Bill Text: CA AB28 | 2013-2014 | Regular Session | Amended
Bill Title: Economic development: enterprise zones.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB28 Detail]
Download: California-2013-AB28-Amended.html
BILL NUMBER: AB 28 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 29, 2013
AMENDED IN ASSEMBLY MARCH 4, 2013
INTRODUCED BY Assembly Member V. Manuel Pérez
( Coauthors: Assembly Members
Alejo, Brown, Daly, Fox,
Hall, Roger Hernández, Holden,
Muratsuchi, Perea, Quirk-Silva,
Salas, and Weber )
DECEMBER 3, 2012
An act to amend Sections 7071, 7072, 7073.1, 7076, 7076.1, 7081,
7085, 7085.1, and 7085.5 of the Government Code, relating to economic
development development, and declaring the
urgency thereof, to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 28, as amended, V. Manuel Pérez. Economic development:
enterprise zones.
The Enterprise Zone Act provides for the designation and oversight
by the Department of Housing and Community Development of various
types of economic development areas throughout the state, including
enterprise zones, targeted tax areas, and manufacturing enhancement
areas, collectively known as geographically targeted economic
development areas, or G-TEDAs. Pursuant to these provisions,
qualifying entities in those areas may receive certain tax and
regulatory incentives.
This bill would revise various definitions for purposes of the act
and modify specified requirements for designating and administering
enterprise zones and G-TEDAs, collectively. The bill would impose new
requirements on the Department of Housing and Community Development
with respect to the enterprise zone program and modify department and
Franchise Tax Board reporting requirements.
Existing law, the Enterprise Zone Act, authorizes the Department
of Housing and Community Development to assess a fee of not more than
$15 on each enterprise zone and manufacturing enhancement area for
each application for issuance of a certificate pursuant to specified
tax credit provisions.
This bill would instead authorize the department to charge a fee
for those applications not to exceed the reasonable cost of
administering the Enterprise Zone Act, but not to exceed $20. The
bill would require any increase in the fee higher than the amount
that was charged by the department as of January 1, 2014, to be
adopted by regulation.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7071 of the Government Code is amended to read:
7071. The Legislature finds and declares as follows:
(a) The health, safety, and welfare of the people of California
depend upon the development, stability, and expansion of private
business, industry, and commerce, and there are certain areas within
the state that are economically depressed due to a lack of investment
in the private sector. Therefore, it is declared to be the purpose
of this chapter to help stabilize local communities, alleviate
poverty, and enhance the state's economic prosperity through the
streamlining and expediting of licensing and permitting of
development-related activities and the implementation of publicly and
privately funded programs and services that stimulate business and
industrial growth in the depressed areas of the state.
(b) The geographically targeted economic development area (G-TEDA)
programs are based on the economic principle that targeting
significant incentives to lower-income communities allows these
communities to more effectively compete for new businesses and retain
existing businesses, which results in increased tax revenues, less
reliance on social services, and lower public safety costs. Residents
and businesses also directly benefit from these more sustainable
economic conditions through improved neighborhoods, business
expansion, and job creation.
(c) Therefore, it is in the economic interest of the state to have
one strong, combined, and business-friendly and community
development-friendly incentive program to help attract business and
industry to the state, to help retain and expand existing state
business and industry, and to create increased job opportunities for
all Californians.
(d) This chapter shall not be construed to infringe upon
regulations relating to the civil rights, equal employment rights,
equal opportunity rights, or fair housing rights of any person.
SEC. 2. Section 7072 of the Government Code is amended to read:
7072. For purposes of this chapter, the following definitions
shall apply:
(a) "Department" means the Department of Housing and Community
Development.
(b) "Date of original designation" means the earlier of the
following:
(1) The date the eligible area receives designation as an
enterprise zone by the department pursuant to this chapter.
(2) In the case of an enterprise zone deemed designated pursuant
to subdivision (e) of Section 7073, the date the enterprise zone or
program area received original designation by the former Trade and
Commerce Agency pursuant to Chapter 12.8 (commencing with Section
7070) or Chapter 12.9 (commencing with Section 7080), as those
chapters read prior to January 1, 1997.
