Citations Affected: IC 2-5; IC 4-3; IC 6-2.5; IC 6-3.1; IC 6-3.5; IC 27-5.1; noncode.
Synopsis: Various economic development matters. Establishes a process by which the small business coordinator may submit comments about the impact of a proposed bill to the office of management and budget (OMB). Authorizes the OMB to review the comments. Requires, after review by the OMB, the comments to be posted to the general assembly's web site by the legislative services agency. Provides that certain transactions occurring after December 31, 2006, and before January 1, 2009, that involve tangible personal property are exempt from sales tax if the person acquiring the property acquires it for the person's direct use in the direct production of a motion picture. Revises the wage standards for eligibility for an EDGE credit for retaining jobs. Provides that an applicant for an EDGE credit for the retention of jobs must employ at least 35 persons (instead of 75 as required by current law). Increases the $5,000,000 per year cap on the amount of EDGE credits that may be granted to retain existing jobs during each state fiscal year to $10,000,000 per year. Applies the cap to state fiscal year 2006 and each state fiscal year thereafter (current law imposes a cap only through state fiscal year 2007). Removes the January 1, 2008, deadline for making investments in machinery, equipment, or special purpose buildings used to make motion pictures or audio productions that are eligible for the Hoosier Business Investment Tax Credit (HBITC). Extends the deadline by which a qualified investment must be made in order to be eligible for the HBITC until January 1, 2012. Reduces from $500,000,000 to $100,000,000 the amount of annual worldwide revenue that a business must have in order to qualify for the headquarters relocation tax credit. Requires a business to employ at least 75 employees in Indiana to receive the headquarters relocation tax credit. Provides that the credit is available for taxable years beginning after December 31, 2005 (instead of December 31, 2006). Authorizes counties, cities, and towns that receive county economic development income taxes (CEDIT) to: (1) establish local venture capital funds; and (2) establish regional venture capital funds by pooling CEDIT revenues and grant proceeds. Provides that a regional venture capital fund shall be administered by a governing board. Authorizes the governing board to make grants or loans from the fund to public or private entities for economic development purposes. Provides that a farm mutual insurance company may elect taxation under the gross premium tax. (This conference committee report does the following: (1) Provides that certain transactions occurring after December 31, 2006, and before January 1, 2009, that involve tangible personal property are exempt from sales tax if the person acquiring the property acquires it for the person's direct use in the direct production of a motion picture. (2) Increases the aggregate amount of EDGE credits available for job retention and applies the cap to state
fiscal year 2006 and each state fiscal year thereafter. (3) Reduces the number of persons
that must be employed by an applicant to be eligible for an EDGE credit for retaining jobs.
(4) Removes the January 1, 2008, deadline for investments in machinery, equipment, or
special purpose buildings used to make motion pictures or audio productions that are
eligible for the HBITC. (5) Extends the deadline by which a qualified investment must be
made in order to be eligible for the HBITC until January 1, 2012. (6) Reduces from
$500,000,000 to $100,000,000 the amount of annual worldwide revenue that a business must
have in order to qualify for the headquarters relocation tax credit. (7) Requires a business
to employ at least 75 employees in Indiana to receive the headquarters relocation tax credit.
(8) Provides that the headquarters relocation credit is available for taxable years beginning
after December 31, 2005 (instead of December 31, 2006). (9) Provides that a farm mutual
insurance company may elect taxation under the gross premium tax.)
Effective: January 1, 2006 (retroactive); April 1, 2006; July 1, 2006; January 1, 2007.
MR. SPEAKER:
Your Conference Committee appointed to confer with a like committee from the Senate
upon Engrossed Senate Amendments to Engrossed House Bill No. 1380 respectfully reports
that said two committees have conferred and agreed as follows to wit:
that the House recede from its dissent from all Senate amendments and that
the House now concur in all Senate amendments to the bill and that the bill
be further amended as follows:
Delete the title and insert the following:
A BILL FOR AN ACT to amend the Indiana Code concerning
economic development and taxation.
