Citations Affected: IC 4-4; IC 6-1.1; noncode.
Effective: January 1, 1998 (retroactive); January 1, 1999 (retroactive);
January 1, 2000 (retroactive); upon passage; July 1, 2000; January 1,
2001.
January 10, 2000, read first time and referred to Committee on Finance.
January 27, 2000, amended, reported favorably _ Do Pass.
January 31, 2000, read second time, ordered engrossed. Engrossed.
February 1, 2000, read third time, passed. Yeas 50, nays 0.
acreage of property hat may be exempt from 50 to 200 acres if it is owned by a 4-H association. Provides an exemption from personal property tax for commercial passenger airplanes located in St. Joseph County for maintenance. Provides local designating bodies the option of allowing new manufacturing equipment to be moved without losing the assessed value deduction. Specifies that the provision limiting a property tax abatement for new manufacturing equipment to the extent that it would cause the assessed value of all personal property of the owner in the taxing district in which the equipment is located to be less than the assessed value of all personal property of the owner in that taxing district in the immediately preceding year does not apply to new manufacturing equipment located in a particular township if the total original cost of all new manufacturing equipment placed into service by the owner during the preceding 60 months exceeds $50,000,000, and if the economic revitalization area in which the new manufacturing equipment was installed was approved by the designating body before September 1, 1994. Grandfathers in the abatement of property taxes in a consolidated city if the property owner and city complete all required procedures before July 1,2000 (retroactive to 1997).
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1. IC 4-4-30 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2000]:
Chapter 30. Development Assistance Disclosure and Taxpayer
Protection
Sec. 1. As used in this chapter, "development assistance" means
any form of public assistance provided by Indiana or a political
subdivision to stimulate economic development of a specific
corporation, business, industry, geographic area, or part of
Indiana's economy. The term includes the following:
(1) Tax deductions under IC 6-1.1-12.1.
(2) Tax credits under the enterprise zone program.
(3) Training grants, including grants provided by the
department of workforce development and grants or other
assistance under the training 2000 program established by
IC 4-4-4.6.
(4) Loans and loan guarantees.
(5) Tax increment financing.
(6) Grants, including research and development grants, but
excluding grants from the build Indiana fund.
(7) Fee waivers.
(8) Land price subsidies.
(9) Infrastructure, the principal beneficiary of which is a
single business or defined group of businesses at the time the
infrastructure is built or improved.
(10) Matching funds.
(11) Industrial development bonds.
Sec. 2. As used in this chapter, "granting body" means Indiana
or a political subdivision that provides development assistance.
Sec. 3. This chapter applies only to a project if the project
involves an investment or expenditure of more than one hundred
thousand dollars ($100,000).
Sec. 4. (a) Before a granting body may provide any development
assistance, the granting body must adopt by rule or resolution,
after a public hearing, criteria for awarding development
assistance. The criteria must include a policy regarding the wages
that will be paid for any jobs related to the development assistance
or that will be created or retained through the use of the
development assistance.
(b) The department of commerce, the department of workforce
development, and the department of labor shall assist local
government granting bodies in developing criteria required by this
section.
Sec. 5. (a) Before a granting body may provide development
assistance to a person:
(1) the person must enter into a development assistance
agreement with the granting body; and
(2) the development assistance agreement must be approved
under subsection (d), if applicable.
(b) A development assistance agreement entered into under
subsection (a) must include at least all of the following:
(1) A description of the development assistance, including the
amount and type. The description must include the fair
market value of the development assistance to the recipient,
including the value of conveying any property at less than a
fair market price and including any other in-kind benefits to
the person receiving the development assistance.
(2) A statement specifying the public purpose for the
development assistance. The public purpose specified in the
development assistance agreement may not be increasing the
tax base. Job retention may be specified in the development
assistance agreement as a public purpose only if job loss by
the person receiving the development assistance is imminent
and demonstrable.
(3) The general goals for the development assistance.
