Enterprise Zone Reform

1. Enterprise Zone Reform Improving the Enterprise Zone Program

2. 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/

3. Why make a regulatory change? To respond to industry feedback and 3rd party reports identifying problems with the current program.

4. 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.

5. Rapidly Rising Program Costs

6. 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.

7. How are we making it easier to Voucher? Expanding & clarifying qualifying criteria for: • Veterans • The Economically Disadvantaged • Disabled Individuals • Those on Public Assistance

8. 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)

9. Economically Disadvantaged S8466(2) • Eliminate the Income Verification Form • Eliminate proof of age • Establish 3rd party document list to verify

10. 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

11. 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.

12. 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 statement State Rehabilitation plan Medical records Vocational rehabilitation letter Verification by state or federal rehabilitation counselor Letter from a state drug or alcohol rehabilitation agency Social Security Administration disability records Social Service records/referral Valid “Ticket to Work”

13. Closing Voucher Loopholes • Minimize self-certification • Ensure integrity of program

14. TEA S8466(18) Require documents to be from verifiable third parties. No longer acceptable: • I-9 & W-4 • Rental Agreements • Landlord Statements

15. 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

16. 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.

17. 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.

18. 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

19. How do we ensure Zones succeed? Measuring performance and ensuring MOU accountability through: • Data collection • Reporting • Auditing • Regulatory consequences for failure

20. Measuring Performance Biennial Report • Enterprise Zone MOU commitments • Boundaries and street ranges • Copies of annual reports

21. Accountability • Clarify auditing standards • Outlining consequences • Accountability = good performance

22. Data Collection • Annual Voucher Statistics • Biennial Report • Digital Maps

23. Voucher Data Collection

24. 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/

25. 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.