BILL ANALYSIS �
AB 2672
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ASSEMBLY THIRD READING
AB 2672 (Jobs, Economic Development, and the Economy Committee)
As Amended April 26, 2012
Majority vote
ECONOMIC DEVELOPMENT 4-2 APPROPRIATIONS 12-4
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|Ayes:|V. Manuel P�rez, Beall, |Ayes:|Fuentes, Blumenfield, |
| |Block, Hueso | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Morrell |Nays:|Donnelly, Nielsen, Norby, |
| | | |Wagner |
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SUMMARY : Increases communication between the Department of General
Services (DGS) and the Housing and Community Development Department
(HCD) for purposes of implementing the state's enterprise zone and
Local Agency Military Base Realignment Areas (LAMBRA) programs.
Specifically, this bill :
1)Requires awarding state agencies to prepare a yearly report to DGS
on the number of businesses located in enterprise zones or in
LAMBRAs claiming preferences for state contracts.
2)Requires DGS to report to HCD aggregate figures on the number of
businesses located in enterprise zones or in LAMBRAs claiming
preferences for state contracts.
3)Requires the Department of Personnel Administration to change
their contracts training program to address the requirements for
preference for small businesses, disabled veteran-owned business
and enterprise zone preferences.
EXISTING LAW :
1)Designates HCD to oversee the enterprise zone and LAMBRA programs
and requires HCD to submit a report to the Legislature every five
years that evaluates the effect of the Enterprise Zone program on
employment, investment, and incomes, and on state and local tax
revenues in designated enterprise zones.
AB 2672
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2)Establishes a 5% state preference for goods contracts in excess of
$100,000 for companies that certify that at least 50% of the hours
required to perform the contract are completed in worksites
located in an enterprise zone.
3)Establishes a 5% state preference for service contracts in excess
of $100,000 for companies that certify that at least 90% of the
labor hours required to perform the contract are completed in
worksites located in an enterprise zone.
4)Awards, where a company complies with the above preferences, an
additional preference for companies that employ persons residing
in a targeted employment area as follows:
a) A 1% preference for companies that hire between 5-9% of
their workforce from the targeted employment area.
b) A 2% preference for companies that hire between 10-14% of
their workforce from the targeted employment area.
c) A 3% preference for companies that hire between 15-19% of
their workforce from the targeted employment area.
d) A 4% preference for companies that hire above 20% of their
workforce from a targeted employment area.
1)Provides that companies can obtain a maximum 15% preference from
combined preference programs.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
implementation of this bill will have General Fund and special fund
costs of approximately $100,000 annually.
COMMENTS : The California Enterprise Zone Program and the other
geographically-targeted economic development areas (G-TEDAs)
represent the state's primary economic development programs in
California. Eligibility for G-TEDA designation is limited to areas
within communities that can demonstrate blighted conditions such as
high poverty or high unemployment rates.
HCD administers four G-TEDA programs including: Enterprise Zones,
Manufacturing Enhancement Areas (MEAs), LAMBRAs and the Targeted Tax
Area (TTA).
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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 directly benefit from these more
sustainable economic conditions through improved neighborhoods,
business expansion, and job creation.
The 42 enterprise zones, eight LAMBRAs, two MEAs and one TTA are
located in portions of 54 Assembly Districts and 34 Senate
Districts. Each zone designation is for a period of 15 years,
although the initial zones were given an additional five years due
to the slow start-up of the program. No other extensions have been
authorized.
G-TEDAs range in size from one square mile to over 70 square miles
and in geographic locations ranging from Eureka and Shasta Valley
near the Oregon border to San Diego and Calexico along the Mexican
border. With the approval of the 2006 reforms, each designated area
is governed by a comprehensive economic strategy that details local
government commitments, benchmarks, and baselines.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
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