California Legislature—2013–14 Regular Session

Assembly Bill No. 28

Introduced by Assembly Member V. Manuel Pérez

December 3, 2012

An act to amend Sections 7071, 7072, 7073.1, 7076, 7076.1, 7081, 7085, 7085.1, 7085.5, and 7114.2 of the Government Code, relating to economic development.

LEGISLATIVE COUNSEL’S DIGEST

AB 28, as introduced, V. Manuel Pérez. Economic development: enterprise zones.

The Enterprise Zone Act provides for the designation and oversight by the Department of Housing and Community Development of various types of economic development areas throughout the state, including enterprise zones, targeted tax areas, local agency military base recovery areas (LAMBRAs), and manufacturing enhancement areas, collectively known as geographically targeted economic development areas, or G-TEDAs. Pursuant to these provisions, qualifying entities in those areas may receive certain tax and regulatory incentives.

This bill would revise various definitions for purposes of the act and modify specified requirements for designating and administering enterprise zones, LAMBRAs, and G-TEDAs, collectively. The bill would impose new requirements on the Department of Housing and Community Development with respect to the enterprise zone program and modify department and Franchise Tax Board reporting requirements.

Existing law, the Enterprise Zone Act, authorizes the Department of Housing and Community Development to assess a fee of not more than $15 on each enterprise zone and manufacturing enhancement area for each application for issuance of a certificate pursuant to specified tax credit provisions. Existing law, the Local Agency Military Base Recovery Area Act, authorizes the Department of Housing and Community Development to assess a fee of not more than $15 on each local agency military base recovery area for each application for issuance of a certificate pursuant to specified tax credit provisions.

This bill would instead authorize the department to charge a fee for those applications not to exceed the reasonable cost of administering the Enterprise Zone Act or the Local Agency Military Base Recovery Area Act, respectively, but not to exceed $20. The bill would require any increase in the fee higher than the amount that was charged by the department as of January 1, 2014, to be adopted by regulation.

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.  

Section 7071 of the Government Code is amended
to read:

7071.  

The Legislature finds and declares as follows:

(a) The health, safety, and welfare of the people of California
depend upon the development, stability, and expansion of private
business, industry, and commerce, and there are certain areas within
the state that are economically depressed due to a lack of
investment in the private sector. Therefore, it is declared to be the
purpose of this chapter to begin insert help stabilize local communities, alleviate end insert
begin insert poverty, and enhance the state’s economic prosperity through the end insert
begin insert streamlining and expediting of licensing and permitting of end insert
begin insert development-related activities and the implementation of publicly end insert
begin insert and privately funded programs and services that end insert stimulate business
and industrial growth in the depressed areas of the state begin delete by relaxing end delete
begin delete regulatory controls that impede private investment end delete .

begin insert

(b) The geographically targeted economic development area
(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.

end insert begin delete

(b) It

end delete

begin insert end insert
begin insert (c) end insert begin insert   end insert begin insert Therefore, it end insert is in the economic interest of the state to have
one strong, combined, and business-friendly begin insert and community end insert
begin insert development-friendly end insert incentive program to help attract business
and industry to the state, to help retain and expand existing state
business and industry, and to create increased job opportunities
for all Californians.

begin delete end delete begin delete

(c) No enterprise zone shall be designated in which any
boundary thereof is drawn in a manner so as to include larger stable
businesses or heavily residential areas to the detriment of areas
that are truly economically depressed.

end delete begin delete end delete

(d)  begin delete Nothing in this end delete begin insert This end insert chapter shall begin insert not end insert be construed to
infringe upon regulations relating to the civil rights, equal
employment rights, equal opportunity rights, or fair housing rights
of any person.

SEC. 2.  

Section 7072 of the Government Code is amended to
read:

7072.  

For purposes of this chapter, the following definitions
shall apply:

(a) “Department” means the Department of Housing and
Community Development.

(b) “Date of original designation” means the earlier of the
following:

(1) The date the eligible area receives designation as an
enterprise zone by the department pursuant to this chapter.

