Benchmarking State Business Incentives · Benchmarking State Business Incentives Prepared By: Prepared For: Business Oregon A Review and Comparison of Oregon State Incentive Programs

Benchmarking State Business Incentives

Prepared By:

Prepared For:

Business Oregon

A Review and Comparison of Oregon State Incentive Programs

February 15, 2010

http://peakeconsultingllc.com/index.htm

Benchmarking Oregon State Business Incentives

February 15, 2010

Page 1

Report Outline

Project Goals and Objectives……………………………………………………………………………………………….2

Overview of Incentives as a Business Attraction Tool…………………………………………………………..2

Section 1: Program Assessment............................................................................................4

Section 2: Competitor Incentive Analysis…………………………………………………………………………..10

Section 3: Business Climate Analysis………………………………………………………………………………….19

Section 4: Findings & Recommendations…………………………………………………………………………..29

Appendix………………………………………………………………………………………………………………………….33


February 15, 2010

Page 2

Project Goals and Objectives

The goals and objectives of the project included the following:

1. To review Oregon state incentive programs, primarily, Strategic Investment Program (“SIP”),

Business Energy Tax Credit as available for equipment manufacturers (“BETC– manufacturing), and

Enterprise Zone property tax abatements (Standard and Long Term)

2. To analyze similar and competitor states for tax abatements, income tax credits, property tax

credits, and other recruitment based incentive programs

3. To discover how current Oregon incentive programs helped attract companies to the state

4. To identify opportunities and recommendations for current incentive programs

Overview of Incentives as a Business Attraction Tool

When it comes to attracting new business investment, incentives help states and communities to

compete in corporate location decision-making by enticing companies to locate new facilities or

encouraging existing companies to expand and not move operations elsewhere. In addition,

incentives are a way for states and communities to help “level the playing field” when variable

operating costs, such as labor and utilities, are at a penalty for a particular operation compared to

competitor locations. Types of incentives include:

Tax credits, including refundable ones, or those that can be transferred or sold; such credits may be

used against income, withholding and/or other tax liabilities

Rebates of taxes already paid returned to the company as cash or credit

Property tax abatements on real or on real & personal property, the latter of which may not be

taxed in some states at least if used in manufacturing

Because property taxes are a required, predictable expense, which becomes increasingly

substantial with more capital-intensive projects, their abatement can deliver a more bankable,

upfront return

Discretionary funds that provide jurisdictions with more incentive flexibility

Other tax reductions such as reduced rates for city property taxes, utility taxes, etc.

Low interest loans for capital investent with interest rates less than market value

Grants, like the Governor’s Strategic Reserve Fund (SRF) in Oregon

Grants can be the most attractive for business as “nothing beats cash,” although tax benefits

can also have particular advantages for some firms or situations

Grants also provide greater discretion to public bodies compared to tax break programs, which

for legal and administrative reasons typically need to operate under more automatic or

“statutory” parameters and processes


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Credits against income taxes

These frequently have little or problematic worth, because firms will not have sufficient near-

term tax liability to realize much benefit

BETC transferability offers one alternative to overcome this challenge and improve the credit’s

cash-like return—other ways to effect grant or cash-like equivalency with tax credits is to make

them refundable or convertible into rebates

Credits applicable against state withholding taxes

These may likewise offer strong (but payroll-based) benefit due to the size and regularity of such

tax payments, allowing the firm to more readily realize the face value of the credit

Other incentive methods may involve local programs, training assistance and other discretionary

funds


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Section 1 - Program Assessment:

Where are we now?

The first step in the analysis was to conduct an in-depth assessment of Oregon’s existing state

programs used to incentivize business development (notably SIP, BETC, and Enterprise Zones) and to

validate these programs. It is important that the state receive adequate return on their investments

they make in companies to ensure the return is relative to the investment. This section summarizes

Oregon’s major state incentive programs, provides general comments about each program, as well as

comments on programs from confidential interviews conducted with selected program recipients.

Oregon’s Major State Incentive Programs

Oregon’s major state incentive programs and the programs in which this study centered around

include the following:

Strategic Investment Program (SIP) - exempts a portion of large capital investments from property

taxes available for massive capital expenditures, which are very high relative to the number of

(typically high-wage) jobs

Business Energy Tax Credit (BETC) - Available to those who invest in energy conservation, recycling,

renewable energy resources and less-polluting transportation fuels, as well as for manufacturing

Standard Enterprise Zones (EZ) - 59 zones in the state can all offer eligible firms at least 3 and up to

5 years of exemption on new property

Long-term Enterprise Zones (EZ) - Most of 48 rural enterprise zones can offer 7–15 years of

exemption from property taxes

Other programs that were not the primary focus of this study, but are relative state incentive

programs include:

Strategic Reserve Fund (SRF) - Discretionary grant funds that are set up as a loan that is not paid

back if commitments are satisfied. (Interest rate is 5% if not forgiven) Funding: 2007-09 =

$7,425,000, 2009-11 = $5,914,187. SRF may yet experience reductions in the ongoing February

2010 legislative session. The SRF is relatively small compared to discretionary grant resources that

exist in some other states. Since 2007, prevailing wage rate [PWR] requirements apply if the total

public grants and loans are $750,000 or greater.

Oregon Investment Advantage (OIA) - The exemption is a 10-year waiver of all income and excise

taxes relating to qualifying business operations. The program is oriented to rural/lagging areas of

state, with increasing use for various situations. The number of eligible counties [all in rural Oregon]

shrinks drastically after 2010.


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SIP - General Comments

Shown to be successful in the attraction of new industry and the expansion of existing industries

involving huge capital outlays

In effect, caps the property taxes on major investment at either $25 (rural) or $100 million (urban)

Provides the local community with alternative additional funding, with statutorily defined

“community service fee”

Only has a handful of users, with eligible projects since 1995 averaging less than two a year, even as

more than half comprise relatively recent wind-energy developments

Program works as a function of county/local efforts, such that the county can negotiate any number

of conditions in their agreements with business, and the emphasis has been on the firm’s making

special payments

Often, return-on-investment analyses demonstrating favorable results have preceded projects

Business Oregon is charged with collecting data annually from businesses starting in 2011

BETC–Manufacturing - General Comments

Manufacturing projects, as allowed since 2007, comprise several facilities that produce exclusively

solar/photovoltaic (PV) components

Starting in 2007, manufacturing piece was grafted onto a program traditionally oriented toward

energy policy and the subsidization of conservation efforts and alternative sources, not necessarily

the incentivizing of business development in comparison with competitor locations

Already represents an innovative, major incentive for qualifying “Clean Tech” industries for

manufacturing equipment or materials exclusively for renewable energy use

Exceptionally useful program in successfully competing for current industry opportunities that other

states are aggressively courting, as well

The incentive focus is on investment dollars, in a way that does not generally adjust or expand with

the overall size of the capital outlay, or to the jobs or payroll created; some businesses (attempt to)

obtain multiple certificates for up to $40 million in certified project costs

Pass-through option provides critical grant-like liquidity; presently, this and other program

elements are in flux, raising uncertainties about effective salability of credits

Has taken a real “hit” in the press in terms of traditional subsidy role for conservation and

alternative sources relative to sudden growth in the size of wind-generation projects and other new

issues

Since 2008, for manufacturing, statutorily based standards are incorporated and subject to

retroactive enforcement under contracts with developers officiated through Business Oregon


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Program is subject to sunset by 2012 in a way that now deters major manufacturing proposals;

February 2010 legislation may address this

Standard EZ – General Comments

Is widely used and is a successful program for many types of projects, both large and small

Benefit relates direct to the size of investment, but in an upfront way by abating new property taxes

for three to five years

Driven by the local community, for which it is often their only tool available to incentivize business

to expand or locate

Because it is driven locally, program lacks consistency across the state in terms of communication,

administration, and how the incentive is marketed and presented; also, the local discretion with

some program elements creates inconsistency with the size and availability of the tax benefit

Local, de-centralized nature and administrative resources create challenges for statewide tracking

and monitoring, even as annual filing and enforcement mechanisms generate source of data

Local role provides for local ownership and cooperation among entities and with the state, and

minimizes the staffing resources needed at the state level

Serving hundreds of businesses in widely varying sizes throughout state

Size of the tax benefit varies exponentially according to the size of capital investment in property; by

law it is retroactively enforceable but only during benefit period

Sunsets in 2013

Long-term EZ – General Comments

Particularly supports rural communities in securing major opportunities with highly competitive

property tax abatement on new facility investment

Requires minimum levels for investment size, job creation and employee compensation, which are

retroactively enforceable for the entire 7–15-year period of property tax abatement

Driven by the local community in the form of city, port and county sponsors of most rural

designations

Inconsistently offered by local sponsors, and not necessarily aggressively marketed, across the state

Possesses no established mechanisms for tracking and monitoring; verification and data collection

currently handled through local, ad hoc means, which may have sufficed so far with only a mere

handful of users, but administrative efforts are called for going forward


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Incentive Program Assessment

In order to assess the effectiveness of the current incentive programs, confidential phone interviews

were conducted with 10 companies that recently used one or more incentive programs. The

interviews centered on discussions about experience and perceived effectiveness of incentive

programs in Oregon, as well as suggestions for improvements. The table below summarizes the types

of incentive programs, in which the interviewed companies participated.

Program Used Number of Companies

BETC–Manufacturing 3

SIP 1

EZ 4

Long-term EZ 1

SRF 4

OIA 2

Note: Some companies utilized more than one incentive program.

Characteristics of Companies Interviewed – Investment & Job Levels

Company Investment Jobs Company Investment Jobs

#1 $200-700 m 300-500 #6 $52 million 100

#2 $18 million 100 #7 $1.5 million 25

#3 Minimal Internships #8 $15 billion 7-9,000

#4 $31.8 mil. 290 #9 $13 million 48

#5 $25 million 200-400 #10 $94 million 74

Note: Company names were kept confidential; they are identified above by numbers only.

Program Assessment—SIP

Comments from the confidential interviews of selected program recipients include the following:

We would not have a major R&D in Oregon without SIP. We have the most important and highest

paying jobs in the company here, our size would be significantly smaller and we would have been hit

much more in this downturn in the economy


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[Unrelated to incentives:] Oregon instituted single sales factor which has been a major win for

companies and really encourages companies to grow investment in OR versus growing in other

states. From a tax policy, I think Oregon will benefit from it in the long term

Suggestions for Improvements from Interviews:

None reported

Program Assessment—BETC–Manufacturing


BETC was 100% instrumental in decision to locate in Oregon

Need timely communication with DOE—very lengthy response time—nine months

Difficult to track progress of the project as to when the goals have been met

Became complicated in 2008

With so many legislative changes, I don’t even know even know what’s available today

Legislative environment is changing in regards to the program

Question the survivability of BETC

We will all have to figure out how to work through the process [of improving the BETC] rather than

castigating each other. Perhaps one solution is to push out the payment terms. Larger companies

would be OK with that but I don’t know if the smaller companies would survive. Ultimately, it will

take the citizens, legislative groups, business development groups and companies all working

together to come up with an equitable solution. Everyone has to understand what the long-term goal

is and work together to figure out how to get there.

Suggestions for improvements from Interviews:

Improve the pass-through partner process

Go to a grant of the BETC benefit [or other grant-equivalency methods] rather than having to go

through pass-through partner [“middle man”]

Establish clear goals in the beginning. Process was very loose early on which made it difficult for the

department to confirm that criteria had been met

Reduce the Review Fee that is capped at $75,000

Program Assessment – EZ



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The partnership with the City has been very positive. The economic development staff at the City

helped us through the application process.

Didn’t know about the program until locals told them after they made the decision to locate there

(only 1 respondent said this and the company did use the program)

Application, Approval and Compliance Process was pretty straight forward

Suggestions for Improvement from Interviews:

Make sure there is a strong local partner

It was a little frustrating in the beginning trying to find out which programs to apply for


February 15, 2010

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Section 2 - Competitor Incentive Analysis:

What does the competition have that we don’t have?

The next step in the analysis included obtaining data regarding the effectiveness of Oregon incentive

programs compared to ten (10) other competitor states’ income tax credits, property tax abatements,

and other recruitment-based incentive programs used in the last two years. The research conducted

for this phase of analysis helped to identify gaps and opportunities for incentive programs. This

section summarizes the competitor states chosen for the analysis, highlights of competitor programs,

and compares these programs to Oregon state programs. A detailed matrix of programs for each

state can be found in the Appendix section.

Competitor States for Analysis

The following groups of states were chosen for the analysis in conjunction with Business Oregon:

Immediate neighbors, which often occur in Pacific Coast recruitments:

California, Washington

Other Western states that not only compete regionally with Oregon, but appear to have an

interesting package of incentives:

Arizona, New Mexico, Utah

Non-western states that seem for some time to have had generally robust incentive efforts, with

which Oregon might compete on occasion:

North Carolina, Oklahoma

Great Lakes group of states, with which Oregon might compete seldom, but that have engaged in

notable programs to incentivize clean energy, R&D and other industries of interest to Oregon:

Michigan, New York, Ohio

Notes on Chosen Competitor States:

In one way or another, these states were chosen largely because of their perceived exemplary

attributes. There are many other states with notable programs, as well as 10–20 that have at most

nominal incentives for business development purposes, which is arguably the case for California

Of the states included here, some only very recently embarked in the last couple years on new

initiatives to either replace or supplement older programs


February 15, 2010

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Map of Competitor States for Analysis

Competitor Incentive Program Highlights

The following outlines areas of competitors’ incentive programs that are exceptional models in that

they have been utilized and have been shown to be beneficial to those states. Highlights from

competitor states along with specific examples included the following:

1. Clear policy discourse

Multiple agencies, Governor’s office and legislature are all in agreement on open, explicit

incentive policy, with some states demonstrating a strong willingness to address controversy in

pursuit of cogent but effective approaches

Example: Oklahoma - saw a need to address higher paying jobs. A new incentive program was

passed in the spring of 2009 and took effect in November of 2009, expanding on other programs

Example: Ohio - started receiving complaints on their compliance process and recently changed

from a specific job criteria to total payroll-based criteria which alleviated a tremendous amount

of paperwork for the companies. [The movement from per-job to total payroll-based benefit

serves an opportunity to link the incentive more directly to quality employment, usually with

criteria for average or minimum compensation.]

2. Clear performance measures

Very specific company commitments regarding jobs, investment and timing

Example: Utah - has single incentive agreements that specify clear performance milestones that

cuts across a couple of different, but generous programs for special, more negotiated benefits.

Very strong agreements between the companies and the state [through the Governor’s Office of

Economic Development Board (GOED) which is a special board for economic development]

and/or local jurisdiction, including consequences if the performance measures are not met.


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Example: Ohio - Job Creation Tax Credit (JCTC) refundable program outlines specific outcomes if

the company reduces committed employment or fails to maintain operations; also requires

company to stay twice as long as the incentive term.

3. Discretionary funds

Many states have discretionary, or “deal closing” funds that can be used at the discretion of the

Governor or other appropriate top level economic development official. These funds can be used

for anything, but the preference for fund use is typically directed at infrastructure or training.

Oregon’s SRF is a discretionary program but it is not funded well. As previously mentioned, it also

triggers PWR as it reaches $750,000 in conjunction with other public funds.

Example: New Mexico – has widely used this type of incentive for major projects and has

contributed millions in those instances; funds are usually provided over two years. (Schott solar

went here, but had also equally considered an Oregon location.)

4. Credits that are refundable or transferrable or useable against taxes other than income tax

If the company does not have enough tax liability, the incentive is either refunded to the company

or can be transferred to another entity which provides for direct, positive cash flow

Example 1: Ohio – Non-refundable Commercial Activity Tax (CAT)

tax credit of up to $150,000 that can go up to 50% of a project’s allowable costs with loans

ranging from $1-5 million. Program is also partnered with the R&D tax credit and if the

company is meeting the job creation and investment commitments, the company is eligible for a

dollar for dollar credit against their Ohio CAT liability equal to the amount of the principal and

interest which equates to a refundable tax credit.

Example 2: New Mexico - Credit of up to 10% of the combined value of the salary and benefits

for each net new job greater than $40,000 in urban and greater than $28K in rural, as well as the

ability to use these and other credits against multiple tax liabilities, including withholding taxes.

Example: Utah - 30% credit on withholding taxes, and use as well as income taxes

Example: Arizona - Up to 10% refundable income tax credit on investments

5. Creativity

Unique programs that help meet the needs of business and/or target industries

Example: Oklahoma - One major target industry is Aerospace and in an effort to help attract

both companies and the needed workforce, they offer a tax credit incentive to both the

Aerospace companies and to their engineers. This program also helps the Universities improve

their curriculum to further assist the companies. The incentives are:

Company = Tax Credit of 5-10% of Engineer’s compensation

Company = Tax Credit of 50% of tuition reimbursed to new engineers

Engineers = Individual Tax Credit of $5,000 per year for 5 years for the engineers


February 15, 2010

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Competitor States Comparison by Region

The following tables summarize the major incentive program offerings for each competitor state,

changes coming and/or general comments. The following data was not meant to be inclusive of all

programs; only the programs substantial enough to decisively make a difference in location decisions.

The sections highlighted in yellow are available for renewable energy projects.

Neighboring Competitor States

California Washington

1/1/2011—Single sales factor option kicks in

Incentives are difficult to understand but are primarily reduction in B&O taxes [Gross

Receipts Tax]

Best incentives are local through Redevelopment Authorities which have more flexibility than the state and can

provide: low interest loans (some forgivable), fee and permit waiver or

abatement, infrastructure improvement up to and including free land using TIF funds

Sales and use tax waivers based on location (primarily rural) and for specific targeted

industries

Municipal utilities can reduce rates up to 30-40%

Extremely targeted incentives May exemplify the case of over-targeting in

trying to too closely specify specific industries with geographic overlay. Program application

becomes too narrow and too complex and uncertain.

Reduced B&O Tax Rate

California (really the only selected state) that has nominal incentives. Enterprise zone

program exists with high job tax credit, but criteria and other restriction may often

render it ineffective


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Other Western State Competitors

Arizona Utah New Mexico

10% refundable credit & 77% reduction in property taxes

Very strong incentive agreements covering up to three programs, mainly for

special opportunities, including grant and credit

equal to 30% of state corporate, sales and

withholding tax liabilities

Refundable High Wage Tax Credit = 10% of salary & benefits, and otherwise claimable against state

compensating, sales and withholding tax liabilities

FTZ (federal Foreign Trade Zone) = 77% reduction in

property taxes

Grant available to small existing companies in rural

Utah for creating high paying jobs

Manufacturing/Investment Tax Credit (ITC) = 5% of

equipment cost

Job Training = Cash assistance of up to $8,000

per employee (however, may be presently suspended due

to budget)

Tax credit for 100% of state corporate, sales and

withholding tax liabilities

Transferable Rural Jobs Tax Credit of up to 6.25% on 1st

$16,000 of wages paid

Discretionary Grant

Up to 75% grant for technical skills training

Clearly defined and communicated Red flags (stop proposal pending

changes) / Green flags (to continue to approval by

special Governor’s Board for Economic Development)

Special refundable ITC on another 5% (in addition to

using regular ITC), High Wage & IRB-based exemptions

from use tax and property taxes over long term

Additional notes on these competitor states include:

Arizona

Arizona’s new renewable incentive program has very close parameters to follow:

Annual state cap of $70 million

51% of new FTEs must pay wages of at least 125% of the median annual Arizona wages


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Taxpayer must pay 80% of health insurance premiums or 80% of the cost of alternative health

benefits providing standard comprehensive coverage

Minimum new Full Time Equivalents [FTEs] for the 10% credit = 1.5 employees per $500,000

for a manufacturing facility and 1 employee for each $200,000 in a headquarter operation

The real and personal property tax assessment is effectively 5% [down from 25%] of market value

resulting in 77% reduction in property taxes. Arizona also is one of very few states that have

additional Foreign Trade Zone incentives. Job training is not usually listed as an incentive as all states

have fairly similar training incentives but because of the larger amount ($8,000) it is listed in the case

of Arizona.

Utah

Utah’s incentive agreements are clear and reasonable and economic impact analyses are conducted

on every project.

