Gov. Don Siegelman signed into law several measures that impact Alabama's economic development prospects. These include the Alabama Development Office (ADO) Notification Requirement, requiring economic developers and other parties to notify the ADO in advance of any incentives programs under discussion. The purpose is to centralize incentives negotiations. The legislature also created the Alabama 21st Century Fund Authority, which has the power to issue bonds in limited amounts for purposes of economic development and industrial recruitment. The law will enable the state to provide infrastructure for such large projects as the Honda plant project announced in the summer of 1999.

Lawmakers also passed a change in funding of industrial development grants; the law removes the two-year limitation on selling bonds to fund the Alabama Industrial Development Grant program. The previous law did not provide funding for the program. The new law will enable the State Industrial Development Authority to make grants to some 26 companies on the waiting list. Finally, a Multi-county Industrial Development Authorities law authorizes creation of industrial development authorities that may operate in more than one county in the state. This measure will let economic developers in different counties pool resources through creation of a common economic development authority.

A new utility regulation commission was established in May 1999 to replace the Alaska Public Utilities Commission. Gov. Tony Knowles intends for the Regulatory Commission of Alaska to better protect the interests of the state's ratepayers. "[Senate Bill 133] will help reduce the backlog of cases by allowing panels of commissioners, hearing officers and arbitrators to resolve cases as appropriate; and gives the chair of the commission more authority of administrative matters, freeing the other commissioners to work on substantive matters," explained the governor.

In June, Gov. Knowles signed fiscal year 2000 budget bills that include significant reductions in state spending. The US$2.27 billion budget includes $27 million in spending cuts and a one-time $39 million reduction in debt service.

Additionally, Senate Bill 107 eliminates the Alaska Tourism Marketing Council and provides for the Dept. of Commerce and Economic Development to contract annually with a single, qualified trade association (QTA) to promote tourism. And House Bill 83 overhaul's Alaska's Securities Act to comply with the 1996 federal National Securities Market Improvement Act.

Finally, the legislature enacted a bill to accelerate termination of the Board of Storage Tank Assistance from June 30, 2000, to June 30, 1999. Among other measures, the bill refocuses storage tank assistance programs from grants to loans and limits assistance to smaller businesses.

Gov. Jane Dee Hull got much of what she was looking for -- particularly in the area of education -- in the state's first biennial budget for fiscal years 2000 and 2001, which was signed into law in April. Among other measures, the budget ensures that Arizona will see its eighth and ninth straight year of tax reductions.

Besides a vehicle license tax reduction, business tax cuts will include a reduction in the corporate income tax rate from 8 percent to 7 percent. Research and development tax credits will increase. These aspects of the budget will undoubtedly add momentum to Arizona's recent success in attracting high-tech companies to the state.

On the education front, the new budget calls for $218 million in additional funding for kindergarten through grade 12. Universities will receive an additional $41 million, and community colleges will be given $17 million above current funding. Work-force development coffers will see an infusion of $3 million over the two-year period beyond current funding levels.

"I am pleased that we are increasing funding for education, transportation and health while meeting basic state needs and cutting taxes," stated Gov. Hull at the time the legislature passed the budget. "This budget represents a real change in Arizona's priorities. Improving education is now the centerpiece of a sound and fair state budget."

The National Federation of Independent Business (NFIB) hailed the most recent session of the General Assembly as "very friendly" to small business. Measures passed include a highway modernization program sponsored by Gov. Mike Huckabee, property tax cuts and an improved small business loan-guarantee program. The session failed, however, to approve legal reforms that would have limited frivolous lawsuits and eased liability and other insurance costs.

On July 30, Senate Bill 23 took effect, which reduced the state's capital gains tax. The law excludes the first 30 percent of any taxpayer's net capital gain from state income tax. "This long-overdue tax measure is a fair and equitable tax reduction," noted James Hendres, a Little Rock small business owner. "We will, however, continue to press for complete exemption from this tax in a future session of the legislature."

On July 7, 1999, Gov. Gray Davis signed into law middle-class tax cuts worth $715 million. He also signed a bill that eliminates the first two years of the minimum franchise tax for new corporations and a senate bill that increases the research and development tax credit. A third bill signed that day provides a permanent exclusion of 50 percent of capital gains on small business stock held over five years.

Later in July, the governor signed a bill authorizing the use of electronic signatures and digital signatures in brokerage agreements. The move is seen by many as a sign that the state is embracing electronic commerce initiatives, which could attract more high-tech industry to the Golden State.

The governor's office also has announced that two former military bases have earned conditional designations as Local Area Military Base Recovery Areas (LAMBRA). The designation allows the bases to extend state tax incentives, including local inducements, to lure future job-creating projects to companies locating in a LAMBRA.

Colorado's state legislature enacted several measures that impact business, including a reduction in corporate and personal income tax from 5 percent to 4.75 percent. For income tax years commencing on or after Jan. 1, 2000, and when the state surplus is more than $260 million, individuals and corporations who bought Colorado property or stocks before May 9, 1994, and sold these assets after five years will be able to exclude capital gains from Colorado taxable income. Colorado law normally excludes from state income tax only those capital gains on property or stocks held at least five years if acquired on or after May 9, 1994.

House Bill 1311 was enacted, as well. It states that for fiscal years commencing on or after July 1, 1998, and when the revenue surplus is more than $170 million, businesses are eligible for a state tax refund based on the amount of personal property tax paid to counties during the fiscal year. Taxpayers who paid $500 or less in personal property tax during the fiscal year will receive a refund of the amount of personal property tax paid. Those who paid more than $500 will receive $500 plus 13.37 percent of the amount paid over $500. The legislature also has enacted a sales tax exemption for biotechnology equipment, alternative fuel vehicles and farm equipment costing over $1,000.

In April, Gov. Bill Owens announced an initiative called "New Century Colorado" to modernize state government, achieve operational efficiencies, reduce costs and improve service delivery. "New Century Colorado will combine the expertise of Colorado's state work force and private professionals to take full advantage of 21st century technology and management efficiencies for the benefit of Colorado taxpayers," noted Gov. Owens.

