March 30, 2005
ENGROSSED
SENATE BILL No. 100
_____
DIGEST OF SB 100
(Updated March 29, 2005 1:28 pm - DI 92)
Citations Affected: IC 6-3.5; noncode.
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. Authorizes
Miami County and Howard County to increase their respective county
option income taxes by 0.25% over the maximum rates for county jail
purposes.
Effective: Upon passage; July 1, 2005.
Long, Broden, Weatherwax, Mrvan,
Lubbers
(HOUSE SPONSORS _ ESPICH, CRAWFORD, BORROR, GIAQUINTA)
January 4, 2005, read first time and referred to Committee on Tax and Fiscal Policy.
January 18, 2005, reported favorably _ Do Pass.
January 24, 2005, read second time, ordered engrossed. Engrossed.
January 31, 2005, read third time, passed. Yeas 44, nays 5.
HOUSE ACTION
March 7, 2005, read first time and referred to Committee on Ways and Means.
March 29, 2005, amended, reported favorably _ Do Pass.
March 30, 2005
First Regular Session 114th General Assembly (2005)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
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word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
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this style type reconciles conflicts
between statutes enacted by the 2004 Regular Session of the General Assembly.
ENGROSSED
SENATE BILL No. 100
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-3.5-6-19; (05)ES0100.1.1. -->
SECTION 1. IC 6-3.5-6-19 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: 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 county.
(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
chapter:
(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.
SOURCE: IC 6-3.5-6-27; (05)ES0100.1.2. -->
SECTION 2. IC 6-3.5-6-27 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Sec. 27. (a) This section applies only to Miami
County. Miami County possesses unique economic development
challenges due to:
(1) underemployment in relation to similarly situated
counties; and
(2) the presence of a United States government military base
or other military installation that is completely or partially
inactive or closed.
Maintaining low property tax rates is essential to economic
development, and the use of county option income tax revenues as
provided in this chapter to pay any bonds issued or leases entered
into to finance the construction, acquisition, improvement,
renovation, and equipping described under subsection (c), rather
than use of property taxes, promotes that purpose.
(b) In addition to the rates permitted by sections 8 and 9 of this
chapter, the county council may impose the county option income
tax at a rate of twenty-five hundredths percent (0.25%) on the
adjusted gross income of resident county taxpayers if the county
council makes the finding and determination set forth in subsection
(c). Section 8(e) of this chapter applies to the application of the
additional rate to nonresident taxpayers.
(c) In order to impose the county option income tax as provided
in this section, the county council must adopt an ordinance finding
and determining that revenues from the county option income tax
are needed to pay the costs of financing, constructing, acquiring,
renovating, and equipping a county jail, including the repayment
of bonds issued, or leases entered into, for financing, constructing,
acquiring, renovating, and equipping a county jail.
(d) If the county council makes a determination under
subsection (c), the county council may adopt a tax rate under
subsection (b). The tax rate may not be imposed at a rate or for a
time greater than is necessary to pay the costs of financing,
constructing, acquiring, renovating, and equipping a county jail.
(e) The county treasurer shall establish a county jail revenue
fund to be used only for the purposes described in this section.
County option income tax revenues derived from the tax rate
imposed under this section shall be deposited in the county jail
revenue fund before making a certified distribution under section
11 of this chapter.
(f) County option income tax revenues derived from the tax rate
imposed under this section:
(1) may only be used for the purposes described in this
section;
(2) may not be considered by the department of local
government finance in determining the county's maximum
permissible property tax levy limit under IC 6-1.1-18.5; and
(3) may be pledged to the repayment of bonds issued, or leases
entered into, for the purposes described in subsection (c).
SOURCE: IC 6-3.5-6-28; (05)ES0100.1.3. -->
SECTION 3. IC 6-3.5-6-28 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Sec. 28. (a) This section applies only to Howard
County. Maintaining low property tax rates is essential to
economic development, and the use of county option income tax
revenues as provided in this chapter to pay any bonds issued or
leases entered into to finance the construction, acquisition,
improvement, renovation, and equipping described under
subsection (c), rather than the use of property taxes, promotes that
purpose.
(b) In addition to the rates permitted by sections 8 and 9 of this
chapter, the county income tax council may impose the county
option income tax at a rate of twenty-five hundredths percent
(0.25%) on the adjusted gross income of resident county taxpayers
if the county income tax council makes the finding and
determination set forth in subsection (c). Section 8(e) of this
chapter applies to the application of the additional rate to
nonresident taxpayers.
