LOS ANGELES EMPOWERMENT ZONE BUSINESS TAX WAIVER INCENTIVE / STATUS REPORT

Motion - Designated in 1994, the Los Angeles Empowerment Zone's (LA EZ) primary focus has been to provide economic opportunity for its residents and businesses by fostering job creation, entrepreneurial activities, small business expansion, industrial development and improved access to goods and services. In addition to Federal tax credits, one of the incentives provided by the City to meet the goals of the zone has been to waive the City Business Tax. Existing Empowerment Zone businesses receive a business tax waiver of $500 and have taxes frozen at the current rate for 5 years. Business start-ups or new businesses from outside the City locating in the LA EZ pay only $25 annually for 5 years. In order to determine if the LA EZ tax benefits have had an impact on the area and its residents to date, the Council should instruct the Office of Finance to provide a status report that includes information on how the LA EZ benefits are disseminated, a review of the tax benefits provided, how many new and existing businesses utilized the incentives, fiscal impacts, and recommendations on ways to improve the program or extend the waiver to other incentive areas, including the State Enterprise Zones. THEREFORE MOVE that the City Council instruct the Office of Finance to submit a status report relative to the Los Angeles Empowerment Zone business tax waiver incentive, and include a review of the tax credits provided, fiscal impact, number of new and existing businesses that utilized the incentive, and recommendations on ways to improve the effectiveness of the program and benefits of extending the waiver of business tax or other incentives to the State Enterprise Zones. FURTHER MOVE that the Chief Legislative Analyst be instructed to review and report to Council with incentives offered by other large Cities within California to meet the goals of State Enterprise Zones, Empowerment Zone and the Renewal Community. OLD COUNCIL FILE 97-0401 AND SUPP