Gov. John Rowland signed so-called economic cluster legislation into law in mid-1999 designed to create jobs and increase the gross state product by $84 million over 10 years. Dept. of Economic and Community Development Commissioner James F. Abromaitis says the program will make Connecticut a national leader in development-driven tax policies. The new legislation is part of the state's Cluster Initiative, which targets job growth in several key industries.

The legislation will allow small companies to carry over their net operating losses on their corporate income taxes for 20 years instead of the current five years. It also creates a research and development tax credit exchange that allows companies to exchange credits they have earned but cannot use. They will exchange the credits for a payment from the state equal to 65 percent of the credit's value.

"It's generally small companies and start-up companies that are creating high-paying career opportunities," says Abromaitis. "But many small companies that conduct a lot of research and development activities typically generate net operating losses during their early years. As a result, they tend to locate in states that give companies ample time to succeed. This program will help them decide that they belong in Connecticut."

In March, Gov. Rowland issued an Executive Order creating a Jobs Cabinet and naming a Work-force Competitiveness Advisor. This move is part of an ongoing effort to coordinate the various job-training programs administered by state agencies.

Gov. Thomas Carper's administration reached an agreement in July with legislative leaders resulting in personal, business and property tax cuts. Business tax reductions include $4.6 million or 25 percent gross of receipts tax reduction. The plan also eliminates the public utility tax on natural gas consumption for certain manufacturers, such as automobile manufacturers.

"In each of the last six years, we have cut personal or business taxes," noted Gov. Carper. "I am pleased that Delaware's strong financial picture has allowed us to initiate another round of tax reductions. This package is a sound one -- a plan that will put money back into the pockets of every Delaware taxpayer, support our seniors, allow school boards discretion in addressing school finances, increase incentives for businesses to grow and ensure that we continue our state's tradition of sound fiscal management."

As the 140th General Assembly drew to a close in late June, the governor signed into law the Fiscal 2000 operating budget, which totals just under $2 billion, an increase of 5.66 percent over Fiscal 1999.

Delaware's big news for the year was pharmaceutical giant AstraZeneca's decision to build its North American headquarters adjacent to the current Zeneca site in North Wilmington. The state's incentive package totals $18.7 million; Delaware also will invest $70 million in road improvements over the next few years.

The Sunshine State's legislature passed numerous measures in its 1999 session that directly benefit the business community -- and companies considering a presence in Florida. A civil litigation reform package includes protections to businesses from civil liability stemming from the Y2K bug. Another measure provides more than $1 billion in tax relief for businesses and families, including a $187 million reduction in unemployment compensation premiums. Unemployment taxes for most Florida businesses will be cut by 0.5 percent for 2000, and the initial rate for new employers will be 2 percent.

House Bill 397 provides a sales tax exemption (phased in over four years) for labor charges for the repair of industrial machinery and equipment. Senate Bill 318 marks the second year of a three-year phase-out of intangibles tax on accounts receivable and reduces the annual tax on intangible personal property from 2 to 1.5 mills. Senate Bill 2500 appropriates $130 million for various intermodal transportation projects, such as airport and seaport access, roadway improvements and brownfield development.

Senate Bill 662 contains several provisions designed to streamline Florida's Expedited Permitting Review Process. And Senate Bill 1566 streamlines and improves one of Florida's most effective and frequently used business incentives: the Quality Target Industry Tax Refund Program. The bill establishes firm, statutorily set refund awards; sets an annual cap of $24 million in fiscal year 1999-2000 and $30 million thereafter to provide greater fiscal accountability and guidance for the program; removes unnecessary applications and criteria; and establishes a waiver from the 10-percent expansion requirement for rural cities and counties as well as enterprize zones, among other measures. The bill also implements the federal Work-force Investment Act, which is designed to allocate more worker training funds and decision-making authority to the state and local levels. Also, the bill created the Governor's Quick Action Closing Fund, which will help attract economic development activity to the state.

Georgia's 1999 Legislative Session saw passage of the Ports Activity Job Tax and Investment Tax Credits. Companies that increase their port traffic tonnage through Georgia ports by more than 10 percent over 1997 base year port traffic, or 75 net tons, five containers, or 10 TEUs, whichever is greater, during the previous 12-month period and meet Business Expansion and Support Act (BEST) criteria for the county in which they are located, are qualified for increased job tax credits and investment tax credits.

Companies that create 400 or more new jobs, invest $20 million or more in new and expanded facilities and increase their port traffic by more than 20 percent above its base year port traffic may take both job tax credits and investment tax credits.

The legislature also passed House Bill 533, which provides a property tax credit to homeowners. House Bill 438 lets members of an affiliated group of corporations assign income tax credits to another corporation in the group, and back to the assignor if the two parties cease to be members of the same affiliation.

In March, the legislature passed a law establishing the Georgia Regional Transportation Authority, which will build and operate mass transit systems in counties not meeting federal environmental regulations. Curbing urban sprawl in the Atlanta metropolitan area is a priority of Gov. Roy Barnes.

The U.S. Dept. of Energy has awarded Hawaii's Dept. of Business, Economic Development and Tourism $352,000 in federal energy conservation grants. The grants consist of $200,000 to develop voluntary guidelines for designing commercial buildings that are more energy efficient than required under the state's Model Energy Code.

A second part of the grant funds is an award of $115,000 for supporting an energy-efficient schools project and a Univ. of Hawaii School of Architecture partnership. And the grants include $37,600 to install solar water heaters in a rural community in North Kohala on the Big Island. Approximately $200,000 in grants is available for community-based economic development (CBED) and planning projects, technical assistance and training; eligible organizations currently are submitting applications for those funds. The CBED program and its revolving fund were created in 1990 by the state's legislature.

Idaho's legislature clarified the manufacturing sales tax exemption pertaining to clean rooms used in the semiconductor manufacturing process. Clean rooms are environments within a larger space where humidity, temperature, particulate matter and contamination are controlled.

In June, Gov. Kempthorne awarded $2 million from the Idaho National Engineering & Environmental Laboratory (INEEL) Settlement Fund to the Regional Development Alliance (RDA). RDA will use the award to continue its efforts to reduce southeastern Idaho's dependence on INEEL. INEEL is a National Environmental Research Park used by government and private industry to conduct nuclear research and development. By year-end 1996, the facility employed more than 8,000 people. The funds will support economic diversification efforts in seven eastern Idaho counties. Idaho will receive up to $30 million from the Dept. of Energy and the Navy.