(4) Goals for the number of jobs to be created by the person
receiving the development assistance during the two (2) years
following the date the development assistance is granted. The
goals may include separate goals for the number of part-time
jobs and full-time jobs, and in cases where job loss is
imminent and demonstrable, separate goals for the number of
jobs retained.
(5) Wage goals for the jobs to be created or retained by the
person receiving the development assistance during the two
(2) years following the date the development assistance is
granted.
(6) A description of the financial obligation of the person
receiving the development assistance if the goals specified in
the development assistance agreement are not met.
(7) A statement explaining why the development assistance is
needed to achieve the public purpose specified in the
development assistance agreement.
(8) A commitment by the person receiving the development
assistance to continue operations at any site where the
development assistance is used for at least five (5) years after
the date the development assistance is provided.
(9) The name and address of the parent corporation or other
parent entity, if any, of the person receiving the development
assistance.
(10) A list of all development assistance provided to the
person receiving development assistance during the
immediately preceding five (5) years by other granting bodies.
(c) The granting body and the person receiving the development
assistance must both sign the development assistance agreement.
Before a granting body signs a development assistance agreement,
the granting body must ensure that the person receiving the
development assistance is not ineligible to receive the development
assistance under section 9 of this chapter.
(d) For a local government granting body that is not an elected
body, a development agreement entered into under this chapter
must be approved by the following:
shall publish a detailed tax expenditure report. The tax expenditure
report must:
(1) be derived from state tax returns filed during the
preceding calendar year; and
(2) include at least the following information:
(A) The amount of tax expenditures made by Indiana, in
the form of uncollected revenues, for each specific tax
credit or tax deduction that is:
(i) provided to a taxpayer by Indiana; and
(ii) considered development assistance for purposes of
this chapter.
(B) An itemized listing for each of the tax expenditures
described in clause (A) of:
(i) each taxpayer that claimed a credit or deduction
described in clause (A); and
(ii) the specific amount of the credit or deduction
provided to the taxpayer for the year.
(C) The following additional information:
(i) The name of each taxpayer receiving a credit or
deduction described in clause (A), and the name and
address of the controlling entity of the taxpayer.
(ii) The address and description of any property for
which a credit or deduction described in clause (A) is
received.
(iii) The date upon which a credit or deduction described
in clause (A) first took effect.
(iv) The date upon which a credit or deduction described
in clause (A) is scheduled to expire.
(v) The estimated or scheduled amount of any credit or
deduction described in clause (A) for the period between
the date the credit or deduction took effect and the date
the credit or deduction is scheduled to expire.
(vi) The tax revenue foregone for the year as a result of
each specific credit or deduction described in clause (A).
(b) The department of state revenue shall compile and publish
all data in the report required by this section in both written and
electronic form.
Sec. 11. (a) Each county auditor shall before September 1
provide to the state board of tax commissioners the following
information concerning property tax deductions and credits
claimed during the preceding year for property located in the
county:
applicant's industry, as most recently provided by the United
States Department of Labor, Bureau of Labor Statistics. The
information required under this subdivision must be listed
according to two (2) digit standard industrial classification
(SIC) numbers or three (3) digit standard industrial
classification (SIC) numbers, if that information is available.
(11) For an application for development assistance related to
a specific project site that is not located in a metropolitan
statistical area (as defined by the United States Department of
Commerce, Bureau of the Census), the average weekly wage
paid in the county in which the project is located, as most
recently reported by the United States Department of
Commerce in the "County Business Patterns" report or a
similar report.
(12) The type and amount of employer paid health care
coverage that the applicant will provide to its new employees
not more than ninety (90) days after hiring. The applicant
must specify any costs that will be paid by the new employees.
(13) A list of all other forms of development assistance that
the applicant is seeking and the name of the granting body
from which that development assistance is sought.
(14) A description of effects the applicant's use of the
development assistance may have on employment at any site
in a United States jurisdiction controlled by the applicant or
the applicant's controlling entity, including any automation,
consolidation, merger, acquisition, product line movement,
business activity movement, or restructuring by either the
applicant or the controlling entity.
