HB 1374-1_ Filed 01/26/2000, 13:30

Text Box

Adopted Rejected


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COMMITTEE REPORT


                                                        YES:

25

                                                        NO:
0

MR. SPEAKER:

    Your Committee on       Ways and Means     , to which was referred       House Bill 1374     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

SOURCE: Page 1, line 1; (00)CR137401.1. -->     Page 1, between the enacting clause and line 1, begin a new paragraph and insert:
SOURCE: IC 4-4-8-1; (00)CR137401.1. -->     "SECTION 1. IC 4-4-8-1 , AS AMENDED BY P.L.227-1999, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 1. As used in this chapter:
    "Department" means the department of commerce.
    "Enterprise zone" means an enterprise zone created under IC 4-4-6.1.
    "Governing body" means the legislative body of a city, town, or county, an economic development commission, or any board administering the affairs of a special taxing district.
    "Industrial development program" means any program designed to aid the growth of industry in Indiana and includes:
        (1) the construction of airports, airport facilities, and tourist attractions;
        (2) the construction, extension, or completion of sewerlines, waterlines, streets, sidewalks, bridges, roads, highways, public ways, and information and high technology infrastructure (as defined in this section);
        (3) the leasing or purchase of property, both real and personal; and
        (4) the preparation of surveys, plans, and specifications for the construction of publicly owned and operated facilities, utilities, and services.
    "Information and high technology infrastructure" includes, but is not limited to, fiber optic cable and other infrastructure that supports high technology growth and the purchase and installation of such fiber optic cable and other infrastructure.
    "Minority enterprise small business investment company" means an investment company licensed under 15 U.S.C. 681(D).
    "Qualified entity" means a city, town, county, economic development commission, or special taxing district.
    "Small business investment company" means an investment company licensed under 15 U.S.C. 691 et seq.
    "State corporation" means the state corporation, as defined by IC 6-3.1-5-2.
SOURCE: IC 4-4-8-2; (00)CR137401.2. -->     SECTION 2. IC 4-4-8-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 2. (a) The general assembly finds that:
        (1) areas in Indiana have insufficient employment opportunities and insufficient diversification of industry;
        (2) these conditions are harmful to the health, prosperity, economic stability, and general welfare of these areas and, if not remedied, will be detrimental to the development of these areas; and
        (3) the use of money under this chapter and the fostering of industrial development programs serves a public purpose.
    (b) There is created a fund to be known as the industrial development fund from which fund loans may be made to qualified entities and small business investment companies and the state corporation in accordance with this chapter and the rules adopted under it. The administrative control of the fund and the responsibility for the administration of this chapter are vested jointly in the state board of

finance and the department. The department, subject to the approval of the state board of finance, may adopt rules for the proper administration of the fund and this chapter. The department, subject to the approval of the state budget agency, may employ personnel as necessary for the efficient administration of this chapter.

SOURCE: IC 4-4-8-3; (00)CR137401.3. -->     SECTION 3. IC 4-4-8-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 3. (a) There is appropriated to the industrial development fund from the general fund of the state two million dollars ($2,000,000). This sum does not revert to the general fund but constitutes a revolving fund to be used exclusively for the purpose of this chapter. The department, subject to the approval of the state board of finance, may order the auditor of state to make any approved loan from the revolving fund to any qualified entity (including the purchase of bonds of the qualified entity), any small business investment company, or minority enterprise small business investment company. or the state corporation.
    (b) A qualified entity may borrow funds from the department under this chapter and shall use the loan proceeds for the purpose of instituting and administering any approved industrial development program. The combined amount of any such outstanding loans to any one (1) program may not exceed one million dollars ($1,000,000). However, the one million dollar ($1,000,000) restriction in this subsection does not apply to an approved industrial development program in an economic development district established by a qualified entity under IC 6-1.1-39. A loan made under this chapter to an economic development commission is not a loan to or an obligation of the qualified entity that formed the commission, if the repayment of the loan is limited to a specified revenue source under section 8 of this chapter.
    (c) A small business investment company or minority enterprise small business investment company or the state corporation may use the loan proceeds for any lawful purpose.
    (d) Notwithstanding any other law (including IC 5-1-11 ) the loan to a qualified entity under this section may be directly negotiated with the department without public sale of bonds or other evidences of indebtedness of the qualified entity.
SOURCE: IC 4-4-8-5; (00)CR137401.4. -->     SECTION 4. IC 4-4-8-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 5. (a) The state board of

