BILL ANALYSIS �
AB 1411
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Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
V. Manuel P�rez, Chair
AB 1411 (Assembly Committee on Jobs, Economic Development, and
the Economy) - As Introduced: March 10, 2011
SUBJECT : Geographically Targeted Economic Development Areas
Omnibus
SUMMARY : This bill makes technical changes to the statutes
related to the Geographically Targeted Economic Development
Areas (G-TEDAs). Specifically, the bill:
1)Recalibrates the date, by which the California Department of
Housing and Community Development (HCD) must submit the
required 6-year report, to reflect only those years HCD
administered the programs and excludes the years when the now
defunct Technology, Trade and Commerce Agency administered the
G-TEDA programs.
2)Eliminates the requirement that local governments comprising a
G-TEDA review the progress every two years. However, the
governing board of the G-TEDA must still review and adopt the
biennial report submitted to HCD.
3)Requires the six-year HCD report differentiate between the
progress of G-TEDAs designated before January 1, 2007 and
those designated after.
4)Eliminates the obsolete reference to an annual work plan.
5)Makes other technical code changes.
EXISTING LAW : Provides for the establishment of G-TEDA programs
to stimulate business and industrial growth, and create jobs in
depressed areas of the state. Specifically, existing law:
1)Establishes the Enterprise Zone (EZ) Program with a maximum of
42 EZs, each designated for an initial 15-year period by HCD.
HCD is authorized to approve one five-year extension for EZs
designated prior to January 1, 1990.
2)Establishes the Local Agency Military Base Realignment Area
(LAMBRA) Program with a maximum of eight LAMBRAs, each
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designated for an eight-year period by HCD. Limits
designation to one LAMBRA per geographical region of the
state.
3)Establishes the Manufacturing Enhancement Area (MEA) Program
with a maximum of two MEAs, each designated for a 14-year
period by HCD. Limits MES designation to impoverished areas
along the California-Mexico border.
4)Established the Targeted Tax Area (TTA) Program, administered
by HCD, within the County of Tulare for a 15-year period.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Purpose of the bill : According to the author: "AB 1411 is a
reintroduction of AB 1554 (JEDE) from 2009. Legislative
Standing committees typically carry measures to update and
clean up the codes. This bill makes non-substantive
technical, changes to the Government Code pertaining to
G-TEAs."
2)Status report on the G-TEDA programs : The EZ program and the
other G-TEDAs are among the largest state economic development
programs in California. HCD administers four G-TEDA programs
including programs for the EZs, MEAs, LAMBRAs, and one TTA.
The G-TEDA programs are based on the principle that targeting
significant economic incentives to low-income communities
allows these communities to more effectively compete for new
businesses and retain existing businesses, resulting 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.
Under the G-TEDA programs, businesses and other entities
located within targeted areas are eligible for a variety of
local and state provided incentives. Local governments often
write down the costs of development. They may also fund
related infrastructure improvements, provide job training to
prospective employees, or establish a streamlined process of
obtaining permits. Additionally, the state offers a number of
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incentives, including: tax credits; special tax provisions;
priority notification when selling state surplus lands; access
to certain brownfield clean-up programs; and, preferential
treatment for state contracts.
The Assembly Committee on Jobs, Economic Development, and the
Economy (JEDE), and the Assembly Revenue and Taxation
Committee undertook a comprehensive, four-month examination of
the EZ Program and other G-TEDAs during the 2005-06 Session.
A summary of the hearing can be found on the JEDE website at:
www.assembly.ca.gov . AB 1550 (Arambula and Karnette), Chapter
718, Statutes of 2006 was enacted to implement many of the
management and oversight related recommendations from these
hearings. This bill currently provides a vehicle for
non-controversial clean-up to AB 1550.
3)American Community Survey : In the past census data was
released every decade. In 2010 the U.S. Census Bureau working
with the American Community Survey (ACS) released the first
five-year estimates for small areas. This five-year estimate
is based on data collected from 2005-2009. ACS collects
information such as age, race, income, commute time to work,
home values veteran status, as well as other valuable
information every year. Collecting this information more
frequently gives a more up-to-date view about the U.S.
population at the local community level. ACS also releases
one-year estimates for areas with a population of 65,000 or
larger and a three-year estimate for areas with populations of
20,000 or more.
4)Proposed amendments : Staff understands that amendments will
be offered to change the reference to U.S. Census data to
American Community Survey data.
5)Related legislation : Below is a list of bills relating to
G-TEDA tax incentives from prior legislative sessions.
a) AB 1554 (JEDE) G-TEDA Omnibus: This bill makes
technical changes to the statutes related to the
Geographically Targeted Economic Development Areas.
Status: This bill was held on the Senate Floor in 2010.
b) AB 579 (Swanson) Effective Date of LAMBRA Designations:
Chapter 529, Statutes of 2007: This bill authorizes a
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financial institution to claim an investment credit for
loans made to a business located in a LAMBRA.
c) AB 1398 (Arambula) G-TEDA Business Incentives : This
bill harmonizes the hiring credit requirements between the
EZ, LAMBRA, TTA, and the MEA. Status: Filed with the
Chief Clerk pursuant to Joint Rule 56.
d) AB 1651 (Arambula) California Cleantech Credit on New
Equipment : This bill authorizes a tax credit for tax
payers located in an enterprise zone for capital outlay
projects that achieve superior environmental efficiencies.
Status: Filed with the Chief Clerk pursuant to Joint Rule
56.
e) SB 341 (Lowenthal) CEQA and Enterprise Zones : Chapter
643, Statutes of 2007: This bill expands the methods by
which an initially designated EZ may meet the requirements
of the California Environmental Quality Act by authorizing
the use of negative declarations and mitigated negative
declarations.
f) AB 1550 (Arambula) G-TEDA Reforms : Chapter 718, Statutes
of 2006: This bill makes a number of significant changes
to the management and oversight of the G-TEDA programs.
This bill is the result of extensive oversight hearings by
JEDE and R&T, and extended discussions with stakeholder
groups.
g) AB 2398 (Maze) Targeted Tax Area Expension : Chapter
423, Statutes of 2004: This bill allows for the expansion
of a targeted tax area (TTA) territory by up to 15% upon
meeting specified criteria. Adds additional incentives to
the TTA program.
h) SB 763 (Lowenthal) Expansion of State Voucher Fee
Authority : Chapter 634, Statutes of 2006: This bill
expands HCD's fee authority for the purpose of off-setting
the cost of administering the G-TEDA programs.
REGISTERED SUPPORT / OPPOSITION :
Support
Assembly Committee on Jobs, Economic Development, and the
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Economy, (sponsor)
Opposition
None received
Analysis Prepared by : Mercedes Flores / J., E.D. & E. / (916)
319-2090