New Mexico

New Mexico’s Refundable High Wage Credit of up to 10% has a requirement that the employees must

be hired by July 1, 2015, and they do not have to be New Mexico residents. The ITC of 5% is limited to

85% of compensating, gross receipts or withholding tax within any one reporting period.


February 15, 2010

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Non-Western State Competitors

Oklahoma North Carolina

Quality Jobs Program = 5% of payroll in form of cash rebate specified by NAICS codes

One NC Fund = Very Discretionary

Newer program 21st Century Jobs Program = 7% initially and then 10% after the first 10 jobs are created as specified by Basic and

Enhanced job classification

JDIG = Discretionary

Aerospace Industry = 5-10% of compensation + 50% tuition tax credit + Employee receives

individual tax credit 35% tax credit—non refundable

Investment/New Jobs Tax Credit 80% of property tax exemption

Can take advantage of first or second incentive as there are no specific incentives

for renewable energy projects Local option revolving loan fund

Additional notes on these competitor states include the following:

Oklahoma

Oklahoma’s Quality Jobs Program is extremely well laid out for specific industries that fit the program

as listed by NAICS code, the amounts are determined by a formula and provides up to 5% cash rebate

of payroll. The 21st Century Jobs program provides up to 10% after the first ten jobs as long as the

jobs average $86,637 in the highest county. This program can have as few as ten employees but the

average pay has to be 300% of the average wage in the locating county.

Oklahoma’s Investment/New Jobs Tax Credit is a five-year tax credit against corporate income tax

liability on the greater of 1% per year of investment in a qualified new depreciable property or a credit

of $500 per year per job against the corporate income tax liability. The amount doubles in an

Enterprise Zone.

North Carolina

As noted, North Carolina’s incentives are fairly discretionary in part due to their being budgetary

expenditures.


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Great Lakes Region Competitors

Michigan New York Ohio

MEGA Tax Credit = 100% wages & benefits (non-refundable, but might

generally negate applicable tax liabilities)

Empire Zones = Wage, investment, property tax

credits (may be transitioning to “Excelsior” program with

lower state funding

Job Creation Tax Credit—Refundable

Anchor District Tax Credit = 5%

Grants on case by case R&D Loan—Tax credit to cover principal & interest

Refundable Payroll Tax Credit (PV & Others)

Real property tax abatement Rapid Outreach/Deal closing

fund

Renewable Energy Renaissance Zones

+ Discretionary Grant Reduced rate loan

Building OH Job Stimulus Funds—Grant

Additional notes on these competitor states include the following:

Michigan Michigan has a fairly unique incentive in their Anchor District Tax Credit which is a 5% tax credit

against corporate tax for investments made by suppliers of high tech industries locating within ten

miles of the “Anchor” location. If the supplier utilizes a tax credit, the Anchor District Tax Credit is

reduced to 2.5%. The project must create at least ten jobs, have a $1 million minimum investment

and is limited to five companies per year.

Michigan’s Energy Renaissance Zones provides a 100% abatement of Michigan Business Tax, state

education tax, personal and real property taxes, and local income taxes. In conjunction with this

incentive, there is a discretionary incentive that can be utilized.

New York In effect, the Empire zones provide a ten-year tax abatement on most taxes. However, this may be

changing as recently, the Governor proposed eliminating Empire Zones and instituting the Excelsior

Zone program which would decrease the Empire Zone tax abatements. The outcome is unknown at

this time until the legislative process is completed.

Ohio Ohio’s Job Creation Tax Credit is a refundable tax credit again the Commercial Activity Tax (CAT) and is

typically 50%. As noted earlier, the reporting requirements have been eased to make compliance

easier for the participating companies. Typically there is some (can be a small amount) Rapid

Outreach/Closing fund in every project.


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The Building Ohio Job Stimulus Fund program is a grant supported from bonds that were sold. The

program is administered by the Air Quality Development Authority.

Renewable Energy Equipment Manufacturing Incentive Comparison

The table below summarizes all of the incentive types available from Oregon and the ten study

competitors. Some of these programs are more exclusive for renewable energy, which in some case

may be broader than Oregon’s BETC, encompassing batteries, electric vehicles and other

clean/advance technology applications, several include renewable-specific incentives and some

include non-renewable-specific incentives that can be utilized by renewable projects. Of note, is

California which has little in the way of incentives to offer outside of the Local Redevelopment Areas.

The State of California does have a property tax exemption for solar energy systems, but the term

“system” refers to installations on rooftops (not utility-grade production facilities) and not the actual

manufacturing of those systems or components.

Incentive Type OR CA WA AZ* UT* NM* OK* NC* MI* NY* OH*

Pass-through Credit X

Refundable Tax Credit X X X X

Non-refund. Tax Credit X X X X X X

Property Tax Abatement X X X X X X

Discretionary Funds X X X X X

Other Tax Reductions X X X X X

Low Interest Loan X** X X X

Other X X X

* Where Oregon was the leader in renewable incentives, these states are (increasingly) offering very

generous and sometimes very smartly designed incentives, not only for the recruitment of

manufacturers, but also for renewable energy production by wind farms, solar farms, etc.

** The Pass-through Credit combined with the low-interest loan makes an unusually strong incentive.


February 15, 2010

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Section 3 - Business Climate Analysis:

How do we fit into the Bigger Picture of Business Costs?

Although incentives are a critical component to business attraction, it is also necessary to consider

other factors that are important to business location decisions. This section summarizes other

important location factors and compares the business climate in a selected region in Oregon with that

in comparable areas in other competitor states.

The optimal location is one that balances competing interests and minimizes

operating costs, one time non-reoccurring costs, and risk for the company and their

new operation. This location is identified through an “apples to apples”

comparison of location alternatives.

Location drivers span a hierarchy of investigative scales including the

following:

1. Strategic Fit – How does the operation fit within the supply chain and

what is the best geographic location for the new facility?

2. Community & Property – Within the best geographic location, is there an available facility or

Greenfield site that meets the needs of the project and does the community also meet other

critical requirements?

3. Schedule & Due Diligence – Are risk factors minimized at the selected property and does the

community have the ability to meet the project timeline?

4. Incentives – What incentive programs are available to help bridge the gaps and close the deal?

Strategic Fit

The initial investigative factor is to determine the “Strategic Fit” of an operation in relation to its

broader supply chain. It is critical for a company to first consider where raw materials and suppliers

are located as well as customer markets and distribution points when considering geographic

locations for the new operation. Also during this phase, it is necessary for the company to consider

direct requirements for the operation such as labor needs, utility services and costs, state and local

taxes, and other critical factors.


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Community & Property

Once geographic location is determined, a company will investigate

specific communities and properties for the new

operation. As speed to market has become an

increasingly important issue, companies are looking

for locations that not only meet the requirements of

their operation, but also offers a location that is

“ready to go” for new investment. A state and

community that delivers on the fundamentals of

community preparedness can compete for new and

expanding industry. This is done by possessing the

following:

Inventory of sites and buildings

Appropriate utility infrastructure

Labor force ready to work

Training resources are in place

Community support for industry

Professional presentation

Green and sustainable mission and message

Schedule & Due Diligence

As discussed above, speed to market is a critical component of industry especially the rapidly growing

Clean Technology sector. This requires not only ready sites and labor force, but also updated zoning

and building codes to accommodate new products manufacturing, and a local permit process that is

designed to accommodate accelerated project schedules. For all project types, due diligence items

such as presented below are critical components of location decisions.

Property ownership

Cost and terms of sale or lease

Environmental testing

Boundary survey

Title search

Geo-technical Study

Archeological

Traffic Study

Zoning

Building Codes

Permitting

Utility services


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Incentives

As other location factors are critical to site selection, incentive programs are also very important in

attracting new business investment and expansion. Ultimately incentives serve as a deal closer

toward the end of company site-selection evaluation, but they are increasingly important at the

beginning of a decision-making process, as things that go into initial check-off lists or that can

encourage firms to consider options to expand locally. The state and local ED community must be

able to support incentive agreements that serve a broad spectrum of industry needs including

workforce training, recruitment, site infrastructure, investment credits and do this efficiently and

without delay.

For industries such as Clean Technology, companies are looking for incentives that will not only

directly affect their bottom line, but also help grow their business. Incentives offered to end users of

Renewable Energy (RE) products also help grow a local RE market, RE manufacturing, and the RE value

chain.

Comparative Cost Analysis

The objective of the comparative cost analysis is to gage Oregon’s competitive position with other

locations in competitor states by measuring estimated annual variable operating costs for two

example projects:

1) Clean Technology Manufacturing (PV module plant)

2) Advanced Manufacturing (metals manufacturing parts supplier plant)

Operating Cost Comparative Analysis

Operating costs in Oregon (Portland

MSA) were compared to trial city

regions in competitor states where

Clean Tech and/or Advanced

Manufacturing investment is now

occurring.

Costs include:

Transportation

Wages / Fringe Benefits

Electric power

Natural gas

Water and Sewer

Real Estate Costs

Property taxes


February 15, 2010

Page 22

Notes on the operating cost analysis:

This research focused on the cost analysis of various locations which is typical of a site selection

evaluation process. The chosen states and locations used in this analysis may not all compete for

the same type of project at the same time.

The focus for Oregon for the comparison is based on the Portland-metro area, as well as metro

areas in other competitor states. Costs may vary in other locations within each state.

The two sample projects were chosen based on current target industries and opportunities that

Oregon would like to attract, but scenarios are not indicative of all business location situations.

Costs in other parts of Oregon may differ relative to competitive sites in other states.

The comparative cost analysis was based on two example models:

Clean Technology - PV Module Plant Project

Advanced Manufacturing - Parts Supplier to the Metals Manufacturing Industry Plant Project

Project details and investment information is summarized below:

Clean Technology (PV Module) Plant – Project Description

393 employees (369 hourly and 24 salaried)

Hourly workers consist of semi-skilled and skilled workers

7 day / 8,10,12 hour shift operation / upper 60th percentile for wages

75 outbound trucks per week

Minimum 100 acre site, 500,000 SF plant

Electric: 7,000 kW / 4,800,000 kWh per month

Natural Gas: 156,000,000 ccf per year

Water: 15,000,000 GPM / Sanitary Sewer: 12,000,000 GPM

Investment: $149,000,000 (plus cost of land)

Advanced Manufacturing (Parts Supplier) Plant – Project Description

191 employees (176 hourly and 15 salaried)

Hourly workers consist of semi-skilled and skilled workers

7 day / 8,10,12 hour shift operation / upper 60th percentile for wages

50 outbound trucks per week

Minimum 50 acre site, 250,000 SF plant

Electric: 2,500 kW / 1, 200,000 kWh per month

Natural Gas: 780,000 ccf per year

Water: 7,000,000 GPM / Sanitary Sewer: 6,000,000 GPM

Investment: $81,500,000 (plus cost of land)


February 15, 2010

Page 23

Comparison of Regional and State Characteristics Source: Bureau of Labor Statistics, 2009; US Census, 2000; Census of Manufacturing, 2002; Bureau of National Affairs, Union Membership and Earnings Book, 2009; American Community Survey, 2008; Various State Revenue Departments and Tax Commissions, 2009-10 Note: Full size spreadsheet can be found in the Appendix section of this report.

Access to Market - Map of US Population within 250 Mile Radius

The map below illustrates the U.S. population within a 250 mile radius of each metropolitan area trial

location. Access to national markets may be a critical component for a manufacturing plant that is

servicing the entire country from one location. For a regional service provider with multiple locations

to service the country, access to respective regional and/or super regional markets is critical.


February 15, 2010

Page 24

Clean Technology (PV Module Manufacturer) Sample Project

The table below illustrates the total annual variable operating costs for the hypothetical PV module

manufacturing plant including costs for outbound transportation, labor and fringe benefits, electric

power, natural gas, water, sewer, property tax, and land and building costs. The total costs are

compared against each other to find the lowest total cost location (“Base”). All other locations are

compared against that in the “Penalty Over Base” column, which presents the additional cost above

the “Base” location. The “Index” column represents the numbers in a percentage above the “Base”,

with “Base” being equal to 100.

Estimated Total Annual Variable Operating Costs – PV Module Plant

Clean Technology – Operating Costs Comparison

Note: Full size version of this spreadsheet and detailed source information can be found in Appendix B of this report.

These operating costs were obtained through various national, state, and local sources (see individual

cost component comparisons in Appendix B for detailed source information). Transportation costs in

the chart above reflect outbound costs only and assume one manufacturing plant to service the entire

U.S. market. Labor and fringe benefit costs represent average wages for the region for specific job

types as required by a typical PV Module manufacturing operation. Utility costs for electric power,

natural gas, water, and sewer are based on rates from service providers within each trial area. Land

costs are based on size of the proposed operation times the average cost per acre within each regional

area. Building costs consider proposed investment levels and construction index for each trial region.

Property taxes also consider investment levels and local real, personal, and inventory (if applicable)

effective tax rates for each region. State tax cost estimates were not included in this analysis due to

the complexity of requiring internal company financial data to arrive at apportionment formulas.

State taxes typically do not vary by much with actual manufacturing operations and are often not a

direct factor in location decisions.

Detailed cost comparisons for each factor can be found in Appendix B of this report.


February 15, 2010

Page 25

Comparison Chart: Estimated Total Annual Variable Operating Costs – PV Module Plant

Renewable Energy Incentives for the Sample Project – PV Module Plant

The table below presents incentive programs that Oregon and some of the low cost locations in the

sample PV operation costs analysis would have to offer the sample project. In each instance below,

some or all of the programs may be used in a particular project. The key here is that each state has

different tools to offset costs to increase their competitiveness. BETC puts Oregon in the game, makes

it competitive with power costs, but does not necessarily beat the states in the total location decision.

Oregon Ohio North Carolina New York

BETC--50 percent of eligible costs, up to a

maximum of $40 million

Building OH Job Stimulus Funds—

Grant

35% tax credit-Non Refundable

Grant, Clean Energy, and Energy Efficient

Product Manufacturing

Incentive Program

Energy Loan Program Refundable Payroll

Tax Credit 80% property tax

exemption Real property tax

abatement

Standard EZ or SIP

Refundable PV Manufacturing Tax

Credit—25% of Capital Costs

Local Option Revolving Loan Fund

Reduced rate loan


February 15, 2010

Page 26

Advanced Manufacturing (Parts Supplier) Sample Project

The table below illustrates the total annual variable operating costs for the hypothetical advanced

manufacturing plant including costs for outbound transportation, labor and fringe benefits, electric

power, natural gas, water, sewer, property tax, and land and building costs. The total costs are

compared against each other to find the lowest total cost location (“Base”). All other locations are

compared against that in the “Penalty Over Base” column, which presents the additional cost above

the “Base” location. The “Index” column presents the numbers in a percentage above the “Base”,

with “Base” being equal to 100.

Estimated Total Annual Variable Operating Costs – Advanced Manufacturing Plant

Note: Full size version of this spreadsheet can be found in Appendix C of this report.

These operating costs were obtained through various national, state, and local sources (see individual

cost component comparisons in Appendix C for detailed source information). Transportation costs in

the chart above reflect outbound costs only and assume a manufacturing plant that will service each

respective regional area where located. Labor and fringe benefit costs represent average wages for

the region for specific job types as required by a typical Advanced Manufacturing operation. Utility

costs for electric power, natural gas, water, and sewer are based on rates from service providers

within each trial area. Land costs are based on size of the proposed operation times the average cost

per acre within each regional area. Building costs consider proposed investment levels and

construction index for each trial region. Property taxes also consider investment levels and local real,

personal, and inventory (if applicable) effective tax rates for each region. State tax cost estimates

were not included in this analysis due to the complexity of requiring internal company financial data to

arrive at apportionment formulas. State taxes typically do not vary by much with actual

manufacturing operations and are often not a direct factor in location decisions.

Detailed cost comparisons for each factor can be found in Appendix C of this report.


February 15, 2010

Page 27

Comparison Chart: Estimated Total Annual Variable Operating Costs – Advanced Manufacturing Plant

Incentives for the Sample Project – Advanced Manufacturing Plant

The table below presents incentive programs that Oregon and some of the low cost locations in the

sample advanced manufacturing plant cost analysis would have to offer the sample project. In each

instance below, some or all of the programs may be used in a particular project. In this case, some of

the competition may be offering better incentives in terms of cash-like incentives and programs that

may be more directly tied to payroll costs. Since the project is not a renewable energy manufacturing

project, BETC is not available to offer the project, therefore will not differentiate Oregon from the

competition.

Oregon Utah New Mexico Oklahoma

Strategic Investment Program

Economic Development Tax

Increment Financing

Refundable High Wage Credit

Basic or 21st Century

Quality Jobs Program

Standard Enterprise Zone

Industrial Assistance Fund

Investment Tax Credit

Investment/ New Jobs Tax

Credit Program

Long Term EZ Discretionary Grant Local Property Tax Abatement

Oregon Investment Advantage

Transferrable Rural Tax Credit


February 15, 2010

Page 28

Findings - Operating Costs Comparison

Based on the results of the cost analysis Oregon (Portland area) is approximately 31% higher for the

PV Module plant and 23% higher for the Advanced Manufacturing Parts Supplier plant than the lowest

(BASE) cost locations in Ohio and Utah, respectively. Although these example projects are not

indicative of all project requirements and the comparison trial locations may not be direct competitors

with Oregon for all projects, these sample projects, which are in target industries for Oregon, present

a unique perspective of areas where Oregon may fall short in competing for new investment.

Ultimately costs for transportation, sewer, natural gas, and real estate hurt Oregon in comparison to

the selected competitor locations. Incentive programs may be revised or created to combat some of

these shortcomings and level the playing field for Oregon to compete with other areas.


February 15, 2010

Page 29

Section 4 - Findings & Recommendations:

How can Oregon improve?

The following summarizes Oregon’s strengths and weaknesses in business attraction and/or existing

industry expansion. In addition, recommendations are presented below for BETC Manufacturing,

Overall Incentive Programs, and Claw-backs which can provide a roadmap for improvements if desired

by the State of Oregon.

Oregon Strengths & Weaknesses

Strengths:

SIP, BETC, EZ, and LTEZ are attractive to business and useful recruiting tools

Success of other incentive programs (OIA and SRF)

Low electric power costs

Competitive costs compared to CA and WA for Pacific coast market

Legacy semi-conductor industry

End user incentives and “Green” culture help drive local market for Renewable Energy products and

attract Clean Tech investment

Shovel Ready Sites - Certified Sites program helps reduce risks and delays for a site that otherwise

satisfied project needs

Weaknesses:

Perception of inadequate requirements has caused issues relative to non-manufacturing BETC

Complicated incentive process (BETC) and present uncertainty with aspects of pass-through and

sunset provision

Capital-based incentive program over jobs- and payroll-based incentives that would directly link

calculation of the benefit to the quantity and quality of new employment

Aside from large capital or renewable energy projects, incentives are not competitive

High transportation costs / poor market access to service large region or national market

Higher real estate costs compared to other regions, which may reflect overall supply of sites along

with other factors

Recommendations—BETC–Manufacturing

1. Consider changing program in accordance with clear goals:


February 15, 2010

Page 30

From an incentive essentially related to the capital investment by substituting computations

based more on the jobs/payroll of the facility to a somewhat broader set of applicable industries

to provide for other economic opportunities

Instead of a pass-through credit, provide the business a way it can directly receive a refund on

its tax return or rebate for some amount of its unused credits

Instead of a pass-through credit, change it to a grant

2. In light of changes like those above, consider reducing:

General size of the credit relative to project costs which might make it more scalable

Establish clearer, more explicitly standardized qualifications steps

Housing the program with Business Oregon

Put a cap on total annually certified incentives which will make the organization think more

about who/what is getting incentivized—In 2008 manufacturers only received 9% of tax credits

and manufacturers provide more jobs, therefore greater economic benefit to the state

3. Extend the manufacturing tax credits to ensure continuation of the program.

Recommendations—Overall Incentives

1. Pursue greater analysis of return-on-investment, both before and after receipt of incentives,

relative to technical resources, approval steps and program goals.

