead-acid batteries.
Appropriations (approximate dollars in millions)
1999 - 8.8 2000 - 8.7 2001 - 9.0
(5) The Heavy Vehicle Systems R&D  activity seeks to develop, in collaboration with truck
manufacturers and their suppliers, technologies that will reduce non-engine parasitic energy losses
from aerodynamic drag, rolling resistance, friction and wear, underhood thermal conditions, and
accessory loads, as well as ensure powertrain and truck system integration to increase overall vehicle
system energy utilization and efficiency.
Appropriations (approximate dollars in millions)
1999 - 1.5 2000 - 2.9 2001 - 5.0
(6) Early in FY 1998, DOE launched Cooperative Automotive Research for Advanced
Technologies  to ensure that universities and small businesses can fully participate in advanced
automotive R&D activities.
Appropriations (approximate dollars in millions)
1999 2.3 2000 - 1.5 2001 - 1.5
II. Fuels Utilization
The Fuels Utilization R&D  sub-programme, along with partners in the energy and
transportation industries, supports R&D that will provide transportation vehicle users with fuel
options that are cost competitive, achieve high fuel economy, and deliver low emissions.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 32
Appropriations (approximate dollars in millions)
1999 - 17.8 2000 - 21.2 2001 -23.1
1. The Advanced Petroleum Based Fuels (APBF)  activity is essential to the development of
petroleum-based fuels and lubricants that will a llow high efficiency diesel engines for passenger
vehicle, light truck, and heavy truck applications to achieve low emissions with minimal efficiency
penalties while employing the use of advanced after treatment technologies.  It is also paving the way
for inclusion of renewable fuels such as oxygenates and biodiesel, as blends with petroleum-based
clean diesel fuel, to reduce greenhouse gas emissions and enhance energy security.  Other advancedfuels being researched, such as liquids made from natural gas, will facilitate expanded use of domestic
energy reserves to produce transportation fuels.
The APBF activity is implemented through public/private partnerships that help to provide
technical management for the programme.  An example of this is the Advanced Petroleum BasedFuels - Diesel Emission Control (APBF-DEC) project. The APBF-DEC has a steering committee of
government and industry partners from vehicle and engine manufacturers, energy companies,
emission control manufacturers and their trade associations that identifies priorities.  The effort is cost
shared 50/50 between government and industry.  Projects in this area are awarded competitively and
are evaluated annually with industry partners.  In the Alternative Fuels  activity, the environmental
impacts of fuels is evaluated.
Appropriations (approximate dollars in millions)
Advanced Petroleum Based Fuels
1999 - 6.6 2000 - 9.2 2001 - 10.8
Alternative Fuels
1999 - 11.2 2000 - 11.9 2001 - 12.3
III. Materials Technologies
The Materials Technologies  sub-programme supports the development of cost-effective
materials and materials manufacturing processes necessary to successfully commercialize
significantly more fuel-efficient, low-emission transportation vehicles.  This sub-programme is acritical enabler for concepts developed in other Transportation Sector sub-programmes.
Appropriations (approximate dollars in millions)
1999 - 37.4 2000 - 41.6 2001 - 41.5
1. The Propulsion Materials Technology focuses on developing enabling materials for
propulsion components and subsystems needed to achieve higher engine efficiencies, lower
emissions, improved alternative fuel capabilities, and lower specific weight and volume, without
compromising other factors such as cost, safety, and recyclability.  This activity covers all types ofadvanced materials—metals, ceramics, composites, and novel material systems such as ‘smart’
materials.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 33
Appropriations (approximate dollars in millions)
1999 - 8.2 2000 - 8.8 2001 - 8.8
2. Since its beginning in 1991-1992, the R&D portfolio of the Automotive Lightweight
Materials  activity has been planned and coordinated in conjunction with DOE national laboratories
and in partnership with the major US-based automakers (Chrysler group of the Daimler-Chrysler
Corporation, the Ford Motor Company and General Motors Corporation).  Programme planning and
coordination will continue.  During the notification period, general programme planning and
coordination continued with the US Council for Au tomotive Research’s  US Automotive Materials
Partnership and its Automotive Composites Consortium and with automaker members of the
Partnership for a New Generation of Vehicles’ Materials Technical Team.  DOE increased
coordination with efforts supported by Natural Resources Canada.
Appropriations (approximate dollars in millions)
1999 - 23.8 2000 - 24.5 2001 - 27.2
3. At the High Temperature Materials Laboratory,  DOE maintains world class,
state-of-the-art technical, scientific level diagnostic/characterization capabilities for advancedmaterials, develops advanced analytical techniques, and supports the material characterization
requirements of DOE/EERE-OTT.
Appropriations (approximate dollars in millions)
1999 - 5.4 2000 - 8.3 2001 - 5.5
IV. Technology Deployment
Transportation Technologies deployment activities accelerate the adoption and use of
alternative fuel and advanced technology vehicles to help meet national energy and environmental
goals.
The DOE's deployment efforts logically follow and complement successful technology
development by industry and government.  As identified in the National Energy Policy, consumer
education and demonstration activities are critical to accelerating the use of energy technologies.
For the period 2003-2007, the programme plans to promote both alternative fuel vehicles and
advanced technology (high fuel economy) vehicles.
Appropriations (approximate dollars in millions)
1999 - 12.9 2000 - 12.8 2001 - 14.8
V. Cooperative Programmes with States
DOE/EERE-OTT  is pursuing collaborative applied research, development, and field testing
with the States, specifically aimed at achieving common goals.  This collaboration provides
opportunities to leverage funding for important R&D that might not receive adequate support at either
the federal or the state level.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 34
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 1.9 2001 - 2.0
VI. Energy Efficiency Science Initiative
The Energy Efficiency Science Initiative seeks to identify and fund “bridging” research and
development (R&D) that falls between fundamental exploratory science and pre-commercial applied
R&D.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 3.8 2001 - 3.4
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title:  Energy Conservation Programme s – Building Technology, State and
Community Sector
Period covered by the notification
The period covered by the notification is fiscal years 1999, 2000 and 2001.
Policy Objective and/or purpose
In partnership with industry and government, the DOE/EERE Office of Building Technology,
State and Community Programmes (BTS) develops, pr omotes, and integrates energy technologies and
practices to make buildings more efficient and affordable and communities more livable.
Accomplishing this mission through a variety of innovative programmes that leverage non-Federal
resources and expertise will save tens of billions of dollars, create new jobs, and lower the emission of
air pollutants, including greenhouse gases.  The BTS research and development portfolio, as well as
the BTS demonstration and deployment activities, directly address the energy security concern
regarding our national energy supply infrastructure, as well the spikes of fluctuating energy prices andthe resulting energy trade deficits.
The Building Technology programme notified for fiscal year 1998 predates the creation of
DOE in 1978.  The sub-programmes and programme activities are described below.
Background and Authority
These programmes are administered by DOE’s Office of Energy Efficiency and Renewable
Energy, Office of Building Technology, Stat e, and Community Programmes (EERE-BTS).G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 35
Legislative authority derives from:
P.L. 94-163,   Energy Policy and Conservation Act (1975)
P.L. 94-385,   Energy Conservation and Production Act (1976)
P.L. 95-91,     Department of  Energy Organization Act (1977)
P.L. 95-618,   Energy Tax Act of 1978
P.L. 95-619,   National Energy Conservation Policy Act (1978)
P.L. 95-620,   Power Plant and Industrial Fuel Use Act of 1978
P.L. 96-294,   Energy Security Act (1980)P.L. 100-12,   National Appliance Energy Conservation Act of 1987
P.L. 100-615, Federal Energy Management Improvement Act of 1988
P.L. 102-486, Energy Policy Act of 1992
Annual Appropriations are contained in:Department of the Interior and Related Agenci es Appropriations Acts for FY 1999, FY 2000
and FY 2001.
Form
Assistance under the programmes is provided through grants, cooperative agreements,
CRADAs4 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programmes is determined through various competitive procedures, which
are open to all eligible parties.
Amount
Programme
Appropriations (approximate dollars in millions) including management and planning
Total, Building Technology, State and Community Sector1999 - 262.2 2000 - 284.0 2001 - 293.3
Sub-programmes and activities
I. Building Research and Standards
The mission of the Building Research and Standards programme is to significantly enhance
the energy efficiency and environmental quality of US commercial and residential buildings by
improving the energy efficiency of building co mponents through R&D and effectively integrating
those components into the building energy systems through systems design and regulatory activities.
The programme is comprised of three programmes:  the Residential Buildings Integration Programme,
                                                     
4 See footnote 2 above.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 36
the Commercial Buildings Integration Programme, and the Equipment, Materials, and Tools
Programme, supported by Technology Road Maps & Competitive R&D activities.
Appropriations (approximate dollars in millions)
1999 - 60.3 2000 - 75.4 2001 - 62.8
1. The Technology Road Maps & Competitive R&D  activities are used to inform and guide
the three referenced programmes.
Appropriations (approximate dollars in millions)
1999 - 6.4 2000 - 6.9 2001- 6.8
2. The Residential Buildings Integration Programme  improves the energy efficiency in new
and existing homes through R&D, demonstrations, and regulatory strategies.  The programme directly
supports National Energy Policy Recommendations for increased energy efficiency.
Appropriations (approximate dollars in millions)
1999 - 9.6 2000 - 11.9 2001- 11.9
3. The Commercial Buildings Integration Programme  works with competitively selected
industry groups on cost-shared projects that accelerate the development and adoption of new building
technologies and practices, and conducts regulatory activity focusing on commercial building codes.The Commercial Buildings Integration Progra mme directly supports National Energy Policy
Recommendations for improved energy efficiency.  Commercial Building Integration also increases
public-private partnerships through cost-shared R&D pr ojects (5 to 7 projects) with mid- to long-term
results, and through near-term technical assistance to high profile commercial construction projects to
showcase performance-based building excellence.
Appropriations (approximate dollars in millions)
1999 - 2.5 2000 - 4.2 2001 - 4.5
4. The Equipment, Materials, and Tools Programme  promotes the widespread adoption of
energy-efficient products and technologies in both residential and commercial buildings through R&Dand regulatory activities.  The programme directly supports National Energy Policy
Recommendations for increased energy efficiency and Global Climate Change mitigation by focusing
on technologies that can be utilized in new and existing homes to reduce peak and baseload electricity
demand.  The programme includes Building Envelope Research and Development.
Appropriations (approximate dollars in millions)
1999 - 43.0 2000 - 52.3 2001 - 39.7
II. Building Technology Assistance
The four component programmes included within the Building Technology Assistance
Programme are the Weatherization Assistance Programme, the State Energy Programme, theG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 37
Community Energy Programme and the Energy Star programme.  The programmes support
recommendations in the 2001 National Energy Policy.
Appropriations (approximate dollars in millions)
1999 - 187.5 2000 - 189.4 2001 - 210.5
1. The Weatherization Assistance Programme  works to reduce the energy costs of
low-income households by providing cost-effective, energy efficiency improvements while ensuring
the health and safety of people served.
Appropriations (approximate dollars in millions)
1999 - 133.0 2000 - 145.0 2001 - 152.6
2. The State Energy Programme  supports Federal/State partnerships that transfer energy
efficiency technologies to the State and local level through formula grants which allow  states to tailor
energy efficiency programmes to local needs and leverage non-Federal resources.
Appropriations (approximate dollars in millions)
1999 - 33.0 2000 - 33.5 2001- 37.9
3. The Community Energy Programme  provides technical assistance, demonstrations,
training, and education to communities to accelerate the use of innovative and cost-effective energytechnologies, strategies, and methods.
Appropriations (approximate dollars in millions)
1999 - 18.6 2000 - 18.2 2001 - 17.8
4. The Energy Star Programme  is a collaborative effort with the Environmental Protection
Agency and industry that provides its trademark name to commercial buildings and equipment,
windows and home designs, and appliances that are highly efficient and cost-effective.
Appropriations (approximate dollars in millions)
1999 - 2.7 2000 - 2.7 2001 - 2.2
III. Cooperative Programmes with the States
The goal of the DOE/EERE-BTS Cooperative Programmes with States initiative which
started in FY 2000 is to pursue collaborative applied research, development, and demonstration
(RD&D) that accelerates the use of clean energy technologies.  This collaboration provides
opportunities to leverage funding for important RD&D that might not receive adequate support at
either the Federal or the state government level.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 2.0 2001 - 2.0G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 38
IV. Energy Efficiency Science Initiative
The goal of the DOE/EERE-BTS Energy Efficiency Science Initiative is to focus funding and
effort on “bridge” research and development (R&D ) that falls between fundamental exploratory
science and pre-commercial applied R&D and to stimulate R&D in the public and private sectors in
ways that maximize synergies among different research fields, technologies, investigator
communities, and end-use applications.  This approach also seeks to expand existing cooperation
within DOE.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 3.9 2001 - 3.8
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: Energy Conservation – Industry Sector
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The mission of the programme is to improve the energy efficiency, environmental
performance, and productivity of energy-intensive industries by developing and delivering advanced
science and technology options which will:
– lower raw material and depletable energy use per unit of output;
– improve labour and capital productivity; and– reduce the generation of wastes and pollutants.
The R&D portfolio focuses on generic pre-competitive research concentrating on cooperative
projects with nine of the major process and extraction industries in the industrial sector.  These
industries, referred to as the Industries of the Future, include: forest products, steel, aluminium, metalcasting, glass, chemicals, petroleum, mining and agriculture.  In addition, the portfolio includes
crosscutting research and development efforts on technology needs which have been identified in
technology roadmaps across multiple industries, and which form technology bases from which more
industry-specific developments can derive.  The crosscutting activities also include technical
information and outreach programmes, demonstrations, training, and tool development which assistindustry in evaluating and adopting these new energy efficient and pollution preventing technologies
and technique.  Sub-programmes are described below.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 39
The Continuous Fibre Ceramic Composite programme and the Materials and Metals
Processing Metals Initiative notified in 1998, have been restructured and renamed.  Similar activities
are within the Industries of the Future (Specific) Steel Vision and Metal Casting Vision and theIndustries of the Future (Cross-cutting) Emerging Technologies programme activities described
below.
Background and Authority
These programmes are administered by the Department of Energy, Office of Energy
Efficiency and Renewable Energy, Office of Industrial Technologies (OIT).
Legislative authority derives from:P.L. 102-486, Energy Policy Act of 1992
P.L. 94-163, Energy Policy and Conservation Act (1975)P.L. 94-385, Energy Conservation and Production Act (1976)
P.L. 95-91, Department of Energy Organization Act (1977)
P.L. 95-618, Energy Tax Act of 1978
P.L. 95-619, National Energy Conservation Policy Act (1978)
P.L. 95-620, Powerplants and Industrial Fuel Use Act of 1978P.L. 96-294, Energy Security Act (1980)
P.L. 100-12, National Appliance Energy Conservation Act of 1987
P.L. 100-615, Federal Energy Management Improvement Act of 1988
P.L. 101-218, Renewable Energy and Energy Efficiency Technology Competitiveness Act of
1989P.L. 101-549, Clean Air Act Amendments of 1990
P.L. 101-575, Solar, Wind, Waste, and Geotherm al Power Production Incentives Act of 1990
P.L. 93-577, Federal Non-nuclear Energy Research and Development Act of 1974
Annual Appropriations are contained in:Department of the Interior and Related Agenci es Appropriations Acts for FY 1999, FY 2000
and FY 2001.
Form
Assistance under the programmes is provided through grants, cooperative agreements,
CRADAs5 and other forms of collaboration accomplished through consortium-based activities
between government laboratories and private industry.
To whom and how assistance is provided
Participation in the programmes is determined through various competitive procedures, which
are open to all eligible parties.
                                                     
5 See footnote 2 above.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 40
Amount
Programme
Appropriations (approximate dollars in millions) including management and planning
Total, Industry Sector1999 - 162.8 2000 - 175.2 2001 - 146.0
Sub-programmes and activities
I. Industries of the Future (Specific)
DOE/EERE OIT's Industry of the Future strategy aligns its resources with its principal
customers -- the energy- and waste-intensive indust ries which have developed industry-wide visions
and roadmaps on improving their energy and environmental performance.  These industries – steel,
aluminium, glass, metal casting, forest products, chemicals, petroleum, agriculture, and mining –
account for roughly three-quarters of all US industrial energy use and for 75 per cent to 90 per cent of
manufacturing wastes for most waste streams.  The Industries of the Future (Specific) programmesupports cost-shared research, development, and demonstration in advanced technologies to improve
the energy efficiency and environmental performance of America's most energy- and waste-intensive
industries.
Appropriations (approximate dollars in millions)
Total, Industries of the Future (Specific)
1999 - 56.4 2000 - 66.0 2001 - 71.8
(1) During the notification period, twenty universities, 11 national laboratories, 10 suppliers, two
research institutes and over 30 forest and paper companies partnered with the DOE toimplement the Forest and Paper Products  industry vision.
Appropriations (approximate dollars in millions)
1999 - 11.7 2000 - 12.1 2001 - 11.8
(2) The  Steel Vision  initiative was launched in 1986, and was previously notified for FY 1998.
Programme efforts include projects to reduce energy use and raise industry productivity
through:  increased use of net shape casting processes, improved sensing and controls of the
major energy intensive unit processes, and increased use of iron- and steel-making byproductsto reduce use of virgin raw materials.  In 1999, in collaboration with the American Iron and
Steel Institute, six new R&D projects were initiated to address critical R&D needs.
Appropriations (approximate dollars in millions)
1999 - 10.3 2000 - 10.6 2001 - 10.3
(3) The Aluminium Vision  programme activity assists the aluminium industry to continually
improve its energy and environmental performance.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 41
Appropriations (approximate dollars in millions)
1999 - 7.9 2000 - 10.6 2001 - 10.8
(4) The Metal Casting Vision  programme activity funds research in industry-defined areas for
manufacturing technologies, materials technologies, products and markets, and environmental
technologies.
Appropriations (approximate dollars in millions)
1999 - 5.7 2000 - 5.8 2001 - 5.5
(5) The Glass Vision  programme activity funds research in production efficiency, energy
efficiency and conservation, environmental protections and recycling and deploymentlogistics.
Appropriations (approximate dollars in millions)
 1999 - 4.7 2000 - 4.8 2001 - 4.6
(6) The Chemicals Vision  programme activity funds research in new chemical sciences and
engineering, computational technologies, and chemical synthesis technologies.
Appropriations (approximate dollars in millions)
1999 - 12.1 2000 - 12.5 2001 - 12.1
(7) The Petroleum Vision  programme activity funds research to address process efficiency for
downstream applications.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 2.0 2001 - 2.6
(8) The Mining Vision  programme activity funds research in characterization and processing for
exploration and excavation.
Appropriations (approximate dollars in millions)
1999 - 2.0 2000 - 3.0 2001 - 3.5
(9) The Agriculture Vision  programme activity funds research in bio-based industrial
feedstocks.
Appropriations (approximate dollars in millions)
1999 - 2.0 2000 - 4.0 2001 - 6.6
(10) The Supporting Industries  programme activity funds technology R&D that is not supported
by other sub-programmes.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 42
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - n/a 2001 -1.6
II. Industries of the Future (Crosscutting)
Industries of the Future (Crosscutting) works with Industries of the Future industry partners
and suppliers to conduct cost-shared RD&D on technologies that have potential applications across
the nine vision industries as well as provide th e immediate tools and technical assistance industry
needs to expedite the implementation of energy-efficient, clean manufacturing technologies.
Appropriations (approximate dollars in millions)
1999 - 98.1 2000 - 94.4 2001 - 59.7
(1) The Industrial Materials for the Future (IMF)  programme activity had no activities in
FY 2001, but will continue in FY 2002 and FY 2003.
Appropriations (approximate dollars in millions)
1999 n/a 2000 n/a 2001 - n/a
(2) The Combustion  programme activity supported research and development in high-efficiency
combustion systems and industrial gasification.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 n/a 2001 - 14.4
(3) The Sensors & Controls  programme activity supported research and development and field
demonstrations.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - n/a 2001 - 3.7
(4) The Industrial Technical Assistance (Best Practices and Industrial Assessment Centres)
programme activity supported engineering students and manufacturers, including in motors
and compressed air and steam activities.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - n/a 2001 - 15.0
(5) The Enabling Technologies  programme activity included support for engineered ceramics
and continuous fibre ceramic composite, advanced industrial materials, sensors and controls,and combustion systems research.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 43
Appropriations (approximate dollars in millions)
1999 - 18.9 2000 - 26.0 2001 - 30.5
(6) Distributed Generation
This programme seeks to develop: 1) new high-efficiency, industrial power generation/
cogeneration systems including micro-turbines, and reciprocating engines and;  2) industrial
distributed generation systems (utility and Industries of the Future R&D partnerships).
Appropriations (approximate dollars in millions)
1999 - 50.1 2000 - 27.3 2001 - n/a
(7) Financial Assistance
The Office of Industrial Technologies (OIT) Financial Assistance Programme helps
independent inventors, small businesses, and indust ry who lack the funds an d/or know-how to move
promising energy-saving and energy production technologies from the research bench to the
marketplace.  Technologies face a tremendous barrier to acceptance unless this important and uniqueassistance is provided at the make-or-break intersection on the road to technology commercialization.
