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AB 1139 Update

The hearing date for AB 1139 in the Assembly JEDE Committee has been rescheduled now for April 29.  That conveniently coincides with the next CAEZ quarterly board meeting in Sacramento.

Many groups are organizing their opposition to the bill.  Here is CalChamber’s press release:

(April 15, 2009) A California Chamber of Commerce-opposed bill that in effect guts the California enterprise zone (EZ) program is expected to be heard in an Assembly policy committee on April 29. The bill creates new conditions and requirements that will drastically reduce the number of businesses, particularly small businesses, that will be able to participate in the program.

Contact Laurie Lively at laurie.lively@calchamber.com as soon as possible if you would like your company to be added to the opposition coalition letter.

AB 1139 (J. Perez; D-Los Angeles) mandates, as a condition of participating in the EZ program, businesses to provide health care coverage and full-time employment. AB 1139 also eliminates one of the primary ways that employees qualify for a hiring credit under the program, which is residency in a low-income, low-employment neighborhood, known as a “targeted employment area.” In addition, the bill establishes impractical deadlines and regulations that severely limit the program’s effectiveness and would make participation in the program burdensome and costly for businesses.

The reductions proposed by AB 1139 would be on top of severe reductions already imposed on the EZ program in the October 2008 Budget. AB 1452 (Committee on Budget, Chapter 763, Statutes of 2008) placed a two-year limit on the ability of businesses to use all business tax credits, including enterprise zone credits, capping those credits at one-half of the taxpayer’s tax liability. Although AB 1139 would further significantly reduce the tax credits available under the EZ program, it has been designated as needing only a majority vote of the Legislature to be enacted.

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