finance and the department shall authorize the making of a loan to any qualified entity under this chapter only when all of the following conditions exist:
        (1) An application for the loan has been submitted by the qualified entity, in a verified petition, to the state board of finance and the department in such manner and form as the state board of finance and the department direct, setting forth therein:
            (A) the need for the program and the need for funds for instituting and administering the program;
            (B) an engineering estimate of the cost of the proposed program acceptable to the state board of finance and the department;
            (C) the amount of money needed; and
            (D) such other information as is requested by the state board of finance and the department.
        (2) The proposed program has been approved by the state board of finance and the department, which they may do only if they have determined that the program is based upon sound engineering principles and is in the interest of industrial development.
        (3) The loan does not exceed one hundred percent (100%) of the cost to the qualified entity of any approved program, the cost of the program to be based upon an estimate made by a competent engineering authority and approved by the department.
        (4) The qualified entity has agreed to furnish assurance, satisfactory to the state board of finance and the department, that it will operate and maintain the program, after completion, in a satisfactory manner.
    (b) The state board of finance and the department shall authorize the making of a loan to any small business investment company or the state corporation under this chapter only if:
        (1) the small business investment company or minority enterprise small business investment company or the state corporation has loaned to or invested in a business located in an enterprise zone for a purpose directly related to the enterprise zone an amount that is at least twice the amount of the requested loan; and
        (2) the small business investment company or state corporation has submitted an application, before the beginning of the phase

out period of the enterprise zone, to the state board of finance and the department that shows the amount of the loan requested and any other information that is requested by the state board of finance and the department.

