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ITEM #21 CITY OF COLTON For the City Council Meeting of April 7, 2009 TO: Honorable Mayor and Councilmembers FROM: Candace E. Cassel, Economic Development Director SUBJECT: Consideration of City Council Resolution Authorizing the Adoption of Qualifying Census Tracts as "Targeted Employment Areas" for the San Bernardino Valley Enterprise Zone DATE: March 9, 2009 BACKGROUND On August 15, 2006, the City Council authorized Resolution R-108-06, the execution of a Memorandum of Understanding between the cities of Colton and San Bernardino, the County of San Bernardino and IVDA to enable application for a new enterprise zone. The multi - jurisdictional enterprise zone, San Bernardino Valley Enterprise Zone (SBVEZ), was awarded conditional approval by the State on January 17, 2007. Final designation of the zone was awarded on March 5, with a retroactive designation date to October 16, 2006 The State granted the retroactive date to avoid any lapse in incentives to those businesses who were previously in the Agua Mansa Enterprise Zone and are now currently within the SBVEZ boundaries. An enterprise zone designation serves as a unique marketing tool, providing a competitive edge over another jurisdiction for a business location. State enterprise zones offer various incentives to businesses located within a zone including: 1) employment tax credits; 2) sales and use tax credits for purchase of new equipment and machinery; 3) business expense deduction; 4) net operating loss carryover; and 5) net interest deduction for lenders. Businesses receive the credits/deductions upon filing their tax returns with the State. The employment tax credits are available to those businesses located in an enterprise zone for qualified employees who meet certain criteria at the time of hire to include: 1) A person receiving or eligible to receive subsidized employment, training or services funded by the federal Job Partnership Act (JTPA), or its successor, Workforce Investment Act (WIA) registered core of intensive services; 2) A person eligible to be a voluntary or mandatory registrant under CalWORKS, formerly known as Greater Avenue to Independence (GAIN); 3) A member of a targeted group defined in the federal Work Opportunity Tax Credit (WOTC); 4) An economically disadvantaged individual 14 years of age or older; 5) A qualified dislocated worker; 6) A disabled individual eligible for, enrolled in, or who completed a state rehabilitation program; 7) A Vietnam Veteran or veteran recently separated from military service; 8) An ex -offender (felony and/or misdemeanor offense); 9) A person eligible for, or a recipient of Public Assistance (TANF, SSI, Food Stamps);