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AB 106: Unexpected Controversy

AB 106 is another bill attempting to clean up and clarify issues related to the dismantling of the Enterprise Zone program.

The bill was heard late on Sept. 9 in the Senate Budget and Fiscal Review Committee where the Department of Finance (representing the Governor’s office) proposed four additional amendments:

1. To clarify that the 10-year limit on carrying forward tax credits starts in 2014.
2. To clarify that only employees hired before 1/1/14 may be considered qualified under the outgoing program (as opposed to hired in tax years ending in 2014).
3. To provide explicit authority to local governments to continue to issue vouchers until the end of 2014 for qualified employees hired before 1/1/14.
4. To exclude applications for the new “California Competes” incentive fund from public records requests so that other states will not be able to undermine those negotiations.

The first two issues are simply clarifying poorly written statute passed in AB 93 and SB 90. The fourth item seem perfectly logical and reasonable. The third item is meant to fulfill a commitment made by the administration and others to enable the legislation that allows qualified employees hired all the way through 12/31/2013 to be certified under the expiring program.

Some Enterprise Zones have already started sending notifications that they will cease accepting applications as soon as this month in order to process the applications they already have in backlog before the end of the year. This thwarts the legislation which allows employees hired through the end of the year to be included.

The following is the video of the hearing in which Chairman Leno objects to the amendments listed above for unspecified reasons and manages to pass the bill as is without adopting the changes.

Senate Budget and Fiscal Review Committee Hearing AB 106 9/9/2013 from Max Shenker on Vimeo.

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