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California State Assembly
Committee on Jobs, Economic Development, and the Economy

California Enterprise Zone Program

Enterprise Zones and Other Geographically - Targeted Economic Development Areas

The California Enterprise Zone Program and the other geographically-targeted economic development areas (G-TEDAs) represent the state's primary economic development programs in California. Eligibility for G-TEDA designation is limited to areas within communities that can demonstrate blighted conditions such as high poverty or high unemployment rates.

The Department of Housing and Community Development administers four G-TEDA programs including: Enterprise Zones (EZs), Manufacturing Enhancement Areas (MEAs), Local Agency Military Base Realignment Areas (LAMBRAs), and the Targeted Tax Area (TTA).

The G-TEDA programs are based on the principle that targeting significant economic incentives to low-income communities allows these communities to more effectively compete for new businesses and retain existing businesses, resulting in increased tax revenues, less reliance on social services, and lower public safety costs. Residents and businesses directly benefit from these more sustainable economic conditions through improved neighborhoods, business expansion, and job creation.

The 42 EZs, eight LAMBRAs, two MEAs and one TTA are located in portions of 54 Assembly Districts and 34 Senate Districts. Each zone designation is for a period of 15 years, although the initial zones were given an additional five years due to the slow start-up of the program. No other extensions have been authorized.
 

G-TEDAs range in size from one square mile to over 70 square miles and in geographic locations ranging from Eureka and Shasta Valley near the Oregon border to San Diego and Calexico along the Mexican border. With the approval of the 2006 reforms (discussed later in this section), each designated area is governed by a comprehensive economic strategy that details local government commitments, benchmarks, and baselines.

Community Development Incentives

Assessments of the California Enterprise Zone Program

Oversight Hearings Drive Reforms

Below is additional information on 2009-10, 2005-06 oversight hearings and key web links.

Enterprise Zone Hearings during the 2009-10 Legislative Session - Agendas, Summaries, White Papers and Recommendations

A series of three hearings were held by the Assembly Committee on Jobs, Economic Development, and the Economy on the California Enterprise Zone Program and other programs. Collectively, the G-TEDA programs represent one of the state's primary economic and workforce development initiatives. During these hearings the Committee heard from a broad range of stakeholders with an interest in the G-TEDA programs.

Here is a link to the white paper (doc). Below are links to the agendas and background materials from the Enterprise Zone hearings.
 

  1. Here is the link to the agenda for the August 18, 2009 Enterprise Zone Hearing (doc) in Sacramento and links to background materials.
  2. Here is the link to the agenda for the October 8, 2009 Enterprise Zone Hearing (doc) in San Jose and links to background materials.
  3. Here is the link to the agenda for the October 19, 2009 Enterprise Zone Hearing (doc) in San Diego and links to background materials.

Here is a link to the white paper (doc). Throughout the hearing and consultation process, this white paper will be revised to incorporate information presented to the Committee. A copy of the white paper is also available through the JEDE Office.

Final list of recommendations (Appendix N) (doc)

Enterprise Zone Hearings during the 2005-06 Legislative Session – Recommendations, White Paper, Agendas and Handouts from Hearings

While the G-TEDA programs have been around for decades, it was not until the winter of 2005 that the first oversight hearings were held.

During the course of these hearings, hosted jointly by JEDE and the Assembly Committee on Revenue and Taxation, the Committees reviewed current and best practices related to designation, management and monitoring, and use of business incentives available through the G-TEDA programs. As a result of these hearings, JEDE developed a list of 47 recommendations on how to improve the overall G-TEDA programs and drafted AB 1550 (Arambula and Karnette), Chapter 718, Statutes of 2006. Key reforms in AB 1550 include:
 

  • Requiring EZ applications to be ranked based on their economic development strategy and implementation plan, including to the extent the strategy does the following: sets reasonable and measurable benchmarks, goals, and objectives; identifies local resources, incentives, and programs; provides for the attraction of private investment; includes regional and community-based partnerships; and addresses hiring and retention of unemployed or underemployed residents or low-income individuals.
  • Requiring G-TEDAs to biennially report to HCD on their progress in meeting the goals and objectives identified in their implementing MOU. G-TEDAs designated prior to January 1, 2007, are required to update their goals and objectives by April 15, 2008, and meet the annual reporting requirements by October 1, 2009.
  • Adding a new audit element that requires the review of an EZ's administrative support and whether financial commitments made in the G-TEDA application and MOU have been kept. The bill also made similar conforming changes in the MEA, TTA, and LAMBRA audit requirements.

The memorandum outlining the final recommendations, the white paper and the summary of these hearings is provided below.

Recommendations: Final Arambula Memo on Recommendations (doc)
White paper: 20 Years of California Enterprise Zones: A Review and Prospectus (doc)

Hearing Background Materials
 

Useful Links to Enterpise Zone Related Websites

Enterprise Zone Web Links
 

Key Organizations

  • California Association of Enterprise Zones (CAEZ) www.caez.org
  • California Association for Local Economic Development: www.caled.org/

Key State Agencies and Departments

Federal Government Agencies and Departments

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