Most manufacturers considering expanding or relocating their plant follow the adage: location, location, location.

While consultants admit that overseas manufacturers seem to place more weight on tax incentives than domestic companies, economic development initiatives can make the difference over one state landing the deal versus another. At the very least, incentives are part of the overall equation considering in all review processes and one way for a State to distinguish itself from its competition.

What a State offers (or does not offer) may also indicate the overall business climate of that state. In other words, initiatives set forth by State Legislature are a good measuring stick to how pro-business government officials are and will be in working with your company in its expansion or relocation process.

The type of incentives or legislative initiatives also indicates the industry sector(s) that State

desires to grow. If your business fits into those categories, it might reap handsome benefits by locating there. Obviously, there is no better proof in the pudding coming from the state than backing up words with financial incentives.

Unfortunately, the tendency among states during these difficult economic times is away from offering incentives.

Most states find themselves facing budget constraints. Consequently, many states that are anxious to reel in your company are placing more emphasis on their own marketing arms via economic development organizations and chambers of commerce and developing increasingly innovative Web sites. With higher unemployment becoming an issue once again, some states are placing wider emphasis on tax incentives geared towards hiring, as well as job training.

Obtaining information on what attractive initiatives states still offer, and just what those incentives are, may be a more daunting task than ever for some manufacturers.

That is why Expansion Management takes it upon itself to ease the task and provide you with a thumbnail reference of what new initiatives are available.

In our annual survey of all 50 states, we once again asked each to respond with what new economic development initiatives their legislative bodies have enacted in the last two years to attract or retain jobs. The programs outlined here run the gamut, from tax credits based on job creation to brownfields enticements to rewards for high-technology companies.

As one might expect, the initiatives vary from state to state, depending on economic conditions in each one and what types of businesses that each state is trying to attract.

Of course, some states have long-standing, popular programs that don't appear in this round up because they are not new. Or, they are not compelled to offer incentives because the tax base of doing business there is already low. For that reason, the round up is not inclusive. Plus, not all States responded to our request, perhaps for that very reason. This year's round up includes 31 states.

But for those that we did hear from, what follows is our brief description of some of the new programs from each responding state. We suggest you contact the respective state for details on those programs of interest to your company.

Alabama: Approved industries investing $500,000 and creating five jobs in designated areas may deduct 5 percent of plant costs for 20 years against state income tax liability through the Favored Geographic Area Project.

Arkansas: Arkansas offers incentives with expanded tax credits and coverage of e-commerce and additional emerging technologies; the Venture Capital Investment Act and several new venture capital funds; and incubators including Bio-Ventures for biotechnology businesses.

Colorado: Colorado's Certified Capital Companies (CAPCOs) provide equity, debt or other forms of financing for start-up or expanding businesses. CAPCOs will have access to $100 million in 2002 and in 2004, allowing insurance companies to receive premium tax credits for investment in CAPCOs.

Connecticut: Through Connecticut's Urban/Industrial Site Investment Tax Credit Programs, local investors of an urban or industrial project may be eligible to receive a dollar-for-dollar corporate tax credit of 100 percent of their investment up to a maximum of $100 million.

Delaware: Energy Alternatives Program offers rebates retroactive to July 2001 to qualifying businesses in Conectiv's service area. The expanded Brownfields Matching Grant Program offers up to $50,000 in matching grants to municipalities, developers, and businesses to conduct Phase II assessments and remediation. The Information Technology Grant to Small Businesses offers funds that may be matched with in-kind salaries and services and may be used to train entry level to highly skilled employees at Delaware colleges or institutions.

Florida: Florida is spending $30 million to create high-tech "Centers of Excellence" at its universities that focus on R&D, tech transfer and promote public-private collaboration. The State has granted a grace period for companies unable to meet incentive performance requirements due to economic conditions.

Georgia: Through the Business Expansion and Support Act, tax credits for corporations have been increased and now can be taken against payroll taxes. Available are Corporate Headquarters Tax credits for companies creating 100+ jobs and investing at least $1 million in Georgia. The Machinery Component Sales Tax Exemption expands to include new manufacturing machinery and machinery components up to $150,000 in purchases for five years. Tax exemptions are also available for clean room equipment and computer hardware sales to lure high tech companies to Georgia.

Hawaii: Act 221 expands existing high-technology tax credits and added a new 4 percent credit for refitting older buildings for high-speed telecommunications.

Idaho: New initiatives include reducing corporate income tax from 8.0 to 7.6 percent; R&D credits involving 5 percent of basic research costs; a 3 percent transferable state income tax credit for qualified investments in broadband equipment throughout Idaho; and a Rural Component to its Workforce Development Training Fund.

Illinois: The Corporate Headquarters Relocation Act provides incentives to businesses with at least $25 billion in annual worldwide revenues that are relocating its corporate headquarters to Illinois with at least 250 headquarters employees. The company may receive: Expanded EDGE Illinois Income Tax Credits; Enhanced Property Tax Abatement by local government; and Recoupment of Relocation Costs through Relocation Grants.

Indiana: As of Jan. 1, 2003 there will be two types of tax credits: job creation and job retention. The General Assembly is also examining restructuring the state's tax system.

Kansas: The income tax credit for property taxes on commercial and industrial machinery and equipment was raised to 20 percent for property tax years 2005 and 2006, and 25 percent beginning in 2007. Two changes were made to the Investments in Major Projects and Comprehensive Training program regarding the statutory cap on program funding and the thresholds to qualify for retraining.