(2) In the case of an enterprise zone deemed designated pursuant
to subdivision (e) of Section 7073, the date the enterprise zone or
program area received original designation by the former Trade
and Commerce Agency pursuant to Chapter 12.8 (commencing
with Section 7070) or Chapter 12.9 (commencing with Section
7080), as those chapters read prior to January 1, 1997.

(c) “Eligible area” means any of the following:

(1)  begin insert (A) end insert begin insert   end insert An area designated as an enterprise zone pursuant to
Chapter 12.8 (commencing with Section 7070), as it read prior to
January 1, 1997, or as a targeted economic development area,
neighborhood development area, or program area pursuant to
Chapter 12.9 (commencing with Section 7080), as it read prior to
January 1, 1997.

begin delete end delete begin delete

(2) A geographic area that, based upon the determination of the
department, fulfills at least one of the following criteria:

end delete begin delete end delete begin delete end delete begin delete

(A) The proposed geographic area meets the Urban Development
Action Grant criteria of the United States Department of Housing
and Urban Development.

end delete begin delete end delete begin delete end delete begin delete

(B) The area within the proposed eligible area has experienced
plant closures within the past two years affecting more than 100
workers.

end delete begin delete end delete begin delete end delete begin delete

(C) The city or county has submitted material to the department
for a finding that the proposed geographic area meets criteria of
economic distress related to those used in determining eligibility
under the Urban Development Action Grant Program and is
therefore an eligible area.

end delete begin delete end delete begin delete end delete begin delete

(D) The area within the proposed zone has a history of
gang-related activity, whether or not crimes of violence have been
committed.

end delete begin delete end delete begin delete

(3)

end delete

begin insert (B) end insert  A geographic area begin insert within census tracts of the proposed end insert
begin insert eligible area with a median household income for a family of four end insert
that begin delete meets end delete begin insert does not exceed 80 percent of the statewide median end insert
begin insert income for the most recently available calendar year, as well as end insert
begin insert meeting end insert at least begin delete two end delete begin insert one end insert of the following criteria:

begin delete

(A)

end delete

begin insert (i) end insert  The census tracts within the proposed eligible area have an
unemployment rate not less than 3 percentage points above the
statewide average for the most recent calendar year as determined
by the Employment Development Department.

begin delete

(B)

end delete

begin insert (ii) end insert  The begin delete county of end delete begin insert census tracts for end insert the proposed eligible area
begin delete has end delete begin insert are served by public schools that have end insert more than 70 percent
of the children enrolled in begin delete public school participating in end delete the federal
free lunch program.

begin delete

(C)

end delete

begin insert (iii) end insert  The begin delete median household income for a family of four end delete begin insert area end insert
within the begin delete census tracts of end delete begin insert proposed zone has experienced end insert
begin insert significant distress factors, as defined by end insert the begin delete proposed eligible end delete
begin delete area does end delete begin insert department, including, but end insert not begin delete exceed 80 percent end delete begin insert limited end insert
begin insert to, a history end insert of begin delete the statewide median income for the most recently end delete
begin delete available calendar year end delete begin insert significant gang-related activity, high crime end insert
begin insert rates, or a significant number of plant or business closures, or all end insert
begin insert of these end insert .

begin insert

(2) The amendments made to this subdivision during the
2012-13 Regular Session shall apply only to requests for proposals
issued on or after January 1, 2014.

end insert

(d) “Enterprise zone” means any area within a city, county, or
city and county that is designated as an enterprise zone by the
department in accordance with Section 7073.

(e) “Governing body” means a county board of supervisors or
a city council, as appropriate.

(f) “G-TEDA” means a geographically targeted economic
development area, which is an area designated as an enterprise
zone, a begin delete Manufacturing Enhancement Area end delete begin insert manufacturing end insert
begin insert enhancement area end insert , a targeted tax area, or a local agency military
base recovery area.

(g) “High-technology industries” includes, but is not limited to,
the computer, biological engineering, electronics, and
telecommunications industries.