(c) In order to impose the county option income tax as provided
in this section, the county income tax council must adopt an
ordinance finding and determining that revenues from the county
option income tax are needed to pay the costs of financing,
constructing, acquiring, renovating, and equipping a county jail,
including the repayment of bonds issued, or leases entered into, for
financing, constructing, acquiring, renovating, and equipping a
county jail.
(d) If the county income tax council makes a determination
under subsection (c), the county income tax council may adopt a
tax rate under subsection (b). The tax rate may not be imposed at
a rate or for a time greater than is necessary to pay the costs of
financing, constructing, acquiring, renovating, and equipping a
county jail.
(e) The county treasurer shall establish a county jail revenue
fund to be used only for the purposes described in this section.
County option income tax revenues derived from the tax rate
imposed under this section shall be deposited in the county jail
revenue fund before making a certified distribution under section
11 of this chapter.
(f) County option income tax revenues derived from the tax rate
imposed under this section:
(1) may only be used for the purposes described in this
section;
(2) may not be considered by the department of local
government finance in determining the county's maximum
permissible property tax levy limit under IC 6-1.1-18.5; and
(3) may be pledged to the repayment of bonds issued, or leases
entered into, for the purposes described in subsection (c).
SOURCE: IC 6-3.5-7-5; (05)ES0100.1.4. -->
SECTION 4. IC 6-3.5-7-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 5. (a) Except as
provided in subsection (c), the county economic development income
tax may be imposed on the adjusted gross income of county taxpayers.
The entity that may impose the tax is:
(1) the county income tax council (as defined in IC 6-3.5-6-1) if
the county option income tax is in effect on January 1 of the year
the county economic development income tax is imposed;
(2) the county council if the county adjusted gross income tax is
in effect on January 1 of the year the county economic
development tax is imposed; or
(3) the county income tax council or the county council,
whichever acts first, for a county not covered by subdivision (1)
or (2).
To impose the county economic development income tax, a county
income tax council shall use the procedures set forth in IC 6-3.5-6
concerning the imposition of the county option income tax.
(b) Except as provided in subsections (c), (g), (k), (p), and (r) the
county economic development income tax may be imposed at a rate of:
(1) one-tenth percent (0.1%);
(2) two-tenths percent (0.2%);
(3) twenty-five hundredths percent (0.25%);
(4) three-tenths percent (0.3%);
(5) thirty-five hundredths percent (0.35%);
(6) four-tenths percent (0.4%);
(7) forty-five hundredths percent (0.45%); or
(8) five-tenths percent (0.5%);
on the adjusted gross income of county taxpayers.
(c) Except as provided in subsection (h), (i), (j), (k), (l), (m), (n), (o),
or (p),
or (s), the county economic development income tax rate plus
the county adjusted gross income tax rate, if any, that are in effect on
January 1 of a year may not exceed one and twenty-five hundredths
percent (1.25%). Except as provided in subsection (g),
or (p),
(r), (t),
or (u), the county economic development tax rate plus the county
option income tax rate, if any, that are in effect on January 1 of a year
may not exceed one percent (1%).
(d) To impose, increase, decrease, or rescind the county economic
development income tax, the appropriate body must, after January 1 but
before April 1 of a year, adopt an ordinance. The ordinance to impose
the tax must substantially state the following:
"The ________ County _________ imposes the county economic
development income tax on the county taxpayers of _________
County. The county economic development income tax is imposed at
a rate of _________ percent (____%) on the county taxpayers of the
county. This tax takes effect July 1 of this year.".
(e) Any ordinance adopted under this chapter takes effect July 1 of
the year the ordinance is adopted.
(f) The auditor of a county shall record all votes taken on ordinances
presented for a vote under the authority of this chapter and shall, not
more than ten (10) days after the vote, send a certified copy of the
results to the commissioner of the department by certified mail.
(g) This subsection applies to a county having a population of more
than one hundred forty-eight thousand (148,000) but less than one
hundred seventy thousand (170,000). Except as provided in subsection
(p), in addition to the rates permitted by subsection (b), the:
(1) county economic development income tax may be imposed at
a rate of:
(A) fifteen-hundredths percent (0.15%);
(B) two-tenths percent (0.2%); or
(C) twenty-five hundredths percent (0.25%); and
(2) county economic development income tax rate plus the county
option income tax rate that are in effect on January 1 of a year
may equal up to one and twenty-five hundredths percent (1.25%);
if the county income tax council makes a determination to impose rates
under this subsection and section 22 of this chapter.
