Enterprise Zone Reform

Improving the Enterprise Zone Program

Agenda

• Why make a regulatory change?

• What were HCD’s objectives in crafting regulatory change?

• What are the key regulatory changes?

• Where can you get more information about the Rulemaking Process?

– http://www.hcd.ca.gov/ezregs/

Why make a regulatory change?

To respond to industry feedback and 3rd party reports identifying problems with the current program.

Feedback - 3rd Party Reports

• PPIC Report: Current EZ Program fails to increase level of employment in Zones.

• Hiring credits, intended as incentive for hiring decisions, can be claimed long after-the-fact.

• Supporting voucher documents need to be updated.

Rapidly Rising Program Costs

What HCD values were considered in undertaking a rulemaking change?

Increase efficiency and accountability. Focus tax credits on activities incentivized by

the program.

Streamline process for program participants.

How are we making it easier to Voucher?

Expanding & clarifying qualifying criteria for: Veterans The Economically Disadvantaged Disabled Individuals Those on Public Assistance

Veteran Demonstration S8466(1-B)

Vet categories - any one of the following documents can be used to demonstrate veterans status:• Report of separation or discharge from the Armed

Forces, National Guard, or Coast Guard

• Veterans Administration documentation

• Written verification by State veterans agency

• DD Form 214, Certificate of Release or Discharge from Active Duty

• Letter from the National Personnel Records Center (NPRC)

Economically Disadvantaged S8466(2)

Eliminate the Income Verification Form Eliminate proof of age Establish 3rd party document list to verify

Economically Disadvantaged Documentation

• CalFresh or Supplemental Nutrition Assistance Program (SNAP)• Medicaid/Medi-Cal• Infants and Children Program• Healthy Families A & B• Temporary Assistance for Needy Families• National School Lunch’s Free Lunch Program (NSL)• Head Start Income Eligible• Supplemental Security Income (SSI)• Bureau of Indian Affairs General Assistance• Tribal Temporary Assistance for Needy Families• Low Income Home Energy Assistance Program• Medical Baseline Energy Billing• Receives publicly subsidized affordable housing

Disabled Individual S8466(12)

• Consistent with statute – if eligible for a State rehabilitation plan, then also eligible for a voucher.

• Provide documents that are required to participate in a state rehab program, but state rehab participation is not required.

Disability Documentation(B) To demonstrate that an employee is disabled and is eligible for, enrolled in, or has completed a state rehabilitation plan, the Voucher Applicant shall submit a document to that effect from the following list:

Physician's statementState Rehabilitation plan Medical recordsVocational rehabilitation letterVerification by state or federal rehabilitation counselorLetter from a state drug or alcohol rehabilitation agencySocial Security Administration disability recordsSocial Service records/referralValid “Ticket to Work”

Closing Voucher Loopholes

• Minimize self-certification• Ensure integrity of program

TEA S8466(18)

Require documents to be from verifiable third parties.

No longer acceptable:• I-9 & W-4• Rental Agreements• Landlord Statements

Acceptable TEA Documentation• Valid driver's license or other local, State or Federal ID

card issued within the past 5 years

• Utility bill

• Valid Passport*

• Mortgage Statement

• County Property Tax statement

• Credit card bill or statements

• Voter registration confirmation documents

TEA Certification

• Statute requires redrawing TEA boundaries 180 days after publication of new census data.

• Census data is now published annually, therefore each TEA must be redrawn annually.

Date of Hire

• “New hire” vs. “rehire” test based on a 12-month window.

• Date of hire is evidenced exclusively by the W-4 form.

Eliminating Retroactivity

• 30% of vouchers are issued retroactively

• Limited to 1 year from the date of hire

• 1 year grace period for hires made prior to regulatory change taking effect

How do we ensure Zones succeed?

Measuring performance and ensuring MOU accountability through:o Data collectiono Reportingo Auditing o Regulatory consequences for failure

Measuring Performance

Biennial Report

Enterprise Zone MOU commitments

Boundaries and street ranges

Copies of annual reports

Accountability

• Clarify auditing standards

• Outlining consequences

• Accountability = good performance

Data Collection

• Annual Voucher Statistics

• Biennial Report

• Digital Maps

Voucher Data Collection

EZ Name# of

Vouchers Issued

# of Companies Receiving Vouchers

New Job?

Existing Job?

Avg. Hourly Wage

Calworks VeteransPublic

Assistance Recipient

TEA

Fresno 6304 368 685 5619 9.41 0 18 23 5942

Merced 2964 264 545 2537 9.92 125 3 358 2158

Regulatory Process

• 45-Day Public Notice & Comment period

• Public Hearings in Los Angeles, San Diego, Oakland, and Sacramento - February, 2013

• Details on comment submission or hearings

http://www.hcd.ca.gov/ezregs/

What is the Expected Impact of Regulatory Change?

• Eliminate retroactive vouchering.

• Streamline vouchering for vets and recipients of public assistance.

• Improvement in Program clarity and accountability.