(c) "Eligible area" means any of the following:
(1) (A) An area designated as an enterprise zone pursuant to
Chapter 12.8 (commencing with Section 7070), as it read prior to
January 1, 1997, or as a targeted economic development area,
neighborhood development area, or program area pursuant to Chapter
12.9 (commencing with Section 7080), as it read prior to January 1,
1997.
(B) A geographic area within census tracts of the proposed
eligible area with a median household income for a family of four
that does not exceed 80 percent of the statewide median income for
the most recently available calendar year, as well as meeting at
least one of the following criteria:
(i) The census tracts within the proposed eligible area have an
unemployment rate not less than 3 percentage points above the
statewide average for the most recent calendar year as determined by
the Employment Development Department.
(ii) The census tracts for the proposed eligible area are served
by public schools that have more than 70 percent of the children
enrolled in the federal free lunch program.
(iii) The area within the proposed zone has experienced
significant distress factors, as defined by the department,
including, but not limited to, a history of significant gang-related
activity, high crime rates, or a significant number of plant or
business closures, or all of these.
(2) The amendments made to this subdivision during the 2012-13
Regular Session shall apply only to requests for proposals issued on
or after January 1, 2014.
(d) "Enterprise zone" means any area within a city, county, or
city and county that is designated as an enterprise zone by the
department in accordance with Section 7073.
(e) "Governing body" means a county board of supervisors or a city
council, as appropriate.
(f) "G-TEDA" means a geographically targeted economic development
area, which is an area designated as an enterprise zone, a
manufacturing enhancement area, a targeted tax area, or a local
agency military base recovery area.
(g) "High-technology industries" includes, but is not limited to,
the computer, biological engineering, electronics, and
telecommunications industries.
(h) "Resident," unless otherwise defined, means a person whose
principal place of residence is within a targeted employment area.
(i) "Rural city" means a city with a population under 75,000 that,
in whole or in part, is located in an area designated as "frontier"
or "rural" on the California Medical Service Study Areas map, as it
was published in September 2010 or more recently updated by the
Office of Statewide Health Planning and Development.
(j) (1) "Targeted employment area" means an area within a city,
county, or city and county that is composed solely of those census
tracts designated by the United States Department of Housing and
Urban Development as having at least 51 percent of its residents of
low- or moderate-income levels, using either the most recent United
States Census Bureau data available at the time of the original
enterprise zone application or the most recent United States Census
Bureau data available at the time the targeted employment area is
designated to determine that eligibility. The purpose of a "targeted
employment area" is to encourage businesses in an enterprise zone to
hire eligible residents of certain geographic areas within a city,
county, or city and county. A targeted employment area may be, but is
not required to be, the same as all or part of an enterprise zone. A
targeted employment area's boundaries need not be contiguous. A
targeted employment area does not need to encompass each eligible
census tract within a city, county, or city and county. The governing
body of each city, county, or city and county that has jurisdiction
of the enterprise zone shall identify those census tracts whose
residents are in the most need of this employment targeting. Only
those census tracts within the jurisdiction of the city, county, or
city and county that has jurisdiction of the enterprise zone may be
included in a targeted employment area.
(2) At least a part of each eligible census tract within a
targeted employment area shall be within the territorial jurisdiction
of the city, county, or city and county that has jurisdiction for an
enterprise zone. If an eligible census tract encompasses the
territorial jurisdiction of two or more local governmental entities,
all of those entities shall be a party to the designation of a
targeted employment area. However, any one or more of those entities,
by resolution or ordinance, may specify that it shall not
participate in the application as an applicant, but shall agree to
complete all actions stated within the application that apply to its
jurisdiction, if the area is designated.
(3) Each local governmental entity of each city, county, or city
and county that has jurisdiction of an enterprise zone shall approve,
by resolution or ordinance, the boundaries of its targeted
employment area, regardless of whether a census tract within the
proposed targeted employment area is outside the jurisdiction of the
local governmental entity.
