HB 1480-1_ Filed 03/29/2001, 15:05

COMMITTEE REPORT

MR. PRESIDENT:

    The Senate Committee on Finance, to which was referred House Bill No. 1480, has had the same under consideration and begs leave to report the same back to the Senate with the recommendation that said bill be AMENDED as follows:

SOURCE: Page 5, line 23; (01)CR148002.5. -->     Page 5, delete lines 23 through 42, begin a new paragraph and insert:
SOURCE: IC 6-1.1-12-40; (01)CR148002.7. -->     "SECTION 7. IC 6-1.1-12-40 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 40. (a) As used in this section, "assessed value of inventory" means the assessed value determined after the application of any deductions or adjustments that apply by statute or rule to the assessment of inventory, other than the deduction established in subsection (e).
    (b) As used in this section, "county income tax council" means a council established by IC 6-3.5-6-2.
    (c) As used in this section, "fiscal body" has the meaning set forth in IC 36-1-2-6.
    (d) As used in this section, "inventory" has the meaning set forth in IC 6-1.1-3-11.
    (e) Except as provided in subsection (j), a deduction applies to the assessed value of inventory. If the county fiscal body or county income tax council does not take action under subsection (f), the deduction is equal to a percentage of the assessed value of inventory for the appropriate year of assessment as follows:


    YEAR OF ASSESSMENT     PERCENTAGE
    2002    10%
    2003    20%
    2004    30%
    2005    40%
    2006    50%
    2007    60%
    2008    70%
    2009    80%
    2010    90%
    2011 and thereafter            100%
    (f) An ordinance may be adopted before January 1, 2002, to provide that:
        (1) the percentage of the deduction established in subsection (e) is one hundred percent (100%) for the 2002 year of assessment and thereafter;
        (2) the percentage of the deduction established in subsection (e) reaches one hundred percent (100%) within a period between two (2) years and nine (9) years under the appropriate schedule in subsection (i); or
        (3) the deduction established in subsection (e) does not apply for any year of assessment.
    (g) The entity that may adopt the ordinance under subsection (f) is:
        (1) the county income tax council if the county option income tax is in effect on January 1, 2001;
        (2) the county fiscal body if the county adjusted gross income tax is in effect on January 1, 2001; or
        (3) the county income tax council or the county fiscal body, whichever acts first, for a county not covered by subdivision (1) or (2).
To adopt an ordinance under subsection (f), 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. The entity that adopts the ordinance shall provide a certified copy of the ordinance to the state board of tax commissioners before February 1, 2002.
    (h) If an ordinance is adopted under subsection (f)(1), the deduction established in subsection (e) applies in the amount of one

hundred percent (100%) for the 2002 assessment year and thereafter.
    (i) If an ordinance is adopted under subsection (f)(2), the percentage to be used to determine the amount of the deduction established in subsection (e) is the percentage derived from the following table that corresponds to the period of years established in the ordinance over which the deduction reaches one hundred percent (100%):
        (1) Period of nine (9) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    11%
    2003    22%
    2004    33%
    2005    44%
    2006    55%
    2007    66%
    2008    77%
    2009    88%
    2010 and thereafter            100%
        (2) Period of eight (8) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    13%
    2003    25%
    2004    38%
    2005    50%
    2006    63%
    2007    75%
    2008    88%
    2009 and thereafter            100%
        (3) Period of seven (7) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    14%
    2003    28%
    2004    43%
    2005    57%
    2006    71%
    2007    85%
    2008 and thereafter            100%


