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Legislators were apparently all too aware. The record shows that 1,321 “regular” bills were introduced between last Tuesday and Friday, 888 in the Assembly and 433 in the Senate. That breaks down to:

* 330.3 a day
* 13.8 an hour
*1.15 every five minutes

It’s also an average of 11 bills for each lawmaker, and it does not include bills introduced before last Tuesday. Nor does it include resolutions, proposed constitutional amendments or measures proposed in any of the eight special sessions that have run or are running concurrently with the regular session.

According to legislative staffers, this year’s crop was actually not too big, probably owing to the paucity of state funds. See? There’s always a silver lining…

If you are joining the ranks of these prestigious companies in Santa Ana and want to see what types of tax benefits you can take advantage of, please contact us for a free consultation.

Below are some of my favorite thoughts that he posted, “We are in a time of double-digit unemployment rates, significant underemployment, minimal economic diversity, budget deficits, and a record-high of inventory of vacant business and industrial space. Expansion, not elimination of the California Enterprise Zone program that rewards businesses and employees for locating and expanding in economically challenged neighborhoods, including a large portion of Long Beach, should be encouraged.

The California Enterprise Zone (EZ) Program does exactly that, which is why we will be asking you to follow our lead and contact your representatives in Sacramento and urge them to protect the Enterprise Zone Program and oppose any attempt to dissolve or decrease enterprise zone areas or incentives.

Tax incentives that are part of Enterprise Zones include such things as equipment, hiring, worker credits, tax deductions, and preference points that can help them secure state-sponsored contracts. In other words, tools that attract businesses and promote economic development.”

Natalie Everett, from the Signal, reports the following regarding the hire, “Damian Jones has 15 years of experience in the field, including a stint as The Home Depot’s government relations senior manager. His firm, Pacific Strategy Group, represents about 350 clients in 17 offices across the nation. One of the first issues Jones will tackle is securing Santa Clarita’s enterprise zone. A bill is making its way through the state Legislature that would make eligibility for the lucrative tax breaks – up to $37,000 for one employee over five years – harder to get.”

“(We recently) held a forum for existing business owners asking them what were the benefits of doing business in the Santa Clarita Valley, and the No. 1 answer was availability of the enterprise zone,” Jones said. “Real dollars are being saved, it’s improving our economy, and people are trying to … minimize their impact.”

It’s great to see cities from around the state are realizing the importance of the Enterprise Zones and are putting the resources needed behind their plans.

Incentives

Incentives of the Enterprise Zone program include:

• Sales and Use Tax Credit:
  California income or franchise tax may be reduced by the amount of Sales or Use Tax paid on certain machinery purchased (for exclusive use in an Enterprise Zone).
  $1.45 million or more per year in tax credits is available for qualifying machinery.
• Hiring Credit:
  A qualified business may reduce its state income tax by the amount of wages paid to one or more qualified employee(s) over a five-year period. $23,400 or more in tax credits is available per qualified employee. Some of these employees may also qualify an employer for a Federal tax credit, Worker Opportunity Tax Credit (WOTC), of up to $2,100.
• Business Expense Deduction:
  Part of the cost of the certain property purchased for exclusive use in the Enterprise Zone may be deducted as a business expense in the first year it is placed in service. (Amount of deduction changes annually; call for current value).
• Net Operating Loss Carryover:
  Up to 100% Net Operating Loss (NOL) Carryover for individuals or corporations doing business in the Enterprise Zone may be carried over for up to 15 years to reduce the amount of taxable income generated within the Enterprise Zone for those years.
• Net Interest Deduction for Lenders:
  A deduction from income is allowed on the amount of “net interest” earned on loans made to a trade or business located exclusively in the Enterprise Zone.

Declaring that “We need to get Californians back to work”, Senator Correa introduced Senate Bill 1010 in the regular session, Senate Bill 967, Senate Bill 42, in the eighth special session, Senate Bill 1 in the sixth special session, and jointly introduced Senate Bills 965 and 968 in the regular session.

The package’s positive impact is both statewide and focused on Orange County job retention and development, each impacting a targeted challenge.

SB 1010 and SBX8-42 would allow twenty-five (ten of which have to be in Southern California) public and private projects to apply for a “safe haven” from time consuming litigation if they have completed the California Environmental Quality Act (CEQA) process after public hearings are held in the region that the project is proposed and, upon approval of the Secretary of Business Transportation and Housing Agency.

According to the Senator, the criteria in selecting these projects shall consider the following determinants: the number and quality of jobs that will be created by the project; the amount of capital investment made by the project; and, striking a balance between projects sponsored by public and private entities.

The Orange County Senator continued by adding that the measure would not exempt the projects from the CEQA but rather helps to reduce the lengthy litigation while respecting our environmental responsibilities.

Continuing with the package’s description, Senator Correa went on to describe Senate Bill 967, a measure dubbed “California First!” which will provide employers with a five percent bid preference in exchange for ensuring that ninety percent of their workers on that contract will be California residents and taxpayers.

Senator Correa added that the measure begins to provide a level playing field with other states that provide the same incentives, and provides greater opportunities for Californians to have good paying jobs that keep tax dollars here in California.