Kentucky: HB 525 includes income tax credits for R&D, and the Kentucky Investment Fund Act that offers a 40 percent tax credit against personal and corporate income tax and corporate license fees to investors in investment funds. Amendments to the Kentucky Securities Act encourages increased formation of venture capital and angel funding.

Maine: If approved, a June bond issue will create a rural development authority to build speculative buildings and redevelop commercial and industrial properties; recapitalize two small business loan programs; create two manufacturing research centers at the University of Maine and the University of Southern Maine; continue funding for non-profit biomedical laboratories; and expand floating Opportunity Zones by increasing available tax credits for venture capital in high unemployment areas to 60 percent.

Maryland: One Maryland promotes business growth through financial assistance and tax credits in "distressed" areas with high unemployment and low per capita income. The funding program may be used for development of industrial sites, for infrastructure improvements and to encourage private sector investment.

Michigan: In April, NextEnergy was unveiled to promote Michigan as a world leader in the research, development, commercialization and manufacture of alternative energy technologies. The blueprint proposes a 700-acre, tax-free NextEnergy Zone near Ann Arbor to facilitate an alternative energy business cluster.

Mississippi: Advantage Mississippi Initiative promotes the state to make best use of knowledge based resources throughout Mississippi by making the "University Connection"; and creates incentives and innovations that match the needs of the new economy.

Nebraska: Nebraska's Unicameral elected to retain all economic development incentives, despite extreme pressures to recoup monies earmarked for incentives. Examples are Invest Nebraska Act and the Rural Economic Opportunities Act.

Nevada: In the 2001 Session, Nevada legislature expanded tax abatement programs to include renewable energy such as wind and solar power. The package of abatements includes sales/use tax and property tax.

New Jersey: The Commercialization Center for Innovative Technologies encourages the growth of technology companies and the scientific breakthroughs. The New Jersey Economic Development Authority (NJEDA) approved an across-the-board reduction of interest rates in all NJEDA lending programs. Three additional Urban Enterprise Zones have been approved, bringing the total to 30 statewide.

North Carolina: In 2001, North Carolina updated a flexible, targeted discretionary grant program at the Governor's disposal with a new allocation of $15 million, up from $2 million in 2000. Companies can use the grants (with local government matches) to purchase new equipment, building renovations or infrastructure improvements.

Ohio: The Ohio Third Frontier Project, a 10-year plan, is the largest commitment ever to expanding the state's high-tech research capabilities and promoting start-up companies. The Job Retention Tax Credit encourages companies employing 1,000+ workers to retain jobs and make significant capital investments in buildings, equipment and machinery. The Net Worth Exemption for high-tech start-ups exempts the net worth tax for companies in biotechnology, R&D and technology transfer. Other programs include the Job Creative Tax Credit and a private venture capital fund for Appalachian Ohio.

Oklahoma: HUD designated a portion of Oklahoma City as a federal Empowerment Zone. The city is one of seven zones eligible for $17 billion in tax incentives. The ad valorem exemption has been extended for warehouse/distribution projects. The government has passed the right-to-work, and the former Indian Land Tax Incentive has been extended to 2004

Oregon: Eligible businesses that increase full-time jobs can have their newly invested property exempted from local taxes for 3 to 5 years in any enterprise zone. This includes E-commerce business activity in E-commerce zones that can also earn a tax credit on its State income/excise tax return. Most significant, qualifying businesses may receive a credit against annual State income or corporate excise tax liability, up to $2 million.

Pennsylvania: SelectSites offers businesses interested in expansion or relocation opportunities in Pennsylvania to get up and running fast with "ready to build" sites that already have the necessary infrastructure in place for a wide array of companies.

Tennessee: The Tennessee Department of Economic & Community

Development (ECD), the Tennessee Technology Development Corporation (TTDC) and several state and regional partners are working on four key components of the new Tennessee Means Technology initiative.

Utah: Utah's goals include doubling the number of engineering and computer science students by 2005, and building new education facilities to become a top-tier technology state.

Vermont: Vermont Training Program provides customized training for on-the-job, classroom, skills upgrade, or other specialized training with Vermont sharing in the cost. Year 2000 legislation keeps Vermont's captive insurance laws current. In the 2002 session, re-authorization of financial services tax credit is pending along with legislation for tax incentives for high tech companies.

Virginia: Virginia has liberalized the interpretation of its sales and use tax to include multiple industries, specifically clean rooms for the semiconductor and biotech industries. Legislation expands the Virginia Investment Partnership performance-based incentive program to include non-manufactures.

West Virginia: The Economic Opportunity Credit allows businesses that create 20+ jobs to offset up to 80 percent of state business tax liability over 10 years. The Manufacturing Investment Credit offers a 50 percent corporate net income and franchise tax based on facility investment with no new job creation required. Strategic R&D Credit can offset up to 100 percent of taxes for R&D projects with unlimited carry-forwards for 10 years. New, venture capital companies will be exempt from the franchise tax after January 2003. Financing incentives include HB 4005 Development Financing Pool; Linked Deposit Program; and venture capital.

Wisconsin: To foster the start up and expansion of technology businesses across the state, Wisconsin Gov. Scott McCallum proposed the creation of eight technology zones, each with $5 million in tax credits to be provided for technology business development activities. For each zone, the state Department of Commerce will allocate tax credits based on criteria such as job creation and retention, the project's potential for attracting additional high-technology businesses to the area, and the extent and nature of high tech used or produced by the business.

Wyoming: Wyoming has partnered with Georgia to improve workforce development with the Quick Start Program. Wyoming is the first state approved to license this nationally-recognized program. Wyoming companies and those relocating to Wyoming can take advantage of training certifications in customer service, manufacturing and warehousing and distribution.