Introduced Version






HOUSE BILL No. 1166

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 5-29; IC 6-2.5-6-17; IC 6-8.1-9-3.

Synopsis: Sales tax rebate for developing a tourist site. Authorizes the office of tourism development to enter into an agreement for a state sales tax rebate with the operator of a new tourism attraction. Establishes the criteria for awarding rebates. Establishes procedures for claiming rebates. Appropriates money to the department of state revenue for the payment of rebates.

Effective: July 1, 2007.





Cochran, Stemler




    January 11, 2007, read first time and referred to Committee on Small Business and Economic Development.







Introduced

First Regular Session 115th General Assembly (2007)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2006 Regular Session of the General Assembly.

HOUSE BILL No. 1166



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an appropriation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 5-29-1-4.5; (07)IN1166.1.1. -->     SECTION 1. IC 5-29-1-4.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 4.5. "Entertainment destination center" means a facility containing at least one hundred thousand (100,000) square feet of building space that:
        (1) is adjacent or complementary to an existing tourism attraction, a tourism attraction project being developed under IC 5-29-5, or a convention facility; and
        (2) provides its patrons a variety of leisure and entertainment options, including:
            (A) at least one (1) major themed restaurant; and
            (B) at least three (3) additional entertainment venues, including any of the following:
                (i) Live entertainment facilities.
                (ii) Multiplex theaters.
                (iii) Large format theaters.
                (iv) Motion simulators.
                (v) Family entertainment centers.
                (vi) Concert halls.
                (vii) Virtual reality or other interactive games.
                (viii) Museums.
                (ix) Exhibitions.
                (x) Other cultural or leisure time activities.

SOURCE: IC 5-29-1-6; (07)IN1166.1.2. -->     SECTION 2. IC 5-29-1-6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 6. "Person" means any association, corporation, limited liability company, fiduciary, individual, joint stock company, joint venture, partnership, sole proprietorship, or other private legal entity.
SOURCE: IC 5-29-1-7; (07)IN1166.1.3. -->     SECTION 3. IC 5-29-1-7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 7. "Qualified project costs" means the following costs incurred in the development of a tourism attraction project:
        (1) The cost of acquisition and construction of the tourism attraction project or any modification, improvement, or extension of the tourism attraction project.
        (2) Any cost related to the acquisition of any necessary property, easement, or right-of-way.
        (3) Engineering or architectural fees, legal fees, accountants' fees, and financial advisers' fees.
        (4) Any cost incurred for preliminary planning to determine the economic or engineering feasibility of a proposed tourism attraction project.
        (5) The costs of:
            (A) economic investigations and studies;
            (B) surveys;
            (C) preparation of designs, plans, working drawings, and specifications; and
            (D) the inspection and supervision of the construction of the tourism attraction project.
        (6) Any cost incurred in equipping or furnishing the tourism attraction project.
        (7) Any cost incurred to fund any liability, other loss, or insurance reserves or the funding and contribution of such insurance reserves or other capital to a risk retention group to provide insurance coverage against liability claims or other losses.

SOURCE: IC 5-29-1-8; (07)IN1166.1.4. -->     SECTION 4. IC 5-29-1-8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY

1, 2007]: Sec. 8. (a) "Tourism attraction" means any of the following:
        (1) A cultural or historic site.
        (2) A recreation or entertainment facility.
        (3) An area of natural phenomenon or scenic beauty.
        (4) An entertainment destination center.

     (b) The term does not include any of the following:
        (1) A racetrack or satellite facility licensed under IC 4-31.
        (2) A riverboat licensed under IC 4-33.
        (3) A facility located in a professional sports development area established under IC 36-7-31 or IC 36-7-31.3.
        (4) A lodging or dining facility unless the facility is located in an entertainment destination center.
        (5) A retail facility other than a gift shop or other retail operation that is operated as a subordinate part of an entertainment destination center or other tourism attraction.
        (6) A recreational facility that is not operated as a visitor destination.