2. In terms of return-on-investment, improve and/or determine the following:

Methodology and the social/economic benefits and costs to include in the analysis

Definition of what is adequate, which will depend on type and timing of the incentive

3. Integrate ROI or economic impact analyses as a standardized part of the approval process on all

proposed major projects , respective to discretion in awarding incentives and analytical resources

4. Keep the entire incentive process (application, approval and compliance) simple, easy and user

friendly or companies will be deterred, especially smaller ones; consider linking information,

including tax forms and filing systems in claiming abatements

5. Consider a lower threshold for SIP or broader geographic access to incentives for Long-term EZ or

OIA

6. Consider incentives based on withholding taxes, other tax sources, or providing refundable tax

credits or rebates

7. Consider new incentives for projects outside of renewable or adjust existing incentives to include

other industries

8. Consider adding discretionary terms into statutory incentives— i.e., differences in percentages or

terms that can varied based on clear guidelines


February 15, 2010

Page 31

9. Add a “But-For” clause, whereby the business confirms that if not for the incentive it would not be

proceeding with its project to requirements

10. Consider the potential detrimental impact of Prevailing Wage Requirements (PWR) for grants and

loans as such requirements tend to seriously undermine the value of the incentive for private

developers.

Recommendations—Claw-backs

1. Utilizing and enforcing Claw-backs may be feasible for only the largest projects that warrant

special procedures and effort by both agency and the company

2. Review retroactive provisions and enforcement with incentive program enhancements, as well as

for new programs

3. Provisions might serve more than one incentive at a time, like apparently unique Utah model,

such as putting an SRF award and BETC–Manufacturing under same system

4. For negotiated situations or as a general standardized requirement, develop agreements with

clear performance measurements that include jobs, investment, timing, etc., as otherwise

provided by law

5. Consider adding clauses for some programs with major projects that says company must agree to

stay in state for a period of time (for example, twice as long as incentive lasts or some term after

the incentive expires)

6. Provide a balance between economic impact and claw-back provisions

7. Provide clear linkage to program criteria and objectives

8. Consider adding language that if a company does not fulfill a required commitment, then the

company must repay a certain percentage of incentive per year that fell short; pay back should be

pro-rated relative to how much firm falls sort of target

9. Claw-back provisions should account for force majeure, general recessionary conditions or

industry standards as the basis for some degree of flexibility or automatic relief—tough but

reasonable

10. Consider increasing administrative resources to accommodate recommendations


February 15, 2010

Page 32

Austin and Peake Consulting would like to acknowledge the assistance of Arthur Fish, Incentives Coordinator, Business Oregon (Oregon Business Development Department) for his expertise and assistance in this report.

Report Prepared By: Austin Consulting Michelle Comerford, Managing Director [email protected] 440.544.2682 phone Peake Consulting Margaret Grissom, Principal [email protected] 859.331.3422 phone


February 15, 2010

Page 33

APPENDIX

Appendix A - Matrix of Competitor State Programs

Appendix B - Business Climate Operating Cost Comparison - PV Module

Manufacturing Plant

Appendix C - Business Climate Operating Cost Comparison – Advanced

Manufacturing Parts Supplier Plant

Figure A-1: Oregon

Selective State and Local Incentive Programs Matrix

Incentive Incentive Amount Term Fees Clawback Difficulty of Process Miscellaneous

Strategic Investment Program

(SIP) exempts a portion of large

capital investments from property

taxes. The program is available

statewide for traded-sector

projects and is usually only useful

for extremely high-capital

expenditures per employee. High

wages are not a requirement but

have been typical high capital

expenditure projects.

Property tax exemption in excess first $25

million in rural area and $100 million

investment inside urban growth boundary of

metropolitan area or city with 30,000

population. Community service fee of 25%

of company's tax savings provided to local

service providers capped at $500,000 in

rural area and $2 million in urban area.

Requires local approval and can have

additional requirements added at the local

level. Threshold value increases 3% per

year for 15 years, i.e. second year $25

million + 3% = $27.75 million.

15 Years Initial fee of

$5,000/rural &

$10,000/urban and a

secondary fee of

$10,000/rural &

$50,000/urban if

project is approved.

50% of second fee

goes to OR Dept of

Revenue for

administrative

purposes.

Commission may suspend

benefits if annual report is

not received (starting in

2011).

State-level application can be

found online but is not a version

that can be completed and

submitted electronically. Local

application processes vary.

Business Energy Tax Credit

(BETC) Available to those who

invest in energy conservation,

recycling, renewable energy

resources and less-polluting

transportation fuels. Only the

heightended benefit available for

manufacturing of renewable

energy products is reviewed for

these purposes.

No job requirement. Tax credit of 50

percent of eligible costs, up to a maximum

of $40 million. Eligible costs may include

the building, equipment, machinery and

other expenses related to the

manufacturing of renewable energy

products such as solar cells and wind

turbines. (Amounts are subject to legislative

change)

10% per year over

five years

Generally equals

0.6% of the

estimated system

cost up to $75,000 for

manufacturing.

Maximum eligible

cost is determined

differently for each

technology and will

be reduced over

time.

DOE certifies eligible costs

before credits are given to

company or pass-through

partner. If not in compliance,

the prior and future tax

credits can be revoked. If

there is a pass-through

partner that has/or is taking

advantage of the credits, the

owner of the facility is

responsible for the money if

it must be revoked.

Administered by the Oregon

Department of Energy. Apply for

a preliminary certification before

company begins a project.

Preliminary certifications for PV

and Solar Thermal (ST) are only

valid for 12 months after which

time the applicant will need to re-

apply. Exemption: preliminary

certifications for public building

projects are valid for 36 months.

When the Pass-through Option is used, the

pass-through partner pays the project

owner a lump-sum payment calculated

using the pass-through rate. The pass-

through rate takes into account the value of

the money over time and other factors. The

Oregon Department of Energy reviews and

sets the pass-through rate. The pass-

through rate used is the rate in effect at the

time the Oregon Department of Energy

receives the Pass-through Agreement. Of

note: Chapter 913 creates or adjusts

sunset dates for tax credit programs. BETC

is 1/1/2012.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 4

Prepared By:

Austin Consulting / Peake Consulting

Figure A-1: Oregon



Standard Enterprise Zones

(EZ) 59 in the state, 48 of 59 are

rural Enterprise Zones.

Property tax abatement for three years in a

standard zone if there is an increase in

jobs. If compensation are 150% of the

county average wage, then it can be

extended up to five years and may have

additional requirements at the local level.

Must increase by greater of one job or 10%

of employment. Must maintain employment

throughout benefit period.

3 years in a

standard zone but

may be extended to

4 or 5 year, which

may entail additional

local requirements.

Either no fee or an

authorization/filing

fee that 15–30% of

59 of the sponsors

have established.

This fee can be $200

or up to .1% of the

total estimated cost

of the firm’s proposed

investment in

qualified property.

Failure to meet one of the

requirements during the

three to five (calendar)

years of the exemption

would result in

disqualification, as follows:

All back taxes are imposed,

only relevant property

disqualified for removal from

zone, or for ineligible use

(including non-use >180

days,). It is possible for

another eligible firm to

purchase the operation. If a

failure is “discovered” –

without notice –

disqualification includes

20% penalty. Implemented

at local level, infrequent but

disqualifications do occur

Authorization application to the

local zone manager, written

agreement with commitments on

both sides. After property is in

service, initial and annual filings

made wtih county assessor.

Annual report from Assessors'

office to Department of

Revenue, which maintains

fillable forms on line for

busniesses to use.

New law: Chapter 743 allows "reservation

enterprise zones" that can be implemented

in the nine federally recognized Tribes.

One currently exists. Similar parameters as

the rural enterprise zone except instead of

state income tax credits, the credits will

equal tribal taxes paid by business.

Prevailing wage was introduced last

session but died in committee. It said that if

project was $5 million investment then

PWR is triggered. Of note: PWR would

dampen economic development efforts in

that area.

Long Term Enterprise Zones

(40 in rural zone and counties

with longstanding annual

unemployment rates or per

capita income levels meeting

defined levels.)

Full relief from property taxes on a new

facility. With the Governor’s approval, 5 to

15 years of corporate income tax credits

can supplement this property tax relief.

Special criteria restrict these incentives to

rather exceptional investments in terms of

minimum investment cost and a minimum

number of new hires, which depend on the

facility’s location and the county’s size. The

credit is equal to 62.5 percent of gross

payroll to be used against state corporate

excise/income tax liability relating to the

facility, over and above an annual minimum

payment of state taxes.

Seven to fifteen

consecutive years

as determined by

county

There is a clawback by

statute but it has not yet

been triggered. Tax credit

will be difficult to monitor

except through Dept of

Revenue. Failure to meet

statutory employment (of 10,

35, 50 or 75 jobs) and

compensation (150% of

county average wage)

minimums trigger

retroactive repayment of

abated property taxes and

loss of tax credit during tax

abatement period.

Certification Authorization

application to the local zone

manager and county assessor,

and local zone sponsor written

agreement with commitments on

both sides. For additional

credits, Governor issues

approval of tax credits and term.

Only limited use so far, with 5 active

exemption, and likely not credit use

Prepared For:

Business Oregon

February 15, 2010

Page 2 of 4

Prepared By:


Figure A-1: Oregon



Oregon Investment Advantage The exemption is a 10-year waiver of all

income and excise taxes relating to

qualifying business operations. Criteria =

specific per capita income criteria,

industrial or Urban Growth Boundary (UBG)

zone in city of < 15,000. Must create at

least five new full-time, year-round jobs.

The jobs also have minimum pay

requirements. Facility operations must be

the first of their kind in Oregon for the

company and they must not compete with

existing businesses in the area.

Ten years Without five jobs in future

(and compensation

standard), then drop out of

the program. No retroactive

effect. Not required to file

every year.

There are two application forms

necessary for this program. A

preliminary certification is

completed before hiring or any

construction work is done. An

annual certification is then

completed for each of the 10

years that the income tax

exemption is claimed. Both

application are on-line and fill-

able with Business Oregon.

Number of eligible counties will shrink from

more than 20 to less than 10 after 2010.

Strategic Reserve Fund Discretionary grant funds. Usually set up as

a loan and not paid back if commitments

are made. Interest rate is 5% if not

forgiven. (Unwritten policy of $5,000/job) for

"traded-sector" business, including

manufacturing (and now also, electrical

generation) for training or other expenses.

Funding: 2007-09 = $7,425,000, 2009-11 =

$5,914,187, which may be reduced further.

Three years No fees If the jobs are not

created/retained and then

maintained, usually for 8

consecutive calendar

quarters, the loan is not

forgiven and must be

repaid. Loan agreements

usually allow for partial

forgiveness if all other

conditions have been met

except the job

creation/retention and

maintenance on which is

forgiven on a pro-rata basis.

Administered by the Oregon

Business Development

Department. A proposal is

made, staff determines if the

Department wants to fund it.

Then it goes to the Governor for

approval. There is a contract

agreement.

Prevailing wage restriction if more than

$750,000 state and local commitment.

Companies have a three year window to

meet the terms. Very few don't comply; five

were required to send a partial payment

between 1995-2005 and none since then.

Prepared For:

Business Oregon

February 15, 2010

Page 3 of 4

Prepared By:


Figure A-1: Oregon



Energy Loan Program Many

commercial projects qualify for

both the Business Energy Tax

Credit (BETC) and a low-interest

loan.

http://www.oregon.gov/ENERGY/

LOANS/selphm.shtml

Loans usually range between $20,000 and

$20 million. Most energy efficiency

measures, renewable energy measures

and waste heat projects are eligible. Loans

can pay for related costs such as

engineering and design, permits, loan fees,

and project management.

Loan terms usually

range from five to 15

years, depending on

available funds and

project type. Longer

terms may be

available. The loan

term must be within

the expected life of

the project. Loans

are fixed rate. Rates

vary depending on

the type of borrower

and project and

when the Loan

Program sells sold

bonds. Commercial

renewable energy

and waste heat

projects may qualify

for lower tax-exempt

rates

The application fee is

.1 percent (up to

$2500) of the amount

requested. The

Energy Loan

Program also

charges an

underwriting fee of .5

percent, with a $500

minimum and $5,000

maximum.

Adequate collateral for

government borrowers if the

equipment is being

financed. Commercial

loans must be fully secured.

A first or second mortgage

on the project´s land,

buildings, and equipment is

usually pledged. Other

assets may be pledged, if

necessary.

An applicant that must obtain an

energy facility site certificate

under ORS 469.300 to 469.520

for a project is not eligible for a

loan except if the project is

exempted from the site

certificate requirement by ORS

469.320(2) or other exemptions

granted by the Energy Facility

Siting Council.

Contact: Art Fish, Arthur Fish, Incentives Coordinator, Oregon Business Development Department, 503-986-0140, www.oregon4biz.com, Fax: 503-581-5115, State Lands Building Suite 200, 775 Summer St NE, Salem OR

97301–1280

Note: The information contained in this report is confidential and not for disclosure outside Business Oregon except under prior written approval of Austin and Peake Consulting.

Prepared For:

Business Oregon

February 15, 2010

Page 4 of 4

Prepared By:


Figure A-2: California

State and Local Incentive Programs Matrix


Enterprise Zone Annual sales tax credit on purchases up to $20 million of

mfg equipment purchased each year for five years, 50%

tax credit per qualified employee over five years (Year

1/50%, 2/40%, 3/30%, 4/20%, 5/10%) based upon lesser

of actual wage or 150% of state minimum wage, and in

some cases. Qualified employee and other criteria can

severely restrict benefit. Up to 100% net operating loss

(NOL) deduction with a 15 years carry-forward, Net

interest deduction for lenders to Zone businesses,

Accelerated expensing of some depreciable property. 5

percent bid preference on service and commodity

contracts valued at more than $100,000 and may request

an additional 1 to 4 percent workforce preference by

certifying to hire a specified percent of their contract

workforce labor hours from a targeted employment area,

or from enterprise zone eligible employees. (Was

suspended for 2008 and 2009)

Annual sales tax credit

for five years, net

operating loss (NOL)

deduction with a 15

years carry-forward.

Term is tied to the life of

the Zone and is

customarily renewed

prior to expiration. Most

have been renewed in

the last couple of years

so the life is estimated

to be 15 years.

No fees No clawbacks Application and approval

process little more difficult than

the compliance process. For

that, a company files a specific

form with annual tax return but

even that can be considered

cumbersome and likely would

take an accountant to complete.

CA's tax structure is very unpredictable

and very volatile...more so than other

states which results in a boom or bust

cycle. A Commission was established to

address the volatility. Look for the

upcoming legislature to possibly be

presented with the findings. Possibility of

a pendulum swing back after Governor

leaves office in another year. Governor's

green initiatives have been successful

but he has been blamed for the deficit.

May see another $10-12 billion come up

early 2010. Of Note: Effective 1/1/2011,

CA current method for assessing taxes

on businesses that have operations in

CA but have significant sales outside, the

state will level the tax playing field as

companies can elect to have a single

sales factor. By establishing a permanent

elective single sales factor (allowing

companies to choose to weigh only sales

made in the state--not property or payroll-

-to determine corporate taxes owed.)

Local Revelopment Areas Most communities (386 in state) have these vehicles to

promote economic development which are locally

controlled. Incentives can range from low interest loans

(some forgivable), fee and permit deferral or abatement,

infrastructure improvements, up to and including free

land for the right project.

On-going No fees Varies by community Varies by community Based on tax increment financing (TIF) at

local level. [Urban renewal in Oregon is

base on TIF]

Reduced Utility Rates Private and public owned utilities can provide special

incentives to industrial users. In addition, in the case of

municipally owned utilities, their rates can be at much at

30-40% less than other utilities.

On-going No fees Varies by utility Varies by utility

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-2: California

State and Local Incentive Programs Matrix


Local Agency Military Base

Recovery Area (LAMBRA),

Targeted Tax Area (TTA) and

Manufacturing Enhancement

Area (MEA) are similar to

Enterprize Zones

Hiring tax credit, sales and use tax credit, business

expense deduction and NOL carry forward. LAMBRA

was established in response various base closure acts

and to attract investment and redevelopment of former

military bases. There are currently eight LAMBRA's in

California. TTA is similar to Enterprise Zone but is

restricted to certain SIC codes. The MEA was also

established in response to base closures and there are

two in CA.

On-going and NOL for

15 years

No fees No clawbacks Application and approval

process little more difficult than

the compliance process. For

that, a company files a specific

form with annual tax return.

Sales Tax Exemption Rebates

(utilized by one city)

By working with the City, A company that establishes a

customer service office in a particular CA city, can

negotiate and approve a company's California sales

orders, they are able to receive a cash rebate equal to

between .25% and .5% of their taxable sales to their

California customers. The City also has partnered with

two sister cities in Illinois and Texas to allow the

companies to also take advantage of the same savings

opportunity for all their Illinois and Texas sales. This

program was successfully piloted with Sears, as well as

another leading Minnesota based national retailer, and a

$2 billion medical manufacturer. There are opportunities

for .com companies.

On-going No fees No clawbacks Geared toward operations with large

about sales to California customers

Contacts: Mary Jane Olhasso, 909-395-2197 cell: 909-518-9756 and Mary Ingersall, Team CA 916-791-9900. Brad Gates, Economic Development Coordinator, City of Ontario, 303 East B Street, Ontario, CA 91764, P 909-395-

2081,[email protected]


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


http://www.caez.org/LAMBRAs-MEAs--TTA/LAMBRAs/index.html









Figure A-3: Washington

State Incentive Programs Matrix


Machinery and Equipment Sale

& Use Tax Exemption

Varies depending upon the purchases but also includes installation,

maintenance and repair. Available for manufacturers, processors for

hire & manufacturers who perform R&D throughout the state.

One time when

purchased

There are filing

requirements

but no fees

None As many states do, WA lists sales and

use tax exemption as an incentive. As

most states with such a tax or abate it

generally for machinery & equipment

purchases by traded sector industries, it

is really a rather commonplace incentive

However, WA includes the installation,

maintenance and repair taxes as abated

and many states do not tax construction

labor so it may or may not be an

incentive. WA does not have an income

tax but has B&O tax on gross income.

Rural, CEZ and CEZ County

Sale & Use Tax Deferral/Waiver

on all capital costs

Manufacturers, computer-related businesses, R&D laboratories,

commercial testing facilities, and persons conditioning vegetable seeds

(excluding light and power businesses). Availability in rural and

counties with CEZ excludes only three counties.

One time when

purchased

There are filing

requirements

but no fees

Seven-year deferral, not

permanently waived unless

propertty is still in use

Programs are designated for

many different industries and

each is listed separately.

Advantage compared to above is that

construction and other purchases are

more broadly exempt, not merely

production or R&D machinery &

equipment

Business and Occupation Tax

Credits & Abatements

Several different programs for

several different industries

(general manufacturing, high

tech, aerospace, semi-conductor,

aluminum smelting, etc.)

(1) High Technology: Up to $2 million per year for high technology

businesses that perform R&D in specific high technology categories

and manufacturers; (2) The Small Business Tax Credit is available for

businesses whose total B&O tax liability is below: $71 for Monthly

taxpayers, $211 for Quarterly taxpayers, $841 for Annual taxpayers; (3)

50% of customized training expenses; (4) 100% of property taxes for

aerospace; (5) Biofuel credits & deductions; and (6) food-processing

exemption.

Varies; depends on

industry, year

implemented or

expiration of program.

See dor.wa.gov

No fees If there is a failure to submit

an annual report, the

department shall declare the

amount of taxes reduced for

the previous calendar year

to be immediately due and

payable. Excise taxes

payable are subject to

interest, but not penalties, at

the rate provided for

delinquent taxes. The

department shall assess

interest, retroactively to the

date the preferential tax rate

No application but annual

electronic filing is required

The state B&O tax is a gross receipts

tax. It is measured on the value of

products, gross proceeds of sale, or

gross income of the business.

Washington, unlike many other states,

does not have an income tax.

Washington’s B&O tax is calculated on

the gross income from activities,

meaning there are no deductions from

the B&O tax for labor, materials, taxes, or

other costs of doing business, or for out-

of-state sales of manufactured goods.

Programs are designated for many

different industries and each is listed

separately.

