Today I attended the second of three hearings related to AB1139. The hearing focused on the Enterprise Zones and innovation. Assemblyman Manuel Perez, as head of the JEDE, presided over the hearing. Assemblyman John Perez, AB1139’s author was also present for the first part of the hearing and stated that his two main concerns were getting rid of the TEA criteria and getting rid of retroactive vouchering. His stated reason for wanting to delete the TEA criteria was not persuasive. He did not cite to any concrete numbers or even rough statistics, but in a general baby-out-with-the-bathwater stroke suggested that “some” employees who live in expensive lofts are qualifying for the credit because some nicer areas of Oakland, Long Beach and San Francisco are within the TEA. On that basis, he concluded that the TEA category must go.

There was some very persuasive commentary by proponents of the EZ, and particularly some truly amazing real life stories from businesses who said that but for the EZ, they would not be in business today. Interestingly, those employers are hiring the types of employees and providing the types of benefits that the EZ program was designed to accomplish. More on today’s hearing next week.

The next AB 1139 hearing is October 19 in San Diego.

CAEZ president Craig Johnson wrote this letter today to the local Enterprise Zone community:

Dear CAEZ Members and Friends of CAEZ,

Following the legislative hearing for AB 1139 on April 29, CAEZ pledged to work with Assemblyman John Perez and the sponsors of AB 1139. To that end, the attached letter was mailed this morning to Assemblyman Perez and all of the Members of the Assembly Committee on Jobs, Economic Development & the Economy. This letter addresses the numerous inaccuracies cited by the supporters of the bill, corrects the record about the program, it’s structure, mission and accomplishments.

CAEZ continues to monitor legislative activity in Sacramento that may affect our program, especially as the Legislature continues to grapple with record budget deficits. I will keep you apprised of any urgent matters that require a call to action of our Membership. Your response to AB 1139 assures me of your commitment to the defense of our program during perilous times.

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

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones

Craig Johnson wrote this letter of praise for the efforts in opposing AB 1139 which apparently pushed the bill off track.  It won’t be reheard until January 2010.  Johnson also encouraged businesses to keep working to oppose this terrible bill.  Here is the text of his letter:

Dear CAEZ Members and Friends of CAEZ:

Yesterday, AB 1139 was heard in the Assembly C ommittee on Jobs, Economic Development and the Economy (JEDE).  GOOD NEWS!—–the bill was held in Committee and won’t be back until 2011, which was a huge victory for us.  Although the bill now becomes a two-year bill, we will continue to be on alert, as the onerous provisions in this bill could still be incorporated into another bill this year.

CAEZ was the lead in providing testimony in opposition of the bill, as Lydia Moreno, CAEZ Board member and Community Development Coordinator for the City of San Diego and I provided testimony.  Cindy Schock, who owns a business in Lodi, provided compelling testimony describing how the Enterprise Zone program is providing her company with the opportunity to expand, grow and hire new employees.  Thanks to Fran Aguilera of the San Joaquin Enterprise Zone for connecting us with her.  The hearing room was packed with opponents of the bill and numerous individuals lined up to express opposition to the bill.  My thanks to all those who took time out of their very busy schedules to be there in support of the Enterprise Zone program.

The testimony in support of the bill was filled with significant inaccuracies and outdated information about the program.  The program was portrayed as one overrun with problems, ineffectiveness and abuse and consultants who assist companies claim the tax credits were described by the labor union lobbyist as “poverty pimps”.  So much for civil discourse.

Committee members Mary Salas (Chula Vista), Jim Beall (San Jose) and Marty Block (San Diego), provided supportive comments about the Enterprise Zones in their districts, with Assemblymember Salas also expressing specific concerns about the proposed elimination of the TEA and retroactive vouchering.  Committee Chairman, Manuel Perez, who represents the Coachella Valley, Calexico/Imperial County and Imperial Valley Enterprise Zones, encouraged the opponents of the bill to work with the author to effect any needed changes to the EZ program.

Our next steps will include working with our opposition coalition members, (Cal Chamber, CEON, Cal-Tax, Cal Bankers, CMTA, League of Cities, City of San Jose & others), to prepare a letter addressed to the Committee members, correcting numerous inaccuracies stated about the EZ program during the hearing.  I will share this letter with you, which will help prepare all of you to respond to attacks on the program going forward.

The CAEZ Government Affairs Committee will continue to follow this bill and work closely with the Coalition.  Continued education of Members of the Legislature will be the order of the day and I encourage all of you to regularly communicate with your Legislators about your Zones, your businesses and clients and how they make a difference in your communities.

Our letter writing campaign was incredibly successful, contributing to the 200+ letters of opposition received by the Committee Consultant.  To read the consultant’s analysis and see the opposition list, click on this link.  There was also a supplemental list distributed at the hearing that listed an additional 22 names in opposition!  Your response to this call to action is greatly appreciated and no doubt persuaded the author to describe his bill as “a work in progress”.  Our goal is to eventually describe this bill as DEAD!!

We’re working to get the audio of the hearing posted on the CAEZ website, so please check the site regularly for this and other updates (an updated legislative report will be posted shortly).

Thanks you again for your tremendous response to this outrageous attack on California’s Enterprise Zone program.

CRAIG JOHNSON
President
California Association of Enterprise Zones
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