| 1 | 1 | | |
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| 2 | 2 | | Introduced Version |
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| 3 | 3 | | HOUSE BILL No. 1395 |
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| 4 | 4 | | _____ |
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| 5 | 5 | | DIGEST OF INTRODUCED BILL |
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| 6 | 6 | | Citations Affected: IC 36-7-41. |
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| 7 | 7 | | Synopsis: Youth sports and tourism development areas. Allows the |
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| 8 | 8 | | legislative body of a city or town to adopt a resolution establishing a |
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| 9 | 9 | | youth sports and tourism development area (tax area). Requires that the |
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| 10 | 10 | | tax area include a facility or complex of facilities used by youth sports |
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| 11 | 11 | | teams and organizations for practice or competitive sporting events. |
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| 12 | 12 | | Requires the legislative body to make findings when adopting a |
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| 13 | 13 | | resolution. Requires the legislative body to submit a resolution |
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| 14 | 14 | | establishing a tax area to the budget committee and budget agency for |
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| 15 | 15 | | review and approval. Allows a tax area to receive incremental state and |
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| 16 | 16 | | local income tax revenue and incremental sales tax revenue attributable |
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| 17 | 17 | | to the tax area. Requires a city or town that establishes a tax area to |
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| 18 | 18 | | establish a youth sports and tourism development area fund. Limits the |
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| 19 | 19 | | amount of incremental tax revenue that may be allocated to $1,000,000 |
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| 20 | 20 | | per tax area per state fiscal year. Provides that a tax area terminates not |
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| 21 | 21 | | later than 25 years after the date on which the first obligation payable |
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| 22 | 22 | | from tax revenues allocated to the tax area is incurred. |
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| 23 | 23 | | Effective: July 1, 2024. |
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| 24 | 24 | | Judy, Snow, GiaQuinta |
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| 25 | 25 | | January 11, 2024, read first time and referred to Committee on Ways and Means. |
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| 26 | 26 | | 2024 IN 1395—LS 7060/DI 125 Introduced |
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| 27 | 27 | | Second Regular Session of the 123rd General Assembly (2024) |
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| 28 | 28 | | PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana |
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| 29 | 29 | | Constitution) is being amended, the text of the existing provision will appear in this style type, |
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| 30 | 30 | | additions will appear in this style type, and deletions will appear in this style type. |
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| 31 | 31 | | Additions: Whenever a new statutory provision is being enacted (or a new constitutional |
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| 32 | 32 | | provision adopted), the text of the new provision will appear in this style type. Also, the |
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| 33 | 33 | | word NEW will appear in that style type in the introductory clause of each SECTION that adds |
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| 34 | 34 | | a new provision to the Indiana Code or the Indiana Constitution. |
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| 35 | 35 | | Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts |
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| 36 | 36 | | between statutes enacted by the 2023 Regular Session of the General Assembly. |
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| 37 | 37 | | HOUSE BILL No. 1395 |
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| 38 | 38 | | A BILL FOR AN ACT to amend the Indiana Code concerning local |
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| 39 | 39 | | government. |
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| 40 | 40 | | Be it enacted by the General Assembly of the State of Indiana: |
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| 41 | 41 | | 1 SECTION 1. IC 36-7-41 IS ADDED TO THE INDIANA CODE AS |
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| 42 | 42 | | 2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY |
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| 43 | 43 | | 3 1, 2024]: |
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| 44 | 44 | | 4 Chapter 41. Youth Sports and Tourism Development Area |
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| 45 | 45 | | 5 Sec. 1. This chapter applies only to a city or town located in a |
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| 46 | 46 | | 6 county that does not have a consolidated city. |
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| 47 | 47 | | 7 Sec. 2. As used in this chapter, "budget agency" means the |
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| 48 | 48 | | 8 budget agency created by IC 4-12-1-3. |
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| 49 | 49 | | 9 Sec. 3. As used in this chapter, "budget committee" means the |
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| 50 | 50 | | 10 budget committee established by IC 4-12-1-3. |
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| 51 | 51 | | 11 Sec. 4. As used in this chapter, "department" refers to the |
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| 52 | 52 | | 12 department of state revenue. |
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| 53 | 53 | | 13 Sec. 5. As used in this chapter, "gross retail base period |
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| 54 | 54 | | 14 amount" means the aggregate amount of state gross retail and use |
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| 55 | 55 | | 15 taxes remitted under IC 6-2.5 by the businesses operating in the |