Newly elected Gov. George Ryan wasted no time proving he was serious about improving the business climate in his state. The spring 1999 session of the state's General Assembly saw passage of two Ryan initiatives that will benefit businesses in Illinois. The first is the Illinois Jobs through Competitiveness Act, which is a key component of the governor's economic development strategy for the state. It includes the Economic Development through a Growing Economy (EDGE) tax credit. The Act also increases funding for programs that foster technology as an economic growth engine and expands the scope of the Dept. of Commerce and Community Affairs' labor-management grant program. It also includes several measures that assist small businesses and allocates more resources to coordinating community economic development initiatives.

The second major initiative passed is Illinois FIRST, a $12 billion, five-year plan to meet the state's transportation infrastructure needs into the next century.

The session also saw passage of several tax measures, pertaining to personal income, corporate income, sales, utility, property and unemployment compensation. Several technology-related programs are likely to benefit from new funding, including the Illinois Technology Enterprise Corp. and the Manufacturing Extension Partnership of Illinois, among other programs.

The Hoosier State's 1999 Legislative Session produced several changes of interest to the business community. Lawmakers passed an inventory tax cut of approximately $129 million over the biennium, for example. Businesses can take a credit against their income taxes for inventory taxes paid on personal property assessed up to $12,500 before 2002 and $37,500 after 2002. The tax cut will particularly benefit small businesses.

Indiana's General Assembly also provided three allocations for the Internet 2 -- a limited access version of the Internet currently under development. Indianapolis will be the location of the Midwest network control center, which could spur high-tech economic development in the area.

The Biennial Budget establishes a new community college system through a partnership between Ivy Tech State College and Vincennes University. The partnership, which will receive a $2 million appropriation, will make associate degrees more widely available. Also, the Indiana Twenty-First Century Research and Technology Fund received an allocation of $50 million, and the Indiana Dept. of Transportation received a $3 million appropriation for airport development.

Additionally, Indiana's Industrial Development Grant Fund, Industrial Development Loan Fund and Industrial Development Project Guaranty Fund (IDFA) now make incentives available to high-tech infrastructure concerns. High growth companies now are eligible for loan guaranties under IDFA, which may triple its maximum loan reserve contribution under the Capital Access Program when the borrower is a growth company that pays high wages to highly skilled employees.

Iowa's 1999 General Assembly passed three important measures impacting the state's business climate. First, for companies using the New Jobs and Income Program (NJIP), the investment tax credit has been expanded to cover the cost of land and existing buildings as well as construction and reconstruction of buildings and machinery and equipment. Up to 10 percent of these investments is eligible for the tax credit, which can be carried forward for seven years or until used up.

NJIP requires investments of at least $10.4 million and creation of at least 50 new jobs meeting wage and benefit requirements. Other benefits of the program include a 3-percent tax credit against employee state income tax withholding and a 13-percent research and development activity corporate tax credit that can be carried forward or refunded.

Secondly, argon and similar gases consumed in manufacturing welding processes have been exempted from Iowa sales taxes retroactive to Jan. 1, 1999. Claims for retroactive funds were due Oct. 1. Thirdly, to promote continued expansion of the Internet and to make it more affordable to businesses and citizens, Iowa has exempted online computer access charges from state sales tax as of July 1, 1999.

Kansas Gov. Bill Graves signed into law Senate Bill 45 in May 1999, which provides targeted tax relief to two Kansas industries: oil production and short-line railroads. The measure provides sales, income and property tax relief totaling $10.4 million over the next fiscal year.

The relief includes $8.3 million for an income tax credit for property taxes paid by Kansas oil producers, including a 75 percent tax credit for tax year 1998 and a 50 percent credit for tax year 1999 and beyond. "We can't do much to control the international oil market, but we can ease [oil producers'] burden with this domestic tax relief," noted Graves. Also included in the tax relief package is a one-year exemption of the sales tax on labor and materials used to construct or refurbish grain storage and to enhance short-line railroad infrastructure. The tax cut applies to rail repair and maintenance, and includes both commercial and on-farm use.

Kansas's High Performance Incentive Program (HPIP), administered by the Dept. of Commerce and Housing, has been expanded to include distributors of durable and non-durable goods. HPIP offers an investment tax credit, a sales tax exemption associated with capital investments, training tax credit and priority consideration for other programs offered by Kansas business development agencies.

Kentucky's General Assembly is considering making changes to its tax policy in the 2000 legislative session, according to the state's Cabinet for Economic Development. In the meantime, several efforts are under way to help small, entrepreneurial businesses get down to business in the Blue Grass State.

In August, Gov. Paul Patton and Secretary of State John Brown III introduced the state's One-Stop Business Licensing Program, which simplifies the business-licensing process required of start-ups. The program lets business owners determine online (www.sos.state.ky.us) which of over 600 state licenses are needed for their particular business. The service immediately identifies the necessary licenses for each of over 1,800 business types. "This service saves precious time and resources often spent mired in regulatory requirements and now allows entrepreneurs to focus their energies on what's most important -- making sure their business succeeds," noted Secretary Brown.

In June, Gov. Patton declared 1999 as the Year of the Small Manufacturer in recognition of the important contributions these companies make to the economic strength of the state and the country. In Kentucky alone, 4,500 small manufacturers employ more than 300,000 people. Kentucky's small manufacturing industries generate one-fourth of the state's total gross product and one-fifth of the state's employment total. Also in June, the Bluegrass State Skills Corp. approved $795,000 to fund 32 worker-training projects across the state.

Louisiana's Legislature passed several laws in the most recent session that benefit the state's work force. Unemployment taxes paid by businesses have been cut 20 percent, and unemployment benefits for workers who lost their job through no fault of their own have increased by 20 percent.

Funding is being increased for the incumbent worker-training program from $6 million to $50 million. "That gives Louisiana the second-largest incumbent worker training program in the country, and the largest fund per worker," noted Gov. Mike Foster in comments made at the close of the 1999 Regular Session.

