Governor Schwarzenegger Announces Six Enterprise Zones In L.A. County
The new designations will take the place of the 23 zones set out in statute which are expiring over the next several months. Each zone designation is in effect for 15 years. Santa Clarita received the designation as a California Enterprise Zone for the first time this year, crediting the support of Senator George Runner, Assemblyman Keith Richman and Governor Arnold Schwarzenegger. The Santa Clarita enterprise zone encompasses 98% of all of the commercial, business and industrial zoned land within the City.
· Firms can earn $31,234 or more in state tax credits for each qualified employee hired.
· Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts.
· Lenders to Zone businesses may receive a net interest deduction.
· Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment.
· Enterprise Zone companies can earn preference points on state contracts.
· Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years.
In August, Gov. Schwarzenegger released a report commissioned by HCD that evaluated the success of Enterprise Zones in spurring economic recovery. The report shows that from 1990 to 2000 Enterprise Zones on average experienced:
· Poverty Rates: declined 7.35 percent more than the rest of the State
· Unemployment Rates: declined 1.2 percent more than the rest of the State
· Household Incomes: increased 7.1 percent more than the rest of the State
· Wage and Salary Income: increased 3.5 percent more than the rest of the State
The next step in the designation process will be the Department of Housing and Community Development's (HCD) issuance of a conditional designation letter to each of the new zones. The letters will outline conditions which must be met to be granted final designation. Examples of conditions include preparation of an Environmental Impact Report and a signed memorandum of understanding with the Department which includes performance measures and benchmarks.
City of Arvin City of Arvin
Delano City of Delano
Fresno-City City of Fresno
Fresno-County Cities of Fowler, Firebaugh, Kerman, Mendota, Orange Cove, Parlier, San Joaquin, Sanger, Selma, County of Fresno
Merced Cities of Los Banos, Atwater, Dos Palos, Gustine, Livingston, Merced, County of Merced
Greater Sacramento/Stockton 3,683 businesses located within the zone; 3,900 hires the first year
North Sacramento City of Sacramento, County of Sacramento
Yuba Sutter Cities of Marysville, Yuba City, Wheatland, Live Oak, Counties of Yuba and Sutter
Inland Empire/Imperial Valley 5,651 businesses located within the zone; 3,225 hires the first year
Calexico City of Calexico, County of Imperial
City of San Bernardino Cities of San Bernardino and Colton, County of San Bernardino, Inland Valley Development Agency
Coachella Cities of Coachella and Indio, County of Riverside
Los Angeles Region 80,653 businesses located within the zone; 19,880 hires the first year
City of LA-Central/Hollywood City of Los Angeles - Hollywood and Central City
Compton City of Compton
Santa Clarita City of Santa Clarita
Long Beach City of Long Beach
Pasadena City of Pasadena
City of Southgate/Lynwood Cities of Southgate and Lynwood
San Diego 8,640 businesses located within the zone; 2,500 hires the first year.
San Diego Cities of San Diego, Chula Vista, National City
Bay Area 38,067 businesses located within the zone; 6,000 hires the first year
Richmond City of Richmond
San Francisco City and County of San Francisco
San Jose City of San Jose
Northern California 7,810 businesses located within the zone; 1,900 hires the first year
Shasta Cities of Redding, Anderson, Shasta Lake, County of Shasta
Eureka City of Eureka, County of Humboldt
Oroville City of Oroville