BILL ANALYSIS
AB 1139
Page A
Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
V. Manuel Perez, Chair
AB 1139 (J. P?rez) - As Amended: April 13, 2009
SUBJECT : Enterprise Zone Hiring Credits
SUMMARY : Revises credit eligibility, calculation, redemption
and reporting of the hiring credit, under the Personal Income
Tax and the Corporate Tax, for businesses located in enterprise
zones. Specifically, this bill :
1)Modifies the definition of "qualified wages" to mean:
a) That portion of wages paid or incurred by the taxpayer
during the taxable year to a qualified employee that does
not exceed ___ percent of minimum wage; or
b) That portion of wages paid or incurred during a taxable
year to a qualified aircraft employee in the Long Beach
Enterprise Zone that does not exceed 202% of minimum wage;
or
c) That portion of wages paid or incurred by the taxpayer
during the taxable year that does not exceed ___ percent of
the minimum wage for a qualified employee that works for a
qualified employer for at least 35 hours a week, and for
whom the taxpayer pays at least 80% of any of the
following:
i) Health care coverage that meets the minimum
requirements set forth in Chapter 2.2 of Division 2 of
the Health and Safety Code;
ii) A group insurance policy, as defined, that covers
hospital, surgical, and medical care expenses, provided
that the out of pocket costs for enrollees of health care
service plans providing benefits under a preferred
provider organization policy;
iii) Any Taft-Hartley health and welfare fund or any
other lawful collective bargaining agreement that
provides for health and welfare coverage for collective
bargaining unit or other employees thereby covered;
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iv) Any employer-sponsored group health plan meeting the
requirements of the federal Employee Income Security Act
of 1974, provided it meets the benefits required under
sub clause (I) or (II) of this clause;
v) A multiple employer welfare agreement established,
as specified, provided that its benefits have not changed
after January 1, 2004, or that it meets the benefits
required under sub clause (I) or (II) of this clause;
vi) Coverage provided under the Public Employees'
Medical and Hospital Care Act (Part 5 (commencing with
Section 22850) of Division 5 of Title 2 of the Government
Code), provided it meets the benefits required under sub
clause (I) or (II) of this clause or is otherwise
collectively bargained; (VII) Health coverage provided by
the University of California to students of the
University of California who are also employed by the
University of California.
2)Provides that for the purposes of meeting the requirements of
(b) (ii) above, a health care service plan does not include
Medicare supplement, vision-only, dental-only, or specified
disease insurance that pays benefits on a fixed benefit,
cash-payment-only basis.
3)Requires applications for a hiring credit certification be
submitted to the certifying agency within 21 days of the
commencement of employment.
4)Deletes targeted employment areas as an eligible category for
the issuance of hiring credits.
5)Provides annual reporting requirements on tax payers for each
employee who has been certified as eligible for the hiring
credit to include:
a) The total wages or other compensation paid to the
qualified employee.
b) The total type of work performed by the qualified
employee.
c) The length of employment of the qualified employee.
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d) Any benefits provided by the tax payer to the qualified
employee.
6)Authorizes a certifying agency to refuse to issue a
certification for a subsequently hired employee is the tax
payer has failed to report the specified information.
7)Delete the hiring credit eligibility reference to the now
defunct Aid to Families with Dependent Children and replace it
with the federal Temporary Assistance for Needy Families.
8)Delete the hiring credit eligibility reference to the now
defunct federal Job Training Partnership Act (JTPA) to the
Workforce Investment Act.
9)Delete the hiring credit eligibility reference to the now
defunct Greater Avenues for Independence Act of 1985 and
replace it with the federal California Work Opportunity and
Responsibility to Kids Act.
10)Specifies that changes in this act become effective on
January 1, 2010.
EXISTING LAW
1)Establishes the Enterprise Zone Program, administered by the
Department of Housing and Community Development (HCD) to
stimulate business and industrial growth and create jobs in
depressed areas of the state. A maximum of 42 EZs are
authorized at any one time. Designations are for a period of
15-years, HCD, however, is authorized to approve one five-year
extension for EZs designated prior to January 1, 1990.
2)Requires applications in response to enterprise zone
designation solicitations after January 1, 2007 be ranked
based on their economic development strategy and
implementation plan, including to the extent of the strategy:
sets reasonable and measurable benchmarks, goals, and
objectives; identifies local resources, incentives, and
programs; provides for the attraction of private investment;
includes regional and community-based partnerships; and
addresses hiring and retention of unemployed or underemployed
residents or low-income individuals. Further, EZ's designated
prior to January 1, 2007, are required to update their goals
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and objectives through an amendment in their Memorandum of
Understanding (MOU) with HCD, as specified,
3)Requires EZs to biannually report to HCD on their progress in
meeting the goals and objectives identified in their
implementing MOU.
4)Authorizes an income tax credit for hiring certain "qualified
employees." Qualified employees include only those
individuals who meet all of the following:
a) The employee provides service to an employer where at
least 90% of those services within a taxable year are
directly related to the conduct of a taxpayers business or
trade located in an enterprise zone;
b) The employee performs at least 50% of their service for
the taxpayer during the taxable year in an enterprise zone;
and
c) The employee is hired after the date of the enterprise
zone designation.
