BUSINESS INCENTIVE PROGRAMS

Many South Bay businesses derive great benefit from the vast array of incentives available to them from the State of California, Los Angeles County and individual South Bay cities. In addition to providing the most advanced infrastructure in the United States, the State of California has committed itself to facilitating commercial / industrial employee training and recruitment services as well as providing for California enterprise zone tax credits in certain economically distressed areas.

Tax Credits:

-Manufacturers in respect to investments in qualifying machinery and equipment may earn an Investment Tax Credit of 6%.

-A Research & Development Tax Credit of 15% may be available for work performed in-house or 24% for work performed by an outside firm.

Employment: Recruitment and Training

California position as the world’s 4^th largest economy is based largely upon A well educated and trained workforce. Click here for an overview of California resources.

Programs of particular interest to business include:

The Employment Development Department’s job service program serves the State’s 850,000 employers and about 1 million job seekers that register for services each year. Its computer based CalJOBS system electronically cross-references qualified job applicants with employer’s job openings.

The Employment Training Panel trains employees and may offer cash reimbursements, which average $1,000 - $1,500, in respect of each employee trained a minimum of 40 hours and retained on a job for ninety (90) days.

The Center for Business Training at El Camino College provides consulting and customized training designed to meet specific workforce and management training needs. Qualified companies may be eligible for state funding to offset training costs.

The Center for training and Development at CSU, Dominguez Hills offers customized training and consulting to meet specific workforce and management training needs. CSUDH also offers training under the auspices of the Employment Training Panel to employees of qualifying firms.

One-Stop Career Centers and Workforce Investment Boards have workforce development centers that serve businesses by providing labor market information, trained and motivated workers, customized training, on-the-job training and other placement programs.

Small Business Development Centers

Individual counseling, professional consulting, low-cost seminars and a comprehensive business research library are available to small business owners.

The Small Business Development Center offers individual business consulting services and prepackaging of small business loans for women and minority owned businesses.

The Center for International Trade Development provides seminars and individual counseling in all areas of international trade including specialization in e-commerce.

The California Manufacturing Technology Center (CMTC) offers a wide range of high quality, affordable & professional consulting services int eh areas of Information Technology, Strategic Business Planning, Lean Enterprise, Quality Management and Manufacturing & Engineering.

Los Angeles Harbor College is another source of employer assistance, offering targeted training programs and other resources.

Fee Reductions, Waivers and Deferrals

Arrangements can be made in certain circumstances to waive or reduce development and permit fees in redevelopment areas.

Communities can offer to defer development fees in order to reduce "up-front" costs.

Permit fee reductions, the provision of infrastructure improvements and other local incentives are possible through tax increment financing in redevelopment areas.

Foreign Trade Zones

A foreign trade zone is an area where foreign and domestic merchandise is considered to be outside U.S. Customs territory.

Merchandise may be admitted into a zone without formal Customs entry, thereby deferring payment of duty or excise taxes until the product is legally entered into the United States or eliminating duty if the product is re-exported.

The Port of Los Angeles is the grantee for Foreign-Trade Zone 202, and has developed an open zone concept to make the FTZ program more accessible to companies of varying types and sizes.

-Web site: http://www.portla.com/zone.htm

Financing Programs

The U.S. Small Business Administration provides financial assistance in the form of loan guarantees. There are several categories of SBA guaranteed loans addressing needs of smaller South Bay companies.

-Web site: http://www.sba.gov/financing/

The Los Angeles County Community Development Commission administers several kinds of lending programs, ranging from a Micro Loan Program to the Float Loan Program lending up to $15 million.

-Web site: http://www.lacdc.org/

The California Statewide Communities Development Authority has funding from $250,000 available to qualifying manufacturers, solid waste processors and recyclers for financing new facilities, expanding existing facilities or upgrading equipment. California Communities specializes in issuing tax-exempt financing for public agencies and eligible private agencies for industrial, housing, and non-profit and other tax-exempt facilities.

-Web site: http://www.cacommunities.com

The Los Angeles Regional Technology Alliance, supporting the five county LA Region, provides assistance to technology-based firms in the development and submission of proposals to receive grant funding from federal, state and private institutions. In addition, LARTA sponsors special events on venture capital acquisition and alternative forms of financing.

-Web site: www.larta.org

The California Integrated Waste Management Board offers funding opportunities authorized by legislation to assist public and private entities in the safe and effective management of the waste stream.

-Web site: http://www.ciwmb.ca.gov/Grants/

Selected banks in the South Bay area are committing significant resources to various commercial lending programs and other financial services tailored to fit the needs of new and growing companies. These include micro loan programs, SBA guaranteed loans, and economic development loan consortia.

Enterprise Zones

This program provides tax incentives to businesses, allowing the private sector to revive the economy in economically distressed areas throughout California. Tax credits and benefits include:

Sales & Use Tax Credit. All of the 8% sales tax, or use tax, paid on the purchase of qualified machinery and parts can be claimed as a tax credit. This includes manufacturing equipment, as well as computer, and telecommunications equipment. Manufacturers receive an extra 6% Investment Tax Credit, which can be claimed in addition to the 8% Sales Tax Credit.

Hiring Tax Credit. Firms can earn up to $26,895 over a 5-year period per qualified employee hired. 100 qualified employees < hired could amount to $2.68 million in tax credits.

25% 5-Year Electrical Discount. For new and expanding businesses in enterprise zones located in the City of Los Angeles.

Business Expenses Deduction. Up to $20,000 can be deducted fromthe cost of new equipment before depreciation.

100% Net Operating Loss Carry Forward (NOL). Net Interest Deduction for Lenders. Net interest can be deducted from income earned on loans made in an enterprise zone.

-Web site: http://www.cityofla.org/cdd/icd/

Utility Discounts

Southern California Edison provides discounted rates on electricity usage to eligible companies in the manufacturing and film industries. These economic development rates are available to qualifying companies seeking to locate, expand or retain their operations in California.

Edison also offers Energy-Efficiency Programs such as the Express Efficiency Rebates, a statewide program that offers financial incentives to help small and medium-sized businesses pay for energy-efficient equipment.

-http://www.scebiz.com/solutionscc/programs/index.htm

Industry Networks

A variety of growth industries are generating formal networks or clusters, or a collection of companies providing information for informed decision-making relative what infrastructure and programs are required for sustained growth. This information may be accessed via the Partnership web site (www.southbaypartnership.com) for interested businesses in the relevant industry.

Other Programs

The South Bay Economic Development Partnership, through its affiliates, also provides specialized assistance in the following areas:

• Seminars providing the small business owner/operator with an overview of human resource, legal and insurance requirements;
• Manufacturing workshops for process management and improvement;
• Regional community profiles, economic and demographic data;
• Site selection services for business expansion and relocation;
• Workers compensation insurance review;
• Custom economic development project design and management services;
• Coordinated media programs;
• Technical assistance accessing county, state, and federal programs;
• and Ombudsperson and mitigation services.

Tax structures and abatements

- Incentive zones (Enterprise, Revitalization, Empowerment, Foreign Trade)
- Labor Market information, job training
- Utility and transportation services
- Permit assistance and licensing
- Employee hiring and relocation
- Public financing programs (local, state and federal) including industrial development bonds
- Coordinated media programs
- Personalized briefings and orientations tailored to your specific needs
- Trade coordination with the ports, LAX, foreign trade zone, railroads and utility companies