Rural or located in CEZ

Business and Occupation Tax

Credit

Rural: $2,000 credit for each new qualified employment position with

annual wages and benefits of $40,000 or less; or $4,000 credit for each

new employment position with wages and benefits of more than

$40,000 annually. To be granted the credit, the business’s average

qualified employment positions at the specific facility must increase by

at least 15 percent over the following four calendar quarters from the

period in which the employee was hired. $1,000/employee for 5 years

for software programming & manufacturing, computer-related

businesses, R&D laboratories, and commercial testing facilities, 100%

of B&O tax for Third party help desk services and, 20% of the cost

(limited to $5,000 annually) spent on job training for manufacturers,

computer-related businesses, R&D laboratories, and commercial

testing facilities (excluding light and power businesses) can be used to

offset B&O tax.

When employed No fees Same as above Same as above Programs are designated for many


separately.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-3: Washington



Sales Tax Deferral/Waiver Construction of cold storage & certain food manufacturing or

processing facilities, defers or waives sales and use tax associated

with construction, expansion, or renovation of qualified buildings and

acquisition of qualified machinery and equipment in research and

development and pilot scale manufacturing in the above fields and

biotechnology & Medical Device Manufacturing. Provides a sales and

use tax exemption for machinery and equipment used directly in

generating electricity using fuel cells, wind, solar or landfill gas energy,

and for the labor and services necessary to install such equipment, but

only if the purchaser develops a facility capable of generating not less

than 200 watts of electricity. Sales and use tax exemption for

purchases of computer hardware, software and peripherals, and

charges for labor and services related to the installation of such

equipment in the aerospace industry. Food wholesalers, retail

distribution centers, third-party warehouses and cold storage

warehouses machinery & equipment; plus 50% sales tax refund on the

wholesalers, retail distribution centers, third-party warehouses and cold

storage warehouses. 100% (2009-13) and 75% afterwards for

Renewable energy generators.

When purchased No fees Seven-year deferral, not

permanently waived unless

propertty is still in use

Same as above Programs are designated for many


separately.

Two-step reduction in tax rate

or reduced B&O

Two-step reduction for companies extracting and wholesaling of timber

and manufacturing of timber or wood products. B&O tax reduced to

.138% or eliminated for biofuel manufacturers, distributors, etc .

Varies; depends on

industry, year

implemented or

expiration of program.

See dor.wa.gov

No fees Same as above

Property tax reduction Software designed for a specific need for a single person or group of

persons is exempt from property tax. Included in the definition is a

modification of canned computer software. Six year real and personal

property tax reduction for biodiesel fuel manufacturers

Six years No fees Same as above

Reduced B&O for Renewable

Manufacturers

October 1, 2009, the rate is reduced to .275% and the specified

components expanded, as compared to 0.454%..

Program expiration June

30, 2014

No fees Same as above Same as above

Contacts: Susan St. Germain, 206-256-6114,Sr. Business Development Manager, Washington State Community, Trade & Economic Development, 2001 6th Ave, Suite 2600, Seattle, WA and James Palmer 206-256-6146

Two bills were introduced the week of January 25, 2010 in the Washington Legislature (SB 6789 and HB 3147) that would allow a 15-month sales tax exemption on the purchase and installation of computers and energy for new data centers in rural

counties. The repeal of the tax benefits in November 2007 has slowed data center development in the state, which had seen a boom in mission-critical projects in 2006 and 2007. Microsoft cited the tax issue in its decision to migrate its Windows Azure

cloud computing service out of Washington State. Meanwhile, Oregon is attracting major new projects, including a $188 million Facebook data center in Prineville


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


http://www.dor.wa.gov/docs/Pubs/Incentives/TaxIncentivesOverview_web.pdf

http://www.dor.wa.gov/docs/Pubs/Incentives/TaxIncentivesOverview_web.pdf

Figure A-4: Arizona

Selected

Incentive Programs Matrix


Foreign Trade Zone (FTZ) Real and personal property reduction to 5% (down from

25%) resulting in 77% reduction in real and personal

property taxes. (Only state with unique FTZ incentives)

Life of zone Application fee

= $8-12,000,

Activation fee =

$2,000,and

Annual fee of

$7,000

None since they are tax

reclassifications or earned

income tax credits.

If there is no FTZ, then the local

process takes about one month

but the Federal process can take

8-12 months.

Enterprise Zone State income tax credits of $3,000 per qualified

employee and property tax reduction of 77%

Property tax reduction

for five years

None None since they are tax


income tax credits.

Military Reuse Zones 77% reduction in real and personal property, state

income tax credits of up to $10,000 per new employee

and certain sales and use tax exemptions on certain

types of construction


for five years



income tax credits.

R&D Tax Credit Program Income tax credit for qualified research with maximum

credit of $2.5 million, if expenses do not exceed the

maximum credit, credit is 22% of expenses. If allowable

expenses do exceed $2.5 million, credit is $600 plus

13% of expenses over $2.5 million

While research is being

conducted



income tax credits.

Refundable Energy Incentive

Program

Up to 10% refundable tax credit AND 77% reduction in

property taxes. Annual state cap of $70 million. 51% of

new FTEs must pay wages at least 125% of median

annual Arizona wages. Taxpayer must pay 80% of

health insurance premiums or 80% of the cost of

alternative health benefits providing standard

comprehensive coverage. Minimum new FTEs for 10%

credit: 1.5 per $500,000 invested in a manufacturing

facility,1 per $200,000 invested in a headquarters.

Minimum $25 million capital investment.


for up to ten years

where 51% of new FTEs

pay wages at least

125% of median annual

Arizona wages and for

15 years at 200%.

Fee and

certification

process

depends on the

size of project.

The cap is

$10,000 per

application.

5-year clawback on

underperforming projects,

with liberal hardship clause

included in the bill language.

Pre-certification application,

application and investment must

be made during taxable years

beginning in 2010 through

2014.Credit is allowable in equal

annual installments over five

consecutive years beginning with

the year of the investment.

ADOC administers the program

and certification process. They

will assess financial health of

company, value of refundable

tax credits and ensure

compliance through the annual

tax filings. The tax filing will

ensure number of jobs and

wages.

Job Training Grants Cash assistance of up to $8,000 per qualified employee

of up to $1.5 million. Up to 75% of expenses incurred

for technical skills training

As employees are hired No fees None May be fiscally suspended in 2009

Contacts: Matthew D. Miller, Strategy Analyst, Greater Phoenix Economic Council,2 N. Central Ave., Suite 2500,Phoenix, Arizona 85004,Phone: 602.262.8628,[email protected], Chris Camacho 602-262-8619.


Prepared For:

Business Oregon

February 15, 2010

Page 1 of 1

Prepared By:


Figure A-5: Utah

Selected Statewide Incentive Programs Matrix


Economic Development Tax

Increment Financing (EcDIF)

Refundable tax credit for up to 30% of new state

revenues (state portion of sales (4.7), corporate

income (5% of revenue attributable to state) and

withholding taxes (5%) paid to the state over the life (5-

10 years) of the project; no more that 50% credit in

one year; must pay 125% of the county average

(100% in rural counties) and preferably be in a

targeted industry. (Excludes retail distribution projects)

At least 50 jobs in urban areas; Local community must

provide local incentive as well. New revenue over 10

years = 1 million so, 30% is $30,000. 1st year can

receive 50% of new state revenues for 3 years and

then 30% thereafter until the 30% of new state

revenues or the term is exceeded. 30% is for a rare

project. Typical is 20-25%.

Typically 5-10 years and

is determined on a case

by case basis. Legislation

authorizes up to 20 years

but 20 years is rare. Time

is based on how

comfortable the company

is extending their numbers

out 5 or 10 years.

Numbers are used to

establish a baseline for

what they can receive in

benefits

No fees. Post-performance. Enter

into an incentive agreement

with GOED that specifies

performance milestones

Local community must also

participate; must enter into a

performance contract with

specific milestones. Policy and

legislation require buy in by

community through match (loose

interpretation) that can be

infrastructure, property tax

abatement, etc.

The Board of the Governor's Office of

Economic Development (GOED Board)

consists of 15 members appointed to

four-year terms by the Governor with the

advice and consent of the Senate. No

more than eight members are from one

political party and the membership

represents all areas of the state. The

GOED Board is charged with promoting

and encouraging the economic,

commercial, financial, industrial,

agricultural, and civic welfare of the

state. The GOED Board also advises

GOED staff on the development,

attraction, retention and expansion of

businesses, industries and commerce

within the state. The state has a Request

for Protected Record Status form on line.

Economic impact analyses are

conducted.

Industrial Assistance Fund

(IAF)

Grant from Governor's Office of Economic

Development Board used for attraction and retention.

Based on # employees retained or created. Funded by

legislature but budget shortfall means likely won't be

funded this year. Typical amount is $2500 to

$5000/job. Legislation authorizes up to $15,000 but

recently highest is $5,000. Past year is 10-15% of

projects. Must create/retain 50 new jobs and pay

125%/urban and 100%/rural county average wage.

One time grant No fees. Post-performance. Enter



performance milestones.

There is a clawback if #s are

not met.

Must enter into a performance

contract with specific milestones

Rural Fast Track Grant available to small existing companies in rural

Utah for creating high paying jobs. Population <

30,000 w/average household income < $60k, Been in

business > 2 years, at least 2 employees; up to

$50,000. $1k for each new job paying over 110%,

$1250 for over 115% and $1500 for jobs paying over

125% of county average wage.

One time grant No fees. Post-performance. Enter



performance milestones.

There is a clawback if

commitments are not met.

Must enter into a performance


Green flags: # and salary of jobs, new

state revenue, long term capital

investment, targeted industry,

competition with other locations. Red

flags: In business < 3 years, lack of

profitability for previous 3 years,

bankruptcy or negative cash flow, sales

declines, start-up company, non-profit

org or retail

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-5: Utah



Renewable energy

Development Incentive

(Hydroelectric, Solar, Biomass,

Geothermal, Wind, Waste

Gas/Heat Recovery

Refundable tax credit up to 100% of new state tax

revenues (including, state, corporate, sales and

withholding taxes) over the life of the project (typically

5-10 years). Renewable energy generation or related

manufacturing. Must create new high paying jobs at

least 125% of urban county average or 100% of rural,

demonstrate company stability sustainability, local

community incentive, compete with other locations

and enter into incentive agreement with GOED.

Generation project doesn't have minimum job

requirement.

Typically 5-10 years Post-performance. Must enter into a performance


Green flags: # and salary of jobs, new

state revenue, long term capital

investment, targeted industry,

competition with other locations; Red

flags: start up or pre-revenue, non-profit,

bankruptcy or negative cash flow, sales

decline.

Contacts: Samantha Mary Julian, Energy and Natural Resources Cluster Director, State of Utah, Governor’s Office of Economic Development,324 South State Street, Salt Lake City 84111,801-538-8746, [email protected]. Theresa Foxley,

Renewable Energy Project Manager, Corporate Recruitment and State Incentives, 801-538-8742, Cell: 801-558-2803 ,[email protected] IAMC contact: Jeff Edwards 801-328-8824


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


Figure A-6: New Mexico


Incentive Incentive Amount Term Fees Clawback Difficulty of Process/Criteria Miscellaneous

JTIP/Job Training Incentive

Program

Customized training for OJT. 50% of the employees

wages, up to 1040 hours. 2 factors: hourly wage rate

and Federal O'net Job Zone classification (web site).

Urban = 50%, rural = 65%. Have to be increasing

employment. Not available for skills upgrade. Only

10% of employees qualified for training can be the

G&A (sales, marketing, finance, etc.). Cash back to

the company. Submit form and receive $ back in 30

days.

Indefinite time period. No application

fee. Have to be

NM resident for

at least one

year in their

lifetime. If hire

>20 in urban

area, have to

provide health

insurance and

must pay 50%.

If a facility that received JTIP funds

closes or if layoffs of JTIP trainees occur

within 1 year of the completion of training,

the JTIP Board will require the refund of

the funds associated with any JTIP

trainee(s) which were claimed and

subsequently laid off. Layoff is defined

as a separation of an employee from an

establishment that is initiated by the

employer as a result of market forces or

other factors not related to employee

performance. The board will require a

refund of funds from companies whose

JTIP layoffs exceeded $100,000 of

reimbursement for those employees. The

board will require a refund of funds within

90 days of notification. If a JTIP eligible

trainee is laid off during the training period

and is subsequently rehired within four

months by the same employer, the

trainee can be treated as a new hire and

thus remains eligible for JTIP.

The company submits their application and

certificate of eligibility (relative to jobs, when

required) to the NM Tax and Revenue

Department. The Department approves the

application, returns the approved form or letter

of approval to the company, then the

company submits the approved application

form along with the next filing of their CRS-1

to utilize the credit.

Refundable High Wage Tax

Credit

Credit of up to 10% of combined value of the salary

and benefits for each net new job > than $40k in

urban and $28k in rural. Credit is against the gross

receipts tax (state portion only which is 5%), employee

withholding and compensating tax. Must be hired by

7/1/15. Do not have to be NM residents.

Four consecutive years.

Have to have worked for

48 weeks prior to the

company getting credit

for it.

No application

fee. Submit

CRS1 one

page form to

Tax and

Revenue

If credit exceeds liability, get refund from

Tax and Revenue. No clawback as job

was occupied in that year and claim is

after the job.

Pretty easy process, with tax forms that

coordinate across programs.

Manufacturing Tax

Credit/Investment Tax Credit

5% of value of the equipment. Limited to 85% of

compensating, gross receipts or withholding tax within

any one reporting period. Remaining credits can be

carried forward indefinitely. Purchases made prior to

2020. Employment: must hire one new full time

employee for every $500,000 up to $30 million. After

$30 million = one employee per million and one new

employee must be hired for each $500,000 in

equipment. So have to hire 60 employees up to the

$30 million and one per million after that.

Each purchase. If using

IRB for land, bldg and

equipment can use

benefits of IRB and

Investment Tax Credit.

PILOT required for IRB

depending on fiscal

impact analysis but it is

usually 3-5%.

No fees/fill out

CRS1 form

Clawback and there is a requirement that

you have to apply within one year of

purchase of equipment. No recapture

provision.

Complete CRS1 form. Tax forms coordinate

across programs.

If taking Investment Tax credit and high

wage credit. Take ITC first and then High

Wage Tax credit since that is refundable.

Discretionary NM has a history of doing this in the past. How much

Gov has or is receiving in this session is unknown.

For extraordinary project, there will be funds. Used for

infrastructure, raw land or building. Economic impact

analysis is conducted. Funds depend on budget

Secretary and Governor decide amounts. They also

look for additional money from locals and/or

developers; Gov said in past they want a 25% match

from county, city and/or developer.

Typically funds are

provided over two years

Unknown Unknown Unknown

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-6: New Mexico


Incentive Incentive Amount Term Fees Clawback Difficulty of Process/Criteria Miscellaneous

Technology Job Tax Credit Credit of 4% in urban and 8% in rural for expenses in

qualified research. If employment in either urban or

rural EZ increases, credit can be doubled. Bldg,

equipment, land, operational costs, payroll, patent,

etc. expenses are broadly defined. BUT need to be

doing research on YOUR product or service.

Technological in nature, must improve your product or

create new product. Cosmetic changes are not

included. Can take an additional 4% credit if

increasing base payroll expense by $75,000 for each

million $ of expenditure. Credit against CRS1. Not

available for expenditures with IRB. Can claim other

expenses but not the IRB related.

Can be carried forward

indefinitely

No fees/fill out

CRS1 form

Clawback: Credit cancellation and

recapture provision for unused credits in

the event facility is non operational for

180 within 2 years after approval of

credit.

If claim ITC for equipment, cannot claim

equipment cost under Technology Job Tax

Credit. Cannot be doing contract research.

Tax forms coordinate across programs.

Have to maintain an entire different

accounting for the incentives to be

obtained. So the R&D dept would have

to be monitored separately from the

other departments.

Transferrable Rural Jobs Tax

Credit

Credit of up to 6 1/4% on first $16,000 of wages paid.

Goes against CRS1. Employee has to have worked

48 of 52 weeks in reporting period being claimed. Tier

1 = 15,000 people or less = four years, Tier 2 =

30,000 people = two years. Credit is transferrable but

not refundable. If employees make over $16k =

$1,000/job. If the credits are transferred or sold the

price is determined by the market.

Eligible for a two year

credit or four year credit.

Excess Credit can be

carried forward three

years

No fees/fill out

CRS1 form

No clawback. Can go against owners personal income tax

or the companies corporate income tax in

addition to the CRS1

Alternative Energy

Manufacturing Tax Credit

Mirrors Investment Tax Credit except specific to

energy related product. Same criteria for jobs. If

manufacturing, can take ITC and Alternative energy

Tax credit AND high wage and the IRB (with tax

exemptions). Credit amount is 5% of value of

investment. Job requirements are minimal.

Carries forward for 5

years

No fees/goes

against CRS1

Clawback: Credit cancellation and

recapture provision for unused credits in

the event facility is non operational for

180 consecutive days within 2 years after

approval of credit.

Complete form. Tax forms coordinate

across programs.

Take Alternative, ITC and then high

wage tax credit.

Contacts: Angela Talbot, Senior Business Development Manager, [email protected], cell (505) 301-6560, direct (505) 338-1113 Ext. 104, Gary Tonges, Albuquerque 505-246-6200. Vice President, Business Development, Albuquerque Economic

Development,,851 University Blvd., Suite 203,,Albuquerque, NM 87106, 505-246-6212 - Direct


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


Figure A-7: Oklahoma



Basic Quality Jobs

Program

Cash rebates of up to five percent (5%) of

gross annual taxable wages. Source of

revenue is state income tax. State has a

formula that determines what the percentage

will be. For 5%, have to have $45-50k average

salary. If down to $30k, amount would be

about 3.8%. It is an econometric model,

payroll, average wages, capital investment,

amount of project shipped out of state. Some

rural counties (66 of 77 counties) are

automatically 5%. Average. is 4.4%. If project

goes into Opportunity Zone, the wage

threshold is removed and is automatically 5%.

Ten years for

manufacturers with $2.5

million payroll, small

employers (90 or less) =

up to 7 years and the

High Impact Program

(lower threshold for

payroll) = up to 6 years.

Legislatively decided.

Based on jobs/wages

cost benefit analysis

which provides a limit

and the maximum

length can be as

mentioned above.

Origination fee is

$1,000 and is deducted

from their first payment.

No fee for small

employers

Pay for Performance/if

don't create jobs, then

don't receive the benefit. If

don't have $2.5 million

payroll, then company is

dropped from the program.

If they collect some of the

money and is dropped

form the program, the

money is not given back to

the state.

Online excel spreadsheet for

application, technical

assistance in completing

application available and

encouraged, quarterly reports

due in order to receive payroll

tax refund, Takes 2-3 weeks

for approval. For any claim

submitted prior to end of the

month, the payment is made

in the first two weeks of

following month.

Extremely well laid out for specific industries that

fit the program as listed by NIACS code. Specific

NAICS codes for Manufacturing (only 3), R&D

(2), Central Administrative Office or R&D Testing

(9), Other support service for Transportation

industry (1), Wind power generation (1), Air

Transportation (1), Flight Training (1), Service

companies IF 50% sales out of state (55),

electric services (1). $2.5 million payroll

threshold and company has 3 years to reach

amount. A lower payroll threshold can be

available for targeted areas. High Impact

Program - Lowers annualized payroll threshold to

$1 million for businesses that produce new direct

jobs to the State that are equal to or greater than

1% of the total labor force of the county in which

they locate. Payout is 2.5% of taxable wages for

up to 6 years. Small Employer Program - Allows

qualifying small businesses (90 employees or

less) to receive up to a 5% cash-back incentive

for up to 7 years to locate or expand in

Oklahoma. All companies must meet minimum

wage and health coverage requirements. $1.5

million payroll for food processing or locating on

former military base. 0% threshold for within 10

miles of Superfund site or National Priorities List.

Program is also available for Change in Control

(of companies) that includes change in >50%

ownership or value of assets. Great web site

with form to fill out about your project:

http://www.okcommerce.gov/index.php?option=c

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 3

Prepared By:





21st Century Quality Jobs Initial cash rebates of up to 7% of taxable

wages for the first three years and cash

rebates of up to 10% once they reach 10 jobs

at $86,637 average wages in the highest

county. Source of funds is payroll withholding

and $ is set aside. Can have as few as 10

employees but average pay has to be 300% of

average in that county. (i.e. Average wage is

$25,000 and goes to $75.000)

Ten years $2,500 ($10 million or

less contract) , $5000

(more than $10 million

and less than $50

million), $7,500 (any

contract over $50

million) depending on %

of benefit. All fees come

out of first payment.

