Citations Affected: IC 4-23-2-2; IC 36-10-12.
Synopsis: Cultural and performing arts development districts.
Authorizes cities and counties that have a redevelopment commission
to apply to the department of commerce and the arts commission for
designation of a cultural and performing arts development district.
Establishes procedures for the allocation of incremental property tax,
sales tax, and income tax revenue to the redevelopment commission for
use within the district. Authorizes the issuance of bonds for projects
within the district.
Effective: July 1, 2005.
January 19, 2005, read first time and referred to Committee on Local Government.
A BILL FOR AN ACT to amend the Indiana Code concerning
amount" means the total amount of state gross retail and use taxes
remitted under IC 6-2.5 by the businesses operating in the territory
comprising a district during the state fiscal year that precedes the
date on which the district was designated under section 13 of this
Sec. 8. As used in this chapter, "gross retail incremental amount" means the remainder of:
(1) the aggregate amount of state gross retail and use taxes that are remitted under IC 6-2.5 by businesses operating in a district during a state fiscal year; minus
(2) the gross retail base period amount;
as determined by the department of state revenue under section 22 of this chapter.
Sec. 9. As used in this chapter, "income tax base period amount" means the total amount of the following taxes paid by employees employed in the territory comprising a district with respect to wages and salary earned for work in the district for the state fiscal year that precedes the date on which the district was designated under section 13 of this chapter:
(1) The adjusted gross income tax.
(2) The county adjusted gross income tax.
(3) The county option income tax.
(4) The county economic development income tax.
Sec. 10. As used in this chapter, "income tax incremental amount" means the remainder of:
(1) the aggregate amount of state and local income taxes paid by employees employed in a district with respect to wages earned for work in the district for a particular state fiscal year; minus
(2) the income tax base period amount;
as determined by the department of state revenue under section 22 of this chapter.
Sec. 11. (a) The legislative body of a unit may, by ordinance or resolution, authorize the unit's redevelopment commission to apply to the department of commerce for designation of all or part of the territory within the jurisdiction of the redevelopment commission as a cultural and performing arts development district and to enter into an agreement governing the terms and conditions of the designation. The application must be in a form specified by the department and must include the following:
(1) A development proposal for the area for which the designation of a district is being requested.
(2) Evidence of previous, concurrent, or proposed economic development initiatives that would supplement or be enhanced by the designation of a district.
(3) Any other information the department determines necessary to make the determinations required under this chapter.
(b) A unit that submits an application under subsection (a) must also provide a copy of the application to:
(1) the Indiana arts commission; and
(2) the budget committee for review and recommendation to the budget agency.
(c) The budget agency, after review by the budget committee, shall approve an application for designation of a district if the budget agency determines that:
(1) the area to be designated as a district meets the conditions necessary for designation as a district; and
(2) the designation of the district will benefit the people of Indiana by protecting or increasing state and local tax bases and tax revenues for at least the duration of the district.
(d) The income tax incremental amount and the gross retail incremental amount may not be allocated to a district until the budget agency approves the application.
Sec. 12. The department of commerce shall adopt rules under IC 4-22-2 to establish criteria for the designation of districts. The rules adopted under this section must include the following criteria:
(1) The consistency of the proposed district with any existing overall economic development strategy for the unit submitting the application.
(2) The identification of local residents' need and support for institutions that would be created or supported by the designation of the district.
(3) The economic viability of the community within the district.
(4) The possibility that designation of a district will catalyze further economic development in the unit seeking district designation.
(5) The sustainability of all projects receiving benefits following their completion.
(6) A long term plan for any infrastructure development.
(7) A contingency plan for the infrastructure created and supported as a result of benefits received through district
designation if the project is not successful.
(8) The overall cost to the state as compared with the anticipated economic benefit to the unit seeking designation of a district.
(9) Evidence that a public benefit will result from designation of the district, such as free public workshops on art and culture, interaction with elementary and secondary education institutions for the enhancement or inclusion of arts and culturally related curricula, development of public art, or other free performances or exhibitions that will serve to educate the public with regard to art and culture and stimulate public interest in similar pursuits.
(10) Other criteria that the department considers appropriate, as determined in consultation with the Indiana arts commission.
Sec. 13. After consideration of the criteria adopted under section 12 of this chapter, the department of commerce may approve or reject an application for designation of a district. However, the department may not approve an application if the Indiana arts commission and the budget agency have not recommended approval of the application.
