Introduced Version
HOUSE BILL No. 1511
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 36-7-42.
Synopsis: Riverfront economic development tax area. Allows the
legislative body of a city or a county without a consolidated city to
adopt a resolution establishing a riverfront economic development tax
area (tax area). Sets forth requirements for the location of the tax area.
Requires the legislative body to make findings when adopting a
resolution. Requires the legislative body to submit a resolution
establishing a tax area to the budget committee and budget agency for
review and approval. Allows a tax area to receive incremental state
income tax revenue and incremental sales tax revenue attributable to
the tax area. Requires a city or county that establishes a tax area to
establish a riverfront economic development area fund. Provides that
a tax area terminates not later than 25 years after the date on which the
resolution establishing the tax area is adopted.
Effective: July 1, 2025.
Pfaff, Miller K
January 21, 2025, read first time and referred to Committee on Ways and Means.
2025 IN 1511—LS 6865/DI 125 Introduced
First Regular Session of the 124th General Assembly (2025)
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HOUSE BILL No. 1511
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 36-7-42 IS ADDED TO THE INDIANA CODE AS
2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
3 1, 2025]:
4 Chapter 42. Riverfront Economic Development Area
5 Sec. 1. This chapter applies to a city or a county without a
6 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, "designating body" means a:
14 (1) city legislative body; or
15 (2) county legislative body;
16 that may establish a tax area under this chapter.
17 Sec. 6. As used in this chapter, "gross retail base period
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1 amount" means the aggregate amount of state gross retail and use
2 taxes remitted under IC 6-2.5 by the businesses operating in the
3 territory comprising a tax area during the full state fiscal year that
4 precedes the date on which the designating body adopts a
5 resolution establishing a tax area under section 14 of this chapter.
6 Sec. 7. As used in this chapter, "gross retail incremental
7 amount" means the remainder of:
8 (1) the aggregate amount of state gross retail and use taxes
9 that are remitted under IC 6-2.5 by businesses operating in a
10 tax area during a state fiscal year; minus
11 (2) the gross retail base period amount;
12 as determined by the department under section 19 of this chapter.
13 Sec. 8. As used in this chapter, "income tax base period
14 amount" means the aggregate amount of state income tax paid by
15 employees employed in the territory comprising a tax area with
16 respect to wages and salary earned for work in the tax area for the
17 full state fiscal year that precedes the date on which the
18 designating body adopts a resolution establishing a tax area under
19 section 14 of this chapter.
20 Sec. 9. As used in this chapter, "income tax incremental
21 amount" means the remainder of:
22 (1) the aggregate amount of state income tax paid by
23 employees employed in a tax area with respect to wages
24 earned for work in the tax area for a particular state fiscal
25 year; minus
26 (2) the income tax base period amount;
27 as determined by the department under section 19 of this chapter.
28 Sec. 10. As used in this chapter, "state income tax" means tax
29 imposed under IC 6-3-1 through IC 6-3-7 (the adjusted gross
30 income tax).
31 Sec. 11. As used in this chapter, "tax area" means a geographic
32 area established as a riverfront economic development area under
33 section 14 of this chapter.
34 Sec. 12. As used in this chapter, "taxpayer" means a person that
35 is liable for the part of the following taxes attributable to a tax area
36 established under section 14 of this chapter:
37 (1) The state gross retail tax imposed under IC 6-2.5-2-1 or
38 use tax imposed under IC 6-2.5-3-2.
39 (2) State income tax.
40 Sec. 13. A designating body may establish a riverfront economic
41 development area that may include any facility or complex of
42 facilities located in an area within the territory of the city or
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1 county with boundaries that:
2 (1) border on at least one (1) side of a river; and
3 (2) may not be located more than:
4 (A) one thousand five hundred (1,500) feet; or
5 (B) three (3) city blocks;
6 from the river, whichever is greater.
7 However, if the area adjacent to the river is incapable of being
8 developed because the area is in a floodplain, or for any other
9 reason that prevents the area from being developed, the distances
10 described in subdivision (2) are measured from the city blocks
11 located nearest to the river that are capable of being developed.
12 Sec. 14. (a) A tax area must be initially established by resolution
13 according to the procedures set forth for the establishment of an
14 economic development area under IC 36-7-14. A resolution
15 establishing a tax area must provide for the allocation of income
16 tax incremental amounts and gross retail incremental amounts
17 attributable to the tax area.
18 (b) In establishing the tax area, instead of the findings required
19 for the establishment of economic development areas under
20 IC 36-7-14, the designating body must find that establishment of
21 the tax area will do all of the following:
22 (1) Attract new business enterprises to the district or retain or
23 expand existing business enterprises in the district.
24 (2) Benefit the public health and welfare and be of public
25 utility and benefit.
26 (3) Protect and increase state and local tax bases or revenues.
27 (4) Result in a substantial increase in temporary and
28 permanent employment opportunities and private sector
29 investment within the district.
30 (c) A designating body adopting a resolution under this section
31 shall designate the duration of the tax area. However, a tax area
32 must terminate not later than twenty-five (25) years after the date
33 on which the resolution establishing the tax area is adopted.
34 (d) The tax area established under this chapter is a special
35 taxing district authorized by the general assembly to enable the
36 designating body to provide special benefits to taxpayers in the tax
37 area by promoting economic development that is of public utility
38 and benefit.
