The bills that would have limited the EZ benefits in California have died and the bills that passed, and will likely be approved by Governor Schwarzenegger, are positive.

Long Beach submitted their application for a 15-year extension beyond the January, 2007 scheduled expiration of the LB EZ.

The "gap language" (see Section 7074(c)(2)), which will keep all the Zones effective until HCD completes their application review process (currently scheduled for December 2006, but may slip into the first quarter of 2007) has been inserted. As previously mentioned, the gap language will ensure that the zones that do get re-designated will continue to generate benefits from their currently scheduled expiration date through the 15 year extension period.

Those Zones that do not get their applications approved will continue to offer businesses the various hiring tax credits, sales/ use tax credits and net interest deductions up until Housing & Community Development (HCD) makes their final Zone determinations.

Also, any "qualified" employees hired before the expiration of the Zone will continue to generate credits for up to 60-months from their hire date - even if the zone expires AFTER they were hired.

Please contact NTCG if you have any questions.