On June 27, 2013, the California State Assembly approved an economic development reform bill (AB-93) which moves $750 million worth of business incentives from California‚Äôs Enterprise Zones to statewide incentive programs.
AB-93 was amended and approved by the California State Senate on a 30-9 vote a couple of days ago, so it went straight to the Governor‚Äôs desk for his signature after the amended version was passed by the Assembly on a 54-16 vote.
After the bill‚Äôs passage, CA Governor Edmund G. Brown Jr. issued a statement in which he said it was a big and bipartisan win for working people and businesses in California. He said AB 93 would create good manufacturing jobs and help grow the economy.
Kish Rajan, director of GO-Biz, the Governor‚Äôs Office of Business and Economic Development, said that the California economy had been coming back strong during the past year. He said the AB 93 vote adds to that momentum and would put their foot on the accelerator for economic development in California.
The bill had backing from labor groups, while others, such as the League of California Cities, opposed the bill, claiming it would decrease local tax revenues and place additional burdens on struggling communities.
AB 93 moves Enterprise Zone incentives to three new programs, as outlined below:-
The existing sales tax credit for Enterprise Zone businesses is now a statewide sales and use tax (SUT) exemption on manufacturing and bio-tech equipment purchase for manufacturing companies and those engaged in biotech R&D.
A Hiring Credit of 35 percent of wages that fall in between 1.5-3.5 times the minimum wage will be available for five years in specific geographic areas to companies hiring long-time unemployed workers, veterans, ex-offenders and those receiving federal earned income tax credit.
The California Competes Credit, to be administered by GO-Biz, will help the Golden State attract new business activity and retain existing ones by offering tax credits as an incentive based on the number and quality of jobs created.
Read more about the reforms approved under AB 93 in this updated briefing put out by Go-Biz.¬†