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| 56 | 56 | | 16 territory comprising a tax area during the full state fiscal year that |
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| 57 | 57 | | 17 precedes the date on which the legislative body of a city or town |
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| 58 | 58 | | 2024 IN 1395—LS 7060/DI 125 2 |
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| 59 | 59 | | 1 adopts a resolution establishing a tax area under section 14 of this |
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| 60 | 60 | | 2 chapter. |
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| 61 | 61 | | 3 Sec. 6. As used in this chapter, "gross retail incremental |
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| 62 | 62 | | 4 amount" means the remainder of: |
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| 63 | 63 | | 5 (1) the aggregate amount of state gross retail and use taxes |
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| 64 | 64 | | 6 that are remitted under IC 6-2.5 by businesses operating in a |
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| 65 | 65 | | 7 tax area during a state fiscal year; minus |
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| 66 | 66 | | 8 (2) the gross retail base period amount; |
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| 67 | 67 | | 9 as determined by the department under section 19 of this chapter. |
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| 68 | 68 | | 10 Sec. 7. As used in this chapter, "income tax base period |
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| 69 | 69 | | 11 amount" means the aggregate amount of state and local income |
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| 70 | 70 | | 12 taxes paid by employees employed in the territory comprising a tax |
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| 71 | 71 | | 13 area with respect to wages and salary earned for work in the tax |
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| 72 | 72 | | 14 area for the state fiscal year that precedes the date on which the |
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| 73 | 73 | | 15 legislative body of a city or town adopts a resolution establishing |
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| 74 | 74 | | 16 a tax area under section 14 of this chapter. |
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| 75 | 75 | | 17 Sec. 8. As used in this chapter, "income tax incremental |
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| 76 | 76 | | 18 amount" means the remainder of: |
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| 77 | 77 | | 19 (1) the aggregate amount of state and local income taxes paid |
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| 78 | 78 | | 20 by employees employed in a tax area with respect to wages |
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| 79 | 79 | | 21 earned for work in the tax area for a particular state fiscal |
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| 80 | 80 | | 22 year; minus |
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| 81 | 81 | | 23 (2) the income tax base period amount; |
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| 82 | 82 | | 24 as determined by the department under section 19 of this chapter. |
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| 83 | 83 | | 25 Sec. 9. As used in this chapter, "legislative body" means the: |
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| 84 | 84 | | 26 (1) common council of a city; or |
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| 85 | 85 | | 27 (2) town council of a town. |
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| 86 | 86 | | 28 Sec. 10. As used in this chapter, "state and local income taxes" |
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| 87 | 87 | | 29 means taxes imposed under any of the following: |
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| 88 | 88 | | 30 (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax). |
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| 89 | 89 | | 31 (2) IC 6-3.6 (local income tax). |
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| 90 | 90 | | 32 Sec. 11. As used in this chapter, "tax area" means a geographic |
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| 91 | 91 | | 33 area established as a youth sports and tourism development area |
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| 92 | 92 | | 34 under section 14 of this chapter. |
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| 93 | 93 | | 35 Sec. 12. As used in this chapter, "taxpayer" means a person that |
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| 94 | 94 | | 36 is liable for the part of the following taxes attributable to a tax area |
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| 95 | 95 | | 37 established under section 14 of this chapter: |
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| 96 | 96 | | 38 (1) The state gross retail tax imposed under IC 6-2.5-2-1 or |
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| 97 | 97 | | 39 use tax imposed under IC 6-2.5-3-2. |
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| 98 | 98 | | 40 (2) State and local income taxes. |
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| 99 | 99 | | 41 Sec. 13. A legislative body may establish a youth sports and |
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| 100 | 100 | | 42 tourism development area within the boundaries of the city or |
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| 101 | 101 | | 2024 IN 1395—LS 7060/DI 125 3 |
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| 102 | 102 | | 1 town that must include a facility or complex of facilities used by |
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| 103 | 103 | | 2 youth sports teams and organizations for practice or competitive |
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| 104 | 104 | | 3 sporting events. A tax area may include any parcel of land on |
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| 105 | 105 | | 4 which the facility or complex of facilities is located. A tax area |
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| 106 | 106 | | 5 must include contiguous tracts of land within the city or town, |
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| 107 | 107 | | 6 however, a tax area may not consist of a total area that is more |
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| 108 | 108 | | 7 than three (3) square miles. |
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| 109 | 109 | | 8 Sec. 14. (a) A tax area must be initially established by resolution |
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| 110 | 110 | | 9 according to the procedures set forth for the establishment of an |