(4) (A) Within 180 days of updated United States Census Bureau
data becoming available, each local governmental entity of each city,
county, or city and county that has jurisdiction of an enterprise
zone shall approve, by resolution or ordinance, boundaries of its
targeted employment area reflecting the new census data. If no
changes are necessary to the boundaries based on the most current
census data, the enterprise zone may send a letter to the department
stating that a review has been undertaken by the respective local
governmental entities and no boundary changes are required.
(B) A targeted employment area boundary approved prior to the 2000
United States census data becoming available that has not been
reviewed and its boundaries revised to reflect the most recent census
data, shall be reviewed and updated, and a new resolution or
ordinance submitted by the appropriate local governmental entity to
the department, by July 1, 2007. However, enterprise zones that
expire on or prior to December 31, 2008, shall be exempt from the
update requirement.
SEC. 3. Section 7073.1 of the Government Code is amended to read:
7073.1. (a) A city, county, or city and county with an eligible
area within its jurisdiction may complete a preliminary application
for designation as an enterprise zone. The applying entity shall
establish definitive boundaries for the proposed enterprise zone and
the targeted employment area. An entity may propose zones in areas
with noncontiguous boundaries, and the department may designate those
areas as zones if the director determines both of the following:
(1) The noncontiguous area is needed to implement the applicant's
economic development strategy.
(2) The excluded area between the proposed zone boundaries would
not, based on the proposed economic strategy, also benefit from the
zone designation.
(b) (1) In designating enterprise zones, the department shall
select from the applications submitted those proposed enterprise
zones that, upon a comparison of all of the applications submitted,
indicate that they propose the most appropriate economic development
strategy and implementation plan utilizing state and local programs
and incentives to create jobs, attract private sector investment, and
improve the economic conditions within the zone proposed. The
department shall prescribe a format that promotes succinct and
focused strategies and plans, and set minimum standards for the
strategies and plans. For the purposes of this subdivision, important
elements of a strategy or plan may include, but are not limited to,
all of the following:
(A) An assessment of current financial and community development
strengths, needs, and opportunities.
(B) A framework for investment of time, action, and money.
(C) Clear articulation of goals.
(D) Measurable objectives, including targets.
(E) Proposed implementation activities and tasks, including
timeframes, and a framework for evaluating performance, including
qualitative and quantitative benchmarks.
(F) An identification of local resources, including incentives,
the jurisdiction will utilize to implement the strategy or plan and
how those resources will help to leverage or maximize the benefit of
state resources that become available for enterprise zone
communities.
(2) For purposes of this subdivision, local resources may include,
but are not limited to, all of the following:
(A) The suspension or relaxation of locally originated or modified
building codes, zoning laws, general development plans, or rent
controls.
(B) The elimination or reduction of fees for applications,
permits, and local government services.
(C) The establishment of a streamlined permit process.
(D) Elimination or reduction of construction taxes or business
license taxes.
(E) The provision or expansion of infrastructure.
(F) The targeting of federal block grant moneys, including small
cities, education, and health and welfare block grants.
(G) The targeting of economic development grants and loan moneys,
including grant and loan moneys provided by the United States
Department of Housing and Urban Development.
(H) The targeting of state and federal job disadvantaged and
vocational education grant moneys, including moneys provided by the
federal Workforce Investment Act of 1998 (Public Law 105-220), or its
successor.
(I) The targeting of federal or state transportation grant moneys.
(J) The targeting of federal or state low-income housing and
rental assistance moneys.
(K) The use of tax allocation bonds, special assessment bonds,
bonds under the Mello-Roos Community Facilities Act of 1982 (Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title
5), industrial development bonds, revenue bonds, private activity
bonds, housing bonds, bonds issued pursuant to the Marks-Roos Local
Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of
Chapter 5), certificates of participation, hospital bonds,
redevelopment bonds, school bonds, and all special provisions
provided for under federal tax law for enterprise community or
empowerment zone bonds.
(L) Local financing authorities.
(M) Federal Workforce Investment Act moneys and programs funded
with those moneys.
(N) Federal Community Development Block Grant Program moneys.
(O) CalWORKs funding and other related resources.