On the education front, new legislation commits $45 million to a program that guarantees college tuition to all qualified high school graduates. Another measure creates a new, statewide community and technical college system. According to the state's Office of Commerce and Industry, Louisiana has climbed from 46th to 4th in the nation in increased investment in higher education.

Maine's legislature passed no new laws that create new programs for businesses, but several existing programs gained additional funding. Areas benefiting include the Maine Manufacturing Extension Partnership, which will help small businesses prepare for Y2K, business marketing efforts and funding for two business-assistance outreach positions in rural areas of the state.

On the education front, funding will increase in several areas. The base budgets of the university and technical college systems will rise 3.5 percent each per year. Funding increases $4.5 million for increased enrollment capacity in the technical school system, and the state has issued a $26.5 million bond for expanding labs, equipment and libraries. The budget also increases funding for Jobs for Maine Grads, a school-to-work program.

In the past two years, Maine has increased funding for research and development by almost $70 million. In the past year, the state passed a $20 million R&D bond, increased funding to the university by $10 million for research and created the Maine Technology Institute to encourage, promote and support R&D activity leading to the commercialization of new products and services in the state's technology sectors.

Maryland's legislature passed several measures that will benefit companies locating or expanding businesses in the state. House Bill 188 creates a new revolving loan fund with an initial budget of $4.75 million. The self-sustaining fund, which eventually will be capitalized at $50 million, will strengthen Maryland's ability to attract and retain significant projects in industries deemed a priority for job growth and capital investment.

Senate Bill 136 creates the Maryland Competitive Advantage Financing Fund directed to small and minority-owned businesses. House Bill 5 creates a Smart Growth Economic Development Infrastructure Fund for loans to qualified distressed counties.

Senate Bill 169 allows corporations or real estate investment trusts to deal with new takeover techniques by empowering boards of directors to consider local interests as well as the best interests of their shareholders. Another bill signed expands the existing state enterprise zone program by authorizing subdivisions to designate focus areas within enterprise zones. The measure will provide enhanced property tax credits and income tax credits. Senate Bill 779 allows a tax credit for new or expanded business premises and for business entities that satisfy certain requirements. It authorizes affiliates of business entities to be included for purposes relating to the credits and eliminates a prohibition against granting the credits to a business entity that has been certified for the Job Creation Tax Credit.

A 20.3 percent decrease in the state's workers' compensation insurance rates took effect Sept. 1 -- it's the fifth consecutive double-digit decrease. The cuts reflect changes stemming from the Workers' Compensation Reform Act of 1991. The latest cuts should result in savings of $170 million for Massachusetts businesses.

The state has launched a program called the Insurance Partnership, which helps small businesses offer health insurance to low-wage workers. To be eligible, businesses must employ 50 or fewer full-time workers and have low-income workers who are Massachusetts residents and meet certain requirements.

Michigan is phasing out its Single Business Tax following passage of legislation aimed at keeping the state's powerful economic engine running smoothly in the years to come. When fully eliminated after 23 years, the annual savings to business will be $2.7 billion per year in current dollars.

In April, the Michigan Economic Development Corp. was formed through an alliance between the state and local communities. The agency is the successor to the Michigan Jobs Commission.

Also in April, Gov. John Engler released a report entitled "State Smart: Michigan" that outlines new initiatives to attract more firms in the fields of advanced manufacturing, life sciences and information technology. The centerpiece of the plan is a series of tax reforms designed to level the playing field between technology-based firms and traditional industries by providing the same benefits to each under the tax code.

And in July, the governor signed a bill extending the life of the Michigan Economic Growth Authority (MEGA) by four years. The MEGA Board awards Single Business Tax credits as a means of promoting expansion for Michigan firms and attracting new ones.

Gov. Jesse Ventura signed into law Minnesota's largest personal income tax credit in 1999, returning about $1.4 billion to state residents. The measure reduces the top rate of 8.5 percent to 8 percent; the middle rate of 8 percent to 7.25 percent; and the bottom rate of 6 percent to 5.5 percent.

The legislature also passed a sales tax rebate of $1.25 billion and allocated more funds for the cleanup of brownfield sites. Public education gets a $751 million boost in funding, and the governor supports funding passed by the legislature to invest in a light rail system to ease congestion.

Small business owners were pleased early in the year with passage of a law prohibiting the act of amortization by local government units as a land-use regulation.

In February 1999, Gov. Kirk Fordice issued an executive order creating a State Work-force Investment Board. The group's mandate is "to maximize cooperation among state agencies; reduce bureaucratic requirements; eliminate duplication, conflict and wasteful practices; and to provide the highest quality services to the persons participating in the work-force investment programs." The board will develop a five-year strategy, improve the work-force investment system, develop funds distribution formulas, streamline adult employment and training, and establish and manage a one-stop employment and training delivery system.

The State Senate allowed House Bill 551 to die, which drew criticism from the governor. The bill would have extended the repealer, which would have continued an income tax credit to employers who hire people receiving welfare benefits, also known as Temporary Assistance for Needy Families.

Gov. Mel Carnahan signed a $200 million tax cut in June 1999 that includes four major provisions. It increases the personal exemption by 75 percent for all income tax filers; a full deduction of health insurance premiums is provided for 69,000 self-employed individuals by complementing the federal tax deduction; it eliminates the corporate franchise tax for 19,500 small businesses; and it extends the pension income tax deduction to 32,000 households not currently eligible.

In July, the governor signed into law two bills -- the Housing Preservation Program and the New Enterprise Creation Act. The first uses tax credits to encourage the rehabilitation of older homes and the construction of new ones in the state's core cities and towns. The New Enterprise Creation Act allocates tax credits to establish a $20 million fund that will be used to finance early-stage businesses in Missouri. The program is designed to assist the establishment of innovative, high-tech companies that previously had no financing source.

The Montana skies recently got a little bit bluer for businesses looking to locate in the state. The 56th Legislative Assembly enacted more than 80 percent of the recommended strategies in its Jobs and Income -- a Blueprint for Economic Development.

