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(continued)
(4) Each construction or service contractor or subcontractor shall not be on a list of federally debarred contractors.
(g) The State recipient shall establish procedures that ensure that disbursements are properly expended by, or on behalf of, the State recipient. Such procedures shall include:
(1) Performing on-site inspections of the construction or rehabilitation work; and

(2) Using progress inspection reports as the basis for issuing payments to contractors or subcontractors.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.25, 576.61 and 576.65.









s 8414. Requirements for Renovation, Conversion, or Major Rehabilitation Performed by the State Recipient.
(a) A State recipient that chooses to perform all or part of the labor, and/or to provide all or part of the materials necessary for Renovation, Conversion, or Major rehabilitation, shall comply with the requirements of this section.
(1) FESG funds shall not be used to pay any family member of any person on the Governing Board or staff of the State recipient.
(2) The State recipient shall enter into a written contract with each subcontractor, pursuant to the requirements of section 8413.


Note: Authority: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.57 and 576.61.









s 8415. Budget Changes.
(a) After the award is made, the Department may approve changes to a project budget provided the requested budget change complies with either of the requirements of section 8415 subdivisions (b) or (c) below.
(b) The proposed budget change meets all of the following criteria when applicable:
(1) Does not substantially change the specific Clients served by the approved project activities;

(2) Continues to meet the priorities and criteria imposed during the respective award selection process;
(3) Results in a product substantially the same as the originally approved Eligible activity and, costs the same as or less than the originally approved Eligible activity;
(4) Will be completed by substantially the same date as allowed for in the original approval;
(5) Is justifiable, at the sole discretion of the Department, upon the Department's consideration of written evidence documenting the reasons for the change. If the proposed budget change involves eliminating an entire expense item from the Grant budget, the State recipient must explain what other funding will pay for this item.
(c) Will not result in a decrease in benefits to the local program.
(d) If the proposed budget change represents more than 10% of the overall award amount, an amendment to the Standard Agreement is required.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Section 576.25.








s 8416. Disbursement Procedures.
(a) FESG funds shall be disbursed pursuant to the terms of the Standard Agreement.
(b) For Renovation, Conversion, or Major rehabilitation activities, the Department may require the State recipient to have an escrow account, a construction fund control account, or a comparable type of account for these activities.
(c) The Department may rely on the State recipient's certification that expenditures claimed in a request for disbursement are eligible and necessary, provided that the State recipient also certifies that detailed supporting documentation verifying each expenditure is available and shall be retained by the State recipient for six years after the execution of the Standard Agreement.
(d) Except for Renovation, Conversion, and Major rehabilitation activities, State recipients may request an advance of 30 days working capital or $5,000, whichever is greater, after the Standard Agreement is executed.
(e) As necessary, the Department shall establish minimum disbursement amounts or other related procedures necessary for the efficient administration of the FESG program.
(f) If a State recipient uses FESG funds for the costs of ineligible activities, the State recipient shall be required to reimburse these funds to the Department, and shall be prohibited from applying to the Department for subsequent FESG funds until the Department is fully repaid.
(g) Notwithstanding section 8416 subdivision. (d), only costs incurred after execution of the Standard Agreement and after all environmental review requirements have been met will be paid by the Department. Environmental review compliance shall include compliance with 24 C.F.R. Part 58.
(h) Requests for disbursement of FESG funds must be made by the State recipient on forms approved by the Department.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.21, 576.25, 576.57, 576.61, 576.63 and 576.65.









s 8417. Reporting and Recordkeeping.
In addition to the requirements of 24 C.F.R. Parts 84 and 85, the following requirements apply to requests for funds, fiscal reporting and maintenance of records:
(a) All reports must be made on forms approved by the Department;
(b) All State recipients must submit a written request for disbursement each time a request for funds is made;
(c) All State recipients must submit a written disbursement expenditure detail report with the first request for disbursement;
(d) All State recipients must submit written quarterly accrued expenditure reports;
(e) A written report must be submitted annually during the period of the Grant;
(f) A written completion report must be submitted within 60 days after expiration of the Standard Agreement;
(g) Additional reports may be requested by the Department to meet other applicable federal reporting requirements;
(h) State recipients must maintain all fiscal and program records pertaining to the Grant for a period of six years from the date of execution of the Standard Agreement; and
(i) Pursuant to 24 C.F.R. section 576.65(b), all State recipients must maintain the confidentiality of records pertaining to the provision of prevention or treatment services to victims of family violence.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.61 and 576.65.