The Financial Assistance Programme provides critical financial assistance in the form of competitive
grants to develop and deliver clean, energy-saving technologies; and leverage financial and
non-financial resources in cooperation with industry. Most important, these innovations can impact
bottom-line performance and provide a sustainable competitive advantage for US industry.  Theprogramme works with Industries of the Future industry partners and suppliers to conduct cost shared
research and demonstration projects that have a broad range of applications and benefits that will
significantly reduce energy use, minimize waste and increase productivity in specific or multiple
vision industries.  Programme components include the Inventions and Innovation (I&I) Programme
and the National Industrial Competitiveness through Energy, Environment, and Economics (NICE3)
Programme that make a real difference by providing modest levels of support, at the right time, to
speed the development of new energy-saving, environmentally friendly technologies anddemonstrating their potential savings and commercial value.
Appropriations (approximate dollars in millions)
1999 - 10.5 2000 - 10.3 2001 - 10.2
(8) Technical Assistance
The integrated delivery programme provides a means of bringing the full range of tools,
technical assistance and technology to thousands of plant sites.  The Office of Industrial Technologies(OIT) calls this mechanism integrated delivery because information and technology are delivered at
the corporate, managerial, technical, and plant levels of US industry.  This new approach will have an
important role in launching new industrial technologies from the research and development stage to
the manufacturing plant where the technology can be used to boost the productivity and
competitiveness of US industry.  In this integrat ed delivery process, the OIT works with industrial
firms to host a plant-level showcase of as many OIT and DOE technologies as possible.  The
showcase demonstrates successful technologies to other companies and increases awareness of and
confidence in these technologies.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 44
Appropriations (approximate dollars in millions)
1999 - 18.6 2000 - 19.7 2001 - 15.9
III. Cooperative Programmes with States
The DOE/EERE-OIT Cooperative Programme with  States pursues collaborative applied
research, development and demonstration (RD&D) that utilizes important federal-state partnerships to
accelerate the use of energy efficiency technologies in energy-intensive industries.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 2.0 2001 - 2.0
IV. Energy Efficiency Science Initiative
The DOE/EERE-OIT Energy Efficiency Science Initiative seeks to identify and fund
“bridging” research, development and demonstration (RD&D) that falls between fundamental
exploratory science and pre-commercial applied RD&D.
Appropriations (approximate dollars in millions)
1999 - n/a 2000 - 3.9 2001 - 3.8
Duration
The programme is not subject to any fixed completion date.  Its continuation is contingent
upon ongoing annual appropriations and authorizations by Congress.
Trade Effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
Title: The Oil Programme
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The Oil Programme contains four broad programme objectives:
(1) Exploration and Production - to identify and address technology and methodology gaps in
reservoir characterization, extraction research, exploration and drilling, and technology
transfer;
(2) Field Demonstrations - to address common production problems associated with specific
types of reservoirs, and demonstrate solutions in the field;G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 45
(3) Downstream Processing - to develop cost-effective and cleaner heavy oil and residual
upgrading and processing technologies to maximize the output of transportation fuels;
(4) Environmental Research - to reduce environmental costs to operators while improving
environmental performance.
Background and authority
The Oil programme is administered by the DOE Office of Fossil Energy.  Legislative
authority for the programme derives from Title XX, Section 2011 of the Energy Policy Act of 1992.
Form:  to whom and how assistance is provided
Using a system of competitive procurement, assistance was provided through various kinds of
cooperative agreements and CRADAs6 to both independent oil producers and major petroleum
companies, as well as firms from service sectors associated with the petroleum industry.
Amount
Appropriations (approximate dollars in millions)
1999 - 47.3 2000 - 57.2 2001 - 66.9
Duration
The programme was in existence at the time of DOE’s creation in 1978.  While it is not
subject to any fixed completion date, its continuation is contingent upon ongoing annual
appropriations by the Congress.
Trade effects
In light of the scope and nature of the activities being assisted, it is not possible to determine
what, if any, trade effects may ever result from this programme.
Title: The Natural Gas Programme
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The Natural Gas programme is aimed at furthering the following four policy objectives:
(1) Exploration and Production - to develop a new generation of technologies to reduce operating
costs and ensure a long-term supply of natural gas;
(2) Delivery and Storage - to improve existing, and develop new, technologies and information
models to increase the efficiency and reliability of the natural gas system;
                                                     
6 See footnote 2.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 46
(3) Processing and Utilization - to upgrade low quality gas to pipeline use and convert to liquid
form natural gas that is too remote to be marketable;
(4) Environmental Research - to reduce environmental costs to operators while improving
environmental performance.
Background and authority
The programme is administered by DOE’s Office of Fossil Energy.  Legislative authority for
the programme stems from Title XX, Section 2013 of the Energy Policy Act of 1992.
Form:  to whom and how assistance is provided
Using a system of competitive procurement, assistance was provided through various kinds of
cooperative agreements and CRADAs7 to chemical manufacturers, pipe producers, private research
groups and various equipment manufacturers.
Amount
Appropriations (approximate dollars in millions)
1999 - 71.0 2000 - 30.8 2001 - 45.0
Duration
The programme was in effect at the time of DOE’s establishment in 1978.  While no
completion date has been set, continuation of the programme is contingent upon ongoing annual
appropriations by the Congress.
Trade effects
In light of the scope and nature of the activities being assisted, it is not possible to determine
what, if any, trade effects may ever result from this programme.
Title: The Clean Coal Technology Demonstration Programme
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The general purpose of the Clean Coal Technology Demonstration Programme is to
demonstrate a new generation of advanced coal-based technologies which significantly advance the
efficiency and environmental performance of either new or existing facilities such that the most
promising technologies can successfully be applied toward commercial and operational uses.Generally, the programme is intended for the development of technologies that have a
moderate-to-significant risk of not achieving commercialization in the absence of outside support.  To
                                                     
7 See footnote 2.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 47
date, much of the work undertaken under this programme has focused on electrical power generator
applications.
Background and authority
This programme is implemented by the Office of Fossil Energy at the DOE.  The legislation
authorizing the programme is found in Public Law 99-190, the Joint Resolution Making Further
Continuing Appropriations for Fiscal Year 1986 and for Other Purposes (19 December 1985).  Annual
funding has been available under appropriations laws for the Department of the Interior and Related
Agencies enacted in various years since 1985.
Form
Participation in the programme is primarily implemented through cost-shared cooperative
agreements.  The DOE reimburses participants for a fixed percentage of allowable costs, as specifiedin each agreement.  DOE’s contribution to a project cannot exceed 50 per cent of allowable costs, and
the DOE cost share of each successful demonstration project is later repaid through a 20-year
recoupment plan based on future commercial sales of the technology.
To whom and how assistance is provided
Assistance to coal mining/processing/refining firms and related equipment/technology
suppliers is determined on the basis of competitively assessed proposals.  Of 38 projects in the
programme, 8 remain active.  Fourteen of these projects involve foreign firms as partners or as
licensors of the technology being used.
Amount
There have been no new project obligations since fiscal year 1998.  In FY 1999, $16.2 million
was available for administration, and $15 million was available for administration in FY 2000.  The
net amount of funds available for fiscal year 2001 was $9 million, less $20 thousand rescinded as part
of a general reduction.
Duration
The Clean Coal Technology Demonstration programme was initiated in 1986.  Programme
assistance for the last project authorized by this programme was awarded in fiscal year 1996, whileR&D activities conducted under all projects are scheduled to be completed by 2007.
Trade effects
In light of the scope and nature of the technology activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.  However, the
International Energy Agency projected in 2000 that world wide demand for coal through 2020 will
increase by approximately 1000 million tons of oil equivalent, equal to an annual average increase of
1.7 per cent.
The development, dissemination and introduction of clean coal technologies should help the
users and beneficiaries of such technologies to play a significant role in this growing market.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 48
Title: Expanding of Exploration and Development (E&D) Costs for Oil, Gas and other
Fuels
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the development of domestic oil, gas and coal resources.
Background and authority
In the case of successful investments in domestic oil and gas wells, intangible drilling costs,
such as wages, the costs of using machinery for grading and drilling and the costs of unsalvageablematerials used in constructing wells, may be expensed for tax purposes rather than amortized over the
productive life of the property.  Integrated oil companies may currently deduct only 70 per cent of
such costs and amortize the remaining 30 per cent over five years.  The same rule applies to the
exploration and development costs of surface stripping and the construction of shafts and tunnels for
other fuel minerals.  The expanding provision is authorized under sections 263(c), 291, 616-617,57(2), and 1254 of the Internal Revenue Code of 1986.  The expanding of intangible drilling costs was
originally established in a 1916 Treasury regulation with the rationale that such costs were ordinary
operating expenses.  Limitations on expanding for integrated oil companies were applied in 1976 and
later years.
Form
Income tax concession.
To whom and how assistance is provided
Fuel mineral producers are permitted accelerated deductions from taxable income.
Amount
There was no revenue loss in 1999.  The revenue loss was $20 million in 2000 and
$50 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 49
Title: Excess of Percentage Over Cost Depletion for Oil, Gas and Other Fuels
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To stimulate the supply of oil and gas, compensate producers for the high risks of
prospecting, and relieve the tax burdens of small-scale producers.
Background and authority
Independent ( i.e., non-integrated) fuel mineral producers and royalty owners are generally
allowed to take percentage depletion deductions rather than cost depletion on limited quantities ofoutput for tax purposes.  Under cost depletion, outlays are deducted over the productive life of the
property based on the fraction of the resource extracted.  Under percentage depletion taxpayers deduct
a percentage of gross income from mineral production at rates of 15 percent for oil, gas and oil shale,
and 10 per cent for coal.  The deduction is limited to 50 per cent of net income from the property,
except for oil and gas where the deduction can be 100 per cent of net property income.  For domesticproduction from marginal wells, the 100 per cent of net income limitation has been suspended for
taxable years before 1 January 2004.  Additionally, the percentage depletion deduction for all oil and
gas properties may not exceed 65 per cent of the taxpayer's overall income and is limited to 365,000
barrels per year per taxpayer.  Production from geothermal deposits is eligible for percentage
depletion up to 65 per cent of net income, but with no limit on output and no limitation with respect toqualified producers.  Unlike depreciation or cost depletion, percentage depletion deductions can
exceed the cost of the investment.
Percentage depletion is authorized under sections 611-613, 613A, and 291 of the Code.
Percentage depletion for oil and gas goes back to 1918 or before and was extended to coal and most
other minerals in 1932.  The Tax Reduction Act of 1975 eliminated the percentage depletion
allowance for major oil and gas companies and reduced the rate for independents to 15 per cent for1984 and beyond.
Form
Income tax concession.
To whom and how assistance is provided
Independent fuel mineral producers and royalty owners are permitted deductions from taxable
income for percentage depletion.
Amount
A deduction from income is allowed for the greater of cost or percentage depletion.
Percentage depletion is 15 per cent of revenue for independent (smaller) oil and gas producers and10 per cent for coal producers.  The revenue loss was $0.26 billion in 1999, $0.34 billion in 2000, and
$ 0.25 billion in 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 50
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Alternative Fuel Production Credit
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To provide incentives for the private sector to increase the development of alternative
domestic energy resources because of concern over oil import dependence and national security.
Background and authority
A tax credit of $3 per barrel (in 1979 dollars) of oil-equivalent production is provided for
several forms of alternative fuels.  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).  The credit isauthorized under section 29 of the Internal Revenue Code as was instituted as part of the Crude Oil
Windfall Profit Tax Act of 1980.
Form
Income tax concession.
To whom and how assistance is provided
Producers and royalty owners of qualifying production are permitted credits against federal
income tax.
Amount
The revenue loss was $1.0 billion in 1999, $1.0 billion in 2000 and $ 0.9 billion in 2001.
Duration
For most qualifying fuels, the production tax credit is available through 2002, provided that
the wells were drilled before 1993.  For gas produced from biomass, and synthetic fuels produced
from coal or lignite, the credit is available through 2007, provided that the facility is placed in service
before July 1998.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 51
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Capital Gains Treatm ent of Royalties on Coal
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the development of the domestic coal industry.
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Internal
Revenue Code.   When the capital gain rate is below the re gular tax rate, the owner is not entitled to
percentage depletion provided in section 613 of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Sales of certain coal under royalty contracts can be treated as capital gains for tax purposes.
The maximum income tax rate for individuals on ordinary income was 39.6 per cent in 1999 and
2000, and 39.1 per cent in 2001.  Long-term capital gains of individual taxpayers are taxed separately
from other income, generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least
five years and otherwise eligible for the 10 per cent tax rate are taxed at an 8 per cent rate starting in2001.  An 18 per cent rate will apply to gains otherwise taxable at 20 per cent for assets acquired on
or after 1 January 2001and held at least five years.
Amount
The revenue loss was $65 million in 1999, $70 million in 2000, and $100 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 52
Title: Enhanced Oil Recovery (EOR) Credit
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To increase the domestic supply of oil, to reduce the demand for imported oil, and to enhance
the energy security of the United States.
Background and authority
An EOR tax credit is provided equal to 15 per cent of the taxpayer's costs for tertiary oil
recovery on projects in the United States.  Qualifying costs include tertiary injectant expenses,intangible drilling and development costs on a qualified enhanced oil recovery project, and amounts
incurred for tangible depreciable property.  Thus, this credit encourages use of tertiary methods in
situations where it would not be profitable otherwise.  The EOR credit may not exceed taxpayer's net
income tax in excess of 25 per cent of net regular tax liability above $25,000 or the tentative
minimum tax.  The EOR tax credit is authorized under section 43 of the Code and was enacted as partof the Omnibus Budget and Reconciliation Act of 1990.
Form
Income tax concession.
To whom and how assistance is provided
Petroleum producers and royalty holders applying approved tertiary petroleum recovery
methods receive a credit against federal income tax.
Amount
The revenue loss was $225 million in 1999, and $310 million annually in 2000 and 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: New Technology Credit: Solar and Geothermal Energy Facilities
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 53
Policy objective and/or purpose
To reduce US consumption of oil and natural gas by encouraging the commercialization of
renewable energy technologies, to reduce dependence on imported oil, and to enhance national
security.
Background and authority
A tax credit of 10 per cent of the basis of each energy property placed in service during any
taxable year is available for investment in solar and geothermal energy facilities.  The tax credit isauthorized by sections 46 and 48 of the Internal Revenue Code.  Business tax credits were part of the
Energy Tax Act of 1978 and were altered in subsequent legislation.  The Energy Policy Act of 1992
made the credit permanent.
Form
Income tax concession.
To whom and how assistance is provided
The credit reduces income taxes for non-utility taxpayers that invest in qualifying equipment.
Amount
The annual revenue loss was less than $100 million in 1999, 2000 and 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Alcohol Fuel Credit and Partial Exemption from Federal Excise Tax on Gasoline
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the substitution of alcohol fuels produced from renewable sources for gasoline
and diesel fuel.
Background and authority
This provision exempts gasohol, a motor fuel composed of at least 10 per cent alcohol
(including methanol) which is not produced from petroleum, natural gas, coal, or peat, from 5.4 cents
(6.0 cents for methanol) of the 18.4 cents per gallon Federal excise tax on gasoline.  The exemption isG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 54
reduced to 5.3 cents for the period 2001-2002, 5.2 cents for 2003-2004, and 5.1 cents for 2005-2007.
Smaller exemptions are allowed for motor fuel with lower alcohol content.  There is a corresponding
income tax credit for alcohol used as a fuel in applications where the excise tax is not assessed.  Thiscredit is equal to 54 cents per gallon for alcohol (60 cents for methanol) used as a  fuel.  The 54-cent
credit is reduced  to 53 cents per gallon for 2001-2002, to 52 cents in 2003-2004 and 51 cents in
2005-2007.  In addition, small producers of ethanol are eligible for a 10 cent per gallon income tax
credit.  The credit is included in a taxpayer’s income.
The alcohol fuel credits are authorized by sections 38 and 40 of the Internal Revenue Code.
The excise tax exemptions are authorized by sections 4041, 4081, and 4091 of the Code.  The alcoholfuels mixture credit and the pure alcohol fuels credit were enacted as part of the Crude Oil Windfall
Profit Tax of 1980, at the rate of 40 cents per gallon for alcohol that was 190 proof or more, and
30 cents per gallon for alcohol between 150 and 190 proof.  The credits were increased in 1982 and
1984.  The Omnibus Reconciliation Act of 1990 reduced the credits to 54 cents and 40 cents for
ethanol and ethanol blends and introduced the 10-cent-per-gallon income tax credit for small ethanol
producers.  In 1998, the Transportation and Equity Act for the 21 st Century reduced the alcohol fuel
credit and excise tax exemption, as described above.
Form
Income tax concession and reduced excise tax rates on fuels containing alcohol.
To whom and how assistance is provided
The credits reduce federal income tax of qualifying producers and blenders.  The seller of
alcohol fuels containing at least 85 per cent alcohol derived from natural gas pays the applicable,
lower motor fuel excise tax rate.  The blender of ethanol-based fuels (and methanol not produced from
petroleum, natural gas, coal or peat) who mixes ethanol or another qualified alcohol with gasoline or
diesel fuel to produce gasohol or diesohol may purchase gasoline or diesel fuel from a seller at a
terminal rack at excise tax-reduced rates or receive a refund if he later mixes fully taxed fuels with
alcohol; these mixtures must contain at least 5.7 per cent alcohol to enjoy the favorable excise tax
treatment.
Amount
The alcohol mixture (or blender’s) credit and the pure alcohol fuel credit is 54 cents per
gallon of ethanol (60 cents for methanol) or at least 190 proof, and 40 cents per gallon of alcoholbetween 150 and 190 proof (45 cents for methanol).  The 54-cent  credit for ethanol is reduced to
53 cents for the period 2001-2002 and the 40 cent credit for ethanol is reduced to 39.26 cents for the
period 2001-2002.  The small ethanol producer credit is 10 cents per gallon of ethanol.  The annual
revenue loss was $15 million for the alcohol fuel credit in fiscal year 1999, $20 million in fiscal year
2000 and $30 million in fiscal year 2001.
In lieu of the blender’s credit, fuel ethanol bl enders may claim an excise tax exemption.  The
annual revenue loss for the excise tax exemption was $760 million in fiscal year 1999, $840 million in
fiscal year 2000 and $990 million in fiscal year 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 55
Duration
The credits expire at the end of the year 2007; the reduced excise tax rates expire
30 September 2007.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title : Credits for Electricity Production from Wind, Biomass, and Poultry Waste
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the development and utilization of electric generating technologies that use
specified renewable energy resources, as opposed to conventional fossil fuels.
Background and authority
Taxpayers are allowed a 1.5-cent credit (adjusted for inflation) per kilowatt hour for
electricity produced from qualified wind energy, "closed-loop" biomass and poultry waste.  The creditis indexed for inflation after 1992 and was 1.7 cents per kilowatt hour in 2001.  The electricity must
be produced from a facility owned by a taxpayer and it must be sold to an unrelated third party.  The
credit is allowed for the first ten years of production from a new facility.  The credit applies to
electricity produced by a wind energy facility placed in service after 31 December 1993, and before
1 January 2004, to electricity produced by a closed-loop biomass facility placed in service after
31 December 1992, and before 1 January 2004, and to a poultry waste facility placed in service after
December 31, 1999, and before 1 January 2004.  The provision for wind and biomass was adopted aspart of the Energy Policy Act of 1992 and was extended to poultry waste in the Tax Relief Extension
Act of 1999.  This provision is authorized in section 45 of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
The credit reduces federal income taxes for taxpayers producing electricity from wind,
biomass and poultry waste.
Amount
The amount of the credit is $ 0.015 per kilowatt hour (adjusted for inflation), produced from
qualified wind, biomass or poultry waste.  The credit equalled $0.017 per kilowatt hour in 2001.  The
annual revenue loss was less than $100 million in 1999, 2000 and 2001. G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 56
Duration
The tax credit applies to new facilities placed in service before 2004.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
FISHERIES
Title:  Fisheries Finance Programme (FFP)
Prior to 1996, this programme was known the Fisheries Obligation Guarantee (FOG)
Programme.
Period covered by the notification
The period covered is fiscal years 1997-2001.
Policy objective and/or purpose
The purpose of FFP is to provide fixed-rate financing with a term equal to the estimated
useful life of the equipment financed.  The predecessor programme – the FOG Programme –  whichoperated from 1972 through 1990, provided government-backed loan guarantees to the US
commercial fishing sector for the construction, reconstruction, replacement and, under certain
circumstances, the purchase of fishing vessels.  Since 1991, the programme has been barred by
NOAA policy and Congressional directives from financ ing any project that could be construed to lead
to overcapitalization of any fishery.  In 1994, the programme’s regulations were amended to reflect
this change in policy.
In 1996, the FOG Programme began providing direct loans, and the name of the programme
was changed to the Fisheries Finance Programme.  At this time, FFP lending authority was extended
to include aquaculture, vessel buybacks, Individua l Fishing Quota (IFQ) purchases (limited to the
Halibut and Sablefish fishery) and Community Development Quota loans.
