IN
Indiana Senate Bill SB0346

Indiana 2025 Regular Session

Indiana Senate Bill SB0346 Compare Versions

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1-*SB0346.2*
2-Reprinted
3-February 18, 2025
1+*SB0346.1*
2+February 12, 2025
43 SENATE BILL No. 346
54 _____
6-DIGEST OF SB 346 (Updated February 17, 2025 2:46 pm - DI 129)
5+DIGEST OF SB 346 (Updated February 11, 2025 9:17 am - DI 140)
76 Citations Affected: IC 6-3.1.
87 Synopsis: Rural business growth. Establishes a state tax credit (credit)
98 for certain capital investments made in rural funds. Establishes
109 procedures for a rural fund to apply to the Indiana economic
1110 development corporation (IEDC) for certification of a capital
1211 investment as eligible for a credit provided by the bill. Requires a rural
1312 fund to pay a nonrefundable application fee of $5,000 to the IEDC.
1413 Provides that the credit is an amount equal to: (1) the applicable
1514 percentage for the credit allowance date; multiplied by (2) the purchase
1615 price paid to the rural fund for the capital investment. Sets forth the
1716 maximum annual amount of credits that may be certified. Provides that
1817 the credit is subject to recapture. Requires a rural fund that has
1918 received a credit to submit reports on an annual basis to the IEDC over
2019 the credit allowance period.
2120 Effective: July 1, 2025.
22-Buchanan, Gaskill, Rogers, Schmitt
21+Buchanan, Gaskill, Rogers
2322 January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
2423 February 11, 2025, reported favorably — Do Pass.
25-February 17, 2025, read second time, amended, ordered engrossed.
26-SB 346—LS 7400/DI 129 Reprinted
27-February 18, 2025
24+SB 346—LS 7400/DI 129 February 12, 2025
2825 First Regular Session of the 124th General Assembly (2025)
2926 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3027 Constitution) is being amended, the text of the existing provision will appear in this style type,
3128 additions will appear in this style type, and deletions will appear in this style type.
3229 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
3330 provision adopted), the text of the new provision will appear in this style type. Also, the
3431 word NEW will appear in that style type in the introductory clause of each SECTION that adds
3532 a new provision to the Indiana Code or the Indiana Constitution.
3633 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
3734 between statutes enacted by the 2024 Regular Session of the General Assembly.
3835 SENATE BILL No. 346
3936 A BILL FOR AN ACT to amend the Indiana Code concerning
4037 taxation.
4138 Be it enacted by the General Assembly of the State of Indiana:
4239 1 SECTION 1. IC 6-3.1-33.5 IS ADDED TO THE INDIANA CODE
4340 2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4441 3 JULY 1, 2025]:
4542 4 Chapter 33.5. Rural Fund Capital Investment Tax Credit
4643 5 Sec. 1. The state tax credit provided by this chapter applies to
4744 6 taxable years beginning after December 31, 2025. However,
4845 7 beginning with the period set forth in section 3(a) of this chapter,
4946 8 the corporation may begin to receive applications for the credit
5047 9 provided by this chapter.
5148 10 Sec. 2. The following definitions apply throughout this chapter:
5249 11 (1) "Affiliate" means an entity that directly, or indirectly
5350 12 through one (1) or more intermediaries, controls, or is
5451 13 controlled by, or is under the common control with, another
5552 14 entity. An entity is controlled by another entity if the
5653 15 controlling entity holds, directly or indirectly, the majority of
5754 16 voting or ownership interest in the controlled entity or has
5855 17 control over day-to-day operations of the controlled entity by
5956 SB 346—LS 7400/DI 129 2
6057 1 contract or by law.
6158 2 (2) "Applicable percentage" means zero percent (0%) for the
6259 3 first two (2) credit allowance dates, and fifteen percent (15%)
6360 4 for the next four (4) credit allowance dates.
6461 5 (3) "Capital investment" means any equity investment in a
6562 6 rural fund by a rural investor that:
6663 7 (A) is acquired after June 30, 2025, at its original issuance
6764 8 solely in exchange for cash;
6865 9 (B) has one hundred percent (100%) of its cash purchase
6966 10 price used by the rural fund to make qualified investments
7067 11 in eligible businesses located in Indiana by the third
7168 12 anniversary of the initial credit allowance date; and
7269 13 (C) is designated by the rural fund as a capital investment
7370 14 that is certified by the corporation under sections 3
7471 15 through 5 of this chapter, including any capital investment
7572 16 that does not satisfy section 3(b)(1) of this chapter if the
7673 17 investment was a capital investment in the hands of a prior
7774 18 holder.
7875 19 (4) "Corporation " means the Indiana economic development
7976 20 corporation established by IC 5-28-3-1.
8077 21 (5) "Credit allowance date" means the date on which the
8178 22 corporation provides the certification set forth in section 5(a)
8279 23 of this chapter and each of the five (5) anniversary dates of
8380 24 that date thereafter.
8481 25 (6) "Department" refers to the department of state revenue.
8582 26 (7) "Eligible business" means a business that, at the time of
8683 27 the initial qualified investment in the business:
8784 28 (A) has fewer than two hundred fifty (250) employees; and
8885 29 (B) has its principal business operations in a rural area of
8986 30 Indiana.
