Citations Affected: IC 4-10-21-6; IC 36-7-33.
Synopsis: Convention and visitor development area. Authorizes the
metropolitan development commission in Marion County to establish
a convention and visitor development area to allocate certain covered
taxes to the acquisition, construction, improving, and equipping of a
capital improvement that is used for the convention and visitor
industry.
Effective: July 1, 2004.
January 15, 2004, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1. IC 4-10-21-6, AS ADDED BY P.L.192-2002(ss),
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 6. The following expenditures that would
otherwise be subject to this chapter shall be excluded from all
computations and determinations related to a state spending cap:
(1) Expenditures derived from money deposited in the state
general fund, the property tax replacement fund, and the
counter-cyclical revenue and economic stabilization fund from
any of the following:
(A) Gifts.
(B) Federal funds.
(C) Dedicated funds.
(D) Intergovernmental transfers.
(E) Damage awards.
(F) Property sales.
(2) Expenditures for any of the following:
(A) Transfers of money among the state general fund, the
property tax replacement fund, and the counter-cyclical
revenue and economic stabilization fund.
(B) Reserve fund deposits.
(C) Refunds of intergovernmental transfers.
(D) Payment of judgments against the state and settlement
payments made to avoid a judgment against the state, other
than a judgment or settlement payment for failure to pay a
contractual obligation or a personnel expenditure.
(E) Distributions or allocations of state tax revenues to a unit
of local government under IC 36-7-13, IC 36-7-26, IC 36-7-27,
IC 36-7-31, or IC 36-7-31.3, or IC 36-7-33.
(F) Motor vehicle excise tax replacement payments that are
derived from amounts transferred to the state general fund
from the lottery and gaming surplus account of the build
Indiana fund.
(G) Distributions of state tax revenues collected under IC 7.1
that are payable to cities and towns.
SECTION 2. IC 36-7-33 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER [EFFECTIVE JULY 1, 2004]:
Chapter 33. Convention and Visitor Development Area in a
County Containing a Consolidated City
Sec. 1. This chapter applies only to a county having a
consolidated city.
Sec. 2. As used in this chapter, "capital improvement board"
refers to the capital improvement board of managers established
by IC 36-10-9-3.
Sec. 3. As used in this chapter, "commission" refers to the
metropolitan development commission acting as the redevelopment
commission of a consolidated city.
Sec. 4. As used in this chapter, "covered taxes" means the
following:
(1) The state gross retail tax imposed under IC 6-2.5-2-1 or
use tax imposed under IC 6-2.5-3-2.
(2) A county option income tax imposed under IC 6-3.5-6.
(3) An innkeeper's tax imposed under IC 6-9.
Sec. 5. As used in this chapter, "department" refers to the
department of state revenue.
Sec. 6. As used in this chapter, "fund" refers to the convention
and visitor development area fund for the county established by
section 11 of this chapter.
Sec. 7. As used in this chapter, "tax area" means a geographic
area established by a commission as a convention and visitor
development area under this chapter.
Sec. 8. (a) The commission may initially establish a convention
and visitor development area as a tax area before July 1, 2008,
according to the procedures set forth in IC 36-7-15.1 for the
establishment of an economic development area. A tax area may be
changed or the terms governing the tax area revised in the same
manner as the establishment of the initial tax area.
(b) Notwithstanding subsection (a), in establishing the tax area,
the commission must make the following findings instead of the
findings required for the establishment of an economic
development area:
(1) The cost of the improvements designated in the resolution
adopted under section 9 of this chapter exceeds five million
dollars ($5,000,000).
(2) The improvements to be undertaken will promote tourism
and the convention and visitor industry and serve the
commercial and cultural interests of Indiana and its citizens.
(3) The improvements to be undertaken are economically
sound and will benefit the public health and welfare and will
be of public utility and benefit.
(4) The improvements to be undertaken will protect or
increase state and local tax bases and tax revenues.
(c) The tax area established by the commission under this
chapter is a special taxing district authorized by the general
assembly to enable the county to provide special benefits to
taxpayers in the tax area by promoting economic development that
is of public use and benefit.
(d) A tax area may contain noncontiguous tracts of land within
the county.
Sec. 9. (a) A tax area must be established by resolution of the
commission. A resolution establishing a tax area must include a
provision for the allocation of covered taxes collected in the tax
area to the fund established under section 11 of this chapter. The
allocation provision must apply to the entire tax area. The
resolution must provide that the tax area terminates not later than
December 31, 2040.
(b) The total amount of state revenue captured by the tax area
may not exceed ten million dollars ($10,000,000) per year for
thirty-six (36) consecutive years.
