The California Association of Enterprise Zones (CAEZ) keeps an updated Legislative Bill Report on its website, listing proposed California legislation that would affect Economic Development Areas (EDAs) in California.  The entry for ABA 1139, which we have been following here, was updated as of April 30th.
As you may recall, RestaWOTC opposes AB 1139, which would institute profoundly detrimental changes to California’s enterprise zone hiring credit program.  The CAEZ’s brief synopsis provides a good spring board for our own brief discussion.  As currently proposed, the bill would:
1. “The bill would essentially eliminate retroactive vouchering.”
ZC COMMENT: Specifically, the bill would require employee certification applications to be submitted to the enterprise zone’s vouchering agent within 21 days of an employee’s hire date. As a result, zone businesses without the current technical expertise or HR capacity to keep up with the program’s procedural requirements in a timely manner would be unable claim their tax benefits — even though they are hiring eligible employees!
Anyone truly experienced with the hiring credit program also realizes that 21 days is not enough time to acquire the documentation needed to determine eligibility under the program’s most important eligibility categories. Correspondence by fax and letter with multiple county, state, and federal agencies is often needed before an application is ready to submit. As a result, zone businesses would probably be forced to submit thousands of incomplete applications while further documentation is still being sought.
2. “The bill would . . . eliminate the use of the TEA (“Targeted Employment Area”) and TTA residency as eligibility criteria.”
ZC COMMENT: A Targeted Employment Area or “TEA” is an economically depressed residential area associated with most California enterprise zones. The families and individuals living in the TEA are the very people the program is supposed to assist. In most zones, eliminating this category would significantly reduce the ability of zone businesses to effectively identify qualifying employees. (Note, TTA residency is similar to the enterprise zone’s TEA, except it applies to a different kind of zone — called a Targetted Tax Area.)