9087 31 Any business classified as an eligible business at the time of
9188 32 the initial investment in the business by a rural fund shall
9289 33 remain classified as an eligible business and may receive
9390 34 follow-on investments from any rural fund. The follow-on
9491 35 investments shall be qualified investments even though the
9592 36 business may not meet the definition of an "eligible business"
9693 37 at the time of the follow-on investment.
97-38 (8) "Municipality" means city or town.
98-39 (9) "Principal business operations" means the location where
99-40 at least sixty percent (60%) of a business's employees work or
100-41 where employees who are paid at least sixty percent (60%) of
101-42 the business's payroll work. A business that has agreed to
94+38 (8) "Principal business operations" means the location where
95+39 at least sixty percent (60%) of a business's employees work or
96+40 where employees who are paid at least sixty percent (60%) of
97+41 the business's payroll work. A business that has agreed to
98+42 relocate employees using the proceeds of a qualified
10299 SB 346—LS 7400/DI 129 3
103-1 relocate employees using the proceeds of a qualified
104-2 investment to establish its principal business operations in a
105-3 new location shall be deemed to have its principal business
106-4 operations in the new location if it satisfied the requirements
107-5 of this subdivision not later than one hundred eighty (180)
108-6 days after receiving a qualified investment.
109-7 (10) "Purchase price" means the amount paid to the rural
110-8 fund that issues a capital investment, which shall not exceed
111-9 the amount of capital investment authority certified under
112-10 sections 3 through 5 of this chapter.
113-11 (11) "Qualified investment" means any investment in an
114-12 eligible business or any loan to an eligible business with a
115-13 stated maturity date of at least one (1) year after the date of
116-14 issuance, excluding revolving lines of credit and
117-15 senior-secured debt unless the chief executive or similar
118-16 officer of the eligible business certifies that the eligible
119-17 business sought and was denied similar financing from a
120-18 depository institution or by a rural fund unless, with respect
121-19 to any one (1) eligible business, the maximum amount of
122-20 investments made in the business by one (1) or more rural
123-21 funds, on a collective basis with all of the businesses' affiliates,
124-22 with the proceeds of the capital investments, are an amount
125-23 equal to the greater of twenty percent (20%) of the rural
126-24 fund's capital investment authority or six million five hundred
127-25 thousand dollars ($6,500,000), exclusive of investments made
128-26 with repaid or redeemed investments or interest or profits
129-27 realized on those investments.
130-28 (12) "Rural area" means:
131-29 (A) an area other than a municipality with a population of
132-30 more than fifty thousand (50,000) or an urban area
133-31 contiguous and adjacent to the municipality;
134-32 (B) an area determined to be rural in character by the
135-33 United States Department of Agriculture;
136-34 (C) an urban area contiguous or adjacent to a municipality
137-35 with a population of more than fifty thousand (50,000) if
138-36 the corporation determines the eligible business is rural in
139-37 nature, employs employees from rural areas, or is
140-38 otherwise beneficial to residents of rural areas; or
141-39 (D) any municipality in Indiana with a population that
142-40 does not exceed seven thousand (7,000) according to the
143-41 2020 federal decennial census.
144-42 (13) "Rural fund" means an entity certified by the
100+1 investment to establish its principal business operations in a
101+2 new location shall be deemed to have its principal business
102+3 operations in the new location if it satisfied the requirements
103+4 of this subdivision not later than one hundred eighty (180)
104+5 days after receiving a qualified investment.
105+6 (9) "Purchase price" means the amount paid to the rural fund
106+7 that issues a capital investment, which shall not exceed the
107+8 amount of capital investment authority certified under
108+9 sections 3 through 5 of this chapter.
109+10 (10) "Qualified investment" means any investment in an
110+11 eligible business or any loan to an eligible business with a
111+12 stated maturity date of at least one (1) year after the date of
112+13 issuance, excluding revolving lines of credit and
113+14 senior-secured debt unless the chief executive or similar
114+15 officer of the eligible business certifies that the eligible
115+16 business sought and was denied similar financing from a
116+17 depository institution or by a rural fund unless, with respect
117+18 to any one (1) eligible business, the maximum amount of
118+19 investments made in the business by one (1) or more rural
119+20 funds, on a collective basis with all of the businesses' affiliates,
120+21 with the proceeds of the capital investments, are an amount
121+22 equal to the greater of twenty percent (20%) of the rural
122+23 fund's capital investment authority or six million five hundred
123+24 thousand dollars ($6,500,000), exclusive of investments made
124+25 with repaid or redeemed investments or interest or profits
125+26 realized on those investments.
126+27 (11) "Rural area" means:
127+28 (A) an area other than a municipality with a population of
128+29 more than fifty thousand (50,000) or an urban area
129+30 contiguous and adjacent to the municipality;
130+31 (B) an area determined to be rural in character by the
131+32 United States Department of Agriculture; or
132+33 (C) an urban area contiguous or adjacent to a municipality
133+34 with a population of more than fifty thousand (50,000) if
134+35 the corporation determines the eligible business is rural in
135+36 nature, employs employees from rural areas, or is
136+37 otherwise beneficial to residents of rural areas.
137+38 (12) "Rural fund" means an entity certified by the
138+39 corporation under sections 3 through 5 of this chapter.
