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New California Budget Proposed – The Future of CA EZ

On January 10, 2013, California Governor, Jerry Brown released his proposed $97.6 billion 2013-14 budget that wipes out years of deficits and includes a small surplus. California is in its best fiscal state in well over a decade due to a number of recent tough spending cuts and the passage of Proposition 30. California’s budget is forecasted to remain balanced for the foreseeable future.

Governor Brown has previously targeted the California Enterprise Zone program for elimination in his proposal efforts, so it was expected to be a part of the current legislative session. While the Enterprise Zone program has not been targeted for elimination, it was announced that the budget would see savings from an immediate kickoff of a proposed regulatory process to revise portions of the program. The proposed regulations were issued by the California Department of Housing and Community Development (HCD) on January 11, 2013; these proposed regulations for the Enterprise Zone program are intended to accomplish the following reforms:

  • Limit retro-vouchering by requiring all voucher applications to be made within one year of the date of hire.
  • Require third-party verification of employee residence within a Targeted Employment Area (TEA).
  • Streamline the vouchering process for hiring veterans and recipients of public assistance.
  • Create stricter zone audit procedures and audit failure procedures.

It is important to note that along with these regulatory reforms, which may be adopted in as little as 3 ½ months, the administration has stated that it will be addressing further reform to the program through legislation; signaling more action ahead on statutory revisions. 

With proposed regulations now released, it is imperative to quickly capture all of the credits under the current vouchering rules. In as short as 3 ½ months, the window for TEA eligibility under current documentation rules and retro-active vouchering may close forever. To prevent losing this benefit, it is crucial that all outstanding hiring documents for your employees be remitted immediately.

Learn more about how ADP can assist with CA EZ retroactive assessments




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