Indiana 2024 Regular Session

Indiana House Bill HB1368 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	HOUSE BILL No. 1368
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 36-7-42.
7	7	Synopsis: Riverfront economic development tax area. Allows the
8	8	legislative body of a city or a county without a consolidated city to
9	9	adopt a resolution establishing a riverfront economic development tax
10	10	area (tax area). Sets forth requirements for the location of the tax area.
11	11	Requires the legislative body to make findings when adopting a
12	12	resolution. Requires the legislative body to submit a resolution
13	13	establishing a tax area to the budget committee and budget agency for
14	14	review and approval. Allows a tax area to receive incremental state
15	15	income tax revenue and incremental sales tax revenue attributable to
16	16	the tax area. Requires a city or county that establishes a tax area to
17	17	establish a riverfront economic development area fund. Provides that
18	18	a tax area terminates not later than 25 years after the date on which the
19	19	resolution establishing the tax area is adopted.
20	20	Effective: July 1, 2024.
21	21	Pfaff, Campbell, Fleming, Errington
22	22	January 10, 2024, read first time and referred to Committee on Local Government.
23	23	2024 IN 1368—LS 6669/DI 125 Introduced
24	24	Second Regular Session of the 123rd General Assembly (2024)
25	25	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
26	26	Constitution) is being amended, the text of the existing provision will appear in this style type,
27	27	additions will appear in this style type, and deletions will appear in this style type.
28	28	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
29	29	provision adopted), the text of the new provision will appear in this style type. Also, the
30	30	word NEW will appear in that style type in the introductory clause of each SECTION that adds
31	31	a new provision to the Indiana Code or the Indiana Constitution.
32	32	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
33	33	between statutes enacted by the 2023 Regular Session of the General Assembly.
34	34	HOUSE BILL No. 1368
35	35	A BILL FOR AN ACT to amend the Indiana Code concerning local
36	36	government.
37	37	Be it enacted by the General Assembly of the State of Indiana:
38	38	1 SECTION 1. IC 36-7-42 IS ADDED TO THE INDIANA CODE AS
39	39	2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
40	40	3 1, 2024]:
41	41	4 Chapter 42. Riverfront Economic Development Area
42	42	5 Sec. 1. This chapter applies to a city or a county without a
43	43	6 consolidated city.
44	44	7 Sec. 2. As used in this chapter, "budget agency" means the
45	45	8 budget agency created by IC 4-12-1-3.
46	46	9 Sec. 3. As used in this chapter, "budget committee" means the
47	47	10 budget committee established by IC 4-12-1-3.
48	48	11 Sec. 4. As used in this chapter, "department" refers to the
49	49	12 department of state revenue.
50	50	13 Sec. 5. As used in this chapter, "designating body" means a:
51	51	14 (1) city legislative body; or
52	52	15 (2) county legislative body;
53	53	16 that may establish a tax area under this chapter.
54	54	17 Sec. 6. As used in this chapter, "gross retail base period
55	55	2024 IN 1368—LS 6669/DI 125 2
56	56	1 amount" means the aggregate amount of state gross retail and use
57	57	2 taxes remitted under IC 6-2.5 by the businesses operating in the
58	58	3 territory comprising a tax area during the full state fiscal year that
59	59	4 precedes the date on which the designating body adopts a
60	60	5 resolution establishing a tax area under section 14 of this chapter.
61	61	6 Sec. 7. As used in this chapter, "gross retail incremental
62	62	7 amount" means the remainder of:
63	63	8 (1) the aggregate amount of state gross retail and use taxes
64	64	9 that are remitted under IC 6-2.5 by businesses operating in a
65	65	10 tax area during a state fiscal year; minus
66	66	11 (2) the gross retail base period amount;
67	67	12 as determined by the department under section 19 of this chapter.
68	68	13 Sec. 8. As used in this chapter, "income tax base period
69	69	14 amount" means the aggregate amount of state income tax paid by
70	70	15 employees employed in the territory comprising a tax area with
71	71	16 respect to wages and salary earned for work in the tax area for the
72	72	17 full state fiscal year that precedes the date on which the
73	73	18 designating body adopts a resolution establishing a tax area under
74	74	19 section 14 of this chapter.
75	75	20 Sec. 9. As used in this chapter, "income tax incremental
76	76	21 amount" means the remainder of:
77	77	22 (1) the aggregate amount of state income tax paid by
78	78	23 employees employed in a tax area with respect to wages
79	79	24 earned for work in the tax area for a particular state fiscal
80	80	25 year; minus
81	81	26 (2) the income tax base period amount;
82	82	27 as determined by the department under section 19 of this chapter.
83	83	28 Sec. 10. As used in this chapter, "state income tax" means tax
84	84	29 imposed under IC 6-3-1 through IC 6-3-7 (the adjusted gross
85	85	30 income tax).
