Monday, July 1, 2013

Associated Press: Legislature approves reforms for enterprise zones

Excerpts from an Associated Press article about AB 93's passage in the California Legislature last week.  Strong words, I know.  But the system badly needed reform. 

Assemblyman Mike Gatto, D-Los Angeles, urged lawmakers to approve a measure to overhaul California's enterprise zone program, during the Assembly session at the Capitol Thursday, June 27, 2013, in Sacramento, Calif. The measure AB93 by Assemblyman Bob Blumenfield, D-Woodland Hills, and supported by Gov. Jerry Brown, failed to pass on the two initial attempts, but was passed on the third vote. Photo: Rich Pedroncelli
Updated 9:04 pm, Thursday, June 27, 2013

SACRAMENTO, Calif. (AP) — The Assembly passed a hard-fought overhaul of California's enterprise zone program on Thursday that was sought by Gov. Jerry Brown after he called the system wasteful and ineffective...

...AB93 passed 55-16 in the Assembly, gaining the supermajority vote needed after two initial attempts fell short. The Senate stayed in session deep into the night on Tuesday until a two-thirds majority was secured...
...The changes, backed by labor groups and some businesses, will redirect the program's $750 million in tax credits on three new economic development efforts, focusing on companies that add or retain well-paying jobs.
A sales tax exemption would be created for manufacturing or research-and-development equipment, a benefit that businesses groups have been seeking for years. Other credits would be available for hiring veterans and the long-term unemployed.
Assemblyman Mike Gatto, D-Los Angeles, described the current system as "a state-managed form of crony capitalism" that has not worked as intended.
"Enterprise zones rarely are the catalyst for creating new jobs," he said. "They most often just simply shift them from one part of the state to another..."
...Related changes added to a separate bill, SB90, on Thursday could allow hiring credits for employing welfare-to-work participants. The new provisions also would prevent enterprise zone tax breaks from going to strips clubs, which occurred in Sacramento County.
Further changes are needed to fix conflicting sections of AB93 that were pointed out by opponents.
SB90 cleared the Assembly Local Government Committee and awaits a vote by the full Assembly. If approved, it will go to the state Senate.
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