5)Provides that in addition to the requirements detailed in (5)
above, a qualified employee is required to also meet one of
over a dozen specific categories of individuals who
immediately preceding employment were:
a) Eligible for services under the federal JTPA, or its
successor;
b) Eligible to be a voluntary or mandatory registrant under
GAIN, or its successor;
c) An economically disadvantaged individual 14 years or
older;
d) A dislocated worker, as specified;
e) A disabled individual who is eligible for, enrolled in,
or has completed a state rehabilitation plan;
f) A service-connected disabled veteran, veteran of
Vietnam, or veteran who has been recently separated from
military service;
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g) An ex-offender, as specified;
h) Eligible to receive specified social services benefits,
including Federal Supplemental Security Income benefits,
Aid to Families with Dependent Children, food stamps, or
state and local general assistance;
i) A member of a federally recognized Indian tribe, band,
or other group of Native American descent;
j) A member of a targeted group, as defined by the Internal
Revenue Service for the purposes of the Work Opportunity
Tax Credit, which includes a qualified IV-A recipient, a
qualified veteran, a qualified ex-felon, a high-risk youth,
a vocational rehabilitation referral, a qualified summer
youth employee, a qualified food stamp recipient, a
qualified Supplemental Security Income recipient, or a
long-term family assistance recipient; or,
aa) A resident of a targeted employment area, as specified.
6)Requires "qualified employees" to be retained in employment
for a minimum of 270 days in order to qualify for hiring
credit vouchering. The value of the hiring credit incentive
totals 50% of the employees' wages in the first year, 40% in
the second, 30% in the third, 20% in the fourth, and 10% in
the fifth year. Although employees can be paid more, the
maximum wage rate used to calculate the credit is 150% of
minimum wage. Aircraft manufacturers in Long Beach may
calculate the credit based on 202% of minimum wage. The
maximum value of the credit per employee is approximately
$40,000 over five years. The hiring credit may only be
applied to offset tax liability attributable to revenues
received from activities located within the EZ where the
employee is primarily working.
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's intent : According to the author, AB 1139 seeks to
enact meaningful reforms to California's enterprise zone
program to ensure that California maximizes its investment in
the program through incentivizing employers to provide quality
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employment in genuinely economically challenged areas. It is
crucial for California during this current fiscal crisis to
ensure that tax credit dollars are working to achieve our
goals.
Further, the author states, that while the enterprise zone
program is intended to address the competitive disadvantages
faced by businesses located in communities plagued by
unemployment, crime, and poverty, the program's current
statutory construct fails to benefit workers living in these
same communities. Currently the program does nothing to
incentivize employers to provide quality jobs to workers in
need of tax revenue derived from income expenditure. In order
for the program to work for employers and employees alike, it
is imperative that the program be revamped to better ensure
that employers benefiting from enterprise zone tax breaks
provide quality jobs to their employees.
In addition, the author states that, AB 1139 lifts the curtain
on how the enterprise zone tax credits are being earned by
employers by requiring that employers reaping the benefits of
the tax credits provide data to certifying agencies which will
then be reported to the Department of HCD so that such data
may be annually reported to the Legislature. The author
believes that current law does not impose any reporting
requirements on employers estimated to garner approximately
$500 million in tax benefits via the enterprise zone program
per year.
The author also states that, this revenue neutral bill will
incentivize employers by rewarding employers with larger tax
benefits for their full time benefited employees.
Additionally the bill reduces (but does not eliminate) the tax
benefit for part-time and non-benefited employees. reduces the
time period for retro-vouchering and amends the Targeted
Employment Area eligibility criterion.
2) Unclear policy change : Existing law specifies that the value
of the hiring credit is to be based on the total amount of
wages paid to employee. For a wage rate, statute limits the
calculation to 150% of minimum wage, except for certain
credits authorized in the Long Beach Enterprise Zone.
AB 1139 proposes to modify the calculation of the hiring
credit by deleting the current threshold of 150% of minimum.
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The bill would, instead, establish two new and yet to be
identified percentage thresholds. Information in the
author's statement indicates that the author's intent is to
"increase the tax credit for employers of full time workers
who provide health benefits to their employees and decrease
the amount of the tax credit for part time and non-benefited
employees."
Without having more specific information, however, it is
difficult to determine the potential impact of the proposed
changes. As an example, the author may be intending to keep
the lower threshold at or near the current level. In this
case, the impact may be minimal. On the other hand, to the
extent that the threshold is deeply reduced for workers with
no or limited health care benefits, the reduced value of the
credit could affect the financial viability of businesses
currently using the program.
Given the state's current unemployment rate of over 11%, with
some enterprise zone areas having unemployment rates of over
20%, understanding the value of the wage rate differential
could be the difference between encouraging a positive social
good (quality jobs) and significantly eliminating the ability
of a business to access the hiring credit and bring on another
employee.