86	86	31 Sec. 11. As used in this chapter, "tax area" means a geographic
87	87	32 area established as a riverfront economic development area under
88	88	33 section 14 of this chapter.
89	89	34 Sec. 12. As used in this chapter, "taxpayer" means a person that
90	90	35 is liable for the part of the following taxes attributable to a tax area
91	91	36 established under section 14 of this chapter:
92	92	37 (1) The state gross retail tax imposed under IC 6-2.5-2-1 or
93	93	38 use tax imposed under IC 6-2.5-3-2.
94	94	39 (2) State income tax.
95	95	40 Sec. 13. A designating body may establish a riverfront economic
96	96	41 development area that may include any facility or complex of
97	97	42 facilities located in an area within the territory of the city or
98	98	2024 IN 1368—LS 6669/DI 125 3
99	99	1 county with boundaries that:
100	100	2 (1) border on at least one (1) side of a river; and
101	101	3 (2) may not be located more than:
102	102	4 (A) one thousand five hundred (1,500) feet; or
103	103	5 (B) three (3) city blocks;
104	104	6 from the river, whichever is greater.
105	105	7 However, if the area adjacent to the river is incapable of being
106	106	8 developed because the area is in a floodplain, or for any other
107	107	9 reason that prevents the area from being developed, the distances
108	108	10 described in subdivision (2) are measured from the city blocks
109	109	11 located nearest to the river that are capable of being developed.
110	110	12 Sec. 14. (a) A tax area must be initially established by resolution
111	111	13 according to the procedures set forth for the establishment of an
112	112	14 economic development area under IC 36-7-14. A resolution
113	113	15 establishing a tax area must provide for the allocation of income
114	114	16 tax incremental amounts and gross retail incremental amounts
115	115	17 attributable to the tax area.
116	116	18 (b) In establishing the tax area, instead of the findings required
117	117	19 for the establishment of economic development areas under
118	118	20 IC 36-7-14, the designating body must find that establishment of
119	119	21 the tax area will do all of the following:
120	120	22 (1) Attract new business enterprises to the district or retain or
121	121	23 expand existing business enterprises in the district.
122	122	24 (2) Benefit the public health and welfare and be of public
123	123	25 utility and benefit.
124	124	26 (3) Protect and increase state and local tax bases or revenues.
125	125	27 (4) Result in a substantial increase in temporary and
126	126	28 permanent employment opportunities and private sector
127	127	29 investment within the district.
128	128	30 (c) A designating body adopting a resolution under this section
129	129	31 shall designate the duration of the tax area. However, a tax area
130	130	32 must terminate not later than twenty-five (25) years after the date
131	131	33 on which the resolution establishing the tax area is adopted.
132	132	34 (d) The tax area established under this chapter is a special
133	133	35 taxing district authorized by the general assembly to enable the
134	134	36 designating body to provide special benefits to taxpayers in the tax
135	135	37 area by promoting economic development that is of public utility
136	136	38 and benefit.
137	137	39 Sec. 15. Except as otherwise provided in this chapter, after a tax
138	138	40 area is initially established, the tax area may not be changed and
139	139	41 the terms governing the tax area may not be revised.
140	140	42 Sec. 16. (a) Upon adoption of a resolution establishing a tax area
141	141	2024 IN 1368—LS 6669/DI 125 4
142	142	1 under section 14 of this chapter, the designating body shall submit
143	143	2 the following to the budget committee for review:
144	144	3 (1) A copy of the resolution.
145	145	4 (2) A map of the tax area.
146	146	5 (3) A complete list of employers in the area and street names
147	147	6 and the range of street numbers of each street in the area.
148	148	7 (4) Any other information requested by the budget committee.
149	149	8 (b) The budget committee shall meet not later than sixty (60)
150	150	9 days after receipt of the materials described in subsection (a) and
151	151	10 make a recommendation on the resolution to the budget agency.
152	152	11 Sec. 17. (a) The budget agency must approve the resolution
153	153	12 before the income tax incremental amount and the gross retail
154	154	13 incremental amount may be allocated to the tax area under this
155	155	14 chapter.
156	156	15 (b) When considering a resolution, the budget committee and
157	157	16 the budget agency must make the following findings:
158	158	17 (1) The area designated as the tax area meets the conditions
159	159	18 necessary for the designation as a tax area under section 13 of
160	160	19 this chapter.
161	161	20 (2) The establishment of the tax area will benefit the people of
162	162	21 Indiana by protecting or increasing state and local tax bases
163	163	22 and tax revenues for at least the duration of the tax area
164	164	23 established under this chapter.
