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Home My WebLink AboutLegislative Review - SB1179 (Ducheny) - Enterprise Zonesg-55 REQUEST: CITY OF PALM DESERT COMMUNITY SERVICES DEPARTMENT STAFF REPORT REQUEST FOR CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE ACTION ON SB 1179 (DUCHENY) AT ITS MEETING OF APRIL 27, 2004. DATE: May 13, 2004 CONTENTS: SB 1179 LANGUAGE Recommendation: By Minute Motion, concur with the action taken by the Legislative Review Committee at its meeting of April 27, 2004, and direct staff to prepare a letter of support for the Mayor's signature with regard to SB 1179 (Ducheny) relative to enterprise zones. Executive Summary: Passage of SB 1179 would extend the designation period of enterprise zones by five years. Background: The Enterprise Zone Act generally provides for the designation by the Department of Housing and Community Development of enterprise zones in the State, pursuant to which certain entities within the zone may receive regulatory, tax, and other incentives for private investment and employment. The designation is binding for a period of 15 years from the date of the original designation, except that the designation period for any zone designated pursuant to specific provisions of law prior to 1990 may total 20 years. Passage of SB 1179 would specify that the designation period of any zone may total 20 years. SB 1179 - Enterprise Zones May 13, 2004 Page Two While no enterprise zones currently exist within Palm Desert, the community benefits from those located in surrounding areas. Therefore, the Legislative Review Committee recommends that the City Council support SB 1179 and direct staff to prepare a letter stating that position to appropriate legislators for the Mayor's signature. r dx< PATRICIA SCULLY SENIOR MANAGEMENT AST SHEILA R. GILLIAN ASSISTANT CITY MANAR CITY MANAGER PAUL GIBSON DIRECTOR OF FINANCE/ CITY TREASURER CARLOS L. OR GA G:lCityCIrkWaren Russo Agenda Items1S8 1179.wpd 2 SB 1179 Senate Bill - AMENDED BILL NUMBER: SB 1179 AMENDED .1 BILL TEXT AMENDED IN SENATE MARCH 17, 2004 INTRODUCED BY Senator Ducheny (Principal coauthor: Assembly Member Correa) (Coauthor: Senator Denham) (Coauthors: Assembly Members Aghazarian, Benoit, Dutton, Dymally, Liu, Lowenthal, Maze, Runner, and Salinas) FEBRUARY 9, 2004 An act to amend Section 7073 of the Government Code, relating to enterprise zones. LEGISLATIVE COUNSEL'S DIGEST SB 1179, as amended, Ducheny. Enterprise Zone Act: designation period. The Enterprise Zone Act generally provides for the designation by the Department of Housing and Community Development of enterprise zones in the state, pursuant to which certain entities within the zone may receive regulatory, tax, and other incentives for private investment and employment. A designation is binding for a period of 15 years from the date of the original designation, except that the designation period for any zone designated pursuant to specified provisions of law prior to 1990 may total 20 years, subject to specified conditions. This bill instead would specify that the designation period of any zone may total 20 years, subject to these conditions, and would make technical, clarifying changes. Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 7073 of the Government Code is amended to read: 7073. (a) Except as provided in subdivision (e), any city, county, or city and county with an eligible area within its jurisdiction may complete a preliminary application for designation as an enterprise zone. The applying entity shall establish definitive boundaries for the proposed enterprise zone and the targeted employment area. (b) (1) In designating enterprise zones, the agency shall select from the applications submitted those proposed enterprise zones that, upon a comparison of all of the applications submitted, indicate that they propose the most effective, innovative, and comprehensive regulatory, tax, program, and other incentives in attracting private sector investment in the zone proposed. (2) For purposes of this subdivision, regulatory incentives include, but are not limited to, all of the following: (A) The suspension or relaxation of locally originated or modified building codes, zoning laws, general development plans, or rent controls. http://info.sen.ca.gov/pub/bill/sen/sb 1151-1200/sb_1179 bill 20040317_amended sen.html 4/6/2004 SB 1179 Senate Bill - AMENDED Page 2 of 4 (B) The elimination or reduction of fees for applications, permits, and local government services. (C) The establishment of a streamlined permit process. (3) For purposes of this subdivision, tax incentives include, but are not limited to, the elimination or reduction of construction taxes or business license taxes. (4) For the purposes of this subdivision, program and other incentives may include, but are not limited to, all of the following: (A) The provision or expansion of infrastructure. (B) The targeting of federal block grant moneys, including small cities, education, and health and welfare block grants. (C) The targeting of economic development grants and loan moneys, including grant and loan moneys provided by the federal Urban Development Action Grant program and the federal Economic Development Administration. (D) The targeting of state and federal job disadvantaged and vocational education grant moneys, including moneys provided by the federal Job Training Partnership Act of 1982 (Public Law 97-300). (E) The targeting of federal or state transportation grant moneys. (F) The targeting of federal or state low-income housing and rental assistance moneys. (G) The use of tax allocation bonds, special assessment bonds, bonds under the Mello -Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5), industrial development bonds, revenue bonds, private activity bonds, housing bonds, bonds issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5), certificates of