Sec. 14. A redevelopment commission and the legislative body of the unit that establishes the redevelopment commission may enter into an agreement with the department of commerce establishing the terms and conditions governing a district designated under section 13 of this chapter. The agreement must include the following provisions:
(1) A description of the area to be included within the district.
(2) Covenants and restrictions, if any, on all or part of the properties contained within the district, and terms of enforcement of any covenants or restrictions.
(3) The financial commitments of any party to the agreement and of any owner or developer of property in the district.
(4) The terms of any commitment required from a public or private institution for support of the operations and activities within the district.
(5) The terms of enforcement of the agreement, which may include the definition of events of default, cure periods, legal and equitable remedies and rights, and penalties and damages, actual or liquidated, on the occurrence of an event of default.
(6) The public facilities to be developed for the district and the
costs of those public facilities, as approved by the department
Sec. 15. (a) If the department of commerce determines that a sale price or rental value at below market rate will assist in increasing employment or private investment in a district, the redevelopment commission and the legislative body of the unit may determine the sale price or rental value for public facilities owned or developed by the redevelopment commission and the unit in the district at below market rate.
(b) If public facilities developed under an agreement entered into under this chapter are conveyed or leased at less than fair market value or at below market rates, the terms of the conveyance or lease must include legal and equitable remedies and rights to assure that the public facilities are used for cultural or performing arts purposes. Legal and equitable remedies and rights may include penalties and actual or liquidated damages.
Sec. 16. (a) Subject to the approval of the legislative body of the unit that establishes the redevelopment commission, the redevelopment commission may adopt a resolution designating a district as an allocation area for purposes of the allocation and distribution of property taxes.
(b) After adoption of the resolution under subsection (a), the redevelopment commission shall:
(1) publish notice of the adoption and substance of the resolution in accordance with IC 5-3-1; and
(2) file the following information with each taxing unit that has authority to levy property taxes in the geographic area where the district is located:
(A) A copy of the notice required by subdivision (1).
(B) A statement disclosing the impact of the district, including the following:
(i) The estimated economic benefits and costs incurred by the district, as measured by increased employment and anticipated growth of real property assessed values.
(ii) The anticipated impact on tax revenues of each taxing unit.
The notice must state the general boundaries of the district and that written remonstrances may be filed with the redevelopment commission until the time designated for the hearing. The notice must also name the place, date, and time when the redevelopment commission will receive and hear remonstrances and objections from persons interested in or affected by the proceedings
pertaining to the proposed allocation area and will determine the
public utility and benefit of the proposed allocation area. The
redevelopment commission shall file the information required by
subdivision (2) with the officers of the taxing unit who are
authorized to fix budgets, tax rates, and tax levies under
IC 6-1.1-17-5 at least ten (10) days before the date of the public
hearing. All persons affected in any manner by the hearing,
including all taxpayers within the taxing district of the
redevelopment commission, are considered notified of the
pendency of the hearing and of subsequent acts, hearings,
adjournments, and orders of the redevelopment commission
affecting the allocation area if the redevelopment commission gives
the notice required by this section.
(c) At the hearing, which may be recessed and reconvened periodically, the redevelopment commission shall hear all persons interested in the proceedings and shall consider all written remonstrances and objections that have been filed. After considering the evidence presented, the redevelopment commission shall take final action determining the public utility and benefit of the proposed allocation area confirming, modifying and confirming, or rescinding the resolution. The final action taken by the redevelopment commission shall be recorded and is final and conclusive, except that an appeal may be taken in the manner prescribed by section 17 of this chapter.
Sec. 17. (a) A person who files a written remonstrance with the redevelopment commission under section 16 of this chapter and who is aggrieved by the final action taken may, within ten (10) days after that final action, file with the office of the clerk of the circuit or superior court of the county a copy of the redevelopment commission's resolution and the person's remonstrance against the resolution, together with the person's bond as provided by IC 34-13-5-7.
(b) An appeal under this section shall be promptly heard by the court without a jury. All remonstrances on which an appeal has been taken shall be consolidated and heard and determined within thirty (30) days after the time of filing of the appeal. The court shall decide the appeal based on the record and evidence before the redevelopment commission, not by trial de novo, and may confirm the final action of the redevelopment commission or sustain the remonstrances. The judgment of the court is final and conclusive, unless an appeal is taken as in other civil actions.
