Citations Affected: IC 6-3.5.
Synopsis: Local option income taxes. Provides that a civil taxing unit's
distributive share of county option income taxes may be used for any
lawful purpose. Expands the use of the county economic development
income tax to any lawful purpose of a county, city, or town.
Effective: July 1, 2004.
January 8, 2004, read first time and referred to Committee on Finance.
A BILL FOR AN ACT to amend the Indiana Code concerning
SECTION 1. IC 6-3.5-6-19, AS AMENDED BY P.L.267-2003,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 19. (a) Except as provided in sections 18(e) and
18.5(b)(3) of this chapter, in determining the fractional share of
distributive shares the civil taxing units of a county are entitled to
receive under section 18 of this chapter during a calendar year, the
department of local government finance shall consider only property
taxes imposed on tangible property subject to assessment in that
(b) In determining the amount of distributive shares a civil taxing unit is entitled to receive under section 18(g) of this chapter, the department of local government finance shall consider only the percentage of the civil taxing unit's budget that equals the ratio that the total assessed valuation that lies within the civil taxing unit and the county that has adopted the county option tax bears to the total assessed valuation that lies within the civil taxing unit.
(c) The distributive shares to be allocated and distributed under this
(1) shall be treated by each civil taxing unit as additional revenue for the purpose of fixing its budget for the budget year during which the distributive shares is to be distributed to the civil taxing unit; and
(2) may be used for any lawful purpose of the civil taxing unit.
(d) In the case of a civil taxing unit that includes a consolidated city, its fiscal body may distribute any revenue it receives under this chapter to any governmental entity located in its county except an excluded city, a township, or a school corporation.
SECTION 2. IC 6-3.5-7-13.1, AS AMENDED BY P.L.224-2003, SECTION 256, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 13.1. (a) The fiscal officer of each county, city, or town for a county in which the county economic development tax is imposed shall establish an economic development income tax fund. Except as provided in sections 23, 25, 26, and 27 of this chapter, the revenue received by a county, city, or town under this chapter shall be deposited in the unit's economic development income tax fund.
(b) Except as provided in sections 15, 23, 25, 26, and 27 of this chapter, revenues from the county economic development income tax may be used as follows:
(1) By a county, city, or town for economic development projects, for paying, notwithstanding any other law, under a written agreement all or a part of the interest owed by a private developer or user on a loan extended by a financial institution or other lender to the developer or user if the proceeds of the loan are or are to be used to finance an economic development project, for the retirement of bonds under section 14 of this chapter for economic development projects, for leases under section 21 of this chapter, or for leases or bonds entered into or issued prior to the date the economic development income tax was imposed if the purpose of the lease or bonds would have qualified as a purpose under this chapter at the time the lease was entered into or the bonds were issued.
(2) By a county, city, or town for:
(A) the construction or acquisition of, or remedial action with respect to, a capital project for which the unit is empowered to issue general obligation bonds or establish a fund under any statute listed in IC 6-1.1-18.5-9.8;
(B) the retirement of bonds issued under any provision of Indiana law for a capital project;