OFFICE OF THE CITY ATTORNEY ROCKARD J. DELGADILLO CITY ATTORNEY REPORT RE:
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1 OFFICE OF THE CITY ATTORNEY ROCKARD J. DELGADILLO CITY ATTORNEY R REPORT NO. :.ocr 2 4 REPORT RE: A DRAFT ORDINANCE AMENDING LOS ANGELES MUNICIPAL CODE SECTION TO ALLOW FOR BUSINESS TAX RELIEF TO CONTRACTORS WHO INSTALL ELECTRICAL GENERATION FACILITIES POWERED BY RENEWABLE FUELS BY ALLOWING THEM TO DEDUCT UP TO $1,000,000 OF GROSS RECEIPTS EARNED THROUGH INSTALLATION OF RENEWABLE ELECTRIC GENERATION FACILITIES The Honorable City Council Room 395, City Hall 200 North Spring Street Los Angeles, CA Honorable Members: Council File No This Office transmits for your action the attached draft Ordinance, approved as to form and legality, amending Section of the Los Angeles Municipal Code to allow for business tax relief to the contractors who install electrical generation facilities powered by renewable fuels by allowing them to deduct up to $1,000,000 of gross receipts earned through installation of renewable electric generation facilities. Background In a letter dated September 28, 2004, Councilmembers Greuel and Garcetti amended their business tax reform proposal to include incentive features concerning Green Energy Technology manufacturing, defined in that letter as"... the design, manufacture, installation and service of products that generate energy from renewable fuel sources using technologically innovative methods and materials." The Office of Finance was requested to report on this subject by the Ad Hoc Business Tax Reform Committee and by the Budget and Finance Committee. AN EQUAL EMPLOYMENT OPPORTUNITY- AFFIRMATIVE ACTION EMPLOYER 200 NORTH MAIN STREET LOS ANGELES, CA TDD (l;:y_ Recyclable and made from recyded was1e. "fb~
2 The Honorable City Council Page 2 In its report to the Budget and Finance Committee, the Office of Finance outlined the following two options for consideration: Option 1: Provide business tax relief to installers of electrical generation facilities powered by renewable fuels by allowing them to deduct up to 90% of the tax that would be otherwise due on gross receipts earned through installation of renewable electric generation facilities. Option 2: Provide business tax relief to installers of electrical generation facilities powered by renewable fuels by allowing them to exclude up to $1,000,000 in gross receipts derived from installation of renewable electric generation facilities. By oral motion, the City Council adopted Option Two contained in the Office of Finance report relative to Green Energy Technology as an Element of the Business Tax Reform. The City Council then requested the City Attorney to draft an ordinance providing tax incentives for green energy/technology businesses doing business in the City of Los Angeles. Ordinance The draft Ordinance amends Section of the Los Angeles Municipal Code to add a new Subsection (d), to allow for business tax relief to contractors who install electrical generation facilities powered by renewable fuels by allowing them to deduct up to $1,000,000 of gross receipts earned through installation of renewable electrical generation facilities. The ordinance has a sunset date in five years. Council Rule 38 Referral The draft Ordinance has been forwarded to the Office of Finance, the Acting Chief Legislative Analyst and the City Administrative Officer for review and report directly to council. California Environmental Quality Act It can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and therefore approval of this ordinance is exempt from the California Environmental Quality Act under City CEQA Guidelines, Article II, section 1.
3 The Honorable City Council Page 3 If you have any questions, please feel free to contact Deputy City Attorney Carmen Hawkins at (213) A representative of this Office will be available at your meeting to answer any questions you may have when you consider this matter. Sincerely, ROCKARD J. DELGADILLO, City Attorney By ~~d- cut~ CLAUDIA CULLING Special Counsel-Municipal CC:CH:ql (115317CHE3)
4 ORDINANCE NO. An Ordinance amending Section of the Los Angeles Municipal Code, to allow for business tax relief to contractors who install electrical generation facilities powered by renewable fuels by allowing them to deduct up to $1,000,000 of gross receipts earned through installation of renewable electric generation facilities. THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS: Section 1. Section of the Los Angeles Municipal Code is amended by adding a new Subsection (d) to read: (d) Business tax relief shall be provided to contractors who install electrical generation facilities powered by renewable energy sources such as, wind energy, hydropower, geothermal energy, biomass energy and solar power by allowing a deduction up to $1,000,000 of gross receipts earned from the installation of renewable electric generation facilities. The provisions of this subsection shall be operative on January 1, 2006 and shall be repealed on December 31,
5 Sec. 2. The City Clerk shall certify as to the passage of this ordinance and have it published in accordance with Council policy, either in a daily newspaper circulated in the City of Los Angeles or by posting for ten days in three public places in the City of Los Angeles: One copy on the bulletin board located in the Main Street lobby to the City Hall; one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall East; and one copy on the bulletin board located at the Temple Street entrance to the Los Angeles County Hall of Records. I hereby certify that this ordinance was passed by the Council of the City of Los Angeles, at its meeting of FRANK T. MARTINEZ, City Clerk By Deputy Approved Approved as to Form and Legality ROCKARD J. DELGADILLO, City Attorney c_~;~c40~ BY----~~=----~~-- CARMEN D. HAWKINS Deputy City Attorney Mayor Date: File No. CF /
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