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The $10 million Industrial Assistance Fund is being tapped for $403,006 by McDonnell Douglas for expenses incurred while moving more of its aircraft assembly operation to Salt Lake City from Long Beach, Calif.

Created by the Legislature earlier this year to entice new business to Utah, the fund can be used by any company, but so far the aircraft manufacturer is the only company to take advantage of it.Lynn Blake, co-director of the Division of Business and Economic Development, told the Board of Business and Economic Development that McDonnell Douglas spent the money between Jan. 1 and May 1. Under an agreement between the state and the company, costs associated with expansion of work into Utah would be reimbursed.

Blake said he will ask the board to approve further expenditures from the fund as the company continues to move more of its fuselage assembly work to Salt Lake City. He said the company will submit a complete expansion plan to the state in two months.

A.J. Egbert, general manager of the Salt Lake MD plant, submitted an itemized list of company moving expenditures that have been audited by state personnel. The board approved the reimbursement.

Blake said the company is attempting to drum up business with Utah companies and held eight seminars around the state telling Utah companies how they can do business with the aircraft company. If the company creates $580 million in new business in Utah, it would receive $10 million in credit, Blake said.

He also announced that Richard R. Nelson, former managing director of The Commerce Group, has been hired to administer the Industrial Assistance Fund, reporting directly to the board. Before working with The Commerce Group, Nelson was co-founder and executive vice president of Publishers Holding Co.