Background and authority
Background is provided above.  The statutory authority for the FOG Programme and FFP is
the Merchant Marine Act of 1936, as amended.  This programme is administered by the National
Marine Fisheries Service (NMFS).
Form
The FFP programme provides direct loans to the fishing industry.  The interest rates charged
on FFP loans are 2 percentage points above comparable maturity Treasury Bond yields as of the dateof the loan closing.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 57
To whom and how assistance is provided
Under the FFP, loans are provided directly to fishermen to finance any of the activities listed
above.
Amount
In light of the many loans currently outstanding, and variations in amortization schedules and
interest rates, the calculation of any subsidy amount, and especially the subsidy per unit, is not readily
attainable.  Below is a table showing the total amount of loans  that have been authorized since 1997.
(If this programme provided a subsidy, the bene fit would be based on the difference between the
interest rate charged under the programme and the amount the firm would pay on a comparable
commercial loan.  The benefit is not the principal amount of the loan.)
FFP LOAN CEILINGS (IN MILLIONS OF DOLLARS)
TYPE OF LOAN FY'97 FY'98 FY'99 FY'00 FY'01
Traditional $25 $24 $24 $24 $19
Halibut/Sablefish IFQ $0 $0 $5 $5 $5
Community Development Quota $0 $0 $25 $0 $0
NE Multispecies $23 $0 $0 $0 $0
Pollock Buyback $0 $0 $75 $0 $0
It is important to note, that due to the relatively high interest rates charged on these loans and
the relatively low default rate, FFP is a self-financing programme.  In other words, the programme
historically has not resulted in a net outflow of government funds.
Duration
Indefinite.
Trade effects
Since 1991 , the FFP has been barred by NOAA policy and Congressional directives from
financing any project that could be construed to lead to overcapitalization of any fishery.  Because of
this policy, and because any subsidy element that might be attributable to this programme is likely to
be small or nonexistent, the trade effects from this programme are likely to be minimal, if any.
Title: Saltonstall-Kennedy Grant Programme:   Fisheries Research and Development
Period covered by the notification
The period covered is fiscal year 2000.
Policy objective and/or purpose
This programme uses funds derived from duties collected on fishery imports to fund a wide
range of research and grants that mostly support effective conservation and management of USfisheries by increasing the biological, economic, and social information needed for sound
management.  The large majority of funded projects are not directed at assisting industry; however, a
small number of grants or a small percentage of certain grants and projects funded under theG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 58
programme do benefit industry, and, thus, in the interests of transparency, this programme has been
included.
Background and authority
The legislative authority for this programme goes back to the Saltonstall-Kennedy Act of
1954.  However, the current grant programme was established by the American Fisheries Promotion
Act of 1980, which amended the Saltonstall-Kennedy  Act ((15 U.S.C. 713c-3(c)).  The National
Marine Fisheries Service administers the programme.
Form
Grants are awarded annually on a competitive basis.
To whom and how assistance is provided
This programme is open to: citizens or nationals of the US; citizens of the Northern Mariana
Islands (NMI), Republic of the Marshall Islands,  corporations, partnerships, associations, or other
non-Federal entities, non-profit or otherwise (including Indian tribes) if such entity is a citizen of the
US or NMI within the meaning of section 2 of the Shipping Act of 1916, as amended.  Federalemployees and Fishery Management Councils and their employees are ineligible.  Projects are
selected for funding through a competition/call for proposals announced in the Federal Register .
Amount
It is difficult to estimate a subsidy per unit for a diverse R&D grant programme. Twenty
proposals were funded in fiscal year 2000 totaling approximately $1.68 million.  Of this amount, only
an estimated $150,000 could be considered to convey a benefit to the US industry.
Duration
Indefinite.
Trade effects
The trade effects of this programme are negligible, if any, due to the small amount of benefits
going to the fishing industry and the programme’s emphasis on the reduction of incidental catch(bycatch), reducing pressure on overfished stocks, product quality/safety and promoting progress
toward sustainable fisheries.  Moreover, much of the results of research conducted with
Saltonstall-Kennedy funds is in the public domain.
Title:  Sea Grant
Industry assistance is provided under the National Sea Grant College Programme.
Period covered by the notification
The period covered by this notification is fiscal years 2000 and 2001.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 59
Policy objective and/or purpose
The Sea Grant programme provides grants to selected universities to carry out research that
addresses many aspects of the long-term economic  development, environmental stewardship, and
responsible use of marine and inland resources, including fish and shellfish.  A majority of these
grants is intended to support effective conservation and management of US fisheries, rather than to
assist commercial activities and thus, may not constitute a subsidy as defined by the Agreement on
Subsidies and Countervailing Measures.  However, a small number of Sea Grant projects benefit
industry, and, for that reason, in the interests of transparency, this programme has been included in
this notification.
Background and authority
In 1965, Sea Grant Colleges were first identified through an amendment to the National
Science Foundation Act of 1950, and, in 1966, the programme was formally established with passageof the National Sea Grant College and Programme Act.  More than 200 individual colleges and
universities in thirty state Sea Grant programmes currently participate in this programme.
Form
Direct federal grants are normally paid to an academic institution or other organization.
To whom and how the assistance is provided
The grant is provided to any individual; any public or private corporation, partnership, or
other association or entity (including any sea grant college, sea grant institute or other institutions); or
any state political subdivision, or agency or officer thereof.  Each Sea Grant institution runs request
for proposal (RFP) process to address local and state concerns.  The National Marine Fisheries
Service headquarters administers another RFP process to elicit proposals with a national scope.
Amount
The large majority of grants under this programme support research in subject areas ( e.g.,
aquatic nuisance species; coastal economic development; coastal habitat enhancement; coastal
hazards; and education), which do not directly provide economic benefits to the fishing industry.
Therefore, it is difficult to determine the value of any subsidy that may be provided under this
programme.  The total programme expenditures was $103.7 million and $105.6 million for fiscalyears 2000 and 2001, respectively.  (These totals represent both federal government funds –
approximately 68 per cent – and matching funds fr om state partners – approximately 32 per cent.)
Duration
Federal grants for research and development under the Sea Grant programme are provided
annually, although some of the projects are multi-annual.  The duration of the programme itself is
indefinite.
Trade effects
Like the Saltonstall-Kennedy Grant Programme, the Sea Grant Programme is not an industry
or trade promotion programme.  Very little of the funds provided directly impact the US fishing
industry.  Additionally, much of the results of research conducted with Sea Grant funds is in theG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 60
public domain.  In light of these considerations, the trade effects of this programme, if any, are likely
to be minimal.
Title: Columbia River Hatcheries
Period covered by the notification
The period covered is fiscal year 2001.
Policy objective and/or purpose
The Mitchell Act (16 USC 755-757; 52 Stat. 345)  authorizes the Secretary of Commerce to
carry on activities for the conservation of fishery resources in the Columbia River Basin.  The
Mitchell Act specifically directs establishment of salmon hatcheries, conduct of engineering and
biological surveys and experiments, and the installation of fish protective devices.  It also authorizesagreements with state fishery agencies and construction of facilities on state-owned lands.  The major
objective of this programme has traditionally been to mitigate the negative effects of lost salmon
habitat caused primarily by the building of dams for hydroelectric power, and also by other factors,
such as agricultural runoffs, logging, and urban development.  Over the years, Mitchell Act hatchery
production has changed to meet two other objectives.  First, some hatchery production has shifted toareas above the Bonneville Dam in order to provide harvestable salmon under the Columbia River
Treaty Indian Trust.  Second, a portion of the hatchery production is being shifted to fulfill a
conservation role in preserving endangered salmon stocks (captive breed) and supplementing their
recovery. With the application of the Endangered Species Act throughout the Columbia River Basin,
substantial changes have been, and will continue to be required of the Mitchell Act Programme.
Background and authority
The Mitchell Act salmon hatcheries programme has received federal appropriations since
1950, and is funded in general appropriations legislation.
Form
The US Government provides operating grants to Columbia River Fisheries Development
Programme salmon hatcheries run by the Oregon Department of Fish and Wildlife, the Washington
Department of Fish and Wildlife, the Confederated Tribes and Bands of the Yakama Nation and the
US Fish and Wildlife Service, Department of Interior.
To whom and how assistance is provided
The funds are provided to the Oregon Department of Fish and Wildlife, the Washington
Department of Fish and Wildlife, and the Confed erated Tribes and Bands of the Yakama Nation
through Cooperative Agreements.  Funds are also provided to the US Fish and Wildlife Service
through an intergovernmental transfer.
Amount
In fiscal year 2001, the Federal appropriations for the Mitchell Act programme was $17.42
million, including about $12.65 million to fund the operations and maintenance of the hatchery
programme in Oregon and Washington.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 61
Duration
Indefinite.
Trade effects
The basic purpose of salmon hatcheries is to mitigate habitat and other losses associated with
other federally-supported activities, and to restore depleted salmon resources, especially certain runs
of chinook and coho salmon.  It is not possible to determine precisely the contribution of Columbia
hatchery-reared fish to the commercial harvests in either waters off Washington, Oregon, andCalifornia or off Alaska but it is generally accepted that they have no discernible trade effect.
Title: Various fishing vessel and permit buyback programmes
Publicly funded buybacks of fishing vessels and/or their permits may be administered under
different programmes depending on the underlying  purpose. In some cases, buyback programmes
were implemented as one means of providing relief to the fishing industry in times of fisheries
disasters.  In other cases, they were a part of a programme dedicated exclusively to buying out
capacity.  In 1996, the Sustainable Fisheries Act amended the Magnuson-Stevens Fishery
Conservation and Management Act to include specific provisions (Section 312 (b)-(e)) authorizing afishing capacity reduction programme.
Period covered by the notification
The period covered by this notification covers the fiscal years from 1999 through 2001.
Policy objective and/or purpose
The principal objective of these programmes is to reduce harvesting capacity in the fishery
sector.
Background and authorities
Publicly-funded vessel and permit buybacks have been implemented in the Northeast, Pacific
Northwest and North Pacific (Alaska), and in the Gulf of Mexico.  During the period from fiscal year
1994 (when publicly funded buybacks began in earnest) to fiscal year 2001, Congress appropriated
funds for fishing vessel and permit buybacks eleven times under four different statutory authorities:
(1) Interjurisdictional Fisheries Act -- Section 308 (b) and (d)(2) American Fisheries Act
(3) Magnuson-Stevens Fishery Conservation and Management Act – Section 312 (a),
“Fisheries Disaster Relief”, and
(4) Magnuson-Stevens Fishery Conservation and Management Act – Section 312 (b)
- (e), “Fishing Capacity Reduction Programme”G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 62
Form
Congressional appropriations to fund the buybacks covered in this notification were provided
in the form of direct grants and loans to industry groups and local authorities.  A smaller share of
these appropriations was also used to defray admini strative costs to the government of buyback grants
and loans to the fishing industry.
To whom and how assistance is provided
In the 1999 Bering Sea and Aleutian Island pollock buyback, the government bought back
9 large factory fishing/processing vessels and 17 fishing permits (including 9 pollock permits)
associated with those vessels.  Grants by the government accounted for about 17 per cent of the total
$90 million amount of the buyback with the other 83 per cent funded by a loan from the Federal
Fisheries Finance Programme (FFP) (see programme description above).  In the 2000 Long Island
Sound lobster buyback, the government made a grant to the states of New York and Connecticut for$1 million each to conduct a buyback of lobster trap tags (effectively a form of lobster fishing
permits).
Amount
The two buybacks covered by this notification totaled approximately $92 million.  However,
as noted immediately above, and under the FFP programme description, one of the buybacks was
substantially financed by the FFP.
Duration
The duration of these programmes is unknown but is generally limited by funding levels.
Trade effects
The United States is generally of the opinion that well-managed vessel and permit buyback
programmes can reduce capacity and the pressure on the resource.  Moreover, to the extent that anygovernment financial contributions under these programmes have not resulted in a benefit to firms
which remain in the industry, it is questionable as to whether a subsidy has been provided that can be
attributable to the fishing industry.  In light of these considerations, it is unlikely that these
programmes have resulted in negative trade effects.
LUMBER & TIMBER
Title: Capital Gains Treatment of Certain Timber Income
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage domestic timber production.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 63
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Internal
Revenue Code.  The provision was originally enacted in 1943.
Form
Income tax concession.
To whom and how assistance is provided
ertain timber sold under a royalty contract can  be treated as capital gains for income tax
purposes.  The maximum income tax rate for individuals was 39.6 per ent in 1999 and 2000 and
39.1 per cent in 2001.  Long-term capital gains of individual taxpayers are taxed separately from other
income, generally at 10 per cent and 20 per cent rates.  Gains on assets that are held at least five yearsand otherwise eligible for the 10 per cent rate are taxed at an 8 per cent rate starting in 2001.  An
18 per cent rate will apply to gains otherwise taxable at 20 per cent for assets acquired on or after
1 January 2001 and held for at least five years.
Amount
The revenue loss was $65 million in 1999, $70 million in 2000, and $100 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Expanding of Multiperiod Timber Growing Costs
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The original ability to expense indirect costs of timber growing was apparently part of a
general perception that these costs were maintenance costs, and thus deductible as ordinary costs of atrade or business.  Following a series of revenue rulings and court cases over the years distinguishing
between what expenses might be deductible and what expenses might be capitalized, the Tax Reform
Act of 1986 included uniform capitalization rules which required indirect expenses to be capitalized
in most cases.  Where the application was d eemed to be unduly burdensome, exceptions were
provided.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 64
Background and authority
Generally, costs must be capitalized when goods are produced for inventory used in one's own
trade or business, or under contract to another party.  Timber production, however, was specifically
exempted from these multiperiod cost rules and pe rmitted to subject such costs to current expanding.
This provision is authorized by sections 162 and 263A(c)(5) of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Timber owners can expense, rather than capitalize, certain deductions from taxable income.
Amount
The revenue loss was $495 million in 1999, $570 million in 2000, and $360 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Investment Credit and Seven-Year Amortization for Reforestation Expenditures
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To promote reforestation on private timberlands.
Background and authority
A special 10 per cent investment tax credit is allowed for up to $10,000 invested annually in
clearing land and planting trees for the ultimate production of timber.  The same amount of forestationinvestment may also be amortized over a seven- year period.  Without this preference, the amount
would have to be capitalized and could be recovered (deducted) only when the trees were sold or
harvested 20 or more years later.  Moreover, the amount of forestation investment that is amortizable
is reduced by one-half of the investment credit that is allowed.  These provisions are authorized by
sections 48(b) and 194 of the Internal Revenue Code.  They were originally enacted in theRecreational Boating Safety and Facilities Improvement Act of 1980.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 65
Form
Income tax concession.
To whom and how assistance is provided
Applies to taxpayers on the reforestation costs incurred during the year as allowances against
federal income taxes.
Amount
The revenue loss was approximately $10 million annually in 1999, 2000, and 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
MEDICAL
Title: The Office of Isotopes for Medicine and Science
Period covered by the notification
The period covered is the fiscal years 1999, 2000 and  2001.
Policy objective and/or purpose
The programme supports isotope-related research and provides a reliable supply of isotope
products and services to serve the needs of the US medical, industrial, and research communities.  The
programme was notified for fiscal year 1998.
The sale of isotopes in the manner authorized by the Medical Isotope Programme began
before the Atomic Energy Act of 1954 took effect.  Commercial isotopes are sold on a cost-recovery
basis.  Because of its pricing structure, when selecting isotopes for production, the programme must
constantly balance current isotope demand, market conditions, and societal benefits with its
responsibility to operate at the lowest possible cost.  Prices set for small-volume, high-cost researchisotopes may not achieve full-cost recovery.  Instead, isotopes produced by the programme for
research and development are provided at reduced prices that provide a reasonable return to the US
Government without discouraging their use. Th e frequency of isotope production depends upon
demand and half-life of the isotope.  Although many isotopes are sold out of inventory, approximately
20 isotopes are produced each year.  It is the policy of the DOE to avoid competing withcommercially available isotopes; for most substances, it is the sole distributor.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 66
Background and authority
The Office of Nuclear Energy, Science and Technology at the DOE administers the
programme.  The Atomic Energy Act of 1954, Pu blic Law No. 101-101 and Public Law No. 103-316,
authorize DOE to sell isotope products, related services, and surplus material.
Form
Assistance under the Medical Isotope Programme is provided through the manufacture and
sale of the isotope products.
To whom and how assistance is provided
Isotopes are sold to a variety of commercial and research institutions in the medical,
industrial, and research communities of both a comm ercial and non-commercial orientation, both in
the United States and abroad.
Amount
Appropriations (approximate dollars in millions)
1999 - 21.5 2000 - 20.4 2001 - 19.0
Duration
The activity is of indefinite duration; programme operates with a revolving fund and
maintains financial viability through its annual appropriations and revenues from sales.
Trade effects
Even if it were possible to quantify trade effects which might ensue from a programme of this
nature, it is doubtful that this particular programme has led to any meaningful trade effects.  Theisotopes made available have been sold throughout the world to over 300 customers, primarily for
medical research.
Title: Orphan Drug Tax Credit
Period covered by the notification
The period covered is the fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage research on drugs for rare diseases or conditions.
Background and authority
The provision provides a 50 per cent tax credit for qualified clinical testing expenses incurred
in testing of certain drugs for rare diseases or conditions, referred to as “orphan drugs.”  Qualified
testing expenses are costs incurred to test an orphan drug after the drug has been approved for human
testing by the Food and Drug Administration (FDA), but before FDA approves it for sale.  A rareG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 67
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 a drug for such disease or condition from US sales of the drug.  The creditoriginally was enacted as a temporary provision in 1983 under the Orphan Drug Act, and was
extended on several occasions.  The credit expired after 31 December 1994, and later was reinstated
for the period 1 July 1996, through 31 May 1997.  The Taxpayer Relief Act of 1997 made the credit
permanent.  The orphan drug credit is authorized under section 45C of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
Taxpayers undertaking qualified research on orphan drugs receive a credit against federal
income tax.
Amount
The revenue loss was $70 million in 1999, $100 million in 2000, and $140 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
METALS, MINERALS AND EXTRACTION (NON-FUEL)
Title: Excess of Percentage over Cost Depletion for Non-fuel Minerals
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the development of domestic non-fuel mineral industry.
Background and authority
The provisions permit most non-fuel mineral extractors to make use of percentage depletion
rather than cost depletion, with percentage depletion rates ranging from 22 per cent for sulphur to5 per cent for sand and gravel.  Percentage depletion is authorized by sections 611-613 and 291 of the
Code.  Percentage depletion similar to its current form was provided in 1932 at 23 per cent for sulphur
and 15 per cent for metal mines.  From 1932 to 1950, percentage depletion was extended to most
other minerals.  The Revenue Act of 1951 granted it to more minerals.  In 1954, still more mineralsG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 68
were granted the allowance, and foreign mines were granted a lower rate.  In 1969, the top depletion
rates were reduced.  The Tax Equity and Fiscal Responsibility Act of 1982 reduced the allowance for
corporations that mined iron ore by 15 per cent.  The Tax Reform Act of 1986 raised the cutback incorporate allowances of iron ore from 15 to 20 per cent.
Form
Income tax concession.
To whom and how assistance is provided
Non-fuel mineral extractors are permitted deductions from taxable income for depletable
expenditures equal to the larger of percentage or cost depletion.
Amount
The revenue loss was $225 million in 1999, $270 million in 2000, and $250 million in 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
Title: Expanding of Exploration and Development Costs for Non-fuel Minerals
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the development of domestic non-fuel mineral industry.
Background and authority
These provisions permit certain capital outlays associated with exploration and development
of nonfuel minerals to be expensed rather than depreciated over the life of the asset.  These provisions
are authorized by sections 263, 263A, 291, 616-617, 56 and 1254 of the Internal Revenue Code.Expanding of mine development expenditures was enacted in 1951 to reduce ambiguity in the
then-existing treatment of, and to encourage, mining.  The provision for mine exploration was added
in 1966.  The Tax Equity and Fiscal Responsibility Act of 1982 limited expanding for corporations to
85 per cent; the remaining 15 per cent must be depreciated.
Form
Income tax concession.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 69
To whom and how assistance is provided
Non-fuel mineral producers and royalty owners  are permitted expanding of certain capital
outlays associated with the development of nonfuel minerals rather than amortization over the life of
the mine for federal income tax purposes.
Amount
The annual revenue loss was $15 million in 1999, $20 million in 2000, and $10 million in
2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of these
provisions.
Title : Capital Gains Treatment of Iron Ore
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage the mining of domestic iron ore.
Background and authority
The capital gains tax treatment is authorized under sections 1231 and 631 of the Code.  As
with coal, percentage depletion is not allowed when the capital gains tax rate is below the regular tax
rate.
Form
Income tax concession.