3)Revenue neutral : Questions have arisen as to whether this
bill is revenue neutral. According to the bill's fiscal key
the bill may be passed by a majority vote, which generally
indicates that in the opinion of the Legislative Counsel, the
impact of implementing the bill does not result in higher
revenues being generated. However, in this case, the revenue
estimate is unclear based on the remaining blank percentage
wage rates. The sponsor has indicated that the author is
awaiting a letter from the Franchise Tax Board before filling
in the blanks in the bill.
4)Cost of health care : Health care costs have been rising for
several decades. Expenditures in the U.S. on health care
surpassed $2 trillion in 2006, almost three times the $714
billion spent in 1990, and over eight times the $253 billion
spent in 1980. In 2006, U.S. health care spending was about
$7,026 per resident and accounted for 16% of the nation's
gross domestic product.
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Total health care expenditures grew at an annual rate of 6.7
percent in 2006, a slower rate than recent years, yet still
outpacing inflation and the growth in national income.
Although Americans clearly benefit from an increase the
availability of health care, the recent rapid cost growth,
coupled with an overall economic slowdown and rising federal
deficit, is placing great strains on the nation's health care
delivery systems, including private employer-sponsored health
insurance coverage.
According to a Families USA study in 2008, California workers
face some of the highest health care costs in the nation.
Over the past eight years (2000 through 2007), family health
insurance premiums rose five times more quickly than median
earnings. In addition, the study found:
a) Health insurance premiums for California's working
families skyrocketed over the last eight years, increasing
by 95.8 percent from 2000 to 2007 while medium income rose
by only 19.3%.
b) For family health coverage in California, the average
annual premium (employer and worker share of premiums
combined) rose from $6,227 to $12,194, an increase of
$5,967.
c) For family health coverage in the state, the employer's
portion of annual premiums rose from $4,683 to $8,938 (a
difference of $4,256), while the worker's portion rose from
$1,544 to $3,256 (a difference of $1,712).
In addition to higher premiums, working families faced higher
out-of-pocket health care costs, such as deductibles,
co-payments, and costs for services that were not covered by
their insurance plans. As a result, health care costs are
absorbing an ever-larger portion of family budgets.
AB 1139 proposes to use the enterprise zone hiring credit as a
new incentive for encouraging businesses located in an
enterprise zone to fund worker health care benefits.
Proponents of the measure state that the current program does
nothing to encourage quality jobs. Opponents of the bill
question whether eliminating or significantly curtailing the
use of hiring credits to businesses trying to provide jobs in
lower income communities is an appropriate trade-off for a new
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health care tax credit.
5)California's EZ programs : Existing law authorizes the
creation of up to 42 enterprise zones based on a statutory
list of criteria related to poverty and economic dislocation.
In addition to the Enterprise Zone Program, existing law also
authorizes the establishment of two Manufacturing Enhancement
Areas, one Targeted Tax Area, and eight Local Agency Military
Base Recovery Areas. Collectively, these business incentive
areas are referred to as geographically-targeted economic
development areas (G-TEDA).
The 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.
Under the G-TEDA programs, businesses and other entities
located within the area are eligible for a variety of local
and state incentives. Local government incentives can include
writing down the costs of development, funding related
infrastructure improvements, providing job training to
prospective employees, or establishing streamlined processes
for obtaining permits. The state also offers a number of
incentives, including: tax credits, special tax provisions,
priority notification in the sale of state surplus lands,
access to certain Brownfield clean-up programs, and
preferential treatment for state contracts.
Enterprise zones are located in portions of more than 54
Assembly Districts and more than 35 Senate Districts.
Enterprise zones range in size from one square mile to 70
square miles and in geographic locations ranging from Eureka
and Shasta Valley near the Oregon border to San Diego and
Calexico along the Mexican border. Below is a chart comparing
the state tax incentives offered to businesses located in a
G-TEDA.
------------------------------------------------------------
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| Comparison of State Tax Benefits by Targeted Area |
------------------------------------------------------------
|-----------+------+---------+---------+----------+----------|
| |Hiring|Longer |Sales |Accelerate|Lender |
| | |NOL<1> |and Use |d |Interest |
| |Credit|Carry- |Tax |Depreciati|Deduction |
| | |Forward |Credit |on | |
| | |Period | | | |
|-----------+------+---------+---------+----------+----------|
|Enterprise | X | X | X | X | X |
|Zone | | | | | |
|-----------+------+---------+---------+----------+----------|
|Manufacturi| X | | | | |
|ng | | | | | |
|Enhancement| | | | | |
| Zone | | | | | |
|-----------+------+---------+---------+----------+----------|
|Targeted | X | X | X | X | |
|Tax Area | | | | | |
|-----------+------+---------+---------+----------+----------|
|Local | X | X | X | X | |
|Agency | | | | | |
|Military | | | | | |
|Base | | | | | |
|Recovery | | | | | |
|Area | | | | | |
------------------------------------------------------------
------------------------------------------------------------
|Source: Legislative Analyst's Office |
------------------------------------------------------------
By far, the largest G-TEDA business incentive is the income
tax credit given for hiring certain targeted employment
populations. According to the Franchise Tax Board (FTB), in
2006, businesses located within a G-TEDA claimed 4,851 credits
worth over $230 million in hiring and sales and use tax
credits. Of the 4,851 hiring and sales and use credits claimed
by all taxpayers located in a G-TEDA, 4,440 were claimed by
businesses located in an enterprise zone. Below is a chart
summarizing total G-TEDA credits claimed in the 2004-2006 tax
years.