s 8418. Monitoring Grant Activities.
(a) The Department shall monitor activities funded by Grants selected and awarded by the Department according to the terms of the Standard Agreement.
(b) If it is determined that a State recipient falsified any certification, application information, financial, or contract report, the State recipient shall be required to reimburse the full amount of the Grant to the Department, and may be prohibited from any further participation in the FESG program.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R Sections 576.61 and 576.67.









s 8419. Audit Requirements.
(a) Private nonprofit organizations must submit audits to the Department for review and approval. These audits must comply with OMB Circular A-133. See 24 C.F.R. 576.57(g).
(b) Units of general local government must submit audits to the Department for review and approval. These audits must comply with 24 C.F.R. Part 44 as set forth in 24 C.F.R. Part 45.
(c) The Department may also periodically request that a State recipient be audited.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.57 and 576.61; 24 C.F.R. Parts 44 and 45.









s 8420. Sanctions.
The Department may impose sanctions, as well as any other remedies available to it under law, on a State recipient for failure to abide by any state and federal laws and regulations applicable to the FESG program. Such sanctions include:
(a) Conditioning a future Grant on compliance with specific laws or regulations;
(b) Directing a State recipient to stop incurring costs under the current Grant;
(c) Requiring that some or all of the Grant amount be remitted to the Department;
(d) Reducing the amount of Grant funds a State recipient would otherwise be entitled to receive; and/or
(e) Electing not to award future Grant funds to a State recipient until appropriate actions are taken by the State recipient to ensure compliance.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. Sections 576.61 and 576.67.









s 8421. Other Federal Requirements.
State recipients shall abide by all applicable local, state, and federal laws pertaining to the FESG program, including, but not limited to, all other applicable federal laws cited in 42 U.S.C. sections 11371-11378 and 24 C.F.R. Part 576.


Note: Authority cited: Section 50406(n), Health and Safety Code. Reference: 24 C.F.R. 576.61.










s 8430. Purpose and Scope.
These regulations implement and interpret Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1, Government Code, which establishes the Enterprise Zone Act; and Sections 17053.74(c) and 23622(c) of the Revenue and Taxation Code.


Note: Authority cited: Sections 7086(a) and (d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code. Reference: Chapter 12.8 (commencing with Section 7070) of Div. 7, Title 1, Government Code; and Sections 17053.74(c) and 23622.7(c), Revenue and Taxation Code.








s 8431. Definitions.
The following definitions shall apply to this Subchapter. References to code sections refer to the sections of these regulations unless otherwise noted.
(a) "Act" shall mean Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1, Government Code.
(b) "Certificate" shall mean the certification described in subdivision (c)(1) of Revenue and Taxation Code Sections 17053.74 and 23622.7.
(c) "Department" means the Department of Housing and Community Development.
(d) "Enterprise Zone" means the same as defined in subdivision (d) of Government Code Section 7072.
(e) "Qualified Employee" means the same as defined in subdivision (a)(4)(A) of Revenue and Taxation Code Sections 17053.74 and 23622.7.
(f) "Remittance Form" means the form described in subsection (b) of Section 8433.


Note: Authority cited: Sections 7086(a) and (d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code. Reference: Sections 7072(a), 7072(d), 7076 and 7086, Government Code; and Sections 17053.74(c) and 23622.7(c), Revenue and Taxation Code.








s 8432. Amount of Department Fee.
(a) Commencing on November 1, 2004, each enterprise zone shall remit to the Department a fee of $10.00 for each application for a Certificate that it accepts. The enterprise zone may collect this fee at the time it accepts an application for processing. The fees shall be remitted pursuant to the procedures set forth in Section 8433.
(b) The Department may adjust the per-application fee from time to time, pursuant to the Administrative Procedure Act, to ensure that fees collected meet, but do not exceed, the Department's costs of administering the Act. In no case shall the per-application fee exceed $10. Prior to any such adjustment, the Department shall notify all enterprise zones.


Note: Authority cited: Sections 7086(a) and (d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code. Reference: Sections 7076(c) and 7086(d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code.








s 8433. Procedure for Remittance of Department Fees.
(a) No later than the 25th day of December 2004, and on the 25th day of each month thereafter, each enterprise zone shall file a completed Remittance Form with the Department for the fees collected during the preceding month. An enterprise zone shall file a Remittance Form even if no applications were accepted during the preceding month.
(b) The Remittance Form shall be provided by the Department and shall inform the enterprise zone that the fees are being collected to reimburse the Department for the costs of its administration of the Act, and shall include instructions for returning the completed Remittance Form. The Remittance Form shall request the following information: (1) date submitted; (2) name of the enterprise zone; (3) the enterprise zone contact person, telephone number and e-mail address; (4) total number of applications accepted for the preceding month; and (5) the total amount of funds being remitted.
(c) Each enterprise zone shall remit to the Department, along with the completed Remittance Form, a single check, made payable to the Department of Housing and Community Development, in a dollar amount equal to the then current per-application fee established by the Department pursuant to Section 8432 multiplied by the number of applications accepted for the month being reported.


