To: Governor Janet Napolitano
Members of the Arizona Legislature
Citizens of the State of Arizona
The Arizona Department of Commerce is charged with promoting and enhancing economic
development and growth statewide. Collaborating with economic development partners statewide,
the Arizona Department of Commerce takes a wholly integrated approach to create jobs, expand the
tax base, increase per-capita income and promote a globally competitive business environment. The
agency provides reliable information and research, community assistance, and targeted business
attraction and development coupled with strategic workforce development.
Our call to action: “Our Job is JOBS!”
During fiscal 2005, the agency
• helped create 9,600 high-wage, high-value jobs throughout Arizona;
• the average salary for these jobs is $41,500;
• thirty-seven companies have expanded or located across the state;
• capital investment from these projects totals nearly $660 million.
The successes contained in this year’s report reflect the partnership and efforts of both public and
private stakeholders who work with Commerce to keep and grow quality jobs for all Arizonans.
Respectfully submitted,

Gilbert Jimenez
Director
Arizona Department of Commerce

TABLE OF CONTENTS
Community Development
Energy.....................................................................................................................2
Infrastructure Development....................................................................................5
Rural Development..................................................................................................7
Military Preservation ...............................................................................................9

Workforce Development
Job-Training Grant Program..................................................................................11
School-To-Apprenticeship Pilot Program ...............................................................16

Business Development
Business Development and Attraction...................................................................17
AZ Fast Grant Program ..........................................................................................19
International Trade Initiatives and Missions .........................................................20
Enterprise Zone (EZ) Program...............................................................................20
Tech Connect Magazine .........................................................................................22

Policy, Research and Planning
Commerce and Economic Development Fund ........................................................23
Commerce Economic Research Advisory Committee .............................................24

COMMUNITY DEVELOPMENT
ENERGY
Municipal Energy Management Program Grants
Low Income Weatherization Program
Rebuild Arizona Program
U.S. Department Of Energy Grants
INFRASTRUCTURE DEVELOPMENT
Economic Strengths Projects Grant Program
Growing Smarter Planning Grants
RURAL DEVELOPMENT
Rural Economic Development Initiative Grant Program
Rural Representatives
MILITARY PRESERVATION
City of Yuma / Yuma County Joint Land Use Plan
Barry M. Goldwater Range / Gila Bend Air Force Auxiliary Field
Joint Land Use Study

ENERGY
MUNICIPAL ENERGY MANAGEMENT PROGRAM (MEMP) GRANTS
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The Municipal Energy Management Program (MEMP) is designed to encourage,
assist, and provide technical assistance to help Arizona incorporated cities,
towns, counties, Indian tribes, and improvement districts reduce energyoperating costs. This is accomplished through the development and
implementation of energy management programs.
The MEMP approach to energy conservation and efficiency is a simple and direct
step-by-step approach.
ƒ The 1st step is to understand where energy is being consumed and how
much it costs, based on the utility bill analysis and audit.
ƒ The 2nd step identifies strategies for lowering energy costs.
ƒ The 3rd step assists in incorporating energy management into future
development through an energy management plan.
ƒ MEMP is part of Commerce’s Energy Office Rebuild Arizona Program.
(See Rebuild Arizona section for specific details.)
ƒ As part of MEMP, the Energy Office has made funds available for energy
saving projects. The office provides energy management training and
technical assistance, utility tracking analysis, and matching grant
assistance awards of $20,000 or less to communities with populations
of 70,000 residents or less. MEMP grants are funded from oil
overcharge funds.

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2005 Grants
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Total grants awarded: $131,571
Return on investment: Community savings of $47,734 (annual) and
$510,900 (over the life span of the projects)

Air conditioning replacement

Estimated
Savings to
Community
$11,960

$6,005 Graham County

Air conditioning replacement

$7,183

$1,535 Queen Valley
Sanitary District

Replacement of wastewater
blower motors

$43,077

$3,393 Town of Patagonia

Insulation of exterior walls and
interior ceiling

$23,748

$20,000 City of Flagstaff

LED traffic signals retrofit

$89,331

$20,000 City of Nogales

Solar inverter and isolation
transformer installation

$59,400

$15,093 City of Avondale

Replacement of water booster
pump motors

$40,698

$20,000 City of Casa
Grande

LED traffic signals retrofit

$20,000 Mohave County

Installation of occupancy sensors

$60,490

$19,000 City of Sierra Vista

Upgrade building automation
control system

$70,186

Grant
$4,400

Community
Town of
Wickenburg

$2,145 Rio Verde Fire
District

Project

Installation of thermal solar hot
water system

$100,126

$4,701

LOW INCOME WEATHERIZATION PROGRAM
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Total homes impacted: 700 per year.
Criteria for applicants: Arizona's defines “low-income” for eligibility purposes
as follows:
ƒ Income is at or below 150 percent of the federal poverty level determined
in accordance with criteria established by the Office of the Secretary, US.
Department of Health and Human Services.
ƒ Households that include members who have received cash assistance
payments under AFDC or SSI, are automatically eligible for
Weatherization assistance.

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Financial savings for low-income Arizonans:
ƒ An Oak Ridge National Lab study of the Weatherization Program found an
average of $218 annual energy cost saving per household assisted.
ƒ The dollar value of non-energy benefits resulting from the Weatherization
of a single home can be two to three times the energy cost savings. Nonenergy benefits are produced from improved property values, improved
health for the residents, growth in local employment, reduced arrearages,
and environmental externalities.
Long-term savings to the state:
ƒ Utility bill analysis completed by the Energy Office and by Oak Ridge
National Lab found a present value of saving (saving over the life of
measures) to be in the range of $1.30 to $1.50 per dollar spent.
ƒ Based on approximately $3.85 million in total funding from federal and
utility sources, present value of saving for the 2004 program year equals
approximately 5 to 5.7 million dollars.
Federal or state funding:
ƒ Federal funding - $1,501,782 from the Department of Energy and
$1,315,360 from Health and Human Services from the Low-Income Home
Energy Assistance Program.
ƒ Utility Funding - $350,000 from Southwest Gas, $500,000 from Arizona
Public Service, $200,000 from Tucson Electric Power.

