Public Policy Action

LAEDC Urges Support of AB 1399

By September 9, 2014 No Comments

September 9, 2014
Governor Jerry Brown
State Capitol, Suite 1173
Sacramento, CA 95814

Re: Assembly Bill 1399 (Medina and V.M. Pérez) – SUPPORT

Dear Governor Brown:

On behalf of the Los Angeles County Economic Development Corporation (LAEDC), an organization dedicated to promoting job growth, economic expansion, and boosting the overall global competitiveness of Los Angeles County, we are writing to express our support of Assembly Bill (AB) 1399, which creates a California New Markets Tax Credit Program.

At the LAEDC, we believe the most successful and permanent economic development solutions entail “triple bottom-line” approaches to public policy and the way we conduct commerce: pursuing a stronger economy, a healthier environment and greater prosperity for our residents and communities. The federal New Markets Tax Credit (NMTC) program was established in 2000 with these equally important co-benefits in mind. Focused exclusively on spurring investment in low-income communities, several local projects that received these tax credits helped to not only create jobs but also improve environmental conditions with projects like converting waste to energy.

Here are a few examples of projects recently funded through the federal program:

• $6 Million for Alliance College-Ready Public Schools to finance a charter school for 450 students in East LA. Since its founding in 2004, more than 95% of Alliance graduates have gone on to college.
• $10 million to West Hills Community College District for an Agricultural Science facility in Coalinga, California, dubbed “Farm of the Future”. The facility includes 15,000 square feet for career and technical education, a student-run farmer’s market, and an 885kW solar facility that is expected to save the District $400,000 annually.
• $34 million to BioFuels Energy’s for a $45 million, 4.5 megawatt (MW) beneficial use of digester gas project (waste to energy) that supplies electricity to the city of San Diego South Bay Water Reclamation Plant and the University of California, San Diego.

As a leading Sothern California economic development organization, we know anecdotally and empirically that the NMTC program serves as a catalyst for investment in low-income communities that may otherwise not occur. Unfortunately, the federal NMTC is not nearly enough to tackle the critical need in these communities, especially here locally in the L.A region, where there are 320 census tracts (with 1.3 million residents) that qualify as “economically distressed.” And with so few tools in the state’s toolbox to promote economic development in these grossly underserved areas, a state program that mirrors and leverages the federal NMTC will become a vital social lifeline and economic driver in these communities—truly allowing us to “lift all boats” out of poverty. This program can also help ensure that California receives an even greater share of federal NMTC, as we will be able to leverage a state program to show additional commitment.

For all of the above reasons, we respectfully urge your support of AB 1399. We look forward to working with you to make this bill a reality and to continue providing our most at-need communities with the tools they need to prosper.

Sincerely,

David Flaks
Chief Operating Officer, Los Angeles County Economic Development Corporation

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