(h) “Resident,” unless otherwise defined, means a person whose
principal place of residence is within a targeted employment area.

begin insert

(i) “Rural city” means a city with a population under 75,000
that, in whole or in part, is located in an area designated as
“frontier” or “rural” on the California Medical Service Study
Areas map, as it was published in September 2010 or more recently
updated by the Office of Statewide Health Planning and
Development.

end insert begin delete

(i)

end delete

begin insert (j) end insert  (1) “Targeted employment area” means an area within a
city, county, or city and county that is composed solely of those
census tracts designated by the United States Department of
Housing and Urban Development as having at least 51 percent of
its residents of low- or moderate-income levels, using either the
most recent United States begin delete Department of end delete Census begin insert Bureau end insert data
available at the time of the original enterprise zone application or
the most recent begin delete census end delete begin insert United States Census Bureau end insert data available
at the time the targeted employment area is designated to determine
that eligibility. The purpose of a “targeted employment area” is to
encourage businesses in an enterprise zone to hire eligible residents
of certain geographic areas within a city, county, or city and county.
A targeted employment area may be, but is not required to be, the
same as all or part of an enterprise zone. A targeted employment
area’s boundaries need not be contiguous. A targeted employment
area does not need to encompass each eligible census tract within
a city, county, or city and county. The governing body of each
city, county, or city and county that has jurisdiction of the
enterprise zone shall identify those census tracts whose residents
are in the most need of this employment targeting. Only those
census tracts within the jurisdiction of the city, county, or city and
county that has jurisdiction of the enterprise zone may be included
in a targeted employment area.

(2) At least a part of each eligible census tract within a targeted
employment area shall be within the territorial jurisdiction of the
city, county, or city and county that has jurisdiction for an
enterprise zone. If an eligible census tract encompasses the
territorial jurisdiction of two or more local governmental entities,
all of those entities shall be a party to the designation of a targeted
employment area. However, any one or more of those entities, by
resolution or ordinance, may specify that it shall not participate in
the application as an applicant, but shall agree to complete all
actions stated within the application that apply to its jurisdiction,
if the area is designated.

(3) Each local governmental entity of each city, county, or city
and county that has jurisdiction of an enterprise zone shall approve,
by resolution or ordinance, the boundaries of its targeted
employment area, regardless of whether a census tract within the
proposed targeted employment area is outside the jurisdiction of
the local governmental entity.

(4) (A) Within 180 days of updated United States begin delete census end delete begin insert Census end insert
begin insert Bureau end insert data becoming available, each local governmental entity
of each city, county, or city and county that has jurisdiction of an
enterprise zone shall approve, by resolution or ordinance,
boundaries of its targeted employment area reflecting the new
census data. If no changes are necessary to the boundaries based
on the most current census data, the enterprise zone may send a
letter to the department stating that a review has been undertaken
by the respective local governmental entities and no boundary
changes are required.

(B) A targeted employment area boundary approved prior to
the 2000 United States census data becoming available that has
not been reviewed and its boundaries revised to reflect the most
recent census data, shall be reviewed and updated, and a new
resolution or ordinance submitted by the appropriate local
governmental entity to the department, by July 1, 2007. However,
enterprise zones that expire on or prior to December 31, 2008,
shall be exempt from the update requirement.

begin insert

(k) “LAMBRA” means a local agency military base recovery
area.

end insert

SEC. 3.  

Section 7073.1 of the Government Code is amended
to read:

7073.1.  

(a)  begin delete Except as provided in subdivision (e), any end delete begin insert A end insert city,
county, or city and county with an eligible area within its
jurisdiction may complete a preliminary application for designation
as an enterprise zone. The applying entity shall establish definitive
boundaries for the proposed enterprise zone and the targeted
employment area. An entity may propose zones in areas with
noncontiguous boundaries, and the department may designate those
areas as zones if the director determines both of the following:

(1) The noncontiguous area is needed to implement the
applicant’s economic development strategy.

(2) The excluded area between the proposed zone boundaries
would not, based on the proposed economic strategy, also benefit
from the zone designation.

