Senate BillNo. 133

Introduced by Senator DeSaulnier

January 28, 2013

An act to amend Section 7073.1 of the Government Code, relating to economic development.


SB 133, as introduced, DeSaulnier. Enterprise zones: applications.

The Enterprise Zone Act provides for the designation of enterprise zones by the Department of Housing and Community Development, based on the department’s approval of applications from a city, county, or city and county with a geographic area meeting certain criteria. The act, among other things, sets forth the application process.

This bill, for any application for an enterprise zone designation submitted on or after January 1, 2014, if any portion of the proposed zone is within, or was previously within, the boundaries of a previously designated zone, or if any portions of the proposed zone are within, or previously were within, the boundaries of 2 or more previously designated enterprise zones, would prohibit the proposed enterprise zone from exceeding a specified aggregate size.

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

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

P1    1


Section 7073.1 of the Government Code is
2amended to read:



(a) begin deleteExcept as provided in subdivision (e), any end deletebegin insertAny end insert
4city, county, or city and county with an eligible area within its
5jurisdiction may complete a preliminary application for designation
P2    1as an enterprise zone. The applying entity shall establish definitive
2boundaries for the proposed enterprise zone and the targeted
3employment area. An entity may propose zones in areas with
4noncontiguous boundaries, and the department may designate those
5areas as zones if the director determines both of the following:

6(1) The noncontiguous area is needed to implement the
7applicant’s economic development strategy.

8(2) The excluded area between the proposed zone boundaries
9would not, based on the proposed economic strategy, also benefit
10from the zone designation.

11(b) (1) In designating enterprise zones, the department shall
12select from the applications submitted those proposed enterprise
13zones that, upon a comparison of all of the applications submitted,
14indicate that they propose the most appropriate economic
15development strategy and implementation plan utilizing state and
16local programs and incentives to create jobs, attract private sector
17investment, and improve the economic conditions within the zone
18proposed. The department shall prescribe a format that promotes
19succinct and focused strategies and plans, and set minimum
20standards for the strategies and plans. For the purposes of this
21subdivision, important elements of a strategy or plan may include,
22but are not limited to, all of the following:

23(A) An assessment of current financial and community
24development strengths, needs, and opportunities.

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

26(C) Clear articulation of goals.

27(D) Measurable objectives, including targets.

28(E) Proposed implementation activities and tasks, including
29timeframes, and a framework for evaluating performance, including
30qualitative and quantitative benchmarks.

31(2) For purposes of this subdivision, local incentives may
32include, but are not limited to, all of the following:

33(A) The suspension or relaxation of locally originated or
34modified building codes, zoning laws, general development plans,
35or rent controls.

36(B) The elimination or reduction of fees for applications,
37permits, and local government services.

38(C) The establishment of a streamlined permit process.

39(D) Elimination or reduction of construction taxes or business
40license taxes.

P3    1(E) The provision or expansion of infrastructure.

2(F) The targeting of federal block grant moneys, including small
3cities, education, and health and welfare block grants.

4(G) The targeting of economic development grants and loan
5moneys, including grant and loan moneys provided by the United
6States Department of Housing and Urban Development.

7(H) The targeting of state and federal job disadvantaged and
8vocational education grant moneys, including moneys provided
9by the federal Workforce Investment Act of 1998 (Public Law
10105-220), or its successor.

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

12(J) The targeting of federal or state low-income housing and
13rental assistance moneys.

14(K) The use of tax allocation bonds, special assessment bonds,
15bonds under the Mello-Roos Community Facilities Act of 1982
16(Chapter 2.5 (commencing with Section 53311) of Part 1 of
17Division 2 of Title 5), industrial development bonds, revenue
18 bonds, private activity bonds, housing bonds, bonds issued pursuant
19to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4
20(commencing with Section 6584) of Chapter 5), certificates of
21participation, hospital bonds, redevelopment bonds, school bonds,
22and all special provisions provided for under federal tax law for
23enterprise community or empowerment zone bonds.

24(3) When designating new enterprise zones, the department
25shall take into consideration the location of existing zones and
26make every effort to locate new zones in a manner that will not
27adversely affect any existing zones.

28(4) When reviewing and ranking new enterprise zone
29applications, the department shall give bonus points to applications
30from jurisdictions that meet minimum threshold points and at least
31two of the following criteria:

32(A) The percentage of households within the census tracts of
33the proposed enterprise zone area, the income of which is below
34the poverty level, is at least 17.5 percent.

35(B) The average unemployment rate for the census tracts of the
36proposed enterprise zone area was not less than five percentage
37points above the statewide average for the most recent calendar
38year as determined by the Employment Development Department.

39(C) The applicant jurisdiction has, and can document that it has,
40a unique distress factor affecting long-term economic development,
P4    1including, but not limited to, resource depletion, plant closure,
2industry recession, natural disaster, or military base closure.

3(5) Except as modified pursuant to paragraph (4), applications
4shall be ranked by the appropriateness of the economic
5development strategy and implementation plan, including all of
6the following:

7(A) The extent the strategy clearly identifies the local resources,
8incentives, and programs that will be made available to the zone
9for meeting its goals and objectives.

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

12(C) The extent the strategy includes related regional and
13community-based partnerships for achieving the goals and
14objectives in the strategy.

15(D) The extent the strategy fits within the jurisdiction’s overall
16economic development strategy, including the extent the strategy
17and implementation plan is appropriate for the local community.

18(E) The extent the strategy addresses the hiring and retention
19of unemployed or underemployed residents or low-income
20individuals in the proposed zone and surrounding areas.

21(F) The extent the strategy sets reasonable and measurable
22benchmarks, goals, and objectives.

23(G) The extent the strategy sets forth an appropriate funding
24schedule for management, oversight, and program delivery within
25the zone relative to the benchmarks, goals, and objectives in the

27(H) The extent that the economic development strategy has a
28comprehensive incentive package for attracting private investment
29to the enterprise zone.

begin insert

30(c) For any application for an enterprise zone designation
31submitted on or after January 1, 2014, both of the following shall

end insert
begin insert

33(1) If any portion of the proposed zone is within, or previously
34was within, the boundaries of a previously designated enterprise
35zone, the aggregate size of the proposed enterprise zone shall not
36exceed the size of the previously designated enterprise zone by
37more than 15 percent.

end insert
begin insert

38(2) If any portions of the proposed zone are within, or previously
39were within, the boundaries of two or more previously designated
40enterprise zones, the aggregate size of the proposed enterprise
P5    1zone shall not exceed the size of the largest single previously
2designated enterprise zone by more than 15 percent.

end insert
begin delete

3 (c)

end delete

4begin insert (d)end insert In evaluating applications for designation, the department
5shall ensure that applications are not disqualified solely because
6of technical deficiencies, and shall provide applicants with an
7opportunity to correct the deficiencies. Applications shall be
8disqualified if the deficiencies are not corrected within two weeks.

begin delete

9 (d)

end delete

10begin insert (e)end insert Except upon dedesignation pursuant to subdivision (c) of
11Section 7076.1, Section 7076.2, or Section 7085.1, a designation
12made by the department shall be binding for a period of 15 years
13from the date of the original designation.

begin delete

14 (e)

end delete

15begin insert (f)end insert This section shallbegin delete onlyend delete applybegin insert onlyend insert to enterprise zone
16applications for which the department has issued a solicitation for
17new enterprise zone designations on or after January 1, 2007.