In this Special Report published August 19, 2013, in State Tax Notes, Matt Mandel, Kathy Freeman, Erin Bradley, and Dorothy Lo examine California's new economic development program and provide taxpayers with a roadmap for navigating the new scheme.
California Governor Jerry Brown on July 11 signed legislation (AB 93 and SB 90 ) enacting a new temporary economic development program (EDP) that makes sweeping changes to the enterprise zone program.
The legislation is the culmination of years of effort to modify the enterprise zone program. Prior reform efforts focused mainly on cuts to the program, but this new legislative package was successful – at least in part – because it provides a replacement for credits that some stand to lose, with different incentives that will benefit others. Ultimately, however, the replacements are temporary, as the entire new EDP will sunset by January 1, 2025.