        (4) Period of six (6) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    17%
    2003    33%
    2004    50%
    2005    67%
    2006    83%
    2007 and thereafter            100%
        (5) Period of five (5) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    20%
    2003    40%
    2004    60%
    2005    80%
    2006 and thereafter            100%
        (6) Period of four (4) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    25%
    2003    50%
    2004    75%
    2005 and thereafter            100%
        (7) Period of three (3) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    33%
    2003    67%
    2004 and thereafter            100%
        (8) Period of two (2) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    2002    50%
    2003 and thereafter            100%
    (j) If an ordinance is adopted under subsection (f)(3), the deduction established in subsection (e) does not apply for any assessment year.
    (k) A taxpayer is not required to file an application to qualify for the deduction established in subsection (e).
    (l) The state board of tax commissioners shall incorporate the deduction established in this section in the personal property return form to be used each year for filing under IC 6-1.1-3-7 or

IC 6-1.1-3-7.5 to permit the taxpayer to enter the deduction on the form. If a taxpayer fails to enter the deduction on the form, the township assessor shall:
        (1) determine the amount of the deduction; and
        (2) within the period established in IC 6-1.1-16-1 , issue a notice of assessment to the taxpayer that reflects the application of the deduction to the inventory assessment.
    (m) The deduction established in this section must be applied to any inventory assessment made by:
        (1) an assessing official;
        (2) a county property tax assessment board of appeals; or
        (3) the state board of tax commissioners.

SOURCE: IC 6-1.1-12-41; (01)CR148002.8. -->     SECTION 8. IC 6-1.1-12-41 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2002]: Sec. 41. (a) This section applies to a county that adopted an ordinance under section 40(f)(3) of this chapter before January 1, 2002.
    (b) The definitions set forth in section 40 of this chapter apply throughout this section.
    (c) A county that adopted an ordinance under section 40(f)(3) of this chapter before January 1, 2002, may adopt an ordinance to:
        (1) rescind the ordinance adopted under section 40(f)(3) of this chapter;
        (2) establish a deduction that applies to the assessed value of inventory; and
        (3) specify that the deduction:
            (A) is equal to one hundred percent (100%) of the assessed value of inventory, beginning in the year following adoption of the ordinance and each year thereafter; or
            (B) reaches one hundred percent (100%) of the assessed value of inventory within a period between the second and tenth year following the year in which the ordinance is adopted, according to the appropriate schedule set forth in subsection (e).
    (d) The entity that may adopt the ordinance under subsection (c) is:
        (1) the county income tax council if the county option income tax is in effect in the county;