participation, hospital bonds, redevelopment bonds, school bonds, and all special provisions provided for under federal tax law for enterprise community or empowerment zone bonds. (5) In the process of designating new enterprise zones, the agency shall take into consideration the location of existing zones , and make every effort to locate new zones in a manner that will not adversely affect any existing zones. (6) In designating new enterprise zones, the agency shall include in its criteria the fact that jurisdictions have been declared disaster areas by the President of the United States within the last seven years. (7) When reviewing and ranking new enterprise zone applications, the agency shall give special consideration or bonus points, or both, to applications from jurisdictions that meet at least two of the following criteria: (A) The percentage of households within the census tracts of the proposed enterprise zone area, the income of which is below the poverty level, is at least 17.5 percent. (B) The average unemployment rate for the census tracts of the proposed enterprise zone area was not less than five percentage points above the statewide average for the most recent calendar year , as determined by the Employment Development Department. (C) The applicant jurisdiction has, and can document that it has, a unique distress factor affecting long-term economic development, including, but not limited to, resource depletion, plant closure, industry recession, natural disaster, or military base closure. (c) In evaluating applications for designation, the agency shall ensure that applications are not disqualified solely because of technical deficiencies, and shall provide applicants with an http://info. sen.ca.gov/pub/bill/sen/sb_1151-1200/sb_1179 bill_20040317_amended sen.html 4/6/2004 SB 1179 Senate Bill - AMENDED Page 3 of 4 opportunity to correct the deficiencies. Applications shall be disqualified if the deficiencies are not corrected within two weeks. (d) (1) Except as provided in paragraph (2), or upon dedesignation pursuant to subdivision (c) of Section 7076.1 or Section 7076.2, a designation made by the agency shall be binding for a period of 15 years from the date of the original designation. (2) The designation period for any zone designated pursuant to eitherthis section or former Section 7085, as it read prior to January 1, 1997, may total 20 years, subject to possible dedesignation pursuant to subdivision (c) of Section 7076.1 or Section 7076.2, if the following requirements are met: (A) The zone receives a superior or passing audit pursuant to subdivision (c) of Section 7076.1. (B) The local jurisdictions comprising the zone submit an updated economic development plan to the agency justifying the need for an additional five years by defining goals and objectives that still need to be achieved and indicating what actions are to be taken to achieve these those goals and objectives. (e) (1) Notwithstanding any other provision of law, any area designated as an enterprise zone pursuant to Chapter 12.8 (commencing with Section 7070) as it read prior to January 1, 1997, or as a targeted economic development area, neighborhood economic development area, or program area pursuant to Chapter 12.9 (commencing with Section 7080) as it read prior to January 1, 1997, or any program area or part of a program area deemed designated as an enterprise zone pursuant to Section 7085.5 as it read prior to January 1, 1997, shall be deemed to be designated as an enterprise zone pursuant to this chapter. The effective date of designation of the enterprise zone shall be that of the original designation of the enterprise zone pursuant to Chapter 12.8 (commencing with Section 7070) as it read prior to January 1, 1997, or of the program area pursuant to Chapter 12.9 (commencing with Section 7080) as it read prior to January 1, 1997, and in no event may the total designation period exceed 15 years, except as provided in paragraph (2) of subdivision (d). (2) Notwithstanding any other provision of law, any enterprise zone authorized, but not designated, pursuant to Chapter 12.8 (commencing with Section 7070) as it read prior to January 1, 1997, shall be allowed to complete the application process started pursuant to that chapter, and to receive final designation as an enterprise zone pursuant to this chapter. (3) Notwithstanding any other provision of law, any expansion of a designated enterprise zone or program area authorized pursuant to Chapter 12.8 (commencing with Section 7070) as it read prior to January 1, 1997, or Chapter 12.9 (commencing with Section 7080) as it read prior to January 1, 1997, shall be deemed to be authorized as an expansion for a designated enterprise zone pursuant to this chapter. (4) No part of this chapter may be construed to require a new application for designation by an enterprise zone designated pursuant to Chapter 12.8 (commencing with Section 7070) as it read prior to January 1, 1997, or a targeted economic development area, neighborhood economic development area, or program area designated pursuant to Chapter 12.9 (commencing with Section 7080) as it read prior to January 1, 1997. (f) Notwithstanding any other provision of law, a city, county, or a city and county may designate a joint powers authority to administer the enterprise zone. (g) No more than 42 enterprise zones may be designated at any one http://info.sen.ca.gov/pub/bill/sen/sb_1151-1200/sb_1179 bill_20040317_amended sen.html 4/6/2004 SB 1179 Senate Bill - AMENDED Page 4 of 4 time pursuant to this chapter, including those deemed designated pursuant to subdivision (e). Upon the expiration or termination of a designation, the agency is authorized to designate another enterprise zone to maintain a total of 42 enterprise zones. http://info.sen.ca.gov/pub/bill/sen/sb_1151-1200/sb_1179_bill 20040317_amended sen.html 4/6/2004