(P) Local education entities, including kindergarten and grades 1
to 12, inclusive, adult education, community colleges, and public and
private universities.
(3) When designating new enterprise zones, the department shall
take into consideration the location of existing zones and make every
effort to locate new zones in a manner that will not adversely
affect any existing zones.
(4) When reviewing and ranking new enterprise zone applications,
the department shall give bonus points to applications from
jurisdictions that meet minimum threshold points and at least both of
the following criteria:
(A) The percentage of households within the census tracts of the
proposed enterprise zone area, the income of which is below the
poverty level, is at least 17.5 percent.
(B) The average unemployment rate for the census tracts of the
proposed enterprise zone area was not less than five percentage
points above the statewide average for the most recent calendar year
as determined by the Employment Development Department.
(5) Except as modified pursuant to paragraph (4), applications
shall be ranked by the appropriateness of the economic development
strategy and implementation plan, including all of the following:
(A) The extent the strategy clearly identifies the local
resources, incentives, and programs that will be made available to
the zone for meeting its goals and objectives.
(B) The extent the strategy provides for attracting private sector
investment.
(C) The extent the strategy includes related regional and
community-based partnerships for achieving the goals and objectives
in the strategy.
(D) The extent the strategy fits within the jurisdiction's overall
economic development strategy, including the extent the strategy and
implementation plan is appropriate for the local community.
(E) The extent the strategy addresses the hiring and retention of
unemployed or underemployed residents or low-income individuals in
the proposed zone and surrounding areas.
(F) The extent the strategy sets reasonable and measurable
benchmarks, goals, and objectives.
(G) The extent the strategy sets forth an appropriate funding
schedule for management, oversight, and program delivery within the
zone relative to the benchmarks, goals, and objectives in the
strategy.
(H) The extent that the economic development strategy has a
comprehensive incentive package for attracting private investment to
the enterprise zone.
(c) For applications for enterprise zone designation submitted on
or after January 1, 2014, both of the following shall apply:
(1) If any portion of the proposed zone is within, or previously
was within, the boundaries of a previously designated enterprise
zone, the aggregate size of the proposed zone shall not exceed the
size of the previously designated and expanded enterprise zone by
more than 15 percent. If a proposed zone is located in a rural city
or in a county with a population under 275,000, the proposed zone
shall not exceed the size of the previously designated zone and
expanded enterprise zone by more than 25 percent.
(2) If any portions of the proposed zone are within, or previously
were within, the boundaries of two or more previously designated
enterprise zones, the aggregate size of the proposed zone shall not
exceed the size of the largest single previously designated and
expanded enterprise zone by more than 15 percent.
(d) In evaluating applications for designation, the department
shall ensure that applications are not disqualified solely because of
technical deficiencies, and shall provide applicants with an
opportunity to correct the deficiencies. Applications shall be
disqualified if the deficiencies are not corrected within two weeks.
(e) Except upon dedesignation pursuant to subdivision (c) of
Section 7076.1, Section 7076.2, or Section 7085.1, a designation made
by the department shall be binding for a period of 15 years from the
date of the original designation.
(f) The applicant shall be required to begin implementation of the
enterprise zone plan contained in the final application within six
months after notification of final designation, or the enterprise
zone shall be dedesignated.
(g) (1) This section shall apply only to enterprise zone
applications for which the department has issued a solicitation for
new enterprise zone designations on or after January 1, 2007.
(2) The amendments made to this section during the 2012-13 Regular
Session shall apply only to enterprise zone applications for which
the department has issued a solicitation for new enterprise zone
designations on or after January 1, 2014.
SEC. 4. Section 7076 of the Government Code is amended to read:
7076. (a) The department shall serve as a liaison between the
state and enterprise zone residents, businesses, workers, nonprofit
organizations, and local governments. State agencies and departments
shall affirmatively support their statutory responsibilities under
this chapter and, consistent with their statutory duties, respond to
requests made by and on the behalf of an enterprise zone.
(b) (1) The department shall provide technical assistance to the
enterprise zones designated pursuant to this chapter with respect to
all of the following activities:
(A) Furnish limited onsite assistance to the enterprise zones when
appropriate.