        (2) the county fiscal body if the county adjusted gross income tax is in effect in the county; or
        (3) the county income tax council or the county fiscal body, whichever acts first, for a county not covered by subdivision (1) or (2).
To adopt an ordinance under subsection (c), 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. The entity that adopts the ordinance shall provide a certified copy of the ordinance to the state board of tax commissioners within thirty (30) days after adoption of the ordinance.
    (e) If an ordinance adopted under subsection (c) specifies that the deduction reaches one hundred percent (100%) of the assessed value of inventory within a period between the second and tenth year following the year in which the ordinance is adopted, the percentage to be used to determine the amount of the deduction for assessments made in each year following the year in which the ordinance is adopted is the percentage derived from the following table that corresponds to the period of years established in the ordinance over which the deduction reaches one hundred percent (100%):
        (1) Period of ten (10) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    10%
    2d    20%
    3rd    30%
    4th    40%
    5th    50%
    6th    60%
    7th    70%
    8th    80%
    9th    90%
    10th and thereafter            100%
        (2) Period of nine (9) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    11%
    2nd    22%
    3rd    33%
    4th    44%
    5th    55%
    6th    66%
    7th    77%
    8th    88%
    9th and thereafter            100%
        (3) Period of eight (8) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    13%
    2nd    25%
    3rd    38%
    4th    50%
    5th    63%
    6th    75%
    7th    88%
    8th and thereafter            100%
        (4) Period of seven (7) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    14%
    2nd    28%
    3rd    43%
    4th    57%
    5th    71%
    6th    85%
    7th and thereafter            100%
        (5) Period of six (6) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    17%
    2nd    33%
    3rd    50%
    4th    67%
    5th    83%
    6th and thereafter            100%
        (6) Period of five (5) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    20%
    2nd    40%
    3rd    60%
    4th    80%
    5th and thereafter            100%
        (7) Period of four (4) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    25%
    2nd    50%
    3rd    75%
    4th and thereafter            100%
        (8) Period of three (3) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    33%
    2nd    67%
    3rd and thereafter            100%
        (9) Period of two (2) years:
    YEAR OF ASSESSMENT     PERCENTAGE
    1st    50%
    2nd and thereafter            100%
    (f) A taxpayer is not required to file an application to qualify for a deduction established under this section.
    (g) The state board of tax commissioners shall incorporate a deduction established under this section in the personal property return form to be used each year for filing under IC 6-1.1-3-7 or IC 6-1.1-3-7.5 to permit the taxpayer to enter the deduction on the form. If a taxpayer fails to enter the deduction on the form, the township assessor shall:
        (1) determine the amount of the deduction; and
        (2) within the period established in IC 6-1.1-16-1 , issue a notice of assessment to the taxpayer that reflects the application of the deduction to the inventory assessment.
    (h) The deduction established in this section must be applied to any inventory assessment made by:
        (1) an assessing official;
        (2) a county property tax assessment board of appeals; or
        (3) the state board of tax commissioners.
".
SOURCE: Page 13, line 5; (01)CR148002.13. -->     Page 13, between lines 5 and 6, begin a new paragraph and insert:
SOURCE: IC 6-2.5-11; (01)CR148002.11. -->     "SECTION 11. IC 6-2.5-11 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]:
     Chapter 11. Simplified Sales and Use Tax Administration Act
    Sec. 1.
This chapter shall be known as and referred to as the "simplified sales and use tax administration act".
    Sec. 2. As used in this chapter:
        (1) "Agreement" means the Streamlined Sales and Use Tax Agreement.
        (2) "Certified automated system" means software certified jointly by the states that are signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction, to determine the amount of tax to remit to the appropriate state, and to maintain a record of the transaction.
        (3) "Certified service provider" means an agent certified jointly by the states that are signatories to the agreement to perform all of the seller's sales tax functions.
        (4) "Person" means an individual, a trust, an estate, a fiduciary, a partnership, a limited liability company, a limited liability partnership, a corporation, or any other legal entity.
        (5) "Sales tax" means the state gross retail tax levied under IC 6-2.5.
        (6) "Seller" means any person making sales, leases, or rentals of personal property or services.
        (7) "State" means any state of the United States and the District of Columbia.
        (8) "Use tax" means the use tax levied under IC 6-2.5.
    Sec. 3. The general assembly finds that a simplified sales and use tax system will reduce and over time eliminate the burden and cost for all vendors to collect this state's sales and use tax. The general assembly further finds that this state should participate in multistate discussions to review, amend, or review and amend the terms of the agreement to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and all types of commerce.
    Sec. 4. (a) For the purposes of reviewing, amending, or reviewing and amending the agreement embodying the simplification requirements set forth in section 7 of this chapter, the state shall enter into multistate discussions. For purposes of those discussions, the state shall be represented by four (4) delegates, appointed as follows:
        (1) One (1) member of the house of representatives, appointed by the speaker of the house of representatives.
        (2) One (1) member of the senate, appointed by the president pro tempore of the senate.
        (3) One (1) individual appointed by the governor.
        (4) The commissioner of the department of state revenue, who is an ex officio member.
A delegate appointed under subdivisions (1) through (3) serves at the pleasure of the officer who appointed that delegate.
    (b) Each delegate who is not a state employee is entitled to the minimum salary per diem provided by IC 4-10-11-2.1 (b). The delegate is also entitled to reimbursement for traveling expenses as provided under IC 4-13-1-4 and other expenses actually incurred in connection with the delegate's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency. Expenses incurred under this subsection shall be paid out of the funds appropriated to the department of commerce or the civil rights commission.
    (c) Each delegate who is a state employee but who is not a member of the general assembly is entitled to reimbursement for traveling expenses as provided under IC 4-13-1-4 and other expenses actually incurred in connection with the delegate's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency.
    (d) Each delegate who is a member of the general assembly is entitled to receive the per diem, mileage, and travel allowances paid to members of the general assembly under travel policies established by the legislative council. Per diem, mileage, and travel allowances paid under this subsection shall be paid from appropriations made to the legislative council or the legislative services agency.
    Sec. 5. The department may enter into the agreement with one (1) or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce. In furtherance of the agreement, the department may act jointly with

