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VIA focuses on enterprise zone

Posted: July 21, 2010 4:55 a.m.
Updated: July 21, 2010 4:55 a.m.
 

Three years after Santa Clarita's enterprise zone went into effect, the business community is pushing to have it expanded to cover more of the valley.

California's 42 enterprise zones are intended to boost business in disadvantaged areas by providing tax breaks for businesses that hire workers who meet certain criteria, from laid-off workers to veterans, and for specific projects such as business expansions.

The zone includes a voucher program that can save companies $36,000 per employee over a five-year period.

During Tuesday's Valley Industrial Association lunch, local business professionals got an overview of the drive to expand the zone, presented by city economic analyst Laura Biery, Jon Collard of American tax Incentives and Tim Burkhart, general manager of Six Flags Magic Mountain.

"This is a big deal," Collard said. "California has become a very business-unfriendly state."

Collard is president of American Tax Incentives and has been involved with enterprise zones for more than a decade.

Over a five-year period, the zoning stands to save 200-plus businesses some $60 million in state income taxes, Biery said.

Employers can stand to qualify for a tax credit of up to $9,000 if an employee meets the requirements of the program, a feature of the Small Business and Work Opportunity Act of 2007.

The existing enterprise zone covers about 97 percent of commercial and industrial properties in the city. The proposed expansion would include areas outside city limits.

The application for the expansion is due to the state by Sept. 15, and is being handled by the SCV Economic Development Corp., the city and Los Angeles County.

If the expansion is successful, Biery said businesses already in the zone would gain an additional 15 years to be part of the voucher program.

Biery said areas that could be included in the expanded enterprise zone include Magic Mountain, the Valencia Commerce Center and possibly the Disney movie ranch east of Highway 14.

Discussing the benefits of the zone, Collard gave several examples.

He said one local manufacturer hired 20 employees through the enterprise zone program, and saw a one-year benefit of $99,996.

"Nothing speaks better than cold, hard cash," he said.

The program also includes tax credits for capital-equipment purchases and for businesses in the film industry.

During his presentation, Collard urged business leaders to oppose Senate Bill 974.

If passed, the bill by Senate President pro-tem Darrell Steinberg, D-Sacramento, would replace enterprise-zone benefits with a "career pathways" program designed to place fresh high school graduates in jobs.

"It's not in the best interest of the business community," he said.
If the application to expand the enterprise zone is successful, it would likely not go into effect until next summer.

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