(15) Individual certifications by the executives of the applicant
and the granting body as to the accuracy of the application,
under penalty of perjury.
(c) Beginning January 1, 2001, each applicant for development
assistance must complete an information form under this section
and submit the information form to the granting body from which
the development assistance is being sought.
Sec. 14. (a) A granting body that provides development
assistance to a person must monitor the progress by the person in
achieving goals set forth in the development assistance agreement
under section 4 of this chapter.
(b) A person receiving development assistance must provide
information required by the department of commerce concerning
goals and results of the development assistance until the later of:
provide the local government granting body with notice that the
information must be filed. If the local government granting body
does not provide the department of commerce with the required
information within fourteen (14) days after the notice is provided,
the department of commerce:
(1) shall suspend any current development assistance
activities under its control in the granting body's jurisdiction;
and
(2) may not complete any current development assistance or
provide any additional development assistance in the granting
body's jurisdiction;
until the granting body provides the information required by
section 13 of this chapter.
(c) The department of commerce shall provide information and
assistance to local government granting bodies concerning the
granting bodies' reporting requirements under this section.
Sec. 16. (a) The department of commerce must, before
November 1, publish a report compiling and summarizing the
information provided to the department under this chapter. The
report must include information provided for the previous
calendar year.
(b) The report required by this section must include at least the
following information:
(1) The total amount of development assistance provided by
all granting bodies.
(2) The total amount of development assistance provided in
various regions of the state.
(3) The distribution of development assistance by amount of
the development assistance.
(4) The distribution of development assistance by type and by
public purpose.
(5) The number and percentage of all persons receiving
development assistance that reached the goals specified in
their development assistance agreements during the year.
(6) The number and percentage of all persons receiving
development assistance that have met the goals specified in
their development assistance agreements within two (2) years
after the date of the development assistance.
(7) The total dollar amount of development assistance
provided to persons that have met the goals specified in their
development assistance agreements within two (2) years after
the date of the development assistance.
organization.
SECTION 2. IC 6-1.1-10-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 15. (a) The
acquisition and improvement of land for use by the public as an airport
and the maintenance of commercial passenger aircraft is a
municipal purpose regardless of whether the airport or maintenance
facility is owned or operated by a municipality. The owner of any
airport located in this state, who holds a valid and current public airport
certificate issued by the Indiana department of transportation, may
claim an exemption for only so much of the land as is reasonably
necessary to and used for public airport purposes. A person
maintaining commercial passenger aircraft in a county having a
population of more than two hundred thousand (200,000) but less
than three hundred thousand (300,000) may claim an exemption
for commercial passenger aircraft not subject to the aircraft excise
tax under IC 6-6-6.5 that is being assessed under this article, if it is
located in the county only for the purposes of maintenance.
(b) The exemption provided by this section is noncumulative and
applies only to property that would not otherwise be exempt. Nothing
contained in this section applies to or affects any other tax exemption
provided by law.
(c) As used in this section, "land used for public airport purposes"
includes the following:
(1) That part of airport land used for the taking off or landing of
aircraft, taxiways, runway and taxiway lighting, access roads, auto
and aircraft parking areas, and all buildings providing basic
facilities for the traveling public.
(2) Real property owned by the airport owner and used directly
for airport operation and maintenance purposes.
(3) Real property used in providing for the shelter, storage, or care
of aircraft, including hangars.
(4) Housing for weather and signaling equipment, navigational
aids, radios, or other electronic equipment.
The term does not include land areas used solely for purposes unrelated
to aviation.
SECTION 3. IC 6-1.1-10-16 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2000 (RETROACTIVE)]:
Sec. 16. (a) All or part of a building is exempt from property taxation
if it is owned, occupied, and used by a person for educational, literary,
scientific, religious, or charitable purposes.
(b) A building is exempt from property taxation if it is owned,
occupied, and used by a town, city, township, or county for educational,
literary, scientific, fraternal, or charitable purposes.