------------------------------------------------------------
---------------------------
<1> NOL= Net Operating Loss
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| Comparison of Total G-TEDA Credits Claimed in 2004 to 2006 |
| Tax Years |
------------------------------------------------------------
|---------+------------+------------+------------+------------|
| |Number of |Value of |Number of |Value of |
| |Credits |Credits |Credits |Credits |
| |Claimed on |Claimed on |Claimed on |Claimed on |
| |Corporate |Bank and |Personal |Personal |
| |Taxes |Corporate |Income |Income |
| | |Taxes |Taxes |(thousands) |
| | |(thousands) | | |
|---------+------------+------------+------------+------------|
|2004 | 3,256 | $218,726 | 5,054 | $130,080 |
|Total | | | | |
|G-TEDA | | | | |
|Credits | | | | |
|---------+------------+------------+------------+------------|
|2005 | 4,325 | $216,416 | 8,270 | $146,02443 |
|Total | | | | |
|G-TEDA | | | | |
|Credits | | | | |
|---------+------------+------------+------------+------------|
|2006 | 4,851 | $230,751 | 9,973 | $154,926 |
|Total | | | | |
|G-TEDA | | | | |
|Credits | | | | |
-------------------------------------------------------------
------------------------------------------------------------
|Source: Franchise Tax Board |
| |
------------------------------------------------------------
Below is a chart comparing the use of individual credits under
each of the G-TEDA programs for the 2006 tax year.
--------------------------------------------------------------
| Comparison of Individual G-TEDA Credits Claimed in 2006 |
--------------------------------------------------------------
---------------------------------------------------------------
| |Hiring |Sales and Use |Business Expense |
| |Credit |Tax Credit |Deduction |
| |(millions) |(millions) |(millions) |
---------------------------------------------------------------
|---------------+-----------+--------------+---------+---------|
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| | | | Amount |Estimated|
| | | | of | Tax |
| | | |deduction| Impact |
| | | | | |
|---------------+-----------+--------------+---------+---------|
|Total EZ | $ 177.4 | $ 39.7 | $ 4.5 | $ 0.3 |
|Credits | | | | |
|---------------+-----------+--------------+---------+---------|
|Total LAMBRA | $0.7 | $ 0.6 | /a | /a |
|Credits | | | | |
--------------------------------------------------------------
|Total MEA | /a | --- | --- | --- |
|Credits | | | | |
|---------------+-----------+--------------+---------+---------|
|Total TTA | $ 4.4 | $0.2 | /a | /a |
|Credits | | | | |
--------------------------------------------------------------
--------------------------------------------------------------
|Source: Estimated by Franchise Tax Board /a = less |
|than $50,000 --- not applicable |
| |
--------------------------------------------------------------
Based on an analysis of FTB data from the 2000 tax year, the
LAO found that approximately 60% of the hiring credits are
filed by small and medium-sized businesses - businesses with
assets under $5 million . However, approximately 65% of the
total value of the credits claimed are from businesses with
assets over $1 billion . Similarly, approximately 50% of the
total value of the credits claimed went to companies with
receipts of over $1 billion .
6)G-TEDA Reforms in 2005 : In the winter of 2005, the Assembly
Committees on Revenue and Taxation, and Jobs, Economic
Development, and the Economy (JEDE) held a series of hearings
on the G-TEDA programs. A summary of these hearings,
including background materials, is available on the JEDE
Committee website at www.assembly.ca.gov .
During the course of these hearings, the Committees reviewed
current and best practices related to designation, management
and monitoring, and use of business incentives available
through the G-TEDA programs. As a result of these hearings,
JEDE developed a list of 47 recommendations on how to improve
the overall G-TEDA programs and drafted AB 1550 (Arambula and
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Karnette), Chapter 718, Statutes of 2006. Key reforms in AB
1550 include:
a) Requiring EZ applications be ranked based on their
economic development strategy and implementation plan,
including to the extent the strategy does the following:
sets reasonable and measurable benchmarks, goals, and
objectives; identifies local resources, incentives, and
programs; provides for the attraction of private
investment; includes regional and community-based
partnerships; and, addresses hiring and retention of
unemployed or underemployed residents or low-income
individuals.
b) Requiring G-TEDAs to biennially report to HCD on their
progress in meeting the goals and objectives identified in
their implementing MOU. G-TEDAs designated prior to
January 1, 2007, are required to update their goals and
objectives by April 15, 2008, and meet the annual reporting
requirements by October 1, 2009.
c) Adding a new audit element that requires the review of
an EZ's administrative support and whether financial
commitments made in the G-TEDA application and MOU have
been kept. The bill also made similar conforming changes
in the MEA, TTA, and LAMBRA audit requirements.