REBUILD ARIZONA PROGRAM
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Since 2003, the Rebuild Arizona program has administered more than $226,000
in grant monies to implement energy program activities.
• Total homes impacted 1/03 to 7/05: 2,577
• Annual energy cost savings 1/03 to 7/05: $232,340
• State agency cost savings: More than $14 million
• Commerce’s Rebuild Arizona program teamed up with the AZ Dept of Housing to
modify the state's Housing Tax Credit Program to include energy-saving
requirements, plan review and site inspection requirements.
ƒ Through the Rebuild America grant, Commerce staffs an engineer's time
to perform plan reviews and make site inspections to ensure compliance
with energy standards.
• Rebuild Arizona grant monies also provide funds to:
ƒ Staff the Department's Municipal Energy Management Program MEMP
(see MEMP section for specific details).
Meet statutory requirement to work with state agencies to implement energy saving
improvements and complete the State Agency Annual Energy Usage Report and
submits the report to the proper authorities.
U.S. DEPARTMENT OF ENERGY (USDOE) GRANTS
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Federal funds provided by the US Department of Energy for various
energy projects.

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Special Project Grants fund projects for:
ƒ Clean Cities Initiatives
ƒ Industries of the Future
ƒ Building Codes and Standards
ƒ Rebuild America, Building America
ƒ Federal Energy Management Program
ƒ Photovoltaic Building Integrated Micro-Inverter
ƒ Wind Energy
ƒ Distributed Energy
ƒ Biomass
ƒ Air Quality Integration.
Objectives of the funding opportunities are:
ƒ To directly involve States in activities to accelerate deployment of energy
efficiency and renewable energy technologies
ƒ To facilitate the commercialization of emerging and underutilized
technologies; and
ƒ To increase the responsiveness of federally funded technology
development efforts to the needs of the marketplace.
Commerce has received $4,153,851 for 22 direct and pass-through grants over
the last 3 years, leveraging in $15,963,870 in matching funds for energy
efficient and renewable energy projects.

2005 Grants
Total grants awarded: $1,069,287
Return on investment: Leveraged $2,236,567 in local community match
funding.

INFRASTRUCTURE DEVELOPMENT
ECONOMIC STRENGTHS PROJECTS (ESP) GRANT PROGRAM
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The ESP Grant Program is a cooperative effort on behalf of Commerce and the
Arizona Department of Transportation that provides state-funded grants for road
construction and improvement projects in beneficiary cities, towns, and
counties.
This is a competitive grant-matching program wherein applicant communities
must be able to provide matching funds amounting to at least 10% of the
project total.
The primary purposes of the program are as follows:
ƒ Create and retain a significant number of jobs in Arizona
ƒ Foster capital investment in Arizona land, building, and equipment
initiatives
ƒ Improve state and local economy
Funding of up to $500,000 is available for grant allocation twice yearly in
January and July.

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Return on Investment: These grants provide funding to communities for
highway or road projects to assist businesses creating quality jobs in Arizona.
Both the state and local community benefit from sales and tax revenues
generated from increased job creation.

2005 Grants
Total grant awarded: $1,218,790 awarded in ESP grants
Return on investment: Assisted the creation of 409 new full time jobs and
capital investment of $44,299,675 million.
ƒ $476,100 grant awarded to Lake Havasu City to assist in improvements to
1,080 feet of SR 95 and Chenoweth Road. This project will help Lowe’s
Home Improvement Warehouse create new full-time and part-time jobs.
ƒ $372,690 grant awarded to the Kingman Airport Authority and the City of
Kingman to assist in the reconstruction of a portion of Commerce Drive
and the construction of an extension of Columbus Way. This project will
help Aqua Glass in creating 101 new jobs.
ƒ $370,000 grant awarded to the Greater Yuma Economic Development
Corporation and the City of Yuma to assist in the construction of 30th
Street. This project will help Alside Window Company create 188
new jobs.
GROWING SMARTER PLANNING GRANTS (GSPG)
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Growing Smarter Planning Grants are used to assist communities in their efforts
to meet state-mandated planning requirements resulting from the Growing
Smarter and Growing Smarter Plus laws.
Annually, the GSPG Program awards 6 grants of approximately $10,000 each to
small and rural cities, towns, and communities.
Example activities included in these efforts include coordinating public
participation programs, conducting research, preparing maps and graphs,
implementing capital improvement plans, and implementing plans to update
zoning ordinances.
In 2003 and 2003, Growing Smarter and Planning in Arizona 101 sessions were
conducted for the Florence Citizens Academy.

2005 Grants
Total granted: $60,000
• City of Maricopa, $10,000 to develop a Comprehensive plan for the
City of Maricopa.
• Town of Florence, $10,000 to review of Town Development Code in
accordance with the town’s General Plan.
• City of Holbrook, $10,000 to update General Plan in accordance with
Growing Smarter statutes.
• Town of Chino Valley, $10,000 to update Zoning Ordinance and
Subdivision Regulations

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Town of Pinetop/Lakeside, $10,000 to update of Subdivision Regulations and
development of Citizen Participation Program
Town of Paradise Valley, $10,000 to make General Code updates, including
sign ordinance, landscape ordinance, Special Use Permits, etc.

