BILL NUMBER: AB 1554	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 30, 2009

INTRODUCED BY   Committee on Jobs, Economic Development, and the
Economy (V. Manuel Perez (Chair), Logue (Vice Chair), Beall, Bill
Berryhill, Block, Huber, and Salas)

                        MARCH 11, 2009

   An act to amend Sections  7085 and 7085.1 of 
 7076.1 and 7085.1 of, and to repeal Section 7085 of,  the
Government Code, relating to economic development.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1554, as amended, Committee on Jobs, Economic Development, and
the Economy. Economic development: omnibus bill.
   Existing law requires the Department of Housing and Community
Development to submit a report to the Legislature every 5 years
evaluating specified effects of enterprise zones.
   This bill would  revise the dates that the department is
required to submit its reports   repeal   ,
recast, and make technical changes to   these provisions
 .
   Existing law requires a geographically targeted economic
development area (G-TEDA) to report to the Department of Housing and
Community Development  by October 1, 2008, and 
every 2 years  thereafter,  on progress made toward
its existing goals and objectives and plans for the following 2-year
period.  Existing law also requires that a copy of this biennial
report be submitted to the legislative bodies of the local
jurisdictions comprising the G-TEDA for review. 
   This bill would  make technical, nonsubstantive changes to
this provision   delete the requirement that this
report be submitted to the legislative bodies of the local
jurisdiction  .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares that this act by the
Assembly Committee on Jobs, Economic Development, and the Economy is
the committee's annual omnibus bill on geographically targeted
economic development areas. 
  SEC. 2.    Section 7085 of the Government Code is
amended to read:
   7085.  (a) Notwithstanding Section 7550.5, the department shall
submit a report to the Legislature on or before December 31, 2010,
addressing the period of January 1, 2004, to July 1, 2010, inclusive,
and submit a report every five years thereafter, addressing the
period of the five immediately preceding fiscal years, that evaluates
the effect of the program on employment, 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 of unemployed individuals
pursuant to Section 7081. The Employment Development Department
shall, for the purposes of the report, provide the department with
existing data on unemployed individuals receiving training. The
Franchise Tax Board shall make available to the department and the
Legislature aggregate information on the dollar value of enterprise
zone tax credits that are claimed each year by businesses.
   (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). 
   SEC. 2.    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 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 or exceeds 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 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) 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. A written agreement entered into
pursuant to this subparagraph 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,
dedesignate the G-TEDA 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.
   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) (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   7085.1  .
   (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.
   SEC. 3.    Section 7085 of the   Government
Code   is repealed.  
   7085.  (a) Notwithstanding Section 7550.5, the department shall
submit a report to the Legislature every five years beginning January
1, 1998, that evaluates the effect of the program on employment,
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 of
unemployed individuals pursuant to Section 7081. The Employment
Development Department shall, for the purposes of the report, provide
the department with existing data on unemployed individuals
receiving training. The Franchise Tax Board shall make available to
the department and the Legislature aggregate information on the
dollar value of enterprise zone tax credits that are claimed each
year by businesses.
   (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). 
  SEC. 3.  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 both 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. 
   (b) A copy of the biennial report developed pursuant to
subdivision (a) shall also be submitted to the legislative bodies of
the local jurisdictions comprising the G-TEDA. 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 these
legislative bodies.  
   (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 subdivisions (d) and (e).

   (c) (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.
   (d) 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. 
   (e) The department shall submit a report to the Legislature on or
before December 31, 2010, addressing the period of January 1, 2004,
to July 1, 2010, inclusive, and submit a report every six years
thereafter, addressing the period of the six immediately preceding
fiscal years, that evaluates the effect of the program on employment,
investment, and incomes, and on state and local tax revenues in
designated enterprise zones. The assessment shall differentiate the
progress made by G-TEDAs designated prior to January 1, 2007, and
those designated after January 1, 2007. 
  SEC. 4.  The Legislature finds and declares both of the following:
   (a) This is an act by the Assembly Committee on Jobs, Economic
Development, and the Economy for code maintenance.
   (b) The changes made by this act to  subdivision (d) of 
Section 7085.1 of the Government Code are technical, nonsubstantive
corrections.