7)Establishing employee eligibility : Existing law authorizes
the establishment of a TEA as a means for encouraging
businesses within an enterprise zone to hire new workers that
live in and around the enterprise zone. TEAs are designated
by the enterprise zone based on the most current U.S. Census
data and can include areas both within and adjacent to the
enterprise zone. None of the other categories of eligible
employee provide a nexus to the community where the enterprise
zone is located. It is estimated that between 80% and 90% of
hiring credit vouchers use the TEA designation for qualifying
employees.
The high usage of the TEA designation is related to a number
of factors. One of the most significant advantages of the TEA
over qualifying an employee under the other nine criteria is
the employer's ability to easily access the appropriate
documentation for submitting the voucher application. As an
example, to demonstrate that an employee qualifies as a
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resident of a TEA an employer has the option of submitting a
copy of the employee's driver's license or state
identification card.
In order to demonstrate that an employee qualifies for the
other eligibility categories, employers have to ask employees
to provide them with copies of sometimes very personal
documents, including, but not limited to, bankruptcy
documents, physicians statements, letters from parole, and
public assistance records or printouts. Some employers have
voiced concerns over asking employees questions about their
eligibility other than being a resident of a TEA.
8)Vouchering Employees : In order for a business to claim a
hiring credit for an employee, the business must obtain a
voucher from a local enterprise zone administrator certifying
the employee hired meets specified criteria. As discussed
above, employers are responsible for gathering the appropriate
documentation to substantiate their claim that the employee
being vouchered meets the statutory and regulatory
requirements. Once vouchered, an employer can claim the
hiring credit on their tax returns filed with FTB.
Currently, an employer is not statutorily limited by when they
must file the voucher application with the enterprise zone
administrator for certification. AB 1139 proposes to require
that voucher applications are filed within 21 days of the
employee being hired. Opponents of the bill state that this
requirement is too onerous, especially for small and medium
size businesses that do not have specialized human resource
staff. Supporters of the bill have stated that by eliminating
the ability of employers to voucher employees, well after they
have been hired, will better focus the hiring credit toward
the creation of new jobs.
9)What is being measured and reported : When taxpayer dollars
are being expended it is important that there is clear
reporting of the use and impacts of these expenditures and/or
forgone funding. Prior to the enactment of AB 1550,
reporting of zone activities involved an annual report based
on questions submitted to the enterprise zone by HCD. The
depth and specifics of these reports varied from enterprise
zone to enterprise zone.
With the enactment of AB 1550, the reporting requirements and
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the consequences for not meeting measurable goals and
objectives in a zone's MOU with HCD were increased. Further,
having each zone's MOU more accurately reflect specific
outcomes increases the effectiveness of the existing audit
provisions. HCD is also required to provide a report every
five years that evaluates the effect of the enterprise zone
program on employment, investment and income, and on state and
local tax revenues. In January 2008, HCD also began requiring
enterprises zones to make monthly reports on their vouchering
activities.
In claiming tax credits, taxpayers are required to submit a
specified tax form when filing their returns. From these
forms FTB is required to provide the Legislature and HCD
information on how businesses are claiming credits. The
charts in comment 4 were developed with information provided
by FTB.
AB 1139 proposes to further expand the reporting requirements
in the bill by requiring employers to annually report on each
vouchered employee. The report would include, among other
items, the total wages paid to the qualified employee, the
type of work performed, their length of employment, and
whether the employee received benefits. Some, but not all of
this information is required to be provided to FTB when the
employer claims the credit. Having the employer report to the
enterprise zone administrator may be a more transparent method
for reporting.
10)Overall effect of the bill : Supporters of AB 1139 believe
that the existing enterprise zone program provides hundreds of
millions of dollars per year in tax credits for employers but
does not do anything for employees. In AB 1139 the sponsors,
International Longshore and Warehouse Union, seek to
incentivize employers to provide quality jobs to all eligible
workers, by entitling employers to a higher tax credit for
full time benefited employees. As California and the nation
face these times of economic straits it is imperative that
California gets the biggest return possible on its tax benefit
investment. Finally, AB 1139 will also relieve the current
burden on local government that forced to shoulder the weight
of the uninsured worker, by incentivizing employers to provide
health benefits.
Opponents of the measure, including local governments and
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business organizations, believe that given the current
economic times, that implementation of AB 1139 would be
destabilizing to local communities that are already under
great duress. Some enterprise zone managers believe that the
full impact of the bill will result in a drastic reduction in
the number of hiring credit vouchers that are issued rather
than reform the system. The elimination of the TEA, without
first addressing the documentation problems of the other
qualifying employee categories is particularly problematic.
Finally, while providing health care is a laudable goal,
realistically, a majority of small and medium size businesses
cannot afford to provide health benefits and the problems of
the uninsured and underinsured should not be specially borne
by lower income communities.