139+40 (13) "Rural investor" means an entity that makes a capital
140+41 investment in a rural fund.
141+42 (14) "Senior-secured debt" means any loan that is secured by
145142 SB 346—LS 7400/DI 129 4
146-1 corporation under sections 3 through 5 of this chapter.
147-2 (14) "Rural investor" means an entity that makes a capital
148-3 investment in a rural fund.
149-4 (15) "Senior-secured debt" means any loan that is secured by
150-5 a first mortgage on real estate with a loan-to-value ratio of
151-6 less than eighty percent (80%).
152-7 (16) "State tax liability" means a person's total tax liability
153-8 that is incurred under:
154-9 (A) IC 27-1-18-2 (the insurance premiums tax); and
155-10 (B) IC 27-1-20-12 (the insurance premiums retaliatory
156-11 tax);
157-12 as computed after the application of the credits that under
158-13 IC 6-3.1-1-2 are to be applied before the credit provided by
159-14 this chapter. An insurance company claiming a credit against
160-15 the taxes listed in this subdivision is not required to pay any
161-16 additional retaliatory tax in Indiana as a result of claiming the
162-17 credit.
163-18 (17) "Taxpayer" means an entity that has state tax liability.
164-19 Sec. 3. (a) A rural fund that seeks to have an equity investment
165-20 certified as a capital investment eligible for a credit allowed under
166-21 this chapter must apply to the corporation. The corporation shall
167-22 begin accepting applications within ninety (90) days after July 1,
168-23 2025.
169-24 (b) The application must include each of the following:
170-25 (1) The amount of capital investment requested.
171-26 (2) A copy of the applicant's or an affiliate of the applicant's
172-27 license as a rural business investment company under 7 U.S.C.
173-28 2009cc or as a small business investment company under 15
174-29 U.S.C. 681 and a certificate executed by an executive officer
175-30 of the applicant attesting that the license remains in effect and
176-31 has not been revoked.
177-32 (3) Evidence that, as of the date the application is submitted,
178-33 the applicant or affiliates of the applicant have invested at
179-34 least one hundred million dollars ($100,000,000) in nonpublic
180-35 companies located in counties within the United States with a
181-36 population of less than seventy-five thousand (75,000)
182-37 according to the 2020 federal decennial census. The evidence
183-38 may be in the form of a list containing the names of the
184-39 companies, the location of the companies, and the amounts
185-40 invested by the applicant or affiliates of the applicant.
186-41 However, an officer of the applicant must certify the list.
187-42 (4) A business plan that includes a revenue impact assessment
143+1 a first mortgage on real estate with a loan-to-value ratio of
144+2 less than eighty percent (80%).
145+3 (15) "State tax liability" means a person's total tax liability
146+4 that is incurred under:
147+5 (A) IC 27-1-18-2 (the insurance premiums tax); and
148+6 (B) IC 27-1-20-12 (the insurance premiums retaliatory
149+7 tax);
150+8 as computed after the application of the credits that under
151+9 IC 6-3.1-1-2 are to be applied before the credit provided by
152+10 this chapter. An insurance company claiming a credit against
153+11 the taxes listed in this subdivision is not required to pay any
154+12 additional retaliatory tax in Indiana as a result of claiming the
155+13 credit.
156+14 (16) "Taxpayer" means an entity that has state tax liability.
157+15 Sec. 3. (a) A rural fund that seeks to have an equity investment
158+16 certified as a capital investment eligible for a credit allowed under
159+17 this chapter must apply to the corporation. The corporation shall
160+18 begin accepting applications within ninety (90) days after July 1,
161+19 2025.
162+20 (b) The application must include each of the following:
163+21 (1) The amount of capital investment requested.
164+22 (2) A copy of the applicant's or an affiliate of the applicant's
165+23 license as a rural business investment company under 7 U.S.C.
166+24 2009cc or as a small business investment company under 15
167+25 U.S.C. 681 and a certificate executed by an executive officer
168+26 of the applicant attesting that the license remains in effect and
169+27 has not been revoked.
170+28 (3) Evidence that, as of the date the application is submitted,
171+29 the applicant or affiliates of the applicant have invested at
172+30 least one hundred million dollars ($100,000,000) in nonpublic
173+31 companies located in counties within the United States with a
174+32 population of less than seventy-five thousand (75,000)
175+33 according to the 2020 federal decennial census. The evidence
176+34 may be in the form of a list containing the names of the
177+35 companies, the location of the companies, and the amounts
178+36 invested by the applicant or affiliates of the applicant.
179+37 However, an officer of the applicant must certify the list.
180+38 (4) A business plan that includes a revenue impact assessment
181+39 projecting state and local tax revenue to be generated by the
182+40 applicant's proposed qualified investments, prepared by a
183+41 nationally recognized, third party, independent economic
184+42 forecasting firm using a dynamic economic forecasting model
188185 SB 346—LS 7400/DI 129 5
189-1 projecting state and local tax revenue to be generated by the
190-2 applicant's proposed qualified investments, prepared by a
191-3 nationally recognized, third party, independent economic
192-4 forecasting firm using a dynamic economic forecasting model
193-5 that analyzes the applicant's business plan over the ten (10)
194-6 years following the date the application is submitted to the
195-7 corporation. The plan must include an estimate of the number
196-8 of jobs created and jobs retained in Indiana as a result of the
197-9 applicant's qualified investments.
