AB 11

Bill Subjects

Abstract

(1) The Enterprise Zone Act provides that its purpose is to stimulate business and industrial growth in the depressed areas of the state by relaxing regulatory controls that impede private investment. The act defines a targeted employment area as an area composed solely of those census tracts in which at least 51% of the residents of those census tracts, determined as specified, are of low- or moderate-income levels. This bill would modify the definition of a targeted employment area, as specified. (2) The act provides that the purpose of a targeted employment area is to encourage businesses in an enterprise zone to hire eligible residents of certain geographic areas within a city, county, or city and county. This bill would delete that provision of the act and instead provide that the purpose of a targeted employment area is to help identify neighborhoods of low- and moderate-income workers for the purpose of providing those workers with employment assistance, training, and job placement. (3) The act requires each governmental entity of each city, county, or city and county that has jurisdiction over an enterprise zone to approve, by resolution or ordinance, the boundaries of its targeted employment area. This bill would delete that requirement, and instead require the governing body of the jurisdiction administering the enterprise zone to adopt a resolution or ordinance designating a targeted employment area that meets specified conditions. The bill would also require, if 2 or more jurisdictions are jointly administering a zone, each of the governing bodies of the 2 jurisdictions to adopt the resolution. (4) The act requires, within 180 days of updated United States census data becoming available, each governmental entity of each city, county, or city and county that has jurisdiction over an enterprise zone to approve, by resolution or ordinance, new boundaries for the area that reflect the new census data. The act authorizes an enterprise zone, if no changes to the boundaries of an area are necessary to conform the area with the most current census data, to send a letter to the Department of Housing and Community Development stating that a review has been undertaken and no boundary changes are required. This bill would delete those provisions, and instead require the governmental entity of each city, county, or city and county that has jurisdiction over an enterprise zone to approve, by resolution or ordinance, new boundaries for its targeted employment area that reflect the new household data provided by the United States Census Bureau in its 5-year American Community Study, and to send that resolution or ordinance to the Department of Housing and Community Development. The bill would require the city, county, or city and county, if no changes to the boundaries of an area are necessary, to send a letter to the department stating that a review has been undertaken and no boundary changes are required. The bill would provide that if the area's boundaries are not updated, and the department does not receive the letter within 180 days of the release of new census information, then the area is invalidated for a period of 2 years, except as specified. (5) The act sets forth various requirements and limitations relating to the formation and composition of a targeted employment area. This bill would revise and recast these requirements and limitations, as specified. (6) The act authorizes a governing body that has already designated a targeted employment area to request to redesignate the area using more current census data, as specified, and requires an area to be comprised of a census tract from only one decennial census. This bill would delete that provision. (7) The Personal Income Tax Law and the Corporation Tax Law authorize a taxpayer to claim certain tax incentives for activities conducted in an enterprise zone, including a credit for wages paid during the taxable year to a qualified employee, as defined, who is employed by the taxpayer during the taxable year in an enterprise zone, and those laws each set forth a schedule for the amount of the credit based on the qualified wages of the qualified employee in each of the first 5 years of employment. This bill would modify the requirements that must be met for an individual to be a qualified employee, as specified, under the Personal Income Tax Law and the Corporation Tax Law, thereby reducing the scope of the credits, and make other specified changes relating to the requirements for a taxpayer to take advantage of the credits. The bill would require that changes made to the Personal Income Tax Law and the Corporations Tax Law by its provisions apply to taxable years beginning on and after January 1, 2011. (8) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (9) The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. Governor Schwarzenegger issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on December 6, 2010. Governor Brown issued a proclamation on January 20, 2011, declaring and reaffirming that a fiscal emergency exists and stating that his proclamation supersedes the earlier proclamation for purposes of that constitutional provision. This bill would state that it addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation issued on January 20, 2011, pursuant to the California Constitution. (10) This bill would take effect immediately as a tax levy.