Gov. Arnold Schwarzenegger designated East Los Angeles an "enterprise zone" Thursday in an effort to create jobs and stimulate business investment in the area.

The program, created in 1984, is aimed at boosting economically distressed areas. The zones grant businesses financial benefits, from tax credits of up to $37,440 for each employee hired to interest deductions on loans.

"Enterprise zones play a key role in revitalizing economically challenged parts of our state," Schwarzenegger said in a statement. "By helping businesses create well-paying jobs, we empower communities to climb the economic ladder and build the state's overall economy."

Schwarzenegger also granted the designation to seven other areas across California. The eight new regions will replace expiring zones, with each designation lasting for 15 years. There are 42 enterprise zones in total across the state.

The program has been criticized in the past for failing to identify the areas most in need and having overly broad eligibility criteria. But a 2006 study commissioned by Schwarzenegger concluded that areas designated enterprise zones saw rising income and declining rates of poverty and unemployment.

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