Tax reductions seem to be the major economic development concern for the state this year. Effective Jan. 1, 2000, the tax rate for business equipment will be reduced from 6 percent to 3 percent, which will remain in effect until Jan. 1, 2004. The state also established an exemption from class 8 property taxes for owners with business equipment valued at $5,000 or less.

Montana also made tax cuts to attract commercial development. Senate Bill 184 reduced the tax rate for residential and commercial real estate properties to 3.71 percent for 1999. The rate will be reduced by .0835 percent each year until 2002, when the rate reaches 3.46 percent.

With labor markets growing tighter every day, Nebraska has taken the initiative to bring workers back to the state. In the past year, the Nebraska Dept. of Economic Development launched its "Nebraska Works!" campaign. As part of the initiative, the state created the Nebraska Works Web page, which provides links to the Dept. of Labor and other in-state job opportunity sites.

Nebraska also recently established a speculative building program. This program allows the state to use community development block grant funds to provide financing to local governments for the purchase of existing buildings or construction of new ones. The state will loan up to 50 percent of the cost of a new building or the rehabilitation of an existing project, or up to $500,000.

In legislative news, the state increased the limit of microenterprise loans to $50,000. Nebraska also passed legislation that allows companies that lease their employees to qualify under the Employment Expansion and Investment Act.

Gov. Kenny Guinn has emphasized work-force education and development in the past year. He recently signed into law his Millennium Scholarships bill. The scholarship program will use half of Nevada's share of the tobacco settlement money to establish full scholarships to Nevada universities or community colleges for any student who graduates high school with a 3.0 grade point average or better. "The Millenium Scholarships will put a new emphasis on higher education, give working families an economic boost and provide an enormous incentive for companies to relocate to our state," Gov. Guinn says.

In other work-force development news, Gov. Guinn also signed an executive order that establishes The Work-Force Investment Board. The board provides educational, employment and training services designed to help workers keep their skills up-to-date in the rapidly changing workplace.

New Hampshire's latest legislative changes cover everything from the establishment of a new division within the Dept. of Resources and Economic Development (DRED) to work-force training programs and possible lower electricity rates.

Perhaps most import among the recent legislative changes was the enactment of the state's job training grant fund. New Hampshire's new $150,000 Training Challenge Grant Program provides assistance to private businesses by reimbursing them for half the cost of training new employees and retaining existing employees.

Other legislative moves included creating the Division of Travel and Tourism Development within the DRED. The division's responsibilities will include promoting the state as a domestic and international travel destination, developing programs to promote the state's tourism industry and encouraging partnerships between the tourism industry and state and local officials.

New Hampshire is also looking to cut electric rates by 18 percent within the next year. The state of New Hampshire and Public Service Co. of New Hampshire (PSNH) signed a memorandum of understanding, which was presented to the Public Utilities Commission on Aug. 1, 1999. PSNH has agreed to write off $225 million of its stranded costs, more than 30 percent of its equity. This will translate to about $367 million in savings for New Hampshire customers.

On Feb. 12, 1999, New Jersey Gov. Christie Whitman announced the signing of the state's energy deregulation bill. The energy deregulation legislation, combined with the 1997 energy tax reforms, will save New Jersey consumers at least 16 percent on their electric bills, she said. The state also earmarked $140 million for improved energy conservation programs and for investments in renewable technologies.

The 1999 Legislation also appropriated $17.5 million to the New Jersey Commerce and Economic Growth Commission. This move provided loans and grants for eight economic development sites in the Delaware River and Bay region.

Earlier this year, New Jersey unveiled its Web-based business resource center (www.njbrc.org). No registration is required to access the site. Once connected, the user can access data on the state's population, industry profiles, business incentives and financing, tax data and international business. The site also provides links to federal, state and county sites.

The Rural Jobs Tax Credit was recently established by New Mexico's legislature. These tax credits entitle employers of Tier 1 areas (population 15,000 or less) to a combined corporate/personal income tax credit of up to $4,000 per job. Tier 2 rural-area (pop. greater than 15,000 but less than 50,000) employers will received a combined credit of $2,000.

Also, New Mexico Gov. Gary Johnson signed into law two proposals to keep alive tax breaks for manufacturers. The investment tax credit has been extended for an additional four years, until Jan. 1, 2004, and the state will maintain its $12 million tax break for manufacturers with operations in New Mexico and other states for another three years, until 2003.

Other legislative moves included the approval of a comprehensive telecommunications industry deregulation bill, allowing US West competitors the right to provide local and in-state long distance services to New Mexico businesses and residents. Under the terms of the bill, business rates will be cut by $2.48 per line for a five-year period. US West will also be required to invest $40 million in upgraded services and equipment to bring advanced telecommunications infrastructure to rural New Mexico over the next two years.

Gov. George Pataki's tax axe continues to fall, making the business climate even better in the state of New York. The new 1999-2000 budget added another $375 million in tax relief for both residents and businesses. It features a package of 25 new job-creating tax cuts worth $250 million in savings, including a $150 million tax cut for banking and insurance industries.

Legislative leaders and Gov. Pataki have also agreed upon a $522 million economic development program to fund the Jobs 2000 (J2K) program, which will increase state support for high-technology academic research and state investment in high-tech business growth. The budget includes a $156.5 million investment in high-tech academic research, $280 million in venture capital funds, $34 million to retain employees to operate high-tech equipment and $51.5 million for infrastructure improvements.

In other pro-business moves, the Empire State Development group has launched a new telephone call center operation to provide customer service to start-up businesses and parties interested in expanding or relocating to the state. The new toll-free hotline (1-800-STATE-NY) allows companies to obtain information about the full range of assistance programs available. The latter half of 1998 also brought about a major change to the state's business climate. In September, Gov. Pataki launched his $1.8 million BUILD NOW-NY initiative. The program pre-qualifies sites to attract new and expanding businesses to New York. It utilizes the same permitting concept as the Governor's Chip Fab '98 (SEMI-NY) program. Earlier this year, 30 sites were designated as BUILD NOW sites.

