BILL ANALYSIS �
AB 2672
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CONCURRENCE IN SENATE AMENDMENTS
AB 2672 (Jobs, Economic Development, and the Economy Committee)
As Amended August 22, 2012
Majority vote
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|ASSEMBLY: |46-24|(May 3, 2012) |SENATE: |24-14|(August 27, |
| | | | | |2012) |
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Original Committee Reference: J.E.D.&E.
SUMMARY: Requires the reporting of information related to the
use of enterprise zone and Local Agency Military Base
Realignment Areas (LAMBRA) procurement preferences to the
Housing and Community Development Department (HCD) for purposes
of preparing an already mandated state report. Specifically,
this bill :
1)Requires Department of General Services (DGS) to report to HCD
aggregate figures on the number of businesses located in
enterprise zones or in LAMBRAs claiming preferences for state
contracts.
2)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.
The Senate amendments remove the requirement for individual
departments to report on the enterprise zone and LAMBRA bid
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.
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
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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.
AS PASSED BY THE ASSEMBLY , the bill required DGS and other
contracting state agencies to provide HCD with specified
information related to the usage of enterprise zone and LAMBRA
procurement preferences.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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
FN:
0005729