News Column

California May Revamp Enterprise Zones

June 28, 2013

The California Assembly passed a bill that would overhaul the state's enterprise zones, replacing them with a statewide system of business incentives.

The proposal, centerpiece of Gov. Jerry Brown's economic development strategy, would all but eliminate the power of the state's 40 locally controlled enterprise zones, replacing the program with a broader, statewide method of providing business incentives, the Los Angeles Times reported Thursday.

After clearing the state Senate Tuesday, Assembly members approved the measure 54-16 Thursday, sending it to the governor's desk.

"This is a big, bipartisan win for California businesses and working people," Brown said. "AB 93 [the bill] will help grow our economy and create good manufacturing jobs."

The bill would redirect existing economic development funds into a sales tax credit to boost manufacturing and biotech research and development, updated enterprise zones that provide incentives for hiring the poor and unemployed people and a program that rewards specific businesses relocating to California, the Times said.

Bill supporters, led by labor unions, high-tech companies and pharmaceutical makers, were pleased.

"By flipping the broken enterprise zone program into Governor Brown's smart, strategic plan for job growth, the Legislature strengthened California's economic recovery," the California Labor Federation said a statement.

Those who defended the 27-year-old tax break -- a coalition led by the California Association of Enterprise Zones -- said enterprise zones created 25,000 jobs and saved an additional 115,000 in 2012.

"AB 93 effectively destroys the state's only remaining tool for local governments to help stimulate economic growth and attract and retain jobs and replaces it with a half-baked plan full of empty promises," the association said in a statement.




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Source: Copyright UPI 2013


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