Amended in Assembly March 4, 2013

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, begin delete 7085.5, and 7114.2 end delete begin insert and 7085.5 end insert of the Government Code, relating to economic development.

LEGISLATIVE COUNSEL’S DIGEST

AB 28, as amended, 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, begin delete local agency military base recovery areas (LAMBRAs), end delete 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 begin delete , LAMBRAs, end delete 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. begin delete 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. end delete

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 begin delete or the Local Agency Military Base Recovery Area Act, respectively end delete , 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 help stabilize local communities, alleviate
poverty, and enhance the state’s economic prosperity through the
streamlining and expediting of licensing and permitting of
development-related activities and the implementation of publicly
and privately funded programs and services that stimulate business
and industrial growth in the depressed areas of the state.

(b) The geographically targeted economic development area
(G-TEDA) programs are based on the economic principle that
targeting significant incentives to begin delete lower income end delete begin insert lower-income end insert
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.

(c) Therefore, it is in the economic interest of the state to have
one strong, combined, and business-friendly and community
development-friendly 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.

(d)  This chapter shall not 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) (A) 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.

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

(i) 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.

(ii) The census tracts for the proposed eligible area are served
by public schools that have more than 70 percent of the children
enrolled in the federal free lunch program.

(iii) The area within the proposed zone has experienced
significant distress factors, as defined by the department, including,
but not limited to, a history of significant gang-related activity,
high crime rates, or a significant number of plant or business
closures, or all of these.

(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.

(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 manufacturing enhancement area, 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.

(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.

(j) (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 Census Bureau data available at the time
of the original enterprise zone application or the most recent United
States Census Bureau 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 Census
Bureau 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 delete

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

end delete

SEC. 3.  

Section 7073.1 of the Government Code is amended
to read:

7073.1.  

(a)  A 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.

(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.

(2) For purposes of this subdivision, local resources 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.

(L) Local financing authorities.

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

(N) Federal Community Development Block Grant Program
moneys.

(O) CalWORKs funding and other related resources.

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

(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
both 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.

(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.

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

(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.

(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.

(d) 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.

(e) 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.

(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.

(g) (1)  This section 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, 2007.

(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.

SEC. 4.  

Section 7076 of the Government Code is amended to
read:

7076.  

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

(b) (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.

(c) The department shall assess a fee 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 Code, not to exceed the reasonable
cost of administering this chapter, but not to exceed twenty dollars
($20). If the department increases the fee higher than the amount
that was charged by the department as of January 1, 2014, then
the department shall adopt the fee increase by regulation. 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.

(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.

(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.

(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.

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 90 to 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 75 to 90 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) 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.

(C) A written agreement entered into pursuant to this paragraph
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. Dedesignation of the
G-TEDA is 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.

(D) 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) 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.

(e) (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.

(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.

SEC. 6.  

Section 7081 of the Government Code is amended to
read:

7081.  

(a) 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.

(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.

(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.

(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.

SEC. 7.  

Section 7085 of the Government Code is amended to
read:

7085.  

(a) In addition to the information it makes available
biennially pursuant to subdivision (e) of Section 7085.1, the
department shall submit a report to the Legislature every six years
that evaluates the effect of the program on retaining and increasing
employment among targeted populations as described in
subdivision (c), public and private 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 and placement of
unemployed individuals pursuant to Section 7081. The
Employment Development Department, the State Department of
Social Services, and the State Department of Education shall, for
the purposes of the report, provide the department with existing
data on unemployed individuals receiving training. The Department
of General Services shall provide information on the use and
outcomes that the department tracks relating to the enterprise zone
procurement preference.

(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).

(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.

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

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 all 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.

(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.

(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.

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

(b) 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 the legislative bodies comprising
the G-TEDA.

(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.

(d) (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.

(e) 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.

(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.

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, to the extent it
is reasonably available, by enterprise zone and by city or county,
on the dollar value of the G-TEDA tax credits and other G-TEDA
tax incentives 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 total number of jobs for which the hiring credits are
claimed.

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

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

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

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

(f) The total cost of qualified property put into service within
enterprise zones begin delete and LAMBRAs end delete 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 begin delete 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 end delete Code.

(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.

begin delete

SEC. 10.  

Section 7114.2 of the Government Code is amended
to read:

7114.2.  

(a) The department shall assess each LAMBRA a fee
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, not to exceed the reasonable cost of administering
this chapter, but not to exceed twenty dollars ($20). If the
department increases the fee higher than the amount that was
charged by the department as of January 1, 2014, then the
department shall adopt the fee increase by regulation. 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.

end delete