Note: Authority cited: Sections 7086(a) and (d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code. Reference: Sections 7076(c) and 7086(d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code.








s 8434. Noncompliance.
If the Department determines that an enterprise zone has failed to comply with the requirements of this Article it may:
(a) Suspend any discretionary services rendered to the enterprise zone including, but not limited to, processing of expansion requests or requests to extend the enterprise zone designation; and
(b) Issue a determination that the enterprise zone is failing for purposes of Government Code Section 7076.1, without further audit of the enterprise zone's operations.


Note: Authority cited: Sections 7086(a) and (d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code. Reference: Sections 7076(c), 7076.1 and 7086(d), Government Code; and Sections 17053.74(c)(1) and 23622.7(c)(1), Revenue and Taxation Code.








s 8439. Definitions.
In addition to the definitions contained in Government Code section 7072, the following definitions shall apply only to the regulations contained in Articles 3-13 of this subchapter. Furthermore, as used in Articles 3-12, the term "Agency" shall mean the Department of Housing and Community Development.
(a) "Act" means the Enterprise Zone Act, Government Code section 7070 et seq.
(b) "Applicant" means a city, county, or city and county that submits an application to the Agency to have a geographical area, including an area within its jurisdiction, designated as an enterprise zone under the provisions of the Act.
(c) "Application" means the written application submitted to the Agency pursuant to either article 6 or article 7 of this subchapter.
(d) "Application area" means the geographical area consisting of the eligible area and commercial and/or industrial area contained in a preliminary or final application.
(e) "Block" means the lowest level in the hierarchy of census geography whereby census data is collected by the United States Department of Commerce, Bureau of the Census.
(f) "Block group" means a combination of blocks that is a subdivision of a census tract.
(g) "Census maps" means the Block Statistics Maps published by the United States Department of Commerce, Bureau of the Census.
(h) "Census tract" means a small statistical subdivision of a county whereby census data is collected by the United States Department of Commerce, Bureau of the Census.
(i) "Commercial area" means a geographic area within which at least 51% of the land area is zoned commercial by the city, county or city and county.
(j) "Conditional designation" means designation by the Agency of a final applicant's application area as an enterprise zone, subject to the final applicant's completion of the conditions necessary for final designation specified in the section 8445 conditional designation document.
(k) "Decennial census" means the population survey of the United States conducted every ten years by the United States Department of Commerce, Bureau of the Census.
(l) "Designation process" means all steps required for final designation, including eligibility, preliminary application, final application, conditional designation and final designation, identified in section 8439.1(c).
(m) "Distressed area" means a geographic area that either (1) meets the requirements of section 8440.2, or (2) is contained in an approved petition.
(n) "Eligible area" means, except for an SB1438 zone, a geographic area that meets the requirements of section 8440.4 and is a distressed area. An eligible area for an SB1438 zone is one which meets the requirements of sections 8440.1 and 8440.3.
(o) "Enterprise zone" means an application area contained in an application awarded final designation status by the Agency.
(p) "Final applicant" means a preliminary applicant selected by the Agency to complete a final application.
(q) "Final application" means the written application submitted to the Agency pursuant to article 7 of this subchapter.
(r) "Final designation" means that the final applicant with conditional designation status has been mailed written notification from the Agency that it has completed, to the satisfaction of the Agency, all conditions of the conditional designation and that designation of the final applicant's application area as an enterprise zone is final and complete.
(s) "Industrial area" means a geographic area within which at least 51% of the land area is zoned industrial by the local jurisdiction.
(t) "Infrastructure" means the physical systems and services which support development and people, including, but not limited to, streets, and highways, transit services, airports, and water and sewer systems.
(u) "Petition" means a written request submitted to the Agency by a city, county, or city and county for a finding that a geographic area within its jurisdiction qualifies as a distressed area.
(v) "Petition area" means the geographic area identified in a petition.
(w) "Preliminary applicant" means a city, county, or city and county that is preparing or has prepared a preliminary application.
(x) "Preliminary application" means the written application submitted to the Agency pursuant to article 6 of this subchapter.
(y) "SB1438 zone" means the process for designation of two enterprise zones which, in addition to compliance with the requirements for designation of an enterprise zone, meet the eligibility requirements contained in section 8440.3.
(z) "Small city" means a California city with a population less than 25,000 as of December 31, 1992.
(aa) "Small city enterprise zone" means the process for designation of two small cities as enterprise zones from applications received on or before June 30, 1994.