(c) The resolution establishing a tax area must designate the
improvements to be undertaken in the tax area, which must include
the acquisition, construction, expansion, renovation, or equipping
(or any combination of these) of a hotel or similar facility serving
the convention and visitor industry, and the anticipated cost of the
improvements.
(d) Covered taxes shall be allocated to the fund on a date set
forth in the resolution of the commission, which shall be the first
day of the calendar month not earlier than sixty (60) days after
adoption of the resolution.
(e) The department may adopt rules under IC 4-22-2 and
guidelines to govern the allocation of covered taxes to a tax area.
Sec. 10. The commission shall notify the department by certified
mail of the adoption of a resolution under section 9 of this chapter
and shall include with the notification a complete list of the
following:
(1) Employers in the tax area.
(2) Street names and the range of street numbers of each
street in the tax area.
The commission shall update the list before July 1 of each year.
Sec. 11. A convention and visitor development area fund for the
county is established. The fund shall be administered by the
department. Money in the fund does not revert to the state general
fund at the end of a state fiscal year.
Sec. 12. Covered taxes attributable to a tax area established
under this chapter shall be deposited in the fund.
Sec. 13. On or before the twentieth day of each month, all
amounts held in the fund shall be distributed to the capital
improvement board.
Sec. 14. The department shall notify the county auditor of the
amount of covered taxes to be distributed to the capital
improvement board.
Sec. 15. All distributions from the fund shall be made by
warrants issued by the auditor of state to the treasurer of state
ordering the payments to the capital improvement board.
Sec. 16. The capital improvement board may use money
distributed from the fund for one (1) or more of the following
purposes:
(1) Acquisition, construction, improving, and equipping of a
capital improvement that is used for the convention and
visitor industry, including the financing or refinancing of a
capital improvement or the payment of lease payments for a
capital improvement.
(2) Deposit to a special fund or account of the commission for
the acquisition, construction, improving, or equipping of a
local public improvement in or serving the tax area, including
the financing or refinancing of a local public improvement or
the payment of lease payments for a local public
improvement.
Sec. 17. The capital improvement board shall repay to the fund
any amount that is distributed to the capital improvement board
and used for a purpose that is not described in section 16 of this
chapter. The department shall distribute the covered taxes repaid
to the fund under this section proportionately to the funds and the
political subdivisions that would have received the covered taxes if
the covered taxes had not been allocated to the tax area under this
chapter.
Sec. 18. The general assembly covenants that this chapter will
not be repealed or amended in any manner that will adversely
affect the owners of bonds secured in any manner by covered taxes
allocated under this chapter. This chapter expires December 31,
2040.
SECTION 3. [EFFECTIVE JULY 1, 2004] The general assembly
finds the following:
(1) Tourism and the convention and visitor business are
critical to successful economic development in a consolidated
city.
(2) Substantial opportunities exist for a consolidated city, by
virtue of its size and population, to attract convention and
visitor business if sufficient convention and visitor facilities
and related infrastructure are developed and available.
(3) The promotion of tourism and the convention and visitor
business in a consolidated city poses unique challenges due to
the need for development of substantial public and private
convention and visitor facilities and related infrastructure
necessary to attract conventions, trade shows, and other
events to a consolidated city.
(4) Encouragement of economic development, including
promotion of tourism and the convention and visitor business
in a consolidated city, will:
(A) generate significant economic activity, a substantial
portion of which results from persons residing outside
Indiana, which may attract new businesses and encourage
existing businesses to remain or expand in a consolidated
city;
(B) promote a consolidated city to residents outside
Indiana, which may attract residents outside Indiana and
new businesses to relocate to a consolidated city;
(C) protect and increase the state and local tax revenues;
and
(D) encourage overall economic growth in a consolidated
city and in Indiana.
(5) A consolidated city faces unique challenges in the
development of infrastructure and other facilities necessary
to promote economic development as a result of its need to
rely on sources of revenue other than property taxes, due to
the large number of tax exempt properties located in a
consolidated city because a consolidated city is the location of
government facilities, the home to multiple institutions of
higher education, and the site of numerous state and regional
nonprofit corporations.
(6) Economic development, including promotion of tourism
and the convention and visitor business, benefit the health and
welfare of the people of Indiana, are public uses and purposes
for which public money may be spent, and are of public utility
and benefit.
(7) The purpose of this act is to provide additional means for
a consolidated city to develop and finance substantial
convention and visitor facilities in order to encourage
economic development, including promotion of tourism and
the convention and visitor business, in a consolidated city.