(b) (1) In designating enterprise zones, the department shall
select from the applications submitted those proposed enterprise
zones that, upon a comparison of all of the applications submitted,
indicate that they propose the most appropriate economic
development strategy and implementation plan utilizing state and
local programs and incentives to create jobs, attract private sector
investment, and improve the economic conditions within the zone
proposed. The department shall prescribe a format that promotes
succinct and focused strategies and plans, and set minimum
standards for the strategies and plans. For the purposes of this
subdivision, important elements of a strategy or plan may include,
but are not limited to, all of the following:

(A) An assessment of current financial and community
development strengths, needs, and opportunities.

(B) A framework for investment of time, action, and money.

(C) Clear articulation of goals.

(D) Measurable objectives, including targets.

(E) Proposed implementation activities and tasks, including
timeframes, and a framework for evaluating performance, including
qualitative and quantitative benchmarks.

begin insert

(F) An identification of local resources, including incentives,
the jurisdiction will utilize to implement the strategy or plan and
how those resources will help to leverage or maximize the benefit
of state resources that become available for enterprise zone
communities.

end insert

(2) For purposes of this subdivision, local begin delete incentives end delete begin insert resources end insert
may include, but are not limited to, all of the following:

(A) The suspension or relaxation of locally originated or
modified building codes, zoning laws, general development plans,
or rent controls.

(B) The elimination or reduction of fees for applications,
permits, and local government services.

(C) The establishment of a streamlined permit process.

(D) Elimination or reduction of construction taxes or business
license taxes.

(E) The provision or expansion of infrastructure.

(F) The targeting of federal block grant moneys, including small
cities, education, and health and welfare block grants.

(G) The targeting of economic development grants and loan
moneys, including grant and loan moneys provided by the United
States Department of Housing and Urban Development.

(H) The targeting of state and federal job disadvantaged and
vocational education grant moneys, including moneys provided
by the federal Workforce Investment Act of 1998 (Public Law
105-220), or its successor.

(I) The targeting of federal or state transportation grant moneys.

(J) The targeting of federal or state low-income housing and
rental assistance moneys.

(K) The use of tax allocation bonds, special assessment bonds,
bonds under the Mello-Roos Community Facilities Act of 1982
(Chapter 2.5 (commencing with Section 53311) of Part 1 of
Division 2 of Title 5), industrial development bonds, revenue
bonds, private activity bonds, housing bonds, bonds issued pursuant
to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4
(commencing with Section 6584) of Chapter 5), certificates of
participation, hospital bonds, redevelopment bonds, school bonds,
and all special provisions provided for under federal tax law for
enterprise community or empowerment zone bonds.

begin insert

(L) Local financing authorities.

end insert begin insert

(M) Federal Workforce Investment Act moneys and programs
funded with those moneys.

end insert begin insert

(N) Federal Community Development Block Grant Program
moneys.

end insert begin insert

(O) CalWORKs funding and other related resources.

end insert begin insert

(P) Local education entities, including kindergarten and grades
1 to 12, inclusive, adult education, community colleges, and public
and private universities.

end insert

(3) When designating new enterprise zones, the department
shall take into consideration the location of existing zones and
make every effort to locate new zones in a manner that will not
adversely affect any existing zones.

(4) When reviewing and ranking new enterprise zone
applications, the department shall give bonus points to applications
from jurisdictions that meet minimum threshold points and at least
begin delete two end delete begin insert both end insert of the following criteria:

(A) The percentage of households within the census tracts of
the proposed enterprise zone area, the income of which is below
the poverty level, is at least 17.5 percent.

(B) The average unemployment rate for the census tracts of the
proposed enterprise zone area was not less than five percentage
points above the statewide average for the most recent calendar
year as determined by the Employment Development Department.

begin delete end delete begin delete

(C) The applicant jurisdiction has, and can document that it has,
a unique distress factor affecting long-term economic development,
including, but not limited to, resource depletion, plant closure,
industry recession, natural disaster, or military base closure.

end delete begin delete end delete

(5) Except as modified pursuant to paragraph (4), applications
shall be ranked by the appropriateness of the economic
development strategy and implementation plan, including all of
the following:

(A) The extent the strategy clearly identifies the local resources,
incentives, and programs that will be made available to the zone
for meeting its goals and objectives.