11)Related legislation from 2007-08 legislative session :
a) AB 121 (Maze) and AB 2709 (Maze) : These bills would
have established a separate category of employee
eligibility under the California Enterprise Zone Program's
hiring income tax credit program to include a person who
was a former foster care recipient. Status: Held in
Assembly Committee on Revenue and Taxation during the
2007-08 Session.
b) AB 579 (Swanson) : This bill would have extended the
official term of the designation of a LAMBRA from eight to
15 years, except that the term may be for 20 years if the
Department of Housing and Community Development determines
that certain conditions exist in year five. Status: Held
in Assembly Committee on Appropriations during the 2007-08
legislative session.
c) AB 1550 (Arambula) : This bill would have made a number
of significant changes to the management and oversight of
the G-TEDA programs. This bill is the result of extensive
oversight hearings by JEDE and Revenue and Taxation, as
well as, extended discussions with stakeholder groups.
Status: Signed by the Governor, Chapter 718, Statutes of
2006.
d) AB 1766 (Dymally ): This bill would have made a number
of significant changes in G-TEDA Program including
streamlining the selection criteria, authorizing
noncontiguous zones, extending certain zone designations,
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and tightening up of the TEA. Status: Held on the Senate
Floor in the 2005-06 Session.
e) AB 2589 (Runner) : This bill would have authorized a
business to use credits generated in an EZ to offset taxes
attributable to the business from any EZ. Status: Held in
the Assembly Committee of Revenue and Taxation in 2005-06
Session.
f) SB 1008 (Duchney): This bill would have made a number
of significant changes in G-TEDA Program including
streamlining the selection criteria, authorizing
noncontiguous zones, extending certain zone designations,
and tightening up of the TEA. Status: Held in the
Assembly Committee on Jobs, Economic Development, and the
Economy in 2005-06 Session.
g) SB 341 (Lowenthal) : This bill would have expanded the
ways in which a local government applying for an enterprise
zone designation after October 1, 2007, may meet the
requirements of California Environmental Quality Act and
eliminates the ability of these jurisdictions to limit
subsequent environmental reviews based on the contents of
the initial CEQA documents. Status: Signed by the
Governor, Chapter 643, Statutes of 2007.
h) SB 763 (Lowenthal) : This bill would have expanded HCD's
fee authority for the purpose of offsetting the cost of
administering the geographically-targeted economic
development area programs. Status: Signed by the
Governor, Chapter 634, Statutes of 2006.
12)Re-referral of legislation : Should AB 1139 be recommended
"do pass" from the Assembly Committee on Jobs, Economic
Development, and the Economy, this measure will be referred to
the Assembly Committee on Revenue and Taxation for additional
consideration of the taxation-related portions of this
measure.
REGISTERED SUPPORT / OPPOSITION :
Support
International Longshore and Warehouse Union (sponsor)
Amalgamated Transit Union
AB 1139
Page R
California Conference of Machinists
California Labor Federation/ AFLCIO
California Teamsters Public Affairs Council
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
Women's Policy Institute Economic Justice Team
Opposition
------------------
|10 letters from |
|Individuals |
|------------------|
|Ace Parking |
|------------------|
|Acme Auto |
|Headlining Co. |
|------------------|
|Acoustics Metal |
|Studs and Drywall |
|------------------|
|ADH Denim, Inc |
|------------------|
|Alliage, Inc. |
|------------------|
|Alliantgroup, LP |
|------------------|
|Amazon |
|Consultants |
|------------------|
|Antelope Valley |
|Chambers of |
|Commerce |
|------------------|
|Asbestos Instant |
|Response, Inc. |
|------------------|
|AVACO Textiles, |
|Inc. |
|------------------|
|Baja's Produce, |
|Inc. |
|------------------|
AB 1139
Page S
|Barbosa Cabinets |
|Inc |
|------------------|
|Baskin Robbins |
|------------------|
|Berberian Design |
|and Cabinets |
|------------------|
|Blum & Clark |
|Accounting Firm |
|------------------|
|Boos & Associates |
|------------------|
|Brassuer Inc. |
|------------------|
|Bryant Rubber |
|Corp. |
|------------------|
|C & I Tax |
|Consultants |
|------------------|
|CalChamber |
|------------------|
|Calexico County |
|Enterprise Zone |
|------------------|
|California |
|Aerospace |
|Technology |
|Association |
|------------------|
|California |
|Association for |
|Local Economic |
|Development |
|------------------|
|California |
|Association of |
|Enterprise Zones |