Sec. 18. (a) An allocation provision adopted under section 16 of
this chapter must:
(1) apply to the entire district; and
(2) require that any property tax on taxable property subsequently levied by or for the benefit of any public body entitled to a distribution of property taxes in the district be allocated and distributed as provided in subsections (b) and (c).
(b) Except as otherwise provided in this section, the proceeds of the taxes attributable to the lesser of:
(1) the assessed value of the taxable property for the assessment date with respect to which the allocation and distribution is made; or
(2) the base assessed value;
shall be allocated and, when collected, paid into the funds of the respective taxing units.
(c) Except as provided in subsection (d), all the property tax proceeds that exceed those described in subsection (b) shall be allocated to the redevelopment commission for the district and, when collected, paid into the cultural and performing arts development fund established under section 24 of this chapter.
(d) Before July 15 of each year, the redevelopment commission shall do the following:
(1) Determine the amount, if any, by which the property tax proceeds to be deposited in the cultural and performing arts development fund will exceed the amount necessary for the purposes described in section 24 of this chapter.
(2) Notify the county auditor of the amount, if any, of excess tax proceeds that the redevelopment commission has determined may be allocated to the respective taxing units in the manner prescribed in subsection (b). The redevelopment commission may not authorize an allocation of property tax proceeds under this subdivision if to do so would endanger the interests of the holders of bonds described in section 25 of this chapter.
(e) Notwithstanding any other law, each assessor shall, upon petition of the redevelopment commission, reassess the taxable property situated upon or in, or added to, the district effective on the next assessment date after the petition.
(f) Notwithstanding any other law, the assessed value of all taxable property in the district, for purposes of tax limitation, property tax replacement, and formulation of the budget, tax rate, and tax levy for each political subdivision in which the property is
located is the lesser of:
(1) the assessed value of the taxable property as valued without regard to this section; or
(2) the base assessed value.
Sec. 19. (a) A redevelopment commission may, by resolution, provide that each taxpayer in a district that has been designated as an allocation area is entitled to an additional credit for taxes (as defined in IC 6-1.1-21-2) that, under IC 6-1.1-22-9, are due and payable in May and November of that year. One-half (1/2) of the credit shall be applied to each installment of property taxes. This credit equals the amount determined under the following STEPS for each taxpayer in a taxing district that contains all or part of the cultural and performing arts development district:
STEP ONE: Determine the part of the sum of the amounts under IC 6-1.1-21-2(g)(1)(A) and IC 6-1.1-21-2(g)(2) through IC 6-1.1-21-2(g)(5) that is attributable to the taxing district.
STEP TWO: Divide:
(A) the part of the county's total eligible property tax replacement amount (as defined in IC 6-1.1-21-2) for that year as determined under IC 6-1.1-21-4 that is attributable to the taxing district; by
(B) the STEP ONE sum.
STEP THREE: Multiply:
(A) the STEP TWO quotient; by
(B) the total amount of the taxpayer's taxes (as defined in IC 6-1.1-21-2) levied in the taxing district that would have been allocated to the cultural and performing arts development fund under section 18 of this chapter had the additional credit described in this section not been given.
The additional credit reduces the amount of proceeds allocated and paid into the cultural and performing arts development fund under section 18 of this chapter.
(b) The additional credit under subsection (a) shall be:
(1) computed on an aggregate basis of all taxpayers in a taxing district that contains all or part of a cultural and performing arts development district; and
(2) combined on the tax statement sent to each taxpayer.
(c) Concurrently with the mailing or other delivery of the tax statement or any corrected tax statement to each taxpayer, as required by IC 6-1.1-22-8(a), each county treasurer shall for each tax statement also deliver to each taxpayer in a cultural and performing arts development district who is entitled to the
additional credit under subsection (a) a notice of additional credit.
The actual dollar amount of the credit, the taxpayer's name and
address, and the tax statement to which the credit applies must be
stated on the notice.
(d) Notwithstanding any other law, a taxpayer in a cultural and performing arts development district is not entitled to a credit for property tax replacement under IC 6-1.1-21-5.
Sec. 20. (a) The state board of accounts and department of local government finance shall adopt the rules and prescribe the forms and procedures that the state board of accounts and department of local government finance consider appropriate for the implementation of an allocation area under this chapter.
