Mayor James Hahn last week continued to move on his campaign promise for business tax reform, proposing with newly-elected councilman Jack Weiss a business license tax exemption of up to two years for start-up businesses with less than $500,000 in revenues. The move followed measures signed the previous week that among other things granted a business tax amnesty to scofflaws.

On the surface, this latest move seemed to suggest that Hahn regarded as insufficient the one-year start-up exemption measure proposed by former City Councilman Mike Feuer and signed into law earlier this year by former Mayor Richard Riordan.

And to some extent, the Feuer-Riordan measure was insufficient. For, according to Hahn spokeswoman Julie Wong, the Feuer-Riordan exemption really wasn't for one year: it applied only to the calendar year in which the business was started.

"If you started your business in January, then you'd get a full-year exemption," Wong said. "But if you started your business in October or November, you were exempted only for the rest of the year, or just a few weeks. When Jan. 1 rolled around, you'd be paying business taxes."

The Hahn-Weiss measure is designed to correct that, giving every start-up business with under $500,000 a minimum of a one-year exemption. Thus a business started in November wouldn't pay any taxes for its first 13 or 14 months.

If this proposal does pass the council and no real opposition emerged last week then a smart entrepreneur preparing to launch a business later this year might decide to wait until after Jan. 1, when he or she could take full advantage of the two-year tax exemption.

Padilla Makes Committee Assignments

When City Council President Alex Padilla made his committee assignments last week, much of the attention focused on high-profile committees like public safety which will continue to be chaired by Councilwoman Cindy Miscikowski or the new Education and Neighborhoods Committee, to be chaired by Councilwoman Janice Hahn.

But starting Sept. 1, L.A. businesses will have to cultivate other committee chairpeople on less high-profile committees, like Planning & Land Use Commission chairman-designate Ed Reyes and Budget & Finance committee chairman Nick Pacheco. (The budget committee holds the key to further business tax reform.)

At the top of that list is freshman Councilman Eric Garcetti, who will head the newly-created Economic Development and Employment Committee. Garcetti last week outlined his main goals for his chairmanship.

First, he said he would try to break the bureaucratic logjam and consolidate the city's economic development functions, which are now spread out among four different departments. "We've done that on the council with this new committee; now it's time to move ahead and do this citywide."

He also wants to bring labor and management together on proposed projects to ensure more high-paying jobs come to the city. He cited the recent agreement between developers of the Staples Center entertainment center and labor for living wage jobs as a model. Finally, Garcetti said, he wants to reach out to immigrant entrepreneurs, "the real emerging backbone of the L.A. economy."

Riordan Exploratory Committee

It was a call last April from President Bush that started the ball rolling on former L.A. Mayor Richard Riordan's gubernatorial bid and one couldn't help but notice the heavy influence of the president on the exploratory committee set up last month on behalf of former L.A. Mayor Richard Riordan. Chairing the committee is Rep. David Dreier, R-Covina, co-chairman of the Bush campaign in California. Also on the committee is L.A. investor Brad Freeman, who was Bush's California finance co-chair.

But the exploratory committee also appears to have another function: to make Riordan more appealing to crucial conservative Republican primary voters. To that end, the committee is stacked with conservatives like Reps. Chris Cox, R-Newport Beach, Darrell Issa, R-Vista, and Howard "Buck" McKeon, R-Santa Clarita.

Several prominent local businesspeople also are on the committee, including Galpin Ford owner Bert Boeckmann and former Arco chairman Lod Cook.

Staff Reporter Howard Fine can be contacted by phone at (323) 549-5225, ext. 227 or by e-mail at hfine@labusinessjournal.com.

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