165	165	24 Sec. 18. If a tax area is established under section 14 of this
166	166	25 chapter, the city or county shall create a riverfront economic
167	167	26 development area fund that consists of all deposits made under
168	168	27 section 20(c) of this chapter. Money in the fund is to be used for the
169	169	28 purposes described in section 22 of this chapter.
170	170	29 Sec. 19. (a) Before October 1 of each year, the department shall
171	171	30 calculate the income tax incremental amount and the gross retail
172	172	31 incremental amount for the preceding state fiscal year for each tax
173	173	32 area established under this chapter.
174	174	33 (b) Businesses operating in the tax area shall report annually, in
175	175	34 the manner and in the form prescribed by the department,
176	176	35 information that the department determines necessary to calculate
177	177	36 incremental gross retail, use, and income taxes. A taxpayer
178	178	37 operating in the tax area that files a consolidated tax return with
179	179	38 the department shall also file annually an informational return
180	180	39 with the department for each business location of the taxpayer
181	181	40 within the tax area. If a taxpayer fails to report the information
182	182	41 required by this section or file an informational return required by
183	183	42 this section, the department shall use the best information available
184	184	2024 IN 1368—LS 6669/DI 125 5
185	185	1 in calculating the incremental gross retail, use, and income taxes.
186	186	2 Sec. 20. (a) If a designating body adopts a resolution establishing
187	187	3 a tax area under section 14 of this chapter, a state fund known as
188	188	4 the incremental tax financing fund is established for the tax area.
189	189	5 The fund shall be administered by the department. Money in the
190	190	6 fund at the end of a state fiscal year does not revert to the state
191	191	7 general fund.
192	192	8 (b) The following amounts shall be deposited during each state
193	193	9 fiscal year in the incremental tax financing fund established for the
194	194	10 tax area under subsection (a):
195	195	11 (1) The aggregate amount of state gross retail and use taxes
196	196	12 that are remitted under IC 6-2.5 by businesses operating in
197	197	13 the tax area, until the amount of state gross retail and use
198	198	14 taxes deposited equals the gross retail incremental amount for
199	199	15 the tax area.
200	200	16 (2) The aggregate amount of state income tax paid by
201	201	17 employees employed in the tax area with respect to wages
202	202	18 earned for work in the tax area, until the amount of state
203	203	19 income tax deposited equals the income tax incremental
204	204	20 amount.
205	205	21 (c) On or before the twentieth day of each month, all amounts
206	206	22 held in the incremental tax financing fund established for a tax
207	207	23 area shall be distributed to the fiscal officer of the city or county
208	208	24 for deposit in the city's or county's riverfront economic
209	209	25 development area fund, as applicable.
210	210	26 Sec. 21. All distributions from the incremental tax financing
211	211	27 fund to the city or county shall be made by warrants issued by the
212	212	28 state comptroller to the treasurer of state ordering those payments
213	213	29 to the fiscal officer of the city or the fiscal officer of the county, as
214	214	30 applicable.
215	215	31 Sec. 22. The resolution establishing the tax area under section
216	216	32 14 of this chapter must designate the use of the income tax
217	217	33 incremental amounts and the gross retail incremental amounts
218	218	34 attributable to the tax area. The funds may be used for the
219	219	35 following:
220	220	36 (1) To acquire, design, improve, prepare, construct, maintain,
221	221	37 repair, operate, furnish, and equip capital improvements and
222	222	38 facilities located in, physically connected to, or directly
223	223	39 serving the tax area.
224	224	40 (2) To pay the principal and interest on any obligations,
225	225	41 including leases, that are payable solely or in part from money
226	226	42 deposited in the riverfront economic development area fund
227	227	2024 IN 1368—LS 6669/DI 125 6
228	228	1 and are incurred by the city or county for the purpose of
229	229	2 financing or refinancing the development of capital
230	230	3 improvements or facilities located in, physically connected to,
231	231	4 or directly serving the tax area.
232	232	5 (3) To establish, augment, or restore a debt service reserve for
233	233	6 obligations.
234	234	7 (4) To pay capital expenses incurred by the city or county for
235	235	8 capital improvements or facilities that are physically
236	236	9 connected to or directly serving the tax area.
237	237	10 Sec. 23. An action to contest the validity of:
238	238	11 (1) bonds issued under this chapter;
239	239	12 (2) a pledge of financial support related to bonds issued under
240	240	13 this chapter; or
241	241	14 (3) a contract or lease entered into under this chapter;
242	242	15 may not be brought after the fifteenth day following the issuance
243	243	16 of the bonds, the entering into the pledge related to bonds, or the
244	244	17 entering into the contract or lease.
245	245	18 Sec. 24. The general assembly covenants that this chapter will
246	246	19 not be repealed or amended in a manner that will adversely affect
247	247	20 the owners of bonds or other obligations issued under this chapter.
248	248	2024 IN 1368—LS 6669/DI 125