Breaking News: HCD Outlaws Cross-Jurisdictional Vouchering

I just received a copy of a memo from Richard Friedman at HCD that was sent to all enterprise zone managers on 3/17/06. It reads in part:

The Department, via the attached opinion of its Legal Affairs Division, has concluded that only the local government that administers the enterprise zone may issue a voucher for a person employed at a worksite located within its local enterprise zone....The Department reminds zone administrators that the Franchise Tax Board (FTB) may disallow the hiring tax credit granted by these vouchers.

It is important to note that not all consultants engage in this practice in the first place. I can think of a couple for whom this will be an inconvenience.