To whom and how assistance is provided
Certain iron ore and timber sold under a royalty contract may be treated as capital gains for
income tax purposes.  The maximum income tax rate for individuals on ordinary income was 39.6 per
cent in 1999 and 2000, and 39.1 per cent in 2001.  Long-term capital gains of individual taxpayers are
taxed separately from other income, generally at 10 per cent and 20 per cent rates.  Gains on assets
that are held at least five years and otherwise eligible for the 10 per/*/cent tax rate are taxed at an8 per cent rate starting in 2001.  An 18 per cent rate will apply to gains otherwise taxable at 20 per
cent for assets acquired on or after 1 January 2001and held at least five years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 70
Amount
The annual revenue loss is less than $2.5 million for 1999, 2000 and 2001.
Duration
Indefinite.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Special Rules for Mining Reclamation Reserves
Period covered by the notification
The period covered is the fiscal years 1999, 2000, 2001.
Policy objective and/or purpose
In allowing the current deduction of mine reclamation and similar expenses, the provisions
encourage reclamation and prevent adverse economic effects on mining firms that might result from
the application of general tax rules regarding deduction for future costs.
Background and authority
The provisions permit taxpayers to establish reserves to cover certain costs of mine
reclamation and of closing solid waste disposal properties.  Net increases in reserves may be taken as
a deduction against taxable income.  The provisions are authorized by section 468 of the Internal
Revenue Code and were enacted in 1984.
Form
Income tax concession.
To whom and how assistance is provided
Taxpayers engaged in mining and solid waste disposal properties receive deductions from
taxable income based on the accrual of liabilities rather than the realization of costs.
Amount
The annual revenue loss was less than $5 million.
Duration
Indefinite.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 71
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: Emergency Steel Loan Guarantee Programme
Period covered by the notification
This notification covers the period beginning with the start of the programme in 1999 through
31 December 2002.
Policy objective and/or purpose
The overall purpose of this programme is to assist steel companies injured by the import
crises.
Background and authority
The Emergency Steel Loan Guarantee Act of 1999  was signed into law on 17 August 1999.
The Guarantee Board, consisting of representatives of the Federal Reserve System, the Securities and
Exchange Commission, and the Department of Comme rce, administer the programme and have the
authority to guarantee loans until 31 December 2003.
Form
The programme guarantees loans up to 95 per cent of the principal amount of loans provided
by private banks.
To whom and how assistance is provided
The programme may guarantee loans provided to qualified steel companies by private
banking and investment institutions in accordance with the rules established by the Guarantee Board.
The Board has the authority to make commitments for guarantees of  loans up to $1 billion.  The
amount guaranteed to any single qualified steel company cannot exceed $250 million.
Amount
The Board acted on 15 loan guarantee applications submitted by the December 2001 deadline.
Eight applications, totaling $592,643,620 in loans, were approved by the Board.  Thus far, one
guaranteed loan – for $110 million – was closed in January 2001 and one $42,118,120 loan facility
closed March 2002.
Duration
Applications are being accepted until 31 December 2003.  All loans are to be paid in full by
31 December 2015.
Trade Effects
It is not possible to estimate what trade effects, if any, may result from this programme.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 72
TEXTILES
Title: The AMTEX Programme
Period covered by the notification
The period covered is the fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The general purpose of the programme is to develop and apply advanced technologies of
mutual interest to both the DOE and the integrated textile and apparel industry  through collaborative
research projects.  These projects include electronic integration, flexible manufacturing, andenvironmental resource conservation.  These will lead to reduced water consumption, reduced waste
products, and reduced inefficiencies currently inherent in processes in both the DOE system of
national laboratories as well as in the textile and apparel sectors.
Background and authority
The AMTEX programme is co-administered by the Office of Energy Research and the Office
of Defence Programmes within the DOE.  Legislative authority for the programme stems from the
National Competitiveness Technology Transfer Act of 1989.
Form
Participation in the programme is actualized through the use of CRADAs8 with four
non-profit industry Research, Education and Tec hnology Transfer (RETT) organizations.  These
industry institutions are Textile Research Institute/Princeton, the Textile/Clothing Technology
Corporation, the Institute of Textile Technology, and Cotton Incorporated.
To whom and how assistance is provided
The AMTEX programme does not provide assistance, per se, to any one company or industry.
Rather, via shared research costs (including support for designated laboratory scientists) and the
transfer of technology through CRADA9, eight DOE laboratories collaborate with the RETTs in
research projects of mutual interest.
Amount
Appropriations (approximate dollars in millions)
1999 - 3.5 2000 - 2.5 2001 - n/a
(This information does not include funds from the Department of Defence.)
                                                     
8 See footnote 2.
9 See footnote 2.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 73
Duration
The AMTEX programme was initiated in 1993, with an anticipated term not to exceed 10
years.  Its continuation is contingent upon ongoing annual appropriations by the Congress.
Trade effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result  from this programme.  While it is anticipated that
successful research projects may lead to the development of technologies that would enablecompanies in the textile and apparel sector to improve their productivity, AMTEX assistance does not
directly benefit the production or exports of particular companies or products.
Title: The Textile/Clothing Techno logy Corporation Programme (TC2)
Period covered by the notification
The period covered is the fiscal years 1999, 2000, and 2001.
Policy objective and/or purpose
The Textile/Clothing Technology Corporation is a non-profit membership organization
designed to stimulate economic growth in the US textile and apparel sector.  It has programmes to
demonstrate advanced equipment and techniques, to educate participants in the sector, and to do basic
research.  Only the basic research element is funded by the federal government through a grant fromthe US Department of Commerce (DOC).  The basic research is performed internally by the
organization and, in part, by external entities on a contractual basis.  The results of the basic research
are made available throughout the textile and apparel sector of the United States.  No production
subsidies are provided under this programme.
Background and authority
The programme is administered by the DOC’s Office of Textiles and Apparel.  Authorization
and funding for the programme is provided for as part of the annual budget and appropriations process
for the DOC.
Form
Assistance is provided under this programme in the form of grants.
To whom and how assistance is provided
A grant is provided to the Textile/Clothing Technology Corporation following the
presentation of a proposal describing the research projects which will be undertaken.
Amount
The amount provided under this programme came to $3 million in each fiscal year (1999,
2000, 2001).G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 74
Duration
Grants were first distributed under the programme in 1981.  Funding must be reauthorized by
the US Congress on an annual basis.
Trade effects
In light of the scope and nature of the R&D activities being assisted, it is not possible to
determine what, if any, trade effects may ever result from this programme.
TIMEPIECES AND JEWELLERY
Title: The Insular Possessions Watch and Jewellery Programme
Period covered by the notification
The period covered is calendar years 1999, 2000 and 2001.
Policy objective and/or purpose
The insular watch and jewellery programme is designed to encourage watch and jewellery
production in the US insular possessions and thereby stimulate development of the insular economies.
Background and authority
The US Department of Commerce and the US De partment of the Interior jointly administer
the Insular Possessions watch portion of the programme under Public Law 97-446, as amended by
Public Law 103-465.  The watch portion provides for duty exemptions and duty refunds in the form of
negotiable production incentive certificates.
The enactment of Public Law 106-36 amended additional US notes to chapter 71 of the
Harmonized Tariff Schedule of the United States (“HTS”) to provide a duty-refund benefit for any
article of jewellery within heading 7113 which is  a product of the US Virgin Islands, American
Samoa, Guam and the Northern Mariana Islands in accordance with the new provisions of the note in
chapter 71 and additional US Note 5 to chapter 91.  The new jewellery portion of the programme is
also administered by the US Department of Comme rce and the US Department of the Interior.  The
jewellery portion of the programme, like watches portion, provides for duty refunds in the form of
negotiable production incentive certificates, but does not provide for the duty-exemptions.
To whom and how assistance is provided
The assistance is provided to watch and jewellery producers located in the US Virgin Islands,
American Samoa, Guam and the Northern Mariana Islands.  At present, there are producers only in
the US Virgin Islands.
The watch portion of the programme establishes an annual allocation for watches and watch
movements assembled in these areas to enter the United States free of duty.  Both the watch and
jewellery portions of the programme provide production incentive certificates which authorize a duty
refund from Customs on (HTS non-column 2) watch movements, watches and parts therefor which
have entered the United States duty-paid.  The subsidy amount is based on the duty foregone on theG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 75
finished watches and watch movements as well as the value of the production certificates issued to
watch and jewellery companies.  Since the watches, the watch movements and jewellery produced
under the programme already receive duty-free treatment, the certificate is negotiable and may betransferred to another company having a record of duty-paid watch imports.  The value of the
certificate is based on the producer’s average creditable wages per unit shipped free of duty into the
United States multiplied by a factor of 90 per cent for the first 300,000 units and by declining
percentages in additional increments up to a maximum of 750,000 units.
Amount
Production Incentive Certificate (“PIC”)
Year (1)                                  Product                                           Total Amount (2)
1999                                       Watches                                            $2,708,0781999                                       Jewellery                                            $28,4202000                                       Watches                                             $2,767,588
2000                                        Jewelle                                              $687,654
2001                                       Watches                                             $2,716,9572001                                        Jewellery                                           $1,209,393
(1) The PIC is based on the wages and shipments made during the abovementioned
calendar years.
(2) 1 per cent is deducted from the total amount of the duty refund shown above to cover
the administrative costs of processing by Customs.
Duty Exemption Amount (3)
1999 $420,339
2000 $468,3042001 $449,317
(3) We calculated the amount of the duty paid by using an approximate total trade
ad valorem equivalent rate of 6 per cent multiplied by the total yearly amount of theinvoices billed to customers.
Duration
Under differing programmes, general duty suspensions for insular products appear to date
back to US acquisition of the territories -- 1917, in the case of the US Virgin Islands.  The criteria
were made uniform in 1954 and a limit was placed on watches in 1967.  The jewellery portion of the
programme does not contain a limit.  The production incentive certificates were authorized forG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 76
watches in 1983 for a 12-year period and preauthori zed for an additional 12-year period in 1995 and
the certificates for jewellery were authorized in 1999 for the duration of the watch authorization.
Trade Effects
Although the precise trade effects cannot be determined, producers benefitting from this
programme account for less than 1 per cent of US annual domestic consumption and do not ship to
non-US customers.
OTHER
Title: Empowerment Zones and Enterprise Communities
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
The purpose of this assistance is to encourage revitalization of distressed areas.  Nominated
areas must meet population, distress, size, and poverty rate criteria in order to be eligible, ensuring
that assistance is targeted to areas experiencing high economic distress.  The use of tax incentives
reflects a desire to encourage the private sector, guided by market forces and supported in a
non-bureaucratic fashion through government assistance, to be a driving force behind the increasedeconomic activity.  Some restrictions on the types of business activities and investments were
imposed in order to limit potential abuses.
Background and authority
The Omnibus Budget Reconciliation Act of 1993 provided for the designation of nine “Round
I” empowerment zones (3 rural and 6 urban) and 95 enterprise communities (30 rural and 65 urban).The Taxpayer Relief Act of 1997 added 2 urban “Round I” zones, 20 “Round II” zones (5 rural and
15 urban), and the District of Columbia Enterprise  Zone (DC Zone).  State and local governments
jointly nominated distressed areas and proposed strategic plans aimed at economic and social
revitalization.  The rural enterprise communities and empowerment zones were designated by the
Secretary of the Department of Agriculture, while the urban enterprise communities andempowerment zones were designated by the Secr etary of the Department  of Housing and Urban
Development.  The tax provisions for enterprise communities and empowerment zones are found in
sections 1391 through 1397 of the Internal Revenue Code.  The tax provisions for the DC Zone are
found in section 1400 of the Internal Revenue Code.
Qualified businesses located in “Round I” em powerment zones and the DC Zone are eligible
for the following federal tax incentives: (i) an em ployment credit for 20 per cent of the first $15,000
of wages paid to employees who live and work in the empowerment zone; (ii) an additional $20,000
per year of expanding, instead of depreciation, of capital investments by small businesses; and (iii) a
new category of tax-exempt private activity bonds.  In addition, qualified capital gains frominvestments in qualified DC Zone assets can be excluded from gross income if the asset is held more
than 5 years.  Qualified businesses located in  “Round II” empowerment zones are eligible for the
additional expanding and tax-exempt financing available in “Round I” zones, but were not eligible forG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 77
the employment credit.  Businesses located in en terprise communities are only eligible for the new
category of tax-exempt bonds.
Form
Income tax concession.
To whom and how assistance is provided
The employment credit and an additional $20,000 per year of expanding are provided when
the recipient business completes its tax return.  No registration is needed to qualify for the tax
incentives.  The new category of tax-exempt private activity bonds requires a local initiation and State
offering of the bonds.  The subsidy is reflected in the lower interest rate charged on the bonds because
interest income on them is excluded from federal taxable income.
The 20 per cent employment credit is provided to zone businesses for each $15,000 of wages
paid to a zone resident.  Substantially all of the employees's services must be provided in the zone to
be eligible.  The $20,000 of additional expanding is targeted to assist small businesses because the
benefit of expanding begins to phase out when investment exceeds $200,000.  To qualify for the
expanding, businesses must also meet other criteria, such as having at least 35 per cent of employeeswho reside in the zone.  Businesses located in  enterprise communities are eligible for the new
category of tax-exempt bonds.  Up to $3 million per business per zone in bond funding and
$20 million per business for all zones is available.  The exclusion of capital gains from qualified DC
Zone assets held more than 5 years does not apply to gains earned before 1998 or after 2008.
Amount
The revenue loss was $330 million in 1999, $310 million in 2000, and $380 million for 2001.
Duration
Tax incentives have been available since the first zones and communities were designated on
21 December 1994.  All of the empowerment zone and enterprise community tax benefits are due to
expire on 31 December 2009, with the exception of the DC Zone tax benefits, which expire on
31 December 2004.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: New Markets Tax Credit
Period covered by the notification
The period covered is fiscal years 1999, 2000 and 2001.
Policy objective and/or purpose
To encourage equity investment in businesses located in economically distressed areas.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 78
Background and authority
The Community Renewal Tax Relief Act of 2000 created the new markets tax credit under
section 45D of the Internal Revenue Code.
Form
Income tax concession.
To whom and how assistance is provided
A tax credit is applied to taxpayers who invest in a Community Development Entity (CDE).
The credit amount is equal to 5 per cent of the investment for each of the first three years and 6 per
cent for each of the following 4 years.  A CDE is any domestic firm whose primary mission is to serve
or provide investment capital for low-income comm unities or individuals.  A fixed amount of equity
investment is eligible each year for the credits, which is apportioned to CDEs through a competitive
application process.  The total amount of equity investment eligible for the credit in 2001 was
$1 billion with a total $15 billion from 2001 to 2007.
Amount
The revenue loss was $10 million for 2001.
Duration
This credit first became effective in 2001 and credit allocations to qualified CDEs will be
made through 2007.
Trade effects
It is not possible to estimate what, if any, trade effects may result from the use of this
provision.
Title: The Export Credit Programmes of the Export-Import Bank of the United States
Period covered by the notification
The period covered is fiscal years 1999, 2000 and  2001.
Policy objective and/or purpose;  background and authority
The Export-Import Bank of the United States (Ex-Im Bank) is authorized by the
Export-Import Bank Act of 1945 to provide credits, guarantees and insurance, including commercial
and political risks, to support exports of US goods and services.  The financial support is to be at rates
and on terms that are competitive with government-supported rates and terms available from other
countries whose exporters compete with US exports.  All Ex-Im Bank programmes are in full
conformity with the OECD guidelines on export cr edit practices and, concomitantly, the Agreement
on Subsidies and Countervailing Measures.  Inasmuch as other official authorities offer official
financing in support of exports from their countries, Ex-Im Bank has offered similar financing.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 79
Form;  amount
The US Federal Credit Reform Act of 1990 (Credit Reform) made fundamental changes in
the budgetary treatment of direct loans, loan guar antees and insurance.  Credit Reform, which became
effective in FY 1992, shifted the accounting basis for federally provided or guaranteed credit from the
amount of cash flowing into or out of the Treas ury for a credit programme, to the estimated net
financial costs of the loans, guarantees and insurance.  Credit Reform requires an annual appropriation
that is used to set aside a loan-loss reserve to cove r any expected financial losses in recognition of the
cost to the US government of running an official export credit programme.
Under the accounting procedures required by Credit Reform, the cost of Ex-Im Bank
programmes is calculated as the difference between the amount committed and the present value of
the expected cash inflows, each discounted by the interest rate on marketable Treasury securities of
like maturity.  This includes the cash flows specified in the contract financed by Ex-Im Bank as well
as “expected” deviations from contract terms including delinquencies, defaults, prepayments, andother factors.  This calculation is performed on a transaction specific basis and for those transactions
showing a positive cash flow on a net present value ba sis, the transaction cash flow is zero-ed out for
Credit Reform purposes.
For direct loans, cash outflows include loan disbursements and cash inflows include exposure
fees and repayment of principal and interest net of expected defaults.  For loan guarantees and
insurance, cash outflows include payments to cover default claims and interest supplements, and cash
inflows include fees and recoveries.  The expected costs are calculated using a model developed by
the Office of Management and Budget.
The following tables show the US government budget authority value for Ex-Im Bank direct
loan, loan guarantee and insurance programmes.  Due to the unique nature of US credit reform
calculations, the numbers presented in the tables are not comparable with short-term cash-flow data
presented by other government export credit agencies.
TABLE I
Direct Loan Budget Authority
($ millions)
Fiscal Year Direct Loan Levels Budget
Authority%
1999 902.7 53.0 5.9%
2000 932.6  1.7 1.3%
2001 871.2 93.8 10.8%G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 80
TABLE II
Loan Guarantee and Insurance Budget Authority
($ millions)
Fiscal Year G'tee & Insurance LevelsBudget
Authority%
1999 12,164.9 602.8 5.0%
2000 11,704.5 890.4 7.6%
2001 8,370.3 729.7 8.7%
Duration
Ex-Im Bank activities are subject to periodic renewal under US law.  Current Ex-Im Bank
activities extend through April 2002.  Congress has recently reauthorized Ex-Im Bank until the end of
September 2006.
Trade Effects
It is impossible to estimate the quantitative trade effects of Ex-Im Bank subsidies without
examining the export credit subsidies offered by other countries.  In general, Ex-Im Bank offers
subsidies to counter trade-distorting subsidies offered by foreign governments.  Thus, the effect of
Ex-Im Bank subsidies is to neutralize foreign-government provided export credit subsidies so thatmarket forces are the main determinants of purchase decisions by foreign buyers.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 81
Attachment I
Statistics Related to Trade Effects of
Agricultural Export Assistance Measures
Value of selected commodities exported by the US
(Values in $1,000)
Fiscal Years 1995 1996 1997 1998 1999 2000 2001
Poultry Products 2,215,246 2,731,022 2,872,387 2,716,662 2,072,120 2,242,569 2,543,945
Butter & Milkfat 89,124 44,016 24,400 17,301 4,355 6,994 5,495
Cheese 86,524 101,268 117,393 119,747 126,736 138,343 157,238
Non-fat Dry Milk 112,240 46,156 78,665 130,126 140,500 183,698 155,171
Other Dairy Products 156,254 194,212 276,421 301,491 296,649 315,650 366,401
TOTAL 2,659,388 3,116,674 3,369,266 3,285,327 2,640,360 2,887,254 3,228,250G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 82
Attached I (Continued)
Production & Consumption of selected commodities in
the United States
(estimates; values in $millions)
Calender Years 1997 1998 1999 2000 2001
Dairy; Butter
Production  522 530 579 578 550
TOTAL Exports 18 3 2 4 1
TOTAL Imports 5 30 18 19 37
Total Dom. Consumption 505 555 596 593 587
Dairy; Cheese
Production 3325 3398 3581 3744 3700
T O T A L  E x p o r t s 3 83 7 3 84 75 2
TOTAL Imports 141 156 195 186 195
Total Dom. Consumption 3431 3500 3691 3843 3885
Dairy; Milk; Nonfat Dry
Production 552 515 617 659 630
TOTAL Exports 117 104 217 142 150
T O T A L  I m p o r t s 35 533
Total Dom. Consumption 413 404 361 345 396
Poultry; Meat; Total
Production 14952 15128 15990 16362 16710
TOTAL Exports 2565 2515 2582 2748 3110
T O T A L  I m p o r t s 33 349
Total Dom. Consumption 12365 12619 13395 13623 13648G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 83
Attachment II
Statistics of US Production, Co nsumption, Imports and Exports
Commodity/Year    Production    Consumption Imports    Exports
Wheat (July-June) (------------------------million metric tons -----------------------------)
1997/98 67.5 34.2 2.6 28.1
1998/99 69.3 37.7 2.9 29.0
Corn (marketing year) (------------------------million metric tons -----------------------------)
1997/98 234 185 0.2 37.7
1998/99 248 186 0.5 50.4
Rice (Rough Equivalent)(August-July)(-----------------mi llion metric tons----------------------------)
1997/98 5.8 3.3 0.3 3.2
1998/99 5.8 3.6 0.3 2.6
Soybeans (September-August)(--------------------------m i llion metric tons-----------------------------)
1997/98 73.1 47.7 0.1 23.8
1998/99 74.6 48.7 0.08 21.9
Sunflower seed (September-August)(-------------------m illion metric tons-----------------------------)
1997/98 1.7 1.6 0.03 0.2
1998/99 2.4 2.0 0.03 0.3
Rapeseed/Canola (September-August)(----------------m illion metric tons------------------------------)
1997/98 0.4 0.6 0.4 0.1
1998/99 0.7 0.7 0.3 0.2
Peanuts (August-July) (------------------------1,000 metric tons -------------------------------)
1997/98 1605 1335 64 309
1998/99 1798 1367 70 255
Upland and ELS Cotton (August-July) (-----------------mi llion 480 lb. bales --------------------------)
1997/98 18.8 11.4 0.01 7.5
1998/99 13.9 10.0 0.4 4.3
Tobacco (unmanufactured, dry weight) ( ----------------1 ,000 metric tons------------------------------)
1997/98 729 773 294 221
1998/99 604 617 223 212G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 84Attachment III
Notification of State-Level Measures
State Programme Title Programme
AuthorityForm of Subsidy Policy Objective To Whom Amount
Alabama Property Tax
AbatementTax Exemption
(state/county/
municipalproperty tax)Manufactures of
aluminium, aluminium
products, or calciumcyanamide.The maximum period of an abatement of
non-educational property taxes is ten years.
