Introduced Version
HOUSE BILL No. 1074
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 36-7-40.
Synopsis: Youth sports and tourism development areas. Allows the
legislative body of a city to adopt an ordinance establishing a youth
sports and tourism development area (tax area). Requires that the tax
area include a facility or complex of facilities used by youth sports
teams and organizations for practice or competitive sporting events.
Requires the legislative body to make findings when adopting an
ordinance. Requires the legislative body to submit an ordinance
establishing a tax area to the budget committee and budget agency for
review and approval. Allows a tax area to receive incremental state and
local income tax revenue and incremental sales tax revenue attributable
to the tax area. Requires a city that establishes a tax area to establish a
youth sports and tourism development area fund. Limits the amount of
incremental tax revenue that may be allocated to: (1) $1,000,000 per
tax area per year; and (2) a total of $10,000,000 per tax area. Provides
that a tax area terminates not later than 20 years after incremental tax
revenues are first allocated to the tax area.
Effective: July 1, 2022.
Heine
January 4, 2022, read first time and referred to Committee on Ways and Means.
2022 IN 1074—LS 6509/DI 125 Introduced
Second Regular Session of the 122nd General Assembly (2022)
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HOUSE BILL No. 1074
A BILL FOR AN ACT to amend the Indiana Code concerning local
government.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 36-7-40 IS ADDED TO THE INDIANA CODE AS
2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
3 1, 2022]:
4 Chapter 40. Youth Sports and Tourism Development Area
5 Sec. 1. This chapter applies only to a city located in a county
6 that does not have a consolidated city.
7 Sec. 2. As used in this chapter, "budget agency" means the
8 budget agency created by IC 4-12-1-3.
9 Sec. 3. As used in this chapter, "budget committee" means the
10 budget committee established by IC 4-12-1-3.
11 Sec. 4. As used in this chapter, "department" refers to the
12 department of state revenue.
13 Sec. 5. As used in this chapter, "gross retail base period
14 amount" means the aggregate amount of state gross retail and use
15 taxes remitted under IC 6-2.5 by the businesses operating in the
16 territory comprising a tax area during the full state fiscal year that
17 precedes the date on which the legislative body of a city adopts an
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1 ordinance establishing a tax area under section 14 of this chapter.
2 Sec. 6. As used in this chapter, "gross retail incremental
3 amount" means the remainder of:
4 (1) the aggregate amount of state gross retail and use taxes
5 that are remitted under IC 6-2.5 by businesses operating in a
6 tax area during a state fiscal year; minus
7 (2) the gross retail base period amount;
8 as determined by the department under section 19 of this chapter.
9 Sec. 7. As used in this chapter, "income tax base period
10 amount" means the aggregate amount of state and local income
11 taxes paid by employees employed in the territory comprising a tax
12 area with respect to wages and salary earned for work in the tax
13 area for the state fiscal year that precedes the date on which the
14 legislative body of a city adopts an ordinance establishing a tax
15 area under section 14 of this chapter.
16 Sec. 8. As used in this chapter, "income tax incremental
17 amount" means the remainder of:
18 (1) the aggregate amount of state and local income taxes paid
19 by employees employed in a tax area with respect to wages
20 earned for work in the tax area for a particular state fiscal
21 year; minus
22 (2) the income tax base period amount;
23 as determined by the department under section 19 of this chapter.
24 Sec. 9. As used in this chapter, "legislative body" means the
25 common council of a city.
26 Sec. 10. As used in this chapter, "state and local income taxes"
27 means taxes imposed under any of the following:
28 (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax).
29 (2) IC 6-3.6 (local income tax).
30 Sec. 11. As used in this chapter, "tax area" means a geographic
31 area established as a youth sports and tourism development area
32 under section 13 of this chapter.