Building on the success of the William S. Lee Act of 1996 and the Economic Opportunity Act of 1998, North Carolina has recently passed the Widely Shared Prosperity Act of 1999 (WSPA) to make sure the entire state, particularly rural markets, takes part in the current economic boom. The new law adds call service centers and electronic mail order houses to the industries eligible for the William S. Lee tax credit. The tax credit applies only to call centers that locate in Tier 1 or Tier 2 counties and are operated by financial services or telecommunications industries. The mail order houses are also required to be located in Tier 1 or Tier 2 (e.g., less developed) counties, and they must create at least 250 jobs to be eligible.

The new law also provides a refund of sales taxes paid on capitalized machinery and equipment for businesses eligible for Lee tax credits located in Tier 1 and Tier 2 counties. For non-profit insurance companies investing at least $20 million in the state, the act refunds sales taxes for purchases of building materials and fixtures for eight years and for computer systems (hardware and software) for four years. WSPA also extends the sales tax cap of 1 percent, or $80 per item, on equipment purchased in the state to air carrier hubs; exempts the purchase of lubricants, materials and supplies used at air carrier hubs from sales tax; and extends the sunset of the Lee Act for an additional four years to 2006.

Furthering the growth in rural areas, the state also passed a $1 billion Clean Water and Natural Gas bond that will provide funding to improve water and sewer infrastructure in those areas and to extend natural gas lines into the counties that do not currently have service.

Education and other work-force development issues are at the forefront of North Dakota's efforts. Gov. Ed Schafer recommended an increase of $27 million for secondary education, including a 4.5 percent annual increase in foundation aid payments, in his 1999-2001 budget. He also earmarked additional funds for investments in technology and professional development for teachers. And the higher education system would be boosted by an additional $30 million, under the governor's proposed budget. Gov. Schafer also recommended creating a financial pool at the Bank of North Dakota for new high-tech businesses and targeting $2 million for specialized work-force training initiatives backed by a Greater North Dakota Assn. task force.

In order to build on the state's agricultural backbone, Gov. Schafer has also recommended that $9 million be used to improve production and create new opportunities through agriculture research, development and financing programs. Specifically, he asked for $3.6 million for agriculture-related research at North Dakota State University (NDSU) and $4.1 million for the Agricultural Products Utilization Committee to provide startup and research money for new initiatives. The proposed budget also funds new initiatives in value-added research at NDSU that will develop new uses for byproducts from value-added processing.

Work-force issues were a top priority of Gov. Bob Taft's administration this year. First, Ohio expanded its training grant program financing from $10 million to $100 million annually. The state also established training tax credits for amounts up to $20 million annually.

In August, Gov. Taft hosted a Work-force Development Forum with governors from Virginia, Arkansas, Oklahoma and South Dakota. His goal was to discuss Ohio's efforts to improve work-force development programs and exchange ideas about other states' efforts.

In other news, Gov. Taft signed into law new tax credits for companies that use Ohio coal. The new law will provide needed support for Ohio's coal industry, which is the economic mainstay of many southern and eastern Ohio counties.

The Oklahoma Fiscal Year 2000 budget puts emphasis on the state's desire to attract and grow high-tech companies. The new budget provides a 60 percent capital gains tax exemption on stock options in startup companies, which will encourage new or growth companies, primarily technology firms, to locate or relocate to Oklahoma. A research tax credit was also established, which provides 30 percent credit for companies that work with Oklahoma universities for research and development.

Also, the budget created the Outstanding Graduate Student Initiative, which provides $1.2 million in additional stipends to attract top graduates to Oklahoma University and Oklahoma State University to encourage more research. And the $28.5 million Regents Business Plan was created as a one-time fund to increase faculty and staff salaries, especially in areas of economic development, student service and information technology.

In other legislative moves, the state made changes to the Oklahoma Quality Jobs program. First, two new SIC codes were added to the list of companies qualifying for the program: wholesale grocery distribution centers and insurance company claims processing services. The second change is that the state now recognizes leased employees as new employees under certain circumstances, based on the permanency of the relationship of the leased employee. Ad valorem taxes also saw some changes. Senate Bill 467 provides a tax credit, effective immediately, to qualifying distribution centers if they hire 100 new full-time employees, invest more than $5 million and start construction before Jan. l, 2000.

Another bill exempts manufacturers from ad valorem taxes for five years if the investment costs for new, expanded or acquired manufacturing facilities is between $250,000 and $500,000. Under this law, qualified businesses must add $250,000 of new payroll in the year of investment and maintain this increase for the four years following the investment. Qualifying companies that invest $500,000 or more must maintain the payroll for five years. These changes are effective Jan. 1, 2000.

Several pro-business moves were made during the 1999 Oregon legislative session. Included was SB 402, which eliminated the sunset date for the entrepreneurial development loan program. This move allows the Economic Development Dept. (EDD) to transfer an increased amount of money to loss reserve accounts of financial institutions under the Capital Access Program for loans made to businesses in distressed areas after June 30, 1999. The bill also establishes the Oregon Targeted Development Account within the Oregon Business Development Fund, which allows the EDD to provide loans at lower rates of interest to businesses in distressed areas of the state.

Electric deregulation also came into play during the latest assembly. Senate Bill 1149 provides commercial electricity consumers direct access no later than Oct. 1, 2001. This bill allows commercial and industrial customers to voluntarily aggregate electricity.

The state also looked to enhance foreign investment by directing the economic development department to earmark an additional $200,000 to finance expanded overseas trade activities, with a focus on China. The state will also have overseas trade representation in China and is looking into the feasibility of opening an office there.

Recent legislative moves put Pennsylvania on the facility location fast track. The 1999-2000 budget made $221.8 million in tax cuts, many of which encourage businesses to locate there. The Capital Stock and Franchise Tax, for example, was reduced from 11.99 mills to 10.99 mills, and the minimum tax payment was cut by a third, from $300 to $200, benefiting approximately 150,000 small businesses. The budget also allowed the Net Operating Loss Recovery Cap to double to $2 million and the apportionment formula's sales factor weight was increased from 50 percent to 60 percent.