other states that are members of the agreement to establish standards for certification of certified service providers and certified automated systems and to establish performance standards for multistate sellers. The department may take other actions reasonably required to implement this chapter. Other actions authorized by this section include, but are not limited to, the adoption of rules and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement. The department or the department's designee shall represent the state of Indiana before the other states that are signatories to the agreement.
    Sec. 6. No provision of the agreement authorized by this chapter in whole or in part invalidates or amends any provision of the law of Indiana. Adoption of the agreement by the state of Indiana does not amend or modify any Indiana law. Implementation of any condition of the agreement in Indiana, whether adopted before, at, or after membership of this state in the agreement, must be by the action of this state.
    Sec. 7. The department shall not enter into the agreement unless the agreement requires each state to abide by the following requirements:
        (1) Simplified State Rate. The agreement must set restrictions to limit over time the number of state rates.
        (2) Uniform Standards. The agreement must establish uniform standards for the following:
            (A) The sourcing of transactions to taxing jurisdictions.
            (B) The administration of exempt sales.
            (C) Sales and use tax returns and remittances.
        (3) Central Registration. The agreement must provide a central electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.
        (4) No Nexus Attribution. The agreement must provide that registration with the central registration system and the collection of sales and use taxes in the signatory states will not be used as a factor in determining whether the seller has nexus with a state for any tax.
        (5) Local Sales and Use Taxes. The agreement must provide for

reduction of the burdens of complying with local sales and use taxes through the following:
            (A) Restricting variances between the state and local tax bases.
            (B) Requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes will not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions.
            (C) Restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes.
            (D) Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.
        (6) Monetary Allowances. The agreement must outline any monetary allowances that are to be provided by the states to sellers or certified service providers. The agreement must allow for a joint public and private sector study of the compliance cost on sellers and certified service providers to collect sales and use taxes for state and local governments under various levels of complexity to be completed on or before July 1, 2002.
        (7) State Compliance. The agreement must require each state to certify compliance with the terms of the agreement before joining and to maintain compliance, under the laws of the member state, with all provisions of the agreement while the state is a member.
        (8) Consumer Privacy. The agreement must require each state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information.
        (9) Advisory Councils. The agreement must provide for the appointment of an advisory council of private sector representatives and an advisory council of nonmember state representatives to consult in the administration of the agreement.


    Sec. 8. The agreement authorized by this chapter is an accord among individual cooperating sovereign states in furtherance of their governmental functions. The agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the duly adopted law of each member state.
    Sec. 9. (a) The agreement authorized by this chapter binds and inures only to the benefit of the state of Indiana and the other member states. No person, other than a member state, is an intended beneficiary of the agreement. Any benefit to a person other than a state is established by the law of the state of Indiana and the other member states and not by the terms of the agreement.
    (b) Consistent with subsection (a), no person shall have any cause of action or defense under the agreement or by virtue of the state of Indiana's approval of the agreement. No person may challenge, in any action brought under any provision of law, any action or inaction by any department, agency, or other instrumentality of the state of Indiana, or any political subdivision of the state of Indiana on the grounds that the action or inaction is inconsistent with the agreement.
    (c) No law of Indiana, or the application thereof, may be declared invalid as to any person or circumstance on the grounds that the provision or application is inconsistent with the agreement.
    Sec. 10. (a) A certified service provider is the agent of a seller, with whom the certified service provider has contracted, for the collection and remittance of sales and use taxes. As the seller's agent, the certified service provider is liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this section. A seller that contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on the transactions processed by the certified service provider. A seller is

