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144 <br /> <br />The Enterprise Zone program offers businesses that locate <br />within its borders the opportunity to reduce their State <br />business income tax through a variety of tax benefits. For <br />example, a business located in the Enterprise Zone can <br />receive tax credits every time it hires an eligible new <br />employee or purchases qualified new machinery, equipment or <br />pollution control devices. Tax credits are also available to <br />lenders who make loans to businesses in the Zone, and to <br />employees who work in the Zone. The six tax incentives are: <br /> <br />Sales and Use Tax Credit: California income or franchise <br />tax may be reduced by the amount of sales or use tax paid <br />on certain machinery purchases for exclusive use in an <br />Enterprise Zone. $1.3 million per year or more in tax <br />credits are available for qualifying machinery purchases. <br /> <br />Hiring Credit: A qualified business may reduce its State <br />income tax by the amount of wages paid to one or more <br />qualified employees. $19,000 or more in tax credits per <br />qualifying employee over a five-year period. <br /> <br />Business Expense Deduction: Part of the cost of certain <br />property purchased for exclusive use in an Enterprise <br />Zone may be deducted as a business expense in the first <br />year it is placed in service. <br /> <br />Net operating Loss Carryover: Net operating losses <br />(NOLs) of individuals or corporations doing business in <br />an Enterprise Zone may be carried over to future years to <br />reduce the amount of taxable Enterprise Zone income for <br />those years. <br /> <br />Net Interest Deduction for Lenders: A deduction from <br />income is allowed on the amount of "net interest" earned <br />on loans made to a trade or business located in an <br />Enterprise Zone. <br /> <br />Employee Tax Credit: Low wage employees who work in the <br />Zone may claim a tax credit to reduce the amount of their <br />income tax on wages earned in the Zone. <br /> <br />The proposed Enterprise Zone would not result in a change in <br />existing zoning designations or land use. <br /> <br />III. ALTERNATIVES TO THE PROPOSED PROJECT <br /> <br />Three alternatives to the proposed project were evaluated in <br />the project EIR. These alternatives include the No Project, <br />Alternate Financing and Reduced Project Area Alternatives. <br /> <br />2 <br /> <br /> <br />