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| 111 | 111 | | 10 economic development area under IC 36-7-14. A resolution |
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| 112 | 112 | | 11 establishing a tax area must provide for the allocation of income |
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| 113 | 113 | | 12 tax incremental amounts and gross retail incremental amounts |
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| 114 | 114 | | 13 attributable to a tax area. |
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| 115 | 115 | | 14 (b) This subsection does not apply to Lake County, Allen |
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| 116 | 116 | | 15 County, or Hamilton County. The total number of tax areas in a |
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| 117 | 117 | | 16 county at any particular time may not exceed one (1). |
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| 118 | 118 | | 17 (c) In establishing the tax area, the legislative body must make |
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| 119 | 119 | | 18 the following findings instead of the findings required for the |
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| 120 | 120 | | 19 establishment of economic development areas: |
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| 121 | 121 | | 20 (1) There is a capital improvement that will be undertaken or |
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| 122 | 122 | | 21 has been undertaken in the tax area for a facility or complex |
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| 123 | 123 | | 22 of facilities that will be used or is used by youth sports teams |
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| 124 | 124 | | 23 and organizations for practice or competitive sporting events. |
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| 125 | 125 | | 24 (2) The capital improvement that will be undertaken or has |
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| 126 | 126 | | 25 been undertaken in the tax area will benefit the public health |
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| 127 | 127 | | 26 and welfare, will be of public utility and benefit, and will |
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| 128 | 128 | | 27 improve the quality of life within the community. |
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| 129 | 129 | | 28 (3) The capital improvement that will be undertaken or has |
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| 130 | 130 | | 29 been undertaken in the tax area will protect or increase state |
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| 131 | 131 | | 30 and local tax bases and tax revenues. |
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| 132 | 132 | | 31 (4) The expected return on investment from the tax area that |
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| 133 | 133 | | 32 is projected over the term of twenty-five (25) years from the |
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| 134 | 134 | | 33 date on which the first obligation is incurred to pay principal |
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| 135 | 135 | | 34 and interest on bonds or lease rentals on leases payable from |
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| 136 | 136 | | 35 tax revenues allocated to the tax area. |
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| 137 | 137 | | 36 (d) A legislative body adopting a resolution under this section |
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| 138 | 138 | | 37 shall designate the duration of the tax area. However, a tax area |
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| 139 | 139 | | 38 must terminate not later than twenty-five (25) years after the date |
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| 140 | 140 | | 39 on which the first obligation is incurred to pay principal and |
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| 141 | 141 | | 40 interest on bonds or lease rentals on leases payable from tax |
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| 142 | 142 | | 41 revenues allocated to the tax area. |
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| 143 | 143 | | 42 (e) The tax area established under this chapter is a special |
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| 144 | 144 | | 2024 IN 1395—LS 7060/DI 125 4 |
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| 145 | 145 | | 1 taxing district authorized by the general assembly to enable the |
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| 146 | 146 | | 2 legislative body to provide special benefits to taxpayers in the tax |
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| 147 | 147 | | 3 area by promoting economic development that is of public utility |
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| 148 | 148 | | 4 and benefit. |
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| 149 | 149 | | 5 Sec. 15. Except as otherwise provided in this chapter, after a tax |
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| 150 | 150 | | 6 area is initially established, the tax area may not be changed and |
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| 151 | 151 | | 7 the terms governing the tax area may not be revised. |
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| 152 | 152 | | 8 Sec. 16. (a) Upon adoption of a resolution establishing a tax area |
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| 153 | 153 | | 9 under section 14 of this chapter, the legislative body shall submit |
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| 154 | 154 | | 10 the following to the budget committee for review: |
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| 155 | 155 | | 11 (1) A copy of the resolution. |
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| 156 | 156 | | 12 (2) A map of the tax area that identifies the parcels. |
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| 157 | 157 | | 13 (3) A complete list of employers in the area and street names |
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| 158 | 158 | | 14 and the range of street numbers of each street in the area. |
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| 159 | 159 | | 15 (4) Any other information requested by the budget committee. |
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| 160 | 160 | | 16 (b) The budget committee shall meet not later than sixty (60) |
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| 161 | 161 | | 17 days after receipt of the materials described in subsection (a) and |
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| 162 | 162 | | 18 make a recommendation on the resolution to the budget agency. |