198-10 (5) A nonrefundable application fee of five thousand dollars
199-11 ($5,000) payable to the corporation.
200-12 Sec. 4. (a) Within thirty (30) days after the receipt of a
201-13 completed application, the corporation shall grant or deny the
202-14 application in full or in part. The corporation shall deny the
203-15 application if any of the following apply:
204-16 (1) The applicant does not satisfy all the criteria set forth in
205-17 section 3 of this chapter.
206-18 (2) The revenue impact assessment submitted with the
207-19 application does not demonstrate that the applicant's business
208-20 plan will result in a positive fiscal impact on Indiana over a
209-21 ten (10) year period that exceeds the cumulative amount of
210-22 credits that would be issued to the applicant if the application
211-23 were approved.
212-24 (3) The corporation has already approved the maximum
213-25 amount of capital investment authority allowed under section
214-26 6 of this chapter.
215-27 (b) If the corporation denies any part of the application, it shall
216-28 inform the applicant of the grounds for the denial. If the applicant
217-29 provides any additional information required by the corporation
218-30 or otherwise completes its application within fifteen (15) days of
219-31 the notice of denial, the application shall be considered complete as
220-32 of the original date of submission. If the applicant fails to provide
221-33 the information or fails to complete its application within the
222-34 fifteen (15) day period, the application shall remain denied and
223-35 must be resubmitted with a new submission date and a new
224-36 application fee.
225-37 Sec. 5. (a) Upon approval of an application, the corporation
226-38 shall provide a certification of the proposed equity investment as
227-39 a capital investment eligible for credits under this chapter, subject
228-40 to the limitations set forth in section 6 of this chapter. The
229-41 corporation shall provide written notice of the certification to the
230-42 applicant, which must include the amount of the applicant's capital
186+1 that analyzes the applicant's business plan over the ten (10)
187+2 years following the date the application is submitted to the
188+3 corporation. The plan must include an estimate of the number
189+4 of jobs created and jobs retained in Indiana as a result of the
190+5 applicant's qualified investments.
191+6 (5) A nonrefundable application fee of five thousand dollars
192+7 ($5,000) payable to the corporation.
193+8 Sec. 4. (a) Within thirty (30) days after the receipt of a
194+9 completed application, the corporation shall grant or deny the
195+10 application in full or in part. The corporation shall deny the
196+11 application if any of the following apply:
197+12 (1) The applicant does not satisfy all the criteria set forth in
198+13 section 3 of this chapter.
199+14 (2) The revenue impact assessment submitted with the
200+15 application does not demonstrate that the applicant's business
201+16 plan will result in a positive fiscal impact on Indiana over a
202+17 ten (10) year period that exceeds the cumulative amount of
203+18 credits that would be issued to the applicant if the application
204+19 were approved.
205+20 (3) The corporation has already approved the maximum
206+21 amount of capital investment authority allowed under section
207+22 6 of this chapter.
208+23 (b) If the corporation denies any part of the application, it shall
209+24 inform the applicant of the grounds for the denial. If the applicant
210+25 provides any additional information required by the corporation
211+26 or otherwise completes its application within fifteen (15) days of
212+27 the notice of denial, the application shall be considered complete as
213+28 of the original date of submission. If the applicant fails to provide
214+29 the information or fails to complete its application within the
215+30 fifteen (15) day period, the application shall remain denied and
216+31 must be resubmitted with a new submission date and a new
217+32 application fee.
218+33 Sec. 5. (a) Upon approval of an application, the corporation
219+34 shall provide a certification of the proposed equity investment as
220+35 a capital investment eligible for credits under this chapter, subject
221+36 to the limitations set forth in section 6 of this chapter. The
222+37 corporation shall provide written notice of the certification to the
223+38 applicant, which must include the amount of the applicant's capital
224+39 investment authority and a schedule of credits by year and amount
225+40 related to the capital investment authority.
226+41 (b) The corporation shall certify proposed capital investments
227+42 in the order that the applications are received by the corporation.
231228 SB 346—LS 7400/DI 129 6
232-1 investment authority and a schedule of credits by year and amount
233-2 related to the capital investment authority.
234-3 (b) The corporation shall certify proposed capital investments
235-4 in the order that the applications are received by the corporation.
236-5 Applications received on the same day shall be deemed to have
237-6 been received simultaneously. For applications that are complete
238-7 and received on the same day, the corporation shall certify
239-8 applications in proportionate percentages based upon the ratio of
240-9 the amount of capital investment authority requested in all
241-10 applications.
242-11 Sec. 6. (a) The corporation may not certify capital investment
243-12 authority under this chapter in an amount that exceeds fifteen
244-13 million dollars ($15,000,000) in credits to be claimed against state
245-14 tax liability in any calendar year, excluding any credit amounts
246-15 carried forward under section 7 of this chapter.
