Reprinted
January 31, 2006
HOUSE BILL No. 1358
_____
DIGEST OF HB 1358
(Updated January 30, 2006 10:43 pm - DI 73)
Citations Affected: IC 6-9; IC 36-7; noncode.
Synopsis: Special economic development project districts. Allows: (1)
a city; or (2) a county that contains a city; that has designated an
economic development project district (EDPD) to designate the EDPD
as a special retail district for retail projects and attractions that meet
certain criteria. Provides that if the special retail district is approved by
the budget agency after review by the budget committee, an additional
1% sales tax applies to retail transactions within the district. Specifies
that this additional 1% sales tax is imposed, paid, and collected in the
same manner as the state sales tax. Requires the amounts received from
the additional 1% sales tax to be paid monthly by the treasurer of the
state to the county fiscal officer and deposited into a special fund.
Allows money in the special fund to be used for any purpose that a
property tax increment could be used. Authorizes a city in which a
retail project or attraction that meets certain investment criteria is
located to designate an EDPD. (Current law allows only four
specifically listed cities to designate an EDPD.) Authorizes the use of
sales tax increment financing in the EDPD for retail projects and
attractions meeting certain investment criteria.
Effective: July 1, 2006.
Behning, Reske
January 12, 2006, read first time and referred to Committee on Commerce, Economic
Development and Small Business.
January 25, 2006, amended, reported _ Do Pass.
January 30, 2006, read second time, amended, ordered engrossed.
Reprinted
January 31, 2006
Second Regular Session 114th General Assembly (2006)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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HOUSE BILL No. 1358
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 6-9-39; (06)HB1358.2.1. -->
SECTION 1. IC 6-9-39 IS ADDED TO THE INDIANA CODE AS
A
NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2006]:
Chapter 39. Special Retail District Supplemental Gross Retail
Tax
Sec. 1. Except as otherwise provided in this chapter, the
definitions in IC 6-2.5-1 apply throughout this chapter.
Sec. 2. As used in this chapter, "commission" refers to:
(1) a redevelopment commission established under IC 36-7-14
in the case of a city other than a consolidated city; or
(2) the metropolitan development commission in the case of a
consolidated city.
Sec. 3. As used in this chapter, "fiscal body" has the meaning set
forth in IC 36-1-2-6.
Sec. 4. As used in this chapter, "fiscal officer" has the meaning
set forth in IC 36-1-2-7.
Sec. 5. As used in this chapter, "gross retail income" has the
meaning set forth in IC 6-2.5-1-5, except that the term does not
include taxes imposed under IC 6-2.5 or IC 6-9.
Sec. 6. (a) Subject to subsection (b), the fiscal body of:
(1) a city; or
(2) a county that contains a city;
in which an economic development project district has been
designated under IC 36-7-26-16 may adopt an ordinance
designating the economic development project district as a special
retail district.
(b) The fiscal body may adopt an ordinance under subsection (a)
only after January 1 but before April 1 of a year.
(c) If the fiscal body adopts an ordinance under subsection (a),
it shall immediately send a certified copy of the ordinance to the
state budget committee for review and recommendation to the
budget agency.
(d) After the state budget committee has reviewed the
designation of the district and made a recommendation to the
budget agency concerning the district, the budget agency may
approve or disapprove the designation of the district. If the budget
agency fails to take action on an ordinance designating a district
within one hundred twenty (120) days after the date the ordinance
is submitted to the budget committee, the designation of the district
by the ordinance is considered approved. If the budget agency
approves the designation of a district, the budget agency shall send
a copy of its approval and a certified copy of the ordinance
designating the district to the commissioner of the department of
state revenue.
Sec. 7. (a) If the fiscal body of a city or county adopts an
ordinance designating a special retail district under section 6 of
this chapter and the designation of the district is approved by the
budget agency under section 6 of this chapter, a one percent (1%)
supplemental gross retail tax is imposed on the transactions
described in section 8 of this chapter that occur within the district.
(b) The supplemental gross retail tax imposed by subsection (a):
(1) takes effect July 1 following the approval of the district by
the budget agency under section 6 of this chapter; and
(2) is in addition to any other tax imposed on the transactions
described in section 8 of this chapter.
Sec. 8. (a) Except as provided in subsection (b), the
supplemental gross retail tax imposed by section 7 of this chapter
applies to all retail transactions that occur within the special retail
district approved by the budget agency under section 6 of this
chapter.
(b) The supplemental gross retail tax does not apply to a
transaction to the extent that the transaction is exempt from the
state gross retail tax under IC 6-2.5.
Sec. 9. (a) The supplemental gross retail tax imposed by section
7 of this chapter is imposed only on the gross retail income derived
from retail transactions.