Labor costs also came into play. Pennsylvania employers will now save an additional $80 million a year with a rate reduction to 5.26 percent in worker's compensation premiums. And effective Jan. 1, 1999, unemployment taxes paid by Pennsylvania employers will decrease $19 million; by the end of 1999, Pennsylvania employers will have saved more than $1.2 billion. In other cost-saving moves, Gov. Tom Ridge signed into law HB 1331, which deregulates the natural gas industry in Pennsylvania. As a result, Pennsylvania consumers will become the first in the nation to be able to shop for both electricity and natural gas. Another bill also eliminated the state's 5 percent tax on natural gas.

High-tech issues also came to the forefront for Pennsylvania during the past year. The state recently created its Pennsylvania Technology Investment Authority, which provides financing for technology firms linking university research with economic development. The state also established the New Economy Scholarship and the GI Bill for the New Economy. The program is designed to prepare Pennsylvania's work force to succeed n the new technology-based economy. The "SciTech" scholarships and the GI Bill for the New Economy took effect July 1, 1999.

In other work-force training issues, the state launched its "satisfaction guaranteed or it's free" job training program in April. Simply put, the customized job training provided by the state will fulfill the employer's need or the state will provide additional training free of charge until the customer is satisfied.

The big news in Puerto Rico is the expansion of its foreign-trade zone system. The U.S. Foreign-Trade Zone Board approved the expansion this year, giving Puerto Rico the most comprehensive non-contiguous foreign-trade zone in the United States. The new system will allow companies to obtain significant new financial savings opportunities when locating manufacturing and distribution operations on the island.

The new system enables companies to increase cash flow savings by exempting Customs duties. For example, customs duties on re-exports and all merchandise exported to other countries or used as scrap and waste have been eliminated. And Customs duties were also reduced or eliminated on imported raw materials, components and packaging used in the manufacturing of products in Puerto Rico, even when sold within Puerto Rico and the mainland states.

The foreign-trade zone status applies to most of the parks, buildings and land owned by the Puerto Rico Industrial Development Co. (PRIDCO). Specifically it covers all of PRIDCO's 136 industrial parks, 667 buildings and 18.2 million sq. ft. (1.7 million sq. m.) of space on 4,500 acres (1,823 hectares) of land.

Gov. Lincoln Almond's focus throughout 1999 has been on education, and Rhode Island's most recent legislative session furthered these efforts. The state increased funding for the Starting Right program by $7 million, and it also increased school aid by $38 million to ensure that schools are prepared for teaching children. And investments continue to be made for operating assistance for higher education and enhancing facilities for the Convocation Center at the University of Rhode Island.

In August of this year, Gov. Almond also announced the creation of a Career and Vocational Education Task Force. The group will review the current career and technical education system, and it will develop recommendations to ensure that the state's students are prepared for the work-force demands of the future. The 14-member task force will present its recommendations to Almond by Nov. 30, 1999.

Improving education at all levels was the priority of new Gov. Jim Hodges and South Carolina's 1999 General Assembly. This spring, Gov. Hodges signed into law some $216.7 million for public education and special schools, agencies and programs. Also, the state agreed to provide $750 million ($250 million in 1999-2000) in state bonds that may be issued with proceeds to be allocated to school districts and permanent school facilities, and it authorized the issuance of $250 million in state capital improvement bonds to fund projects and equipment at state universities and other state educational institutions.

Many business-related issues came to the floor but won't be taken back up until January 2000, the second year of the legislative session. Included in that category is a legislative measure that would deregulate the generation component of the electric market. If the bill is enacted next year, the Public Service Commission will have six months to adopt a plan to restructure the state's electric industry with an objective to provide customer service choice for all customers no later than six years after the enactment of the bill.

Under the leadership of former Gov. David M. Beasley, South Carolina last year focused its economic momentum toward the needs of high-technology companies. In October of last year, former Gov. Beasley announced the formation of the South Carolina Technology Alliance. The alliance is a 13-member board comprised of the presidents of the state's universities, major high-tech industries and other business leaders. As part of this high-tech focus, the state has also developed a Special Schools program, a technical training program linking the state's technical college system and businesses in need of skilled workers.

South Dakota has made efforts to boost its value-added agriculture efforts. State legislators required that $3 million of the state's REDI fund be appropriated for a special subfund to be used to develop and promote value-added agriculture. The assistance will be in the form of grants or loans for agriculture development, feasibility studies or marketing. The state also created two new positions in the Governor's Office of Economic Development that will focus on agriculture-related development.

Workers' compensation rates were also lowered in South Dakota for the fifth consecutive year. Businesses in the voluntary market will get an average decrease of 9.5 percent in their insurance premiums, effective July 1, 1999. Higher risk businesses, those in an assigned risk program, will see an average decrease of 12 percent in South Dakota.

Work-force training was also boosted with the recent implementation of South Dakota's Fast-Start Training Program. This program provides applicant-based training, customized training, apprenticeship training, and continuing education and license renewal training, as well as directed independent study.

Gov. Don Sundquist, not completely satisfied with the results of the 1999 legislative session, called a special session at the end of March to address his concerns about tax reform. As a result, some tax changes were made that will benefit businesses operating in Tennessee. The bill that extends business taxes to all businesses in the state was amended to allow job tax credits for both franchise and excise taxes instead of just franchise tax as in the past. The Franchise Tax Credit was also improved so that taxpayers can now offset one-third of their franchise and excise tax liability per year.

In other legislative news, The Tennessee Work-Force Development Act of 1999 was passed unanimously by the assembly in March, creating the new consolidated Tennessee Dept. of Labor and Work-Force Development. The new group integrates the departments of Labor and Employment Security with the Adult Basic Education group from the Dept. of Education and the employment and training component of the food stamp program from the Dept. of Human Services. It will streamline and integrate economic development efforts for all of Tennessee.

The governor also proposed a transportation budget totaling $1.3 billion. The budget includes 118 highway projects in 67 Tennessee counties. The $1.3 billion also includes an additional $6 million for mass transit.

Businesses came out the big winners of Texas's 76th Legislative Session. One of the most important moves by the state was its $506 million package of tax cuts, which is expected to encourage new business and job growth.

Among the many cuts that affect businesses in the state are a sales tax exemption on the first $25 a month in Internet access charges, a franchise tax credit for businesses that subsidize day care and a franchise tax exemption for small businesses with gross receipts of less than $150,000. The state also appropriated $70 million for R&D tax credits and $45 million for investment credits.