Delete everything after the enacting clause and insert the following:
the impact of proposed legislation on small business.
(c) The OMB may review comments received under subsection
(b). The OMB may amend the comments. After completing its
review, the OMB shall transmit the comments to the legislative
services agency for posting on the general assembly's web site. The
comments submitted under this section shall be transmitted
electronically in a format suitable for posting to the general
assembly's web site as determined by the legislative services
agency.
taxable year in which the relocation costs are incurred. The credit
allowed under this section is equal to the amount determined under
section 9 of this chapter.
(b) For purposes of establishing the employment level required
by subsection (a)(4), a taxpayer may include:
(1) individuals who:
(A) were employed in Indiana by the taxpayer before the
taxpayer commenced a qualifying project; and
(B) remain employed in Indiana after the completion of the
taxpayer's qualifying project; and
(2) individuals who:
(A) were not employed in Indiana by the taxpayer before the
taxpayer commenced a qualifying project; and
(B) are employed in Indiana by the taxpayer as a result of the
completion of the taxpayer's qualifying project.
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.
(3) By a county, city, or town for any lawful purpose for which
money in any of its other funds may be used.
(3) (4) By a city or county described in IC 36-7.5-2-3(b) for making
transfers required by IC 36-7.5-4-2. If the county economic
development income tax rate is increased after April 30, 2005, in
a county having a population of more than one hundred forty-five
thousand (145,000) but less than one hundred forty-eight thousand
(148,000), the first three million five hundred thousand dollars
($3,500,000) of the tax revenue that results each year from the tax
rate increase shall be used by the county only to make the county's
transfer required by IC 36-7.5-4-2. The first three million five
hundred thousand dollars ($3,500,000) of the tax revenue that
results each year from the tax rate increase shall be paid by the
county treasurer to the treasurer of the northwest Indiana regional
development authority under IC 36-7.5-4-2 before certified
distributions are made to the county or any cities or towns in the
county under this chapter from the tax revenue that results each
year from the tax rate increase. In a county having a population of
more than one hundred forty-five thousand (145,000) but less than
one hundred forty-eight thousand (148,000), all of the tax revenue
that results each year from the tax rate increase that is in excess of
the first three million five hundred thousand dollars ($3,500,000)
that results each year from the tax rate increase must be used by
the county and cities and towns in the county for additional
homestead credits under subdivision (4). (5).
(4) (5) This subdivision applies only in a county having a
population of more than one hundred forty-five thousand (145,000)
but less than one hundred forty-eight thousand (148,000). Except
as otherwise provided, the procedures and definitions in
IC 6-1.1-20.9 apply to this subdivision. All of the tax revenue that
results each year from a tax rate increase described in subdivision
(3) (4) that is in excess of the first three million five hundred
thousand dollars ($3,500,000) that results each year from the tax
rate increase must be used by the county and cities and towns in
the county for additional homestead credits under this subdivision.
The following apply to additional homestead credits provided
under this subdivision:
(A) The additional homestead credits must be applied uniformly
to increase the homestead credit under IC 6-1.1-20.9 for
homesteads in the county, city, or town.
(B) The additional homestead credits shall be treated for all
purposes as property tax levies. The additional homestead
credits do not reduce the basis for determining the state property
tax replacement credit under IC 6-1.1-21 or the state homestead
credit under IC 6-1.1-20.9.
(C) The additional homestead credits shall be applied to the net
property taxes due on the homestead after the application of all
other assessed value deductions or property tax deductions and
credits that apply to the amount owed under IC 6-1.1.
(D) The department of local government finance shall determine
the additional homestead credit percentage for a particular year
based on the amount of county economic development income
tax revenue that will be used under this subdivision to provide
additional homestead credits in that year.
