(a) There is hereby created and established in the Treasury of the City of Los Angeles a special fund to be known as the “Tax Reform Fund,” hereinafter referred to in this Chapter as the “Fund.”
(b) The purpose of the Fund shall be for the receipt, retention and disbursement of all monies apportioned by Council out of the initial and continuing revenue attributable to the 2001 business tax and payroll expense tax amnesty program and the initial and continuing revenue attributable to the revenue program initiated pursuant to information obtained as a result of the enactment of Revenue and Taxation Code Section 19551 (AB 63) received in the applicable reporting period and any other monies designated for it by the Council and Mayor.
The Fund shall be annually budgeted by the Mayor and City Council. The amount budgeted shall be an amount equal to 75% of tax amnesty and AB63 receipts actually received in the most recent completed fiscal year.
(c) The Fund shall be administered by the Director of Finance. Expenditures from the Fund shall be made to finance business tax reform. Business tax reform shall be limited to the offset of General Fund revenue losses resulting from changes in business tax rates, changes in the business tax classification structure or other business tax ordinance changes; the development and implementation of system and operational reforms that benefit business taxpayers by making the City a more hospitable business environment and certain direct charges related to operational requirements (e.g., mailings to taxpayers, payments to the State for information services). Expenditures from the Fund shall be authorized by the Council and Mayor. No costs shall be budgeted or charged to the Fund without first being submitted to the Ad Hoc Committee on Business Tax Reform or its successor. Seventy-five percent (75%) of charges for direct costs shall be charged to the Fund. The remaining twenty-five percent (25%) of charges for direct costs shall be charged to the Affordable Housing Trust Fund (LAAC Section 5.522).
(d) The Director of Finance shall keep a record of the gross revenue attributable to the 2001 business tax and payroll expense tax amnesty program and any revenues generated as a direct result of the revenue program initiated pursuant to information acquired by the City as a result of the enactment of Revenue and Taxation Code Section 19551.
The Director of Finance shall report on a bi-annual basis to the Council and Mayor or their designees, the amount of net revenue received in the preceding six-month period. Net revenue shall be gross revenue less apportioned direct costs and other authorized expenditures. This report shall include, but not be limited to, the data and assumptions used in calculating authorized costs. This report shall be filed within 60 days of the close of each reporting period.
Lost revenue due to the diversion of staff shall not be charged to the fund. Lost revenue due to the implementation of tax reform measures as provided in Subsection (c) shall be charged against the Fund only in the first year the tax reform measure is implemented unless a deduction for any subsequent year is specifically authorized by the Council and the Mayor.
(e) All interest and other earnings attributable to monies in the Fund shall be credited to the Fund and shall be devoted to the purposes thereof.
(f) At the close of each fiscal year, monies not expended from the Fund shall remain in the Fund and shall not revert to the Reserve Fund.
(g) Notwithstanding Subsection (f), monies in the fund on June 30, 2004 shall be transferred to the Reserve Fund, consistent with the adopted budget for Fiscal Year 2004-2005. Monies transferred to the Reserve Fund pursuant to this Subsection may only be appropriated to finance Business Tax Reform authorized by and in conformity with Subsection (c). This subsection shall only authorize this one-time, temporary transfer for the Fiscal Year 2004-2005 City budget. Nothing in this Section shall be interpreted to authorize subsequent additional transfers from the fund to the Reserve Fund without further action by the City Council and the Mayor to amend this Section to permit the transfer.
SECTION HISTORY
Chapter and Section Added by Ord. No. 174,035, Eff. 7-30-01.
Amended by: Subsecs. (b) and (d), Ord. No. 174,709, Eff. 8-24-02; Subsecs. (b), (c), and (d), Ord. No. 175,382,* Eff. 9-14-03; Subsec. (g) added, Ord. No. 176,145, Eff. 9-20-04.
* Section 4 of Ord. No. 175,382 provides:
“This Chapter is hereby repealed effective December 31, 2008, unless extended by Ordinance.”