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RB_Jerry_Brown_Budget_4.JPGWith Gov. Jerry Brown's effort to overhaul California's enterprise zone program pending before the state Assembly, the Brown administration this afternoon notified a third enterprise zone it had failed a state audit, this one in Fresno County.

According to a report by the Department of Housing and Community Development, the Fresno County enterprise zone -- one of 40 statewide that have provided tax breaks to employers for years -- exhibited "an overall lack of achievement and documentation for budget commitments, voucher administration and timeliness of regulatory required reports."

The report said the program was marred by lack of appropriate documentation and "areas of weak internal controls," including insufficient self-evaluations.

An enterprise zone official in Fresno did not immediately return a telephone call for comment this afternoon. The zone includes 14 cities in the Fresno area, including Clovis, Huron and Coalinga, but not the city of Fresno itself, according to the state. The city has a separate zone.

The report follows the release of failing grades in audits of two other enterprise zones, in Arvin and Barstow.

The timing of the Fresno audit could be advantageous for the Democratic governor, who is seeking to overhaul the enterprise zone program. The state Senate late Tuesday passed a compromise proposal, which would largely retain the enterprise zones' geographic boundaries but with reduced hiring credits.

The proposal also includes a sales tax exemption for manufacturing and biotech research companies as well as about $30 million in the budget year beginning July 1 for tax credits negotiated with the state on a case-by-case basis.

Brown and labor groups have said the enterprise zone program is ineffective and wasteful. The California Chamber of Commerce and municipalities have said the program is vital to local economies, especially in poor areas such as the Central Valley.

PHOTO: Gov. Jerry Brown speaks at a news conference at the Capitol on Jan. 10, 2013. The Sacramento Bee/Randall Benton



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