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Oversight Hearings Drive Reforms

While the G-TEDA programs have been around for decades, it was not until the winter of 2005 that the first comprehensive legislative oversight hearings were held. Following the hearings, publication of a final report and work group meetings lead by the Assembly Committee on Jobs, Economic Development and the Economy (JEDE), legislation was negotiated and approved on the Senate and Assembly floors on 40-0 and 77-0 votes (AB 1550 (Arambula and Karnette), Chapter 718, Statutes of 2006)).

G-TEDA issues again came to the forefront of the Committee’s agenda in 2009 and JEDE initiated a thorough examination of how the prior reforms were progressing and which additional areas were in need of improvement. During the course of its 2009 review, JEDE held three public hearings, met with a variety of stakeholder groups, and produced an expanded white paper that details the structure and activities of the G-TEDA program in California, as well as in other states. In addition to the authors of the USC and PPIC reports, hearing testimony was provided by economic development practioners, researchers, nonprofits, local governments, labor, and business leaders.

At the first hearing, witnesses provided a general overview of the G-TEDA programs including presentations on the most recent program evaluation studies. The second hearing focused on how the G-TEDA programs help the state’s innovation-based industries – especially those in the manufacturing area. At the third hearing, presentations were arranged around three topics: workforce training, small business development, and models for measuring success.

A final report was issued by JEDE in January 2010 which included summaries of each of the hearings, a comparative review of how California’s program compared to other state’s enterprise zone programs, and a list of the 100 recommendations developed over the course of the hearings. The JEDE report made five key findings, including the need for more structure and accountability mechanisms within the tax incentives and the need to better link workforce development into the overall G-TEDA framework. The final report and other information on the G-TEDA programs are available on the Committee website.

In February of 2010, Speaker John A. Pérez asked JEDE Chairman V. Manuel Pérez to convene a working group to review the final report and develop a comprehensive set of reforms to the enterprise zone program. Members include representatives from Democratic and Republican policy and fiscal staff from both houses of the Legislature, labor organizations, business lobbyists, and local government representatives and associations. Key program revisions under discussion include:

  • Increasing accountability of the program.
  • Better targeting of tax incentives to low and moderate income households.
  • Reforms to structure of the hiring credit.
  • Increased integration of the enterprise zone program with other state and local community development programs, including public programs that support workforce development and job placement.

While the work group met over an extended period, it was unable to reach consensus on several key issues. It is expected that in the 2011-12 legislative session, competing legislation will be introduced in this area.

List of California Enterprise Zones (January 2011) (pdf)

Map California Enterprise Zones (January 2011) (pdf)

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