Alabama Poultry
Environmental
Enhancement
ProjectAgricultural
Development
AuthorityLoans Poultry Industry $750,000 environmental enhancement
programme.  Project provides low-interest
loans for construction of poultry compost
structures and installation of freezer units to
be used for the disposal of dead birds.
Alabama State Enterprise
Zone IncentivesAlabama Department
of RevenueTax credit To encourage
economic growth
in areas
considered tohave depressed
economies.SIC Codes 20-42, 44-
49; major
warehousing,
distribution centres, orprospects of significant
economic impact.The maximum tax credit available to any
private employer locating in an enterprise
zone is $2,500 per new permanent employee
hired.  80% -1st year, 60% -2nd year, 40%-3rd year, 20% -4th & 5th year.  Tax credit
for investment in zone: 10% on first $10,000
invested, 5% on next $90,000 invested, 2%
on remaining investment.  $1,000 tax credit
for training new employees. Tax credit andexemptions for sales and use tax, and income
and corporate franchise tax.
Alabama Swine Industry
DevelopmentProjectAgricultural
DevelopmentAuthorityLoan To assist
integrated swineproducers with
construction costs
of new facilities.Swine industry $1m low-interest loan programme in support
of developing integrated swine industry.Provides funding at 3% for seven years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 85Alabama Free land, block
grant for site,
grading,
excavation; taxincentives, below
market interest
and bond to
finance plant and
equipment.New minimill in
Decatur (joint
venture between
LTV, SumotoMetals and
British Steel with
LTV owning
50%)Trico Steel Company Amount totaled $39 million or higher. Tax
incentives 10-20 years duration.
Alaska Commercial
Fishing Revolving
Loan FundDepartment of
Commerce and
EconomicDevelopmentLoan To promote
economic
development, aswell as the
development of a
predominantly
resident fishery,
and continuedmaintenance of
commercial
fishing vessels
and gear for the
purpose ofimproving the
quality of Alaska
seafood products.Commercial fishermen
or applicants who lack
training or economicopportunities other
than in commercial
fishing in their area of
residence.The interest rate is 2% above the commercial
prime rate, not to exceed 10.5%.   Interest
rate will be fixed at time of loan approval.Maximum loan term is 15 years.  Maximum
lending limit is $100,000. Applicant pays
$100 application fee, 1% loan origination fee
and all direct application processing costs.
Use of vessel governed by state and federalfishery management restrictions.  This
programme has been self-financing since its
inception in 1972.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 86Arizona Defence
Restructuring
ProgrammeDepartment of
Commerce
A.R.S. § 41-1508Tax credit/tax
incentive
No new
certifications to
the Department o f
Revenue after30 June 2001.To assist defence
contractors in the
state in
maintaining andattracting
contracts with the
Department of
Defence (DOD);
and to encouragedefence
contractors to
diversify into
commercial
markets, adopt
new
manufacturingprocesses and
technologies, and
consolidate
facilities into this
state.Defence contractors
(manufacturer,
assembler or
fabricator).A credit allowed against corporate income
taxes for up to 40% of the real and personal
property taxes paid based on jobs retained
and created; corporate and individual incometax credits for increases in net employment
above an established baseline.  The credit is a
dollar amount allowed for each new
employee equaling $7,500 over five years;
and depreciation or amortization costs ofcapital investments may be subtracted from
Arizona gross income equal to one-half of
the time period allowed under the US
Internal Revenue Code.
Arizona Enterprise Zone
ProgrammeDepartment of
Commerce andRevenue
A.R.S. § 41-1525
A.R.S. § 41-1525.01Tax credit To aid in the
development ofeconomically
disadvantaged
areas around the
state.Benefits apply to
businesses located in adesignated state
enterprise zone.Tax credit for net increases in qualified
employment positions. These credits may beup to $3,000 per qualified employment
position over three years. In addition,
qualified manufacturing businesses locating
or expanding within these zones can apply
for a “class six” property tax classificationfor assessment purposes.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 87Arizona Military Reuse
Zone (MRUZ)Department of
Commerce
A.R.S. § 41-1532 et.
seq.Tax credit
(income and
property tax
credits)To ease the
restrictions on the
designation and
renewal of aclosed military
facility as a
military reuse
zone by allowing
the Governor todesignate the
zone upon either
the execution of a
long-term lease or
title transfer.Any company which is
a manufacturer,
assembler, or
fabricator of aviationor aerospace products.Companies’ real and personal property
classified as “class six” property for
assessment purposes.
In addition, tax credits based upon new net
employees and payroll are available.  The
credit is a dollar amount allowed for each
new employee, equaling $7,500 over five
years to regular employees and $10,000 overfive years to displaced military base
employees.  There is also an exemption of
the Transaction Privilege Tax available for a
prime contractor having  a contract with a
qualified MRUZ business for work in the
zone.
Arizona Motion Picture
Production Tax
RefundDepartment of
Commerce
A.R.S. § 42-5015Tax refund Motion picture
production companies.A 50 per cent transaction privilege and use
tax refund to qualifying production
companies for motion picture,television/video and commercial advertising
productions filmed in Arizona.
Arizona Soundstage
Equipment &
Machinery Tax
ExemptionDepartment of
CommerceTax exemption To promote and
attract capital
investment in
soundstage
construction in
Arizona.This exemption applies
only to soundstage
complexes constructed
after 30 June 1996 and
before 1 January 2001
when the exception
expires.Exempts machinery and equipment
purchased for use in film production in a
soundstage complex of multiple stages from
the transaction privilege and use tax.
1Arkansas Enterprise Zones
(AdvantageArkansas)Department of
EconomicDevelopmentTax credits To create new
jobs as a result oflocation,
expansion, or
facility
modernization.The following
businesses located intargeted areas:
manufactures (SIC
20-39); computer
firms; motion picture
production companies;distribution centres;
coal or lignite
extraction firms.The income tax credit is equal to 100 times
the average hourly wage paid per net newpermanent employee, with a maximum cap
of $3,000 per employee. If the business is
located in a “high-unemployment” county,
the multiplier increases to 400 times the
average hourly wage, with a $6,000per-employee cap.  Participating projects are
also eligible for certain sales and use tax
refunds.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 88Arkansas Motion Picture
Incentive Department of
Economic
DevelopmentTax Refund Qualifying motion
picture production
businesses spending
more than $500,000within six months or
$1,000,000 within one
year.Refund of sales and use taxes paid on
qualifying expenditures in conjunction with
the project.
Arkansas Emerging
Technology
DevelopmentDepartment of
Economic
DevelopmentTax Credits Encourage
high-growth
technologies.Facilities that design,
develop or produce
photovoltaic cells,
electric vehicle
components, fuel cells,
micro-turbines,Stirling engines, and
nanotechnology.State income tax credit, with a carry-forward
of 14 years, of 50% of the cost of purchasing
or constructing a facility.
Arkansas Biotechnology
Development and
TrainingDepartment of
Economic
DevelopmentTax credits Encourage
biotechnology
growth in the
state.Eligible developing
biotechnology
businesses.Income tax credits for (1) 5% credit applied
to building and equipment costs; (2) 30%
credit for eligible training costs and for
contracts with state-supported institutions
(not to exceed $10,000 per employee); (3)20% credit of the cost of research over the
base year’s research costs.  Up to $50,000 of
income tax liability may be offset during the
credit year.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 89California Enterprise Zones Trade and Commerce
AgencyTax credits The programme
targets
economically
distressed areasthroughout
California. The
purpose of the
programme is to
provide taxincentives to
businesses and
allow private
sector market
forces to revive
the economy.Companies locating to
or located in an
Enterprise Zone.(1) Tax credits for sales or use taxes paid on
up to $20 million of qualified machinery
purchased per year; (2) a hiring credit for
wages paid to qualified employees during theemployees' first 60 months on the job; (3) a
15-year carryover of up to 100 per cent of net
operating losses; (4) expensing up to $40,000
of certain depreciable property; (5) lender
interest income deductions for loans made tozone businesses; and (6) preference points on
state contracts.  In addition, local incentives
may be available that include reduction or
elimination of local permit and construction-
related fees, expeditious processing of plans
and permits, reduced utility rates, reduced
land costs, assistance in employee hiring,low-cost financing and low-interest revolving
loans.
California Employees in
Economic
Incentive AreasCredit Businesses in an
economic
development
programme area
that hireemployees.
California Local Agency
Military BaseRecovery AreaTrade and Commerce
Agency, LocalAgency Military Base
Recovery Area
(LAMBRA)
legislation (AB 693),
signed into law 1993Tax credits To re-employ
workers, bothcivilian and
military, who lost
jobs as a result of
Base
Realignment andClosure Act from
1988 through
1995.Companies locating in
a LAMBRA zone.The designations allow communities to
extend California Enterprise Zone tax creditsto companies locating in a LAMBRA Zone.
As with Enterprise Zone communities,
LAMBRA communities also have
community incentives as a part of the
business attraction package.  In addition,hiring tax credits are available to encourage
employers to hire disadvantaged workers.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 90California Repair
Underground
Storage Tank Loan
ProgrammesCalifornia Trade and
Commerce AgencyLoans To help small
business owners
who want to
repair, replace,remove or
upgrade
underground
storage tanksSmall businesses. $ 4 million available for loans of up to
$350,000 per borrower or $50,000 per tank;
loan can be used to finance up to 90% of
project costs.
California Targeted Tax Area
IncentivesTrade and Commerce
AgencyTax credits Available only to
companies located in
the targeted tax area
and engaged in a trade
or business within thefollowing SIC codes:
2000-2099;
2200-3999;
4200-4299;
4500-4599;4700-5199.Tax credits for sales and use taxes paid on
certain machinery, machinery parts, and
equipment; tax credits for hiring qualified
employees; fifteen year net operating loss
carry-forward, and accelerated expensingdeduction.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 91Colorado Enterprise Zone Office of Economic
Development, Urban
and Rural Enterprise
Zone Act of 1986Tax credit To encourage
employment and
investment in
specific zones.Any business locating
or expanding
anywhere within a
designated enterprisezone is potentially
eligible.  Specific
programmes, however,
target agricultural
processing,manufacturing, and
R&D. An investment credit of 3% for investments
in equipment used exclusively in the zone.
25% income tax credit (not to exceed
$50,000) to rehabilitate vacant buildings.10% credit for employer job training
expenses.  $500 tax credit for each new full-
time employee and an additional $500 credit
for each full-time employee engaged in
agricultural processing or manufacturing.$200 per employee tax credit for
employer-paid health insurance coverage (at
least 50% covered by employer). A 3% tax
credit is granted for increases in R&D
expenditures.  Also, a tax credit of 25% (not
to exceed $100,000) for private contributions
to local zones for enterprise zonedevelopment projects and for promoting
child care within zones.  Local jurisdictions
also have the option of refunding local
property tax and/or sales and use tax on
equipment and supplies.
Colorado Biotech Sales Tax
RefundDepartment of
RevenueCRS39-26-402Sales and Use
Tax RefundTo encourage
research anddevelopment in
biotechnologyColorado businesses
engaged inbiotechnology research
and developmentState sales and use tax paid on tangible
personal property used in research anddevelopment of biotechnology.
Connecticut Apprenticeship
Training TaxCreditDepartment of Labor Tax credit To encourage
firms to trainConnecticut
workers in the
manufacturing
trades.The manufacturing
trades of machinetools, plastics, or
metals.A firm may apply for a credit of up to $4800
per apprenticeship.  The amount of the creditis limited to the lesser of 50% of the actual
wages paid or the total number of working
hours during the year multiplied by $4, or
$4,800.
Connecticut Machine Tool and
Metal Trade
ApprenticeshipCredit Machine tool and
metal trades. Credit is
provided to employerscreating additional
apprenticeships.Credit is provided for training during the first
half of the apprenticeship programme in the
amount of $2.50 per hour, up to the lesser of50% of the wages paid during the year for
each apprenticeship or $3,000.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 92Connecticut Capital Access
Growth Fund:
UrbanDevelopment
AuthorityLoan Special emphasis
on minority and
women-
ownedbusinesses.
Small business
assistance loans
available for
businesses with100 or fewer full-
time employees.Businesses located in
New London or
Windham counties or
one of 25 designatedmunicipalities are
eligible for targeted
business loans.Maximum loan $500,000.  Maximum
15-year term.
Connecticut Enterprise
Corridor ZoneDepartment of
Economic andCommunity
DevelopmentTax credit Manufacturers and
firms in certainqualifying service
sectors in the targeted
investment
communities, with
employmentrequirements.1) Five-year, 80% abatement of local taxes
on real estate improvements and personalproperty acquisitions: 2) Ten-year, 25%
credit on corporate business taxes, 50% if at
least 5% of all new employees are from the
enterprise zone or from the municipality's
disadvantaged population. 3) $2,250 grant (toa maximum of $75,000) for each new job
(minimum of three) created within a 24-
month period for qualified manufacturing
firms; service firms may be eligible for a
$750 grant per new job created; 4) Low-costloans and free technical assistance; 5) Job-
training and placement assistance; 6)
Exemptions on both state real estate
conveyance taxes and sales taxes on
machinery replacement parts.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 93Connecticut Enterprise Zone Department of
Economic and
Community
DevelopmentTax credit Promotion of
good business
development,
residentialdevelopment, and
the creation and
retention of jobs.Manufacturers and
firms in certain
qualifying service
sectors in the targetedinvestment
communities.
Programme geared
toward manufacturing
and certain servicesector businesses as
well as research and
development related to
manufacturing and
distributors of
manufactured
products.1) Five-year, 80% abatement of local taxes
on real estate improvements and personal
property acquisitions: 2) Ten-year, 25%
credit on corporate business taxes, 50% if atleast 5% of all new employees are from the
enterprise zone or from the municipality's
disadvantaged population. 3) $2,250 grant (to
a maximum of $75,000) for each new job
(minimum of three) created within a 24-month period for qualified manufacturing
firms; service firms may be eligible for a
$750 grant per new job created; 4) Low-cost
loans and free technical assistance; 5) Job-
training and placement assistance; 6)
Exemptions on both state real estate
conveyance taxes and sales taxes onmachinery replacement parts.
Connecticut Enterprise Zone or
Entertainment
District Tax CreditDepartment of
Economic and
Community
DevelopmentTax credit Manufacturers, R&D,
warehousing and
certain services and
entertainment related
business as defined by
regulations located inan Enterprise Zone or
Entertainment District. Allows a business 25 or 50% of their
allocable State Corporate business tax as a
credit.  Corporations may claim this credit for
10 years beginning with the first year
following certification.
Connecticut Manufacturing
Credits toFacilities Located
in Distressed
Municipalities and
Enterprise ZonesDepartment of
Revenue ServicesTax credit Corporations
(includingmanufacturing
facilities) that are
located in designated
distressed
municipalities andenterprise zones.Tax credits up to 50%.
Connecticut Manufacturing
Facility in a High
Unemployment
Area Tax CreditDepartment of
Economic and
Community
DevelopmentTax credit An incentive for
businesses
located in
distressed
locations.Manufacturing
businesses operating in
a designated area of
high unemployment.A credit may be applied against the portion
of the corporation business tax allocable to a
manufacturing facility located in a distressed
municipality.  The credit period lasts for ten
years beginning with the first year following
certification.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 94Connecticut Urban Jobs
ProgrammeDepartment of
Economic and
Community
DevelopmentTax incentives Provides
incentives to
manufac-turing
businesses toencourage the
location and
expansion of
industrial
facilities intargeted
investment
communities
within the state.Manufacturers
relocating to or
expanding in the
targeted investmentcommunities,  geared
toward manufacturing
operations or research
and development
facilities relating tomanufacturing and
non-retail distributors
of manufactured
products.1) An 80% local property tax abatement for
five years for both real and personal
property; 2) A corporate business tax
reduction of 25% for ten years; 3) Workingcapital loans for small business; 4) A 0.5%
reduction in charges for state industrial
mortgages guarantees; 5) A 1% reduction in
interest rates for industrial expansion loans
from the state. Facility owners are entitled tothe property tax incentives; all other
incentives are reserved for facility occupants.
Delaware Corporate Income
Tax CreditsDepartment of
FinanceTax credit To encourage
new and
expanded
facilities within
targetedindustries in
Delaware.Firms within targeted
industries,  including:
manufacturers;
wholesalers;
laboratories used forscientific, agricultural,
or industrial research,
development or
testing;  computer
processors;engineering firms,
consumer credit
reporting services;
wholesale of computer
software;telecommunications
and aviation services.Firms within targeted industries qualify for
corporate income tax credits of $400 for each
new employee and $400 for each new
$100,000 investment. Firms within targeted
industries who also locate in a targeted areaqualify for $650 for each new employee and
$650 for each new $100,000 investment.
Firms must invest a minimum of $200,000
and create a minimum of five new positions.
Total credits in any taxable year cannotexceed 50 per cent of the pre-tax liability.
Unused credits can be carried forward during
the ten-year program. Selected commercial
and retail businesses which locate in one of
the 30 targeted census tracts and meet theminimum investment/employment criteria,
qualify for credits of $400/new employee and
$400/$100,000 investment.
Delaware Enterprise Zones Bonds Manufactures,
first-time farmers, and
pollution control
facilities in targeted
investment
communities.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 95Florida Enterprise Zones Enterprise Florida,
Inc.Tax incentives Increased
opportunities for
entrepreneurial
initiatives andsmall business
expansion in
targeted areas
around the state.Businesses located in
designated areas found
in both urban and rural
communities.Enterprise Zone Jobs Tax Credit (Sales &
Use Tax), Enterprise Zone Jobs Tax Credit
(Corporate Income Tax), Enterprise Zone
Property Tax (Corporate Income Tax), SalesTax Refund for Building Materials, Sales
Tax Refund for Business Machinery and
Equipment, Sales  Tax Exemption for
Electrical Energy, and Community
Contribution Tax Credit. ( Listed below )
Enterprise Zone
Jobs Tax Credit
(Corporate Income
Tax)Enterprise Florida,
Inc.Corporate income
tax creditThe credit amounts to 10% of wages paid to
new employees who are residents of a
Florida enterprise zone.  If 20% or more of
the permanent, full-time employees are
residents of a Florida enterprise zone, the
credit is 15%.  The credit is available for upto one year per new employee.  New
employees who reside in a zone and earn
$1,500 or more per month are eligible for a
credit of 5% of the first $1,500 of monthly
wages.  A five-year carry-forward provisionis available for unused portions of past
credits.
Enterprise Zone:
Jobs Tax Credit(Sales & Use Tax)Enterprise Florida,
Inc.Sales and use tax
creditCredit amounts to 10% of wages paid to new
employees who are residents of a Floridaenterprise zone.  If 20% or more of the
permanent, full-time employees are residents
of a Florida enterprise zone, the credit is
15%.  The credit is available for up to one
year per new employee.  New employeeswho reside in a zone and earn $1,500 or more
per month are eligible for a credit of 5% of
the first $1,500 of monthly wages.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 96Enterprise Zone
Property Tax
Credit Enterprise Florida,
Inc.Property tax
creditCorporate income tax credit equal to 96 per
cent of ad valorem taxes paid on the new or
improved property.  Up to a maximum of
$25,000 annually, and may be carriedforward for five years.
Enterprise Zone,
Sales Tax
Exemption forElectrical Energy
Used in an
Enterprise ZoneEnterprise Florida,
Inc.Sales tax
exemption50% exemption from the municipal utility
tax, if the municipality has enacted an
ordinance for the exemption of the utilitytaxes in an enterprise zone. In addition,
businesses are  exempted from 50% of the
state sales tax on utilities. (If 20% of the
firm's employees are zone residents, the
business is totally exempt from the tax.)
Enterprise ZoneSales Tax Refundfor Building
Materials Used in
an Enterprise ZoneEnterprise Florida,
Inc.Sales tax refund Sales tax refund must be at least $500 but no
more than the lesser of $5,000 or 97% of thetax paid per parcel of property.  Maximum
amount is increased to the lesser of $10,000
or 97% of the tax paid per parcel if 20% of
the permanent employees of the business are
residents of the enterprise zone.