Note: Authority cited: Sections 7073, 7076, and 7085, Government Code. Reference: Sections 7071, 7073, 7073.9, 7076 and 7085, Government Code.








s 8439.1. Enterprise Zone Designation Process.
(a) The regulations contained in this chapter govern the establishment of enterprise zones pursuant to the Enterprise Zone Act, Government Code sections 7070 et seq.
(b) The Agency shall designate a maximum of twenty-five (25) enterprise zones, in addition to two small cities enterprise zones and two SB1438 zones. Pursuant to Government Code section 7073.9, the Agency shall designate two small cities enterprise zones. Pursuant to Government Code section 7073.7, the Agency shall designate two SB1438 zones. The four shall be in addition to the 25 previous designated. Except for the small cities and SB1438 designations, the Agency shall select a maximum of twenty (20) preliminary applications during each designation process to complete a final application, and from the final applications, the Agency shall designate up to eight (8) enterprise zones during each designation process. The Agency shall select a maximum of five (5) preliminary applications for designation of small cities enterprise zones and SB1438 zones, and shall conditionally designate two of the final applicants.
(c) The Agency shall designate an application area as an enterprise zone provided each of the following requirements is satisfied:
(1) A city, county or city and county submits a preliminary application to the Agency, or in the case of a small cities enterprise zone, a small city submits an application;
(2) The application area contains an eligible area and includes:
(A) a commercial area contained within or contiguous to the eligible area; and/or

(B) an industrial area contained within or adjacent to the eligible area;
(3) The preliminary applicant has been selected by the Agency to complete a final application; and
(4) The Agency has awarded the final applicant both conditional and final designation status.


Note: Authority cited: Sections 7073, 7076 and 7085, Government Code. Reference: Sections 7073, 7073.5, 7073.7, 7073.9 and 7076, Government Code.








s 8439.2. Address of Agency.
The following is the Agency mailing address for any and all correspondence, applications, petitions, documents, and other materials concerning enterprise zones:
department of housing and community development Enterprise Zone program Manager p.o. box 942054 Sacramento, California 94252-2054


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7071 and 7073, Government Code.








s 8439.3. Enterprise Zone Application Handbooks; Application Dates.
(a) The Agency shall prepare a handbook entitled "Enterprise Zone Preliminary Application Handbook" that will be mailed to all persons and entities who have requested receipt of a preliminary application. In the case of the small cities enterprise zone designation, the handbook shall be mailed to all small cities. The Enterprise Zone Preliminary Application Handbook shall contain the following:
(1) All due dates for the preliminary application;

(2) A description of the designation process;
(3) The scoring criteria and method employed by the Agency in evaluating preliminary applications; and
(4) The preliminary application form.
(b) The Agency shall prepare a handbook entitled "Enterprise Zone Final Application Handbook" that will be mailed to all final applicants. The Enterprise Zone Final Application Handbook shall contain the following:
(1) All due dates for the final application;
(2) A description of the designation process;
(3) The scoring criteria and method employed by the Agency in evaluating final applications; and
(4) The final application form.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7073 and 7073.9, Government Code.








s 8439.4. Application Area; Prohibition Against Changes.
(a) Each preliminary and final application shall include one, and only one, application area, consisting of one eligible area and one industrial and/or one commercial area. The commercial area shall be contiguous to or contained within the eligible area and shall have continuous boundaries. The industrial area shall be either contained within or adjacent to the eligible area and shall have continuous boundaries. As used in this Section, "adjacent" means eligible area residents can be expected to seek employment in the industrial area based upon historic employment practices.
(b) The application area identified in a preliminary application shall not be changed in the final application except as specified in section 8443.1.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7071, 7073 and 7076, Government Code.








s 8440. Identification of Eligible Area; Eligibility Criteria.
(a) Except for an SB1438 zone, an eligible area shall meet the requirements set forth in section 8440.1 and the entire geographic area shall:
(1) Meet the criteria for a distressed area contained in section 8440.2 and/or
(2) Comply with article 5 of this subchapter.
(b) An SB1438 zone eligible area shall meet the requirements set forth in section 8440.1 and 8440.3.