RURAL DEVELOPMENT
RURAL ECONOMIC DEVELOPMENT INITIATIVE (REDI) GRANT PROGRAM
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Created by the state legislature in 1987, the REDI Grant Program promotes
economic development in rural areas by providing rural organizations with
state funds used to create new jobs, manage community resources, and
develop community marketing strategies that encourage capital investment.
The return on investment (the total leverage amount for REDI 1/03 to date)
was $2,323,465. The majority of the grant funding was used to perform
market analysis, business relocations, site selections, and workforce studies.
REDI assisted with seed funding for initial business and airpark development
and expansion projects and a two-phase freight facility market analysis.
The REDI Grant Program also includes a grant-matching program to
fund services such as consultation and research projects that produce
statewide benefits.
Re statewide benefits have been generated from grant matching: Grant
matching has enabled many rural communities with limited budgets to conduct
required studies and assessments aimed at improving economic development
through job growth or capital investment. The REDI program affects the state
by giving resources to rural communities to help attract new business
development from other states and look for ways to retain and expand existing
businesses. Because REDI distributes its grants throughout the state, we all
benefit due to quality of life improvements that increase sales tax revenue and
job growth in all counties.
Organizations must receive REDI accreditation before they are eligible to receive
grant funds. As of 5/05, 18 organizations representing 37 communities held
REDI accreditation.

2005 Grants
Total grants awarded: $126,780
Return on investment: Leveraged by $619,637 in local funds
ƒ $3,725 grant awarded to the Greater Case Grande Valley Economic
Development Foundation to be used to update the current computer
hardware and software in Foundation office.
ƒ $15,000 grant awarded to the Globe-Miami Economic Development
Corporation and Regional Chamber of Commerce to be used to identify
and evaluate possible sites for an Industrial/Business Park in the
Globe/Miami/San Carlos area.
ƒ $8,105 grant awarded to the Economic Development for Apache County
Commission to help fund the development of marketing materials for a

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special community event that is expected to draw over 400 participants
and enhance the local economy.
$8,000 grant awarded to the Payson Economic Development Corporation
to help fund the design and production of marketing materials.
$8,250 grant awarded to the Bullhead City Economic Development
Authority to help fund an email marketing program and design and
develop a website presenting the benefits of moving to Bullhead City.
$8,000 grant awarded to the Graham County Economic Development
Commission to help fund the repair and improvement of two “Welcome
to Pima” signs.
$12,500 grant was awarded to Greater Flagstaff Economic Council to
help identify a final site selection for the Northern Arizona Freight
Facility Site Selection.
$10,750 grant was awarded to Lake Havasu Partnership for Economic
Development to conduct a feasibility study at Lake Havasu Bluffs Business
and Industry Park.
$10,000 grant was awarded to White Mountain Regional Development
Corporation to determine a market niche at the Town of Taylor’s Business
Technology Park.
$9,840 grant was awarded to Prescott Valley to fund a marketing
campaign focused on business relocations.
$7,645 marketing project was awarded to Greater Flagstaff Economic
Council to help fund Route 66 Day’s event.
$15,000 grant was awarded to Town of Florence to perform a marketing
analysis of their retail areas.
$10,000 grant was awarded to the Town of Wickenburg to perform a
downtown land use circulation and concept plan.

REGIONAL REPRESENTATIVES
Since April 2004, the Greater Rural Economic Project has benefited communities
throughout rural Arizona.
• The legislature approved funding for Commerce Regional Representatives
in 2004.
• As a result of the success of this initiative, demand for state-level economic
development services provided to rural Arizona dramatically increased.
• Regional representatives service every county in the state, as well as all Tribes.
• Regional representatives provide professional and timely assistance to rural
customers in regards to community, economic and workforce development
projects and activities. Working directly with key-stakeholders, the Regional
Representatives interact with elected officials, economic developers, chamber
of commerce directors, tribal representatives and any/all other key individuals
responsible for the economic climate of their communities and the Regions as
a whole.
• Specifically, the work of the Regional Representative involves the following:
ƒ Meet with community councils, local business, civic organizations and
trade associations to discover the needs of the area and how Commerce

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can assist them. Provide information regarding Commerce programs and
assist or facilitate access to these programs;
Provide planning services, meeting facilitation, board training services to
assist various programs within the Department of Commerce (Main
Street, REDI, Workforce Development, Community Planning, Business
Attraction, Film, etc.) to their designated organizations and
municipalities. These may include but are not limited to the
development of short and long term policies and objectives, developing
stronger partnerships, conflict resolution, or other issues to enhance
economic development sustainability;
Provide technical assistance to organizations and businesses making
application to the Job Training and Apprenticeship programs. Also provide
outreach for the Arizona Workforce Connection;
Provide outreach and technical assistance to businesses through the
Global Business Development Division;
Work directly with all 20 tribal communities throughout Arizona, allowing
greater responsiveness to the community, economic and workforce needs.

MILITARY PRESERVATION
CITY OF YUMA / YUMA COUNTY JOINT LAND USE PLAN
Implementation Strategies Review and Potential Implementation Measures
• September 2005 - November 2005
• This project was under the auspices of the Arizona Military Regional
Compatibility Project which was conceived as a proactive statewide endeavor
to convene the stakeholders around each base – the relevant jurisdictions,
base personnel, landowners, and other interested parties – to address land
use compatibility issues.
• Funding: Partially funded by a grant from the Department of Defense Office
of Economic Adjustment, partially ADOC funded.
• Area Targeted: Yuma County and the City of Yuma
• Study Issues: The review of the implementation strategies identified in the
City/County Joint Land Use Plan was a means to apply implementation
measures honed in other Joint Land Use Studies across the state to help
update the existing JLUP.
Results and Implementation Strategies included the following 11 topics:
• Coordination with the Governor's Military Affairs Commissions
• Support for State Trust Land Reform
• Land Acquisition
• Department of Defense Purchase of Conservation Easements
• Land and Water Conservation Fund
• Military Installation Fund
• Purchase of Development Rights
• Transfer of Development Rights

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Partnerships with Non-Governmental Organizations to Facilitate Transfers of
Dev. Rights
Enhanced local notification and disclosure
Best practices techniques