Enterprise ZoneSales Tax Refund
for Business
Machinery andEquipment Used
in an Enterprise
ZoneEnterprise Florida,
Inc.Sales tax refund The refund is based on 97 per cent of sales
tax (6%) paid on qualified equipment.  The
minimum refund is $100.  Purchases of
qualified business equipment must be madewithin a 60-day period. The maximum
amount of refund a business may receive is
$5,000 (or $10,000 if at least 20 per cent of
the permanent employees of the business are
residents of an enterprise zone).G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 97Florida High Impact
Performance
Incentive GrantEnterprise Florida,
Inc.Grant To attract and
grow high impact
businesses in
Florida.A qualified high
impact business,
including: Silicon
technology is the firstdesignated high impact
industry.
Aviation/aero-space is
expected to be
designated, and otherindustry sectors are
expected to be selected
and designated in the
future.A qualified high impact business making a
cumulative investment of $100 million and
creating 100 jobs may be eligible for a total
grant of $1 to $2 million; if the businessmakes a cumulative investment of $800
million and creates 800 jobs it may be
eligible for a total grant award of $10 to $12
million.  A qualified high impact business
engaged in research and development whichmakes a cumulative investment of $75
million and creates 75 jobs may be eligible
for a grant of $2 to $3 million; if the business
makes a cumulative investment of $150
million and creates 150 jobs it may be
eligible for a total grant award of $3.5 to $4.5
million.  Once certified, the high impactbusiness would be awarded 50% of their
eligible grant upon commencement of
operations and the balance of the awarded
grant once the full employment and capital
investment goals are met.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 98Florida Qualified Target
Industry Tax
RefundEnterprise Florida,
Inc.Tax refund To encourage
quality job
growth in
targeted highvalue-added
businesses.Qualified Target
Industries: Corporate
headquarters;
manufacturers of food,apparel, furniture,
paper, printing and
publishing, chemicals,
rubber,
primary/fabricatedmetals, industrial
machinery, electronic
equipment,
transportation
equipment;
communications,
security/commoditybrokers; insurance
carriers; business
services.Tax refunds to pre-approved applicants of up
to $5,000 per new job created; $7,500 in an
Enterprise Zone. New or expanding
businesses in selected targeted industries orcorporate headquarters are eligible.  The
applicant may receive refunds on taxes it
pays including corporate income, sales, ad
valorem, intangible personal property,
insurance premia, and certain other taxes.There is a cap of $5 million per single
qualified applicant in all years, and no more
than 25 per cent of the total refund approved
may be taken in any single fiscal year.   The
local community provides a  match equalling
20 per cent of the tax refund. If located in a
Rural Economic Development Initiativecounty, the business may elect to be exempt
from the local match and accept a refund
equal to 80 per cent of the refund for which
they would otherwise qualify.
Florida Silicon
Technology Sales
Tax RefundProgrammeEnterprise Florida,
Inc.Tax refund To reduce the tax
liability
associated withthe purchase of
replacement
research and
development
equipmentemployed by
silicon
technology
-based industries.Silicon technology-
based facilitiesFor silicon technology-based facilities, any
sales and use taxes paid for replacement and
research equipment purchased are eligible fora full refund.  A certified silicon technology-
based company may elect to receive all or a
portion of the refund or, at the option of the
company and with the agreement of the
university or community college, a portion ofthe refund may be directed to a state
university or community college.  If the
university or community college agrees to
receive the funds, it must further agree to
match them equally and use the proceeds to
deliver educational and research services that
provide direct benefit to the company and itsemployees.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 99Georgia Appalachian
Region Business
Development
Revolving LoanFundDepartment of
Community AffairsLoans Private, for-profit
businesses in the
Appalachian region$3m pool.  Loans equal $200,000 per
qualifying business, or 50% of total project
cost.  Loans are usually made “below market
rate.”
Georgia Enterprise Zone Department of
Industry, Trade and
TourismTax credit Economic
development and
expansionState legislation was
enacted in 1983,
pertaining to Atlantaonly.   Legislation
allows other
communities to create
"development
districts" which aresimilar to Atlanta's
Enterprise Zones.Companies locating within the zones receive
100% exemption on inventory for 25 years.
Industrial: Ad valorem tax reductions onproperty taxes on Freeport-eligible inventory
for 25 years, with a 100% property tax
reduction in the first five years and 80, 60,
40, and 20% reductions in subsequent five
year periods; a 100% exemption exists forinventory for 25 years.   Housing and
Commercial:  Zone created for ten years with
exemptions for real property being 100% for
5 years; 80% for 6 and 7 years; 60% for 8yr;
40% for 9 years; 20%  for 10 years.  Non-exempt real property is taxed by the city.
Georgia Investment Tax
CreditGeorgia Department
of RevenueTax incentive
(credit against
income tax
liability)Based on the same
tiers as mentioned in
connection with the
job tax credit.Tier one: 5%-8% credit if company invests
$1 million. Tier two: 3%-5%
Tier three: 1%-5%G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 100Georgia Job Tax Credit Georgia Department
of Community
AffairsTax Incentive
(tax credit)All counties in state
are divided into one of
the three tiers,
according to four(economic) factors.
The tiers each provide
a different level of
benefits, thereby
providing regionaldifference.  Based on
the tier of an area,
businesses engaged in
manufacturing,
warehousing and
distribution,
processing, tourismand R&D receive tax
credits accordingly.Tier one (least developed): $2,500 tax credit
for each new job created. Tier two: $1,500
and Tier three: $500.
Georgia Sales Tax
ExemptionDepartment of
Industry, Trade and
TourismTax exemption Manufacturing,
remanufacturers of
aircraft engines, parts,
and components, and
governmentcontractors for DOD
or NASA.Tax exemption for machinery; sales and use
tax exemption on purchases of primary
material handling equipment; sales tax
exemption for electricity.  Other exemptions:
purchase for resale; machinery used directlyin making a product for sale; Raw materials
that will become a component of a finished
product.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 101Hawaii Enterprise Zone Department of
Business Economic
Development and
TourismTax incentives Programme was
established to
increase business
activity andcreate jobs in
areas with above
normal
unemployment
and/or belowaverage income
levels.Qualifying businesses
include manufacturing,
wholesaling, aviation
and maritime repair,telecommunications,
medical research, data
systems and
international executive
training.General Excise Tax and Use Tax exemptions,
as well as two different types of income tax
credits.  These include a seven-year
exemption from general excise and use taxeson gross proceeds, an excise tax exemption
for construction or major facility renovation,
an 80% first-year income tax abatement
(decreasing 10% each year thereafter during
the next six years), and an income tax creditequal to 80% of unemployment taxes paid
during the first year (decreasing 10% during
the next six years).  Counties also contribute
one or more incentives for each zone
designated under its jurisdiction.
Idaho Workforce
Development
Training
Fund-RuralComponentGrant To expand the job
training
programme to
counties in ruralIdaho that are
experiencing high
unemployment or
low per capita
income.Counties that do not
have a city over
20,000 in population
and unemployment of6.5% or higher.  Low
per capita income is
defined as less than
80% of the state’s per
capita income level.Up to $3,000 per employee.
Idaho Rural Community
Block GrantGrant To finance and
facilitate business
development in
select areas.Public owned land,
buildings,
infrastructure.Grants up to $500,000.
Idaho Rural
RehabilitationLoan ProgrammeIdaho State
Department ofAgricultureLoan To offer
financing andassistance for
rural
development.Individuals and
organizations in Idahowhose agricultural
projects provide rural
development.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 102Illinois Coal
Demonstration
ProgrammeDepartment of
Commerce and
Community AffairsMixed financing To bring a new
generation of
clean coal
techniques to thecommercial
marketplace, and
to thereby
increase the
mining of Illinoiscoal.Coal mining firms. Finances st ate-of-the-art development and
demonstration projects for advanced coal
systems with utility and industrial
applications.
Illinois Coal Technology
Development
Assistance FundDepartment of
Commerce and
Community AffairsFunding Coal industry firms. $4.5 million for a coal scrubber on the
coal-powered electric plant in Springfield
Illinois Enterprise Zones Department of
Commerce andCommunity Affairs
(DCCA)Tax exemption To stimulate
economic growthand neighbour-
hood
revitalization at
targeted
locations.Businesses located
within an enterprisezone.Investment tax credits, a jobs tax credit,
dividend deduction, interest incomededuction to financial institutions,
contribution deduction to a qualified zone
organization, sales tax exemption on building
materials, utility tax exemption, and sales tax
exemption for items consumed during amanufacturing or assembling process.  Units
of government within a zone may abate local
utility taxes and property taxes.
Illinois Enterprise Zone
Financing
ProgrammeDepartment of
Commerce and
Community AffairsLoan Any for-profit entity
with less than 500
employees locating in
an Illinois Enterprise
ZoneDCCA may participate in an eligible loan for
no less than $10,000, nor more than $75,000.
In no case shall the amount of DCCA’s
subordinated participation exceed 25 per cent
of the total project.  DCCA’s rate will be 200
basis points below the Wall Street JournalPrime rate, but in no event will the rate be
less than 3%.
Illinois Rail Freight
ProgrammeIllinois Department o f
TransportationLoans and grants Communities and
businesses which
improve or construct
rail facilities.87 projects have been undertaken at a cost of
$45.9 million since the programme’s
inception.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 103Indiana Economic
Revitalization
AreaDepartment of Local
Government FinanceTax abatement All taxpayers making
improvements to real
property located in
designated urbandevelopment areas.The abatement is actually a deduction equal
to 100% of the increased assessed value of
the property due to the improvement in the
first year.  The abatement drops to 95% in thesecond year and 80% in the third year,
reaches 50% in the fifth year, and is down to
5% by the tenth year.
Indiana Enterprise Zones Department of
Commerce Tax credit To meet the
individual needs
of businesses and
residents in
Indiana's highly
distressed areas.Business located in an
enterprise zone.Incentives offered to qualified businesses
include: 5% tax credit on interest from loans
to firms in the zone for any business purpose
or to individuals for property improvement;
10% tax credit on employer income tax on
employee wages; property tax credits;employee tax deduction; low-interest loans to
Small Business Investment Companies
(SBICs), Minority Enterprise SBICs
(MESBICs), and Corporation for Innovation
Development (CID) for investments in zonebusinesses; tax increment financing; priority
for neighbourhood assistance funds, and
equity investment tax credit of up to 30% of
stock purchase.
Indiana Livestock
Promotion and
Development FundOffice of the
Commissioner of
AgricultureGrants Livestock
organizations (for
production,
processing, and
distribution);non-profit
organizations which
promote the livestock
industry.24 grants totalling almost $260,000 were
awarded to recipients in 2000.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 104Indiana DeKalb County Tax credits, tax
abatement, bonds,
county economic
developmentincome tax
revenues applied
toward project.
On going tax
incentive
programmes
previously
notified.New minimill
startup in Butler.Steel Dynamics $107.04 million.
Indiana Spencer County Spencer County
tax abatementsNew structural
mill in Whitley
CountySteel Dynamics Up to $59 million.  Duration: 10 years.
Iowa Enterprise Zones Department of
Economic
DevelopmentTax incentives To promote
business
investments and
job creation ineconomically
distressed areas
of Iowa.Businesses located in
an enterprise zone
must invest at least
$500,000, hire at least10 persons at target
wage and benefit
levels, and not be retail
establishments.1) Property tax exemptions for up to 10
years.  2) Investment Tax Credit for up to
10% on corporate income taxes.  3) Refunds
of sales or use taxes paid to contractorsduring construction.  4) A 13% research and
development activities credits on corporate
income taxes.  5) Additional withholding tax
credit of 1.5% (total 3% for the business’ job
training program).
Iowa State of Iowa Tax incentives New plate mill Ipsco Fixed amount of $73 million. Duration of the
state incentive packet is 20 years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 105Kansas Enterprise Zones Department of
Commerce and
HousingTax credit To expand and
renew the local
economy and
improve thesocial economic
welfare of
residents in
economically
distressed areaslocated within the
cities of the state
of Kansas.Retail businesses,
manufacturing
businesses, non-
manufacturing/retailbusinesses, business
headquarters; ancillary
support services,
financial and insurance
corporations.The incentives are: (1) Sales tax exemption
on the purchase of machinery, equipment, or
services associated with any construction,
expansion, or renovation project that createsnet new jobs. (2) Job creation tax credit
($1,500 basic, $2,500 enhanced) against State
income tax liability for each net new job
created.  (3) Investment tax credit ($1,000)
against State income tax liability for each$100,000 or major portion thereof. This is a
one-time credit with unlimited carry-forward
provisions.  The maximum credit in any
given year is 100% of the tax liability in
qualified business facility investment.
Kentucky Coal Income Tax
CreditKentucky Revenue
CabinetTax credit Companies which use
Kentucky coal for
industrial heating or
processing.Credit is allowed for up to 4.5% of the
purchase price of Kentucky coal (excluding
transportation costs).  Credit is allowed for
10 years following either the installation orconversion to coal burning units.  The credit
in any year cannot exceed the corporation's
tax liability, minus other credits.  Unused
credits cannot be carried forward.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 106Kentucky Enterprise Zone Kentucky Economic
Development
Cabinet, Department
of FinancialIncentivesTax credit Effort to bring
new or renewed
development to
targeted,economically
depressed areas.Business locating to or
located in an enterprise
zone.Building materials used in remodelling,
rehabilitation, or new construction are
exempt from sales and use taxes; new and
used machinery and equipment is exemptfrom sales and use tax; commercial vehicles
solely for business purposes shall be exempt
from motor vehicle usage tax; other vehicles
which are not defined as commercial vehicles
solely for business purposes are exempt frommotor vehicle usage tax, limited to the first
$20,000 of the retail price of the vehicle;
credit against the tax levied equal to 10% of
the wages paid to each employee who has
been unemployed for at least 90 days or who
has received public assistance benefits, based
on need and intended to alleviate poverty, forat least 90 days prior to being employed with
the qualified business, up to $1,500 per
employee.  Any unused credit may be carried
forward for up to 5 years.
Kentucky Industrial
Development Act
(KIDA)Kentucky Economic
Development
Cabinet, Departmentof Financial
IncentivesTax credit Companies that create
at least 15 new full-
time jobs and invest atleast $500,000 in
projects approved
under KIDA.  Only
manufacturing projects
are eligible for KIDA.State income tax credits for up to 100% of
annual debt service costs (principal and
interest) for up to 10 years on land, buildings,site development, building fixtures and
equipment used in a project, or the company
may collect a job assessment fee of 2% of the
gross wages of each employee whose job is
created by the approved project and who issubject to Kentucky income taxes.
Kentucky Kentucky Rural
Economic
Development Act(KREDA) Kentucky Economic
Development
Cabinet, Departmentof Financial
IncentivesTax credit To increase
employment in
disadvantagedcounties.Companies with
projects approved
under KREDA.Manufacturing
industries are the
primary target of this
program.State income tax credits and job assessment
fees for up to 100% of annual debt service
costs for up to 15 years on land, buildings,site.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 107Louisiana Enterprise Zone
ProgrammeDepartment of
Economic
DevelopmentTax credit Businesses located in
or locating to an
enterprise zone.One-time tax credit of $2,500 for each net
new permanent job created.  The Enterprise
Zone programme also provides rebates on
applicable state and local sales/use taxes(except where local sales taxes are
encumbered toward payment of bond
indebtedness or are school taxes), on
purchases of building construction materials,
machinery, and equipment by businesses thatbuild or renovate facilities in Louisiana
Enterprise Zones.
Louisiana Biomedical
Research andDevelopment ParkTax exemption
(state corporationincome and
franchise taxes). Medical and health
care-related businesseslocated in the New
Orleans Regional
Medical CentreExemption shall not exceed 30% of the
corporate income, franchise and state’ssales/use taxes during the preceding fiscal
year
Louisiana Film and Video
Sales/Use Tax
Refund
ProgrammeDepartment of
Economic
DevelopmentTax refund Motion picture
production companies.Rebates all of Louisiana state sales/use taxes
paid out by motion picture production
companies that film in the state and pay
sales/use taxes on a minimum of $1 millionof annual purchases in the state.
Maryland Enterprise
Incentive Deposit
FundDepartment of
Business and
EconomicDevelopmentLoan Businesses, located in
a Maryland county that
has a population under200,000 and an
above-average
unemployment rate
during the most recent
four consecutivequarters for which data
is available, are
eligible for
participation in the
program.Linked deposits are limited to $500,000.
Interest rate subsidy of 3%.  The loan rate
must be a fixed rate and must be made for aperiod of at least five years.
Maryland Film Production
Sales and Use TaxExemptionDepartment of
Business andEconomic
DevelopmentTax Exemption Increase film
production (orpost-product
ion) in MarylandFilm production
companies orproducers.Varies - tangible personal property or taxable
services used in connection with filmproduction activity are exempt from sales and
use tax.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 108Maryland One Maryland
Economic
Development Tax
CreditDepartment of
Business and
Economic
DevelopmentTax Credit Attract new
businesses to
distressed areas
of the State (thoseareas not reaching
certain thresholds
for employment
and income).Businesses that
establish or expand in
a priority funding area
in a distressedMaryland county.The credit for start-up costs is the lesser of:
100% of eligible start-up costs or $10,000 per
new employee for qualifying jobs.  The credit
for project costs is the lesser of: 100% ofeligible costs (up to $5 million) or the State
income tax liability for the taxable year from
the project.  In both cases, credits previously
taken are deducted first.
Maryland Smart Growth
Economic
Development
InfrastructureDepartment of
Business and
Economic
DevelopmentLoan, Grant, and
Equity
InvestmentAid the expansion
of existing
businesses and
attract new
businesses to“distressed”
jurisdictions
(those areas not
reaching certain
thresholds foremployment and
income).Eligible businesses in
seven qualifying areas:
Baltimore City,
Allegany, Caroline,
Dorchester, Garrett,Somerset, and
Worcester counties.Amounts vary.
Maryland Maryland
Economic
Development
Authority and
Assistance FundDepartment of
Business and
Economic
DevelopmentLoan, Grant,
InvestmentProvides
incentives to
specific growth
industry sector
businesses
located in Priority
Funding Areas.Businesses in areas
where the State and
local governments
want to focus their
efforts to encourage
and support
development of fixedassets, machinery and
equipment, land, and
working capital.Amounts vary.
Maryland Enterprise Zone
Tax CreditsDepartment of
Business and
Economic
DevelopmentTax credit To promote
private capital
investment and
increase privateemployment
opportunities in
certain areas of
the state.Businesses located in
or locating to an
enterprise zone or
Focus Area that havebeen certified by the
local enterprise zone
administrator.Corporate and personal income tax
incentives.  If a business is located in a Focus
Area, a credit of up to $3000  against the
corporate income tax is provided for eachnew, permanent job; if the new job is filled
by a disadvantaged applicant.  If the business
is not located in a Focus Area, the credit
ranges from $500-$1500.  Credits are
available over a three-year period.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 109Maryland Job Creation Tax
CreditDepartment of
Business and
Economic
DevelopmentTax credit To encourage
firms in  targeted
growth sectors to
locate or expandin Maryland,
especially in
priority funding
and revitalization
areas.Businesses engaged in:
manufacturing,
mining,
transportation,communications;
agriculture, forestry,
fishing;  a public
utility or warehousing;
research, development,or testing;
biotechnology;
computer
programming, data
processing, other
computer- related
services;  centralfinancial, real estate or
insurance services; and
the operation of a
corporate
headquarters.Credit will be granted for the lesser of $1000
for each new employee or 2.5% of a year's
wages for each new, full-time job.  If the new
or expanded facility is located in a designatedrevitalization area, then the credit is
increased to the lesser of $1500 or 5% of a
year's wages for each new, full-time job.  The
maximum credit allowed-during any credit
year for a single facility is $1 million.
Maryland Dept. of Business and
EconomicDevelopment/
Baltimore CountyGrants  New cold rolling
millBethlehem Steel
CorporationsTotal $6 millionG/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 110Massachusetts Economic
Development
Incentive
ProgrammeOffice of Business
DevelopmentTax credit To stimulate job
creation in
distressed areas,
attract newbusinesses,
encourage
existing
businesses to
expand andincrease the
overall economic
development
awareness and
readiness of the
129 participating
cities and townsacross the
Common-wealth.Businesses located in
designated economic
target areas.Businesses and communities negotiate a local
real estate tax incentive agreement.  In turn,
these businesses become eligible for the
state's enhanced 5% Investment Tax Creditand, where applicable, the state's 10%
Abandoned Building Tax Deduction.  In
addition, the programme also targets and
prioritizes capital spending, including such
programmes as Public Works for EconomicDevelopment monies and Community
Development Action Grants, to communities
within Economic Target Areas.