SOURCE: IC 4-4-8-7; (00)CR137401.5. -->     SECTION 5. IC 4-4-8-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 7. The state board of finance and the department shall determine and ascribe to any applicant for a loan a priority rating, which rating shall be based primarily on the need of the qualified entity for any such proposed program or on the need of the small business investment company or minority enterprise small business investment company or state corporation for the loan as such need is related to the needs of other applicants for loans. The qualified entities, small business investment companies, or minority enterprise small business investment company or state corporation having the highest priority rating shall be given first consideration in making loans under this chapter, which loans shall be made in descending order as shown by the priority ratings.
SOURCE: IC 4-4-8-10; (00)CR137401.6. -->     SECTION 6. IC 4-4-8-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 10. (a) If a qualified entity fails to make repayment of money lent under this chapter or is in any way indebted to the fund for any amounts incurred or accrued, the amount payable may be:
        (1) withheld by the auditor of state as set forth in the loan agreement with the qualified entity from any money payable to the qualified entity and transferred to the fund; or
        (2) recovered in an action by the state on relation of the department, prosecuted by the attorney general, in the circuit or superior court of the county in which the qualified entity is located.
    (b) If the state corporation or a small business investment corporation or a minority enterprise small business investment company fails to make repayment of money lent under this chapter or is in any way indebted to the fund for any amounts incurred or accrued, the amount payable may be recovered in an action by the state on relation of the department, prosecuted by the attorney general, in the circuit or superior court of the county in which the state corporation or small business investment corporation or a minority enterprise small business investment company is located.
SOURCE: IC 6-2.1-1-2; (00)CR137401.7. -->     SECTION 7. IC 6-2.1-1-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2001]: Sec. 2. (a) Except as expressly provided in this article, "gross income" means all the gross receipts a taxpayer receives:
        (1) from trades, businesses, or commerce;
        (2) as admission fees or charges;
        (3) from the sale, transfer, or exchange of property, real or personal, tangible or intangible;
        (4) from the performance of contracts;
        (5) as prizes or premiums;
        (6) from insurance policies;
        (7) as damages or judgments;
        (8) from the investment of capital, including interest, discounts, rentals, royalties, dividends, fees, and commissions;
        (9) from the surrender, sale, transfer, exchange, redemption of, or distribution upon, stock of corporations or associations; and
        (10) from any other source not specifically described in this subsection.
    (b) Except as provided in IC 6-2.1-4 , no deductions from a taxpayer's gross income may be taken for return of capital invested, cost of property sold, cost of materials used, labor costs, interest, discounts, commissions paid or credited, losses, or any other expense paid or credited.
    (c) The term "gross income" does not include:
        (1) the receipt or repayment of borrowed money;
        (2) receipts from the issuance or redemption of bonds;
        (3) amounts received as payment of the principal amount of a note taken in lieu of cash if:
            (A) the face value of the note was included in the taxpayer's gross income at the time of acceptance;
            (B) the note was taken before May 1, 1933; or
            (C) the note is a renewal of a note that was taken before May 1, 1933;
        (4) amounts received in payment of, or from the sale of, a promissory note or retail installment contract described in subsection (f) of this section to the extent the gross income tax has previously been paid for the receipt of the promissory note or retail installment contract;
        (5) amounts received as withdrawal of deposits to the extent they constitute principal;
        (6) gross receipts received by corporations incorporated under the laws of Indiana from a trade or business situated and regularly carried on at a legal situs outside Indiana or from activities incident to such trade or business (including the disposal of capital assets or other properties which were acquired and used in such trade or business);
        (7) that part of a commission received by a real estate broker that is paid within five (5) days of the receipt of the commission to a cooperating broker or to an associated broker or salesman;
        (8) amounts received by a corporation or a division of a corporation owned, operated, or controlled by its member electric cooperatives as payment from the electric cooperatives for electrical energy to be resold to their member-owner consumers;
        (9) amounts received by an association of members or a corporation as:
            (A) regularly paid dues, initiation fees, or membership fees paid for social membership; and
            (B) amounts paid to the organization by members if:
                (i) the organization is organized not for profit;
                (ii) such amounts are payable upon the death of a member and do not exceed one dollar ($1) payable by each surviving member at the death of any one (1) member;
                (iii) the number of members who are permitted to make such payments does not exceed one thousand seven hundred (1,700) at any one (1) time;
                (iv) the total amount paid to the beneficiary of any one (1) deceased member does not exceed one thousand dollars ($1,000); and
                (v) the amounts received are only for the purpose of paying reasonable expenses of the organization and payments to beneficiaries of deceased members;
        (10) amounts received as the corpus of an outright gift, devise, or bequest;
        (11) cash discounts allowed and taken on sales;
        (12) goods, wares, or merchandise, or the value thereof, returned by customers if the sale price is refunded either in cash or by

credit;
        (13) judgments for income that are not taxable under this article;
        (14) the receipt of capital by a corporation, partnership, firm, or joint venture from the sale of stock or shares in such corporation, partnership, firm, or joint venture, or contributions to the capital thereof;
        (15) the gross receipts represented by the value of real or tangible personal property received in reciprocal exchange for real or tangible personal property of like kind by and between the owners of the property to the extent of the value of the property or the interest therein of which title is surrendered;
        (16) the gross receipts represented by the value of stock of a corporation or association received in a reciprocal exchange by and between the owners of the stock (including the issuing corporation or association) for stock in the same corporation or association to the extent of the value of the stock or the interest therein of which title is surrendered;
        (17) the gross receipts represented by the value of bonds or similar securities issued by a corporation or association received in a reciprocal exchange by and between the owners of the bonds or securities (including the issuing corporation or association) for bonds or similar securities issued by the same corporation or association to the extent of the value of such bonds or similar securities or the interest therein of which title is surrendered;
        (18) the gross receipts represented by the value of stocks, bonds, or other securities received in a reciprocal exchange by and between the owners of the stocks, bonds, or other securities for other stocks, bonds, or other securities to the extent title is surrendered, if the exchange is made in the course of a consolidation, merger, or other reorganization and the stock, bonds, or other securities received are issued by one (1) or more corporations or associations that are each a party to the reorganization;
        (19) the gross receipts represented by the value of stocks, bonds, or other securities received in a reciprocal exchange by and between the owners thereof of substantially all of the assets of another corporation if the exchange is made in the course of a consolidation, merger, or other reorganization and the stocks,