subject to audit for transactions not processed by the certified service provider. The member states acting jointly may perform a system check of the seller and review the seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider.
    (b) A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system remains responsible and is liable to the state for reporting and remitting tax.
    (c) A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the system to meet the performance standard.
".
SOURCE: Page 25, line 30; (01)CR148002.25. -->     Page 25, line 30, delete "," and insert " or (j),".
    Page 26, line 9, delete "In" and insert " Except as provided in subsection (j), in".
    Page 26, line 23, after "(37,800)," insert " except as provided in subsection (j),".
    Page 26, line 29, after "(13,000)," insert " except as provided in subsection (j),".
    Page 26, delete lines 33 through 42, begin a new paragraph and insert:
    " (j) In a county in which an ordinance adopted under IC 6-1.1-12-40 (f)(3) is not in effect:
        (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) the:
                (i) county option income tax; or
                (ii) 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.
    (k) If the county economic development income tax is imposed as authorized under subsection (j) 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 24(f) 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.
".
    Page 27, delete lines 1 through 3.
    Page 27, line 5, delete "The" and insert " Except as provided in section 5(j) of this chapter, the".
    Page 27, line 9, delete "The" and insert " Except as provided in section 5(j) of this chapter, the".
    Page 27, delete lines 39 through 42, begin a new paragraph and insert:
SOURCE: IC 6-3.5-7-12; (01)CR148002.34. -->     "SECTION 34. IC 6-3.5-7-12 , AS AMENDED BY P.L.14-2000, SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 12. (a) Except as provided in section sections 23 and 24 of this chapter, the county auditor shall distribute in the manner specified in this section the certified distribution to the county.
    (b) Except as provided in subsections (c) and (h) and section sections 15 and 24 of this chapter, the amount of the certified distribution that the county and each city or town in a county is entitled to receive during May and November of each year equals the product of the following:
        (1) The amount of the certified distribution for that month; multiplied by
        (2) A fraction. The numerator of the fraction equals the sum of the following:
            (A) Total property taxes that are first due and payable to the county, city, or town during the calendar year in which the month falls; plus
            (B) For a county, an amount equal to the property taxes imposed by the county in 1999 for the county's welfare fund and welfare administration fund.
        The denominator of the fraction equals the sum of the total

property taxes that are first due and payable to the county and all cities and towns of the county during the calendar year in which the month falls, plus an amount equal to the property taxes imposed by the county in 1999 for the county's welfare fund and welfare administration fund.
    (c) This subsection applies to a county council or county income tax council that imposes a tax under this chapter after June 1, 1992. The body imposing the tax may adopt an ordinance before July 1 of a year to provide for the distribution of certified distributions under this subsection instead of a distribution under subsection (b). The following apply if an ordinance is adopted under this subsection:
        (1) The ordinance is effective January 1 of the following year.
        (2) Except as provided in section 24 of this chapter, the amount of the certified distribution that the county and each city and town in the county is entitled to receive during May and November of each year equals the product of:
            (A) the amount of the certified distribution for the month; multiplied by
            (B) a fraction. For a city or town, the numerator of the fraction equals the population of the city or the town. For a county, the numerator of the fraction equals the population of the part of the county that is not located in a city or town. The denominator of the fraction equals the sum of the population of all cities and towns located in the county and the population of the part of the county that is not located in a city or town.
        (3) The ordinance may be made irrevocable for the duration of specified lease rental or debt service payments.
    (d) The body imposing the tax may not adopt an ordinance under subsection (c) if, before the adoption of the proposed ordinance, any of the following have pledged the county economic development income tax for any purpose permitted by IC 5-1-14 or any other statute:
        (1) The county.
        (2) A city or town in the county.
        (3) A commission, a board, a department, or an authority that is authorized by statute to pledge the county economic development income tax.
    (e) The state board of tax commissioners shall provide each county auditor with the fractional amount of the certified distribution that the

