AB 93 & SB 90: A Three-Pronged Approach to Reform Enterprise Zones and Create Good Jobs
The state Enterprise Zone program started out with the goal of creating jobs in economically distressed area and employment to workers with barriers to employment. But instead of creating jobs, the program became a give away of taxpayer dollars to strip clubs, card rooms and retail giants like Walmart.
Labor fought to reform the program for years, but the two-thirds vote requirement made it difficult to make even the smallest change to the program. In 2013, that all changed.
This year, labor and business came together to support Governor Brown’s proposal to repurpose the EZ program. AB 93 and SB 90 support growth in jobs and industries that sustain our middle class. These bills take the current level of spending in the EZ program and redirect that money into a more effective three-pronged program.
The new program is revenue neutral and capped, curbing the over 30% annual growth in the Enterprise Zone program. The entire program sunsets in 2021 allowing for legislative review and requiring an affirmative vote to extend the sunset date. The three prongs of the new job creation program are:
1. Hiring Credit: AB 93 and SB 90 repurpose the broken enterprise zone program to more effectively create good new jobs in areas of the state with the highest levels of unemployment and poverty. The hiring credit may be claimed within the existing Enterprise Zones as well as in new high poverty areas. The credit includes strong labor standards and accountability measures and is wisely targeted to those who need it most – returning veterans, the long-term unemployed, low-income individuals receiving public assistance, ex-offenders and CalWORKS recipients. The standards include:
- Credits may only be claimed for new jobs, not for filling existing jobs.
- Credit may only be claimed for full-time jobs that pay at least $12 an hour.
- Any employer that relocates within the state must give workers an offer of transfer at the same rate of compensation.
- Retention requirement of at least 3 years or the state may clawback the credit.
- Creates a public database of companies that claim the credit and number of jobs.
- Excludes retail, restaurants, temp agencies and strip clubs from the hiring credit.
2. Manufacturing Equipment Sales Tax Exemption: AB 93 and SB 90 reinvest in manufacturing statewide, boosts California’s competiveness and stimulates a vital sector our state needs to rebuild the middle class. A high road economy, with growth in biotech, high tech, and other manufacturing jobs, is what will sustain our economic growth.
3. CA Competes Fund: The third prong of the Governor’s proposal, the CA Competes Fund, provides tools to the state to attract and retain good jobs. High road jobs criteria for applicants to the fund will guarantee that these dollars will produce our best return on investment and the funds will be targeted to areas of the state with the highest poverty levels.
Labor, business and the Governor worked together to transform Enterprise Zones into a real job creation program that will help to rebuild our middle class, our economy and our state. Learn more.