(b) After each general reassessment under IC 6-1.1-4, the department of local government finance shall adjust the base assessed value one (1) time to neutralize any effect of the general reassessment on the property tax proceeds allocated to the cultural and performing arts development fund under section 18 of this chapter.
Sec. 21. (a) After entering into an agreement under section 14 of this chapter, the redevelopment commission shall send to the department of state revenue:
(1) a certified copy of the designation of the district under section 13 of this chapter;
(2) a certified copy of the agreement entered into under section 14 of this chapter; and
(3) a complete list of the residents and employers in the district and the street names and the range of street numbers of each street in the district.
The redevelopment commission shall update the list provided under subdivision (3) before July 1 of each year.
(b) Not later than sixty (60) days after receiving a copy of the designation of the district, the department of state revenue shall determine the gross retail base period amount and the income tax base period amount.
Sec. 22. Before the first business day in October of each year, the department of state revenue shall calculate the income tax incremental amount and the gross retail incremental amount for the preceding state fiscal year for each district designated under this chapter.
Sec. 23. (a) The treasurer of state shall establish an incremental tax financing fund for each district designated under this chapter. The fund shall be administered by the treasurer of state. Money in
the fund does not revert to the state general fund at the end of a
state fiscal year.
(b) Subject to subsection (c), the following amounts shall be deposited during each state fiscal year in the incremental tax financing fund established for a district under subsection (a):
(1) The total amount of state gross retail and use taxes that are remitted under IC 6-2.5 by businesses operating in the district, until the amount of state gross retail and use taxes deposited equals the gross retail incremental amount for the district.
(2) The total amount of the following taxes paid with respect to wages earned for work in the district, until the amount deposited equals the income tax incremental amount:
(A) The adjusted gross income tax.
(B) The county adjusted gross income tax.
(C) The county option income tax.
(D) The county economic development income tax.
(c) Not more than a total of five million dollars ($5,000,000) may be deposited in a particular incremental tax financing fund for a district over the life of the district.
(d) On or before the twentieth day of each month, all amounts held in the incremental tax financing fund established for a district shall be distributed to the redevelopment commission for deposit in the cultural and performing arts development fund established under section 24 of this chapter.
Sec. 24. (a) Each redevelopment commission that establishes a district under this chapter shall establish a cultural and performing arts development fund to receive:
(1) property tax proceeds allocated under section 18 of this chapter; and
(2) money distributed to the redevelopment commission under section 23 of this chapter.
(b) Money deposited in the cultural and performing arts development fund may be used by the redevelopment commission only for one (1) or more of the following purposes:
(1) Acquisition, improvement, preparation, demolition, disposal, construction, reconstruction, remediation, rehabilitation, restoration, preservation, maintenance, repair, furnishing, equipping, and operation of public facilities that are related to the cultural and performing arts and that are in or serving the district, including projects whose purpose is to:
(A) display art;
(e) The bonds must mature within fifty (50) years.
(f) The redevelopment commission shall sell the bonds at public or private sale on terms determined by the redevelopment commission.
(g) All money received from any bonds issued under this chapter shall be applied solely to the payment of the cost of providing public facilities within a district, or the cost of refunding or refinancing outstanding bonds, for which the bonds are issued. The cost may include:
(1) planning and development of the public facilities and all related buildings, facilities, structures, and improvements;
(2) acquisition of a site and clearing and preparing the site for construction;
(3) equipment, facilities, structures, and improvements that are necessary or desirable to make the public facilities suitable for use and operation;
(4) architectural, engineering, consultant, and attorney's fees;
(5) incidental expenses in connection with the issuance and sale of bonds;
(6) reserves for principal and interest;
(7) interest during construction and for a period thereafter determined by the redevelopment commission, but not to exceed five (5) years;
(8) financial advisory fees;
(9) insurance during construction;
(10) municipal bond insurance, debt service reserve insurance, letters of credit, or other credit enhancement; and
(11) in the case of refunding or refinancing, payment of the principal of, redemption premiums, if any, for, and interest on, the bonds being refunded or refinanced.
Sec. 26. The establishment of cultural and performing arts activities and public facilities within a district serves a public purpose and is of benefit to the general welfare of a unit by encouraging investment, job creation and retention, and economic growth and diversity.