Introduced Version
HOUSE BILL No. 1948
_____
DIGEST OF INTRODUCED BILL
Citations Affected:
IC 6-2.1-3-16
;
IC 6-2.1-3-16.5.
Synopsis: Gross income tax exemptions. Provides that amounts
received from the sale, lease, or other transfer by or to an electric utility
or a general district REMC of an interest in an electric generating
facility that at the time of the sale, lease, or transfer is subject, at least
in part, to certain "safe harbor" sale-leaseback provisions under the
Internal Revenue Code is exempt from gross income tax to the extent
of any mortgage, security interest, or similar encumbrance on the
interest in the facility. Provides an exemption from the gross income
tax for amounts received under a "qualified investment" that is
acquired for the purpose of enabling a lessee to pay the basic rent and
exercise price of a purchase option under the lease of an interest in an
electric generating facility that, at least in part, is subject to "safe
harbor" sale-leaseback provisions of the Internal Revenue Code.
Effective: January 1, 2001 (retroactive).
Welch, Crosby
January 17, 2001, read first time and referred to Committee on Ways and Means.
Introduced
First Regular Session 112th General Assembly (2001)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
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NEW will appear in that style type in the introductory clause of each SECTION that adds
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HOUSE BILL No. 1948
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 6-2.1-3-16; (01)IN1948.1.1. -->
SECTION 1.
IC 6-2.1-3-16
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2001 (RETROACTIVE)]:
Sec. 16. (a) Except as provided in subsection
(b), (c), amounts received
from sales of real estate are exempt from gross income tax to the extent
of any mortgage or other similar encumbrance that exists on the real
estate at the time of its sale.
(b)
Except as provided in subsection (c), amounts received from
the sale, lease, or other transfer by or to an electric utility (as
defined in
IC 8-1-2-1
) or a general district corporation (as defined
in
IC 8-1-13-23
(a)) of an interest in an electric generating facility
(and auxiliary equipment, if any) that at the time of the sale, lease,
or transfer is subject, in whole or in part, to one (1) or more leases
entered into under Section 168(f)(8) of the Internal Revenue Code
of 1954 (as in effect from time to time) are exempt from gross
income tax to the extent of any mortgage, security interest, or
similar encumbrance that exists on the interest in the electric
generating facility (and auxiliary equipment, if any) at the time of
the sale, lease, or transfer.
(c) The exemption exemptions provided by this section does do not
apply to any mortgage, security interest, or encumbrance created for
the purpose of avoiding gross income tax liability.
SOURCE: IC 6-2.1-3-16.5; (01)IN1948.1.2. -->
SECTION 2.
IC 6-2.1-3-16.5
IS ADDED TO THE INDIANA
CODE AS A
NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2001 (RETROACTIVE)]:
Sec. 16.5. (a)
As used in this section, "affiliate" means a corporation,
partnership, limited liability company, or trust that controls, is
controlled by, or is under common control with another
corporation, partnership, limited liability company, or trust. For
purposes of this section, an entity controls another entity if the first
entity directly or indirectly owns at least eighty percent (80%) of
the outstanding voting stock or other equivalent voting interests of
the second entity.
(b) As used in this section, "investment" means:
(1) a loan or deposit made by; or
(2) an investment contract or payment agreement purchased
by;
a qualified lessee.
(c) As used in this subsection, "qualified investment" means the
following:
(1) An investment or group of investments in which the
amount payable on the investment or group of investments is
substantially identical to the amount of cash needed by a
qualified lessee to pay (and the investment or group of
investments has been acquired by a qualified lessee for the
purpose of enabling the qualified lessee to pay):
(A) the remaining basic rent under a qualified lease; and
(B) the exercise price of any purchase option (whether or
not ultimately exercised) that is contained in a qualified
lease.
(2) An investment or group of investments that is made or
purchased to replace part or all of any existing qualified
investment.
(d) As used in this section, "qualified lease" means the lease of
an interest in an electric generating facility (and auxiliary
equipment, if any), where the property is subject (at the
commencement of the lease), in whole or in part, to one (1) or more
leases previously entered into under Section 168(f)(8) of the
Internal Revenue Code of 1954 (as in effect from time to time).
(e) As used in this section, "qualified lessee" means a person
who is a lessee under a qualified lease or is an affiliate of a person
who is a lessee under a qualified lease.
(f) Gross income received by a qualified lessee from a qualified
investment is exempt from gross income tax.
SOURCE: ; (01)IN1948.1.3. -->
SECTION 3. [EFFECTIVE JANUARY 1, 2001 (RETROACTIVE)]
IC 6-2.1-3-16
, as amended by this act, and
IC 6-2.1-3-16.5
, as added
by this act, apply to taxable years beginning after December 31,
2000.
SOURCE: ; (01)IN1948.1.4. -->
SECTION 4.
An emergency is declared for this act.