The federal Empowerment Zones, like WOTC and many other federal “tax extenders” are scheduled to expire on December 31.
Congressman Jerry McNerney, however, is attempting to use the Empowerment Zone program to help replace Stockton’s loss of the California Enterprise Zone program. According to Recordnet.com:
Rep. Jerry McNerney on Tuesday introduced a bill that could allow at least part of Stockton to become a federal “empowerment zone,” a designation that could bring tax credits and other assistance to businesses here.
Empowerment zones and similar federal programs that offer incentives and in some cases grants to economically depressed areas have been around for 20 years. Empowerment zones currently operate in the California cities of Los Angeles, Santa Ana and Fresno.
Empowerment zones offer a federal tax credit for businesses of up to $3,000 a year for each employee who lives and works in the zone, and incentives that can allow business owners to delay capital gains taxes or partially exclude capital gains from taxation.
Stockton Mayor Anthony Silva sent McNerney a letter in support of the bill, saying the law could “be a tool to attract new investment and provide much needed jobs to Stockton residents and surrounding communities.”
Currently, the empowerment zone law is set to expire Dec. 31. McNerney’s Revitalize Our Cities Act would extend it three more years to Dec. 31, 2016, and also allow federal agencies to designate an additional 20 areas to become empowerment zones, possibly including Stockton.
New areas would be eligible to become empowerment zones if they have unemployment and home foreclosure rates that are above the state average.
Stockton’s city government is going through bankruptcy, and the city’s financial woes were complicated by Gov. Jerry Brown’s decision to end the state’s enterprise zone program.
Stockton and San Joaquin County had been among the state’s largest and most active enterprise zone programs, with $104 million in tax credits per year for the county-run zone alone supporting about 10,000 jobs, county officials said.
In the meantime, November 26 is the deadline for communities to submit their applications to be selected as a federal “Promise Zone.” According to the Hollywood Chamber of Commerce, the City of Los Angeles is applying for a designation.
HUD says that Promise Zones will have tax incentives “crafted on the proven model of Empowerment Zone tax credits,” but only if Congress passes legislation based on President Obama’s proposal.