Note: Authority cited: Sections 7073, 7076 and 7085, Government Code. Reference: Section 7073, Government Code.








s 8440.1. Continuous Boundaries; Area Population.
An eligible area shall consist of census tracts, block groups, or enumeration districts with continuous boundaries, and shall contain a population of at least 2,500 persons (based upon the most recent decennial census).


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.










s 8440.2. Distress Criteria.
(a) Each census tract, block group, or enumeration district within a non-petition distress area must meet at least three (3) of the distress criteria listed below:
(1) The net increase in per capita income between 1969 and 1983 was $8,203 or less;
(2) The average rate of unemployment for both 1984 and 1985 was 9% or more;

(3) The percent of persons below the poverty level in 1980 was 12.4% or more; or
(4) At least 70% of the households had income below 80% of median county household income during 1980.
(5) The area is within a jurisdiction declared a disaster area by the President of the United States within the last seven years.
The Agency shall provide applicants with the above-referenced data for each census tract, block group, or enumeration district using information prepared by the Department of Finance.
(b) To determine qualification under subsection (a)(1) above, information for the entire county shall be used if the same census tracts or enumeration districts are not available for the last two decennial censuses. In such cases, if the county qualifies, all census tracts or enumeration districts within that county qualify. For areas where census tracts are not available, enumeration districts shall be used.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8440.3. SB1438 Zone Eligible Area.
(a) "Area", as used in this section, means the county for a census tract outside a city, and the city for a census tract within a city. Therefore, in subsection (b)(1), "unemployment rate for the area" means that rate within the city if the census tract is in a city, otherwise it means the rate for the county.
(b) Each census tract within the SB1438 zone eligible area shall comply with a minimum of two of the following:

(1) The unemployment rate in the area has been twice the unemployment rate for the State of California in each of the years 1990 through 1994, inclusive, based upon figures provided by the Economic Development Department.
(2) The 1990 median household income for each census tract is less than 90 percent of the 1990 median household income for the county in which the census tract is located, based upon figures provided by the Department of Finance Demographics Unit.
(3) The area has experienced at least an eight percent increase in population per year in both 1993 and 1994 while employment in the area has increased less than eight percent per year in 1993 and 1994, based upon figures provided by the Economic Development Department. In calculating the increase, if 1992 population was 100,000, then population in 1993 must be at least 108,000, and in 1994 at least 116,640.


Note: Authority cited: Sections 7073, 7076 and 7085, Government Code. Reference: Section 7073, Government Code.










s 8441. Petition Area as an Eligible Area.
(a) If the petition area does not comply with the distress criteria specified in section 8440.2, the petition area shall qualify as a distressed area, provided the petition area meets the requirements of one of the following sections: section 8441.2, section 8441.3 or section 8441.4.
(b) The petition shall contain all of the following information:
(1) A description and identification of the exact location and the specific boundaries of the petition area, together with the population data for the petition area.
(2) All data and information in support of the contention that the petition area meets the requisite distress criteria set forth in one of the following sections: 8441.2, 8441.3, or 8441.4.
(3) All data and information in support of the contention that the eligible area meets the requirements of section 8440.1.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8441.1. Petition; Time for Submission.
(a) A city, county, or city and county shall be authorized to submit a written petition to the Agency for a finding that a geographic area within its jurisdiction qualifies as a distressed area.
(b) Except for a small cities enterprise zone petition, the petition shall be received by the Agency on or before the sixtieth (60th) day prior to the date that the preliminary applications are due to the Agency. Petitions under the small cities enterprise zone program shall be received by the Agency by the preliminary application due date. The Agency shall not accept any petition that is received after the petition due date.
(c) The Agency shall publish the due date for petitions in the Enterprise Zone Preliminary Application Handbook.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7073 and 7073.9, Government Code.








s 8441.2. Plant Closures.
(a) A petition area shall qualify as a distressed area if the petition area has experienced a plant closure or closures causing the unemployment of at least 100 full-time workers from the plant(s) within the twenty-four (24) months prior to the filing of the petition.
(b) For purposes of this section, the following definitions shall apply:
(1) "Plant" means a business that manufactures, processes, combines or otherwise fabricates a product, and includes a military base; and
(2) "Full-time" means employment which when aggregated with respect to one or more employees totals at least one thousand seven hundred and fifty (1,750) hours per 12-month period.
(c) The city, county, or city and county shall attach the documents that support its contention that the petition area is a distressed area under the provisions of this section including:
(1) The name and address of closed plant(s);
(2) The number of full-time plant workers who became unemployed as a result of the closure of the plant(s); and
(3) The date the plant(s) closed.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.










s 8441.3. Substantially Similar Conditions of Economic Distress.
A petition area shall qualify as a distressed area if at least 51% of the population or the geographic area within the petition area complies with the provisions of section 8440.2. The remaining portion of the population or the geographic area within the petition area shall meet a minimum of three (3) economic distress criteria. At least one (1) of the three (3) criteria shall be an economic distress criteria specified in section 8440.2. The remaining criteria shall meet the criteria set forth below.