|------------------|
|California |
|Bankers |
|Association |
|------------------|
|California |
AB 1139
Page T
|Business |
|Properties |
|Association |
|------------------|
|California |
|Employment |
|Opportunity |
|Network |
|------------------|
|California |
|Grocers |
|Association |
|------------------|
|California |
|Independent |
|Grocers |
|Association |
|------------------|
|California |
|Manufacturers & |
|Technology |
|Association |
|------------------|
|California |
|Retailers |
|Association |
|------------------|
|California |
|Taxpayers |
|Association |
|------------------|
|Capital Credit |
|Consulting, LLC |
|------------------|
|Casa Leaders, |
|Inc. |
|------------------|
|Caterpillar Inc. |
|------------------|
|Certified |
|Laboratories, |
|Inc. |
|------------------|
|Choon Taik Lim, |
|CPA, Inc |
AB 1139
Page U
|------------------|
|Chung and |
|Company, LLC |
|------------------|
|Cinder Block, |
|Inc. |
|------------------|
|City of Calexico |
|------------------|
|City of Chula |
|Vista |
|------------------|
|City of Eureka |
|------------------|
|City of Long |
|Beach |
|------------------|
|City of Manteca |
|------------------|
|City of Oroville |
|------------------|
|City of Pittsburg |
|------------------|
|City of |
|Sacramento |
|------------------|
|City of San |
|Bernardino |
|Economic |
|Development |
|Agency |
|------------------|
|City of Wheatland |
|------------------|
|City of Yreka |
|------------------|
|Coachella Valley |
|Enterprise Zone |
|------------------|
|Community Bank of |
|the Bay |
|------------------|
|Compete |
|Consulting, LLC |
|------------------|
AB 1139
Page V
|Con J. Franke |
|Electric, Inc. |
|------------------|
|Contractors |
|Wardrobe, Inc. |
|------------------|
|County of |
|Siskiyou |
|------------------|
|County of Tulare |
|------------------|
|Cozad Trailer |
|Sales, LLC |
|------------------|
|Crystal Casino |
|------------------|
|Cunico |
|------------------|
|CustomEyes |
|Optometry |
|------------------|
|Dairy Institute |
|------------------|
|Del Monte Foods |
|------------------|
|Delphis,Inc. dba |
|Burger King |
|------------------|
|Dependable |
|Highway Express |
|------------------|
|Diamond Diesel |
|Service Inc. |
|------------------|
|Dickson Testing |
|Company. Inc. |
|------------------|
|Disney |
|------------------|
|DiTomaso |
|Incentive Group |
|------------------|
|Dougherty & |
|Company |
|------------------|
AB 1139
Page W
|Eby Cnstruction, |
|Inc. |
|------------------|
|Economic |
|Development |
|Corporation of |
|Oxnard |
|------------------|
|ELLS CPA's and |
|Business Advisors |
|------------------|
|Embroidery |
|Industries, Inc. |
|------------------|
|Encore Tax |
|Consulting Group, |
|Inc. |
|------------------|
|ENY Textiles, |
|Inc. |
|------------------|
|Epsilon Systems |
|Solutions, Inc. |
|------------------|
|Evapco West |
|------------------|
|Fine Discounts |
|#1, Inc. |
|------------------|
|First Capitol |
|Consulting, Inc. |
|------------------|
|Foreston Trends |
|------------------|
|Gallina, LLP |
|------------------|
|Gate City |
|Beverage |
|Distributors |
|------------------|
|Global |
|Immigration Law |
|Group |
|------------------|
|Great Fresno Area |
AB 1139
Page X
|Chamber of |
|Commerce |
|------------------|
|Guess?, Inc. |
|------------------|
|Guilbert Tex, |
|Inc. |
|------------------|
|Harbor |
|Distributing, LLC |
|------------------|
|Homexx |
|International |
|------------------|
|Hromiko & |
|Associates, LLC |
|------------------|
|Imperial County |
|Board of |
|Supervisors |
|------------------|
|IndigoSportswear |
|Inc. |
|------------------|
|International |
|Beauty Network, |
|Inc |
|------------------|
|International |
|Component |
|Technology |
|------------------|
|Jacobs Pine |
|Consulting, Inc. |
|Tax Incentive |
|Specialist |
|------------------|
|JC Industries |
|------------------|
|Jilllson & |
|Roberts |
|------------------|
|Joseph Gallo |
|Farms |
|------------------|
AB 1139
Page Y
|Kagome Inc. |
|------------------|
|KAOS Management, |
|Inc. |
|------------------|
|Kohl's |
|------------------|
|Krost Baumgarten |
|Kniss & Guerrero |
|------------------|
|L & T Meat |
|Company |
|------------------|
|Labhart Milles |
|Consulting Group, |
|Inc. |
|------------------|
|Land Concern |
|Landscape |
|Architecture |
|------------------|
|Land Design |
|Consultants, Inc. |
|------------------|
|Long Beach Area |
|Chamber of |
|Commerce |
|------------------|
|Los Angeles Area |
|Chamber of |
|Commerce |
|------------------|
|Los Angeles Cold |
|Storage Company |
|------------------|
|Los Angeles |
|County Economic |
|Development |
|Corporation |
|------------------|
|Los Angeles |
|Northeast Valley |
|Enterprise Zone |
