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 6546 NOTE PREPARED: Feb 6, 2024
BILL NUMBER: SB 260 BILL AMENDED: Feb 1, 2024
SUBJECT: Neighborhood and Individual Development Incentives.
FIRST AUTHOR: Sen. Becker BILL STATUS: As Passed Senate
FIRST SPONSOR: Rep. Manning
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: The bill defines a "community based organization" as a private, nonprofit
corporation whose board of directors is comprised of business, civic, and community leaders, and whose
principal purpose includes the provision of low income housing. (Current law limits administration, through
a financial institution, of an account to community development corporations.)
The bill also provides that:
(1) the first $1,500 (rather than $800) is eligible for a state deposit in an individual's account;
(2) the allocation, for each account that has been established for not more than five years, is $3 for
each $1 of the first $1,500 (rather than the first $400) an individual deposited into the individual's
account; and
(3) the amount of the allocation may not exceed $4,500 (rather than $2,400) for each account.
It makes various changes to the administration of and procedure for claiming the Neighborhood Assistance
Tax Credit and the Individual Development Account Tax Credit. It removes a reference to an obsolete tax.
Effective Date: July 1, 2024.
Explanation of State Expenditures: IDAs: The bill increases the annual limit for state deposits into
individual IDAs but does not change the total $4,500 match amount that the state would provide over time
for an eligible individual with an IDA. The amount of state General Fund dollars that will be used as
matching funds for IDAs depends on the state General Fund appropriation for this purpose, as well as the
number of accounts and amount of funds deposited into the accounts by account holders. The bill does not
make an appropriation. In FY 2024 and FY 2025, IDAs received state General Fund appropriations of
SB 260 1 $609,945.
Under current law, an eligible individual may receive state matching funds on the first $800 deposited into
their IDA annually. The state matches $3 for every $1 deposited up to $2,400 annually. Over the life of the
account, the state matches a total of $4,500. This proposal would allow an individual to receive a $3 match
for every $1 deposited up to the full match amount of $4,500 in one year depending on the amount an
individual deposits. Under the proposal, the total state match over the life of the account would remain at
$4,500.
Credit Application Process: The bill changes the documentation process for receiving the Neighborhood
Assistance Tax Credit and the Individual Development Account Tax Credit. Under current law, the business
firm or person that wants to claim the credit applies to the Department of State Revenue (DOR) and the
Indiana Housing and Community Development Authority. Under the bill, neighborhood organizations will
provide the documentation to the authority for eligible taxpayers. The authority may have additional
workload to adjust the application process of the tax credits. The authority should be able to make the
changes within current resources.
The DOR will incur additional expenses to revise tax forms, instructions, and computer programs to reflect
the changes made to the Neighborhood Assistance Tax Credit and the Individual Development Account Tax
Credit. The DOR’s current level of resources should be sufficient to implement these changes.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue, Indiana Housing and Community Development
Authority.
Local Agencies Affected:
Information Sources: State Budget Agency. 2023-2025 As-Passed Budget. Detailed Budget Data; Indiana
Housing and Community Development Authority 2022 Annual Report.
https://www.in.gov/ihcda/newsroom/annual-reports/
Fiscal Analyst: Camille Tesch, 317-232-5293.
SB 260 2