(B) Ensure that the locality has developed a method to make
residents, businesses, and neighborhood organizations aware of the
opportunities to participate in the program.
(C) Help the locality develop a marketing program for the
enterprise zone.
(D) Coordinate activities of other state agencies regarding the
enterprise zones.
(E) Monitor the progress of the program.
(F) Help businesses to participate in the program.
(2) Notwithstanding existing law, the provision of services in
subparagraphs (A) to (F), inclusive, shall be a high priority of the
department.
(3) The department may, at its discretion, undertake other
activities in providing management and technical assistance for
successful implementation of this chapter.
(c) The department shall assess a fee on each enterprise zone and
manufacturing enhancement area for each application for issuance of a
certificate pursuant to subdivision (j) of Section 17053.47 of,
subdivision (c) of Section 17053.74 of, subdivision (c) of Section
23622.7 of, or subdivision (i) of Section 23622.8 of, the Revenue and
Taxation Code, not to exceed the reasonable cost of administering
this chapter, but not to exceed twenty dollars ($20). If the
department increases the fee higher than the amount that was charged
by the department as of January 1, 2014, then the department shall
adopt the fee increase by regulation. The department shall collect
the fee for deposit into the Enterprise Zone Fund, pursuant to
Section 7072.3, for the costs of administering this chapter. The
enterprise zone or manufacturing enhancement area administrator shall
collect this fee at the time an application is submitted for
issuance of a certificate.
(d) (1) (A) The department shall maintain, and post on its
Internet Web site, a catalog of all administrative memoranda in
effect that implement this chapter, including the subject matter of
the memoranda and the effective dates of their publication,
modification, or repeal, along with the text of the memoranda.
(B) The department shall post on its Internet Web site the
publication, modification, or repeal of any of those administrative
memoranda, within 10 business days of that publication, modification,
or repeal.
(2) The department shall post on its Internet Web site enterprise
zone and targeted employment area boundary approvals, modifications,
and repeals within 10 business days of the approval, modification, or
repeal becoming final.
SEC. 5. Section 7076.1 of the Government Code is amended to read:
7076.1. (a) The department may audit the program of any
jurisdiction in any designated G-TEDA at any time during the duration
of the designation, as appropriate. However, the department shall
audit each G-TEDA at least once every five years from the date of
designation or the operative date of this section, whichever is the
latest. The matters to be examined in the course of an audit shall
include an examination of the progress made by the G-TEDA toward
meeting the goals, objectives, and commitments set forth in its
original application and the department's memorandum of understanding
with the G-TEDA.
(b) The department shall, for each audit, determine a result of
superior, pass, or fail in accordance with subdivision (c). The
results of each audit shall be based upon the success of the G-TEDA
in making substantial and sustained efforts since the later of its
designation or last audit to meet the standards, criteria, and
conditions contained in the application and the memorandum of
understanding (MOU) between the department and the G-TEDA, as may be
amended pursuant to the agreement of the G-TEDA and the department.
In each audit, the department shall focus upon the G-TEDA's use of
the marketing plan, local incentives, financing programs, job
development, and program management as described in the application
and the MOU. The department shall also evaluate the vouchering plan,
staffing levels, budget, and elements unique to each application.
(c) For purposes of subdivision (b), an audit determination of
superior, pass, or fail shall be made in accordance with the
following:
(1) A G-TEDA will be determined to be superior if each
jurisdiction comprising the G-TEDA does all of the following:
(A) Meets 90 to 100 percent of its goals, objectives, and
commitments as defined in its application, most recent audit,
biennial report, and memorandum of understanding with the department,
and as determined by the department in consultation with the G-TEDA.
An equivalent or similar commitment may be substituted for an
existing commitment of a G-TEDA if it is determined by the department
that an original commitment was not realistically practical or is no
longer relevant.
(B) Demonstrates that it has reviewed and updated its goals,
objectives, and commitments as defined in its original application,
most recent audit, biennial report, and memorandum of understanding
with the department.
(C) Identifies to the department's satisfaction that it has
incorporated economic development commitments in addition to those
commitments previously made in its application.
