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AB-1242 Enterprise zones.(2013-2014)

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Assembly Bill
No. 1242

Introduced by Assembly Member Melendez

February 22, 2013

An act to amend Section 7073.1 of the Government Code, relating to enterprise zones.


AB 1242, as introduced, Melendez. Enterprise zones.
The Enterprise Zone Act provides for the designation and oversight by the Department of Housing and Community Development of various types of economic development areas throughout the state, including enterprise zones, targeted tax areas, local agency military base recovery areas (LAMBRAs), and manufacturing enhancement areas, collectively known as geographically targeted economic development areas, or G-TEDAs. Pursuant to these provisions, qualifying entities in those areas may receive certain tax and regulatory incentives. These provisions specify requirements for designating an area as an enterprise zone.
This bill would make technical, nonsubstantive changes to this provision.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


 Section 7073.1 of the Government Code is amended to read:

 (a) Except as provided in subdivision (e), any a city, county, or city and county with an eligible area within its jurisdiction may complete a preliminary application for designation as an enterprise zone. The applying entity shall establish definitive boundaries for the proposed enterprise zone and the targeted employment area. An entity may propose zones in areas with noncontiguous boundaries, and the department may designate those areas as zones if the director determines both of the following:
(1) The noncontiguous area is needed to implement the applicant’s economic development strategy.
(2) The excluded area between the proposed zone boundaries would not, based on the proposed economic strategy, also benefit from the zone designation.
(b) (1) In designating enterprise zones, the department shall select from the applications submitted those proposed enterprise zones that, upon a comparison of all of the applications submitted, indicate that they propose the most appropriate economic development strategy and implementation plan utilizing state and local programs and incentives to create jobs, attract private sector investment, and improve the economic conditions within the zone proposed. The department shall prescribe a format that promotes succinct and focused strategies and plans, and set minimum standards for the strategies and plans. For the purposes of this subdivision, important elements of a strategy or plan may include, but are not limited to, all of the following:
(A) An assessment of current financial and community development strengths, needs, and opportunities.
(B) A framework for investment of time, action, and money.
(C) Clear articulation of goals.
(D) Measurable objectives, including targets.
(E) Proposed implementation activities and tasks, including timeframes, and a framework for evaluating performance, including qualitative and quantitative benchmarks.
(2) For purposes of this subdivision, local incentives may include, but are not limited to, all of the following:
(A) The suspension or relaxation of locally originated or modified building codes, zoning laws, general development plans, or rent controls.
(B) The elimination or reduction of fees for applications, permits, and local government services.
(C) The establishment of a streamlined permit process.
(D) Elimination or reduction of construction taxes or business license taxes.
(E) The provision or expansion of infrastructure.
(F) The targeting of federal block grant moneys, including small cities, education, and health and welfare block grants.
(G) The targeting of economic development grants and loan moneys, including grant and loan moneys provided by the United States Department of Housing and Urban Development.
(H) The targeting of state and federal job disadvantaged and vocational education grant moneys, including moneys provided by the federal Workforce Investment Act of 1998 (Public Law 105-220), or its successor.
(I) The targeting of federal or state transportation grant moneys.
(J) The targeting of federal or state low-income housing and rental assistance moneys.
(K) The use of tax allocation bonds, special assessment bonds, bonds under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5), industrial development bonds, revenue bonds, private activity bonds, housing bonds, bonds issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5), certificates of participation, hospital bonds, redevelopment bonds, school bonds, and all special provisions provided for under federal tax law for enterprise community or empowerment zone bonds.
(3) When designating new enterprise zones, the department shall take into consideration the location of existing zones and make every effort to locate new zones in a manner that will not adversely affect any an existing zones zone.
(4) When reviewing and ranking a new enterprise zone applications application, the department shall give bonus points to applications an application from jurisdictions a jurisdiction that meet meets minimum threshold points and at least two of the following criteria:
(A) The percentage of households within the census tracts of the proposed enterprise zone area, the income of which is below the poverty level, is at least 17.5 percent.
(B) The average unemployment rate for the census tracts of the proposed enterprise zone area was not less than five percentage points above the statewide average for the most recent calendar year as determined by the Employment Development Department.
(C) The applicant jurisdiction has, and can document that it has, a unique distress factor affecting long-term economic development, including, but not limited to, resource depletion, plant closure, industry recession, natural disaster, or military base closure.
(5) Except as modified pursuant to paragraph (4), applications shall be ranked by the appropriateness of the economic development strategy and implementation plan, including all of the following:
(A) The extent the strategy clearly identifies the local resources, incentives, and programs that will be made available to the zone for meeting its goals and objectives.
(B) The extent the strategy provides for attracting private sector investment.
(C) The extent the strategy includes related regional and community-based partnerships for achieving the goals and objectives in the strategy.
(D) The extent the strategy fits within the jurisdiction’s overall economic development strategy, including the extent the strategy and implementation plan is appropriate for the local community.
(E) The extent the strategy addresses the hiring and retention of unemployed or underemployed residents or low-income individuals in the proposed zone and surrounding areas.
(F) The extent the strategy sets reasonable and measurable benchmarks, goals, and objectives.
(G) The extent the strategy sets forth an appropriate funding schedule for management, oversight, and program delivery within the zone relative to the benchmarks, goals, and objectives in the strategy.
(H) The extent that the economic development strategy has a comprehensive incentive package for attracting private investment to the enterprise zone.
(c) In evaluating applications for designation, the department shall ensure that applications are not disqualified solely because of technical deficiencies, and shall provide applicants with an opportunity to correct the deficiencies. Applications shall be disqualified if the deficiencies are not corrected within two weeks.
(d) Except upon dedesignation pursuant to subdivision (c) of Section 7076.1, Section 7076.2, or Section 7085.1, a designation made by the department shall be binding for a period of 15 years from the date of the original designation.
(e) This section shall only apply to enterprise zone applications for which the department has issued a solicitation for new enterprise zone designations on or after January 1, 2007.