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Enterprise Zones

By January 8, 2013 No Comments

The California Enterprise Zone Program served to revitalize economically-challenged areas throughout the state, encouraged development in blighted neighborhoods, and created economically stable communities by embracing entrepreneurship and private sector market forces to stimulate local economies.  Historically, the LAEDC supported the protection of this program but also supported many efforts to enhance the program’s effectiveness, impact and return on investment, while reducing its cost.  Effective January 1, 2014, the California Enterprise Zone program is eliminated.

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What’s Next?:

  • AB 93 is awaiting a signature by the Governor.  AB 93 repeals the Enterprise Zone program, effective January 1, 2014, but allows hiring tax credits to carryover for 10 years on individuals vouchered against before December 31, 2013.
  • AB 93 also creates a sales and use tax exemption for manufacturing, research and development, and biotechnology; a California Competes Tax Credit fund; and a hiring tax credit covering four categories of individuals for employers located in the top 25% of high unemployment/high poverty areas within the state or former enterprise zones.
  • SB 90 is a current vehicle to make cleanup amendments to AB 93, including extending the sales and use tax exemption, broadening classifications for qualified employees and more.
  • LAEDC is encouraging reforms to AB 93 to ensure a more effective economic development package.  You can find a list of these reforms here.