(B) The extent the strategy provides for attracting private sector
investment.

(C) The extent the strategy includes related regional and
community-based partnerships for achieving the goals and
objectives in the strategy.

(D) The extent the strategy fits within the jurisdiction’s overall
economic development strategy, including the extent the strategy
and implementation plan is appropriate for the local community.

(E) The extent the strategy addresses the hiring and retention
of unemployed or underemployed residents or low-income
individuals in the proposed zone and surrounding areas.

(F) The extent the strategy sets reasonable and measurable
benchmarks, goals, and objectives.

(G) The extent the strategy sets forth an appropriate funding
schedule for management, oversight, and program delivery within
the zone relative to the benchmarks, goals, and objectives in the
strategy.

(H) The extent that the economic development strategy has a
comprehensive incentive package for attracting private investment
to the enterprise zone.

begin insert

(c) For applications for enterprise zone designation submitted
on or after January 1, 2014, both of the following shall apply:

end insert begin insert

(1) If any portion of the proposed zone is within, or previously
was within, the boundaries of a previously designated enterprise
zone, the aggregate size of the proposed zone shall not exceed the
size of the previously designated and expanded enterprise zone by
more than 15 percent. If a proposed zone is located in a rural city
or in a county with a population under 275,000, the proposed zone
shall not exceed the size of the previously designated zone and
expanded enterprise zone by more than 25 percent.

end insert begin insert

(2) If any portions of the proposed zone are within, or previously
were within, the boundaries of two or more previously designated
enterprise zones, the aggregate size of the proposed zone shall not
exceed the size of the largest single previously designated and
expanded enterprise zone by more than 15 percent.

end insert begin delete

(c)

end delete

begin insert (d) end insert  In evaluating applications for designation, the department
shall ensure that applications are not disqualified solely because
of technical deficiencies, and shall provide applicants with an
opportunity to correct the deficiencies. Applications shall be
disqualified if the deficiencies are not corrected within two weeks.

begin delete

(d)

end delete

begin insert (e) end insert  Except upon dedesignation pursuant to subdivision (c) of
Section 7076.1, Section 7076.2, or Section 7085.1, a designation
made by the department shall be binding for a period of 15 years
from the date of the original designation.

begin insert

(f) The applicant shall be required to begin implementation of
the enterprise zone plan contained in the final application within
six months after notification of final designation, or the enterprise
zone shall be dedesignated.

end insert begin delete

(e)

end delete

begin insert end insert
begin insert (g) end insert begin insert   end insert begin insert (1) end insert   This section shall begin delete only end delete apply begin insert only end insert to enterprise zone
applications for which the department has issued a solicitation for
new enterprise zone designations on or after January 1, 2007.

begin insert

(2) The amendments made to this section during the 2012-13
Regular Session shall apply only to enterprise zone applications
for which the department has issued a solicitation for new
enterprise zone designations on or after January 1, 2014.

end insert

SEC. 4.  

Section 7076 of the Government Code is amended to
read:

7076.  

(a)  begin insert The department shall serve as a liaison between the end insert
begin insert state and enterprise zone residents, businesses, workers, nonprofit end insert
begin insert organizations, and local governments. State agencies and end insert
begin insert departments shall affirmatively support their statutory end insert
begin insert responsibilities under this chapter and, consistent with their end insert
begin insert statutory duties, respond to requests made by and on the behalf of end insert
begin insert an enterprise zone. end insert

begin insert (b) end insert  (1) The department shall provide technical assistance to
the enterprise zones designated pursuant to this chapter with respect
to all of the following activities:

(A) Furnish limited onsite assistance to the enterprise zones
when appropriate.

(B) Ensure that the locality has developed a method to make
residents, businesses, and neighborhood organizations aware of
the opportunities to participate in the program.

(C) Help the locality develop a marketing program for the
enterprise zone.