Massachusetts Seafood Revolving
Loan FundDevelopment Finance
AgencyLoan To  improve the
quality,
efficiency, or
competitiveness
of a company'sseafood
operation.  The
four targeted
areas are
improved productquality,
utilization of fish
by-products,
surimi
production, and
improved
distribution andmarketing.Companies engaged in
the shipping,
processing, freezing,
storing, packing,
distribution, ormarketing of seafood
products.Loans of up to $200,000 are available to
finance equipment and technologies.  The
fund cannot finance vessels.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 111Massachusetts Urban Initiative
FundCommunity
Development Finance
CorporationLoans Minority-owned
businesses with less
than $500,000 in
annual sales intargeted urban
communities.Loans up to $200,000.
Massachusetts Venture Capital
FundCommunity
Development FinanceCorporationLoans and in
some cases,equity financingFirms in low-income
communities whichhave a community
development
corporation, to enable
them to expand or
retain employment forlocal residents.$100,000 to $300,000 per project, up to 1/3
of total financing.
Michigan Renaissance ZonesEconomic
Development
CorporationTax credit To encourage
economic activity
in designated
urban and rural
areas of the state
by waivingvirtually all state
and local taxes
for up to 15
years.Businesses with a
presence in Michigan
choosing to relocate
Michigan-based jobs
to a zone may do so by
meeting notificationrequirements laid out
in the law.By law, Renaissance Zones waive the
following local and state taxes:  Michigan
Single Business Tax; Michigan Personal
Income Tax; Michigan's State Education
Tax; Local Personal Property Tax; Local
Real Property Tax; Local Income Tax; andUtility Users Tax.  These taxes represent
nearly all state and local taxation on a
Michigan business.  Of the 11 Enterprise
Zones, the sunset dates arrive in 10-15 years
after designation on January 1, 1997.
Michigan Technology Park
Development ActTax Abatement
(property tax)New facilities locating
in technology parks
(e.g., research and
development,high-technology
industrial activities,
business activity
related to development
or improvement ofexisting products or
creation of new
products).The abatement is equal to a 50% reduction in
property taxes and may be granted for
periods of 1 to 12 years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 112Minnesota Enterprise Zone
Programme Department of Trade
and Economic
DevelopmentTax credit The main goal of
the programme is
retention of
existingMinnesota
businesses with a
secondary
emphasis on the
creation of newdevelopment and
jobs.Any business located
in or locating to an
enterprise zone.  Any
business is eligibleexcept one of the
following: a recreation
or entertainment
facility, one owned by
a fraternal or veteran'sorganization, one
owned by a public
utility, or a financial
institution.The Zone programme provides business tax
credits (income, property, sales) to qualifying
businesses which create investment,
development, job creation or retention in theEnterprise Zone Tax credits are allocated by
the State to Enterprise Zone cities.
Businesses apply for tax credits through the
city Enterprise Zone coordinator. Tax credits
include: property tax credits, debt financingcredit on new construction, sales tax credit on
construction equipment and materials, and
new or existing employee credits.
Minnesota Urban Challenge
Grant ProgrammeMinnesota Dept. of
Trade and Economic
DevelopmentGrants New and expanding
minority and
women-owned
enterprises located in
targeted areas.Loans will be more than $5,000 and less than
$150,000.
Up to $12 million available.
Minnesota Challenge Grant
ProgrammeDepartment of Trade
and EconomicDevelopmentGrant To provide job
opportunities forlow-income
individuals,
encourage private
investment, and
promote
economic
development inrural areas of the
state.Eligible applicants
include businesseslocated, or intending to
locate, in rural
Minnesota.  "Rural" is
defined as the 80
counties of Minnesota
other than the Twin
Cities metropolitanarea. Maximum loan available is $100,000 up to
50% of start-up or expansion costs.  Mostloans will be smaller due to the high demand
for funds compared with the funds available.
The interest rate is between 3% and 10%, and
the terms will be consistent with other
sources of project financing.  Each Initiative
Fund will determine the specific interest rate
and collateral requirements. Each dollar ofChallenge Grant funds must be matched by at
least one dollar of non-public funds, usually
owners' equity and/or private financing.
Mississippi State Port Income
Tax CreditDepartment of
Economic and
Community
DevelopmentTax credit To encourage the
use of in-state
ports by in-state
companies.Taxpayers who utilize
the port facilities at
state, county, and
municipal ports inMississippi.Credit in an amount equal to certain charges
paid by the taxpayer.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 113Missouri Enterprise Zones Department of
Economic
DevelopmentTax credit To encourage
taxpayers to
establish new
facilities andexpand existing
facilities in
economically
distressed areas
of Missouri andto create new jobs
and new
investment.Businesses located in
or locating to an
enterprise zone.The tax credits are earned each tax period for
up to a 10-year period.  Possible credits
include: $400 for each new job created at the
project; 2% of the new capital investmentover $100,000 created; $400 for each zone
resident employee; $400 prorated on 365
days for each “special” employee hired; $400
per employee trained, who is a zone resident
or was unemployed for 90 days when hired;up to $75,000 refund of unused credits
earned by new facilities only; at least 50%
abatement for 10 years on improvements
made to real property used for
manufacturing, mining, or wholesale
distribution.
Missouri Wine and Grape
Production Tax
Credit Program Department of
Economic
DevelopmentTax credits Vineyards and wine
producers.State income tax credit to an individual,
partnership or corporation in an amount equal
to 24% of the purchase price of all newequipment and materials used directly in the
growing of grapes or the production of wine
in Missouri.
Nebraska Enterprise Zone Department of
Economic
DevelopmentTax credit Qualified Zone
business activities
include manufacturing,
assembly and
fabrication; farming,
ranching or raisinglivestock; research and
development; data
processing,
telecommuni-cations
or insurance services;financial services; and
administrative
headquarters.
Targeted counties have
been designated by theState as Enterprise
Zones.Amounts which shall not exceed $75,000 per
year, shall be: (1) $4,500 for each new
employee and $3,000 per $75,000 of
investment provided at least 50 per cent of
the new employees are Zone residents; (2)
$4,500 for each new employee who is a Zoneresident, $1,500 for non-Zone residents, and
$1,000 per $75,000 of investments; or (3) the
normal provisions for tax credits provided by
the Employment Expansion and Investment
Incentive Act - $1,500 per employee and $1,000 per $75,000 of investment.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 114Nebraska Ethanol Tax CreditDepartment of
RevenueTax Credits Producers of ethanol. $0.20 per gallon.
Nebraska Employment and
Investment
Growth ActDepartment of
RevenueTax Credits Specific types of
businesses which make
major investments in
employees and
property, with some
limitations.Varying percentage based on minimum
required investment levels.
Nebraska Revolving Loan
FundNortheast Nebraska
Development DistrictLoan For-profit business
located in targetedcounties in
Northeastern
Nebraska.Loans will range from $25,000 to $100,000
(maximum).  Fixed asset financing will notexceed 15 years.  Working capital loans will
be financed on a short-term basis of 3 to 7
years.  Interest rates will be fixed and
negotiated on an individual basis.
Nebraska Rural Economic
Opportunity ActNebraska
Tax
IncentiveProgrammesTax credit A taxpayer, who is or
whose owners are,
subject to sales and usetaxes and either an
income tax or financial
institutions tax or a
sub-chapter T
cooperative. 10% investment credit earned on property
placed in service after date of application and
before the end of the entitlement periods (3years). Or, 5% compensation credit earned in
the entitlement period on taxable wages of
new employees.
Nebraska Nebraska Quality
Job Acts Department of
RevenueAllow up to 5%
withholding of
employee’s state
income taxes bythe recipient firmEligible companies
making a certain level
of investment and
employmentAllow retention by the company of state
income taxes from wages paid to new
employees not to exceed 5% to be used by
the company for an employee benefitprogram.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 115New Jersey Urban Enterprise
ZoneDepartment of
Commerce and
Economic
DevelopmentMixed tax
incentivesTo revitalize the
state's most
distressed urban
communitiesthrough the
creation of
private sector
jobs and public
and privateinvestment in
targeted areas
within these
communities.Businesses that locate
within the zone. (20
zones).1) 100% sales tax exemptions for purchase o
f
certain materials and  tangible personal
property. 2) One-time corporation tax credit
of $1,500 for the full-time hiring of residentsof a city where a Zone is located who have
been unemployed or dependent upon public
assistance for at least 90 days, or a
corporation tax credit of $500 for hiring
residents within the Zone, within anotherZone or within a qualifying municipality.  3)
Subsidized unemployment insurance costs
for certain new employees with gross salaries
of less than $4,500 per quarter.  4) Tax credit
of 8% of investment in the Zone by an
approved "in lieu" agreement for certain
eligible firms.  5) Priority for financialassistance from New Jersey Local
Development Financing Fund and Job
Training Program.
New Mexico Aerospace
Research and
Development
DeductionTaxation and
Revenue DepartmentTax abatement or
reductionTo facilitate the
location of a
spaceport in New
Mexico.A company must:  Sell
its services to the US
or its agencies for
aerospace research anddevelopment; and
operate the proposed
spaceport for the
launch and recovery of
reusable spacecraft.Maximum Programme Benefits: A portion of
gross receipts tax is deductible, increasing
over four years to 100% by 1999.  Receipts
from operating the spaceport are deductible.Receipts from launching or recovering space
vehicles or payloads are deductible.  Receipts
from preparing a payload for launch in New
Mexico are deductible.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 116New Mexico Enterprise Zones Economic
Development
DepartmentMixed tax
incentivesTo stimulate the
creation of new
jobs, with
emphasis oneconomically
disadvantaged
workers and long-
term unemployed
individuals, andto revitalize
economically
distressed areas.Businesses locating to
or located in an
enterprise zone.$50,000 tax credit to property owners for the
rehabilitation of qualified business facilities;
Tax increment method of financing local
enterprise zone projects; Local property taxabatement for 10 years on selected property;
Building rehabilitation tax credit up to
$50,000;  65% in-plant training
reimbursement for qualified businesses.
New Mexico Filmmaker's Gross
Receipts Tax
IncentiveTax information
officeTax exemption To facilitate the
filming of
movies, television
shows and
commercials in
New Mexico.Qualified production
companies filming in
New Mexico.A qualified production company may execute
nontaxable transaction certificates with its
suppliers for tangible personal property or
services.  The suppliers may then deduct their
receipts from the gross receipts tax.
New York Empire Zones
Programme
(formerly notified
as
Economic
Development
Zones Programme)Empire State
DevelopmentMixed tax
incentivesTo stimulate
economic growththrough state tax
incentives for
businesses that
expand or locate
in Economic
Development
Zones in NewYork State.Qualified New York
State businesses ortaxpayers operating in
a Zone or Zone
Equivalent Area who
are subject to franchise
and personal income
tax are eligible for
benefits.(1) Investment tax credit - Tax credits up to
10% on business investments in new orexpanded manufacturing facilities.
Employee incentive credit of up to 9% is
available to corporations if employment is
increased when the investment is made.  (2)
Wage tax credit - up to $3000 available for
each new job created.  Credit can be taken for
up to five years. (3) Zone capital tax credit -25% tax credit for eligible investments in or
contributions to certified zone business;
approved community development projects;
or an approved local loan or equity fund.  (4)
New York State sales tax refund - availablefor the 4% state sales tax paid on the
purchase of building materials incorporated
into the construction or renovation of
industrial or commercial facilities in the
zone.  (5) Utility rate reduction available inmany areas. (6) Real property tax abatement,
credits, and reductions also available.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 117New York Long-Term
Economic
Development FundJob Development
AuthorityLoan Applicants must be
private businesses
located in rural or
distressed areas of thestate and in
communities with
population under
25,000, or in counties
that are not within aStandard Metropolitan
Statistical Area, or in
counties with fewer
than 150 people per
square mile.
Exceptions may be
made on a case-by-case basis.Loans of up to one-third of total project cost
or a maximum loan of $150,000 per project.
Interest rate on loans is the prime rate minus
3%, fixed at the time of closing, with aminimum rate of 5% and maximum rate of
10%.
New York JDA Direct Loan
ProgrammeNew York Job
Development
AuthorityLoans Priority given to
projects that contribute
to the revitalization of
distressed areas.Low-interest loans, amounts vary.
New York Energy Products
CentreNew York State
Energy R&D
AuthorityMarketing
assistance and
financial
assistanceBusinesses involved
with a technology,
product, or service that
generates new supplies
of energy more
efficiently and cleanly.Up to $500,000 of project cost may be
funded, with 50% co-funding.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 118New York Industrial Fuels
and Raw MaterialsNew York State Dept.
of Economic
DevelopmentTax exemptions
(sales and use
taxes)Components
used/consumed in
manufacturing,
mining, and R&D, aswell as fuels and
utilities used or
consumed directly in
such activities
(manufacturing fuelsand utilities are taxable
in NYC). Regional
preference for locating
outside of NYC.Amounts vary.  State and local sales tax
exemptions for manufacturing, research and
development, machinery/equipment, and
fuels/utilities do not include a generalexemption for raw materials, but may be
exempt under the “sale for resale” exemption
or other exemptions.
New York Rural
Development Loan
Fund New York Job
Development
AuthorityLoans New and emerging
businesses in
distressed rural
communities, and
communities with1980 populations of
25,000 or less, for
environmentally sound
development projects.Provide up to 20% of the total project costs.
North Carolina Job Creation Tax
CreditDepartment of
CommerceTax credits Job creation Companies that hire
new full-time
employees.  Benefits
dependent upon tier
status.Tax credit for Tier 1: $12,500;
Tier 2: $4,000; Tier 3: $3,000; Tier 4:
$1,000; Tier 5: $500.
North Carolina Worker Training
Tax CreditDepartment of
CommerceTax credits Job training Companies eligible for
job creation ormachinery and
equipment tax credits.Tier 1: $1,000; All other tiers: $500.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 119North Carolina Machinery and
Equipment
Investment Tax
CreditDepartment of
CommerceTax Credit Eligible Companies
are manufacturing,
processing,
warehousing,distribution, and data
processing including
the following SIC
codes: 2011-3999,
4221-4226, 5012-5149, 73)71-7379.The size of the tax credit is based on the
location of the firm and the size of the
investment.  The tax credit equals 7% of the
amount of the investment over the followingthresholds:  Tier 1 counties,  $0; Tier 2
counties, $100,000; Tier 3 counties,
$200,000; Tier 4 counties, $500,000 and Tier
5 counties, $1,000,000.
North Dakota Renaissance Zone
ActOffice of the State
Tax CommissionerTax credits Businesses in certain
designated zones.Up to 100% exemption from property tax for
up to five years for purchasing buildings,
structures, fixtures, and improvements forbusiness purposes.  Up to 100% exemption
from property tax for up to five-years for
purchasing buildings, structures, fixtures and
improvements solely for investment
purposes’; five-years business incomeexemption for purchasing or leasing real
property for use in a business or for
improving real property used in an existing
business; five-year investment income
exemption for purchasing residential orcommercial real property solely for
investment purposes.
Ohio Enterprise Zones Department of
Development Mixed tax
incentivesBusinesses that
establish, expand,renovate, or occupy a
facility in an
Enterprise Zone.Up to 75% exemption in incorporated areas
and up to 60% in unincorporated areas of theimproved real estate or new tangible personal
property tax valuation for up to 10 years.  In
some instances, local school board approval
may be required.  Additional state incentives
available.  Programme highlights includesubstantial tax reductions on real and
personal property and state franchise taxes.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 120Ohio Scrap Tire Loan
and Grant
ProgrammeDepartment of
Development
(ODOD)Grant Any operating
business that has a
significant presence in
Ohio and whichdemonstrates that its
fixed asset expansion
project will recycle
Ohio's scrap tires.ODOD has $2 m illion available for
qualifying loans and grants, with additional
funds earmarked to continue the programme
through the year 2000.   Financing isdesignated as "take-out" financing wherein a
business must complete its project utilizing
interim financing from a conventional lender
as its equity.  Upon completion of the project,
the state funds will be disbursed.  Preferentialinterest rates and terms are provided for
qualifying companies locating or expanding
in "distressed" areas.
Ohio Steel Development
Initiative: 166
Direct Loan or
Loan Guarantee &
Ohio Enterprise
Bond FundDepartment of
DevelopmentLoan Steel makers,
processors, and
foundries (SIC 3300 &
3400) making new
capital investments;
eligible investmentsinclude fixed asset
investment in building,
machinery, and
equipment.Up to $30 million available (up to $10m per
company) under two programmes: 1) Direct
Loan or Loan Guarantee - provides up to
30-40% of eligible project costs, $15,000 of
state money loaned per job retained or
created in non-distressed areas; $35,000 ofstate money loaned per job retained or
created in distressed areas; 10% equity
requirement; interest rate fixed at 3%; term
of 5-15 years based on life of fixed assets; 2)
Ohio Enterprise Bond Fund - provides up to90% of fixed rate financing of eligible
project costs; $75,000 of bond money loaned
per job retained or created; 5-20 year term
based on life of fixed assets.
Ohio Steel Development
Initiative:
Infrastructure
Grants Department of
DevelopmentGrant Steel makers,
processors, and
foundries (SIC 3300 &
3400) making new
capital investments.Eligible investments -
public infrastructure
improvements
necessary to move a
project forward or keyequipment forward.Up to $5 million over three years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 121Ohio Steel Development
Initiative: Targeted
Industries Training
Grant ProgrammeOhio Board of
RegentsGrant Steel makers,
processors, and
foundries.Up to 75% of the instructional and related
costs of a training programme.  Maximum of
$50,000 in benefits to a single company
during a fiscal year - cost per trainee pertraining project cannot exceed $650.
Oklahoma Enterprise Zones Department of
Commerce Mixed financing To entice
manufacturers to
low- income,
high out-
migration, or high
unemployment
areas.Any type of
manufacturing
business located in or
locating to an
enterprise zone. Double the Investmen t/New jobs tax credit
is allowed and low-interest loans may be
made available through the enterprise district
loan fund.  These loans can be for up to
100% of the estimated cost of the building
and equipment.
Oklahoma Former Military
Base Quality JobsActDepartment of
Commerce and TaxCommissionGrants To create new
jobs in areasdesignated as
former military
basesAny type of
manufacturing, certainwarehouse distributors,
certain service
companies.Amounts vary.
Oklahoma High Impact
Quality JobsDepartment of
Commerce and Tax
CommissionGrants To create new job
opportunities in
sparsely
populated areas.Any type of
manufacturing, certain
warehouse distributors,
certain service
companies locating in
low-population areas.Amounts vary.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 122Oklahoma Investment New
Jobs Income Tax
CreditOklahoma Tax
CommissionTax credit Manufacturers or
qualified aircraft
maintenance facilities.Credit of 1%/year of the investment in
qualified depreciable property the year the
property is placed in service, or a credit of
$500/year per additional new jobs engagedonly in manufacturing or processing.  New
jobs credit shall be for each full-time
equivalent manufacturing employee hired
prior to 2003 whose paid wages are at least
$7,000 during each year the credit is claimed.In Enterprise Zones the credit is doubled.
Firms that take advantage of the
Investment/Jobs Income Tax Credit Package
are ineligible for the Quality Jobs 10-Year
Cash Back Incentive.
Oklahoma Sales Tax Refunds
for Computer-
related ProductsOklahoma Tax
CommissionTax refund New or expanded
aircraft maintenance
and manufacturing
facilities; Research anddevelopment or
computer services
companies (SIC 7372-
7375, 8731-8734).Sales tax refund on computers, data
processing equipment, related peripherals,
telegraph or telecommunications services or
equipment.
Oregon Business
Development Fund
(OBDF)Economic
Development
DepartmentLoans Specified businesses
located in rural or
economically
depressed areas are
given preferentialtreatment.Max. 40% OBDF participation; max. loan
size is $250,000 and no more than 20% of the
Fund’s assets can be invested in any one
county.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 123Oregon Enterprise Zone Economic
Development
DepartmentTax abatement or
reductionTo create new
jobs by
encouraging
businessinvestment in
economically
lagging areas of
the state.Eligible business firms
provide goods,
products or services to
other businessoperations.  This
includes processing
plants, distribution
centres, maintenance
facilities, warehouses,and some operations
that handle bulk
clerical tasks or after-
sales technical support.Construction of new facilities in an enterprise
zone entitles a business to a 10 % property
tax abatement for three years on new plant
and most of the equipment installed in theplant.
Oregon Industrial
Development
Bonds/Locally
IssuedPortland
Development
CommissionBonds-IDB’s Portland is the only
city currently meeting
the size limitation of
more than 300,00 in
population.Tax exempt industrial development bonds
can be used for up to 100% of the estimated
cost of the project and are issued for up to 30
years.
Pennsylvania Keystone
Opportunity ZoneProgrammeDepartment of
Community andEconomic
DevelopmentTax creditTo encourage
economic growthin economically
distressed areas.Businesses located in a
keystone opportunityzone.Tax credit used to offset corporate tax
liability.  Tax credit shall not exceed the taxliability of the taxpayer for the tax year.
Pennsylvania Enterprise Zone
Tax CreditDepartment of
Community andEconomic
DevelopmentTax credit To encourage
economic growthin economically
distressed areas.Businesses investing in
an enterprise zone.Up to $250,000 per project, per company, per
year.  Tax credit used to offset corporate taxliability.