247-16 (b) Within ninety (90) days of the applicant receiving notice of
248-17 certification, the rural fund shall issue the capital investment to
249-18 and receive cash in the amount of the certified amount from a
250-19 rural investor. At least ten percent (10%) of the rural investor's
251-20 capital investment shall be composed of capital raised by the rural
252-21 investor directly or indirectly from sources including directors,
253-22 members, employees, officers, and affiliates of the rural investor,
254-23 other than the amount invested by the allocatee claiming the
255-24 credits in exchange for the allocation of credits. The rural fund
256-25 shall provide the corporation with evidence of the receipt of the
257-26 cash investment within ninety-five (95) days of the applicant
258-27 receiving notice of certification.
259-28 (c) If the rural fund does not receive the cash investment and
260-29 issue the capital investment within the time period following
261-30 receipt of the certification set forth in section 5(a) of this chapter,
262-31 the certification shall lapse and the rural fund shall not issue the
263-32 capital investment without reapplying to the corporation for
264-33 certification. Lapsed certifications shall revert to the corporation
265-34 and shall be reissued on a pro rata basis to applicants whose
266-35 capital investment allocations were reduced in accordance with the
267-36 application process set forth in section 5 of this chapter.
268-37 Sec. 7. (a) Upon making a capital investment in a rural fund, a
269-38 rural investor is entitled to a vested credit against the taxpayer's
270-39 state tax liability that may be used on each credit allowance date of
271-40 the capital investment in an amount equal to:
272-41 (1) the applicable percentage for the credit allowance date;
273-42 multiplied by
229+1 Applications received on the same day shall be deemed to have
230+2 been received simultaneously. For applications that are complete
231+3 and received on the same day, the corporation shall certify
232+4 applications in proportionate percentages based upon the ratio of
233+5 the amount of capital investment authority requested in all
234+6 applications.
235+7 Sec. 6. (a) The corporation may not certify capital investment
236+8 authority under this chapter in an amount that exceeds fifteen
237+9 million dollars ($15,000,000) in credits to be claimed against state
238+10 tax liability in any calendar year, excluding any credit amounts
239+11 carried forward under section 7 of this chapter.
240+12 (b) Within ninety (90) days of the applicant receiving notice of
241+13 certification, the rural fund shall issue the capital investment to
242+14 and receive cash in the amount of the certified amount from a
243+15 rural investor. At least ten percent (10%) of the rural investor's
244+16 capital investment shall be composed of capital raised by the rural
245+17 investor directly or indirectly from sources including directors,
246+18 members, employees, officers, and affiliates of the rural investor,
247+19 other than the amount invested by the allocatee claiming the
248+20 credits in exchange for the allocation of credits. The rural fund
249+21 shall provide the corporation with evidence of the receipt of the
250+22 cash investment within ninety-five (95) days of the applicant
251+23 receiving notice of certification.
252+24 (c) If the rural fund does not receive the cash investment and
253+25 issue the capital investment within the time period following
254+26 receipt of the certification set forth in section 5(a) of this chapter,
255+27 the certification shall lapse and the rural fund shall not issue the
256+28 capital investment without reapplying to the corporation for
257+29 certification. Lapsed certifications shall revert to the corporation
258+30 and shall be reissued on a pro rata basis to applicants whose
259+31 capital investment allocations were reduced in accordance with the
260+32 application process set forth in section 5 of this chapter.
261+33 Sec. 7. (a) Upon making a capital investment in a rural fund, a
262+34 rural investor is entitled to a vested credit against the taxpayer's
263+35 state tax liability that may be used on each credit allowance date of
264+36 the capital investment in an amount equal to:
265+37 (1) the applicable percentage for the credit allowance date;
266+38 multiplied by
267+39 (2) the purchase price paid to the rural fund for the capital
268+40 investment.
269+41 (b) The amount of the credit claimed by a taxpayer shall not
270+42 exceed the amount of the taxpayer's state tax liability for the tax
274271 SB 346—LS 7400/DI 129 7
275-1 (2) the purchase price paid to the rural fund for the capital
276-2 investment.
277-3 (b) The amount of the credit claimed by a taxpayer shall not
278-4 exceed the amount of the taxpayer's state tax liability for the tax
279-5 year for which the credit is claimed. Any amount of credit that a
280-6 taxpayer is prohibited from claiming in a tax year as a result of this
281-7 section may be carried forward for use in any of the five (5)
282-8 subsequent tax years.
283-9 (c) The credit shall not be carried back and is not refundable.
284-10 Sec. 8. No credit claimed under this chapter shall be refundable
285-11 or saleable on the open market. Credits may be transferred to
286-12 affiliates of a taxpayer. Credits earned by or allocated to a
287-13 partnership, limited liability company, or S corporation may be
288-14 allocated to the partners, members, or shareholders of such an
289-15 entity for their use in accordance with the provisions of any
290-16 agreement among such partners, members or shareholders, and a
291-17 rural fund shall notify the department of taxpayers that are eligible
292-18 to utilize credits and transfers upon such allocation, change, or
293-19 transfer. Such allocations shall not be considered a sale for the
294-20 purpose of this section.
295-21 Sec. 9. To apply a credit under this chapter against the
296-22 taxpayer's state tax liability, a taxpayer must claim the credit on
297-23 the taxpayer's annual state tax return or returns in the manner
298-24 prescribed by the department. The taxpayer must attach the
299-25 certification provided by the corporation in accordance with
300-26 section 5(a) of this chapter and any additional information that the
301-27 department determines is necessary for the department to
302-28 determine whether the taxpayer is eligible for the credit.
