BILL NUMBER: AB 2398 CHAPTERED 09/09/04 CHAPTER 423 FILED WITH SECRETARY OF STATE SEPTEMBER 9, 2004 APPROVED BY GOVERNOR SEPTEMBER 9, 2004 PASSED THE ASSEMBLY AUGUST 16, 2004 PASSED THE SENATE AUGUST 10, 2004 AMENDED IN SENATE JULY 26, 2004 AMENDED IN SENATE JUNE 28, 2004 AMENDED IN ASSEMBLY MAY 17, 2004 AMENDED IN ASSEMBLY MAY 3, 2004 INTRODUCED BY Assembly Member Maze (Principal coauthors: Assembly Members Parra and Reyes) FEBRUARY 19, 2004 An act to amend Section 7097 of, and to add Section 7099 to, the Government Code, relating to economic development. LEGISLATIVE COUNSEL'S DIGEST AB 2398, Maze. Targeted tax areas: expansion. Existing law requires the Technology, Trade and Commerce Agency, in accordance with certain criteria, to designate an applicant jurisdiction or combination of jurisdictions as a targeted tax area in which certain tax incentives apply. The agency is required to audit the program's operations on a periodic basis and may revoke the designation if certain deficiencies are not corrected. Existing law abolished the Technology, Trade, and Commerce Agency as of January 1, 2004, but did not provide for the transfer of the duties of that agency regarding targeted tax areas. This bill would transfer those duties to the Department of Housing and Community Development, and would authorize the department to approve a proposal to expand a targeted tax area, by no more than 15%, if the department finds that the additional territory proposed to be included in the targeted tax area meets certain criteria and certain other conditions are met. This bill would request the Tulare County Economic Development Corporation to report to the Legislature by January 1, 2008, regarding jobs and taxpayers within the targeted tax area, as provided. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 7097 of the Government Code is amended to read: 7097. (a) The Department of Housing and Community Development shall rank applicant communities and shall designate the first ranking community whose governing body is applying as a community to be designated as a targeted tax area which meets at least four of the five following criteria: (1) The average unemployment rate in the applicant community exceeded 7.5 percent in 1995. (2) The average unemployment rate in the applicant community exceeded 7.5 percent in 1996. (3) The median family income in the applicant community does not exceed thirty-two thousand seven hundred dollars ($32,700). (4) The percentage of persons in the applicant community below the poverty level is at least 17.5 percent. (5) The applicant community ranks in the top quartile, among California counties, in the percentage of population receiving Aid for Families with Dependent Children benefits, based on the Cash Grant Caseload Movement and Expenditures Report, July 1995 to June 1996. (b) For purposes of applying any provision of the Revenue and Taxation Code, any targeted tax area designated pursuant to this section shall not be considered an enterprise zone designated pursuant to Chapter 12.8 (commencing with Section 7070). (c) Except as provided in subdivision (e), the designation as a targeted tax area pursuant to this section shall be binding for a period of 15 years, commencing January 1, 1998. (d) Only one targeted tax area shall be designated by the department, and a renewed or replacement designation shall not be made after the initial designation expires or is revoked. (e) An audit of the program's operation shall be made by the department on a periodic basis with the cooperation of the local governing board. If the department determines that the local jurisdiction is not complying with the terms of the memorandum of understanding, the department shall provide written notice of the program deficiencies and the governing body shall be given six months to correct the deficiencies. If the deficiencies are not corrected, the designation shall be revoked. (f) A county and any cities within the county may apply jointly as a community if the combination of the jurisdictions meets the criteria. SEC. 2. Section 7099 is added to the Government Code, to read: 7099. (a) The Department of Housing and Community Development may approve a proposed expansion of targeted tax area subject to the following conditions: (1) The governing body of each city and county in which the targeted tax area is located approves an ordinance or resolution approving the proposed expansion of the area. (2) The department determines that the proposed additional territory meets the criteria specified in subdivision (a) of Section 7097 to the same extent as the existing territory of the targeted tax area. (3) The proposed expansion, in combination with any previous expansions of the targeted tax area, does not exceed 15 percent of the size of the area on the date of original designation. (4) The expansion area is contiguous to the targeted tax area. (5) The expansion meets the criteria established in paragraphs (1), (2), and (3) of subdivision (b) of Section 7074. (b) The department shall respond in writing to any application for a proposed expansion of the targeted tax area within 90 days of the date on which the application is deemed complete. SEC. 3. The Tulare County Economic Development Corporation is requested to make a report to the Legislature on or before January 1, 2008, as to the following: (a) The total number of additional jobs created by the expansion of the targeted tax area by this act. (b) The number of taxpayers, including subsidiaries, that claim tax incentives for doing business within the targeted tax area.