GREAT WESTERN RECLAMATION, INC. TECHNICAL PROPOSAL PART 2

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lifIlil PROPOSED SANTA ANA iii ENTERPRISE ZONE OVERVIEW eiat) _ Through legislation, the State of California has established an Enterprise Zone program whose goal is to stimulate growth in 4,--- -03catithillsi economically distressed areas throughout the State. An Enterprise Zone is a specific designated area in which companies doing business can take advantage of state and local incentives and programs not available to businesses outside the Enterprise Zone. State incentives available to companies include: U Up to $1.3 million in sales tax credits on the purchase of machinery and equipment; o Up to $19,000 per employee in tax credits for hiring qualified employees; o Employees who work in an Enterprise Zone may claim a tax credit to reduce the amount of their income tax on wages earned in the Enterprise Zone; o Interest earned on money loaned to firms within the area is not taxed by the State; o Fifteen year net operating loss carry-forward (temporarily suspended until 1993) ; o Accelerated expensing deduction; and o Priority for various state programs . If designation is received, local incentives offered by Santa Ana may include, but not be limited to: o Assistance in employee hiring; o Toll free phone number for economic development assistance; and o Low-interest commercial loan and rebate programs. The areas designated as Enterprise Zones are within communities that are considered economically depressed with higher than average unemployment rates. By offering incentives and programs only available in an Enterprise Zone, it is hoped these areas can attract and retain companies that would not otherwise locate, stay, or expand there. A mutually dependent and beneficial relationship is formed when, in turn, these businesses which locate or expand in the Enterprise Zone provide the community with a variety of long-term benefits. For example, these businesses employ the area's residents thus decreasing the area's unemployment rate, increase the community's tax base, diversify and stabilize the economic base, increase the area's capita income, and encourage support industries to locate nearby. The incentives therefore act as an inducement to companies looking to expand or locate facilities to do so within an Enterprise Zone. Both companies presently located in a proposed Enterprise Zone and companies locating new facilities in an Enterprise Zone can take advantage of the incentives. The City of Santa Ana has recently submitted an application to the State for an Enterprise Zone. If zone designation is received, the incentives could be avail- able to businesses as early as May, 1993.