Important Changes to California Target Employment Area (TEA) Policy

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Important Changes to California Target Employment Area (TEA) Policy

According to the state of California Governor’s Office of Business and Economic Development (GO-Biz), new unemployment data and State-certified TEAS become effective May 1, 2014 and will remain in effect until April 30, 2015.  All TEA designations and certifications will be based on GO-Biz selected data and methodologies only and no other data or methodologies will be accepted for the purposes of TEA designations and certifications.

POLICY: The State of California provides customized Targeted Employment Area (TEA) certifications for projects that qualify. Eligible TEAs include metropolitan statistical areas (MSAs), counties, cities and census designated places (CDPs). They also include rural areas and individual census tracts with qualifying high unemployment that are not in already-designated metropolitan statistical areas, counties, cities or CDPs. (See below: “Certified List of Targeted Employment Area (TEA) in California.”)

RE-CERTIFICATIONS: If you are applying for a re-certification for a project that was approved prior to May 1, 2012, please submit your original letter and a complete list of census tracts with updated unemployment figures for 2013, demonstrating that the aggregate unemployment rate of those census tracts is still above the threshold based on the updated 2013 data. (See below for 2013 unemployment data). GO-Biz is currently drafting new regulations for the State’s TEA designation and certification process for the EB-5 Program. The new regulations – once adopted, may have an impact on future re-certifications.

Please read the following policy guidelines applicable to this TEA certification:

  • This designation and certification of TEAs is based on the 2013 calendar year unemployment data estimates published by the State of California EDD. GO-Biz has determined to use the most recent calendar year period labor force and unemployment data estimates for TEA certifications. There will be no other method used and the state is not going to certify TEAs on the most recent 12-month basis.
  • This designation of TEAs in California is effective from May 1, 2014, through April 30, 2015, after which a new certified list will be issued based on the 2014 calendar year unemployment data.
  • Once issued, the customized certification is valid for one year from the date of approval.
  • This designation and certification of TEAs is an exhaustive list of TEAs by the State of California. There will be no other areas or subareas designated and certified as TEAs.
  • Investors who received special area designations in previous years may request a renewed certificate if it is for the same investment project, it covers the same sub-area, and the then-current unemployment data provides a high unemployment rate for the aggregated area. Such requests will be handled on a case-by-case basis and renewed certificates might be issued at the discretion of the State.

 

May 22nd, 2014|Categories: Government Affairs, Research / Analysis, State / Local, Targeted Employed Areas (TEA)|

One Comment

  1. Robert Hobbs May 22, 2014 at 8:10 am

    Thank you for sharing.

    Please note that Special TEA’s are still being accepted:

    From Go Biz: “Special TEA: Commencing May 1, 2013, GO-Biz will allow applications for a Special TEA for projects that do not meet the existing standard, pre-calculated certification categories. GO-Biz will certify Special TEA applications under the following criteria:

    Projects can receive an EB5 Special TEA certification if they are located within an area of twelve or fewer contiguous Census Tracts with a total average unemployment rate of 150% the national average.

    Requests for a special TEA should include a table listing of each census tract with its corresponding unemployment rate and a map showing the project address.

    A supporting letter from the local Economic Development Corporation (EDC) or County or City in which the project is to be located must be provided. The letter must indicate the economic development corporation’s concurrence that the proposed census tract will reasonably be a source of workforce for the project. “