33 Sec. 12. As used in this chapter, "taxpayer" means a person that
34 is liable for the part of the following taxes attributable to a tax area
35 established under section 14 of this chapter:
36 (1) The state gross retail tax imposed under IC 6-2.5-2-1 or
37 use tax imposed under IC 6-2.5-3-2.
38 (2) State and local income taxes.
39 Sec. 13. A legislative body may establish a youth sports and
40 tourism development area within the boundaries of the city that
41 must include a facility or complex of facilities used by youth sports
42 teams and organizations for practice or competitive sporting
2022 IN 1074—LS 6509/DI 125 3
1 events. A tax area may include any parcel of land on which the
2 facility or complex of facilities is located. A tax area may include
3 noncontiguous tracts of land within the city.
4 Sec. 14. (a) A tax area must be initially established by ordinance
5 according to the procedures set forth for the establishment of an
6 economic development area under IC 36-7-14. An ordinance
7 establishing a tax area must provide for the allocation of income
8 tax incremental amounts and gross retail incremental amounts
9 attributable to a tax area. The allocation provision must apply to
10 the entire tax area.
11 (b) This subsection does not apply to Lake County, Allen
12 County, or Hamilton County. The total number of tax areas in a
13 county at any particular time may not exceed one (1).
14 (c) In establishing the tax area, the legislative body must make
15 the following findings instead of the findings required for the
16 establishment of economic development areas:
17 (1) There is a capital improvement that will be undertaken or
18 has been undertaken in the tax area for a facility or complex
19 of facilities that is used by youth sports teams and
20 organizations for practice or competitive sporting events.
21 (2) The capital improvement that will be undertaken or has
22 been undertaken in the tax area will benefit the public health
23 and welfare and will be of public utility and benefit.
24 (3) The capital improvement that will be undertaken or has
25 been undertaken in the tax area will protect or increase state
26 and local tax bases and tax revenues.
27 (d) A legislative body adopting an ordinance under this section
28 shall designate the duration of the tax area. However, a tax area
29 must terminate not later than twenty (20) years after the income
30 tax incremental amount or gross retail incremental amount is first
31 allocated to the tax area.
32 (e) The tax area established under this chapter is a special
33 taxing district authorized by the general assembly to enable the
34 legislative body to provide special benefits to taxpayers in the tax
35 area by promoting economic development that is of public utility
36 and benefit.
37 Sec. 15. Except as otherwise provided in this chapter, after a tax
38 area is initially established, the tax area may not be changed and
39 the terms governing the tax area may not be revised.
40 Sec. 16. (a) Upon adoption of an ordinance establishing a tax
41 area under section 14 of this chapter, the legislative body shall
42 submit the following to the budget committee for review:
2022 IN 1074—LS 6509/DI 125 4
1 (1) A copy of the ordinance.
2 (2) A map of the tax area.
3 (3) A complete list of employers in the area and street names
4 and the range of street numbers of each street in the area.
5 (4) Any other information requested by the budget committee.
6 (b) The budget committee shall meet not later than sixty (60)
7 days after receipt of the materials described in subsection (a) and
8 make a recommendation on the ordinance to the budget agency.
9 Sec. 17. (a) The budget agency must approve the ordinance
10 before the income tax incremental amount and the gross retail
11 incremental amount may be allocated to the tax area under this
12 chapter.
13 (b) When considering an ordinance, the budget committee and
14 the budget agency must make the following findings:
15 (1) The cost of the capital improvement and the site of the
16 capital improvement specified under the ordinance exceeds
17 five million dollars ($5,000,000).
18 (2) The capital improvement specified under the ordinance is
19 economically sound and the establishment of the tax area will
20 benefit the people of Indiana by protecting or increasing state
21 and local tax bases and tax revenues for at least the duration
22 of the tax area established under this chapter.
23 (3) The city has committed significant resources toward
24 completion of the capital improvement identified in the
25 ordinance and to the establishment of the youth sports and
26 tourism development area.