(a) The percentage of aid to families with dependent children (AFDC) recipients residing in the petition area is one hundred and twenty percent (120%) or more of the percentage of AFDC recipients residing in the State of California and in the county within which the petition area is located. For the purposes of this subsection, the following data shall be utilized in calculating the percentage of AFDC recipients residing in the petition area, the State and the county:
(1) The number of resident AFDC recipients shall be based upon the most recent annual data compiled by the State Department of Social Services; and
(2) The total number of residents shall be based on the most recent decennial census data prepared by the United States Department of Commerce, Bureau of the Census;
(b) The percentage of county general relief program recipients residing in the petition area is one hundred and twenty percent (120%) or more of the percentage of general relief program recipients residing in the State of California and in the county within which the petition area is located. For the purposes of this subsection, the following data shall be utilized in calculating the percentage of general relief recipients residing in the petition area, the State and the county:

(1) The number of resident general relief recipients shall be based upon the most recent annual data compiled by the State Department of Social Services; and
(2) The total number of residents shall be based on the most recent decennial census data prepared by the United States Department of Commerce, Bureau of the Census;
(c) The most recent one year high school drop-out rate for school age children residing in the petition area is one hundred and twenty percent (120%) or more of the most recent one year high school drop-out rate for school age children residing in the State of California and in the county within which the petition area is located. The petition area drop-out rate is available from the local unified school district. The State and county drop-out rates shall be contained in the Enterprise Zone Preliminary Application Handbook.
(d) The population of the petition area meets the population loss criteria (also referred to as "population lag/decline") identified by the most recent Urban Development Action Grant guidelines published by the United States Department of Housing and Urban Development as of the date the preliminary applications were mailed by the Agency.
(e) The most recent annual percentage of persons residing in the petition area below the poverty rate is one hundred and twenty percent (120%) or more of the most recent annual poverty rate for the persons residing in the State of California. The State poverty rate shall be contained in the Enterprise Zone Preliminary Application Handbook.
(f) The most recent annual unemployment rate for persons residing in the petition area is one hundred and twenty percent (120%) or more of the most recent annual unemployment rate for the persons residing in the State of California and in the county in which the petition area is located. The State and county unemployment rates shall be contained in the Enterprise Zone Preliminary Application Handbook.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8441.4. Gang-Related Activity.
(a) A petition area shall qualify as a distressed area if the petition area has experienced a history of gang-related activity, whether or not crimes of violence have been committed.
(b) The city, county, or city and county shall attach the documents demonstrating that the petition area has been identified by the Office of Criminal Justice Planning for the State of California as a gang activity area.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8441.5. Approval or Denial of Petitions; Finality of Decisions.
(a) The Agency shall mail a "petition letter" to each city, county, or city and county that submitted a petition within thirty (30) days after the date specified in section 8441.1(b) for the filing of petitions. The petition letter shall inform the city, county, and or city and county that submitted a petition whether the petition is approved or denied.
(b) If the petition has been denied, the petition letter shall inform the city, county, or city and county that submitted a petition of the reasons for denying the petition. The Agency's decision to deny a petition shall be final and no further review of the petition shall be conducted by the Agency.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8442. Jurisdiction over Applications Area.
(a) No city, county or city and county shall participate as an applicant unless a portion of the proposed application area is within its jurisdiction.
(b) For the purposes of this article, "jurisdiction" means the geographic area where applicant has authority to enforce ordinances and resolutions.
(c) Each application must include at least one applicant city and/or county with jurisdiction in the eligible area.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8442.1. Information Required.
All preliminary applications shall contain the documents and information specified in sections 8442.4, 8442.6, 8442.7, 8442.8, and 8449.3.