|------------------|
|Madera Economic |
AB 1139
Page Z
|Development |
|Commission |
|------------------|
|Marcus & |
|Millichap |
|------------------|
|Marza Consulting |
|------------------|
|Merced County |
|Board of |
|Supervisors |
|------------------|
|Merced Regional |
|Enterprise Zone |
|------------------|
|Metal Supply Inc. |
|------------------|
|Mira California |
|------------------|
|Modesto Chamber |
|of Commerce |
|------------------|
|Moon & Bong Chang |
|Medical Clinic |
|------------------|
|MSI Metal Supply, |
|Inc. |
|------------------|
|National |
|Federation of |
|Independent |
|Busness (NFIB) |
|------------------|
|Nibbi Brothers |
|Associates, Inc. |
|------------------|
|Ole Clothing, |
|Inc. |
|------------------|
|Oroville |
|Enterprise Zone |
|------------------|
|Otay Mesa Chamber |
|of Commerce |
|------------------|
AB 1139
Page A
|Oxnard Chamber of |
|Commerce |
|------------------|
|Pacific Alloy |
|Casting Co. Inc |
|------------------|
|Pacific Credit |
|Group |
|------------------|
|Pacific Gas & |
|Electric |
|------------------|
|Pacific Lift and |
|Equipment |
|------------------|
|Pacific Real |
|Estate |
|------------------|
|Palm Desert |
|Chamber of |
|Commerce |
|------------------|
|Paragon Textiles, |
|Inc |
|------------------|
|Pasadena |
|Enterprise Zone |
|------------------|
|Professional |
|Finishing |
|------------------|
|Professional |
|Solutions Group |
|LLC |
|------------------|
|R. W. Zant |
|Company |
|------------------|
|Rivera & Jamjian, |
|LLP |
|------------------|
|Ryan, Inc. |
|------------------|
|Samiyatex |
|------------------|
AB 1139
Page B
|San Bernardino |
|Area Chamber of |
|Commerce |
|------------------|
|San Bernardino |
|Board of |
|Supervisors |
|------------------|
|San Bernardino |
|Downtown Business |
|Association, |
|Inc. |
|------------------|
|San Diego Chamber |
|of Commerce |
|------------------|
|San Diego |
|Leather, Inc. |
|------------------|
|San Fernando |
|Greater Valley |
|Chamber of |
|Commerce |
|------------------|
|San Francisco |
|Center for |
|Economic |
|Development |
|------------------|
|San Gabriel |
|Valley Economic |
|Partnership |
|(SGVEP) |
|------------------|
|San Ysidro |
|Chamber of |
|Commerce |
|------------------|
|Sandicast |
|------------------|
|Sempra Energy |
|------------------|
|Service |
|Connection, Inc. |
|------------------|
AB 1139
Page C
|Shafter |
|Enterprise Zone |
|#23 |
|------------------|
|Shamloo & Company |
|AT&C |
|------------------|
|Shilpark Paint |
|Corp. |
|------------------|
|Siderman, |
|Yampolsky Dental |
|Corporation |
|------------------|
|Sierra Cheese |
|Manufacturing |
|Co., Inc. |
|------------------|
|Siskiyou County |
|Board of |
|Supervisors |
|------------------|
|Siskiyou |
|Enterprise Zone |
|------------------|
|Southwest |
|Airlines |
|------------------|
|Space Age Control |
|------------------|
|Stanislaus |
|Economic |
|Development and |
|Workforce |
|Alliance |
|------------------|
|Star Fisheries, |
|Inc |
|------------------|
|State Farm |
|------------------|
|Summit Bank |
|------------------|
|Tactical Assault |
|Gear |
AB 1139
Page D
|------------------|
|Targeted |
|Management |
|Company, Inc. |
|------------------|
|Tax-Tax Group, |
|Inc. |
|------------------|
|Tenacore Holdings |
|Inc. |
|------------------|
|TGR Geotechnical, |
|Inc. |
|------------------|
|The Enterprise |
|Zone Company |
|------------------|
|The National City |
|Chamber |
|------------------|
|The Vally |
|Economic Alliance |
|------------------|
|Title & Company, |
|LLP |
|------------------|
|Troll Systems |
|------------------|
|Tulare County |
|Targeted Tax Area |
|------------------|
|Ultimate Beauty |
|Companies |
|------------------|
|United Leather, |
|Inc. |
|------------------|
|Unity Forest |
|Products |
|------------------|
|Universal Tax |
|Services |
|------------------|
|Urban Industries |
|Embroidery |
AB 1139
Page E
|------------------|
|Vermont |
|Outlet,Inc. |
|------------------|
|Villa Sorriso |
|Restaurant |
|------------------|
|Wakecraft Boats, |
|Inc. |
|------------------|
|Walton Management |
|Services, Inc. |
|------------------|
|Watsco, Inc. |
|------------------|
|Wencentive |
|Corporation |
|------------------|
|Western Growers |
|------------------|
|Windsor Mortgage |
|and Capital |
|------------------|
|Woods Maintenance |
|Services, Inc. |
|------------------|
|Young Electric |
|Sign Company |
|(YESCO) |
|------------------|
|Yuba Sutter |
|Economic |
|Development |
|Corporation |
|------------------|
|Yuba-Sutter |
|Enterprise Zone |
|------------------|
|Z & S |
|Electronics, Inc. |
| |
------------------
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
AB 1139
Page F