(D) Coordinate activities of other state agencies regarding the
enterprise zones.

(E) Monitor the progress of the program.

(F) Help businesses to participate in the program.

(2) Notwithstanding existing law, the provision of services in
subparagraphs (A) to (F), inclusive, shall be a high priority of the
department.

(3) The department may, at its discretion, undertake other
activities in providing management and technical assistance for
successful implementation of this chapter.

begin delete end delete begin delete

(b) The applicant shall be required to begin implementation of
the enterprise zone plan contained in the final application within
six months after notification of final designation or the enterprise
zone shall lose its designation.

end delete begin delete end delete

(c) The department shall assess a fee begin delete of fifteen dollars ($15) end delete on
each enterprise zone and manufacturing enhancement area for each
application for issuance of a certificate pursuant to subdivision (j)
of Section 17053.47 of, subdivision (c) of Section 17053.74 of,
subdivision (c) of Section 23622.7 of, or subdivision (i) of Section
23622.8 of, the Revenue and Taxation begin delete Code end delete begin insert Code, not to exceed end insert
begin insert the reasonable cost of administering this chapter, but not to exceed end insert
begin insert twenty dollars ($20). If the department increases the fee higher end insert
begin insert than the amount that was charged by the department as of January end insert
begin insert 1, 2014, then the department shall adopt the fee increase by end insert
begin insert regulation end insert . The department shall collect the fee for deposit into
the Enterprise Zone Fund, pursuant to Section 7072.3, for the costs
of administering this chapter. The enterprise zone or manufacturing
enhancement area administrator shall collect this fee at the time
an application is submitted for issuance of a certificate.

begin insert

(d) (1) (A) The department shall maintain, and post on its
Internet Web site, a catalog of all administrative memoranda in
effect that implement this chapter, including the subject matter of
the memoranda and the effective dates of their publication,
modification, or repeal, along with the text of the memoranda.

end insert begin insert

(B) The department shall post on its Internet Web site the
publication, modification, or repeal of any of those administrative
memoranda, within 10 business days of that publication,
modification, or repeal.

end insert begin insert

(2) The department shall post on its Internet Web site enterprise
zone and targeted employment area boundary approvals,
modifications, and repeals within 10 business days of the approval,
modification, or repeal becoming final.

end insert

SEC. 5.  

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 begin insert 90 to end insert 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 begin delete or exceeds 75 end delete begin insert 75 to 90 end insert
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.

begin delete

(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

end delete begin insert

(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) of paragraph (4) 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.

end insert

begin insert (C) end insert begin insert   end insert begin insert A end insert written agreement entered into pursuant to this
begin delete subparagraph end delete begin insert paragraph end insert 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 begin delete dedesignated, end delete
begin delete dedesignate end delete begin insert dedesignated. Dedesignation of end insert the G-TEDA begin insert is end insert
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.

begin delete

Any

end delete

begin insert (D) end insert begin insert   end insert begin insert Any end insert 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) begin insert   end insert 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.

begin insert

(d) In undertaking its audit responsibilities pursuant to this
section, the department shall seek appropriate opportunities to
provide technical assistance and training to help G-TEDAs address
inadequacies identified through the audit of the program.
Assistance may include, but is not limited to, workshops, mentoring
programs, and referrals to other federal, state, and local public
and private entities.

end insert begin delete

(d)

end delete

begin insert (e) end insert  (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.

(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.

begin insert

(f) In addition to any other oversight activities that the
department determines are appropriate and necessary, the
department shall review the progress reports submitted by a
G-TEDA pursuant to Section 7085.1 and determine whether an
audit is warranted.

end insert

SEC. 6.  