39 Sec. 15. Except as otherwise provided in this chapter, after a tax
40 area is initially established, the tax area may not be changed and
41 the terms governing the tax area may not be revised.
42 Sec. 16. (a) Upon adoption of a resolution establishing a tax area
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1 under section 14 of this chapter, the designating body shall submit
2 the following to the budget committee for review:
3 (1) A copy of the resolution.
4 (2) A map of the tax area.
5 (3) A complete list of employers in the area and street names
6 and the range of street numbers of each street in the area.
7 (4) Any other information requested by the budget committee.
8 (b) The budget committee shall meet not later than sixty (60)
9 days after receipt of the materials described in subsection (a) and
10 make a recommendation on the resolution to the budget agency.
11 Sec. 17. (a) The budget agency must approve the resolution
12 before the income tax incremental amount and the gross retail
13 incremental amount may be allocated to the tax area under this
14 chapter.
15 (b) When considering a resolution, the budget committee and
16 the budget agency must make the following findings:
17 (1) The area designated as the tax area meets the conditions
18 necessary for the designation as a tax area under section 13 of
19 this chapter.
20 (2) The establishment of the tax area will benefit the people of
21 Indiana by protecting or increasing state and local tax bases
22 and tax revenues for at least the duration of the tax area
23 established under this chapter.
24 Sec. 18. If a tax area is established under section 14 of this
25 chapter, the city or county shall create a riverfront economic
26 development area fund that consists of all deposits made under
27 section 20(c) of this chapter. Money in the fund is to be used for the
28 purposes described in section 22 of this chapter.
29 Sec. 19. (a) Before October 1 of each year, the department shall
30 calculate the income tax incremental amount and the gross retail
31 incremental amount for the preceding state fiscal year for each tax
32 area established under this chapter.
33 (b) Businesses operating in the tax area shall report annually, in
34 the manner and in the form prescribed by the department,
35 information that the department determines necessary to calculate
36 incremental gross retail, use, and income taxes. A taxpayer
37 operating in the tax area that files a consolidated tax return with
38 the department shall also file annually an informational return
39 with the department for each business location of the taxpayer
40 within the tax area. If a taxpayer fails to report the information
41 required by this section or file an informational return required by
42 this section, the department shall use the best information available
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1 in calculating the incremental gross retail, use, and income taxes.
2 Sec. 20. (a) If a designating body adopts a resolution establishing
3 a tax area under section 14 of this chapter, a state fund known as
4 the incremental tax financing fund is established for the tax area.
5 The fund shall be administered by the department. Money in the
6 fund at the end of a state fiscal year does not revert to the state
7 general fund.
8 (b) The following amounts shall be deposited during each state
9 fiscal year in the incremental tax financing fund established for the
10 tax area under subsection (a):
11 (1) The aggregate amount of state gross retail and use taxes
12 that are remitted under IC 6-2.5 by businesses operating in
13 the tax area, until the amount of state gross retail and use
14 taxes deposited equals the gross retail incremental amount for
15 the tax area.
16 (2) The aggregate amount of state income tax paid by
17 employees employed in the tax area with respect to wages
18 earned for work in the tax area, until the amount of state
19 income tax deposited equals the income tax incremental
20 amount.
21 (c) On or before the twentieth day of each month, all amounts
22 held in the incremental tax financing fund established for a tax
23 area shall be distributed to the fiscal officer of the city or county
24 for deposit in the city's or county's riverfront economic
25 development area fund, as applicable.
26 Sec. 21. All distributions from the incremental tax financing
27 fund to the city or county shall be made by warrants issued by the
28 state comptroller to the treasurer of state ordering those payments
29 to the fiscal officer of the city or the fiscal officer of the county, as
30 applicable.
31 Sec. 22. The resolution establishing the tax area under section
32 14 of this chapter must designate the use of the income tax
33 incremental amounts and the gross retail incremental amounts
34 attributable to the tax area. The funds may be used for the
35 following:
36 (1) To acquire, design, improve, prepare, construct, maintain,
37 repair, operate, furnish, and equip capital improvements and
38 facilities located in, physically connected to, or directly
39 serving the tax area.
40 (2) To pay the principal and interest on any obligations,
41 including leases, that are payable solely or in part from money
42 deposited in the riverfront economic development area fund
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1 and are incurred by the city or county for the purpose of
2 financing or refinancing the development of capital
3 improvements or facilities located in, physically connected to,
4 or directly serving the tax area.
5 (3) To establish, augment, or restore a debt service reserve for
6 obligations.
7 (4) To pay capital expenses incurred by the city or county for
8 capital improvements or facilities that are physically
9 connected to or directly serving the tax area.
10 Sec. 23. An action to contest the validity of:
11 (1) bonds issued under this chapter;
12 (2) a pledge of financial support related to bonds issued under
13 this chapter; or
14 (3) a contract or lease entered into under this chapter;
15 may not be brought after the fifteenth day following the issuance
16 of the bonds, the entering into the pledge related to bonds, or the
17 entering into the contract or lease.
18 Sec. 24. The general assembly covenants that this chapter will
19 not be repealed or amended in a manner that will adversely affect
20 the owners of bonds or other obligations issued under this chapter.
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