303-29 Sec. 10. (a) A credit is subject to recapture if any of the
304-30 following circumstances apply:
305-31 (1) The rural fund does not invest:
306-32 (A) at least sixty percent (60%) of its capital investment
307-33 authority in qualified investments in Indiana within two (2)
308-34 years of the credit allowance date; and
309-35 (B) one hundred percent (100%) of its capital investment
310-36 authority in qualified investments in Indiana within three
311-37 (3) years of the credit allowance date.
312-38 (2) The rural fund fails to maintain qualified investments
313-39 equal to one hundred percent (100%) of its capital investment
314-40 authority from the third anniversary until the sixth
315-41 anniversary of the credit allowance date. For purposes of this
316-42 subdivision, a qualified investment is considered maintained
272+1 year for which the credit is claimed. Any amount of credit that a
273+2 taxpayer is prohibited from claiming in a tax year as a result of this
274+3 section may be carried forward for use in any of the five (5)
275+4 subsequent tax years.
276+5 (c) The credit shall not be carried back and is not refundable.
277+6 Sec. 8. No credit claimed under this chapter shall be refundable
278+7 or saleable on the open market. Credits may be transferred to
279+8 affiliates of a taxpayer. Credits earned by or allocated to a
280+9 partnership, limited liability company, or S corporation may be
281+10 allocated to the partners, members, or shareholders of such an
282+11 entity for their use in accordance with the provisions of any
283+12 agreement among such partners, members or shareholders, and a
284+13 rural fund shall notify the department of taxpayers that are eligible
285+14 to utilize credits and transfers upon such allocation, change, or
286+15 transfer. Such allocations shall not be considered a sale for the
287+16 purpose of this section.
288+17 Sec. 9. To apply a credit under this chapter against the
289+18 taxpayer's state tax liability, a taxpayer must claim the credit on
290+19 the taxpayer's annual state tax return or returns in the manner
291+20 prescribed by the department. The taxpayer must attach the
292+21 certification provided by the corporation in accordance with
293+22 section 5(a) of this chapter and any additional information that the
294+23 department determines is necessary for the department to
295+24 determine whether the taxpayer is eligible for the credit.
296+25 Sec. 10. (a) A credit is subject to recapture if any of the
297+26 following circumstances apply:
298+27 (1) The rural fund does not invest:
299+28 (A) at least sixty percent (60%) of its capital investment
300+29 authority in qualified investments in Indiana within two (2)
301+30 years of the credit allowance date; and
302+31 (B) one hundred percent (100%) of its capital investment
303+32 authority in qualified investments in Indiana within three
304+33 (3) years of the credit allowance date.
305+34 (2) The rural fund fails to maintain qualified investments
306+35 equal to one hundred percent (100%) of its capital investment
307+36 authority from the third anniversary until the sixth
308+37 anniversary of the credit allowance date. For purposes of this
309+38 subdivision, a qualified investment is considered maintained
310+39 even if the qualified investment was sold or repaid as long as
311+40 the rural fund reinvests an amount equal to the capital
312+41 returned or recovered or repaid by the rural fund from the
313+42 original investment, exclusive of any profits realized, in other
317314 SB 346—LS 7400/DI 129 8
318-1 even if the qualified investment was sold or repaid as long as
319-2 the rural fund reinvests an amount equal to the capital
320-3 returned or recovered or repaid by the rural fund from the
321-4 original investment, exclusive of any profits realized, in other
322-5 qualified investments in Indiana within twelve (12) months of
323-6 receipt of the capital. Amounts received periodically by a
324-7 rural fund shall be treated as maintained in qualified
325-8 investments if the amounts are reinvested in one (1) or more
326-9 qualified investments by the end of the following calendar
327-10 year. A rural fund is not required to reinvest capital returned
328-11 from qualified investments after the fifth anniversary of the
329-12 credit allowance date, and the qualified investments shall be
330-13 considered maintained by the rural fund through the sixth
331-14 anniversary of the credit allowance date.
332-15 (3) Before the earlier of:
333-16 (A) exiting the program in accordance with this chapter;
334-17 or
335-18 (B) thirty (30) days after the sixth anniversary of the credit
336-19 allowance date;
337-20 the rural fund makes a distribution or payment that results in
338-21 the rural fund having less than one hundred percent (100%)
339-22 of its capital investment authority invested in qualified
340-23 investments in Indiana or held in cash or other marketable
341-24 securities.
342-25 (4) The rural fund violates section 11 of this chapter, in which
343-26 case the corporation may recapture an amount equal to the
344-27 amount of the rural fund's capital investment authority found
345-28 to be in violation of those provisions.
346-29 (b) Recaptured credits and related capital investment authority
347-30 shall revert to the corporation and shall be reissued on a pro rata
348-31 basis to applicants whose capital investment allocations were
349-32 reduced in accordance with sections 3 through 5 of this chapter.
350-33 (c) No recapture shall occur until the rural fund has been given
351-34 notice of noncompliance and afforded six (6) months from the date
352-35 of the notice to cure the noncompliance.
