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UPDATE: Legislature OKs enterprise zone reforms

Vote would essentially gut the Santa Clarita Valley’s economic development tool

Posted: June 27, 2013 4:49 p.m.
Updated: June 27, 2013 5:41 p.m.
 

Santa Clarita Valley’s enterprise zone was effectively sentenced to death next year as the state Assembly on Thursday adopted revisions already approved by the Senate to reform such zones throughout the state.

The vote apparently means the valley’s enterprise zone, which is used by the business community as an economic development tool, will expire on June 30, 2014, said Jason Crawford, marketing and economic development manager for Santa Clarita.

“After that point the program will be changed in such a way that our zone will be eliminated,” Crawford said.

The state Assembly passed the reform measure by 55-16, a supermajority vote. The Senate approved the reform legislation earlier in the week.

Gov. Jerry Brown is expected to sign the legislation. Brown has called California’s enterprise zone program wasteful and ineffective and has sought reforms for the past year or more.

The bill authorizes former enterprise zones such as Antelope Valley’s to operate as current enterprise zones under a modified program, according to a statement released right after the vote by Assemblyman Steve Fox, D-Palmdale.

The Antelope Valley enterprise zone had expired.

The bill restored the programs in areas with high unemployment. The Santa Clarita Valley is not among those areas.

To benefit from zone designations, which include hiring tax credits, employers would have to offer more than minimum wages, Fox said. Jobs will need to pay $12 to $28 per hour.

The bill would eliminate the California portion of sales tax for manufacturing equipment and research and development for all companies statewide.

Those companies that bring jobs and capital investment to California would have the chance to negotiate tax incentives with the state, Fox said.

Brown wanted this option so he could cut deals with companies on an individual basis to help companies grow — in exchange for specific commitments to invest in the state and create jobs, said Kish Rajan, director of the Governor’s Office of Business and Economic Development, while speaking at a business luncheon in Santa Clarita last week.

Crawford said the city is looking at the 180-plus-page piece of legislation and will need to comb through it to interpret the full effect of the bill.

“We’ll start looking to see if there is anything that is salvageable about the SCV enterprise zone — any language that allows us some benefit for our businesses,” Crawford said.

Thursday’s vote, however, caught people by surprise.

Locally, members of the business community felt they had more time before the Assembly would vote and that there would be a chance to discuss options for restructuring the bill.

“I’m very disappointed,” said Terri Crain, president and CEO of the SCV Chamber of Commerce. “This will definitely impact economic development in Santa Clarita.”

jana@signalscv.com
661-287-5599

 

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