(c) A tract of land, including the campus and athletic grounds of an
educational institution, is exempt from property taxation if:
(1) a building which is exempt under subsection (a) or (b) is
situated on it; and
(2) the tract does not exceed:
(A) fifty (50) acres in the case of:
(i) an educational institution; or
(ii) a tract that was exempt under this subsection on March
1, 1987; or
(B) two hundred (200) acres in the case of a local
association formed for the purpose of promoting 4-H
programs; or
(B) (C) fifteen (15) acres in all other cases.
(d) A tract of land is exempt from property taxation if:
(1) it is purchased for the purpose of erecting a building which is
to be owned, occupied, and used in such a manner that the
building will be exempt under subsection (a) or (b);
(2) the tract does not exceed:
(A) fifty (50) acres in the case of:
(i) an educational institution; or
(ii) a tract that was exempt under this subsection on March
1, 1987;
(B) two hundred (200) acres in the case of a local
association formed for the purpose of promoting 4-H
programs; or
(B) (C) fifteen (15) acres in all other cases; and
(3) not more than three (3) years after the property is purchased,
and for each year after the three (3) year period, the owner
demonstrates substantial progress towards the erection of the
intended building and use of the tract for the exempt purpose. To
establish that substantial progress is being made, the owner must
prove the existence of factors such as the following:
(A) Organization of and activity by a building committee or
other oversight group.
(B) Completion and filing of building plans with the
appropriate local government authority.
(C) Cash reserves dedicated to the project of a sufficient
amount to lead a reasonable individual to believe the actual
construction can and will begin within three (3) years.
(D) The breaking of ground and the beginning of actual
construction.
a result of the redevelopment or rehabilitation and an estimate of
the annual salaries of these individuals.
(3) An estimate of the value of the redevelopment or
rehabilitation.
With the approval of the state board of tax commissioners, the
statement of benefits may be incorporated in a designation application.
Notwithstanding any other law, a statement of benefits is a public
record that may be inspected and copied under IC 5-14-3-3.
(b) The designating body must review the statement of benefits
required under subsection (a). The designating body shall determine
whether an area should be designated an economic revitalization area
or whether a deduction should be allowed, based on (and after it has
made) the following findings:
(1) Whether the estimate of the value of the redevelopment or
rehabilitation is reasonable for projects of that nature.
(2) Whether the estimate of the number of individuals who will be
employed or whose employment will be retained can be
reasonably expected to result from the proposed described
redevelopment or rehabilitation.
(3) Whether the estimate of the annual salaries of those
individuals who will be employed or whose employment will be
retained can be reasonably expected to result from the proposed
described redevelopment or rehabilitation.
(4) Whether any other benefits about which information was
requested are benefits that can be reasonably expected to result
from the proposed described redevelopment or rehabilitation.
(5) Whether the totality of benefits is sufficient to justify the
deduction.
A designating body may not designate an area an economic
revitalization area or approve a deduction unless the findings required
by this subsection are made in the affirmative.
(c) Except as provided in subsections (a) through (b), the owner of
property which is located in an economic revitalization area is entitled
to a deduction from the assessed value of the property. If the area is a
residentially distressed area, the period is not more than five (5) years.
For all other economic revitalization areas designated before July 1,
2000, the period is three (3), six (6), or ten (10) years. For all economic
revitalization areas designated after June 30, 2000, the period is the
number of years determined under subsection (d). The owner is entitled
to a deduction if:
(1) the property has been rehabilitated; or
(2) the property is located on real estate which has been
redeveloped.
The owner is entitled to the deduction for the first year, and any
successive year or years, in which an increase in assessed value
resulting from the rehabilitation or redevelopment occurs and for the
following years determined under subsection (d). However, property
owners who had an area designated an urban development area
pursuant to an application filed prior to January 1, 1979, are only
entitled to a deduction for a five (5) year period. In addition, property
owners who are entitled to a deduction under this chapter pursuant to
an application filed after December 31, 1978, and before January 1,
1986, are entitled to a deduction for a ten (10) year period.