Performance contract is

based on wage/jobs,

taxable payroll = final

dollar amount company

can claim over the life

of the program.

Contract outlines

performance

responsibilities, and

state responsibilities.


don't create jobs, then

don't receive the benefit

Online excel spreadsheet for

application, technical

assistance in completing

application available and

encouraged, quarterly reports

due in order to receive payroll

tax refund,

Passed in spring of 2009; effective November,

2009, enhanced list of job categories, must pay

at least 50% of health insurance, =/> than 300%

of lesser of average of OK state wage or

average of county wage where locating. May

make company ineligible for some other

programs but a comparative estimate of

incentive benefits is offered by Dept of

Commerce for each program. Specialty

hospitals, heavy civil engineering, motion picture

and video, financial investment companies,

insurance carriers, professional, scientific, etc.

were added to the quality job list.

Investment/New Jobs Tax

Credit Package

A five-year tax credit against corporate

income tax liability on the greater of 1% per

year of investment in qualified new

depreciable property or a credit of $500 per

year per job against the corporate income tax

liability. Amount doubles in an Enterprise

Zone. Company selects based upon their

investment and jobs. Can now be combined

with Quality Jobs depending on the

investment and jobs. Jan 1, 2010, for

manufacturing job creation and investing $40

million or more in depreciable property related

to the manufacturing they can then participate

with investment credit of 2% and the quality

jobs. If combined there is a wage threshold of

$35,131 avg. This is ONLY available to

manufacturers.

Each year for Five years

and can be carried

forward until it can be

used.

No fee. Credit is against

taxable income and is

claimed through normal

tax filing and the wage

portion submits

quarterly filing for the

Quality Jobs.


don't create jobs or make

the investment, then don't

receive the benefit

Online form for investment tax

credit. $40 million investment

can be made over 3 year

period. If company doesn't

invest $40 million, they would

have to return the investment

tax credit. Prior to 1/1/10 it

was either investment or

quality jobs; after it can be

both.

Plus Sales Tax Refunds on construction

materials for certain manufacturers and aircraft

maintenance repair facilities; on purchases of

computers, data processing equipment,

telecommunications equipment for certain

aircraft facilities; and for purchases of computer

services and data processing equipment for

qualified computer services or research and

development companies and Income Tax

Exemptions/Credits for hazardous waste

recycling reuse or source reduction; for CNG

conversion; and for insurance premiums.

Available for manufacturers, processing or

aircraft maintenance.

Opportunity Fund No new appropriations were given to the

Oklahoma Opportunity Fund in the 2009

legislative session. However, the program still

exists for the possibility of future

appropriations

One time grant. Undetermined All payments would cease

until those wage

thresholds and annual

payroll requirements are

met.

Undetermined Not funded in 2009 but program is available for

future funding.

Local Property Tax

Abatement

Five year ad valorem tax abatement Five years No fees. Pay for performance. If

you don't build it, you don't

get it.

File a form annually with the

local tax assessor. No

Payment in Lieu of Taxes

(PILOT) to cover schools. All

taxes are abated.

Prepared For:

Business Oregon

February 15, 2010

Page 2 of 3

Prepared By:





OK City--Strategic

Investment Program

$2500-5000/per job cash payment depending

on the wages

One time grant but a

certain % per year for

four/five years

No fees. Source is $65-

70 million bond issue.

No clawback. If jobs are

created, then payments

are made. If jobs cease to

exist, then payments

cease.

Oversight Committee

approves before the City

Counsel gives final approval.

Economic impact analysis conducted and is

used to determine the incentive amount.

Minimum $1.75 million in payroll, 100% of local

average wage, if 120% of wages may have a

bonus rider and levels of funding are clearly

defined. Look for a return on the investment in 5

to 7 years based upon jobs, taxes paid and

location. Provision for emerging technology

companies.

Aerospace Industry Engineer

Workforce Tax Credits

This legislation enacted in 2008 provides tax

credits to both engineers who are hired by an

Oklahoma aerospace company and to those

Oklahoma aerospace companies that hire

them beginning January 1, 2009. The

Oklahoma aerospace companies hiring the

engineers will receive a tax credit equal to

10% of the compensation paid to an engineer

during the first five years of his or her

employment if the engineer graduated from an

Oklahoma college, or a tax credit equal to 5%

of the compensation paid to the engineer

during the first five years of his or her

employment if the engineer graduated from a

college outside Oklahoma up to the maximum

credit of $12,500 per qualified employee per

year. In addition, the new law grants

Oklahoma aerospace companies a tax credit

in the amount of 50% of the tuition reimbursed

to a new engineer graduate for the first four

years of his or her employment. The tax credit

is limited to 50% of the average annual tuition

paid by an engineer at a qualified program at

a public university in Oklahoma. Engineers

who are hired after January 1, 2009 by an

Oklahoma aerospace company may also

No term listed No Fees No Clawbacks There is a form 565 on the

Oklahoma Tax Commission

web site;" Credits for

Employers in the Aerospace

Sector”. This is completed by

company when filing tax

return.

Renewable No new incentives for renewable but if they fit

the other programs they can participate. Wind

power farms are allowed to take property tax

exemption. Wind maintenance service

companies were added to the Quality jobs

programs.

See above See above See above See above

Contacts: Sandy Pratt, 405-815-5104, Robin Roberts Krieger 405-297-8945. Jim Igarta, Oklahoma's Fast Forward Team, Business Location Site Location Manager, Oklahoma Department of Commerce, 900 N. Stiles Ave., Oklahoma

City, OK 73104, Phone: (405) 815-5241, E-mail: [email protected], Mobile: (405) 464-6680 and Richard Schwalbach, 405-815-5269 both at the state.


Prepared For:

Business Oregon

February 15, 2010

Page 3 of 3

Prepared By:


Figure A-8: North Carolina



One NC Fund (formerly

Governor's Industrial

Recruitment Competitiveness

Fund)

NC looks at tier rankings with Tier 1 being most depressed.

Tier 1 = $12,500/job, 2 = $5,000, 3 (top 10 communities in

state) = $750-$1000/job. The amount is negotiated and paid

in cash over three years in 25% increments or as the jobs

are created. Requires 100% match from local community.

Used for equipment, building, pretty much anything.

Governor looks at all projects and is very flexible and

customized. Many companies that are not set up as cost

centers can't take advantage of job tax credits as they

would not incur any taxes.

Three years No application

fee

None as it is pay for

performance

File forms with the Employment

Security Commission (NCIU

Form 101) that goes to

Commerce with information the

company already completes for

unemployment insurance.

Program has a 50% paid health

insurance component for employee.

Job Development Investment

Grant

Company receives a discretionary amount (up to 75%) of

payroll taxes (withholding) after the jobs are created. Totally

discretionary and is determined by Commerce, Revenue

and the Budget Office (5-member committee). As an

example, may receive 50% for 6 years, 75% for 12 years

(which is the highest) with the minimum being 10% of

withholding. Can only approve up to 25 grants in any year

and the total payout cannot exceed $15 million over any 12-

month period. Usually program is reserved for major

projects ($40-50 million project and 200 jobs) unless

locating in depressed area. The job numbers can be lower

if the wages are higher. If it is a mega project-major (>100

million 1000's employees), legislature calls a special

session to approve the one-time incentive.

Over a

negotiated/discretionary

period of time, i.e., 6-12

years.

$5000 for

application

No clawback. Performance

based but if out of

compliance, the amount can

be reduced proportionately

or terminated. There can be

a recapture all or part of

grant and is at the discretion

of the committee. Also

Attorney General's office

signs off on the final

agreement.

Application must be completed

and presented to a committee

for approval. Process is a little

cumbersome as there is a pre-

application, then application,

then Gov.'s letter then contract.

There is no one application for

all programs. Every job, every

salary, description of each job,

etc. which requires the HR of

national companies to complete.

A proof of performance is

submitted. A portion of the fee

amount goes back to the

Industrial Development Fund

that goes into a utility fund that

can be used for infrastructure at

the Secretary's discretion.

Program has a 50% paid health

insurance component for employee.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-8: North Carolina



Article 3J Tax Credits Statutory for (1) job creation and is based on tier system:

Tier 1 over 5 jobs = $12,500/employee, tier 2 over 10 jobs

= $5,000 per job, tier 3 over 15 = $750 /job. Sunsets in

2010. Program is a tax credit against NC income tax and

franchise tax but neither can exceed 50% of that tax liability.

(2) Project investment: Tier 1 is $0 threshold investment =

7% tax credit, Tier 2 is $1 million threshold = 5% tax credit

and Tier 3 is $2 million threshold and 3.5% tax credit. Tax

Credit for income and franchise tax for investment in (3) real

property for large project (minimum investment is $10

million over 3 years and 200 jobs over 2 years).

Job creation and project

investment is for four

years and the

investment in real

property is for 7 years

$500/per credit

for each one

that you file for.

$500 for job

creation and

$500 for

income tax

credit

Pay for performance. Get

the tax credit the following

year of the job creation.

Audited by Dept of

Revenue.

First two are fairly easy;

amendment to tax return in one

page plus the fee. Real property

requires a written determination

from the Department of

Commerce

R&D Tax Credit Based upon % of research expenditures. 0-$50 million =

1.25% of expenditures, $50-200 million = 2.25% credit, over

$200 million = 3.25%. If they contract with the university

research system, they are allowed 20% of those expenses

as a credit against income and franchise taxes.

Fifteen year carry-

forward for credit if they

are unable to make use

of it in its entirely in that

year.

No application

fee

There is no claw back

provision. It is one

"installment" taken in the

year that the expenses were

incurred. If don't meet the

requirements set forth in the

statute, they would not

create a credit.

Substantiate expenses for R&D

and submit to Dept of Revenue.

Renewable Energy/Corporate

Tax Credit

35% Corporate tax credit, maximum of $2.5 million per

installation. Credit must be taken in five equal installments;

allowable credit may not exceed 50% of a taxpayer's state

tax liability for the year, reduced by the sum of all other

state tax credits.

Credit may be carried

forward over next five

years if it can't be used

in the first year

No application

fee

File form with NC Department of

Revenue when file taxes. Install

system in one year and file for

the credit the following year.

Renewable Energy/Property

Tax Abatement

Exempts 80% of the appraised value of a "solar energy

electric system" (also known as a photovoltaic, or PV,

system) from property tax. For the purposes of this

assessment, the term "solar energy electric system" means

"all equipment used directly and exclusively for the

conversion of solar energy to electricity

Throughout life of facility No application

fee

Unknown

Local Option - Revolving Loan

Program for Renewable Energy

and Energy Efficiency

Amount undetermined. No more than 8% interest and no

longer than 15 years

Up to 15 years Unknown Unknown Funding from the Energy

Efficiency and Conservation

Block Grants from the federal

government and the city's or

county's unrestricted revenue.

Contacts: Jennifer Lantz, Wilson EDC 2252-237-1115, Donna Phillips 252-355-9048 ext. 223 (state), [email protected], Martyn Johnson, 919-733-8572 and Garrett Wyckoff Jr., Economic Development Representative, 919-733-

1437. Cell 919-600-0878, [email protected]


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


Figure A-9: Michigan


Incentive Incentive Amount Term Fees Clawback

Difficulty of

Process Miscellaneous

Mega Employment Tax Credit

Program--Standard, Rural and

High Tech

Tax credit of up to 100% of wages and benefits. As an example if a

company has 25 employees X $40k wages = $1 mill payroll,

Therefore 4.35% (payroll tax) paid by employees is returned to the

company = $43,500/year. Wages must be 150% of federal

minimum wage or can't apply.

Term is negotiated;

usually 2, 5 or 10 years

with a maximum of 20

years. Typically it is for

5-7 years.

Rural = $2500,

Standard = $5000 plus

one-time 1/2 of 1%

administration fee

New clawback was put in

place in last year if the

company moves

Corporate staffing and

investment chart

completed plus

financing, wages, etc. is

submitted to packaging

team to review. If staff

likes it, they decide to

scope the project. The

2nd step is a pre-

commitment letter then

it goes to state board

MEGA strategic board.

Usually takes 60-90

Most are tax credit based. Constitution does

not allow cash grants.

No deal closing fund.

Anchor District Tax Credit 5% tax credit against corporate tax investments for made by

suppliers of high tech within 10 miles of location. If supplier utilizes

tax credit, amount is reduced to 2.5%. Must create at least 10 jobs

and have a minimum $1 million investment. Limited to five

companies per year.

Five years Info not available Info not available Corporate staffing and

investment chart

completed plus

financing, wages, etc. is

submitted to packaging

team to review. If they

like it, they decide to

scope the project. The

2nd step is a pre-

commitment letter then

it goes to state board

MEGA strategic board.

Usually takes 60-90

days.

Brownfield Tax Credits 12.5% Tax credit (20% in Urban area) to offset the MI Business

Tax. Credits can be taken by a company, syndicated or sold, or can

be refunded for $.85 on the dollar. An assignment can only be

issued after the credit is issued after the Request for Certificate of

Completion AND in the same year the credit is issued. Qualification

requirements come from the Department of Environmental Quality.

They have fairly loose requirements for sites to be designated as a

Brownfield, but have specific requirements that must be followed

on their clean up action plans.

No set time period Large = $10k + .7%

admin fee, Small =

$5k + 1.4% admin fee,

Mini = $2,500 without

admin fee. The

application fee can

later be used to offset

the admin fee.

There aren’t any claw

backs, because if the

company doesn't complete

the work they don’t receive

payment.

Pre-application,

application, letter from

state, certificate of

completion (preliminary

and final).

Signature local program. State

authorized. Public Act 198

50% abatement on new real and personal property tax at the local

level. Available for manufacturing, high tech and alternative energy.

Core communities (larger cities) have a PA 328 = 100% abatement

on personal property only.

Up to 12 years and is

decided at the local

level

Some communities

may have a small

processing fee of $50

or $75.

Depends on the community. Process is much easier

as it can be done at the

local level and usually in

30 days.

Renewable: Nonrefundable

Business Activity Tax Credit

Equal to the lesser of (1) the amount by which a business' "tax

liability attributable to qualified business activity" for the tax year

exceeds the business's "baseline tax liability attributable to qualified

business activity," or (2) 10% of the amount by which the business'

"adjusted qualified business activity" performed in Michigan, outside

of a "Renaissance Zone,"

Unknown Unknown Unknown Activity must be certified

by the Michigan Next

Energy Authority.

NextEnergy is a comprehensive economic-

development plan to position Michigan as a

world leader in the research, development,

commercialization and manufacture of

alternative-energy technologies.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 2

Prepared By:


Figure A-9: Michigan


Renewable: Refundable

Payroll Tax Credit

Refundable credit equal to their qualified payroll amount multiplied

by their income tax rate for that year. In order for an employee's

compensation to qualify for this treatment, the employee must work

on alternative energy-related research, development or

manufacturing

Unknown Unknown Unknown Unknown

Refundable Photovoltaic


25% of the capital costs for building a qualifying PV manufacturing

facility. Maximum incentive: Generally $15 million, but one certificate

may be for up to $25 million. Total credits issued for all years may

not exceed $75 million.

Credit generally taken

over two years in equal

installments; minimum

capital investment and

job creation

requirements apply


Renewable Energy

Renaissance Zones

100% abatement of Michigan Business Tax, state education tax,

personal and real property taxes, and local income taxes

Tax abatements last up

to 15 years, phased out

in 25% increments over

last 3 years

Unknown Unknown Unknown Michigan enacted legislation allowing for the

creation of Renewable Energy Renaissance

Zones (RERZ). Renaissance zones --

renewable energy renaissance zones are

just one type -- offer significant tax benefits

to facilities located within their boundaries.

Facilities within a renaissance zone do not

pay the Michigan Business Tax, state

education tax, personal and real property

taxes, or local income taxes (where

applicable). The original law allowed for the

designation of up to 10 RERZs, but a 2008

amendment expanded the number to 15

Contacts: Lindsay Eister, Manager Business Attraction, Michigan Economic Development Corporation, 300 N. Washington Sq., Lansing, MI 48913, (517) 749-7785 Cell (517) 373-3786 Voicemail, [email protected]; Justin Horvath/Owasso MI 989-

723-5144


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 2

Prepared By:


Figure A-10: New York



Empire Zone. The next three

incentives are available for

qualified companies in the zone.

http://www.tax.state.ny.us/pdf/pu

blications/multi/pub26_201.pdf

Program is due to expire 6/2010. Likely extend it for specific # of years. If

company is in the program before then, they will be grandfathered. Possible

there will be an exception to the Investment Tax credit and it will be reduced

from 5% to 2.5%. Everything else remains the same if it is just renewed. Rule of

thumb is for every job created 25% of wages/benefits of that salary can be used

as a tax credit of income taxes.

10 years No fees If company ceases business

and there is still depreciable

assets, a portion of the

credit is required to be

recaptured

Difficult process for all incentives

as company is dealing with NY

Dept of Labor and NY Tax and

Finance. Compliance is pretty

easy.

Wage Tax Credit Credits are $1,500 per employee per year; for employees in special targeted

groups the amount is raised to $3,000 per employee per year. In investment

zones, this credit is increased by $500 for workers with wages over $40,000.

Unused state income tax credits can be forwarded indefinitely and new

businesses (those that have been taxable for five years or less) are eligible for a

50% refund of unused credits. As an example, One employee, $1500 year one,

earn $1500, yr 2 = $3000/50% refund or $750/employee per year refunded to

them. 1/2 is carried forward and other 1/2 is in a cash refund. Available to

companies hiring full-time or full-time equivalent employees in the zone.

5 year term but can be

carried forward 15 years

No fees Pay for performance/no

clawback. If don't meet

criteria, then can be






easy.

Investment Tax Credit Businesses that create new jobs and make new investments in production

property and equipment may qualify for tax credits of up to 10% of their eligible

investment. New businesses may elect to receive a refund of certain credits, and

all unused credits can be carried forward for 15 years. As an example, a

company make $100 million investment, they earn $10 million tax credit in year

one. 1/2 (5%) they carry forward to use against future tax liability. The other 1/2

(5%) of $100 million is refunded to them in year two for sum of $5 million.

One time credit that can

be carried forward 15

years

No fees If company ceases business




recaptured





easy.

Employment Incentive Tax

Credit

3% of investment or 30% of the Investment Tax Credit (providing certain

employment figures are met). Non refundable credit works out to be 9% of

investment. In other words, an additional Employment Incentive Credit equal to

30% of the investment tax credit is available for each of the three years after the

Investment Tax Credit (ITC) is claimed if employment is increased when the

investment is made. Unused credits can be forwarded indefinitely and new

businesses (personal income tax only) are eligible for a 50% refund of unused

credits.

Available for each of

three years after

investment tax credit is

claimed and can be

carried forward

indefinitely.

No Fees Pay for performance/no

clawback. If don't meet

criteria, then can be


At the moment, set to expire in

June 30, 2010. The future is

unknown but there is not new

program to present so there will

likely be an extension of current

program.

Real Property Tax Credit (or

rebate)

To encourage development, expansion, and improvement of commercial

property, up to a 75% refund on property tax is available to offset increased

assessments due to improvements to business and commercial property.

Percentage is based upon wages, investment, etc. paid. Empire Zone program

= if own property, 75% refund for 10 years, Can also go through IDA and have

different schedules where they abate (up front) taxes and depends on the type of

development they are targeting and can be for as long as 15 years. If 15 years,

it would be a sliding scale upward. IDA compares to see which is better. Empire

Zone credits can be selected along with the IDA property tax abatements if

determined better.

Ten to fifteen years No fees for

Empire Zone

but there is for

the IDA. IDA

typically

charges 1%.

Empire Zone reviews

annually and if company

doesn't meet their

commitments, there can be

a clawback. But it is pay for

performance so there is little

reason for clawback. If don't

live up to commitment, then

can de-certify the company

for Empire zone benefits.

