LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6436 NOTE PREPARED: Dec 18, 2023
BILL NUMBER: SB 127 BILL AMENDED:
SUBJECT: Economic Development Incentive Accountability.
FIRST AUTHOR: Sen. Taylor G BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: This bill adds various job and employee definitions to the Indiana Economic
Development Corporation (IEDC) laws. It requires that all records related to taxpayer funded economic
development incentives must be disclosed under the Open Records Law.
The bill requires that the IEDC's annual Job Creation Incentives and Compliance Report must be published
on the Indiana transparency portal Internet web site. It requires the IEDC and the Department of State
Revenue (DOR) to compile information on all job creation incentives granted, including the total amount of
uncollected or diverted state tax revenues resulting from each incentive, and it requires that this information
must be included as part of the IEDC's annual Job Creation Incentives and Compliance Report.
The bill requires the IEDC to recapture job creation incentives from a recipient that: (1) fails to make the
level of capital investment; (2) fails to create or retain the promised number of jobs; or (3) pays less in
wages; than specified in an incentive agreement. It also requires the IEDC to compile information on all
recapture activities and incentives recouped from unfulfilled commitments and to include the information
as part of the IEDC's annual Job Creation Incentives and Compliance Report.
It requires incentive recipients to prepare an annual compliance report on the number of jobs created or
retained, employee pay, and various other information concerning the use of the incentives, and it requires
the IEDC to compile this information and include it in the IEDC's annual Job Creation Incentives and
Compliance Report.
It repeals and replaces the definition of "job creation incentive" without change to maintain alphabetical
order.
SB 127 1 Effective Date: July 1, 2024.
Explanation of State Expenditures: IEDC: The bill makes changes to the IEDC’s Economic Incentives and
Compliance Report, including changing the name of the report to the Job Creation Incentives and
Compliance Report and requiring additional information to be included in the report. The IEDC annually
submits this report to the Governor and the Legislative Council. The bill requires recipients of job creation
incentives to submit annual compliance reports to the IEDC to be included in the Job Creation Incentives and
Compliance Report. The bill also requires the IEDC to report the aggregate amount of uncollected or diverted
state tax revenue, a summary of the information provided by certified technology parks, and other
information related to job creation incentive recipients. The bill’s requirements should be able to be
implemented with no additional appropriations, assuming near customary agency staffing and resource levels.
DOR: The bill requires the DOR to annually report to the IEDC the aggregate amount of uncollected or
diverted state revenues resulting from each state tax incentive. The DOR’s current level of staffing and
resources should be sufficient to implement this provision.
Explanation of State Revenues: The bill expands the recapture provisions for job creation incentives to
require a recipient to pay back to the state an incentive that has been received if the recipient (1) does not
make the level of capital investment specified in the incentive application; (2) employs fewer individuals than
specified in the application; or (3) pays less in wages than specified in the application. Current law includes
a recapture provision for recipients that move or close. There are additional recapture provisions for specific
tax credits. During FY 2022, the IEDC recaptured $301,190 from 19 recipients. Over the last five years, the
annual recapture amount has ranged from approximately $44,000 to $1.5 M. The increase in revenue would
depend on the number of recipients who violate the provisions of their incentive agreement, the amount of
the incentive received, and the remaining assets of the business.
The bill defines a job creation incentive as a tax credit, tax deduction, grant, loan, or loan guarantee provided
by the state or an agency of the state for the purposes of encouraging the creation of jobs. This definition
would include a variety of programs, including the Economic Development for a Growing Economy Tax
Credit, Hoosier Business Investment Tax Credit, and the Skills Enhancement Fund. The recapture provision
in the bill applies to all job creation incentives, and if a recapture is initiated, the money would be returned
to the appropriate fund.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana Economic Development Corporation; Department of State Revenue.
Local Agencies Affected:
Information Sources: Indiana Economic Development Corporation, Jobs Realization Reports. Indiana
Economic Development Corporation, Annual Reports.
Fiscal Analyst: Lauren Tanselle, 317-232-9586.
SB 127 2