(b) A person who receives goods or services in a retail
transaction that is taxed under this chapter is liable for the
supplemental gross retail tax. The person shall pay the tax to the
retail merchant as a separate amount added to the consideration
for the goods or services. The retail merchant shall collect the tax
as an agent for the state and the city or county, as applicable.
(c) Except as otherwise provided in this chapter, the
supplemental gross retail tax shall be imposed, paid, and collected
in the same manner in which the state gross retail tax is imposed,
paid, and collected under IC 6-2.5. However, the return to be filed
for the payment of the tax may be either a separate return or may
be combined with the return filed for the payment of the state
gross retail tax, as prescribed by the department of state revenue.
Sec. 10. (a) The amounts received from the supplemental gross
retail tax shall be paid monthly by the treasurer of the state to the
fiscal officer of the city or county that designated the special retail
district under section 6 of this chapter upon warrants issued by the
auditor of state.
(b) The amounts received by the fiscal officer under subsection
(a) shall be deposited into a special fund.
(c) Money in the special fund may be used by a commission for
any purpose for which property taxes allocated to a redevelopment
district under IC 36-7-14-39 or IC 36-7-15.1-26 may be expended,
including the payment of debt service or lease rentals and the
establishment and maintenance of a debt service reserve.
Sec. 11. (a) Subject to subsection (c), the fiscal body of a city or
county may after January 1 but before April 1 of a year adopt an
ordinance to rescind the designation of a special retail district.
(b) If the fiscal body adopts an ordinance under subsection (a):
(1) the special retail district is abolished July 1 following the
adoption of the ordinance; and
(2) the supplemental gross retail tax is rescinded effective July
1 following the adoption of the ordinance.
(c) The fiscal body may not adopt an ordinance rescinding the
designation of a district if there are bonds outstanding or leases or
other obligations payable from the supplemental gross retail tax
under this chapter.
(d) If the fiscal body adopts an ordinance under subsection (a),
it shall immediately send a certified copy of the ordinance to the
commissioner of the department of state revenue.
SOURCE: IC 36-7-26-1; (06)HB1358.2.2. -->
SECTION 2. IC 36-7-26-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 1. This chapter applies
to the following:
(1) A city having a population of more than seventy-five thousand
(75,000) but less than ninety thousand (90,000).
(2) A city having a population of more than one hundred five
thousand (105,000) but less than one hundred twenty thousand
(120,000).
(3) A city having a population of more than one hundred fifty
thousand (150,000) but less than five hundred thousand
(500,000).
(4) A city having a population of more than one hundred twenty
thousand (120,000) but less than one hundred fifty thousand
(150,000).
(5) A city with an economic development project that meets
the project development criteria set forth in section 14(d) of
this chapter.
SOURCE: IC 36-7-26-2; (06)HB1358.2.3. -->
SECTION 3. IC 36-7-26-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 2. (a) Present economic
conditions in certain areas of certain cities are stagnant or deteriorating.
(b) Present economic conditions in such areas are beyond remedy
and control by existing regulatory processes because of the substantial
public financial commitments necessary to encourage significant
increases in economic activities in such areas.
(c) Encouraging economic development in these areas will:
(1) attract new businesses and encourage existing business to
remain or expand;
(2) increase temporary and permanent employment opportunities
and private sector investment;
(3) protect and increase state and local tax bases; and
(4) encourage overall economic growth in Indiana.
(d) Redevelopment and stimulation of economic development
benefit the health and welfare of the people of Indiana, are public uses
and purposes for which the public money may be spent, and are of
public utility and benefit.
(e) Economic development in such areas can be accomplished only
by a coordinated effort of local and state governments.
(f) This chapter shall be liberally construed to carry out the purposes
of this chapter and to provide cities with maximum flexibility to
accomplish those purposes.
(g) The general assembly affirms that the findings in subsections
(a) through (e) apply to a city described in section 1(5) of this
chapter.
SOURCE: IC 36-7-26-6; (06)HB1358.2.4. -->
SECTION 4. IC 36-7-26-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 6. As used in this
chapter, "commission" refers to a redevelopment commission
established under IC 36-7-14 or, in the case of a consolidated city,
the metropolitan development commission.
SOURCE: IC 36-7-26-11; (06)HB1358.2.5. -->
SECTION 5. IC 36-7-26-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 11. As used in this
chapter, "local public improvement" means any redevelopment project
or purpose of a commission or any city under this chapter, or
IC 36-7-14, or IC 36-7-15.1.
SOURCE: IC 36-7-26-14; (06)HB1358.2.6. -->
SECTION 6. IC 36-7-26-14, AS AMENDED BY P.L.185-2005,
SECTION 51, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2006]: Sec. 14. (a) Whenever a commission determines that
the redevelopment and economic development of an area situated
within the commission's jurisdiction may require the establishment of
a district, the commission shall cause to be assembled data sufficient
to make the determinations required under section 15 of this chapter,
including the following:
(1) Maps and plats showing the boundaries of the proposed
district.