Empire Zone would be handled

locally as would the property tax

abatement. When filing their

taxes, company would file for

return of taxes.

Tax Reduction Credit Tax credit based upon a complicated formula, a company can get their taxes

owed reduced to $0.

10 years No fees No clawback Have to be in the zone, create

jobs and apply for the zone

benefits. All credits can be

applied to their income tax

returns.

Capital Tax Credit 25% of investments made in any one year and cannot exceed $100,000/year or

a $300,000 lifetime maximum. May not exceed 50% of taxable liability. Available

for companies with less than 250 employees.

Available as

investments are made

No fees Recapture required: 100% if

within first 12 months, 67%

if between 24-36 months

and 33% if between 36-48

months.

Application is made through the

state business tax return.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 3

Prepared By:





R&D Tax Credit Investments in research and development facilities are eligible for a 9%

corporate tax credit. Additional credits are available to encourage the creation

and expansion of emerging technology businesses, including a three-year job

creation credit of $1,000 per employee and a capital credit for investments in

emerging technologies.

Available as

investments are made

No fees If company ceases business




recaptured




Finance

Discretionary Cash Grant Economic impact analysis determines amount NY should invest in a project and

how much is needed to win the project.

Receive first

dispersment (50% of

grant) after submitted

documentation project is

complete investment

wise and have

employed 50% of

committed jobs. Next

25% comes when the

next 25% and last 25%

when they hit full

employment.

If hire less than

300

employees,

there is a 1%

commitment

fee.

Clawback is pro-rated. Need

to keep 85% employment

for five years. If fall below

that, legally can recapture.

For every year the jobs are

kept, 20% is vested. May

issue and extend and freeze

the grant to give some

leeway.

Get offer letter, sign, once point

of disbursement they provide

documentation of investment

and jobs. Requirements are

confirmed, board approves and

issues grant disbursement. Also

a public hearing that is held.

Annual reporting required.

Green Building/Not being

funded at this time.

Corporate tax credit of up to $2 million per building distributed over five years In definite carry forward No fees Application is made to

Department of Environmental

Conservation (DEC) annual

reporting is required but the

program is currently on hold and

is not accepting applications at

this time. The DEC or another

agency has to revise the

regulations of the program

before a second round of

projects can submit requests.

There is no timeframe for

revisions.

Renewable/Green Energy

Business Growth &

Development Grant

Grant of up to 50% of project with maximum of $200,000. Available to achieve

success, to grow, and to develop new markets through new or expanded

activities in New York but is not available for R&D

In phases No fees No clawback Develop proposal and

NYSERDA would assist in the

furtherance of the product.

Dependant on the business and

the individual need. Decided on

case by case basis.

Grant, Clean Energy, and

Energy Efficient Product

Manufacturing Incentive

Program

Only facilities located within the service territories of New York's major investor-

owned utilities (IOUs) are eligible for funding. Phase I Max: lesser of 5% of

project or $75,000; Phase II Max: lesser of 20% of project or $300,000; Phase

III Max: up to $1,125,000, paid based on 25% of New York content of product

sales over 5 years;

Total: $1.5 million per project. Terms: Phases I & II: 50% cost share; Phase III:

75% cost share. Helping to bring a product to market. Grid connected.

In phases No fees No clawback Develop proposal and





case by case basis.

Prepared For:

Business Oregon

February 15, 2010

Page 2 of 3

Prepared By:





Property Tax Exemption (for

renewable energy)

100% abatement 15-year real property tax exemption for increased assessment

on solar and wind energy systems constructed in New York State. Local option.

LEED cert bldg, can be eligible for credit against property taxes as a percentage

of hard bldg costs which also increases with your level of LEED certification.

4.8% of construction costs for LEED basic certification credit again the property

taxes. Platinum = 15.6% of construction costs. Only have to pay taxes on the

land.

10 year carry forward No fees No clawback Application is submitted and

approved locally. No annual

compliance required.

Locals can use PILOT programs for

property and sales tax abatements.

Common components in incentive

programs.

Loan (for renewable energy) Reduced interest loan for $1 million per borrower for all other non-residential

facilities (plus additional $500,000 for Green Building Improvements) Terms: Up

to 4.0% below the lender rate for ten years; rate adjusted to maintain a floor

interest rate of 3.0%, Up to 6.5% below the lender rate for certain commercial

and multi-family borrowers in the Con Edison service area which is NY City area.

Unknown Unknown Unknown Develop proposal and





case by case basis.

Excelsior Jobs Program

To ensure more targeted, cost-effective, and transparent economic development initiatives, Governor Paterson proposes a new program to replace the Empire Zones program: the Excelsior Jobs Program.

This new program – the Excelsior Jobs Program – will keep New York State competitive in attracting jobs and capital investment.

Future investments will be strategically targeted, their costs will be controlled and they will be transparent and easily understandable to both users and oversight agencies.

The Excelsior Jobs Program will require a new level of transparency and accountability.

All job creation numbers will be net-statewide. Shifting employment among state locations will not count as new employment.

Firms must be in good standing and in compliance with all environmental and worker protection laws, and must be current with all state and local taxes, fees and fines.

Empire State Development (ESD) will monitor compliance. Firms must agree to share information with ESD.

Firms must provide clear and detailed information regarding affiliated businesses.

Annual performance reports will be required to verify compliance and to qualify for benefits.

The new program also narrows the focus of the tax incentives, restricting them to a handful of industries and mandating that the jobs be created and maintained for a period of time before any benefits are handed out.

1/20/10--In the new state budget unveiled in Albany, Paterson proposed a $250 million annual cap on the Excelsior Jobs Program, down sharply from more than $550 million a year that is currently being spent on Empire Zones.

The program’s Excelsior New Jobs tax credit would offer between $2,500 and $10,000 per new job to cover part of the payroll. The Excelsior Investment Tax Credit would provide a 2 percent return on total qualified investments. And the Excelsior Research and

Development tax credit offers a 10 percent return on new research investments, allowing researchers and developers to cover operational costs of a lab or other facility.

To develop the Excelsior Jobs Program, the Paterson Administration has spent the past year reaching out to hundreds of businesses and communities across our State to find out how we can best build a program that delivers what it promises. The

result: three aggressive tax credits for the following targeted industries – high technology, biotechnology, clean technology, finance and manufacturing. In order to receive any of the following tax credits, a firm must first demonstrate job creation

commitments.

Excelsior Jobs Tax Credit will be the backbone of the State’s business attraction and expansion efforts. The New Jobs Incentive will provide a tax credit to firms which create and maintain a set number of new jobs in New York for five years, based on a portion of the payroll

costs associated with those new jobs.

Excelsior Research and Development Tax Credit to support the Innovation Economy. Currently, the Research and Development Tax Credit is available only to businesses investing in capital equipment. The definition of the credit will be broadened to allow the use of credit to

encourage additional categories of investment.

Excelsior Investment Tax Credit to support capital investment. Currently, firms investing in manufacturing, production or research and development property may claim an Investment Tax Credit (ITC) for that investment against their corporate income tax. ITC would be

expanded to encourage capital expansion in New York.

Contacts: Gregory Hitchen, Syracuse Growth Counsel Bus. Dev Mgr, 315-435-3770. Lori Abounader-716-842-1357, ext. 444, [email protected], David Griggs, ext. 369, [email protected]. (Linda @ [email protected]) Mike

Morse, Senior Director of Industry Development, Empire State Development - Strategic Business Division, 30 South Pearl Street, Albany, NY 12245,Tel 518.292.5212 / Fax 518.292.5810, [email protected], Jeff Janiszewski, 518-292-5200, Adam

Tkaczuk, 518-292-5200. Adam doesn't think there is political capital to make major changes. Thinks it will just be extended until changes can be made.

January 6, 2010, Governor Paterson also announced a replacement for Empire Zones – the Excelsior Jobs Program (See below) – which includes three aggressive tax incentives for targeted growth industries, the Sustainable Neighborhoods Project to revitalize

prime housing stock that sits vacant in urban cities across New York State and the Manufacturing Legacy Program to leverage the strengths of the State’s manufacturing industries to guarantee the economic security of the people who are carrying its legacy into

the twenty-first century. Please note this has not been passed, but was presented in the state of state address.


Prepared For:

Business Oregon

February 15, 2010

Page 3 of 3

Prepared By:


Figure A-11: Ohio



Job Creation Tax Credit

(JCTC)

Refundable Tax credit against the Commercial Activity Tax (CAT).

Typically 50%. Reporting requirements have been eased.

Typically 50% and 5-7

years for lower wage

jobs, larger projects

would go for 8-10 years.

By statute, can go up to

75% for 15 years for

mega projects

$500

application fee

If cease operations within

term of credit, can clawback

up to 100% plus interest and

penalty (rarely); after term of

credit, can clawback up to

75% + interest. Statutorily,

OH has to take two things

into account: other

employment in state and the

impact of market conditions

on the closure. If company

fails to meet the numbers,

OH may reduce benefit

based on actuality or in

other words "right size the

credit" to what they have

accomplished.

Medium level of difficulty.

Receive a commitment letter,

make application and get

approval from tax credit

authority. Compliance

improvements provide a new

system that focuses on full time

equivalent and total payroll

which gets away from "who"

works 40 hours week and

provides the opportunity to take

info from other forms already

being submitted to the state.

Ohio had a major tax reform in 2005

along with a major incentive reform.

Ohio Job Retention Tax Credit Nonrefundable tax credit that operates similar to JCTC. 500

retained jobs minimum and $50 million investment for

manufacturing and $20 million for non manufacturing company.

Local community must also financially support the project. Amount

is up to 75% for 15 years and percentage is against CAT liability.

Amount is not as directly related to # of jobs as it is an inverse

relationship to their CAT tax. If they don't owe that much there is no

reason to go above the tax liability.

Up to 15 years .

Standard is 10 years

$500

application fee

If cease operations within

term of credit, can clawback

up to 100% plus interest and

penalty (rarely); after term of

credit, can clawback up to

75% + interest. Statutorily,

OH has to take two things

into account: other

employment in state and the

impact of market conditions

on the closure. If company

fails to meet the numbers,

OH may reduce benefit

based on actuality or in

other words "right size the

credit" to what they have

accomplished.





authority. Compliance

improvements provide a new

system that focuses on full time

equivalent and total payroll

which gets away from "who"

works 40 hours week and

provides the opportunity to take

info from other forms already

being submitted to the state.

R&D lnvestment Loan Fund Non refundable (CAT) tax credit of up to $150,000 that can go up to

50% of projects allowable costs with loans ranging from $1 to 5

million fixed rate at/or below market rate and typically not > than

1/2& of current prime rate. This is partnered with the R&D tax

credit. If meeting job creation/investment commitments, eligible for

a $ for $ credit against their OH tax liability = to the amount of the

principal and interest. Typically amount is less than 45% for 125

jobs or less and will vary depending on wages up to 75% for

projects over 125 jobs.

15 year maximum.

Typical term is for

usable life of asset.

R&D equipment tends to

be in the 7-10 year

range

$1500

application fee,

processing and

commitment

fee of 1% of

loan amount

with max of

$50,000 +

annual

servicing fee of

1/4 of 1%

(.25%) of

outstanding

principal

State has the ability to raise

the interest rate if company

doesn't meet jobs

requirement and can call the

loan if they leave the state.





authority.

Prepared For:

Business Oregon

February 15, 2010

Page 1 of 3

Prepared By:


Figure A-11: Ohio



166 Direct Loan Up to 30% of project costs. Same as R&D but without the tax credit

to offset the principal and interest on the loan.

15 year maximum.

Typical term is for

usable life of asset.

R&D equipment tends to

be in the 7-10 year

range

$1500

application fee,

processing and

commitment

fee of 1% of

loan amount

with max of

$50,000 +

annual

servicing fee of

1/4 of 1%

(.25%) of

State has the ability to raise

the interest rate if company

doesn't meet jobs

requirement and can call the

loan if they leave the state.

Prevailing wage is triggered for

construction, renovation or

installation of M&E. Medium

level of difficulty. Receive a

commitment letter, make

application and get approval

from the State Controlling

Board.

Rapid Outreach/Closing fund The state has $11 million in the fund and a special allocation to take

it up to $15 million as needed. The matrix to determine the amount

takes into account payroll, distressed area/location, green,

investment, % of retained and new payroll compare to county per

capita income and a bonuses if it will raise the local average wage,

is LEED certified, an advanced energy, priority investment area and

how competitive the project is. There is a little in most deals.

Grant None State controlling board for

approval. Reimbursement

for fixed asset investment

Prevailing wage is triggered for

construction, renovation or

installation of M&E. Medium

level of difficulty. Receive a

commitment letter, make

application and get approval

from State Controlling Board.

State Stimulus funds of $150

million towards advanced

energy. Bonds were sold and

is exclusive of federal stimulus

funds. Called the Building

Ohio Jobs Stimulus Program

http://www.ohioairquality.org/

advanced_energy_program/pr

ogram_details.asp

The website discusses a maximum grant of $250,000 and

maximum loan of $2 million. The program is administered by the

state Air Qualiy Development Authority. Two types of projects: non

coal and clean coal ($66 million). Non coal = ($84 million).

(According to an unidentified source the amounts are typically

higher than listed on the website. $ can be in form of grant if there

is the right amount of risk; i.e., wind that has been in production for

years so they will likely get the grant. It must be sustainable and is

a reimburseable grant to purchase equipment. It is structured as a

loan. Traditional ED criteria, jobs, investment, payroll plus the

effect on greenhouse gas in OH. Projects can also go for the

supply chain and do not have to be oem.

Unknown $750 $750 application fee after the

letter of intent. Applicant

submits letter of intent

describing technology. If gets go

ahead, then there is a two-fold

validation process. A little

bureaucratic. Validated by 3rd

party and need a pre-approval

before approval.

Renewable/Refundable Payroll

Tax Credit

Refundable credit equal to their qualified payroll amount multiplied

by their income tax rate for that year. In order for an employee's

compensation to qualify for this treatment, the employee must work

on alternative energy-related research, development or

manufacturing


Prepared For:

Business Oregon

February 15, 2010

Page 2 of 3

Prepared By:


Figure A-11: Ohio



Refundable Photovoltaic


25% of the capital costs for building a qualifying PV manufacturing

facility. Maximum incentive: Generally $15 million, but one

certificate may be for up to $25 million. Total credits issued for all

years may not exceed $75 million.

Credit generally taken

over two years in equal

installments; minimum

capital investment and

job creation

requirements apply

Contacts: Steve Schoeny, Director, Strategic Business Investment Division, 77 S. High St., 29th Floor Columbus, OH 43215-6130, Work: 614-728-9499 Cell: 614-507-6891 and Matt McQuade 614-857-0900 ext 231.


Prepared For:

Business Oregon

February 15, 2010

Page 3 of 3

Prepared By:


Appendix B & C

Operating Cost Comparison for Two Sample Projects

Regional and State Characteristics for Trial Locations

Appendix B: PV Module Manufacturing Plant

Figure B-1: Estimated Total Annual Outbound Transportation Costs

Figure B-2: Estimated Annual Labor Costs

Figure B-3: Estimated Annual Labor and Fringe Benefits Costs

Figure B-4: Estimated Annual Electric Power Costs

Figure B-5: Estimated Annual Natural Gas Costs

Figure B-6: Estimated Annual Water Costs

Figure B-7: Estimated Annual Sewer Costs

Figure B-8: Estimated Annual Real Estate Costs

Figure B-9: Estimated Annual Property Tax Costs

Figure B-10: Estimated Total Annual Variable Operating Costs

Appendix C: Advanced Manufacturing Parts Supplier Manufacturing Plant

Figure C-1: Estimated Total Annual Outbound Transportation Costs

Figure C-2: Estimated Annual Labor Costs

Figure C-3: Estimated Annual Labor and Fringe Benefits Costs

Figure C-4: Estimated Annual Electric Power Costs

Figure C-5: Estimated Annual Natural Gas Costs

Figure C-6: Estimated Annual Water Costs

Figure C-7: Estimated Annual Sewer Costs

Figure C-8: Estimated Annual Real Estate Costs

Figure C-9: Estimated Annual Property Tax Costs

Figure C-10: Estimated Total Annual Variable Operating Costs

Appendix B and Appendix C: Regional and State Characteristics

of Trial Locations used in Operating Cost Comparison

State

Trial Regional

Area

(MSA)

MSA

Population

2010

Total Labor

Force

(Sept-09)

Unemploym

ent Rate

(Sept-09)

Educational

Attainment -

% College

Degree or

Higher

Industry

Distribution -

% Mfg

Companies

Occupational

Distribution -

% Prod &

Trans

Occupations

Mfg

Unioniza

tion

Right to

Work

State

US

Population

within 250

Mi Radius

State

Sales

Tax

State

Corporate

Tax

State

Corporate

Tax Basis

Oregon Portland 2,272,106 1,171,208 10.9% 33.3% 12.9% 12.0% 10.6% No 9,170,294 0.00% 7.90% Net Income

Arizona Phoenix 4,449,866 2,118,763 8.6% 26.5% 7.7% 9.2% 1.4% Yes 6,952,119 8.30% 6.97% Net Income

California Sacramento 2,109,832 1,051,749 11.8% 29.8% 5.4% 8.8% 7.0% No 14,857,448 8.75% 8.84% Net Income

Michigan Saginaw 199,808 90,445 12.9% 19.4% 11.7% 13.0% 26.3% No 31,751,697 6.00% 4.95% Net Income

New Mexico Albuquerque 902,112 406,371 7.8% 29.0% 7.0% 10.3% 14.3% No 3,171,832 6.63% 7.60% Net Income

New York Buffalo 1,123,047 582,106 8.4% 26.9% 10.2% 12.0% 32.7% No 24,921,410 8.75% 7.10% Net Income

North Carolina Charlotte 1,765,782 852,514 11.6% 32.0% 9.9% 11.7% 5.3% Yes 26,129,907 8.25% 6.90% Net Income

Ohio Toledo 648,836 324,819 11.1% 22.9% 13.7% 17.6% 35.8% No 41,750,185 6.75% 0.26% Gross Receipts

Oklahoma Oklahoma City 1,231,175 574,651 5.9% 26.4% 6.8% 11.0% 14.0% Yes 13,236,264 8.38% 6.00% Net Income

Utah Salt Lake City 1,149,277 857,493 6.1% 29.2% 10.6% 12.7% 3.0% Yes 3,142,433 6.85% 5.00% Net Income

Washington Seattle 2,618,199 1,505,960 9.1% 40.4% 11.8% 9.2% 17.7% No 8,876,969 9.50% 0.48% Gross Receipts

Source: Bureau of Labor Statistics, 2009; US Census, 2000; Census of Manufacturing, 2002; Bureau of National Affairs, Union Membership and Earnings Book, 2009; American Community Survey, 2008; Various State Revenue Departments and Tax Commissions, 2009-10

Prepared For:

Business Oregon

February 15, 2010 Prepared By:


Figure B-1: Estimated Total Annual Outbound Transportation Costs

PV Module Manufacturing Plant Sample Project

StateTrial

MSA

US Population

within 250 Mile

Radius

Annual #

of TL's

Average

Cost per TL

Total Annual

Outbound

Transportation

Cost

Penalty Over

Base

Index

(Base=100)

Oregon Portland 9,170,294 3900 $1,200 $4,680,000 $2,730,000 240

Arizona Phoenix 6,952,119 3900 $1,450 $5,655,000 $3,705,000 290

California Sacramento 14,857,448 3900 $1,150 $4,485,000 $2,535,000 230

Michigan Saginaw 31,751,697 3900 $600 $2,340,000 $390,000 120

New Mexico Albuquerque 3,171,832 3900 $1,600 $6,240,000 $4,290,000 320

New York Buffalo 24,921,410 3900 $900 $3,510,000 $1,560,000 180

North Carolina Charlotte 26,129,907 3900 $800 $3,120,000 $1,170,000 160

Ohio Toledo 41,750,185 3900 $500 $1,950,000 Base 100

Oklahoma Oklahoma City 13,236,264 3900 $1,150 $4,485,000 $2,535,000 230

Utah Salt Lake City 3,142,433 3900 $1,600 $6,240,000 $4,290,000 320

Washington Seattle 8,876,969 3900 $1,200 $4,680,000 $2,730,000 240

Source: Various national and regional transportation providers and data from recent Austin Consulting projects.