Note: Authority cited: Sections 7073 and 7076, Government Code; and Section 21082, Public Resources Code. Reference: Sections 7071, 7073 and 7075, Government Code.










s 8442.2. Notification of Preliminary Application Process.
The Agency shall mail an Enterprise Zone Preliminary Application Handbook on the first day of the preliminary application time period to each entity or person who has previously requested receipt of a preliminary application. In the case of a small cities enterprise zone designation, the handbook shall be mailed to all small cities on May 30, 1994.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7073 and 7073.9, Government Code.








s 8442.3. Preliminary Application Deadline.
(a) Preliminary applications shall be received by the Agency no later than 5:00 PM on the one hundred and fiftieth (150th) day after the day the preliminary applications were mailed, except for a small cities enterprise zone preliminary application, which shall be due June 30, 1994. The mailing and deadline dates shall be specified in the Enterprise Zone Preliminary Application Handbook.
(b) The Agency shall reject any preliminary application received after the due date for preliminary applications. The Agency shall inform the applicant in writing within ten (10) days of receipt of the preliminary application that the applicant's preliminary application was received after the due date and was thereby rejected by the Agency.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7073 and 7073.9, Government Code.








s 8442.4. Number of Copies; Applicant Name; Principal Contact Person.
(a) Preliminary applicants shall submit 6 copies of the preliminary application, plus 1 signed and clearly identified original, to the Department, except for the small cities designation process, for which one original and two copies are required.
(b) The preliminary application shall contain:
(1) The name(s) and address(es) of the applicant(s); and

(2) The name, address and phone number of the principal contact person for the preliminary application.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Section 7073, Government Code.








s 8442.5. Review Limited to Information in Preliminary Application.
(a) The Agency shall review preliminary applications based solely upon the information received by the Agency on or before the due date for preliminary applications.
(b) The Agency reserves the right to contact preliminary applicants after the due date for preliminary applications to obtain clarification of submitted information, but not to obtain additional information.


Note: Authority cited: Sections 7073 and 7076, Government Code; and Section 21082, Public Resources Code. Reference: Sections 7071, 7073, and 7075, Government Code.








s 8442.6. Application Area Description.
The preliminary application shall include a description of the application area. The description shall include the following:
(a) Documents that show the exact geographic location of the application area, including both of the below listed items:
(1) Census maps that show the exact location of the eligible area and the census tract, block group, or enumeration district numbers assigned by the United States Department of Commerce, Bureau of the Census; and

(2) A street map that identifies the streets, census tracts, enumeration districts and/or block groups that mark the boundaries of the application area and the commercial and/or industrial area.
(b) Documents that show that the application area contains an eligible area. If applicable, attach a copy of the section 8441.5 petition letter indicating that the petition was approved.
(c) A copy of both the existing general zoning and land use maps for the application area and area immediately surrounding the application area, with the eligible, commercial and/or industrial areas clearly identified.
(d) A statement that the application area includes one industrial area and/or one commercial area. Application areas containing an industrial area adjacent to the eligible area shall provide evidence that the industrial area meets the definition of specifications for adjacent, as set forth in section 8439.4(a).


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7071 and 7073, Government Code.








s 8442.7. Preliminary Economic Development Plan and Evaluation Criteria.
Each preliminary application shall contain a Preliminary Economic Development Plan. Each Preliminary Economic Development Plan shall contain the information and data required by this section, except for a plan contained in a small cities preliminary application, which shall only contain the information and data required by subsection (a), (b) and (f). The Agency shall evaluate and numerically grade each Preliminary Economic Development Plan on a competitive basis, based upon the categories and the corresponding point values set forth below and the scoring method set forth in section 8444.2.
(a) Marketing the zone: up to 250 points.
The Preliminary Economic Development Plan shall contain a detailed marketing plan for the application area. The marketing plan shall include the following information:
(1) An explanation of the specific marketing goals and the course(s) of action to be taken in order to attain the specified goals;
(2) A detailed description of the plans to:
(A) Keep existing businesses from leaving the application area; and
(B) Assistance to be provided in helping existing businesses to expand;
(3) A detailed description of the plans to attract new businesses into the application area, including the names of the industries targeted for attraction;
(4) A detailed description of the role of the local economic development corporation, or similar organization;

(5) A detailed description of the sales plan for on-site visits to existing and/or new businesses;
(6) A detailed analysis of the advertising and promotional strategy, including a media analysis and samples of existing advertising and promotional materials;
(7) A detailed analysis of the staff, organization and budgets to be committed to the marketing plans by all organizations;
(8) Specific examples of successful efforts by the corporations or organizations identified in subsection (a)(4) above to attract and/or retain businesses;
(9) A list of all application area commercial real estate brokers who will handle real estate transactions within the application area; and
(10) Any other indicators of the applicant's plans for marketing the application area.
(b) Available property and businesses: up to 200 points.
The Preliminary Economic Development Plan shall include the number of businesses presently located in the application area, as well as a list that contains the following application area information:
(1) The total square footage of vacant buildings on land zoned industrial that meet all local and state building, fire, and seismic codes, as well as other codes necessary to operate the facility;
(2) The total square footage of vacant buildings on land zoned commercial that meet all local and state building, fire, and seismic codes, as well as other codes necessary to operate the facility;
(3) The total number of acres of vacant improved land zoned industrial. "Improved land" and used in this subsection (b) means that all infrastructure necessary to operate from the site is available to deliver water, power, sewer and traffic services;
(4) The total number of acres of vacant improved land zoned commercial;
(5) The total number of acres of vacant unimproved land zoned industrial; and