bonds, or other securities received are issued by one (1) or more corporations or associations that are each a party to the reorganization;
        (20) in the case of insurance carriers, amounts that become or are used to maintain a reserve or other policy liability, to the extent the reserve or other policy liability is required to be maintained by the state of Indiana;
        (21) in the case of domestic insurance carriers, premium income that is derived from business conducted outside Indiana on which the domestic carrier pays a premium tax of one percent (1%) or more; and
        (22) amounts received by a joint agency established under IC 8-1-2.2 that constitutes a payment by a municipality that is a member of the joint agency for electrical energy that will be sold by the municipality to retail customers; and
         (23) oil inspection fees collected by licensed gasoline distributors under IC 16-44-2.
    (d) The exclusion provided by clause (6) of subsection (c) does not apply to any receipts of a taxpayer received as interest or dividends, from sales, other receipts from investments not acquired or disposed of in connection with the taxpayer's regular business, or to bonuses or commissions received by any taxpayer.
    (e) The exclusion provided by subsection (c) clause (14) does not apply to proceeds that are derived from subsequent transactions in stock of such corporations or organizations or in the interest or shares of the members of any organization.
    (f) The face amount of a retail installment contract or promissory note that is derived from the selling, providing, repairing, working with or on, or servicing of any personal property, or any combination of the foregoing, is includable in a taxpayer's gross income upon receipt. However, any part of a retail installment contract or promissory note that represents insurance premiums or consideration which the retail buyer contracts to pay the retail seller for the privilege of paying the principal balance in installments over a period of time is includable in a taxpayer's gross income when received.
    (g) For purposes of this section:
        (1) "Exchange" means the transfer of title or ownership by means of a transaction involving the barter or swap of property acquired

prior to the exchange, by and between the owners of that property, with or without additional consideration. However, the term "exchange" does not include:
            (A) any sale of property even though other property is purchased with the proceeds of the sale;
            (B) any barter or swap of property where there are more than two (2) parties to the transaction; or
            (C) any transaction where the property exchanged is acquired by one (1) party to the transaction as a result of negotiation or arrangement with the other party with the intent of effectuating an exchange of the property so acquired.
        (2) "Like kind" means property of the same class and kind and has no reference to the grade or quality of such property.".

SOURCE: Page 2, line 20; (00)CR137401.2. -->     Page 2, line 20, delete "five" and insert " seven".
    Page 2, line 21, after "thousand" insert " five hundred".
    Page 2, line 21, delete "($5,000)" and insert " ($7,500)".
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    Page 63, delete lines 7 through 42.
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    Page 64, between lines 13 and 14, begin a new paragraph and insert:
SOURCE: IC 6-3.1-5; IC 6-3.1-6.".
; (00)CR137401.89. -->     "SECTION 89. THE FOLLOWING ARE REPEALED [EFFECTIVE JANUARY 1, 2001]: IC 6-3.1-5 ; IC 6-3.1-6.".
SOURCE: Page 64, line 24; (00)CR137401.64. -->     Page 64, between lines 24 and 25, begin a new paragraph and insert:
SOURCE: ; (00)CR137401.92. -->     "SECTION 92. [EFFECTIVE UPON PASSAGE] IC 6-3-1-3.5 , as amended by this act, applies to taxable years beginning after December 31, 1999.".
    Renumber all SECTIONS consecutively.
    (Reference is to HB 1374 as introduced.)

and when so amended that said bill do pass.

__________________________________

Representative Bauer


CR137401/DI 58    2000