...and the Support for SB 1008

This is the abridged version of CAEZ's list of benefits to be gained from SB 1008:

Allow ALL EZs to apply for up to two, five-year extensions so that zones may have a life of up to 25 years, providing a critical economic development tool for communities that are amongst the state’s most distressed areas and bringing parity to pre-1990 and post-1989 zones. Businesses and unemployed job-seekers need this now more than ever given the state’s economic climate and overall cost of doing business!

Improve the EDA Business Expense Deduction by eliminating the decreasing allowable amount language and setting the maximum amount at $100,000. The percentage of cost that can be used is increased from 40% to 60%.

Improve the EDA Net Operating Loss Carry-forward by removing the apportionment language and allowing the carryover for 17 years rather than 15. The EDA NOL is currently less beneficial than the statewide NOL.

Slightly change the criteria that a city/county has to meet to receive a new EZ designation or to extend their enterprise zone to be similar in nature to that used by the state HCD in the most recent round of designations, including the elimination of outdated program references (i.e., UDAG program). This is being proposed to try to ensure consistency with prior legislation and the goals of the EZ program.

Include new language that will allow HCD to designate a non-contiguous EZ as part of a new zone application or an extension application, providing for greater flexibility to ensure program goals are achieved.

Authors have expressed that they will amend this provision, but it currently reads: Include new language that will provide a timeframe of 24 months for submitting an application for a retroactive hiring credit certificate to facilitate program goals (i.e., timely contact & coordination with EDA administrators thereby encouraging hiring through WIA and other job training and service providers) and to eliminate program abuses.

Beginning with the 2010 census data, require EZs to update their TEAs using the census block group level (instead of census tract level) and with 61% low and mod income levels (instead of 51%). Zones approved or extended on or after 1/1/06 will be required to use the 61% and block group level. This will allow EZs to more accurately target the low-income individuals, which is the intent of this qualifying criteria. Moreover, the use of the block group level versus the tract level could mean that zones may be able to add areas to their TEA that would otherwise not qualify when combined with other higher income block groups in the census tract better targeting of the disadvantaged.

Eliminate of the controversial "eligible for" language (eligible for WIA or CalWORKs or public assistance), which has been subject to misinterpretation and abuse. The "enrolled in" language still remains, as does the individual listing of qualifying hiring credit criteria although in a slightly modified form for clarification and updating (i.e., outdated JTPA, GAIN, etc.) purposes (for all EDAs issuing vouchers).

Add language to make very clear that vouchers should be issued by the local EDA administration in which the employee is employed thus eliminating cross-jurisdictional vouchering, which has been an area of significant abuse and has robbed individual zones of business outreach and job matching opportunities and has proven to be detrimental to all EDA programs.

Clarify the EZ Net Interested Deduction for Lenders language to be consistent with the original intent of this benefit which was to encourage lenders to loan funds to single location zone businesses which would then spend the money locally to hire area residents and improve the economy of these distressed areas.