SOURCE: IC 5-29-1-9; (07)IN1166.1.5. -->     SECTION 5. IC 5-29-1-9 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 9. (a) "Tourism attraction project" means any work or undertaking to develop a tourism attraction, including:
        (1) the acquisition of buildings, land, equipment, facilities, and other real or personal property for necessary, convenient, or desirable appurtenances;
        (2) the installation of utilities; and
        (3) any other work necessary for the development or redevelopment of real property for an entertainment, a recreational, or a cultural purpose designed to attract tourists.
    (b) The term includes site preparation, the planning of the buildings and improvements, the acquisition of property, the demolition of existing structures, the construction, reconstruction, alteration, and repair of the improvements, and all other connected work. The term also includes the acquisition, reconstruction, rehabilitation, alteration, or major repair of existing buildings or improvements.

SOURCE: IC 5-29-5; (07)IN1166.1.6. -->     SECTION 6. IC 5-29-5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]:
     Chapter 5. Tourism Attraction Projects
    Sec. 1. A person that proposes to operate a tourism attraction to

create new jobs in Indiana may apply to the office to enter into an agreement for a state gross retail tax rebate under this chapter. The director shall prescribe the form of the application.
    Sec. 2. After receipt of an application, the office may enter into an agreement with the applicant for a state gross retail tax rebate under this chapter if the office determines that all the following conditions exist:
        (1) The applicant's tourism attraction project will create new jobs that were not jobs previously performed by employees of the applicant in Indiana.
        (2) The applicant's tourism attraction project is economically sound and will benefit the citizens of Indiana by increasing opportunities for employment in Indiana and strengthening the economy of Indiana.
        (3) Receiving the state gross retail tax rebate is a major factor in the applicant's decision to go forward with the tourism attraction project, and not receiving the state gross retail tax rebate will result in the applicant not creating new jobs in Indiana.
        (4) Awarding the state gross retail tax rebate will result in an overall positive fiscal impact to the state, as certified by the office of management and budget using the best available data.
        (5) The office determines that the applicant's total qualified project costs will exceed five million dollars ($5,000,000).
        (6) At least twenty-five percent (25%) of the visitors to the applicant's tourism attraction will be residents of other states.
        (7) The state gross retail tax rebate is not prohibited by section 3 of this chapter.
    Sec. 3. A person may not receive a state gross retail tax rebate under this chapter for any jobs that the person relocates from one (1) site in Indiana to another site in Indiana. Determinations under this section shall be made by the office.
    Sec. 4. The office shall enter into an agreement with a person that is awarded a state gross retail tax rebate under this chapter for a tourism attraction project. The agreement must include all the following:
        (1) A detailed description of the tourism attraction project that is the subject of the agreement.
        (2) A detailed listing of each retail merchant who makes or will make retail transactions at the tourism attraction.
        (3) A requirement that the person shall maintain operations

at the tourism attraction for at least two (2) years following the last calendar year in which the person receives a state gross retail tax rebate under this chapter. A taxpayer is subject to an assessment under section 7 of this chapter for noncompliance with the requirement described in this subdivision.
        (4) A requirement that the person shall provide written notification to the director and the department of state revenue not more than thirty (30) days after the person makes or receives a proposal that would transfer the person's obligations under this chapter or IC 6-2.5 to another person.
    Sec. 5. The amount of a state gross retail tax rebate awarded under this chapter for a particular calendar year is equal to the amount determined under STEP SIX of the following formula:
        STEP ONE: Determine the total amount of the person's qualified project costs for the tourism attraction project that is the subject of an agreement described in section 4 of this chapter.
        STEP TWO: Multiply the STEP ONE amount by twenty-five percent (25%).
        STEP THREE: Divide the STEP TWO result by ten (10).
        STEP FOUR: Determine the total amount of state gross retail taxes remitted by all retail merchants making retail transactions at the tourism attraction in the preceding calendar year.
        STEP FIVE: Multiply the STEP FOUR amount by twenty-five percent (25%).
        STEP SIX: Determine the lesser of:
            (A) the STEP THREE quotient; or
            (B) the STEP FIVE result.
    Sec. 6. (a) A person is first eligible to receive a state gross retail tax rebate awarded under this chapter following the first full calendar year of operations at the tourism attraction that is the subject of an agreement entered into under section 4 of this chapter.
    (b) A person may not receive a state gross retail tax rebate under this chapter for more than ten (10) calendar years.
    (c) IC 6-2.5-6-17 applies to all state gross retail tax rebates awarded under this chapter.
    Sec. 7. If the department of state revenue or the office determines that a person that has received a state gross retail tax rebate under this chapter is not entitled to the rebate because of