(6) The total number of acres of vacant unimproved land zoned commercial;
(7) Any other information concerning the available property and businesses in the application area.
(c) Job development: up to 175 points.
The Preliminary Economic Development Plan shall contain a detailed explanation of the plan to identify, train and place application area unemployed and underemployed persons into the jobs created through the marketing of the application area. The Preliminary Economic Development Plan shall also include the following information:
(1) A list containing the names and addresses of all administrative agencies and/or contractors who will provide intake and/or job development services in the application area under the Job Training Partnership Act (JTPA) (29 USC Section 1501 et seq), Greater Avenues for Independence (GAIN) (Welfare and Institutions Code Section 11320 et seq), and Targeted Jobs Tax Credit (TJTC) ( 26 USC Section 51), and which will provide funds and staff for the implementation of the Preliminary Economic Development Plan;

(2) A detailed explanation of the specific contributions that each agency and/or contractor shall make for the implementation of the Preliminary Economic Development Plan;
(3) A detailed explanation of how the recipients of JTPA, GAIN, and TJTC services will be placed in enterprise zone jobs. The applicant shall include a detailed explanation of the coordination of marketing efforts with job development agencies and/or contractors;
(4) Data that shows the track record of job placements by each agency and/or contractor over the two (2) years preceding the date the preliminary applications were mailed by the Agency;
(5) A detailed organization chart showing all staff persons providing job development management and services for each agency and/or contractor identified in the Preliminary Economic Development Plan as well as all job development coordination staff of the applicant; and
(6) Any other indicators of the applicant's job development plans for the application area.
(d) Local incentives: up to 125 points.
The Preliminary Economic Development Plan shall include a detailed description of the local incentives provided by the applicant and a detailed explanation of how the proposed local incentives will stimulate business investment in the application area. The following information shall be included in the Preliminary Economic Development Plan:
(1) An explanation of the plans to reduce fees for application area business, including development fees, license fees, and permit fees;
(2) An explanation of methods to be employed to reduce the administrative processing time required for plan review and permit applications for application area businesses;
(3) An explanation of the land use plan, together with maps of the application area that forecast local zoning plans for the next 5 to 10 years to ensure that the projected zoning plans are consistent with the Preliminary Economic Development Plan; and

(4) Any other indicators of the applicant's plans for application area incentives.
(e) Financing programs: up to 100 points.
The Preliminary Economic Development Plan shall contain a detailed description of the current and proposed financing programs that will be targeted to businesses within the application area. The description shall include the following information:
(1) A list containing the identity of all agencies, organizations and firms that will provide financial assistance to businesses within the application area;
(2) An explanation of the types of services each entity identified in subsection (e)(1) above offers and a detailed record of the companies that have received financial assistance during the three (3) year period prior to the date the preliminary application was mailed by the Agency;
(3) The identity of all financial institutions with facilities in or near the application area that have expressed an interest in making business loans to companies located in the application area, and a list of those financial institutions which are presently making loans guaranteed by the United States Small Business Administration;
(4) A detailed explanation of the loans available through programs offered by the applicant, together with data showing the result of these loan programs for the three year period immediately prior to the date the preliminary applications were mailed by the Agency; and
(5) Any other indicators of the applicant's financing program.
(f) Unemployment and area income levels: up to 100 points.
The Preliminary Economic Development Plan shall contain data that shows the 1980 per capita income and percent of unemployment for each census tract, block group or enumeration district in the eligible area.


Note: Authority cited: Sections 7073 and 7076, Government Code. Reference: Sections 7073 and 7073.9, Government Code.










s 8442.8. Resolution Required.
A preliminary application shall include a resolution adopted by each city, county, or city and county having jurisdiction over any portion of an application area. A preliminary application without such resolutions shall be rejected and no further review of the preliminary application shall be conducted.
(a) For each city, county, or city and county that is a preliminary applicant, the resolution shall contain the following information:

(1) A finding that the application area is a depressed area, and that designation of the application area as an enterprise zone is necessary in order to attract private sector investment to the application area; and (continued)