BARRY M. GOLDWATER RANGE / GILA BEND AIR FORCE AUXILIARY FIELD
JOINT LAND USE STUDY
May 2004: BMGR/Gila Bend AFAF Joint Land Use Study began under the
sponsorship of Commerce. Completion in January 2005.
The JLUS is part of the Arizona Military Regional Compatibility Project, which was
conceived as a proactive statewide endeavor to convene the stakeholders around
each base – the relevant jurisdictions, base personnel, landowners, and other
interested parties – to address land use compatibility issues.
• Funding: Partially funded by a grant from the Department of Defense Office
of Economic Adjustment, partially ADOC funded.
• Areas Targeted: Areas within the Town of Gila Bend, Maricopa County the
City of Yuma and Yuma County.
• Study Issues: Planned development in the Interstate 8 Corridor north of the
Barry M. Goldwater Range, and other development on the North East side of
Yuma also adjacent to the Range, state trust lands,
• Results/Implementation Strategies:
ƒ Joint Land Use Study Recognition and Adoption by appropriate governing
bodies in affected jurisdictions.
ƒ Revision of Airport Environs Zone Plans and Ordinances
ƒ Support for Recommendations of the Governor’s Military Facilities Task
Force (and legislative endeavors resulting)
ƒ Support for Recommendations of the State Trust Land Reform Group
ƒ Ongoing Organization for JLUS Implementation
ƒ Department of Defense Land Acquisition
ƒ Department of Defense Purchase of Conservation Easements
ƒ Military Installation Fund
ƒ Land Acquisition through Bonds
ƒ Purchase of Development Rights
ƒ Transfer of Development Rights
ƒ Enhanced Local Notification and Disclosure

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Workforce Development
JOB-TRAINING GRANT PROGRAM
SCHOOL-TO-APPRENTICESHIP PILOT PROGRAM
WORKFORCE POLICY

JOB-TRAINING GRANT PROGRAM
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The Arizona Job Training Program is a reimbursable grant program that uses
state funds to support the design and delivery of customized training to meet
specific needs of employers, create new jobs, and increase the skills and wage
levels of employees in Arizona.
The primary objectives of the program are to create jobs by attracting potential
employers to Arizona and to retain and improve the employment situation of
current workers, especially in regards to training level and wages. Additionally,
the program is designed to attract employers to enterprise zones, which are
areas of high poverty and/or unemployment rates.
Grants are provided to businesses for training new and existing employees.
Each beneficiary is given two years to complete job-training programs before
they are able to apply for additional grant funds.
The program has numerous benefits:
ƒ Employees benefit by receiving advanced job training.
ƒ Business firms benefit from having a highly skilled workforce.
ƒ The state and local communities benefit by receiving sales, income, and
property tax revenue.
The “Net New Hire” portion of the program allows businesses to apply for grant
funds that reimburse up to 75% of the costs expended for new employee
training.
The “Incumbent Worker” portion of the program provides funding for up to 50%
costs of training targeted at improving the skills of existing employees.
FY 06: For the first time in four years, the legislature will not transfer funds
from the Job Training Grant Program to fund other state programs.
Grant Recipient Success Story:
“In the competitive aerospace and defense industry, well-trained employees are
a prerequisite to success. The Arizona Job Training grant enables our growing
organization to further expand the unique skill base of our employees in Sierra
Vista and develops a stronger workforce for the region in general.”
– Roger Fate, Senior Vice President, NewTec, Sierra Vista

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2005 Grants
Total grants awarded: $15,807,056
Breakdown of rural businesses, small businesses and large businesses
(note: some businesses are categorized as both small and rural - so totals may not
reflect the true number of participating companies):
• Small: 63
• Rural: 26
• Large: 49
How many new/existing employees were trained: 25,057
How many new jobs were created: 5,181
How many incumbent workers were retained and trained: 19,876
How many companies participated/benefited: 113
Awarded:
• A.I.G., LLC $1,812 to train 2 existing employees in Phoenix.
• Abitibi Consolidated Sales Corp $256,834 to train 440 existing employees
in Snowflake.
• Ace Hardware Corporation $3,163 to train 10 existing employees in
Prescott Valley.
• Advanced Ceramics Research Inc. $122,166 to train 6 existing employees
and to create and train 13 new jobs in Tucson.
• Afni, Inc $101,130 to train 144 existing employees in Tucson.
• AIG SunAmerica $88,613 to train 194 existing employees in Phoenix.
• Alicat Scientific, Inc. $12,520 to train 16 existing employees in Tucson.
• Amcor Sunclipse North America Business Service Center $88,973 to train 68
existing employees in Tempe.
• Ames Business & Learning $167,241 to train 33 existing employees
in Chandler.
• Analyze Inc. $88,657 to train 25 existing employees in Chandler.
• Architecture Company, The $13,912 to train 11 existing employees
in Tucson.
• Arizona Sports Complex LLC $7,591 to create and train 10 new jobs
in Glendale.
• Associated Materials Inc $161,629 to create and train 104 new jobs in Yuma.
• AT Holdings Corp dba ARGO Tracker $62,362 to create and train 16 new jobs
in Tucson.
• Atlas Weathering Services Group - DEST $47,832 to train 31 existing
employees in Phoenix.
• Automatic Data Processing Inc. $66,600 to train 149 existing employees
in Chandler.
• Aviation Communication and Surveillance Systems (ACSS) $441,114 to train
234 existing employees and to create and train 20 new jobs in Phoenix.
• Bombardier Services Corp dba Bombardier Regional Tucson $658,782 to train
68 existing employees and to create and train 51 new jobs in Tucson.
• Breault Research Organization $67,147 to train 22 existing employees
in Tucson.