353-36 (d) A rural fund, before making a qualified investment, may
354-37 request from the corporation a written opinion as to whether the
355-38 business in which it proposes to invest is an eligible business. The
356-39 corporation, not later than fifteen (15) business days after the date
357-40 of receipt of the request, shall notify the rural fund of its
358-41 determination. If the corporation fails to notify the rural fund of its
359-42 determination by the twentieth business day, the business in which
315+1 qualified investments in Indiana within twelve (12) months of
316+2 receipt of the capital. Amounts received periodically by a
317+3 rural fund shall be treated as maintained in qualified
318+4 investments if the amounts are reinvested in one (1) or more
319+5 qualified investments by the end of the following calendar
320+6 year. A rural fund is not required to reinvest capital returned
321+7 from qualified investments after the fifth anniversary of the
322+8 credit allowance date, and the qualified investments shall be
323+9 considered maintained by the rural fund through the sixth
324+10 anniversary of the credit allowance date.
325+11 (3) Before the earlier of:
326+12 (A) exiting the program in accordance with this chapter;
327+13 or
328+14 (B) thirty (30) days after the sixth anniversary of the credit
329+15 allowance date;
330+16 the rural fund makes a distribution or payment that results in
331+17 the rural fund having less than one hundred percent (100%)
332+18 of its capital investment authority invested in qualified
333+19 investments in Indiana or held in cash or other marketable
334+20 securities.
335+21 (4) The rural fund violates section 11 of this chapter, in which
336+22 case the corporation may recapture an amount equal to the
337+23 amount of the rural fund's capital investment authority found
338+24 to be in violation of those provisions.
339+25 (b) Recaptured credits and related capital investment authority
340+26 shall revert to the corporation and shall be reissued on a pro rata
341+27 basis to applicants whose capital investment allocations were
342+28 reduced in accordance with sections 3 through 5 of this chapter.
343+29 (c) No recapture shall occur until the rural fund has been given
344+30 notice of noncompliance and afforded six (6) months from the date
345+31 of the notice to cure the noncompliance.
346+32 (d) A rural fund, before making a qualified investment, may
347+33 request from the corporation a written opinion as to whether the
348+34 business in which it proposes to invest is an eligible business. The
349+35 corporation, not later than fifteen (15) business days after the date
350+36 of receipt of the request, shall notify the rural fund of its
351+37 determination. If the corporation fails to notify the rural fund of its
352+38 determination by the twentieth business day, the business in which
353+39 the rural fund proposes to invest shall be deemed an eligible
354+40 business.
355+41 Sec. 11. No eligible business that receives a qualified investment
356+42 under this chapter or any affiliates of the eligible business shall
360357 SB 346—LS 7400/DI 129 9
361-1 the rural fund proposes to invest shall be deemed an eligible
362-2 business.
363-3 Sec. 11. No eligible business that receives a qualified investment
364-4 under this chapter or any affiliates of the eligible business shall
365-5 directly or indirectly:
366-6 (1) own or have the right to acquire an ownership interest in
367-7 a rural fund or in a member or affiliate of a rural fund
368-8 including, but not limited to, a holder of a capital investment
369-9 issued by a rural fund; or
370-10 (2) lend to or invest in a rural fund or any member or affiliate
371-11 of a rural fund including, but not limited to, a holder of
372-12 capital investment issued by a rural fund, where the proceeds
373-13 of the loan or investment are directly or indirectly used to
374-14 fund or refinance the purchase of capital investments under
375-15 this chapter.
376-16 Sec. 12. (a) A rural fund shall submit a report to the corporation
377-17 by June 30 of each calendar year during the credit allowance
378-18 period.
379-19 (b) The report following the second anniversary of the initial
358+1 directly or indirectly:
359+2 (1) own or have the right to acquire an ownership interest in
360+3 a rural fund or in a member or affiliate of a rural fund
361+4 including, but not limited to, a holder of a capital investment
362+5 issued by a rural fund; or
363+6 (2) lend to or invest in a rural fund or any member or affiliate
364+7 of a rural fund including, but not limited to, a holder of
365+8 capital investment issued by a rural fund, where the proceeds
366+9 of the loan or investment are directly or indirectly used to
367+10 fund or refinance the purchase of capital investments under
368+11 this chapter.
369+12 Sec. 12. (a) A rural fund shall submit a report to the corporation
370+13 by June 30 of each calendar year during the credit allowance
371+14 period.
372+15 (b) The report following the second anniversary of the initial
373+16 credit allowance date shall provide documentation as to the
374+17 investment of at least sixty percent (60%) of the purchase price of
375+18 such capital investment in qualified investments.
376+19 (c) The report following the third anniversary of the initial
380377 20 credit allowance date shall provide documentation as to the
381-21 investment of at least sixty percent (60%) of the purchase price of
382-22 such capital investment in qualified investments.
383-23 (c) The report following the third anniversary of the initial
384-24 credit allowance date shall provide documentation as to the
385-25 investment of one hundred percent (100%) of the purchase price
386-26 of such capital investment in qualified investments. Unless
387-27 previously reported under this section, the report must also include
388-28 the following information:
389-29 (1) The name and location of each eligible business receiving
390-30 a qualified investment.
391-31 (2) Bank statements of the rural fund evidencing each
392-32 qualified investment.