Note: Transportation costs above are based on outbound transportation only. Average cost per TL is based on access to all national

markets and population centers.

Prepared For:

Business Oregon



Figure B-2: Estimated Total Annual Labor Costs

PV Module Manufacturing Plant

Number: 172 Number: 52 Number: 14 Number: 9 Number: 65 Number: 31 Number: 10 Number: 16

StateTrial

MSA

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Total

Annual

Cost

Penalty

Over

Base

Index

(Base=1

00)

Oregon Portland $14.24 $5,094,500 $24.00 $2,595,800 $18.70 $544,500 $16.74 $313,400 $15.00 $2,028,000 $33.09 $2,133,600 $29.28 $609,000 $17.72 $589,700 $13,908,500 $2,167,700 118

Arizona Phoenix $12.77 $4,568,600 $22.11 $2,391,400 $16.95 $493,600 $15.37 $287,700 $13.65 $1,845,500 $31.02 $2,000,200 $27.91 $580,500 $16.29 $542,100 $12,709,600 $968,800 108

California Sacramento $14.40 $5,151,700 $24.46 $2,645,600 $18.79 $547,200 $17.75 $332,300 $15.00 $2,028,000 $34.05 $2,195,500 $30.13 $626,700 $19.00 $632,300 $14,159,300 $2,418,500 121

Michigan Saginaw $13.57 $4,854,800 $24.20 $2,617,500 $18.32 $533,500 $15.62 $292,400 $14.23 $1,923,900 $34.32 $2,213,000 $28.81 $599,200 $16.64 $553,800 $13,588,100 $1,847,300 116

New Mexico Albuquerque $12.23 $4,375,400 $21.51 $2,326,500 $16.32 $475,200 $14.57 $272,800 $13.01 $1,759,000 $30.49 $1,966,000 $26.88 $559,100 $15.45 $514,200 $12,248,200 $507,400 104

New York Buffalo $13.52 $4,836,900 $21.51 $2,326,500 $17.96 $523,000 $15.58 $291,700 $14.17 $1,915,800 $32.78 $2,113,700 $27.97 $581,800 $16.53 $550,100 $13,139,500 $1,398,700 112

North Carolina Charlotte $13.01 $4,654,500 $22.67 $2,452,000 $17.27 $502,900 $15.31 $286,600 $13.84 $1,871,200 $32.10 $2,069,800 $28.81 $599,200 $16.49 $548,800 $12,985,000 $1,244,200 111

Ohio Toledo $13.33 $4,768,900 $22.95 $2,482,300 $17.67 $514,600 $15.48 $289,800 $14.17 $1,915,800 $31.92 $2,058,200 $27.43 $570,500 $16.28 $541,800 $13,141,900 $1,401,100 112

Oklahoma Oklahoma City $11.80 $4,221,600 $20.50 $2,217,300 $15.64 $455,400 $13.87 $259,600 $12.55 $1,696,800 $28.95 $1,866,700 $25.43 $528,900 $14.86 $494,500 $11,740,800 BASE 100

Utah Salt Lake City $12.56 $4,493,500 $21.79 $2,356,800 $16.66 $485,100 $15.08 $282,300 $13.52 $1,827,900 $30.75 $1,982,800 $27.05 $562,600 $15.85 $527,500 $12,518,500 $777,700 107

Washington Seattle $15.20 $5,438,000 $25.76 $2,786,200 $20.07 $584,400 $17.93 $335,600 $16.16 $2,184,800 $35.10 $2,263,200 $31.20 $649,000 $19.03 $633,300 $14,874,500 $3,133,700 127

Source: Economic Research Institute, Geographic Reference Report, 2009; Bureau of Labor Statistics, 2009.

Packers (Unskilled) /

Material Handlers -

Vehicle Operators

(Semi-Skilled)

Electrical - Mechanical

Maintenance (Skilled)

369

Line Supervisors

(Skilled)

Quality Control

(Skilled)TOTAL

Office / Clerical

(Semi and Skilled)

Note: All costs are based on 2080 hours per year and do not include fringe benefits, overtime, or shift differentials. Information was collected from recent Austin Consulting experience in the area, economic development

organizations, state wage surveys, and the Bureau of Labor Statistics (BLS) and the Economic Research Institute; Geographic Wage Report. Estimated wage levels provided above reflect January 2010 wages.

Competitor Locations

Production Assembler

/ Electrical Equipment

Assemblers (Semi-

Skilled)

Metal Fabrication /

Machine Tool Set-Up

(Skilled)

General Maintenance

(Semi-Skilled)

Prepared For:

Business Oregon



Figure B-3: Estimated Total Annual Labor and Fringe Benefit Costs


StateTrial

MSA

Retirement &

Savings Plans

Life & Health

Insurance

Social

Security

Worker's

Compensation

Unemployment

Insurance

Total Annual

Fringe Benefit

Costs

Total Annual

Labor Costs

Total Annual

Labor and

Fringe Benefit

Costs

Penalty Over

Base

Index

(Base

=100)

Oregon Portland $688,541 $1,432,721 $1,064,108 $472,152 $323,392 $3,980,914 $13,908,500 $17,889,414 $2,640,090 117

Arizona Phoenix $629,143 $1,309,126 $972,312 $354,606 $51,660 $3,316,847 $12,709,600 $16,026,447 $777,123 105

California Sacramento $692,119 $1,440,168 $1,069,639 $705,419 $87,822 $3,995,167 $14,159,300 $18,154,467 $2,905,143 119

Michigan Saginaw $673,231 $1,400,864 $1,040,448 $581,429 $89,667 $3,785,639 $13,588,100 $17,373,739 $2,124,415 114

New Mexico Albuquerque $606,280 $1,261,551 $936,977 $468,541 $154,242 $3,427,591 $12,248,200 $15,675,791 $426,467 103

New York Buffalo $660,668 $1,374,724 $1,021,033 $627,073 $106,641 $3,790,139 $13,139,500 $16,929,639 $1,680,315 111

North Carolina Charlotte $642,648 $1,337,228 $993,184 $519,335 $85,460 $3,577,855 $12,985,000 $16,562,855 $1,313,531 109

Ohio Toledo $650,474 $1,005,279 $1,005,279 $706,036 $89,667 $3,456,735 $13,141,900 $16,598,635 $1,349,311 109

Oklahoma Oklahoma City $581,189 $1,209,343 $898,201 $744,515 $75,276 $3,508,524 $11,740,800 $15,249,324 BASE 100

Utah Salt Lake City $619,738 $1,289,555 $957,777 $330,467 $164,131 $3,361,668 $12,518,500 $15,880,168 $630,844 104

Washington Seattle $736,281 $1,532,059 $1,137,889 $663,880 $312,838 $4,382,947 $14,874,500 $19,257,447 $4,008,123 126

Source: Bureau of Labor Statistics, "Employer Costs" , 2009. OR Dept of Consumer & Business Svcs, 'Workers' Comp Premium Ranking", 2008; RIA, 'All States Handbook," 2010.

"Total Annual Labor Costs" column is the Total Annual Labor Costs from the Table in Figure B-2.

Note: Figures are based on information gathered from published sources and Austin's familiarity with regional fringe benefit costs. These costs include the employer's share of statutory requirements including pensions, F.I.C.A.,

workers' compensation, unemployment insurance, and miscellaneous items (profit sharing, savings plan, etc.). Payments for time ot worked (vacations, holidays, rest periods, sick leave, military leave, etc.) are included in annual

labor costs which are based on 2080 hours worked annually.

Prepared For:

Business Oregon


Austin Consulting

Figure B-4: Estimated Total Annual Electric Power Costs


StateTrial

MSA

Total Annual

KWH

Cost Per

KWH

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 57,600,000 $0.047 $2,707,200 $167,040 107

Arizona Phoenix 57,600,000 $0.079 $4,556,160 $2,016,000 179

California Sacramento 57,600,000 $0.079 $4,550,400 $2,010,240 179

Michigan Saginaw 57,600,000 $0.078 $4,469,760 $1,929,600 176

New Mexico Albuquerque 57,600,000 $0.055 $3,162,240 $622,080 124

New York Buffalo 57,600,000 $0.050 $2,903,040 $362,880 114

North Carolina Charlotte 57,600,000 $0.047 $2,730,240 $190,080 107

Ohio Toledo 57,600,000 $0.050 $2,856,960 $316,800 112

Oklahoma Oklahoma City 57,600,000 $0.054 $3,110,400 $570,240 122

Utah Salt Lake City 57,600,000 $0.044 $2,540,160 Base 100

Washington Seattle 57,600,000 $0.049 $2,834,560 $294,400 112

Source: Edison Electric Institute, "Typical Residential, Commercial, and Industrial Bills," 2009 and Various Service Providers.

Note: Electric power costs above are based on a demand of 7,000 kW and a consumption of 4,800,000 kWh/month with a power factor =

0.9.

Prepared For:

Business Oregon



Figure B-5: Estimated Total Annual Natural Gas Costs


StateTrial

MSA

Total Annual

Consumption

(CCF)

Cost Per

CCF

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 1,560,000 $1.05 $1,630,200 $1,021,800 268

Arizona Phoenix 1,560,000 $0.80 $1,254,240 $645,840 206

California Sacramento 1,560,000 $0.39 $608,400 Base 100

Michigan Saginaw 1,560,000 $0.90 $1,397,760 $789,360 230

New Mexico Albuquerque 1,560,000 $0.47 $726,960 $118,560 119

New York Buffalo 1,560,000 $1.04 $1,617,720 $1,009,320 266

North Carolina Charlotte 1,560,000 $0.72 $1,126,320 $517,920 185

Ohio Toledo 1,560,000 $0.87 $1,361,880 $753,480 224

Oklahoma Oklahoma City 1,560,000 $1.11 $1,723,800 $1,115,400 283

Utah Salt Lake City 1,560,000 $0.46 $719,160 $110,760 118

Washington Seattle 1,560,000 $1.20 $1,868,880 $1,260,480 307

Source: Energy Information Administration, 'Natural Gas Monthly," 2009 and Various Service Providers.

Note: Natural gas costs above are based on a non-interruptible consumption of 130,000 ccf's per month.

Prepared For:

Business Oregon



Figure B-6: Estimated Total Annual Water Costs


StateTrial

MSA

Total Annual

Gallons

Cost Per

Gallon

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 180,000,000 $0.0028 $498,391 $336,391 308

Arizona Phoenix 180,000,000 $0.0039 $693,713 $531,713 428


Michigan Saginaw 180,000,000 $0.0021 $380,901 $218,901 235


New York Buffalo 180,000,000 $0.0019 $339,336 $177,336 209

North Carolina Charlotte 180,000,000 $0.0023 $416,311 $254,311 257

Ohio Toledo 180,000,000 $0.0012 $215,168 $53,168 133

Oklahoma Oklahoma City 180,000,000 $0.0021 $372,970 $210,970 230


Washington Seattle 180,000,000 $0.0039 $707,405 $545,405 437

Source: Raftelis Financial Consulting, "Water and Wastewater Rate Survey," 2006 and Various Municipal Service Providers.

Note: Water costs above are based on municipal water provider within each metropolitan area and a monthly consumption of

15,000,000 gallons.

Prepared For:

Business Oregon



Figure B-7: Estimated Total Annual Sewer Costs


StateTrial

MSA

Total Annual

Gallons

Discharged

Cost Per

Gallon

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 144,000,000 $0.0102 $1,470,700 $1,387,625 1770

Arizona Phoenix 144,000,000 $0.0024 $348,537 $265,462 420

California Sacramento 144,000,000 $0.0008 $115,200 $32,124 139


New Mexico Albuquerque 144,000,000 $0.0006 $83,076 Base 100

New York Buffalo 144,000,000 $0.0015 $214,239 $131,163 258


Ohio Toledo 144,000,000 $0.0042 $604,031 $520,955 727



Washington Seattle 144,000,000 $0.0104 $1,491,875 $1,408,800 1796


Note: Sewer costs above are based on municipal sewer provider within each metropolitan area and a monthly discharge of 12,000,000 gallons.

Prepared For:

Business Oregon



Figure B-8: Estimated Total Annual Real Estate Costs


StateTrial

MSA

Land Cost per

Acre

Building &

Construction

Cost

Total Land &

Building Cost

Estimated Total

Annual Payments

Penalty

Over Base

Index

(Base=100)

Oregon Portland $196,020 $41,416,000 $61,018,000 $6,587,937 $2,144,901 148

Arizona Phoenix $174,250 $37,032,250 $54,457,250 $5,879,484 $1,436,448 132

California Sacramento $87,120 $45,215,250 $53,927,250 $5,822,370 $1,379,334 131

Michigan Saginaw $34,848 $39,537,250 $43,022,050 $4,644,967 $201,931 105

New Mexico Albuquerque $108,900 $37,074,000 $47,964,000 $5,178,535 $735,499 117

New York Buffalo $21,780 $42,334,500 $44,512,500 $4,805,886 $362,850 108

North Carolina Charlotte $87,120 $32,439,750 $41,151,750 $4,443,036 Base 100

Ohio Toledo $21,780 $40,359,250 $42,537,250 $4,612,058 $169,022 104

Oklahoma Oklahoma City $87,120 $34,360,250 $43,072,250 $4,650,387 $207,351 105

Utah Salt Lake City $87,120 $36,113,750 $44,825,750 $4,839,707 $396,671 109

Washington Seattle $261,360 $43,670,500 $69,806,500 $7,536,806 $3,093,770 170

Source: NAI Global Market Reports, 2009; Means Construction Index, 2010; Local real estate contacts, 2010.

Note: Real estate costs above assume purchase of 100 acres and construction of a 500,000 square foot building. Building and construction costs are calculated

using a base per square foot cost for standard industrial buildings multiplied by a city-specific index. The construction cost information is taken from the Means

Construction cost indexes, which is a standard guide for cost estimating in the construction industry. The annual payment for land and building is equal to 12

times the amoritized monthly payment at .75 percent monthly interest over 240 months for the sum of land, construction, and purchase costs.

Prepared For:

Business Oregon



Figure B-9: Estimated Total Annual Property Tax Costs


Personal Real Personal Real Personal Real Inventory

Oregon Portland 1.94% 100.00% 100.00% 1.94% 1.94% $87,000,000 $61,018,000 $12,000,000 $2,870,069 $2,161,711 405

Arizona Phoenix 10.56% 22.00% 22.00% 2.32% 2.32% $87,000,000 $54,456,250 $12,000,000 $3,286,312 $2,577,954 464

California Sacramento 1.07% 100.00% 100.00% 1.07% 1.07% $87,000,000 $53,927,250 $12,000,000 $1,509,331 $800,973 213

Michigan Saginaw 3.29% 0.00% 50.00% 0.00% 1.65% $87,000,000 $43,022,050 $12,000,000 $708,358 BASE 100

New Mexico Albuquerque 4.57% 33.33% 33.33% 1.52% 1.52% $87,000,000 $47,964,000 $12,000,000 $2,055,386 $1,347,028 290

New York Buffalo 3.06% 0.00% 100.00% 0.00% 3.06% $87,000,000 $44,512,500 $12,000,000 $1,361,637 $653,279 192

North Carolina Charlotte 1.10% 100.00% 100.00% 1.10% 1.10% $87,000,000 $41,151,750 $12,000,000 $1,408,336 $699,978 199

Ohio Toledo 6.79% 0.00% 35.00% 0.00% 2.38% $87,000,000 $42,717,250 $12,000,000 $1,015,026 $306,668 143

Oklahoma Oklahoma City 11.34% 13.13% 11.36% 1.49% 1.29% $87,000,000 $43,072,250 $12,000,000 $1,850,899 $1,142,541 261

Utah Salt Lake City 1.42% 100.00% 100.00% 1.42% 1.42% $87,000,000 $44,825,750 $12,000,000 $1,869,948 $1,161,590 264

Washington Seattle 0.79% 100.00% 100.00% 0.79% 0.79% $87,000,000 $69,806,500 $12,000,000 $1,238,771 $530,413 175

Source: Various State Revenue Departments and Tax Commissions, 2009-10; Local Assessors, 2009-10.

Land Varies by Market

Building Varies by Market

Machinery $87,000,000Raw Materials $4,000,000

Goods-In-Progress $4,000,000

Finished Goods $4,000,000

$45,215,250

$196,020

$174,250

$87,120

$34,848

Land Value (based on

average $/Acre)

StateTrial

MSA

Total Annual

Taxes

$87,120

$87,120

$261,360

$36,113,750

$43,670,500

$41,416,000

$37,032,250

Index

(Base=100)

Assumptions for New Plant

Tax Rate

Assessment Ratio Effective Tax Rate Taxable Property (if applicable)

Building Value (based on

Building Cost)

Note: Investment value assumptions for the new plant include the information below.

Penalty Over

Base

$39,537,250

$37,074,000Albuquerque

Buffalo $42,334,500

$32,439,750Charlotte$40,359,250

$34,360,250

$108,900

$21,780

$87,120

$21,780

For each metro area there is a tax rate and real and personal assessment ratios. The product of the tax rate and the assessment ratio is the effective tax rate. The effective tax rate times the taxable property value is

equal to the tax. In most cases the personal effective rate is also applied to inventory in states where inventory is taxed. The property tax assessment ratios and rates are taken from individual city web sites, and state

department of revenue web sites. Not all inventory shown in the taxable property column will be subject to tax in all locations.

Toledo

Oklahoma City

Salt Lake City

Seattle

Market

Portland

Phoenix

Sacramento

Saginaw

Prepared For:

Business Oregon



Figure B-10: Estimated Total Annual Variable Operating Costs


State

Trial Regional

Area

(MSA)

Transportation Labor Fringe

Benefits

Electric

Power Natural Gas Water SewerLand &

Building

Property

Tax

Total Annual

Cost

Penalty Over

Base

Index

(Base =

100)

Oregon Portland $4,680,000 $13,908,500 $3,980,914 $2,707,200 $1,630,200 $498,391 $1,470,700 $6,587,937 $2,870,069 $38,333,911 $9,120,153 131

Arizona Phoenix $5,655,000 $12,709,600 $3,316,847 $4,556,160 $1,254,240 $693,713 $348,537 $5,879,484 $3,286,312 $37,699,893 $8,486,135 129

California Sacramento $4,485,000 $14,159,300 $3,995,167 $4,550,400 $608,400 $162,000 $115,200 $5,822,370 $1,509,331 $35,407,168 $6,193,410 121

Michigan Saginaw $2,340,000 $13,588,100 $3,785,639 $4,469,760 $1,397,760 $380,901 $686,945 $4,644,967 $708,358 $32,002,430 $2,788,672 110

New Mexico Albuquerque $6,240,000 $12,248,200 $3,427,591 $3,162,240 $726,960 $482,921 $83,076 $5,178,535 $2,055,386 $33,604,909 $4,391,151 115

New York Buffalo $3,510,000 $13,139,500 $3,790,139 $2,903,040 $1,617,720 $339,336 $214,239 $4,805,886 $1,361,637 $31,681,497 $2,467,739 108

North Carolina Charlotte $3,120,000 $12,985,000 $3,577,855 $2,730,240 $1,126,320 $416,311 $619,874 $4,443,036 $1,408,336 $30,426,971 $1,213,213 104

Ohio Toledo $1,950,000 $13,141,900 $3,456,735 $2,856,960 $1,361,880 $215,168 $604,031 $4,612,058 $1,015,026 $29,213,758 Base 100

Oklahoma Oklahoma City $4,485,000 $11,740,800 $3,508,524 $3,110,400 $1,723,800 $372,970 $423,331 $4,650,387 $1,850,899 $31,866,111 $2,652,353 109

Utah Salt Lake City $6,240,000 $12,518,500 $3,361,668 $2,540,160 $719,160 $283,966 $410,025 $4,839,707 $1,869,948 $32,783,134 $3,569,376 112

Washington Seattle $4,680,000 $14,874,500 $4,382,947 $2,834,560 $1,868,880 $707,405 $1,491,875 $7,536,806 $1,238,771 $39,615,744 $10,401,986 136

Note: Total Annual Variable Operating Costs are a sum of Figures B-1 through B-9 for each respective trial location. See detailed Figures for source information.