(h) For a county having a population of more than forty-one
thousand (41,000) but less than forty-three thousand (43,000), except
as provided in subsection (p), the county economic development
income tax rate plus the county adjusted gross income tax rate that are
in effect on January 1 of a year may not exceed one and thirty-five
hundredths percent (1.35%) if the county has imposed the county
adjusted gross income tax at a rate of one and one-tenth percent (1.1%)
under IC 6-3.5-1.1-2.5.
(i) For a county having a population of more than thirteen thousand
five hundred (13,500) but less than fourteen thousand (14,000), except
as provided in subsection (p), the county economic development
income tax rate plus the county adjusted gross income tax rate that are
in effect on January 1 of a year may not exceed one and fifty-five
hundredths percent (1.55%).
(j) For a county having a population of more than seventy-one
thousand (71,000) but less than seventy-one thousand four hundred
(71,400), except as provided in subsection (p), the county economic
development income tax rate plus the county adjusted gross income tax
rate that are in effect on January 1 of a year may not exceed one and
five-tenths percent (1.5%).
(k) This subsection applies to a county having a population of more
than twenty-seven thousand four hundred (27,400) but less than
twenty-seven thousand five hundred (27,500). Except as provided in
subsection (p), in addition to the rates permitted under subsection (b):
(1) the county economic development income tax may be imposed
at a rate of twenty-five hundredths percent (0.25%); and
(2) the sum of the county economic development income tax rate
and the county adjusted gross income tax rate that are in effect on
January 1 of a year may not exceed one and five-tenths percent
(1.5%);
if the county council makes a determination to impose rates under this
subsection and section 22.5 of this chapter.
(l) For a county having a population of more than twenty-nine
thousand (29,000) but less than thirty thousand (30,000), except as
provided in subsection (p), the county economic development income
tax rate plus the county adjusted gross income tax rate that are in effect
on January 1 of a year may not exceed one and five-tenths percent
(1.5%).
(m) For:
(1) a county having a population of more than one hundred
eighty-two thousand seven hundred ninety (182,790) but less than
two hundred thousand (200,000); or
(2) a county having a population of more than forty-five thousand
(45,000) but less than forty-five thousand nine hundred (45,900);
except as provided in subsection (p), the county economic development
income tax rate plus the county adjusted gross income tax rate that are
in effect on January 1 of a year may not exceed one and five-tenths
percent (1.5%).
(n) For a county having a population of more than six thousand
(6,000) but less than eight thousand (8,000), except as provided in
subsection (p), the county economic development income tax rate plus
the county adjusted gross income tax rate that are in effect on January
1 of a year may not exceed one and five-tenths percent (1.5%).
(o) This subsection applies to a county having a population of more
than thirty-nine thousand (39,000) but less than thirty-nine thousand
six hundred (39,600). Except as provided in subsection (p), in addition
to the rates permitted under subsection (b):
(1) the county economic development income tax may be imposed
at a rate of twenty-five hundredths percent (0.25%); and
(2) the sum of the county economic development income tax rate
and:
(A) the county adjusted gross income tax rate that are in effect
on January 1 of a year may not exceed one and five-tenths
percent (1.5%); or
(B) the county option income tax rate that are in effect on
January 1 of a year may not exceed one and twenty-five
hundredths percent (1.25%);
if the county council makes a determination to impose rates under this
subsection and section 24 of this chapter.
(p) In addition:
(1) the county economic development income tax may be imposed
at a rate that exceeds by not more than twenty-five hundredths
percent (0.25%) the maximum rate that would otherwise apply
under this section; and
(2) the:
(A) county economic development income tax; and
(B) county option income tax or county adjusted gross income
tax;
may be imposed at combined rates that exceed by not more than
twenty-five hundredths percent (0.25%) the maximum combined
rates that would otherwise apply under this section.
However, the additional rate imposed under this subsection may not
exceed the amount necessary to mitigate the increased ad valorem
property taxes on homesteads (as defined in IC 6-1.1-20.9-1) resulting
from the deduction of the assessed value of inventory in the county
under IC 6-1.1-12-41 or IC 6-1.1-12-42.
(q) If the county economic development income tax is imposed as
authorized under subsection (p) at a rate that exceeds the maximum
rate that would otherwise apply under this section, the certified
distribution must be used for the purpose provided in section 25(e) or
26 of this chapter to the extent that the certified distribution results
from the difference between:
(1) the actual county economic development tax rate; and
(2) the maximum rate that would otherwise apply under this
section.