(2) (A) A G-TEDA will be determined to be passing if each
jurisdiction comprising the area meets 75 to 90 percent of its goals,
objectives, or commitments as defined in its original application,
most recent audit, biennial report, and memorandum of understanding
with the department, and as determined by the department in
consultation with the G-TEDA. An equivalent or similar commitment may
be substituted for an existing commitment of a G-TEDA if it is
determined by the department that an original commitment was not
realistically practical or is no longer relevant.
(B) Any G-TEDA that is determined to be passing may appeal in
writing to the department for a determination of superior. Only one
appeal may be filed pursuant to this subparagraph with respect to a
determination by the department, and may be filed no later than 30
days after the G-TEDA's receipt of the determination to which the
appeal pertains. The department shall respond in writing to any
appeal that is properly filed pursuant to this subparagraph within 60
days of the date of that filing.
(3) (A) A G-TEDA will be determined to be failing if any
jurisdiction comprising the G-TEDA fails to meet or exceed 75 percent
of its goals, objectives, or commitments as defined in its original
application, most recent audit, biennial report, and memorandum of
understanding with the department, and as determined by the
department in consultation with the G-TEDA. An equivalent or similar
commitment may be substituted for an existing commitment of a G-TEDA
if it is determined by the department that an original commitment was
not realistically practical or is no longer relevant.
(B) Any G-TEDA that is determined to be failing shall enter into a
written agreement with the department that specifies those items
that the G-TEDA is required to remedy or improve. Failure of the
G-TEDA and the department to negotiate and enter into a written
agreement as so described within 60 days of the last day upon which
the department is required to deliver a response letter pursuant to
subparagraph (C) of paragraph (4) shall result in the dedesignation
of the G-TEDA on January 1 immediately following the department's
written notice of dedesignation to the G-TEDA.
(C) A written agreement entered into pursuant to this paragraph
shall be for a six-month period. If, upon the expiration of the
agreement, the department determines that the G-TEDA has not met or
implemented at least 75 percent of the conditions set forth in the
agreement, the department shall, after immediately providing written
notification to each jurisdiction comprising the G-TEDA that the
G-TEDA is to be dedesignated dedesignated,
dedesignate the G-TEDA . Dedesignation of the G-TEDA is
effective on the first day of the month next following the date upon
which the agreement expired. If, upon expiration of the agreement,
the department determines that the G-TEDA has met or implemented at
least 75 percent of the conditions set forth in the agreement, the
department shall do either of the
following:
(i) Allow the G-TEDA an additional year, or a longer period in the
department's discretion, to meet or implement those conditions in
their entirety.
(ii) Pursuant to written notice provided immediately to each
jurisdiction that comprises the G-TEDA that the G-TEDA is to be
dedesignated, dedesignate the G-TEDA effective on January 1
immediately following the date of the department's written
notification of dedesignation to those jurisdictions.
(D) Any business, located within any jurisdiction that comprises a
G-TEDA that has been dedesignated, that has elected to avail itself
of any state tax incentive specifically applicable to a G-TEDA for
any taxable or income year beginning prior to the dedesignation of
the G-TEDA may, to the extent the business is otherwise still
eligible for those incentives, continue to avail itself of those
incentives for a period equal to the remaining life of the G-TEDA.
However, any business, located within any jurisdiction that comprises
a G-TEDA that has been dedesignated, that has not availed itself of
any state tax incentive in the manner described in the preceding
sentence may not, after dedesignation of the G-TEDA, avail itself of
any state incentive specifically applicable to a G-TEDA.
(4) (A) Notwithstanding paragraphs (1) to (3), inclusive, a G-TEDA
shall be determined to be failing if any jurisdiction comprising the
G-TEDA, in the determination of the director, provides funding
support in at least three of the previous five years at a level that
is less than 75 percent of the amount committed to in the G-TEDA's
memorandum of understanding with the department.
(B) In the event that a G-TEDA is determined to be failing
pursuant to this paragraph, subparagraph (B) of paragraph (3) shall
apply.