(5) (6) This subdivision applies only in a county having a
population of more than four hundred thousand (400,000) but less
than seven hundred thousand (700,000). Except as otherwise
provided, the procedures and definitions in IC 6-1.1-20.9 apply to
this subdivision. A county or a city or town in the county may use
county economic development income tax revenue to provide
additional homestead credits in the county, city, or town. The
following apply to additional homestead credits provided under
this subdivision:
(A) The county, city, or town fiscal body must adopt an
ordinance authorizing the additional homestead credits. The
ordinance must:
(i) be adopted before September 1 of a year to apply to
property taxes first due and payable in the following year; and
(ii) specify the amount of county economic development
income tax revenue that will be used to provide additional
homestead credits in the following year.
(B) A county, city, or town fiscal body that adopts an ordinance
under this subdivision must forward a copy of the ordinance to
the county auditor and the department of local government
finance not more than thirty (30) days after the ordinance is
adopted.
(C) The additional homestead credits must be applied uniformly
to increase the homestead credit under IC 6-1.1-20.9 for
homesteads in the county, city, or town.
(D) The additional homestead credits shall be treated for all
purposes as property tax levies. The additional homestead
credits do not reduce the basis for determining the state property
tax replacement credit under IC 6-1.1-21 or the state homestead
credit under IC 6-1.1-20.9.
(E) The additional homestead credits shall be applied to the net
property taxes due on the homestead after the application of all
other assessed value deductions or property tax deductions and
credits that apply to the amount owed under IC 6-1.1.
(F) The department of local government finance shall determine
the additional homestead credit percentage for a particular year
based on the amount of county economic development income
tax revenue that will be used under this subdivision to provide
additional homestead credits in that year.
(7) For a regional venture capital fund established under
section 13.5 of this chapter or a local venture capital fund
established under section 13.6 of this chapter.
(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.
(d) If there are bonds outstanding that have been issued under section
14 of this chapter or leases in effect under section 21 of this chapter, a
county, city, or town may not expend money from its economic
development income tax fund for a purpose authorized under
subsection (b)(3) in a manner that would adversely affect owners of the
outstanding bonds or payment of any lease rentals due.
[EFFECTIVE JULY 1, 2006]: Sec. 13.5. (a) The general assembly
finds that counties and municipalities in Indiana have a need to
foster economic development, the development of new technology,
and industrial and commercial growth. The general assembly finds
that it is necessary and proper to provide an alternative method for
counties and municipalities to foster the following:
(1) Economic development.
(2) The development of new technology.
(3) Industrial and commercial growth.
(4) Employment opportunities.
(5) The diversification of industry and commerce.
The fostering of economic development and the development of
new technology under this section or section 13.6 of this chapter for
the benefit of the general public, including industrial and
commercial enterprises, is a public purpose.
(b) The fiscal bodies of two (2) or more counties or municipalities
may, by resolution, do the following:
(1) Determine that part or all the taxes received by the units
under this chapter should be combined to foster:
(A) economic development;
(B) the development of new technology; and
(C) industrial and commercial growth.
(2) Establish a regional venture capital fund.
(c) Each unit participating in a regional venture capital fund
established under subsection (b) may deposit the following in the
fund:
(1) Taxes distributed to the unit under this chapter.
(2) The proceeds of public or private grants.
(d) A regional venture capital fund shall be administered by a
governing board. The expenses of administering the fund shall be
paid from money in the fund. The governing board shall invest the
money in the fund not currently needed to meet the obligations of
the fund in the same manner as other public money may be
invested. Interest that accrues from these investments shall be
deposited into the fund. The fund is subject to an annual audit by
the state board of accounts. The fund shall bear the full costs of the
audit.
(e) The fiscal body of each participating unit shall approve an
interlocal agreement created under IC 36-1-7 establishing the
terms for the administration of the regional venture capital fund.
The terms must include the following:
(1) The membership of the governing board.
(2) The amount of each unit's contribution to the fund.
(3) The procedures and criteria under which the governing
board may loan or grant money from the fund.
(4) The procedures for the dissolution of the fund and for the
distribution of money remaining in the fund at the time of the
dissolution.