Rhode Island Employer's
Apprenticeship
Tax CreditEconomic
Development
CorporationTax credit The credit applies to
the following trades in
the metal and plastic
industries: machinist,
toolmaker,modelmaker, gage
maker, patternmaker,
plastic process
technician, tool &
machine setter,diesinker, moldmaker,
tool & die maker,
machine tool repair.Annual credit allowed is 50% of the actual
wages paid to the qualifying apprentice or
$4,800, whichever is less.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 124Rhode Island Enterprise Zone Economic
Development
CorporationTax credit To foster
economic growth
in distressed
urban areas.A taxpayer who owns
a certified business
facility within an area
designated by theEnterprise Zone
Council.Business Tax Credit:  50% of the Rhode
Island salaries and wages paid only to those
newly hired enterprise job workers
comprising the employees included in the"5% growth test" used for certification by the
council.  The maximum credit for each
worker is $10,000.  Resident Business Owner
tax modifications:  deduct $50,000 per year
as a modification reducing federal adjustedgross income during the first 3 years of
operation; and $25,000 during the fourth and
fifth years.  Tax Credit for Donations: 20%
deduction credit allowed for donations to
publicly supported improvement projects in
the zone, max of $10,000 per year and cannot
reduce the tax below the minimum.Enterprise Zone Interest Credits:  Lenders to
certified businesses may be eligible for
credits based on the interest paid by the
business.  Regular Loan Interest:  A taxpayer
is allowed a 10% credit (maximum $10,000)for interest on loans made to certified
businesses.
Special Rehabilitation Loan Interest Income
Credit: 100% credit ($20,000 maximum) for
interest earned on loans made to certifiedbusinesses for rehabilitation of Council-
certified industrial or commercial property if
the amount of the loan is a minimum of
25 per cent of the business’ basis of real
property.
Rhode Island Seafood Revolving
Loan FundEconomic
Development
CorporationLoan Rhode Island Seafood
Industry firms are
eligible for funds.The maximum loan amount is $150,000.
Programme funds should not average more
than 90% of total project cost.  Interest rates
are fixed at the prime plus 1%.  Themaximum term for real estate is 15 years;
machinery and equipment is 10 years; and
working capital is 5 years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 125South Carolina Movie Production
Project and
Facility CreditsS.C. Code Sec.
12-6-3510Tax Credit Promote and
encourage the
location of
motion pictureproduction.Taxpayer investing in
a South Carolina
movie production or
production facility.33% of the value of a taxpayer’s investment
in constructing, converting, or equipping a
motion picture production facility or post
production facility in South Carolina.  TotalProject Credit is limited to $15,000 and total
Production Facility Credit is limited to $5
million for all years.
South Carolina Corporate Income
Tax Moratorium in
Distressed
CountiesSouth Carolina
Department of
RevenueCorporate Income
Tax MoratoriumCompanies located in
South Carolina’s most
economically
distressed counties.Corporate income tax moratorium.  Length o f
moratorium dependent upon number of new
jobs created: 100 ne w jobs over 5 years
results in a 10-year moratorium; 200 new
jobs results in a 15-year moratorium.
South Carolina Economic Impact
Zone Investment
Tax CreditSouth Carolina
Department of
CommerceTax Credit To help offset the
impact of federal
downsizing in thestate and spur
growth in areas
surrounding
Charleston Naval
Base, MyrtleBeach Air Force
Base, and the
Savannah River
Site.Manufacturers located
in “Economic Impact
Zones.”One-time credit against a company’s
corporate tax of between 1% and 5% of a
company’s investment in new productionequipment.  Credit percentage depends on the
applicable recovery period for property under
the Internal Revenue Code.
South Carolina Job Development
CreditSouth Carolina
Department of
CommerceTax credit Provides
companies that
add value to
South Carolina or
the community inwhich they locate
with
reimbursements
for eligible
capitalexpenditures
associated with
providing new
full-time jobs.Companies must meet
and maintain agreed
upon investment and
employment levels.Benefits available over 15 years.  Credit is
available throughout the state, although the
percentage of the credit varies according to
the county classification.  Companies in
developed counties are eligible for only 55%of the credit, while companies in least
developed counties retain 100% of the credit.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 126Tennessee Jobs Tax Credit Tennessee
Department of
Economic and
CommunityDevelopmentTax Credit To create jobs
and increase
investment in the
SpecialEnhancement
Counties.Businesses located in
economically
distressed areas.Up to $3,000 applied against the amount of
increase in the corporation’s franchise tax
liability caused by its expansion.
Tennessee Minority Business
Development LoanFundLow-interest
loansTo stimulate
capitalinvestment,
encourage job
creation, and
build
entrepreneurialcapacity to
advance the
economic
well-being of the
growing minoritybusiness sector.Business located in the
TVA power servicearea for purchase of
fixed assets.Loans range from $50,000 up to $500,000
and are generally awarded for a period ofthree to ten years, from five to seven years
for equipment, and eight to ten years for real
property.
Tennessee Special
Opportunities
Counties (SOC)
ProgrammeLow-interest loan To aid the
Valley’s poorest,
less developed
rural areas by
assisting in the
creation of
projects for job
creation andincome
enhancement by
providing limited
financial
assistance forproject
implemen-tation.Businesses that will
use the loan for
buildings, plant
equipment,
infrastructure, or
property.Loans are based on capital investment
leveraged and number of jobs created.
TVA’s investment is generally based on
$3,000 to $5,000 per job created.  Investment
should not exceed 25% of project costs.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 127Tennessee Economic
Development Loan
FundLow- interest
loanTo stimulate
capital
investment,
encourage theretention and
growth of
high-quality jobs,
and promote
economic growthin the TVA
power service
area.Businesses located in
the TVA power
service area.Maximum investment is $2 million.
Texas Enterprise Zone Department of
Economic
DevelopmentTax refund To encourage job
creation and
capital
investment in
areas of economic
distress.New or expanding
businesses in a zone.Refund of state sales or use taxes paid on
machinery and equipment, building
materials, labor for the rehabilitation of
existing buildings, and electricity and natural
gas purchased for use in the enterprise zone.
Each project is limited to a maximum refundof $1.25 million or $250,000 per year over
the five-year period.
Franchise tax deduction on annual report
filing for each year of five-year designation.State franchise tax liability is based upon the
project's taxable capital or earned surplus
income.  The deduction is based on the
amount of capital investment made by the
project in the enterprise zone.  The project'sapportioned taxable capital may be reduced
by 50% of the capital investment made in the
enterprise zone or the apportioned earned
surplus income may be reduced by 5% of the
capital investment made in zone.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 128Texas Capital Fund Real
Estate
Development
ProgrammeDepartment of
Economic
DevelopmentGrants Non-entitlement cities
and counties which
generally are those
with less than 50,000and 200,000 in
population,
respectively,  to
acquire, construct or
rehabilitate real estateto support new
businesses to invest in
the area.
Texas Capital Fund
Small Business
Incubator
ProgrammeDepartment of
Economic
DevelopmentGrants To establish a new
small business
incubator or expand an
existing small business
incubator located in
non-entitlement citiesand counties which
generally are those
with less than 50,000
and 200,000 in
population,respectively.
Texas Capital Fund Loan
ProgrammeDepartment of
Economic
DevelopmentLoans New business
development and
expansions innon-entitlement cities
and counties which
generally are those
with less than 50,000
and 200,000 inpopulation,
respectively.Interest rates will be fixed at the Wall Street
Journal prime, unless the need for a lower
rate can be documented through financialanalysis.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 129Texas Capital Fund
Small and/or
Minority
Businesses LoanProgrammeDepartment of
Economic
DevelopmentLoans Small and/or minority
businesses located in
non-entitlement cities
and counties whichgenerally are those
with less than 50,000
and 200,000 in
population,
respectively.Interest rates are fixed at Wall Street Journal
prime, unless the need for a lower rate can be
documented through financial analysis.
Texas Rural Economic
Development FundDepartment of
Economic
DevelopmentLoan guarantee Businesses located in
designated rural areas.
Utah Enterprise Zones Department of
Community and
Economic
DevelopmentTax credit Foster
development in
areas with
pervasive
poverty,
unemployment,or general
distress.Companies within
targeted industries
which move into, start
up, or expand within
an Enterprise ZoneIncome tax credit or a corporate franchise tax
credit of $750 for each new full-time position
that has been filled for not less than 6 months
during a given tax year, or $1,250 if the
position pays 125% of the average non-
agricultural payroll wage for the industry.An annual investment tax credit against
income tax or corporate franchise tax of 10%
of the first $250,000 in investment and 5% of
the next $1,000,000 investment in plant,
equipment, or other depreciable propertywithin Enterprise Zones.
Utah Industrial
Assistance FundDepartment of
Community and
Economic
DevelopmentGrant or loan To foster and
develop industry
to assure the
welfare of
citizens,
economic growthand employment.Companies that
establish,  relocate or
develop industry in an
economically
disadvantaged rural
area.Amounts vary.  Credit amount determined by
number of jobs created and the increased
economic activity that results from the
assistance.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 130Virginia Clean Fuel
Vehicle Job
Creation Tax
CreditEconomic
Development
PartnershipTax credit Businesses
manufacturing or
converting vehicles to
operate on clean fueland manufacturers of
components for use in
clean fuel vehicles.Income tax credit for each new full-time job
created, over and above the previous year's
employment level.  The credit is equal to
$700 in the year the job is created, and ineach of two succeeding years if the job is
continued, for a maximum of $2,100 per job.
Unused credits may be carried forward for
five years.  The credit is available for taxable
years beginning on or after January 1, 1996through December 31, 2006. Businesses
receiving this tax credit are not eligible to
receive the Major Business Facility Job Tax
Credit.
Virginia Solar Photovoltaic
Manufacturing
GrantsVirginia Dept. of
Economic
DevelopmentGrants Manufacturer who
sells solar photovoltaic
panels manufactured in
the state.Grants of 75 cents per watt of the rated
capacity of panels sold are available for a
five-year period.  The max. grant available is
$4.5 million.
Virginia Enterprise Zone Department of
Housing and
CommunityDevelopmentTax credit To stimulate
business
development indistressed urban
and rural areas.Businesses locating or
expanding in a zone.(1) A ten-year general credit against state tax
liability (80% first year and 60% in years two
through ten);  (2)  A credit against state taxequal to 30% of qualified Zone
improvements for rehabilitation projects of at
least $50,000 and new construction projects
of at least $250,000.  Maximum cumulative
credit is $125,000 in any five-year period;
(3) Large projects with an investment in
excess of $100 million and the creation of atleast 200 jobs are eligible for a negotiable
credit of up to 5% of total investment (real
property and machinery and equipment).
This credit is in lieu of the refundable real
property improvement tax credit, and creditsmay be carried forward until fully used; and
(4)  Businesses creating new, full-time jobs
receive grants equal to $500 per job ($1,000
for zone residents) for three years.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 131Virginia Loan/Grant
ProgrammeVirginia Coalfield
Economic
Development
Authority/TheVirginia Southwest
PromiseLoans and grants To enhance the
economic base of
the seven
counties and onecity of far
southwestern
Virginia
(Buchanan,
Dickenson, Lee,Russell, Scott,
Tazewell, and
Wise counties
and the City of
Norton).Private businesses
must be basic
employers who will
bring new income tothe area.Loans are limited to $10,000 per permanent
job created, and the average minimum hourl y
wage should equal or exceed 1.5 times the
current federal minimum wage rate at the endof one year of employment.  Any project
providing at least 25 jobs within 12 months
of start-up will be given priority.
Washington Coastal Loan
ProgrammeOffice of Trade and
Economic
DevelopmentLoan To create
economic
opportunities in
Jefferson,Clallam, Grays
Harbor, Pacific,
and Wahkiakum
counties.Businesses Variable loans.  Loans up to $150,000.
Technical assistance loans up to $50,000 for
public agencies and $20,000 for businesses
for feasibility studies.
Washington Distressed Area
Business and
Occupation Tax
Credit ProgrammeDepartment of
RevenueTax credit Certain businesses
located in distressed
areas. The business
must be a
manufacturing,research and
development or
computer- related
service business.$1,000 credit against the business and
occupation (B&O) tax for each new
employment position created and filled.
Individual businesses are limited to a
maximum credit of $300,000 over the life ofthe program.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 132Washington Distressed Area
Sales and Use Tax
Deferral/Exemptio
n ProgrammeDepartment of
RevenueTax exemption To encourage
manufacturing
and R&D
activities and jobcreation in the
state, particularly
in rural and
economically
depressed areas.Manufacturing,
research and
development, or
computer-relatedservice businesses in
designated areas.Defer payment of retail sales and/or use taxes
on qualified construction and equipment
costs for a period of three or eight years.
Washington High Technology
Business and
Occupation Tax
Credit ProgrammeDepartment of
RevenueTax credit The eligible high
technology businesses
include: advanced
computing, advancedmaterials,
biotechnology,
electronic device
technology and
environmentaltechnology.An annual credit of up to $2 million is
allowed for each business that performs the
required activities and meets the minimum
expense requirements.  The credit cannotexceed the amount of the business and
occupation tax due for that calendar year.
The rate for the credit is .515% for nonprofit
corporations and associations and 2.5% for
profit businesses.
Washington High Technology
Sales and Use Tax
Deferral/
Exemption
ProgrammeDepartment of
RevenueTax exemption To stimulate
growth in certain
high technology
industries.Research and
development pilot
scale manufacturing in
the areas of advanced
computing, advanced
materials,
biotechnology,
electronic devicetechnology and
environmental
technology.A sales and use tax deferral/exemption.  If
the project is used for qualifying purposes for
eight years, deferred taxes will be forgiven.
If the project is used for non-qualifying
purposes during the eight year period, taxes
plus interest are due on a pro-rated basis.
Even if the deferral is disallowed, no sales
and use tax will be due on exemptmanufacturing and equipment (i.e.
Manufacturing Tax Incentive Programme).
Washington Industrial
Machinery and
EquipmentDepartment of
RevenueTax exemption
(sales and use
taxes)Aircraft, rolling stock,
and watercraft; motor
vehicles and trailers
used by nonresidents.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 133Washington Industrial
Machinery and
EquipmentDepartment of
RevenueTax exemption
(property tax)Motor vehicles,
aircraft, aircraft parts,
vessels under
construction in excessof 1,000 ton burden,
state-taxable vessels,
ships and vessels in
interstate and foreign
commerce.
Washington Industrial Fuels
and Raw MaterialsDepartment of
RevenueTax exemption
(property tax)Ore of metal
shipped into state;
timber;
hardboard,particle board,
and finished
plywood;
electrolytically
refined metals.
Washington Ships and Vessels
UnderConstructionDepartment
Of RevenueTax exemption
(property tax)To improve
competitiveposition of the
state’s shipyards.Provided to vessels
under construction thatare 1,000 tons or more
burden upon
completion.
Washington Small Timber
HarvesterDepartment of
RevenueTax Exemption
(B&O)To reduce tax
burden on small
tree harvests.Provide to the roughly
2,640 individuals and
small businesses that
qualify as small timber
harvesters.
Washington $50 Minimum
Timber TaxDepartment of
RevenueTax Exemption To support
smaller timber
harvesters andreduce
administrative
costs.Harvesters who incur
less than $50 in timber
tax liability in aquarter are excused
from payment of tax.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 134Washington Prototype of
Aircraft PartsDepartment of
RevenueTax Exemption
(Retail sales &
use tax
exemption)To assist small
manufacturers of
aircraft parts.Small firms that
purchase materials
used to develop
prototype aircraftparts.
Washington Fishing Boat Fuel Department of
RevenueTax Exemption
(retail sales and
Use Taxexemption)In recognition
that most of the
fuel is consumedout of the stateVessels engaged in
commercial deep sea
fishing or in theoperation of
commercial charter
fishing boats.
West Virginia Aerospace
Industrial Facility
Investments CreditWest Virginia
Department of Tax
and RevenueTax Credit The purpose of
this tax credit is
to encourage the
establishment ofnew industry, the
expansion of
existing industry,
and the growth
and revitalizationof aerospace
industrial
facilities in West
Virginia.Eligibility for this tax
credit is limited to
taxpayers who operate
facilities used for themanufacturing
rebuilding or physical
refurbishment of: (1)
Aircraft, (engines,
engine parts, otherparts, auxiliary
equipment; and/or (2)
Guided missiles, space
vehicles, vehicle
propulsion units,
guided missile parts,
propellers, spacevehicle parts, or
guided missile and
space vehicle auxiliary
parts.The tax credit shall be limited to 15% (1.5%
for each of ten consecutive years) of the total
qualified investment in a qualified aerospace
industrial facility. The amount of creditutilized in any given year shall not reduce the
taxpayer’s liability for Business Franchise
Tax and Corporation Net Income Tax (in
combination with all other allowable
investment credits) by more than 60%. Anyunused credit for a particular year is
forfeited.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 135West Virginia New Value-Added
Aluminium or
Polymer
ManufacturingOperations Tax
CreditWest Virginia
Department of Tax
and RevenueTax Credit To encourage job
creation in the
manufacture of
“Value-addedaluminium or
polymer
products” -
those products
that add to,increase or
enhance the value
of any raw, base
or unimproved
aluminium or
polymer product.Eligible taxpayers for
tax years beginning on
or after July 1, 1998.
The credit is scheduledto expire July 1, 2002.
The credit may be
claimed against that
portion of BusinessFranchise Tax and
Personal Income Tax
or Corporation Net
Income Tax liability
which is attributable to
“new jobs” created in
the State during thetaxable year.The maximum amount of the one-time credit
is $250 for each new job filled by a full time
employee at such a facility. Full-time jobs
created by a taxpayer in a short tax yearduring the taxpayer’s first year of operation,
or filled in the year in which this credit
expires, are prorated.
The credit may only be taken one time for
each new job created. Once claimed in a tax
year for a new job, the credit may not be
claimed in a subsequent year for that
position.
West Virginia New Steel
Manufacturing
Operations Tax
Credit
(Value-Added
Steel Products)West Virginia
Department of Tax
and RevenueTax Credit To encourage job
creation in the
manufacture of
“Value-added
steel product” -
any product thatadds to, increases
or enhances the
value of any raw,
bare or
unimproved steelproduct.Eligible taxpayers for
tax years beginning on
or after July 1, 1998.
The credit is scheduled
to expire July 1, 2005.
The credit may be
claimed against that
portion of Business
Franchise Tax and
Personal Income Taxor Corporation Net
Income Tax liability
which is attributable to
“new jobs” created
during the taxable
year.The maximum amount of the one-time credit
is $250 for each new job filled by a full time
employee at such a facility. Full-time jobs
created by a taxpayer in a short tax year
during the taxpayer’s first year of operation,
or filled in the year in which this creditexpires, are prorated.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USAPage 136West Virginia New Value-Added
Wood
Manufacturing
Operations TaxCredit
(Consumer-Ready
Wood Products)West Virginia
Department of Tax
and RevenueTax Credit To encourage job
creation in the
manufacture of
“Consumer-readywood products” -
value-added
wood products
that are ready for
sale to consumersat the end of the
manufacturing
process.This credit is available
to eligible taxpayers
for tax years beginning
on or after July 1,1997. The credit is
scheduled to expire
July 1, 2002.
The credit may be
claimed against that
portion of Business
Franchise Tax and
Personal Income Tax
or Corporation Net
Income Tax liability
which is attributable to“new jobs” created  in
the State.The maximum amount of the annual credit is
$250 for each new job filled by a full time
employee at such a facility during the tax
year. Full-time jobs created by a taxpayer ina short tax year during the taxpayer’s first
year of operation, or filled in the year in
which this credit expires, are prorated.
West Virginia Wood Processing
Tax CreditDevelopment Office Tax credit New wood processing
operations.$250 per year for full time employee for 10
years to new or expanding companies
involved in the manufacture of value-added
wood products.  The finished product mustbe consumer ready.
Wisconsin Dairy 2020 Early
Planning Grant
ProgrammeDepartment of
CommerceLoan Existing and start-up
dairy producers whose
farms are, or will be,located in a city, town
or village with a
population of less then
6,000.Up to 75% of eligible project costs up to a
maximum of $3,000.  Actual amount of
funds awarded is based on viability of theproject, the project’s economic impact, and
fund availability.G/SCM/N/48/USA
G/SCM/N/60/USA
G/SCM/N/71/USA
Page 137Wisconsin Development Zone
ProgrammeDepartment of
Commerce, Act 328Tax credit To encourage
private
investment in
distressed areas,improving both
the quality and
quantity of
employment
opportunities forpersons who are
unemployed or
who may face
barriers to
employment.Businesses located in
or locating to a
development zone in a
distressed economicarea.Tax credit in three parts consisting of the
following: a credit of up to 50 per cent of the
environmental remediation coasts, a credit of
up to $8000 in tax credits for every newposition created and filled by a member of a
targeted group and a credit of up to $6000 in
tax credits for every new position created.
Wyoming Taxpayer
RemediesW.S. 39-17-109(d) Tax Credit Producers of ethanol in
Wyoming.Credit of 40 cents per gallon.
__________