(2) A complete list of street names and the range of street
numbers of each street situated in the proposed district.
(3) A plan for the redevelopment and economic development of
the proposed district. The plan must describe the local public
improvements necessary or appropriate for the redevelopment or
economic development.
(b) For a city described in section 1(2) or 1(3) of this chapter, the
proposed district must contain a commercial retail facility with at least
five hundred thousand (500,000) square feet, and any distributions
from the fund must be used in the area described in subsection (a) or
in areas that directly benefit the area described in subsection (a).
(c) For a city described in section 1(4) of this chapter, the proposed
district may not contain any territory outside the boundaries of a
redevelopment project area established within the central business
district of the city before 1985.
(d) For a city described in section 1(5) of this chapter:
(1) the proposed district may not exceed four hundred (400)
acres;
(2) the proposed district must be established for the purpose
of undertaking a project, or a series of projects, that have a
total private capital investment of more than one hundred
million dollars ($100,000,000);
(3) the total capital investment for the project, or series of
projects, must be more than five hundred million dollars
($500,000,000) at the completion of the project, or series of
projects; and
(4) the project would not otherwise be accomplished through
the ordinary operations of private investment because of the
unique quality and scope of the project or series of projects.
SOURCE: IC 36-7-26-23; (06)HB1358.2.7. -->
SECTION 7. IC 36-7-26-23 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 23. (a) Before the first
business day in October of each year, the board shall require the
department to calculate the net increment for the preceding state fiscal
year. The department shall transmit to the board a statement as to the
net increment in sufficient time to permit the board to review the
calculation and permit the transfers required by this section to be made
on a timely basis.
(b) There is established a sales tax increment financing fund to be
administered by the treasurer of state. The fund is comprised of two (2)
accounts called the net increment account and the credit account.
(c) On the first business day in October of each year, that portion of
the net increment calculated under subsection (a) that is needed:
(1) to pay debt service on the bonds issued under section 24 of
this chapter or to pay lease rentals under section 24 of this
chapter; and
(2) to establish and maintain a debt service reserve established by
the commission or by a lessor that provides local public
improvements to the commission; and
(3) with respect to a city described in section 1(5) of this
chapter, and as certified by the city, for any other purpose for
which property taxes allocated to a redevelopment district
under IC 36-7-14-39 or IC 36-7-15.1-26 may be expended;
shall be transferred to and deposited in the fund and credited to the net
increment account. Money credited to the net increment account is
pledged to the purposes described in subdivisions (1) and (2), subject
to the other provisions of this chapter.
(d) On the first business day of October in each year, the remainder
of:
(1) eighty percent (80%) of the gross increment; minus
(2) the amount credited to the net increment account on the same
date;
shall be transferred and credited to the credit account.
(e) The remainder of:
(1) the gross increment; minus
(2) the amounts credited to the net increment account and the
credit account;
shall be deposited by the auditor of state as other gross retail and use
taxes are deposited.
(f) A city described in section 1(2), 1(3), or 1(4) of this chapter may
receive not more than fifty percent (50%) of the net increment each
year. During the time a district exists in a city described in section 1(3)
or 1(4) of this chapter, not more than a total of one million dollars
($1,000,000) of net increment may be paid to the city described in
section 1(3) or 1(4) of this chapter. During each year that a district
exists in a city described in section 1(2) of this chapter, not more than
one million dollars ($1,000,000) of net increment may be paid to the
city described in section 1(2) of this chapter.
(g) A city described in section 1(5) of this chapter may not
receive any net increment until the commission and the board
determine that the fiscal body of the city has pledged local revenues
other than money received under this chapter or IC 6-9-39 to any
bonds payable wholly or in part from the net increment. The
amount of the local revenues pledged by the city must equal at least
twenty percent (20%) of the total annual debt service and debt
service reserve transferred under subsection (c)(1) and (c)(2). In
addition, the commission and the board must determine that the
project for which the city has pledged its revenues meets either of
the following criteria:
(1) The following circumstances exist:
(A) There is not an existing similar retail project or
attraction of a private company that has been proposed to
be located within the district or within sixty-five (65) miles
of the district.
(B) The private company proposing to locate within the
district has committed to not establishing a similar retail
project or attraction within one hundred twenty (120)
miles of the district.
(C) The private company's retail project or attraction
located in the district has a capital investment of at least
twenty-five million dollars ($25,000,000).
(2) The project consists of a multi-tenant project or attraction
that contains:
(A) at least five hundred thousand (500,000) square feet;
and
(B) at least two (2) retail projects that meet the criteria
described in subdivision (1).
(g) (h) The auditor of state shall disburse all money in the fund that
is credited to the net increment account to the commission in equal
semiannual installments on November 30 and May 31 of each year.
