Enterprise Zone Reform Heads to the Governor’s Desk


Today the California State Assembly passed AB 93, a bill to transform California’s failed Enterprise Zone Program. The bill is now headed to the governor’s desk, where he is expected to sign it.

“California cannot afford to hand out millions of dollars to corporations without demanding clear, measurable results in return,” said Garo Manjikian, CALPIRG Legislative Advocate. “AB 93 will make economic development subsidies much more transparent, targeted, and accountable to the public.“

In March CALPIRG Education Fund released our annual report,  Following the Money 2013, which analyzed all 50 states for transparency in government spending. Unfortunately, California received an “F”, scoring lower than almost every other state in the country. One of the reasons for California’s low score? The lack of transparency in our tax expenditure programs, like the Enterprise Zone program.

AB 93 makes California’s economic development subsidies (including the Enterprise Zone program) more accountable to its goals, by making these CALPIRG-backed changes:

  1. To accomplish real gains in employment: Businesses in high-need areas will only be given credits for net increases in jobs, rather than simply handing “hiring credits” to those with new hires, as is done now.
  2. To keep things in check moving forward: All incentive credits and hiring credits would be made public and easily accessible online.
  3. To make the outcomes matter to businesses: If the business fails to meet the terms and conditions of its contract, the incentive credit can be revoked

“These transparency and accountability measures will allow citizens to hold companies and the Government accountable to delivering the public benefits they are expected to provide,” said Manjikian.