Dear CAEZ Members and Friends of CAEZ:

The Enterprise Zone program is once again in jeopardy.  Senate President Pro Tem
Darrell Steinberg (D-Sacramento), has introduced SB 974, which would be extremely
detrimental to the Enterprise Zone program and make it useless for most California
companies.  

SB 974 proposes to create a "career pathways" tax credit, in an effort to enhance
career technical education efforts in the state.  However, this new tax credit is
paid for by eliminating the Targeted Employment Area from the list of eligible
criteria for the hiring credit and retroactive vouchering for all employees hired
after January 1, 2011.  The elimination of the TEA will specifically target
neighborhoods with some of the highest levels of unemployment, poverty rates and
crime in California and eliminate an important incentive for businesses to remain
in those communities and hire local residents.  Additionally, by eliminating an
important hiring incentive, the cost of doing business increases significantly. 
California has already been crowned, once again, as the worst state to do business
in and this bill only tightens our grip on the title.

Voucher retroactivity is effectively eliminated by the requirement that all hiring
credit vouchers be completed within 28 days of the date of hire; an unrealistic
expectation at best.  This provision effectively eliminates small business owners
from participating in the program, as they will find this arbitrary and impractical
deadline an impediment that makes participation in the program almost impossible. 
As a result, those businesses with the greatest growth potential and therefore
California's best hope for reducing our historic unemployment rate, will be left
out of the program.

The bill also caps the amount of tax credits available to Enterprise Zone businesses. 
This will launch an unprecedented scramble among EZ businesses to compete against
each other to get their voucher applications submitted as quickly as possible.  And
woe to the company that follows the rules, fills out the forms, meets the filing
deadline, but is still left holding the bag, because the tax credit cap has been
reached.  Sorry, you're out of luck.  Try again next year.  Only government would
come up with an idea like this!  No wonder California companies are easy pickens'
for business recruiters from Arizona, Texas, Nevada, Utah, North Carolina, etc.,
etc., etc.

This bill is very similar to AB 1139, from last year.  This bill hides behind the
noble idea of creating a program designed to help high school students receive
training for technical jobs that don't exist in California.  There has been a
concerted effort by the labor unions over the past several months to eliminate
the program and I believe this is a bill they would like to use to achieve that
objective.

So, what can you do?  Write Senator Steinberg today!  SB 974 passed out of the
Senate Appropriations Committee today and is headed to the Senate floor next week. 
And write your local Assembly member and Senator, letting them know how important
the Enterprise Zone program is to your community, your businesses and your clients. 
The state budget crisis continues unabated and every program will be on the table
for discussion.  If the EZ program is to survive budget negotiations, it's up to
us to let Sacramento know how important this program is to California's economy. 
Approximately 10% of all jobs in California are located in Enterprise Zones.  That's
over 1.5 million jobs and billions of dollars of payroll that currently contribute
to distressed communities across the state.

Below is a sample letter for you and your EZ businesses to use.  USE IT!! 
Your overwhelming response last year to AB 1139 was the determining factor in
turning back that pernicious bill.  I need you to exert the same effort against
SB 974.

Should you or any of your EZ businesses require assistance in the preparation of
the letter, or have any questions about how to determine who your Legislators are,
please email CAEZ at:  action@caez.org or call 530.830.CAEZ (2239).

Thank you for your assistance and continued support of the Enterprise Zone program.

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones

Please Note:  Craig Johnson is not related to Tim Johnson of the Califonia Business Minute

                                                                             Sample Letter
                                    (Company, EZ, City or County Letterhead)

The Honorable Darrell Steinberg
Senate President Pro Tem
State Capitol
Sacramento, CA  95814

RE: SB 974 – Oppose

Dear Senator Steinberg:

On behalf of (insert name of EZ, City, County or business), I’m writing to express
our/my opposition to Senate Bill 974.

While it’s a laudable goal to support and provide high school students with a
potential future through career technical education pathways, this bill will
effectively eliminate the Enterprise Zone program to accomplish this goal and
cause irreparable harm to (my business/my community).

Of great concern is that SB 974 will eliminate the Targeted Employment Area (TEA)
from the list of eligible criteria for the Enterprise Zone hiring credit. 
Elimination of the TEA specifically targets the residents of low-income neighborhoods,
with some of the highest levels of unemployment, poverty rates and crime in California
and eliminates an important incentive for employers to remain in these communities and
hire employees who face significant barriers to employment.

Additionally, SB 974 will also eliminate retroactive vouchering, which will have a
crushing impact on (my small business or small businesses in our community). The
arbitrary and impractical 28-day deadline to complete hiring credit vouchers, will
put (my business or small businesses) at a distinct disadvantage and create an
impediment that makes participating in the program almost impossible.  As a result,
businesses with the greatest growth potential will be left out of the program. 
Adding the annual cap on the amount of credits Enterprise Zone businesses can take
will result in the collapse of the Enterprise Zone program and create a ripple effect
of layoffs and business closures from one end of the state to the other.

You’ve got a lot of real problems to deal with in Sacramento that require real solutions. 
Eviscerating the most successful business assistance program in the state won’t
improve California’s business climate and lead to economic recovery.  I urge you to
drop SB 974 and search for alternative ways to encourage business growth and create
jobs.

Sincerely,