SOURCE: IC 36-7-26-24; (06)HB1358.2.8. -->
SECTION 8. IC 36-7-26-24 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 24. (a) The commission
may issue bonds, payable in whole or in part, from money distributed
from the fund to the commission, to finance a local public improvement
under IC 36-7-14-25.1 or may make lease rental payments for a local
public improvement under IC 36-7-14-25.2 and IC 36-7-14-25.3. The
term of any bonds issued under this section may not exceed twenty (20)
years, nor may the term of any lease agreement entered into under this
section exceed twenty (20) years. The commission shall transmit to the
board a transcript of the proceedings with respect to the issuance of the
bonds or the execution and delivery of a lease agreement as
contemplated by this section. The transcript must include a debt service
or lease rental schedule setting forth all payments required in
connection with the bonds or the lease rentals.
(b) This subsection applies only to bonds issued with respect to
a project described in section 23(g) of this chapter. The bonds shall
be sold by private sale for the price or prices, in the manner, and
at the times determined by the city to one (1) or more of the private
companies locating a retail project or attraction in the district.
Bonds sold under this subsection are not in any manner a general
obligation of the state.
(b) (c) On January 15 of each year, the commission shall remit to
the treasurer of state the money disbursed from the fund that is credited
to the net increment account that exceeds the amount needed:
(1) to pay debt service or lease rentals and under this chapter;
(2) to establish and maintain a debt service reserve under this
chapter; and
(3) with respect to a city described in section 1(5) of this
chapter, for the uses permitted under section 23(c)(3) of this
chapter;
in the prior year and before May 31 of that year. Amounts remitted
under this subsection shall be deposited by the auditor of state as other
gross retail and use taxes are deposited.
(c) (d) The commission in a city described in section 1(2) of this
chapter may distribute money from the fund only for the following:
(1) Road, interchange, and right-of-way improvements.
(2) Acquisition costs of a commercial retail facility and for real
property acquisition costs in furtherance of the road, interchange,
and right-of-way improvements.
(3) Demolition of commercial property and any related expenses
incurred before or after the demolition of the commercial
property.
(4) For physical improvements or alterations of property that
enhance the commercial viability of the district.
(d) (e) The commission in a city described in section 1(3) of this
chapter may distribute money from the fund only for the following
purposes:
(1) For road, interchange, and right-of-way improvements and for
real property acquisition costs in furtherance of the road,
interchange, and right-of-way improvements.
(2) For the demolition of commercial property and any related
expenses incurred before or after the demolition of the
commercial property.
(e) (f) The commission in a city described in section 1(4) of this
chapter may distribute money from the fund only for the following
purposes:
(1) For:
(A) the acquisition, demolition, and renovation of property;
and
(B) site preparation and financing;
related to the development of housing in the district.
(2) For physical improvements or alterations of property that
enhance the commercial viability of the district.
(g) The commission in a city described in section 1(5) of this
chapter may distribute money from the fund for any purpose for
which property tax proceeds allocated to a redevelopment district
may be expended under IC 36-7-14 or IC 36-7-15.1
SOURCE: IC 36-7-26-25; (06)HB1358.2.9. -->
SECTION 9. IC 36-7-26-25 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 25. The board may not
approve a resolution under section 16 of this chapter until the board has
satisfied itself that the city in which the proposed district will be
established has maximized the use of tax increment financing under
IC 36-7-14,
or IC 36-7-14.5,
or IC 36-7-15.1 to finance public
improvements within or serving the proposed district, subject to the
granting of an additional credit under IC 36-7-14-39.5,
IC 36-7-15.1-26.5, IC 36-7-15.1-35, or IC 36-7-15.1-56. The city may
not grant property tax abatements to the taxpayers within the proposed
district or a district, except that the board may approve a resolution
under section 16 of this chapter in the proposed district or a district in
which real property tax abatement not to exceed three (3) years has
been granted.
SOURCE: ; (06)HB1358.2.10. -->
SECTION 10. [EFFECTIVE JULY 1, 2006]
(a) Notwithstanding
IC 6-9-39-6, as added by this act, the fiscal body of:
(1) a city; or
(2) a county that contains a city;
in which an economic development project district has been
designated under IC 36-7-26-16 may adopt an ordinance
designating the economic development project district as a special
retail district after June 30, 2006, and before October 1, 2006.
(b) Notwithstanding IC 6-9-39-7, as added by this act, a
supplemental gross retail tax is imposed on the transactions
described in IC 6-9-39-8, as added by this act, that occur within the
special retail district designated in an ordinance adopted under this
SECTION and approved by the budget agency under IC 6-9-39-6,
as added by this act.
(c) Notwithstanding IC 6-9-39-7, as added by this act, a
supplemental gross retail tax imposed under this SECTION takes
effect January 1, 2007.
(d) This SECTION expires January 2, 2007.