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Bull Moose Tube of Casa Grande LLC $160,652 to train 5 existing employees
and to create and train 23 new jobs in Casa Grande.
Cambridge Filter Corporation $69,000 to train 12 existing employees
in Gilbert.
Castro Engineering $56,722 to train 42 existing employees in Tucson.
Catalina Tool & Mold, Inc. $157,705 to train 54 existing employees
in Tucson.
Centex Home Equity Company $326,117 to create and train 405 new
jobs in Tempe.
Citicorp Credit Services, Inc. $352,726 to create and train 1300 new
jobs in Tucson.
Collectcorp Corporation $556,049 to train 88 existing employees and
to create and train 189 new jobs in Phoenix.
Competitive Engineering Inc. $18,192 to train 20 existing employees
in Tucson.
Connecticut General Life Insurance Company for CIGNA $43,643 to
train 412 existing employees in Phoenix.
Coyote Moon Health Resort & Spa $59,448 to create and train 14 new jobs
in Tucson.
CVS Pharmacy $110,000 to train 40 existing employees in Phoenix.
DHL Information Services Inc. $243,244 to train 414 existing employees and
to create and train 125 new jobs in Scottsdale.
Diamondback Tactical $101,250 to train 15 existing employees in Peoria.
Direct Alliance Corporation $124,643 to train 194 existing employees
in Tempe.
DRG Technologies, Inc. dba Impressive Labels, SuperFast Labels $102,064
to train 125 existing employees in Safford.
DunnAir Business Jet Completion Center $335,063 to create and train 138
new jobs in Tucson.
Edward Jones $518,433 to train 224 existing employees and to create and
train 190 new jobs in Tempe.
EOS Technologies, Inc. $517,841 to train 37 existing employees and to
create and train 39 new jobs in Tucson.
First American Title Insurance Company $56,735 to train 973 existing
employees in Phoenix.
Future Fabricators, Inc. $10,729 to train 23 existing employees in Phoenix.
GenoSensor $9,625 to train 1 existing employee and to create and train
1 new job in Tempe.
Golden Eagle Distributors, Inc $161,538 to train 167 existing employees
in Tucson.
Goodrich Turbomachinery and Universal Propulsion $289,439 to train
635 existing employees to create and train 25 new jobs in Chandler.
Government Employees Insurance Company dba GEICO $91,291 to
train 94 existing employees in Tucson.
Granite Construction $134,473 to train 257 existing employees and to create
and train 157 new jobs in Tucson.
Holsum Bakery, Inc. $462,381 to train 485 existing employees and to create
and train 164 new jobs in Tolleson.

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Homeowners Loan Corp. $216,749 to train 163 existing employees
in Phoenix.
Honeywell Aerospace $648,700 to train 2,360 existing employees
in Phoenix.
HydrGeophysics, Inc. $27,773 to train 10 existing employees in Tucson.
Ideation Design Group $1,485 to train 4 existing employees in Tucson.
IMC Magentics Corporation $62,440 to train 31 existing employees in Tempe.
Infonxx $11,250 to train 35 existing employees in Tucson.
Institute for Supply Management $58,035 to train 72 existing employees
in Tempe.
IBM $700,000 to train 755 existing employees in Tucson.
InterTech Computer Products, Inc. $109,499 to train 34 existing employees
in Phoenix.
Intuit, Inc. $59,823 to train 53 existing employees in Tucson.
Knight Refrigerated $246,580 to create and train 140 new jobs in Phoenix.
L-3 Communications Government Services, Inc. $5,375 to train 1 existing
employees in Sierra Vista.
Laboratory Sciences of Arizona $700,000 to train 552 existing employees
in Tempe.
Machine Solutions Incorporated dba MSI $160,608 to create and train 70
new jobs in Flagstaff.
Madden Publishing Inc. $25,818 to train 49 existing employees in Tucson.
Management & Training Corp - AZ State Prison $50,280 to create and train
150 new jobs in Golden Valley.
M&I Windows & Doors/M&I Metals $249,749 to train 402 existing employees
in Prescott Valley.
Modtech Holdings Inc $11,884 to train 50 existing employees in Phoenix.
Mogollon Health Alliance $4,750 to train 1 existing employees in Payson.
Mohave Engineering Associates Inc. $5,225 to train 49 existing employees
in Kingman.
Mountain Power $64,645 to train 70 existing employees in Tucson.
MRS Associates, Inc. $42,500 to create and train 250 new jobs in Phoenix.
Nat'l Assoc. of Minority Contractors of AZ Chapter $279,220 to create and
train 38 new jobs and to train 117 existing employees in Phoenix.
Nestle Purina PetCare Company $134,711 to train 127 existing employees
and to create and train 6 new jobs in Flagstaff.
Novakinetics, LLC $67,741 to create and train 31 new jobs in Flagstaff.
Opta Systems, LLC dba Go Video $2,118 to train 10 existing employees
in Scottsdale.
Orbital Sciences Corporation $322,211 to train 916 existing employees and
to create and train 215 new jobs in Chandler.
OZ Optics Inc. $6,909 to create and train 1 new jobs in Tucson.
Paragon Space Development Corporation $8,415 to train 4 existing
employees in Tucson.
Phase 2 Solutions, Inc. $103,758 to create and train 700 new jobs
in Phoenix.
Phoenix Analysis and Design Technologies $10,906 to train 10 existing
employees in Tempe.