(C) Any G-TEDA that is determined to be failing pursuant to this
paragraph may appeal in writing to the department. The appeal shall
be filed within 30 days of the G-TEDA's receipt of the determination
to which the appeal pertains. The department shall respond in writing
to any appeal that is properly filed within 60 days of the date of
filing.
(d) In undertaking its audit responsibilities pursuant to this
section, the department shall seek appropriate opportunities to
provide technical assistance and training to help G-TEDAs address
inadequacies identified through the audit of the program. Assistance
may include, but is not limited to, workshops, mentoring programs,
and referrals to other federal, state, and local public and private
entities.
(e) (1) For purposes of this section, "dedesignation" means that
a G-TEDA is no longer a G-TEDA for purposes of either Section 7073 or
7085.
(2) Upon notification by the department of the dedesignation of a
G-TEDA and the end of the appeal period with respect to that
dedesignation, the department shall initiate an application process
for a new designation as provided in Section 7073, 7073.8, 7085,
7097, or 7114.
(f) In addition to any other oversight activities that the
department determines are appropriate and necessary, the department
shall review the progress reports submitted by a G-TEDA pursuant to
Section 7085.1 and determine whether an audit is warranted.
SEC. 6. Section 7081 of the Government Code is amended to read:
7081. (a) Notwithstanding any other provision of state law, and
to the extent permitted by federal law, the Employment Development
Department and the State Department of Education shall give high
priority to the training of unemployed individuals who reside in a
targeted employment area or a designated enterprise zone.
(b) When developing workforce development and training plans and
strategies, including, but not limited to, plans, activities, and
responsibilities related to Section 14010 of the Unemployment
Insurance Code or accessing or allocating funds from the federal
Workforce Development Act of 1998 (Public Law 105-220), a state
entity shall consider how the G-TEDA programs could be integrated so
as to maximize the benefits to workers and businesses.
(c) The department may assist localities in designating local
business, labor, and education consortia to broker activities between
the employment community and educational and training institutions.
Any available discretionary funds may be used to assist the creation
of those consortia.
(d) Local education entities that administer student work permits
shall consider how enterprise zone program hiring credits could be
used to benefit lower income students who apply for work permits at
their offices.
SEC. 7. Section 7085 of the Government Code is amended to read:
7085. (a) In addition to the information it makes available
biennially pursuant to subdivision (e) of Section 7085.1, the
department shall submit a report to the Legislature every six years
that evaluates the effect of the program on retaining and increasing
employment among targeted populations as described in subdivision
(c), public and private investment, and incomes, and on state and
local tax revenues in designated enterprise zones. The report shall
include a department review of the progress and effectiveness of each
enterprise zone, including, but not limited to, any efforts made
regarding training and placement of unemployed individuals pursuant
to Section 7081. The Employment Development Department, the State
Department of Social Services, and the State Department of Education
shall, for the purposes of the report, provide the department with
existing data on unemployed individuals receiving training. The
Department of General Services shall provide information on the use
and outcomes that the department tracks relating to the enterprise
zone procurement preference.
(b) An enterprise zone governing body shall provide information at
the request of the department as necessary for the department to
prepare the report required pursuant to subdivision (a).
(c) Targeted populations included within the report required
pursuant to subdivision (a) shall include, but not be limited to, the
disabled, disabled veterans, individuals formerly on forms of
federal and state assistance, individuals within the targeted
employment areas, ex-offenders, and veterans.
(d) The base year for the report required pursuant to subdivision
(a) shall be the calendar year commencing January 1, 2014.
SEC. 8. Section 7085.1 of the Government Code is amended to read:
7085.1. (a) The governing board of the G-TEDA shall report to the
department by October 1, 2008, and by that date every other year
thereafter, on the activities of the G-TEDA in the previous two
fiscal years and its plans for the current and following fiscal year.
The biennial report shall include at least all of the following:
(1) The progress the G-TEDA has made during the period covered by
the report relative to its goals, objectives, and commitments set
forth in its original application and the department's memorandum of
understanding with the G-TEDA.