(d) For an area designated as an economic revitalization area after
June 30, 2000, that is not a residentially distressed area, the designating
body shall determine the number of years for which the property owner
is entitled to a deduction. However, the deduction may not be allowed
for more than ten (10) years. This determination shall be made:
(1) as part of the resolution adopted under section 2.5 of this
chapter; or
(2) by resolution adopted within sixty (60) days after receiving a
copy of a property owner's certified deduction application from
the county auditor. A certified copy of the resolution shall be sent
to the county auditor who shall make the deduction as provided
in section 5 of this chapter.
A determination about the number of years the deduction is allowed
that is made under subdivision (1) is final and may not be changed by
following the procedure under subdivision (2).
(e) Except for deductions related to redevelopment or rehabilitation
of real property in a county containing a consolidated city or a
deduction related to redevelopment or rehabilitation of real property
initiated before December 31, 1987, in areas designated as economic
revitalization areas before that date, a deduction for the redevelopment
or rehabilitation of real property may not be approved for the following
facilities:
(1) Private or commercial golf course.
(2) Country club.
(3) Massage parlor.
(4) Tennis club.
(5) Skating facility (including roller skating, skateboarding, or ice
skating).
(6) Racquet sport facility (including any handball or racquetball
court).
(7) Hot tub facility.
notify each taxing unit within the original and the new economic
revitalization area of the proposed resolution, including the date
and time of the public hearing. If a resolution is adopted under this
section, the designating body shall deliver a copy of the adopted
resolution to the county auditor and the state board of tax
commissioners within thirty (30) days after its adoption.
(c) New manufacturing equipment relocated under this section
remains eligible for the assessed value deduction under this
chapter. However, the same deduction percentage is to be applied
as if the new manufacturing equipment had not been relocated.
SECTION 6. IC 6-1.1-12.1-4.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 1998 (RETROACTIVE)]: Sec. 4.7.
Section 4.5(f) of this chapter does not apply to new manufacturing
equipment located in a township that:
(1) has a population of more than three thousand five hundred
(3,500) but less than four thousand three hundred (4,300); and
(2) is located in a county having a population of more than
thirty-five thousand (35,000) but less than thirty-seven
thousand (37,000);
if the total original cost of all new manufacturing equipment placed
into service by the owner during the preceding sixty (60) months
exceeds fifty million dollars ($50,000,000), and if the economic
revitalization area in which the new manufacturing equipment was
installed was approved by the designating body before September
1, 1994.
SECTION 7. [EFFECTIVE JANUARY 1, 1999 (RETROACTIVE)]
(a) This SECTION applies to a property owner that:
(1) before January 1, 1999, received a notice from a
consolidated city that offered to provide assessed value
deductions to the property owner under IC 6-1.1-12.1;
(2) has fulfilled all expectations of the consolidated city
concerning job creation or retention, capital investment, and
other requirements imposed by the consolidated city; and
(3) is not eligible for the assessed value deductions described
in the agreement because of the failure of the property owner
or the consolidated city, or both, to comply with one (1) or
more requirements of IC 6-1.1-12.1.
(b) Notwithstanding IC 6-1.1-12.1, the consolidated city may
grant the assessed value deductions described in subsection (a) if,
before July 1, 2000, both the property owner and the consolidated
city complete all the procedures required by IC 6-1.1-12.1 that
would have been necessary to comply with IC 6-1.1-12.1 and grant
the deductions described in subsection (a).
(c) Assessed value deductions granted under this SECTION
apply to property taxes first due and payable after December 31,
1997. However, the interest provided for in IC 6-1.1.-37-11 does not
apply to a property tax refund due the property owner as a result
of this SECTION.
(d) This SECTION expires July 2, 2000.
SECTION 8. [EFFECTIVE UPON PASSAGE] IC 6-1.1-10-16, as
amended by this act, applies to assessments for March 1, 2000, and
property taxes first due and payable after December 31, 2000.
SECTION 9. An emergency is declared for this act.