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Phoenix Electrical Joint Apprenticeship and Training Committee $4,750
to train 76 existing employees in Phoenix.
Plastic Technologies, Inc. - West $17233 to train 1 existing employee
and to create and train 7 new jobs in Eloy.
Poore Brothers Inc. $13,682 to train 50 existing employees in Goodyear.
Precision Shooting Equipment, Inc. $18,422 to train 88 existing employees
in Tucson.
Price Industries $89,383 to create and train 114 new jobs in Casa Grande.
Printpack, Inc $31,365 to train 32 existing employees in Prescott Valley.
Provac Inc. $19,513 to train 3 existing employees in Tempe.
Ramsoo Inc. dba Rainbow International $10,207 to train 10 existing
employees in Tucson.
Raytheon Missile Products $700,000 to train 1,949 existing employees
in Tucson.
Republic Plastics LTD $193,182.00 to create and train 25 new jobs
in San Manuel.
Research Integrations, Inc. $5,693 to train 11 existing employees in Tempe.
RF Power Devices $64,313 to train 10 existing employees in Phoenix.
Ridgetop Group, Inc. $41,256 to train 26 existing employees in Tucson.
Sabina Products, Inc. $9,922 to create and train 5 new jobs in Phoenix.
Sargent Controls & Aerospace $234,782 to train 210 existing employees
in Marana.
Schaller Anderson Inc. $209,328 to train 243 existing employees in Phoenix.
Sedona Rouge, LLC $94,454 to train 8 existing employees and to create and
train 80 new jobs in Sedona.
Sion Power Corporation $46,491 to train 20 existing employees in Tucson.
Skinner Tameron & Company, LLP $2,742 to train 3 existing employees
in Tempe.
Smitthipong & Rosamond Associates, Inc. $8,306 to train 5 existing
employees in Tucson.
Southern AZ Aids Foundation $18,759 to train 52 existing employees
in Tucson.
Southwest Airlines Co $433,338 to train 4,265 existing employees
in Phoenix.
Southwest Hazard Control $2,200 to train 10 existing employees
in Tucson.
Spectrum Printing Company, LLC $45,082 to train 22 existing employees
in Tucson.
Suntec Concrete Constructors, Inc. $149,191 to train 207 existing employees
in Phoenix.
TA Caid Industries, Inc. $73,027 to train 75 existing employees in Tucson.
Tristar Engineering & Management $26,000 to train 10 existing employees
and to create and train 19 new jobs in Phoenix.
Tucson Container Corporation $3,390 to train 3 existing employees
in Tucson.
Tucson Embeded Systems $21,485 to train 15 existing employees
in Tucson.
Tucson Utilities Contractors Associations $274,091 to create and train
45 new jobs in Tucson.

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Ventana Medical Systems, Inc. $443,248 to train 394 existing employees
in Tucson.
Verde Valley Fire District $31,088 to create and train 1 new jobs and to
train 39 existing employees in Cottonwood.
Wells Fargo Bank - Consumer Credit Corp $285,326 to create and train
300 new jobs in Phoenix.
Western Urological Associates, PC $7,045 to train 13 existing employees
in Lake Havasu.
White Mountain Labs, LLC $34,375 to train 5 existing employees in Phoenix.
Wulfsberg Electronics Division $21,451 to train 38 existing employees
in Prescott.
Younger Brothers Construction $196,698 to train 358 existing employees
in Tempe.

SCHOOL-TO-APPRENTICESHIP PILOT PROGRAM
The School-to-Apprenticeship pilot program develops training track, partnering with
schools, businesses, governmental agencies and students. Focus: Humbolt School
District in Yavapai County.
• Partners: Prescott Valley Industrial Council, Prescott Valley businesses,
community leaders, the Humboldt Unified School District (HUSD), and the
Arizona Department of Education.
• Students will receive instruction and experience in all aspects of a potential
occupation through service learning, job shadowing, job placement and
apprenticeship training.
• The program is part of an educational reform movement designed to increase
students’ motivation to learn by demonstrating the connection between
school and work. Mr. Marks encourages other interested business leaders to
join this effort to address additional workforce needs in the community.
• This program is now facilitated by the District itself.

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Business Development
BUSINESS DEVELOPMENT AND ATTRACTION
AZ FAST GRANT PROGRAM
INTERNATIONAL TRADE INITIATIVES AND MISSIONS
ENTERPRISE ZONE (EZ) PROGRAM
TECH CONNECT MAGAZINE

BUSINESS DEVELOPMENT AND ATTRACTION
Commerce markets Arizona worldwide in an effort to attract new business and
high-wage jobs. Commerce is also instrumental in relocating Arizona companies to
new industry areas and expanding existing companies into new areas.
General Inquiries:
• Total new locates, expansions and retentions in Arizona: 37
• Total # Jobs created: 9,600 new jobs
• Total capital investment: $660 million
• Average salaries: $41,537 – Higher than average
2005 NEW LOCATES
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Assisted the location of Knight Refrigerated to Phoenix, resulting in the creation
of 175 new jobs and a $21,500,000 capital investment.
Assisted the location of Bull Moose Tube Company to Casa Grande, resulting in
the creation of 32 new jobs and an $8,100,000 capital investment.
Assisted the expansion of Countrywide Financial Corporation to Chandler,
resulting in the creation of 2500 new jobs and a $15,600,000
capital investment.
Assisted the location of Medline Industries, Inc. to Tolleson, resulting in the
creation of 50 new jobs and a $2,000,000 capital investment.
Assisted the expansion of Machine Solutions, Inc. to Flagstaff, resulting in the
creation of 70 new jobs.
Assisted the location of Heyco to Phoenix, resulting in the creation of 30 new
jobs and a $1,000,000 capital investment.
Assisted the location of McKesson Corporation to Scottsdale, resulting in the
creation of 300 new jobs and a $3,000,000 capital investment.
Assisted the location of Walmart Stores to Kingman, resulting in the creation of
500 new jobs and a $60,000,000 capital investment.
Assisted the location of Masco to Chandler, resulting in the creation of 325 new
jobs and a $14,500,000 capital investment.
Assisted the location of Verizon to Chandler, resulting in the creation of 1200
new jobs and a $20,000,000 capital investment.