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| 163 | 163 | | 19 Sec. 17. (a) The budget agency must approve the resolution |
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| 164 | 164 | | 20 establishing a tax area under section 14 of this chapter before the |
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| 165 | 165 | | 21 income tax incremental amount and the gross retail incremental |
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| 166 | 166 | | 22 amount may be allocated to the tax area under this chapter. |
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| 167 | 167 | | 23 (b) When considering a resolution, the budget committee and |
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| 168 | 168 | | 24 the budget agency must make the following findings: |
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| 169 | 169 | | 25 (1) The cost of the capital improvement and the site of the |
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| 170 | 170 | | 26 capital improvement specified under the resolution exceeds |
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| 171 | 171 | | 27 five million dollars ($5,000,000). |
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| 172 | 172 | | 28 (2) The capital improvement specified under the resolution is |
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| 173 | 173 | | 29 economically sound and the establishment of the tax area will |
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| 174 | 174 | | 30 benefit the people of Indiana by protecting or increasing state |
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| 175 | 175 | | 31 and local tax bases and tax revenues for at least the duration |
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| 176 | 176 | | 32 of the tax area established under this chapter. |
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| 177 | 177 | | 33 (3) The city or town has committed significant resources |
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| 178 | 178 | | 34 toward completion of the capital improvement identified in |
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| 179 | 179 | | 35 the resolution and to the establishment of the tax area. |
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| 180 | 180 | | 36 Sec. 18. If a tax area is established under section 14 of this |
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| 181 | 181 | | 37 chapter, the city or town shall create a youth sports and tourism |
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| 182 | 182 | | 38 development area fund that consists of all deposits made under |
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| 183 | 183 | | 39 section 20(d) of this chapter. Money in the fund is to be used for the |
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| 184 | 184 | | 40 purposes described in section 22 of this chapter. |
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| 185 | 185 | | 41 Sec. 19. (a) Before October 1 of each year, the department shall |
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| 186 | 186 | | 42 calculate the income tax incremental amount and the gross retail |
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| 187 | 187 | | 2024 IN 1395—LS 7060/DI 125 5 |
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| 188 | 188 | | 1 incremental amount for the preceding state fiscal year for each tax |
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| 189 | 189 | | 2 area established under this chapter. |
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| 190 | 190 | | 3 (b) Businesses operating in the tax area shall report annually, in |
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| 191 | 191 | | 4 the manner and in the form prescribed by the department, |
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| 192 | 192 | | 5 information that the department determines necessary to calculate |
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| 193 | 193 | | 6 incremental gross retail, use, and income taxes. A taxpayer |
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| 194 | 194 | | 7 operating in the tax area that files a consolidated tax return with |
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| 195 | 195 | | 8 the department shall also file annually an informational return |
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| 196 | 196 | | 9 with the department for each business location of the taxpayer |
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| 197 | 197 | | 10 within the tax area. If a taxpayer fails to report the information |
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| 198 | 198 | | 11 required by this section or file an informational return required by |
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| 199 | 199 | | 12 this section, the department shall use the best information available |
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| 200 | 200 | | 13 in calculating the incremental gross retail, use, and income taxes. |
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| 201 | 201 | | 14 Sec. 20. (a) If the legislative body of a city or town adopts a |
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| 202 | 202 | | 15 resolution establishing a tax area under section 14 of this chapter, |
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| 203 | 203 | | 16 a state fund known as the incremental tax financing fund is |
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| 204 | 204 | | 17 established for the tax area. The fund shall be administered by the |
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| 205 | 205 | | 18 department. Money in the fund at the end of a state fiscal year does |
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| 206 | 206 | | 19 not revert to the state general fund. |
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| 207 | 207 | | 20 (b) Subject to subsection (c), the following amounts shall be |
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| 208 | 208 | | 21 deposited during each state fiscal year in the incremental tax |
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| 209 | 209 | | 22 financing fund established for the tax area under subsection (a): |
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| 210 | 210 | | 23 (1) The aggregate amount of state gross retail and use taxes |
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| 211 | 211 | | 24 that are remitted under IC 6-2.5 by businesses operating in |
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| 212 | 212 | | 25 the district, until the amount of state gross retail and use taxes |
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| 213 | 213 | | 26 deposited equals the gross retail incremental amount for the |