county and each city or town in the county is entitled to receive under this section.
    (f) Money received by a county, city, or town under this section shall be deposited in the unit's economic development income tax fund.
    (g) Except as provided in subsection (b)(2)(B), in determining the fractional amount of the certified distribution the county and its cities and towns are entitled to receive under subsection (b) during a calendar year, the state board of tax commissioners shall consider only property taxes imposed on tangible property subject to assessment in that county.
    (h) In a county having a consolidated city, only the consolidated city is entitled to the certified distribution, subject to the requirements of section sections 15 and 24 of this chapter.
SOURCE: IC 6-3.5-7-13.1; (01)CR148002.35. -->     SECTION 35. IC 6-3.5-7-13.1 , AS AMENDED BY P.L.124-1999, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: 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 section sections 23 and 24 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, and 23, and 24 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.
    (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.
SOURCE: IC 6-3.5-7-15; (01)CR148002.36. -->     SECTION 36. IC 6-3.5-7-15 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 15. (a) The executive of a county, city, or town may, subject to the use of the certified distribution permitted under section 24 of this chapter:
        (1) adopt a capital improvement plan specifying the uses of the revenues to be received under this chapter; or
        (2) designate the county or a city or town in the county as the recipient of all or a part of its share of the distribution.
    (b) If a designation is made under subsection (a)(2), the county treasurer shall transfer the share or part of the share to the designated unit unless that unit does not have a capital improvement plan.
    (c) A county, city, or town that fails to adopt a capital improvement plan may not receive:
        (1) its fractional amount of the certified distribution; or
        (2) any amount designated under subsection (c)(2);
for the year or years in which the unit does not have a plan. The county treasurer shall retain the certified distribution and any designated distribution for such a unit in a separate account until the unit adopts a plan. Interest on the separate account becomes part of the account. If a unit fails to adopt a plan for a period of three (3) years, then the balance in the separate account shall be distributed to the other units in the county based on property taxes first due and payable to the units during the calendar year in which the three (3) year period expires.
    (d) A capital improvement plan must include the following components:
        (1) Identification and general description of each project that would be funded by the county economic development income tax.
        (2) The estimated total cost of the project.
        (3) Identification of all sources of funds expected to be used for each project.
        (4) The planning, development, and construction schedule of each project.
    (e) A capital improvement plan:
        (1) must encompass a period of no less than two (2) years; and
        (2) must incorporate projects the cost of which is at least seventy-five percent (75%) of the fractional amount certified distribution expected to be received by the county, city, or town in that period of time.
    (f) In making a designation under subsection (a)(2), the executive must specify the purpose and duration of the designation. If the designation is made to provide for the payment of lease rentals or bond payments, the executive may specify that the designation and its duration are irrevocable.
SOURCE: IC 6-3.5-7-24; (01)CR148002.37. -->     SECTION 37. IC 6-3.5-7-24 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 24. (a) For purposes of this section, "imposing entity" means the entity that adopted the county economic development income tax under section 5 of this chapter.
    (b) Except as provided in subsection (e), the imposing entity may adopt an ordinance to provide for the use of all or a part of the certified distribution (other than the
part of the certified distribution identified in IC 6-3.5-7-5 (k)) for the purpose provided in subsection (f). If the county economic development income tax was imposed at a rate authorized by IC 6-3.5-7-5 (j)(1), the imposing entity must adopt an ordinance to:
        (1) designate whether any of the certified distribution (other than the
part of the certified distribution identified in IC 6-3.5-7-5 (k)) will be used for the purpose provided in subsection (f); and
        (2) provide for the use of the part of the certified distribution identified in IC 6-3.5-7-5 (k) for the purpose provided in subsection (f).
A county income tax council that adopts an ordinance under this subsection shall use the procedures set forth in IC 6-3.5-6 concerning the adoption of an ordinance for the imposition of the county option income tax. An ordinance may be adopted under this subsection after January 1 but before April 1 of a calendar year.
    (c) An ordinance adopted under subsection (b):
        (1) first applies to the certified distribution made in the calendar year that immediately succeeds the calendar year in which the ordinance is adopted;
        (2) must specify the calendar years to which the ordinance applies; and
        (3) must specify the percentage of the certified distribution to be used for the purpose provided in subsection (f).
    (d) If an ordinance is adopted under subsection (b), the percentage of the certified distribution specified in the ordinance for use for the purpose provided in subsection (f) shall be:
        (1) retained by the county auditor under subsection (h); and
        (2) used for the purpose provided in subsection (f) instead of the purposes specified in the capital improvement plans adopted under section 15 of this chapter.
    (e) The imposing entity may not provide in an ordinance adopted under subsection (b) for the use of the certified distribution under this section:
        (1) to the extent that the certified distribution is pledged as described in section 12(d) of this chapter; or
        (2) if an ordinance adopted under IC 6-1.1-12-40 (f)(3) is in effect.