In other business-friendly moves, Gov. George Bush signed into law the state's electric deregulation bill. Different provisions of the bill will be phased in beginning Sept. 1, 1999, when utilities will be required to freeze their basic electric rates at current prices until Jan. 1. 2002. On Jan. 1, 2002, new electric providers must discount rates by 6 percent for all residential customers and small commercial customers.

Utah's 1999 legislative session resulted in some big wins for business and industry. One of the more prominent actions was the reinstatement of a manufacturing exemption, which restored sales tax exemptions on replacement parts for manufacturers. The total amount of exemptions for replacement parts for manufacturers now totals $28 million.

Other moves included an amendment to a research and development bill, which clarified and broadened requirements for companies to qualify for income tax credits for research activities. The legislature also decided to appropriate an $4.2 million for the Industrial Assistance fund, which will be used for business expansions within the state and assisting out-of-state firms to set up shop. A $6 million pollution control exemption was also enacted that provides sales tax exemptions for firms using pollution control equipment.

In other news, the state is preparing for future growth. The 1999 legislative session established 21st Century Communities. This bill provides funding to local rural governments for planning orderly growth in their communities and to increase economic opportunity. The state also developed the New Century Scholarships that creates a two-year, 75 percent tuition scholarship program for high-achieving students who complete associate degree requirements by Sept. 1 following their high school graduation.

The Vermont legislature this year enhanced its economic development efforts by passing legislation that reduced taxes and provided more money to the Vermont Economic Development Authority to lower interest rates on business loans. The state also increased funding for work-force development, higher education and infrastructure improvements.

A new work-force development program was also instituted this past year in Vermont. The machinist training program provides machinist training for unemployed or underemployed workers. The program provides both on-the-job training and upgrade training for the manufacturing industry.

Economic development has been a primary focus of Gov. Jim Gilmore in the past 12 months. In December of last year, he announced a series of economic development initiatives designed to aid rural communities. As part of this effort, he proposed to provide $3 million in funding for the Industrial Site Development Fund and to increase the number of Enterprise Zones from 50 to 55, with the new zones targeting economically distressed areas of the state.

The $3 million in second-year funding for the Industrial Site Development Fund will stimulate the development of industrial sites in the rural regions of the state that lack suitable locations for industrial development. And the increase of Enterprise Zones will provide increased incentives for business expansion and location in the state's most distressed communities.

Gov. Gilmore also announced last December the Virginia Strategy, the Commonwealth's new strategic plan for economic development. The strategy recommends investing $150,000 for a comprehensive review of local, state and federal work-force training programs; $500,000 to restore the Virginia Enterprise Initiative to level funding and provide a 20 percent funding increase to serve additional areas of the state; $545,731 to establish the Virginia Business Center, a one-stop shop for existing and prospective businesses; and $3.94 million to continue level funding for incentives for regional economic efforts.

Gov. Gary Locke's Economic Vitality Initiative was enhanced greatly by this year's legislative session.

First, the state broadened the applicant pool for the Community Economic Revitalization Board's prospective development and feasibility study projects by adding Rural Counties to Rural Natural Resources (RNR) areas. Rural Counties are defined as counties with a population density of less than 100 persons per square mile. RNR areas are maintained as timber and salmon impacted areas.

The state also added telecommunications infrastructure as an eligible public project cost to support job creation and/or retention projects. And the list of eligible business types that can be supported through the investment of public infrastructure was widened to include advanced technology as well as research and development. The legislature also increased per-project funding limits for prospective development from $500,000 to $1 million, limited to RNR areas and Rural Counties. Washington legislators also created the Rural Economic Vitality Program for transportation improvements that foster economic development in rural counties and state empowerment zones.

West Virginia's 1999 Legislative session resulted in several business-friendly measures, including everything from infrastructure improvements and tax credits to work-force development programs.

On the tax credit side, the state has created a tax credit for investment in aerospace industrial facilities. The aerospace incentive permits a credit equal to 15 percent of the qualified investment, to be taken equally over 10 years, that can be taken against up to 60 percent of the taxpayer's corporate net and franchise tax liabilities.

The legislature also established a work-force development initiative under the Council for Community and Economic Development. The council will oversee and administer grants to community and technical colleges in accordance with the criteria established in the statue and any additional criteria established by the council. The goal is to establish a work-force development system that responds more quickly to the skill requirements of employers.

Additional funds for construction of industrial access roads were also approved by West Virginia's legislature this year. The amount of unmatched moneys from the industrial access road fund was increased from $300,000 to $400,000.

Wisconsin's burgeoning biotech community was given a major financial boost in April of this year. The State of Wisconsin Investment Board is pumping $50 million into venture capital financing for young biotech firms in the state. It is expected that the venture capital firms will be chosen by the end of 1999 and the first investments made by mid-2000.

And for energy-intensive industries of all kinds that require reliable power, Gov. Tommy G. Thompson negotiated an agreement with the state's utilities and the Customer First Coalition that will greatly enhance the reliability of Wisconsin's energy, while also providing savings for consumers and creating the nation's first independent transmission company. The Reliability 2000 pact allows the independent transmission company (TRANSCO) to determine the most effective transmission of energy throughout Wisconsin, delivering reliable power to all corners of the state.

Wisconsin's utilities have agreed to divest of their transmission facilities and transfer them to TRANSCO. The state utilities will be required to spend $84 million on energy conservation programs, including weatherization of buildings and installation of efficient appliances.

The good news in Wyoming is not what passed in the 1999 legislative session, but what didn't pass. And what didn't pass were major tax increases that would have effected business and industry. Among the many taxes that were proposed to increase include the sales and use tax, personal services; sales and use tax, business services; and a fuel tax. The state had also considered repealing the sales and use tax exemptions. Total tax increase, if the bills had passed, would have exceeded $200 million.

On the other hand, Wyoming did pass some very pro-business legislature during its latest session. These included incentives for air travel and air carrier maintenance. And Gov. Jim Geringer touts that the state will be one of the first in the country to implement the federal Work-Force Investment Act to enhance the quality of its work force.     SS