(2) Identification of the previous two years' funding, including
in-kind funding. The previous two years' funding levels shall be
compared to the funding levels identified in its original application
and the department's memorandum of understanding with the G-TEDA,
and the amount identified in the previous biennial report. An
explanation of any meaningful discrepancies in these amounts shall be
provided.
(3) Identification of the financial value of local incentives
provided during the report period, and of federal and other state
resources accessed to serve the residents, workers, and businesses in
the G-TEDA.
(4) Information aggregated from certification applications
approved in the zones relating to the hiring credit. The type of
information may include, but not be limited to, the number of jobs
for which certifications have been issued and the wage rates and the
number and size of the businesses utilizing the program.
(5) Information on the number of state-certified disabled
veteran-owned business enterprises that submitted applications for
employee certification.
(b) The progress of the G-TEDA in meeting the goals, objectives,
and commitments set forth in the original application and the
memorandum of understanding with the department shall be reviewed at
least biennially by the legislative bodies comprising the G-TEDA.
(c) An enterprise zone governing body shall provide information at
the request of the department as necessary for the department to
prepare the report required pursuant to this section and Section
7085.
(d) (1) G-TEDAs designated prior to January 1, 2007, shall have
until April 15, 2008, to update their benchmarks, goals, objectives,
and funding levels for administering the G-TEDA program, in order to
make them measurable and conducive to the successful completion of
the economic development strategy. The local legislative body and the
department shall approve the updated goals and objectives. The
updated goals and objectives shall be included as an update to the
existing memorandum of understanding between the G-TEDA and the
department.
(2) G-TEDAs that fail to obtain approved updated goals and
objectives by April 15, 2008, shall be dedesignated effective July 1,
2008. The Director of Housing and Community Development shall
provide notice of prospective dedesignation to the local government
no later than May 1, 2008. The director may authorize up to two 60
calendar day extensions, if the local government and G-TEDA are
acting in good faith and the additional time would allow them to meet
the requirements of this subdivision. Businesses located within a
G-TEDA that have been dedesignated shall continue to have access to
tax incentives previously authorized within the G-TEDA pursuant to
Section 7082.2.
(3) G-TEDAs designated prior to January 1, 2007, are not required
to implement the biennial reporting requirements of subdivisions (a)
and (b) until October 1, 2009.
(4) G-TEDAs that expire prior to January 1, 2010, are not required
to meet the conditions of this subdivision.
(e) The department shall biennially, beginning on or before
December 31, 2008, make available to the Legislature information
related to the progress that each G-TEDA is making toward
implementing its goals, objectives, and commitments set forth in the
original application, the department's memorandum of understanding
with the G-TEDA, and the G-TEDA's biennial report.
(f) G-TEDAs that fail to submit a timely biennial report to the
department shall be audited pursuant to Section 7076.1. This
subdivision shall apply to all reports due on or after October 1,
2014.
SEC. 9. Section 7085.5 of the Government Code is amended to read:
7085.5. The Franchise Tax Board shall annually make available to
the department and the Legislature information, to the extent it is
reasonably available, by enterprise zone and by city or county, on
the dollar value of the G-TEDA tax credits and other G-TEDA tax
incentives that are claimed each year by businesses and shall design
and distribute forms and instructions that will allow the following
information to be accessible:
(a) The total number of jobs for which the hiring credits are
claimed.
(b) The number of businesses claiming each individual tax credit.
(c) The nature of the business claiming each individual tax
credit.
(d) The distribution of zone tax incentives among industry
groups.
(e) The distribution of zone tax incentives by the annual
receipts and asset value of the business claiming each individual tax
credit.
(f) The total cost of qualified property put into service within
enterprise zones during the previous five taxable years. In
determining these amounts, qualified property put into service within
enterprise zones shall have the same meaning as defined in Sections
17053.70 and 23612.2 of the Revenue and Taxation Code.
(g) Any other information that the Franchise Tax Board and the
department deem to be important in determining the cost to, and
benefit derived by, the taxpayers of the state.
SEC. 10. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to ensure the public good by providing certainty
regarding the incentives available for attracting and retaining jobs
in economically distressed areas of the state and businesses in
enterprise zones, it is necessary that this act take effect
immediately.