Section 7081 of the Government Code is amended to
read:

7081.  

begin insert (a) end insert begin insert   end insert Notwithstanding any other provision of state law,
and to the extent permitted by federal law, the Employment
Development Department and the State Department of Education
shall give high priority to the training of unemployed individuals
who reside in a targeted employment area or a designated enterprise
zone. begin delete The department may assist localities in designating local end delete
begin delete business, labor, and education consortia to broker activities between end delete
begin delete the employment community and educational and training end delete
begin delete institutions. Any available discretionary funds may be used to end delete
begin delete assist the creation of those consortia. end delete

begin insert

(b) When developing workforce development and training plans
and strategies, including, but not limited to, plans, activities, and
responsibilities related to Section 14010 of the Unemployment
Insurance Code or accessing or allocating funds from the federal
Workforce Development Act of 1998 (Public Law 105-220), a state
entity shall consider how the G-TEDA programs could be
integrated so as to maximize the benefits to workers and businesses.

end insert begin insert

(c) The department may assist localities in designating local
business, labor, and education consortia to broker activities
between the employment community and educational and training
institutions. Any available discretionary funds may be used to
assist the creation of those consortia.

end insert begin insert

(d) Local education entities that administer student work permits
shall consider how enterprise zone program hiring credits could
be used to benefit lower income students who apply for work
permits at their offices.

end insert

SEC. 7.  

Section 7085 of the Government Code is amended to
read:

7085.  

(a)  begin delete Notwithstanding end delete begin insert In addition to the information it end insert
begin insert makes available biennially pursuant to subdivision (e) of end insert begin insert end insert Section
begin delete 7550.5, end delete begin insert 7085.1, end insert the department shall submit a report to the
Legislature every begin delete five end delete begin insert six end insert years begin delete beginning January 1, 1998, end delete that
evaluates the effect of the program on begin delete employment, end delete begin insert retaining and end insert
begin insert increasing employment among targeted populations as described end insert
begin insert in subdivision (c), public and private end insert 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 begin insert and placement end insert of
unemployed individuals pursuant to Section 7081. The
Employment Development begin insert Department, the State end insert Department begin insert of end insert
begin insert Social Services, and the State Department of Education end insert shall, for
the purposes of the report, provide the department with existing
data on unemployed individuals receiving training. The begin delete Franchise end delete
begin delete Tax Board end delete begin insert Department of General Services end insert shall begin delete make available end delete
begin delete to the department and the Legislature aggregate end delete begin insert provide end insert
information on the begin delete dollar value of enterprise zone tax credits that end delete
begin delete are claimed each year by businesses end delete begin insert use and outcomes that the end insert
begin insert department tracks relating to the enterprise zone procurement end insert
begin insert preference end insert .

(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).

begin insert

(c) Targeted populations included within the report required
pursuant to subdivision (a) shall include, but not be limited to, the
disabled, disabled veterans, individuals formerly on forms of
federal and state assistance, individuals within the targeted
employment areas, ex-offenders, and veterans.

end insert begin insert

(d) The base year for the report required pursuant to subdivision
(a) shall be the calendar year commencing January 1, 2014.

end insert

SEC. 8.  

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 begin delete both end delete begin insert all end insert 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 begin delete year’s end delete biennial
report. An explanation of any meaningful discrepancies in these
amounts shall be provided.

begin insert

(3) Identification of the financial value of local incentives
provided during the report period, and of federal and other state
resources accessed to serve the residents, workers, and businesses
in the G-TEDA.

end insert begin insert

(4) Information aggregated from certification applications
approved in the zones relating to the hiring credit. The type of
information may include, but not be limited to, the number of jobs
for which certifications have been issued and the wage rates and
the number and size of the businesses utilizing the program.

end insert begin insert

(5) Information on the number of state-certified disabled
veteran-owned business enterprises that submitted applications
for employee certification.

end insert

(b)  begin delete A copy of the biennial report developed pursuant to end delete
begin delete subdivision (a) shall also be submitted to the legislative bodies of end delete
begin delete the local jurisdictions comprising the G-TEDA. end delete 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 begin delete these legislative bodies, either as part of end delete the begin delete approval end delete
begin delete of end delete begin insert legislative bodies comprising end insert the begin delete G-TEDA’s annual work plan end delete
begin delete or separately, at the discretion of the legislative body end delete begin insert G-TEDA end insert .

begin insert

(c) 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 this section and Section
7085.