(r) This subsection applies only to a county described in section 27
of this chapter. Except as provided in subsection (p), in addition to the
rates permitted by subsection (b), the:
(1) county economic development income tax may be imposed at
a rate of twenty-five hundredths percent (0.25%); and
(2) county economic development income tax rate plus the county
option income tax rate that are in effect on January 1 of a year
may equal up to one and twenty-five hundredths percent (1.25%);
if the county council makes a determination to impose rates under this
subsection and section 27 of this chapter.
(s) Except as provided in subsection (p), the county economic
development income tax rate plus the county adjusted gross income tax
rate that are in effect on January 1 of a year may not exceed one and
five-tenths percent (1.5%) if the county has imposed the county
adjusted gross income tax under IC 6-3.5-1.1-3.3.
(t) This subsection applies to Miami County. Except as provided
in subsection (p), the sum of the county economic development
income tax rate and the county option income tax rate that are in
effect on January 1 of a year may not exceed one and twenty-five
hundredths percent (1.25%).
(u) This subsection applies to Howard County. Except as
provided in subsection (p), the sum of the county economic
development income tax rate and the county option income tax rate
that are in effect on January 1 of a year may not exceed one and
twenty-five hundredths percent (1.25%).
SOURCE: IC 6-3.5-7-13.1; (05)ES0100.1.5. -->
SECTION 5. IC 6-3.5-7-13.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2005]: 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;
(C) the payment of lease rentals under any statute for a capital
project;
(D) contract payments to a nonprofit corporation whose
primary corporate purpose is to assist government in planning
and implementing economic development projects;
(E) operating expenses of a governmental entity that plans or
implements economic development projects;
(F) to the extent not otherwise allowed under this chapter,
funding substance removal or remedial action in a designated
unit; or
(G) funding of a revolving fund established under
IC 5-1-14-14.
(3) By a county, city, or town for any lawful purpose for
which money in any of its other funds may be used.
(c) As used in this section, an economic development project is any
project that:
(1) the county, city, or town determines will:
(A) promote significant opportunities for the gainful
employment of its citizens;
(B) attract a major new business enterprise to the unit; or
(C) retain or expand a significant business enterprise within
the unit; and
(2) involves an expenditure for:
(A) the acquisition of land;
(B) interests in land;
(C) site improvements;
(D) infrastructure improvements;
(E) buildings;
(F) structures;
(G) rehabilitation, renovation, and enlargement of buildings
and structures;
(H) machinery;
(I) equipment;
(J) furnishings;
(K) facilities;
(L) administrative expenses associated with such a project,
including contract payments authorized under subsection
(b)(2)(D);
(M) operating expenses authorized under subsection (b)(2)(E);
or
(N) to the extent not otherwise allowed under this chapter,
substance removal or remedial action in a designated unit;
or any combination of these.
(d) If there are bonds outstanding that have been issued under
section 14 of this chapter or leases in effect under section 21 of this
chapter, a county, city, or town may not expend money from its
economic development income tax fund for a purpose authorized
under subsection (b)(3) in a manner that would adversely affect
owners of the outstanding bonds or payment of any lease rentals
due.
SOURCE: ; (05)ES0100.1.6. -->
SECTION 6. [EFFECTIVE UPON PASSAGE]
Notwithstanding
the provisions in IC 6-3.5-6 that indicate that an ordinance
establishing or increasing the rate of a county option income tax in
2005 must be adopted before April 1, 2005, an ordinance adopted
in 2005 to establish an additional rate under IC 6-3.5-6-27, as
added by this act, may be adopted before June 1, 2005. An
ordinance under this SECTION must be adopted in the same
manner as an ordinance under IC 6-3.5-6. An ordinance adopted
under this SECTION is effective on the later of the following:
(1) July 1, 2005.
(2) Fifteen (15) regular business days after the department of
state revenue receives a certified copy of the ordinance from
the county auditor.
SOURCE: ; (05)ES0100.1.7. -->
SECTION 7. [EFFECTIVE UPON PASSAGE] Notwithstanding
the provisions in IC 6-3.5-6 that indicate that an ordinance
establishing or increasing the rate of a county option income tax in
2005 must be adopted before April 1, 2005, an ordinance adopted
in 2005 to establish an additional rate under IC 6-3.5-6-28, as
added by this act, may be adopted before June 1, 2005. An
ordinance under this SECTION must be adopted in the same
manner as an ordinance under IC 6-3.5-6. An ordinance adopted
under this SECTION is effective on the later of the following:
(1) July 1, 2005.
(2) Fifteen (15) regular business days after the department of
state revenue receives a certified copy of the ordinance from
the county auditor.
SOURCE: ; (05)ES0100.1.8. -->
SECTION 8.
An emergency is declared for this act.