BILL ANALYSIS �
Bill No: AB
2672
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Staff Analysis
AB 2672 Author: J., E.D. & E. Committee
As Amended: April 26, 2012
Hearing Date: June 26, 2012
Consultant: Paul Donahue
SUBJECT
State procurement omnibus bill
DESCRIPTION
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 report yearly to DGS
on the number of businesses located in enterprise zones
or in LAMBRAs that are claiming preferences for state
contracts.
2)Requires DGS to report to HCD on the number of businesses
located in enterprise zones or in LAMBRAs that are
claiming preferences for state contracts.
3)Requires the Department of Personnel Administration to
amend its contracts training program to address the
requirements for preferences for small businesses,
disabled veteran-owned business and enterprise zone
preferences.
EXISTING LAW
1)Designates HCD to oversee the enterprise zone and LAMBRA
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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.
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.
5)Provides that companies can obtain a maximum 15%
preference from combined preference programs.
BACKGROUND
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
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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).
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.
SUPPORT:
California Association of Enterprise Zones
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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