end insert begin delete

(c)

end delete

begin insert (d) end insert  (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 begin delete 60-calendar-day end delete begin insert 60 calendar day end insert 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.

begin delete

(d)

end delete

begin insert (e) end insert  The department shall begin delete biennially end delete begin insert biennially, beginning on end insert
begin insert or before December 31, 2008, end insert 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 begin insert G-TEDA’s end insert biennial
report.

begin insert

(f) G-TEDAs that fail to submit a timely biennial report to the
department shall be audited pursuant to Section 7076.1. This
subdivision shall apply to all reports due on or after October 1,
2014.

end insert

SEC. 9.  

Section 7085.5 of the Government Code is amended
to read:

7085.5.  

The Franchise Tax Board shall annually make available
to the department and the Legislature information, begin insert to the extent it end insert
begin insert is reasonably available, end insert by enterprise zone and by city or county,
on the dollar value of the begin delete enterprise zone end delete begin insert G-TEDA end insert tax credits begin insert and end insert
begin insert other G-TEDA tax incentives end insert that are claimed each year by
businesses and shall design and distribute forms and instructions
that will allow the following information to be accessible:

(a) The begin insert total end insert number of jobs for which the hiring credits are
claimed.

begin delete end delete begin delete

(b) The number of new employees for which hiring credits are
claimed.

end delete begin delete end delete begin delete

(c)

end delete

begin insert (b) end insert  The number of businesses claiming each individual tax
credit.

begin delete

(d)

end delete

begin insert (c) end insert  The nature of the business claiming each individual tax
credit.

begin delete

(e)

end delete

begin insert (d) end insert  The distribution of zone tax incentives among industry
groups.

begin delete

(f)

end delete

begin insert (e) end insert  The distribution of zone tax incentives by the annual receipts
and asset value of the business claiming each individual tax credit.

begin insert

(f) The total cost of qualified property put into service within
enterprise zones and LAMBRAs during the previous five taxable
years. In determining these amounts, qualified property put into
service within enterprise zones shall have the same meaning as
defined in Sections 17053.70 and 23612.2 of the Revenue and
Taxation Code, and qualified property put into service within a
LAMBRA shall have the same meaning as defined in Sections
17053.45 and 23645 of the Revenue and Taxation Code.

end insert

(g) Any other information that the Franchise Tax Board and the
department deem to be important in determining the cost to, and
benefit derived by, the taxpayers of the state.

SEC. 10.  

Section 7114.2 of the Government Code is amended
to read:

7114.2.  

(a) The department shall assess each LAMBRA a fee
begin delete of fifteen dollars ($15) end delete for each application for issuance of a
certificate pursuant to subdivision (c) of Section 17053.46 of the
Revenue and Taxation Code and subdivision (c) of Section 23646
of the Revenue and Taxation Code begin insert , not to exceed the reasonable end insert
begin insert cost of administering this chapter, but not to exceed twenty dollars end insert
begin insert ($20). If the department increases the fee higher than the amount end insert
begin insert that was charged by the department as of January 1, 2014, then end insert
begin insert the department shall adopt the fee increase by regulation end insert . The
department shall collect the fee for deposit into the Enterprise Zone
Fund, pursuant to Section 7072.3, for the costs of administering
this chapter. The LAMBRA administrator shall collect this fee at
the time an application is submitted for issuance of a certificate.

(b) The department shall adopt regulations governing the
imposition and collection of fees pursuant to this section and the
issuance of certificates pursuant to subdivision (c) of Section
17053.46 of the Revenue and Taxation Code and subdivision (c)
of Section 23646 of the Revenue and Taxation Code. The
regulations shall provide for a notice or invoice to fee payers as
to the amount and purpose of the fee. The adoption of the
regulations shall be deemed to be an emergency and necessary for
the immediate preservation of the public peace, health and safety,
or general welfare. Notwithstanding subdivision (e) of Section
11346.1, the regulations shall remain in effect for no more than
360 days unless the agency complies with all the provisions of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 as required by subdivision (e) of Section 11346.1.