393-33 (3) A copy of the written opinion of the corporation, as
394-34 provided in section 10(d) of this chapter, or evidence that the
395-35 business was an eligible business at the time of the qualified
396-36 investment, as applicable.
397-37 (4) The number of jobs created and jobs retained as a result
398-38 of each qualified investment.
399-39 (5) The average salary of the jobs described in subdivision (4).
400-40 (6) Any other information required by the corporation.
401-41 (d) For all subsequent years, a rural fund shall submit an annual
402-42 report to the corporation by June 30 of each calendar year during
378+21 investment of one hundred percent (100%) of the purchase price
379+22 of such capital investment in qualified investments. Unless
380+23 previously reported under this section, the report must also include
381+24 the following information:
382+25 (1) The name and location of each eligible business receiving
383+26 a qualified investment.
384+27 (2) Bank statements of the rural fund evidencing each
385+28 qualified investment.
386+29 (3) A copy of the written opinion of the corporation, as
387+30 provided in section 10(d) of this chapter, or evidence that the
388+31 business was an eligible business at the time of the qualified
389+32 investment, as applicable.
390+33 (4) The number of jobs created and jobs retained as a result
391+34 of each qualified investment.
392+35 (5) The average salary of the jobs described in subdivision (4).
393+36 (6) Any other information required by the corporation.
394+37 (d) For all subsequent years, a rural fund shall submit an annual
395+38 report to the corporation by June 30 of each calendar year during
396+39 the credit allowance period, which must include the following
397+40 information:
398+41 (1) The number of jobs created and jobs retained as a result
399+42 of qualified investments.
403400 SB 346—LS 7400/DI 129 10
404-1 the credit allowance period, which must include the following
405-2 information:
406-3 (1) The number of jobs created and jobs retained as a result
407-4 of qualified investments.
408-5 (2) The average annual salary of jobs described in subdivision
409-6 (1).
410-7 (3) Any other information required by the corporation.
411-8 Sec. 13. On or after the sixth anniversary of the credit allowance
412-9 date, a rural fund may apply to the corporation to exit the program
413-10 and no longer be subject to the requirements established under this
414-11 chapter. The corporation shall respond to the exit application
415-12 within fifteen (15) days of receipt. In evaluating the exit
416-13 application, the fact that no credits have been recaptured and that
417-14 the rural fund has not received a notice of recapture that has not
418-15 been cured as allowed under section 10(c) of this chapter shall be
419-16 sufficient evidence to prove that the rural fund is eligible for exit.
420-17 The corporation shall not unreasonably deny an exit application
421-18 submitted under this section. If an exit application is denied, the
422-19 notice shall include the reasons for the determination.
401+1 (2) The average annual salary of jobs described in subdivision
402+2 (1).
403+3 (3) Any other information required by the corporation.
404+4 Sec. 13. On or after the sixth anniversary of the credit allowance
405+5 date, a rural fund may apply to the corporation to exit the program
406+6 and no longer be subject to the requirements established under this
407+7 chapter. The corporation shall respond to the exit application
408+8 within fifteen (15) days of receipt. In evaluating the exit
409+9 application, the fact that no credits have been recaptured and that
410+10 the rural fund has not received a notice of recapture that has not
411+11 been cured as allowed under section 10(c) of this chapter shall be
412+12 sufficient evidence to prove that the rural fund is eligible for exit.
413+13 The corporation shall not unreasonably deny an exit application
414+14 submitted under this section. If an exit application is denied, the
415+15 notice shall include the reasons for the determination.
423416 SB 346—LS 7400/DI 129 11
424417 COMMITTEE REPORT
425418 Mr. President: The Senate Committee on Tax and Fiscal Policy, to
426419 which was referred Senate Bill No. 346, has had the same under
427420 consideration and begs leave to report the same back to the Senate with
428421 the recommendation that said bill DO PASS.
429422 (Reference is to SB 346 as introduced.)
430423
431424 HOLDMAN, Chairperson
432425 Committee Vote: Yeas 12, Nays 1
433-_____
434-SENATE MOTION
435-Mr. President: I move that Senate Bill 346 be amended to read as
436-follows:
437-Page 2, between lines 37 and 38, begin a new line block indented
438-and insert:
439-"(8) "Municipality" means city or town.".
440-Page 2, line 38, delete "(8)" and insert "(9)".
441-Page 3, line 6, delete "(9)" and insert "(10)".
442-Page 3, line 10, delete "(10)" and insert "(11)".
443-Page 3, line 27, delete "(11)" and insert "(12)".
444-Page 3, line 32, delete "or".
445-Page 3, line 37, delete "rural areas." and insert "rural areas; or
446-(D) any municipality in Indiana with a population that
447-does not exceed seven thousand (7,000) according to the
448-2020 federal decennial census.".
449-Page 3, line 38, delete "(12)" and insert "(13)".
450-Page 3, line 40, delete "(13)" and insert "(14)".
451-Page 3, line 42, delete "(14)" and insert "(15)".
452-Page 4, line 3, delete "(15)" and insert "(16)".
453-Page 4, line 14, delete "(16)" and insert "(17)".
454-(Reference is to SB 346 as printed February 12, 2025.)
455-BUCHANAN
456426 SB 346—LS 7400/DI 129