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Assisted the expansion of Advance Ceramics Resarch to Tucson, resulting in the
creation of 13 new jobs and a $- capital investment.
Assisted the location of Innovative Plastics to Phoenix, resulting in the creation
of 40 new jobs and a $1,200,000 capital investment.
Assisted the location of Collect Corp. to Phoenix, resulting in the creation of 200
new jobs and a $2,500,000 capital investment.
Assisted the location of Plastic Technology to Casa Grande, resulting in the
creation of 34 new jobs and a $4,150,000 capital investment.
Assisted the location of Lydian Trust to Phoenix, resulting in the creation of 315
new jobs and a $4,000,000 capital investment.
Assisted the Retention of Analyze, Inc. in Chandler.
Assisted the location of LeNature's to Phoenix, resulting in the creation of 335
new jobs and a $200,000,000 capital investment.
Assisted the expansion of MRS Associates to Phoenix, resulting in the creation of
250 new jobs and a $500,000 capital investment.
Assisted the location of Milgard Windows to Surprise, resulting in the creation of
300 new jobs and a $36,000,000 capital investment.
Assisted the location of Associated Materials, Inc to Yuma, resulting in the
creation of 189 new jobs and an $18,000,000 capital investment.
Assisted the location of Northwestern Industries to Yuma, resulting in the
creation of 40 new jobs and a $7,000,000 capital investment.
Assisted the expansion of Ferguson Enterprises to Phoenix, resulting in the
creation of 150 new jobs and a $1,700,000 capital investment.
Assisted the location of Northeastern Industustries to Camp Verde, resulting in
the creation of 27 new jobs and a $2,200,000 capital investment.
Assisted the location of Tomcar to Phoenix, resulting in the creation of 200 new
jobs and a $5,000,000 capital investment.
Assisted the location of Aqua Glass Corp to Kingman, resulting in the creation of
100 new jobs and a $14,250,000 capital investment.
Assisted the location of GST Industries to Mesa, resulting in the creation of 20
new jobs and a $274,000 capital investment.
Assisted the location of Cessna to Mesa, resulting in the creation of 200 new
jobs and a $16,000,000 capital investment.
Assisted the location of Rockwell Collins to Scottsdale, resulting in the creation
of 9 new jobs and a $250,000 capital investment.
Assisted the location of Bobcat Company to Tucson, resulting in the creation of 3
new jobs and a $1,200,000 capital investment.
Assisted the location of Monster to Tempe, resulting in the creation of 350 new
jobs and a $7,000,000 capital investment.
Assisted the location of Norweigan Cruise Lines to Mesa, resulting in the creation
of 500 new jobs and a $5,000,000 capital investment.
Assisted the location of GMAC Mortgage to Phoenix, resulting in the creation of
400 new jobs and a $2,000,000 capital investment.
Assisted the location of E-Bay to Phoenix, resulting in the creation of 55 new
jobs and a $120,000,000 capital investment.
Assisted the location of Republic Plastics to San Manuel, resulting in the creation
of 100 new jobs and a $7,000,000 capital investment.
Assisted the location of DHL Worldwide to Phoenix, resulting in the creation of
38 new jobs and a $3,000,000 capital investment.

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Assisted the location of Hamilton-Sunstrand to Phoenix, resulting in the creation
of 250 new jobs and a $52,000,000 capital investment.
Assisted the location of Vanguard Financial Services to Scottsdale, resulting in
the creation of 300 new jobs and a $4,000,000 capital investment.

AZ FAST GRANT PROGRAM
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AZ FAST Grants are awarded to encourage the growth and development of
technology companies in Arizona.
ƒ AZ FAST Grants assist Arizona businesses in developing and
commercializing their technology and products and securing federal
business and technology funding under the Small Business Innovation and
Research (SBIR) Program and the Small Business Technology Transfer
(STTR) Program.
50% of FAST Grant funding comes from Commerce Economic and Development
Commission state funds.
ƒ The remaining 50% of funding comes from the U.S Small Business
Administration Federal and State Technology (FAST) Partnership Program
and national agencies such as NASA, USDA, the Department of Defense,
the Department of Education, the Environmental Protection Agency, the
National Science Foundation, the US Departments of Commerce and
Transportation, and The National Institutes of Health.
Grant Recipient Success Story:
“The AZ FAST grant allowed Kutta Consulting the tools and opportunity to build
a prototype PDA (Personal Digital Assistant)-like device to control and monitor
sensors on small unmanned aerial vehicles (SUAVs). Soldiers in the field will be
able to quickly conduct short-range surveillance with this hand-held device.
Right now they have to wait for information gathered by manned or unmanned
aerial vehicles to be sent through a long chain of command before it makes it
into the soldier’s hands. This device has military as well as public safety
applications and can be used in the future for border patrol, police work, and
scouting and monitoring fires.”
– Douglas Limbaugh, Owner, Kutta Consulting, Inc.

2005 Grants:
A total of $110,000 (half state funded, half federally funded) was awarded to 22
companies. This investment has the opportunity to be the catalyst for $2,519,068.
Awarded grants:
Kutta Consulting

$

780,000

Submitted grants:
Kinetic Muscles
Kronos Science Lab
White Mountain Lab
Advanced Ceramics Research
5AM Solutions
Seventh Rank Associates

$
$
$
$
$
$

100,000
300,000
70,000
140,000
99,720
119,348

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Medipacs
QuantTera
Piezo Energy
Global Building Systems
BTEK Software
BioLogix
Tucson Embedded Systems
Engineering Science Analysis Corp
2005 AZ FAST SUBMITTALS

$
100,000
$
100,000
$
150,000
$
70,000
$
120,000
$
100,000
$
170,000
$
100,000
$ 1,739,068

INTERNATIONAL TRADE INITIATIVES
AND MISSIONS
Commerce provides long-term assistance to Arizona businesses so they become
more competitive outside the United States. The Department works with small- and
medium-sized Arizona companies that are new to exporting or are expanding to
new markets, and works to attract foreign-direct investment into Arizona.
2005 Trade Initiatives and Missions
Economic impact is discovered over many years, as a result, it’s challenging
to predict.
Trade Shows Attended – Information on companies that attended number of
meetings is still being compiled.
• Farnborough Air Show
• Trade mission to Monterrey, Mexico, for multiple industries
• Bio Trade Mission to Yokohama, Japan will take place in an effort to match
bio-industry business owners in Arizona with their counterparts in Japan
through JETRO (Japan External Trade Organization).
• Mexica, Germany

ENTERPRISE ZONE (EZ) PROGRAM
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Purpose: Improve the local economies of state areas with high poverty and
unemployment rates by increasing incentives and opportunities for private
investment in “enterprise zones.”
In order to encourage private investment as well as job creation and retention in
zones, the EZ Program offers two major benefits:
ƒ Income tax credits for non-retail businesses or insurers creating new jobs
in a zone.
ƒ Property reclassification for small manufacturers investing in a zone.
General Overview
Overall (from 1/03 to date):