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| 214 | 214 | | 27 tax area. |
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| 215 | 215 | | 28 (2) The aggregate amount of state and local income taxes paid |
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| 216 | 216 | | 29 by employees employed in the tax area with respect to wages |
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| 217 | 217 | | 30 earned for work in the tax area, until the amount of state and |
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| 218 | 218 | | 31 local income taxes deposited equals the income tax |
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| 219 | 219 | | 32 incremental amount. |
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| 220 | 220 | | 33 (c) The aggregate amount of revenues that is attributable to |
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| 221 | 221 | | 34 state gross retail and use taxes and state and local income taxes, |
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| 222 | 222 | | 35 and is deposited in each incremental tax financing fund established |
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| 223 | 223 | | 36 for a tax area, may not exceed one million dollars ($1,000,000) per |
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| 224 | 224 | | 37 tax area during any state fiscal year. |
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| 225 | 225 | | 38 (d) On or before the twentieth day of each month, all amounts |
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| 226 | 226 | | 39 held in the incremental tax financing fund established for a tax |
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| 227 | 227 | | 40 area shall be distributed to the fiscal officer of the city or town for |
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| 228 | 228 | | 41 deposit in the city's or the town's youth sports and tourism |
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| 229 | 229 | | 42 development area fund. |
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| 230 | 230 | | 2024 IN 1395—LS 7060/DI 125 6 |
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| 231 | 231 | | 1 Sec. 21. All distributions from the incremental tax financing |
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| 232 | 232 | | 2 fund to the city or town shall be made by warrants issued by the |
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| 233 | 233 | | 3 state comptroller to the treasurer of state ordering those payments |
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| 234 | 234 | | 4 to the fiscal officer of the city or town. |
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| 235 | 235 | | 5 Sec. 22. The resolution establishing the tax area under section |
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| 236 | 236 | | 6 14 of this chapter must designate the use of the income tax |
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| 237 | 237 | | 7 incremental amounts and the gross retail incremental amounts |
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| 238 | 238 | | 8 attributable to the tax area. The funds may be used by a city or |
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| 239 | 239 | | 9 town for the following: |
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| 240 | 240 | | 10 (1) To acquire, design, improve, prepare, construct, maintain, |
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| 241 | 241 | | 11 repair, operate, furnish, and equip capital improvements and |
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| 242 | 242 | | 12 facilities located in, physically connected to, or directly |
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| 243 | 243 | | 13 serving the tax area. |
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| 244 | 244 | | 14 (2) To pay the principal and interest on any obligations, |
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| 245 | 245 | | 15 including leases, that are payable solely or in part from money |
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| 246 | 246 | | 16 deposited in the youth sports and tourism development area |
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| 247 | 247 | | 17 fund and are incurred by the city or town for the purpose of |
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| 248 | 248 | | 18 financing or refinancing the development of capital |
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| 249 | 249 | | 19 improvements or facilities located in, physically connected to, |
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| 250 | 250 | | 20 or directly serving the tax area. |
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| 251 | 251 | | 21 (3) To establish, augment, or restore a debt service reserve for |
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| 252 | 252 | | 22 obligations. |
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| 253 | 253 | | 23 (4) To pay capital expenses incurred by the city or town for |
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| 254 | 254 | | 24 capital improvements or facilities that are physically |
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| 255 | 255 | | 25 connected to or directly serving the tax area. |
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| 256 | 256 | | 26 Sec. 23. An action to contest the validity of: |
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| 257 | 257 | | 27 (1) bonds issued under this chapter; |
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| 258 | 258 | | 28 (2) a pledge of financial support related to bonds issued under |
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| 259 | 259 | | 29 this chapter; or |
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| 260 | 260 | | 30 (3) a contract or lease entered into under this chapter; |
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| 261 | 261 | | 31 may not be brought after the fifteenth day following the issuance |
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| 262 | 262 | | 32 of the bonds, the entering into the pledge related to bonds, or the |
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| 263 | 263 | | 33 entering into the contract or lease. |
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| 264 | 264 | | 34 Sec. 24. The general assembly covenants that this chapter will |
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| 265 | 265 | | 35 not be repealed or amended in a manner that will adversely affect |
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| 266 | 266 | | 36 the owners of bonds or other obligations issued under this chapter. |
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| 267 | 267 | | 2024 IN 1395—LS 7060/DI 125 |
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