27 Sec. 18. If a tax area is established under section 14 of this
28 chapter, the city shall create a youth sports and tourism
29 development area fund that consists of all deposits made under
30 section 20(d) of this chapter. Money in the fund is to be used for the
31 purposes described in section 22 of this chapter.
32 Sec. 19. (a) Before October 1 of each year, the department shall
33 calculate the income tax incremental amount and the gross retail
34 incremental amount for the preceding state fiscal year for each tax
35 area established under this chapter.
36 (b) Businesses operating in the tax area shall report annually, in
37 the manner and in the form prescribed by the department,
38 information that the department determines necessary to calculate
39 incremental gross retail, use, and income taxes. A taxpayer
40 operating in the tax area that files a consolidated tax return with
41 the department shall also file annually an informational return
42 with the department for each business location of the taxpayer
2022 IN 1074—LS 6509/DI 125 5
1 within the tax area. If a taxpayer fails to report the information
2 required by this section or file an informational return required by
3 this section, the department shall use the best information available
4 in calculating the incremental gross retail, use, and income taxes.
5 Sec. 20. (a) If the legislative body of a city adopts an ordinance
6 establishing a tax area under section 14 of this chapter, a state fund
7 known as the incremental tax financing fund is established for that
8 tax area. The fund shall be administered by the department.
9 Money in the fund does not revert to the state general fund at the
10 end of a state fiscal year.
11 (b) Subject to subsection (c), the following amounts shall be
12 deposited during each state fiscal year in the incremental tax
13 financing fund established for the tax area under subsection (a):
14 (1) The aggregate amount of state gross retail and use taxes
15 that are remitted under IC 6-2.5 by businesses operating in
16 the district, until the amount of state gross retail and use taxes
17 deposited equals the gross retail incremental amount for the
18 tax area.
19 (2) The aggregate amount of state and local income taxes paid
20 by employees employed in the tax area with respect to wages
21 earned for work in the tax area, until the amount of state and
22 local income taxes deposited equals the income tax
23 incremental amount.
24 (c) The aggregate amount of revenues that is attributable to
25 state gross retail and use taxes and state and local income taxes,
26 and is deposited in each incremental tax financing fund established
27 for a tax area, may not exceed:
28 (1) one million dollars ($1,000,000) per tax area during any
29 state fiscal year; and
30 (2) a total of ten million dollars ($10,000,000) per tax area.
31 (d) On or before the twentieth day of each month, all amounts
32 held in the incremental tax financing fund established for a tax
33 area shall be distributed to the fiscal officer of the city for deposit
34 in the city's youth sports and tourism development area fund.
35 Sec. 21. All distributions from the incremental tax financing
36 fund to the city shall be made by warrants issued by the auditor of
37 state to the treasurer of state ordering those payments to the fiscal
38 officer of the city.
39 Sec. 22. The ordinance establishing the tax area must designate
40 the use of the income tax incremental amounts and the gross retail
41 incremental amounts attributable to the tax area. The funds may
42 be used by a city only for the following:
2022 IN 1074—LS 6509/DI 125 6
1 (1) To acquire, improve, prepare, construct, maintain, repair,
2 operate, furnish, and equip capital improvements and
3 facilities located in, physically connected to, or directly
4 serving the tax area.
5 (2) To pay the principal and interest on any obligations,
6 including leases, that are payable solely or in part from money
7 deposited in the youth sports and tourism development area
8 fund and are incurred by the city for the purpose of financing
9 or refinancing the development of capital improvements or
10 facilities located in, physically connected to, or directly
11 serving the tax area.
12 (3) To establish, augment, or restore a debt service reserve for
13 obligations.
14 (4) To pay capital expenses incurred by the city for capital
15 improvements or facilities that are physically connected to or
16 directly serving the tax area.
17 Sec. 23. The general assembly covenants that this chapter will
18 not be repealed or amended in a manner that will adversely affect
19 the owners of bonds or other obligations issued under this chapter.
2022 IN 1074—LS 6509/DI 125