California Legislature—2013–14 Regular Session

Assembly Bill No. 1242

Introduced by Assembly Member Melendez

February 22, 2013

An act to amend Section 7073.1 of the Government Code, relating to enterprise zones.

LEGISLATIVE COUNSEL’S DIGEST

AB 1242, as introduced, Melendez. 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. These provisions specify requirements for designating an area as an enterprise zone.

This bill would make technical, nonsubstantive changes to this provision.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 7073.1 of the Government Code is
amended to read:

7073.1.  

(a) Except as provided in subdivision (e), begin delete 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.

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

(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 begin delete any end delete begin insert an end insert existing begin delete zones end delete begin insert zone end insert .

(4) When reviewing and ranking begin insert a end insert new enterprise zone
begin delete applications end delete begin insert application end insert , the department shall give bonus points
to begin delete applications end delete begin insert an application end insert from begin delete jurisdictions end delete begin insert a jurisdiction end insert that
begin delete meet end delete begin insert meets end insert minimum threshold points and at least two 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.

(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.

(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) 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.

(d) 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.

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