(f) An interlocal agreement made by the participating units under
subsection (e) must provide that:
(1) each of the participating units is represented by at least one
(1) member of the governing board; and
(2) the membership of the governing board is established on a
bipartisan basis so that the number of the members of the
governing board who are members of one (1) political party
may not exceed the number of members of the governing board
required to establish a quorum.
(g) A majority of the governing board constitutes a quorum, and
the concurrence of a majority of the governing board is necessary
to authorize any action.
(h) An interlocal agreement made by the participating units
under subsection (e) must be submitted to the Indiana economic
development corporation for approval before the participating
units may contribute to the fund.
(i) A majority of members of a governing board of a regional
venture capital fund established under this section must have at
least five (5) years of experience in business, finance, or venture
capital.
(j) The governing board of the fund may loan or grant money
from the fund to a private or public entity if the governing board
finds that the loan or grant will be used by the borrower or grantee
for at least one (1) of the following economic development
purposes:
(1) To promote significant employment opportunities for the
residents of the units participating in the regional venture
capital fund.
(2) To attract a major new business enterprise to a
participating unit.
(3) To develop, retain, or expand a significant business
enterprise in a participating unit.
(k) The expenditures of a borrower or grantee of money from a
regional venture capital fund that are considered to be for an
economic development purpose include expenditures for any of the
following:
(1) Research and development of technology.
(2) Job training and education.
(3) Acquisition of property interests.
(4) Infrastructure improvements.
(5) New buildings or structures.
(6) Rehabilitation, renovation, or enlargement of buildings or
structures.
(7) Machinery, equipment, and furnishings.
(8) Funding small business development with respect to:
(A) prototype products or processes;
(B) marketing studies to determine the feasibility of new
products or processes; or
(C) business plans for the development and production of
new products or processes.
capital fund.
(b) A unit establishing a local venture capital fund under
subsection (a) may deposit the following in the fund:
(1) Taxes distributed to the unit under this chapter.
(2) The proceeds of public or private grants.
(c) A local venture capital fund shall be administered by a
governing board. The expenses of administering the fund shall be
paid from money in the fund. The governing board shall invest the
money in the fund not currently needed to meet the obligations of
the fund in the same manner as other public money may be
invested. Interest that accrues from these investments shall be
deposited into the fund. The fund is subject to an annual audit by
the state board of accounts. The fund shall bear the full costs of the
audit.
(d) The fiscal body of a unit establishing a local venture capital
fund under subsection (a) shall establish the terms for the
administration of the local venture capital fund. The terms must
include the following:
(1) The membership of the governing board.
(2) The amount of the unit's contribution to the fund.
(3) The procedures and criteria under which the governing
board may loan or grant money from the fund.
(4) The procedures for the dissolution of the fund and for the
distribution of money remaining in the fund at the time of the
dissolution.
(e) A unit establishing a local venture capital fund under
subsection (a) must be represented by at least one (1) member of
the governing board.
(f) The membership of the governing board must be established
on a bipartisan basis so that the number of the members of the
governing board who are members of one (1) political party may
not exceed the number of members of the governing board
required to establish a quorum.
(g) A majority of the governing board constitutes a quorum, and
the concurrence of a majority of the governing board is necessary
to authorize any action.
(h) The terms established under subsection (d) for the
administration of the local venture capital fund must be submitted
to the Indiana economic development corporation for approval
before a unit may contribute to the fund.
(i) A majority of members of a governing board of a local venture
capital fund established under this section must have at least five
(5) years of experience in business, finance, or venture capital.
(j) The governing board of the fund may loan or grant money
from the fund to a private or public entity if the governing board
finds that the loan or grant will be used by the borrower or grantee
for at least one (1) of the following economic development
purposes:
(1) To promote significant employment opportunities for the
residents of the unit establishing the local venture capital fund.
(2) To attract a major new business enterprise to the unit.
31, 2006.
____________________________ ____________________________
Representative Smith J Senator Ford
Chairperson
____________________________ ____________________________
Representative Austin Senator Hume
House Conferees Senate Conferees