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Tax credits companies reported: 18,535 new jobs were created.
Tax credits companies reported: 24,620 continuing jobs.
Property reclassification manufacturers reported: 8,776 jobs were
supported.
ƒ Capital investment: Tax credit companies and property reclassification
manufacturers made over $2.9 billion dollars in capital investment.
ƒ Total new job tax credits? $39,092,195 tax credits were reported.
ƒ Total # enterprise zone companies?
o Tax credit companies: 587 companies reported tax credits.
o Property Reclassification manufacturers: A total of 17
manufacturers were newly certified during FY03 – FY05.
o Since the inception of the property reclassification program 63
manufacturers have been certified for the benefit. Many have
received the benefit an no longer qualify thus in:
♦ FY03 = 39 active manufacturers
♦ FY04 = 43 active manufacturers
♦ FY05 = 35 active manufacturers
Enterprise Zone Designations:
ƒ Yavapai County/Chino Valley received an enterprise zone designation,
bringing the total number of enterprise zones to 24.
ƒ FY04 – Greenlee County, Bullhead City, Lake Havasu City and Camp
Verde received enterprise zone designation. Bringing the total number
of enterprise zones to 25.
ƒ FY05 – City of Mesa received enterprise zone designation. Bringing the
total number of enterprise zones to 26.
New jobs and capital investment required for income tax credits: No capital
investment is required to qualify. Rather in any year a company creates a net
new quality job, it can qualify for a tax credit. In regard to the property
reclassification benefit, a manufacturer must make a capital investment to
qualify for the benefit. The capital investment required is between $500,000 and
$2 million depending on the zone location.
In what specific zone areas (i.e. cities, counties towns) are they located? Map
available.
ƒ
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2005
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A total of 204 companies reported $8,586,635 in tax credits at 333 business
locations. Many of the companies who reported in FY05 have several business
locations in different zones. With a combined investment of over $733 million
dollars, these companies created 5,627 new jobs with an average wage of
$16.58 per hour for the State of Arizona. These companies also reported 2,873
continuing second year jobs and 1,944 continuing third year jobs.
There were 35 active manufacturers in the program, 4 of which were newly
certified in FY05. With a combined investment this year of over $65 million
dollars, these companies employed 2,629 Arizonans with an average wage of
$14.02 per hour.
ƒ 32 small manufacturers, 2 woman-owned manufacturer and 1
minority-owned manufacturer, which totals 35 active manufacturers.
Company and district-specific data has not yet been complied.

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TECH CONNECT MAGAZINE
Launched in 2004 the inaugural issue of Tech Connect Magazine, a tool to promote
Arizona's innovation and technology assets. Distribution will be made through the
Phoenix Business Journal, Inside Tucson Business, and economic development
partners statewide.
• 20,000 distribution statewide
• Governor is distributing to over 1,200 C-level execs in California
• Trade offices are distributing overseas
• Funded by advertising revenue

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POLICY, RESEARCH AND PLANNING
COMMERCE AND ECONOMIC DEVELOPMENT FUND
COMMERCE ECONOMIC RESEARCH ADVISORY COMMITTEE

COMMERCE AND ECONOMIC DEVELOPMENT
COMMISSION (CEDC) FUND
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The CEDC is the state’s economic policy and planning board and is chaired by
the Director of Commerce.
The CEDC Fund provides financial assistance to support Arizona economic
development efforts and serves as the funding source for several separate grant
programs, including the Municipal Energy Management Program.
Fund investment focus areas are 1) Strategic Research and Initiatives, 2)
Technology Sector Project Capital, 3) Direct Assistance to Arizona Businesses,
and 4) an Intermediary Participation Program
CEDC funds are state-based and can be used to support an array of economic
development activities including research and development of prescription
drugs, business production of new technologies, and expanding military
facilities.

2005 Activities
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Seven new CEDC Commissioners were appointed in FY 05: Jose Cardenas,
Steven Roman, Fred DuVal, Vicki Chandler, Evelyn Casuga, Ruben Ramos and
Dale Ann Bailey.
The CEDC continued research to support its statutory responsibility to develop
the strategic long-range economic development plan for Arizona.
$60,000 funding match to leverage up to $180,000 in federal funding for the
Florence Military Reservation and Silverbell Army joint land use studies. These
studies help ensure land use planning and development respects the mission
and needs of critical military assets.
$200,000 loan to the University of Arizona for the feasibility studies associated
with establishing a new bio park at the University of Arizona.
$200,000 grant for the legal and administrative costs to establish CPATh, a
partnership of the University of Arizona, US Food and Drug Administration and
SRI (formerly the Stanford Research Institute) to establish a new drug
development program.
$35,000 to match ABOR funds to develop a business plan for the Arizona Water
Institute. This project is an outcome of the world class research and
development strengths in hydrology found throughout Arizona’s university
system and in sustainably-oriented semiconductor companies such as Intel, ON
and others.
The CEDC also conducted an economic analysis of the solar industry and a
survey to identify the industry’s workforce and business development needs and
challenges. In addition to water, solar is a critical industry development
opportunity for Arizona.

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COMMERCE ECONOMIC RESEARCH
ADVISORY COMMITTEE
Established 2003 and Ongoing: Established the Commerce Economic Research
Advisory Committee, which includes 12 volunteer economists/planners from public
and private sectors who serve as an advisory and peer review body for economic
information and research projects (including all three universities). This body
brings the collective intelligence of Arizona's leading economists together to focus
on economic issues for the benefit of state government. Additionally, the three
university business research units are now working together instead of duplicating
efforts
The impact of the ERAC is that research undertaken by Commerce and its partners
is driven by true market needs and is peer-reviewed, ensuring quality and relevant
information is being developed.

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