Prepared For:

Business Oregon



Figure C-1: Estimated Total Annual Outbound Transportation Costs

Advanced Manufacturing - Parts Supplier Plant Sample Project

StateTrial

MSA

Annual #

of TL's

Average

Cost per TL

Total Annual

Outbound

Transportation

Cost

Penalty Over

Base

Index

(Base=100)

Oregon Portland 2600 $950 $2,470,000 Base 100

Arizona Phoenix 2600 $950 $2,470,000 Base 100

California Sacramento 2600 $950 $2,470,000 Base 100

Michigan Saginaw 2600 $950 $2,470,000 Base 100

New Mexico Albuquerque 2600 $950 $2,470,000 Base 100

New York Buffalo 2600 $950 $2,470,000 Base 100

North Carolina Charlotte 2600 $950 $2,470,000 Base 100

Ohio Toledo 2600 $950 $2,470,000 Base 100

Oklahoma Oklahoma City 2600 $950 $2,470,000 Base 100

Utah Salt Lake City 2600 $950 $2,470,000 Base 100

Washington Seattle 2600 $950 $2,470,000 Base 100

Source: Various national and regional transportation providers and data from recent Austin Consulting projects.

Note: Transportation costs above are based on outbound transportation only. Average cost per TL is based on access to regional

and local markets and population centers for each trial location.

Prepared For:

Business Oregon



Figure C-2: Estimated Total Annual Labor Costs


Number: 68 Number: 31 Number: 6 Number: 5 Number: 31 Number: 18 Number: 6 Number: 9

StateTrial

MSA

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Hourly

Rate

Annual

Labor

Cost

Total

Annual

Cost

Penalty

Over

Base

Index

(Base=10

0)

Oregon Portland $14.24 $2,014,100 $24.00 $1,547,500 $18.70 $233,400 $16.74 $174,100 $15.00 $967,200 $33.09 $1,238,900 $29.28 $365,400 $17.72 $331,700 $6,872,300 $1,053,400 118

Arizona Phoenix $12.77 $1,806,200 $22.11 $1,425,700 $16.95 $211,500 $15.37 $159,800 $13.65 $880,200 $31.02 $1,161,400 $27.91 $348,300 $16.29 $304,900 $6,298,000 $479,100 108

California Sacramento $14.40 $2,036,700 $24.46 $1,577,200 $18.79 $234,500 $17.75 $184,600 $15.00 $967,200 $34.05 $1,274,800 $30.13 $376,000 $19.00 $355,700 $7,006,700 $1,187,800 120

Michigan Saginaw $13.57 $1,919,300 $24.20 $1,560,400 $18.32 $228,600 $15.62 $162,400 $14.23 $917,600 $34.32 $1,284,900 $28.81 $359,500 $16.64 $311,500 $6,744,200 $925,300 116

New Mexico Albuquerque $12.23 $1,729,800 $21.51 $1,387,000 $16.32 $203,700 $14.57 $151,500 $13.01 $838,900 $30.49 $1,141,500 $26.88 $335,500 $15.45 $289,200 $6,077,100 $258,200 104

New York Buffalo $13.52 $1,912,300 $21.51 $1,387,000 $17.96 $224,100 $15.58 $162,000 $14.17 $913,700 $32.78 $1,227,300 $27.97 $349,100 $16.53 $309,400 $6,484,900 $666,000 111

North Carolina Charlotte $13.01 $1,840,100 $22.67 $1,461,800 $17.27 $215,500 $15.31 $159,200 $13.84 $892,400 $32.10 $1,201,800 $28.81 $359,500 $16.49 $308,700 $6,439,000 $620,100 111

Ohio Toledo $13.33 $1,885,400 $22.95 $1,479,800 $17.67 $220,500 $15.48 $161,000 $14.17 $913,700 $31.92 $1,195,100 $27.43 $342,300 $16.28 $304,800 $6,502,600 $683,700 112

Oklahoma Oklahoma City $11.80 $1,669,000 $20.50 $1,321,800 $15.64 $195,200 $13.87 $144,200 $12.55 $809,200 $28.95 $1,083,900 $25.43 $317,400 $14.86 $278,200 $5,818,900 BASE 100

Utah Salt Lake City $12.56 $1,776,500 $21.79 $1,405,000 $16.66 $207,900 $15.08 $156,800 $13.52 $871,800 $30.75 $1,151,300 $27.05 $337,600 $15.85 $296,700 $6,203,600 $384,700 107

Washington Seattle $15.20 $2,149,900 $25.76 $1,661,000 $20.07 $250,500 $17.93 $186,500 $16.16 $1,042,000 $35.10 $1,314,100 $31.20 $389,400 $19.03 $356,200 $7,349,600 $1,530,700 126

Source: Economic Research Institute, Geographic Reference Report, 2009; Bureau of Labor Statistics, 2009.

Note: All costs are based on 2080 hours per year and do not include fringe benefits, overtime, or shift differentials. Information was collected from recent Austin Consulting experience in the area, economic

development organizations, state wage surveys, and the Bureau of Labor Statistics (BLS) and the Economic Research Institute; Geographic Wage Report. Estimated wage levels provided above reflect January

2010 wages.

Competitor Locations

Production Assembler /

Electrical Equipment

Assemblers (Semi-

Skilled)

Metal Fabrication /

Machine Tool Set-Up

(Skilled)

General Maintenance

(Semi-Skilled)

Packers (Unskilled) /

Material Handlers -

Vehicle Operators

(Semi-Skilled)

Electrical -

Mechanical

Maintenance (Skilled)

174

Line Supervisors

(Skilled)

Quality Control

(Skilled)TOTAL

Office / Clerical (Semi

and Skilled)

Prepared For:

Business Oregon



Figure C-3: Estimated Total Annual Labor and Fringe Benefits Costs


StateTrial

MSA

Retirement &

Savings Plans

Life & Health

Insurance

Social

Security

Worker's

Compensation

Unemployment

Insurance

Total Annual

Fringe Benefit

Costs

Total Annual

Labor Costs

Total Annual

Labor and Fringe

Benefit Costs

Penalty Over

Base

Index

(Base

=100)

Oregon Portland $338,787 $704,909 $523,549 $230,528 $152,494 $1,950,267 $6,872,300 $8,822,567 $1,275,743 117

Arizona Phoenix $310,401 $645,886 $479,711 $173,589 $24,360 $1,633,947 $6,298,000 $7,931,947 $385,123 105

California Sacramento $341,427 $710,444 $527,660 $345,157 $41,412 $1,966,100 $7,006,700 $8,972,800 $1,425,976 119

Michigan Saginaw $332,721 $692,329 $514,205 $285,572 $42,282 $1,867,109 $6,744,200 $8,611,309 $1,064,485 114

New Mexico Albuquerque $299,498 $623,198 $462,861 $229,872 $72,732 $1,688,161 $6,077,100 $7,765,261 $218,437 103

New York Buffalo $325,704 $677,727 $503,360 $306,851 $50,286 $1,863,928 $6,484,900 $8,348,828 $802,004 111

North Carolina Charlotte $317,317 $660,276 $490,399 $254,829 $40,298 $1,763,119 $6,439,000 $8,202,119 $655,295 109

Ohio Toledo $320,483 $666,863 $495,292 $344,675 $42,282 $1,869,595 $6,502,600 $8,372,195 $825,371 111

Oklahoma Oklahoma City $286,805 $596,786 $443,244 $365,593 $35,496 $1,727,924 $5,818,900 $7,546,824 BASE 100

Utah Salt Lake City $305,780 $636,270 $472,570 $161,738 $77,395 $1,653,753 $6,203,600 $7,857,353 $310,529 104

Washington Seattle $362,235 $753,742 $559,818 $327,299 $147,517 $2,150,611 $7,349,600 $9,500,211 $1,953,387 126

Source: Bureau of Labor Statistics, "Employer Costs" , 2009. OR Dept of Consumer & Business Svcs, 'Workers' Comp Premium Ranking", 2008; RIA, 'All States Handbook," 2010.

Note: Figures are based on information gathered from published sources and Austin's familiarity with regional fringe benefit costs. These costs include the employer's share pf statutory

requirements including pensions, F.I.C.A., workers' compensation, unemployment insurance, and miscellaneous items (profit sharing, savings plan, etc.). Payments for time

not worked (vacations, holidays, rest periods, sick leave, military leave, etc.) are included in annual labor costs which are based on 2080 hours worked annually.

"Total Annual Labor Costs" column is the Total Annual Labor Costs from the Table in Figure B-2.

Prepared For:

Business Oregon



Figure C-4: Estimated Total Annual Electric Power Costs


StateTrial

MSA

Total Annual

KWH

Cost Per

KWH

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 14,400,000 $0.047 $676,800 $41,760 107

Arizona Phoenix 14,400,000 $0.079 $1,139,040 $504,000 179

California Sacramento 14,400,000 $0.104 $1,497,600 $862,560 236

Michigan Saginaw 14,400,000 $0.078 $1,117,440 $482,400 176


New York Buffalo 14,400,000 $0.050 $725,760 $90,720 114


Ohio Toledo 14,400,000 $0.050 $714,240 $79,200 112


Utah Salt Lake City 14,400,000 $0.044 $635,040 Base 100


Source: Edison Electric Institute, "Typical Residential, Commercial, and Industrial Bills," 2009 and Various Service Providers.

Note: Electric power costs above are based on a demand of 2,500 kW and a consumption of 1,200,000 kWh/month with a power

factor = 0.9.

Prepared For:

Business Oregon



Figure C-5: Estimated Total Annual Natural Gas Costs


StateTrial

MSA

Total Annual

Consumption

Cost Per

CCF

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 780,000 $1.05 $815,100 $455,520 227

Arizona Phoenix 780,000 $0.80 $627,120 $267,540 174

California Sacramento 780,000 $0.58 $452,400 $92,820 126

Michigan Saginaw 780,000 $0.90 $698,880 $339,300 194

New Mexico Albuquerque 780,000 $0.47 $363,480 $3,900 101

New York Buffalo 780,000 $1.04 $808,860 $449,280 225

North Carolina Charlotte 780,000 $0.72 $563,160 $203,580 157

Ohio Toledo 780,000 $0.87 $680,940 $321,360 189

Oklahoma Oklahoma City 780,000 $1.11 $861,900 $502,320 240

Utah Salt Lake City 780,000 $0.46 $359,580 Base 100

Washington Seattle 780,000 $1.20 $934,440 $574,860 260

Source: Energy Information Administration, 'Natural Gas Monthly," 2009 and Various Service Providers.

Note: Natural gas costs above are based on a non-interruptible consumption of 65,000 ccf's per month.

Prepared For:

Business Oregon



Figure C-6: Estimated Total Annual Water Costs


StateTrial

MSA

Total Annual

Gallons

Cost Per

Gallon

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 84,000,000 $0.0028 $232,652 $157,052 308

Arizona Phoenix 84,000,000 $0.0039 $323,816 $248,216 428




New York Buffalo 84,000,000 $0.0019 $156,443 $80,843 207


Ohio Toledo 84,000,000 $0.0012 $104,634 $29,034 138





Note: Water costs above are based on municipal water provider within each metropolitan area and a monthly consumption of

7,000,000 gallons.

Prepared For:

Business Oregon



Figure C-7: Estimated Total Annual Sewer Costs


StateTrial

MSA

Total Annual

Gallons

Discharged

Cost Per

Gallon

Total Annual

Cost

Penalty

Over Base

Index

(Base=100)

Oregon Portland 72,000,000 $0.0102 $735,350 $706,161 2519

Arizona Phoenix 72,000,000 $0.0024 $174,269 $145,079 597

California Sacramento 72,000,000 $0.0008 $57,600 $28,411 197


New Mexico Albuquerque 72,000,000 $0.0004 $29,189 Base 100

New York Buffalo 72,000,000 $0.0015 $107,308 $78,119 368


Ohio Toledo 72,000,000 $0.0042 $300,967 $271,777 1031





Note: Sewer costs above are based on municipal sewer provider within each metropolitan area and a monthly discharge of 6,000,000 gallons.

Prepared For:

Business Oregon



Figure C-8: Estimated Total Annual Real Estate Costs


StateTrial

MSA

Land Cost per

Acre

Building &

Construction

Cost

Total Land &

Building Cost

Estimated Total

Annual Payments

Penalty

Over Base

Index

(Base=100)

Oregon Portland $196,020 $20,708,000 $30,509,000 $3,293,969 $1,072,451 148

Arizona Phoenix $174,250 $18,516,125 $27,228,625 $2,939,742 $718,224 132

California Sacramento $87,120 $22,607,625 $26,963,625 $2,911,185 $689,667 131

Michigan Saginaw $34,848 $19,768,625 $21,511,025 $2,322,483 $100,965 105

New Mexico Albuquerque $108,900 $18,537,000 $23,982,000 $2,589,267 $367,749 117

New York Buffalo $21,780 $21,167,250 $22,256,250 $2,402,943 $181,425 108

North Carolina Charlotte $87,120 $16,219,825 $20,575,825 $2,221,518 Base 100

Ohio Toledo $21,780 $20,269,625 $21,358,625 $2,306,029 $84,511 104

Oklahoma Oklahoma City $87,120 $17,180,125 $21,536,125 $2,325,193 $103,675 105

Utah Salt Lake City $87,120 $18,056,875 $22,412,875 $2,419,853 $198,335 109

Washington Seattle $261,360 $21,835,250 $34,903,250 $3,768,403 $1,546,885 170

Source: NAI Global Market Reports, 2009; Means Construction Index, 2010; Local real estate contacts, 2010.

Note: Real estate costs above assume purchase of 50 acres and construction of a 250,000 square foot building. Building and construction costs are calculated

using a base per square foot cost for standard industrial buildings multiplied by a city-specific index. The construction cost information is taken from the Means

Construction cost indexes, which is a standard guide for cost estimating in the construction industry. The annual payment for land and building is equal to 12

times the amoritized monthly payment at .75 percent monthly interest over 240 months for the sum of land, construction, and purchase costs.

Prepared For:

Business Oregon



Figure C-9: Estimated Total Annual Property Tax Costs


Personal Real Personal Real Personal Real Inventory

Oregon Portland 1.94% 100.00% 100.00% 1.94% 1.94% $51,000,000 $30,509,000 $5,500,000 $1,580,460 $1,072,947 311

Arizona Phoenix 10.56% 22.00% 22.00% 2.32% 2.32% $51,000,000 $27,228,125 $5,500,000 $1,817,396 $1,309,883 358

California Sacramento 1.94% 100.00% 100.00% 1.94% 1.94% $51,000,000 $26,963,625 $5,500,000 $834,990 $327,477 165

Michigan Saginaw 3.29% 0.00% 50.00% 0.00% 1.65% $51,000,000 $21,511,025 $5,500,000 $1,193,894 $686,381 235

New Mexico Albuquerque 4.57% 33.33% 33.33% 1.52% 1.52% $51,000,000 $23,982,000 $5,500,000 $1,141,912 $634,399 225

New York Buffalo 3.06% 0.00% 100.00% 0.00% 3.06% $51,000,000 $22,256,250 $5,500,000 $680,819 $173,306 134

North Carolina Charlotte 1.10% 100.00% 100.00% 1.10% 1.10% $51,000,000 $20,575,875 $5,500,000 $786,590 $279,077 155

Ohio Toledo 6.79% 0.00% 35.00% 0.00% 2.38% $51,000,000 $21,358,625 $5,500,000 $507,513 BASE 100

Oklahoma Oklahoma City 11.34% 13.13% 11.36% 1.49% 1.29% $51,000,000 $21,536,125 $5,500,000 $1,119,080 $611,567 221

Utah Salt Lake City 1.42% 100.00% 100.00% 1.42% 1.42% $51,000,000 $22,412,875 $5,500,000 $1,041,362 $533,849 205

Washington Seattle 0.79% 100.00% 100.00% 0.79% 0.79% $51,000,000 $34,903,250 $5,500,000 $678,636 $171,123 134

Source: Various State Revenue Departments and Tax Commissions, 2009-10; Local Assessors, 2009-10.

Land Varies by Market

Building Varies by Market

Machinery $51,000,000Raw Materials $2,000,000

Goods-In-Progress $2,000,000

Finished Goods $1,500,000

For each metro area there is a tax rate and real and personal assessment ratios. The product of the tax rate and the assessment ratio is the effective tax rate. The effective tax rate times the taxable property

value is equal to the tax. In most cases the personal effective rate is also applied to inventory in states where inventory is taxed. The property tax assessment ratios and rates are taken from individual city web

sites, and state department of revenue web sites. Not all inventory shown in the taxable property column will be subject to tax in all locations.

Salt Lake City $87,120 $18,056,875

Seattle $261,360 $21,835,250

Toledo $21,780 $20,269,625

Oklahoma City $87,120 $17,180,125

Buffalo $21,780 $21,167,250

Charlotte $87,120 $16,219,825

Saginaw $34,848 $19,768,625

Albuquerque $108,900 $18,537,000

$20,708,000

Phoenix $174,250 $18,516,125

Sacramento $87,120 $22,607,625

Portland $196,020

Index

(Base=100)

Property Tax

Rate

Assessment Ratio Effective Tax Rate Taxable Property (if applicable)

Note: Investment value assumptions for the new plant include the information below.

Assumptions for New Plant Market

StateTrial

MSA

Total Annual

Taxes

Penalty Over

Base

Land Value (based on

average $/Acre)

Building Value (based on

Building Cost)

Prepared For:

Business Oregon



Figure C-10: Estimated Total Annual Variable Operating Costs


State

Trial Regional

Area

(MSA)

Transportation Labor Fringe

Benefits

Electric

Power Natural Gas Water SewerLand &

Building

Property

Tax

Total Annual

Cost

Penalty Over

Base

Index

(Base =

100)

Oregon Portland $2,470,000 $6,872,300 $1,950,267 $676,800 $815,100 $232,652 $735,350 $3,293,969 $1,580,460 $18,626,898 $3,506,325 123

Arizona Phoenix $2,470,000 $6,298,000 $1,633,947 $1,139,040 $627,120 $323,816 $174,269 $2,939,742 $1,817,396 $17,423,330 $2,302,757 115

California Sacramento $2,470,000 $7,006,700 $1,966,100 $1,497,600 $452,400 $75,600 $57,600 $2,911,185 $834,990 $17,272,175 $2,151,602 114

Michigan Saginaw $2,470,000 $6,744,200 $1,867,109 $1,117,440 $698,880 $177,491 $315,652 $2,322,483 $1,193,894 $16,907,149 $1,786,576 112

New Mexico Albuquerque $2,470,000 $6,077,100 $1,688,161 $790,560 $363,480 $198,869 $29,189 $2,589,267 $1,141,912 $15,348,539 $227,966 102

New York Buffalo $2,470,000 $6,484,900 $1,863,928 $725,760 $808,860 $156,443 $107,308 $2,402,943 $680,819 $15,700,961 $580,388 104

North Carolina Charlotte $2,470,000 $6,439,000 $1,763,119 $682,560 $563,160 $194,285 $309,943 $2,221,518 $786,590 $15,430,175 $309,602 102

Ohio Toledo $2,470,000 $6,502,600 $1,869,595 $714,240 $680,940 $104,634 $300,967 $2,306,029 $507,513 $15,456,518 $335,945 102

Oklahoma Oklahoma City $2,470,000 $5,818,900 $1,727,924 $777,600 $861,900 $173,169 $211,665 $2,325,193 $1,119,080 $15,485,431 $364,858 102

Utah Salt Lake City $2,470,000 $6,203,600 $1,653,753 $635,040 $359,580 $132,372 $205,013 $2,419,853 $1,041,362 $15,120,573 Base 100

Washington Seattle $2,470,000 $7,349,600 $2,150,611 $728,640 $934,440 $329,666 $745,938 $3,768,403 $678,636 $19,155,933 $4,035,361 127

Note: Total Annual Variable Operating Costs are a sum of Figures C-1 through C-9 for each respective trial location. See detailed Figures for source information.

Prepared For:

Business Oregon



Documents

Benchmarking State Business Incentives · Benchmarking State Business Incentives Prepared By: Prepared For: Business Oregon A Review and Comparison of Oregon State Incentive Programs