the person's:
        (1) noncompliance with the requirements of the person's state gross retail tax rebate agreement; or
        (2) failure to comply with all the provisions of this chapter;
the department or the office shall, after giving the person an opportunity to explain the noncompliance, impose an assessment on the person in an amount that may not exceed the sum of any previously allowed state gross retail tax rebates under this chapter together with interest and penalties required or permitted by law.
    Sec. 8. (a) On or before July 1, the director shall annually submit a report to the lieutenant governor on the state gross retail tax rebate program under this chapter. The report must include:
        (1) information on the number of agreements that were entered into under this chapter during the preceding calendar year;
        (2) a description of the project that is the subject of each agreement;
        (3) an update on the status of projects under agreements entered into before the preceding calendar year;
        (4) an assessment of the effectiveness of the program in creating new jobs in Indiana;
        (5) an assessment of the effect of the program on state tax revenues; and
        (6) the sum of the state gross retail tax rebates awarded under this chapter in the preceding calendar year.
    (b) A copy of the report required under subsection (a) shall be transmitted in an electronic format under IC 5-14-6 to the executive director of the legislative services agency for distribution to the members of the general assembly.

SOURCE: IC 6-2.5-6-17; (07)IN1166.1.7. -->     SECTION 7. IC 6-2.5-6-17 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 17. (a) To receive a state gross retail tax rebate awarded under IC 5-29-5 for a particular calendar year, a person must:
        (1) file a claim:
            (A) with the department;
            (B) on a form prescribed by the department; and
            (C) on or before April 15 of the immediately succeeding calendar year; and
        (2) submit to the department proof of all information that the department determines is necessary for the calculation of the rebate amount under IC 5-29-5-5.
    (b) If the department receives a claim for a rebate under this section, the department shall consider the claim and may hold a hearing on the claim to obtain and consider additional evidence. After considering the claim and all evidence relevant to the claim, the department shall issue a decision on the claim, stating the part, if any, of the rebate allowed and containing a statement of the reasons for any part of the rebate that is denied. The department shall mail a copy of the decision to the person who filed the claim. If the department allows the full amount of the rebate claim, a warrant for the payment of the claim is sufficient notice of the decision.
    (c) If the person disagrees with any part of the department's decision, the person may appeal the decision. The person must file the appeal with the tax court. The tax court does not have jurisdiction to hear a rebate appeal suit if:
        (1) the appeal is filed more than three (3) years after the date the claim for a rebate is filed with the department;
        (2) the appeal is filed more than ninety (90) days after the date the department mails the decision of denial to the person; or
        (3) the appeal is filed both before the decision is issued and before the one hundred eighty-first day after the date the person files the claim for a rebate with the department.
    (d) The tax court shall hear the appeal de novo and without a jury and, after the hearing, may order or deny any part of the appealed rebate. The court may assess the court costs in any manner that it feels is equitable.

     (e) An amount sufficient to pay the state gross retail tax rebates provided under this section is annually appropriated from the state general fund to the department.
SOURCE: IC 6-8.1-9-3; (07)IN1166.1.8. -->     SECTION 8. IC 6-8.1-9-3, AS AMENDED BY P.L.111-2006, SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 3. (a) This chapter does not apply to refund claims made for gasoline taxes under IC 6-6-1.1, special fuel taxes under IC 6-6-2.5, or the motor vehicle excise tax (excluding interest and penalties) under IC 6-6-5.
     (b) This chapter does not apply to a state gross retail tax rebate awarded under IC 5-29-5.