Through an unusual political process, AB 93 was shotgunned through the California State legislature last week, a bill that effectively eliminates the long-standing State Enterprise Zone Program at the end of this year. The bill was released on Monday, voted on in the Senate Tuesday and voted on in the Assembly Thursday. Before going to vote in the Senate, the bill was debated on the floor – although at the time, legislators didn’t even have a final copy of the bill in their hands.
The four-day whirlwind pretty much summed up the political misdirection surrounding the future of this program. In 2011, Governor Brown attempted to eliminate Enterprise Zones with no success. Many legislators on both sides of party lines have Enterprise Zones in their districts and have seen the positive effects the program has had on their business communities. Early in 2013, Brown again targeted the program, but this time through the regulatory reform process holding a series of hearings up and down the state to solicit input on changes that would make the program more efficient.
As both sides engaged heavily in talks as to how to make the program more effective, advocates and opponents alike were taken back by Brown throwing out talks of reform and again replacing with talks of elimination and re-appropriation of funds to a new economic development strategy he and his team had conceived, seemingly overnight.
For companies operating in an Enterprise Zone who have not yet claimed state income tax credits available to them for qualified hiring and asset purchasing, the time to do so is now. Companies can claim credits through the end of this year and any carryover tax credits can be utilized for ten years moving forward. Companies can also look retro-actively four tax years to obtain credits and refunds not yet claimed. For more information or a complimentary analysis, please contact us at firstname.lastname@example.org.
Brendan Foote is a senior vice president of Hughes Marino, an award-winning California commercial real estate company specializing in tenant representation and building purchases with offices in San Diego, Orange County, Los Angeles, San Francisco and Silicon Valley. Brendan heads Hughes Marino’s Tax Credit Services division and helps tenants claim tax credits under the now retired California Enterprise Zone program. Contact Brendan at 1-844-NO-CONFLICT or email@example.com to learn more.