On Thursday, April 24, the Governor announced new tax incentives for employers hiring workers in specific parts of Western Riverside County, as well as other areas of California with high unemployment and poverty.
The New Employment Credit (NEC) is a hiring credit for businesses in California communities with the highest rates of unemployment and poverty. The credit is part of the Governor's Economic Development Initiative, which passed in 2013 and received support from both Republicans and Democrats in the Legislature, businesses and labor groups.
The employment credit pilot program provides Western Riverside County and Inland Southern California businesses the opportunity to expand and boost employment throughout our community and region. The pilot areas within Western Riverside County include census tracts in Jurupa Valley, Riverside, Moreno Valley and Perris.
The geographical designations for the NEC and the pilot areas can be found on the Franchise Tax Board's website http://maps.gis.ca.gov/gobiz/dga/default.aspx.
The Governor's announcement that our communities are included in the pilot program is a boost to our economy, our residents and our businesses. Our communities have struggled through the economic recovery and this is tremendously good news.
Under the legislation, the Governor's Office of Business and Economic Development (GO-Biz) will oversee the credit and may designate up to five pilot areas. In selecting the first round of pilot areas, GO-Biz evaluated employment, poverty and wage data to identify areas of the state that would benefit the most from the expanded hiring credit. The designation as a pilot area is effective immediately, applicable for four years and may be extended by GO-Biz for an additional three years.
The Governor's Economic Development Initiative is funded by redirecting approximately $750 million annually from the state's outdated and ineffective Enterprise Zone program and also includes a statewide sales tax exemption on qualifying manufacturing equipment and research and development equipment purchases for biotech and manufacturing companies.
More information about the New Employment Credit is available at: http://www.business.ca.gov/Portals/0/AdditionalResources/Reports/GEDIv2.2013.pdf.
As always it is an honor to serve you.
Richard D. Roth
Senator, 31st District