Continuing the discussion of jobs development, the Orange County Senator who also sits on the Senate’s Business and Professions committee, jointly introduced Senate Bill 968, with Senator Negrete McLeod, (Chino) a measure which helps streamline the current process used in retraining unemployed workers to receive skills in emerging or expanding technologies and industries, while ensuring the unemployed worker continues to coordinate their unemployment funds into a seamless process. In highlighting the proposal, Senator Correa stated that “in this challenging environment, our state must be vigilant in ensuring that the labor force be prepared with the skills necessary to take this state out of this deep recession”.

Senator Correa closed out his package with a duo of bills directly impacting Orange County; Senate Bills SB 1 in the 6th special session and SB 965 in the regular session. If enacted, SB 1 would complement central Orange County’s supportive jobs development climate by further adding an additional Enterprise Zone for Orange County in Anaheim. The bill would provide for the California Department of Housing and Community Development to establish such a zone to encourage and stimulate job growth, development, and investment in the community. According to Senator Correa, the measure would provide taxpayers who invest, operate, or locate a trade or business in the targeted area with the ability to receive special tax incentives. This measure is sponsored in part by the Anaheim Chamber of Commerce and the Orange County Business Council.

The Orange County Senator went on to state that, “While the latest jobs report is encouraging, we still have nearly one in every ten adults unemployed in Orange County. It’s our job to do all we can to help grow opportunities for more and better jobs here in Orange County.”

The series of Correa employment measures will begin to be considered this week.

Senator Lou Correa represents the 34th District, which includes the cities of Anaheim, Buena Park, Fullerton, Garden Grove, Santa Ana, Stanton and Westminster.

Click here to view the minutes of the meeting.

Democratic gas tax plan rolls back corporate tax benefits
The Senate Budget Committee on Tuesday approved rollbacks of two corporate tax benefits as part of a complex gas-tax swap to help close the state’s $19.9 billion deficit.

The committee also approved a 4.8 percent surcharge on residential and commercial property insurance, which would raise roughly $200 million for the general fund.

The Democratic proposal allows companies to apply only 68 percent of past operating losses against their income in 2010, shrinking that tax benefit and increasing state revenues from corporate taxes. Existing state law allows companies to apply 100 percent of certain past operating losses against income in 2010.

The proposal also would prevent corporations from assigning tax credits in 2010 to affiliated corporations or subsidiaries. Current state law allows that practice to occur starting this year.

Those two changes would allow the state to raise $655 million for the general fund. Democrats believe they can pass the changes on a majority-vote basis because they are decreasing taxes on gasoline by a comparable amount, theoretically making the change “revenue neutral.” Gov. Arnold Schwarzenegger had proposed suspending those two tax benefits — among others — but only if the state failed to get enough federal help.

The California Teachers Association is gathering signatures to place an initiative on the November ballot that would block those tax benefits permanently.

The Senate Budget Committee passed the changes Tuesday on an 8-2 party-line vote. The full Senate and Assembly would still have to approve the plan.

The thrust of the gas-tax plan is the elimination of state sales tax on gasoline, replacing that sales tax with an excise tax on gas. That would allow the state to account for gasoline taxes in a different way that saves the state $920 million in general fund dollars. All told, the proposal would cut the deficit by nearly $1.6 billion. Drivers would save roughly 3 cents per gallon in 2010–11.

Transit agencies would lose out under the Democratic plan, but not by as much as under Schwarzenegger’s proposal. Democrats would preserve sales tax on diesel fuel, generating an estimated $313 million annually. The state also would give transit agencies $400 million for operations out of an existing transportation account.

The Democratic plan would allow local governments to place on the ballot an additional fee on gasoline to pay for transit. Voters would have to approve any such fee by a majority vote.

Republicans questioned that part of the proposal, suggesting that it was a back-door way of raising revenues without meeting requirements for a tax hike. Democrats responded by saying they were only expanding the authority of local officials.

Categories: State budget, Taxes

Posted by Kevin Yamamura

This is a great city to do business in, and on the October 15, 1986 the City of Huntington Park was designated as an Enterprise Zone by the State of California.  Businesses already in the Zone can qualify for benefits, as can new businesses relocating or expanding into the Huntington Park area.

What specific Incentives for businesses operating in this zone?

Incentives of the Enterprise Zone program include:

• Sales and Use Tax Credit:
  California income or franchise tax may be reduced by the amount of Sales or Use Tax paid on certain machinery purchased (for exclusive use in an Enterprise Zone). $1.45 million or more per year in tax credits is available for qualifying machinery.
• Hiring Credit:
  A qualified business may reduce its state income tax by the amount of wages paid to one or more qualified employee(s) over a five-year period. $23,400 or more in tax credits is available per qualified employee. Some of these employees may also qualify an employer for a Federal tax credit, Worker Opportunity Tax Credit (WOTC), of up to $2,100.
• Business Expense Deduction:
  Part of the cost of the certain property purchased for exclusive use in the Enterprise Zone may be deducted as a business expense in the first year it is placed in service. (Amount of deduction changes annually; call for current value).
• Net Operating Loss Carryover:
  Up to 100% Net Operating Loss (NOL) Carryover for individuals or corporations doing business in the Enterprise Zone may be carried over for up to 15 years to reduce the amount of taxable income generated within the Enterprise Zone for those years.
• Net Interest Deduction for Lenders:
  A deduction from income is allowed on the amount of “net interest” earned on loans made to a trade or business located exclusively in the Enterprise Zone.