     (f) The imposing entity may, in the ordinance adopted under subsection (b), determine to use all or a part of the certified distribution to increase the percentage credit allowed for homesteads in the county under IC 6-1.1-20.9-2 for a year. If an ordinance is adopted under subsection (b), the county auditor shall, for each calendar year in which an increased homestead credit percentage is authorized under this section, determine:
        (1) the amount of the certified distribution that will be dedicated to an increased homestead credit percentage for the year;
        (2) the amount of uniformly applied homestead credits for the year for all homesteads in the county that equals the amount determined under subdivision (1); and
        (3) the increased percentage of homestead credit that equates to the amount of homestead credits determined under subdivision (2).
    (g) The increased percentage of homestead credit determined by

the county auditor under subsection (f) applies uniformly for all homesteads in the county in the calendar year for which the increased percentage is determined.
    (h) The county auditor shall retain from the payments of the county's certified distribution an amount equal to the revenue lost, if any, due to the increase of the homestead credit within the county. The money shall be distributed to the civil taxing units and school corporations of the county:
        (1) as if the money were from property tax collections: and
        (2) in such a manner that no civil taxing unit or school corporation will suffer a net revenue loss because of the allowance of an increased homestead credit.
".
    Delete page 28.
SOURCE: Page 29, line 1; (01)CR148002.29. -->     Page 29, delete lines 1 through 14.
    Page 64, delete lines 21 through 42.
    Page 65, delete lines 1 through 18.
    Page 65, between lines 25 and 26, begin a new line block indented and insert:
        " (3) A city having a population of more than one hundred fifty thousand (150,000) but less than five hundred thousand (500,000).".
    Page 65, line 41, after "1(2)" insert " or 1(3)".
    Page 66, line 40, after "1(2)" insert " or 1(3)".
    Page 66, line 42, after "1(2)" insert " or 1(3)".
    Page 67, line 3, after "1(2)" insert " or 1(3)".
    Page 67, between lines 32 and 33, begin a new paragraph and insert:
    " (d) 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.
".
    Page 68, delete lines 3 through 11, begin a new paragraph and insert:
SOURCE: ; (01)CR148002.92. -->     "SECTION 92. [EFFECTIVE JANUARY 1, 2002] (a) IC 6-1.1-12-40 , as added by this act, applies to inventory

assessments after December 31, 2001.
    (b) This SECTION expires January 1, 2004.
".
    Renumber all SECTIONS consecutively.
    (Reference is to HB 1480 as reprinted February 23, 2001.)

and when so amended that said bill do pass.

Committee Vote: Yeas 14, Nays 0.

____________________________________

    Borst
Chairperson


CR148002/DI 101    2001