Indiana 2025 Regular Session

Indiana Senate Bill SB0452 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~SB0452.1~~
2		-	~~January 22, 2025~~
	1	+
	2	+	Introduced Version
3	3		SENATE BILL No. 452
4	4		_____
5		-	DIGEST OF ~~SB 452 (Updated January 21, 2025 10:59 am - DI 140)~~
6		-	Citations Affected: IC 2-5.
	5	+	DIGEST OF INTRODUCED BILL
	6	+	Citations Affected: IC 2-5-3.2-1.
7	7		Synopsis: Tax incentive review. Amends provisions that apply to the
8	8		legislative services agency's periodic tax incentives review and
9	9		analysis.
10	10		Effective: July 1, 2025.
11		-	Holdman~~, Baldwin~~
	11	+	Holdman
12	12		January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
13		-	January 21, 2025, reported favorably — Do Pass.
14		-	SB 452—LS 6998/DI 120 January 22, 2025
	13	+	2025 IN 452—LS 6998/DI 120 Introduced
15	14		First Regular Session of the 124th General Assembly (2025)
16	15		PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
17	16		Constitution) is being amended, the text of the existing provision will appear in this style type,
18	17		additions will appear in this style type, and deletions will appear in this style type.
19	18		Additions: Whenever a new statutory provision is being enacted (or a new constitutional
20	19		provision adopted), the text of the new provision will appear in this style type. Also, the
21	20		word NEW will appear in that style type in the introductory clause of each SECTION that adds
22	21		a new provision to the Indiana Code or the Indiana Constitution.
23	22		Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
24	23		between statutes enacted by the 2024 Regular Session of the General Assembly.
25	24		SENATE BILL No. 452
26	25		A BILL FOR AN ACT to amend the Indiana Code concerning
27	26		taxation.
28	27		Be it enacted by the General Assembly of the State of Indiana:
29	28		1 SECTION 1. IC 2-5-3.2-1, AS AMENDED BY P.L.9-2024,
30	29		2 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31	30		3 JULY 1, 2025]: Sec. 1. (a) As used in this section, "tax incentive"
32	31		4 means a benefit provided through a state or local tax that is intended to
33	32		5 alter, reward, or subsidize a particular action or behavior by the tax
34	33		6 incentive recipient, including a benefit intended to encourage economic
35	34		7 development. The term includes the following:
36	35		8 (1) An exemption, deduction, credit, preferential rate, or other tax
37	36		9 benefit that:
38	37		10 (A) reduces the amount of a tax that would otherwise be due
39	38		11 to the state;
40	39		12 (B) results in a tax refund in excess of any tax due; or
41	40		13 (C) reduces the amount of property taxes that would otherwise
42	41		14 be due to a political subdivision of the state.
43	42		15 (2) The dedication of revenue by a political subdivision to provide
44	43		16 improvements or to retire bonds issued to pay for improvements
45	44		17 in an economic or sports development area, a community
46		-	SB 452—LS 6998/DI 120 2
	45	+	2025 IN 452—LS 6998/DI 120 2
47	46		1 revitalization area, an enterprise zone, a tax increment financing
48	47		2 district, or any other similar area or district.
49	48		3 (b) The general assembly intends that each tax incentive effectuate
50	49		4 the purposes for which it was enacted and that the cost of tax incentives
51	50		5 should be included more readily in the biennial budgeting process. To
52	51		6 provide the general assembly with the information it needs to make
53	52		7 informed policy choices about the efficacy of each tax incentive, the
54	53		8 legislative services agency shall conduct a regular review, analysis, and
55	54		9 evaluation of all tax incentives according to a schedule developed by
56	55		10 the legislative services agency.
57	56		11 (c) The legislative services agency shall conduct a systematic and
58	57		12 comprehensive review, analysis, and evaluation of each tax incentive
59	58		13 scheduled for review. The review, analysis, and evaluation must
60	59		14 include information about each tax incentive that is necessary to
61	60		15 achieve the goals described in subsection (b), which may include any
62	61		16 of the following:
63	62		17 (1) The basic attributes and policy goals of the tax incentive,
64	63		18 including the statutory and programmatic goals of the tax
65	64		19 incentive, the economic parameters of the tax incentive, the
66	65		20 original scope and purpose of the tax incentive, and how the
67	66		21 scope or purpose has changed over time.
68	67		22 (2) The tax incentive's equity, simplicity, competitiveness, public
69	68		23 purpose, adequacy, and extent of conformance with the original
70	69		24 purposes of the legislation enacting the tax incentive.
71	70		25 (3) The types of activities on which the tax incentive is based and
72	71		26 how effective the tax incentive has been in promoting these
73	72		27 targeted activities and in assisting recipients of the tax incentive.
74	73		28 (4) The count of the following:
75	74		29 (A) Applicants for the tax incentive.
76	75		30 (B) Applicants that qualify for the tax incentive.
77	76		31 (C) Qualified applicants that, if applicable, are approved to
78	77		32 receive the tax incentive.
79	78		33 (D) Taxpayers that actually claim the tax incentive.
80	79		34 (E) Taxpayers that actually receive the tax incentive.
81	80		35 (5) The dollar amount of the tax incentive benefits that has been
82	81		36 actually claimed by all taxpayers over time, including the
83	82		37 following:
84	83		38 (A) The dollar amount of the tax incentive, listed by the North
85	84		39 American Industrial Classification System (NAICS) Code
86	85		40 associated with the tax incentive recipients, if an NAICS Code
87	86		41 is available.
88	87		42 (B) The dollar amount of income tax credits that can be carried
89		-	SB 452—LS 6998/DI 120 3
	88	+	2025 IN 452—LS 6998/DI 120 3
90	89		1 forward for the next five (5) state fiscal years.
91	90		2 (6) An estimate of the economic impact of the tax incentive,
92	91		3 including the following:
93	92		4 (A) A return on investment calculation for the tax incentive.
94	93		5 For purposes of this clause, "return on investment calculation"
95	94		6 means analyzing the cost to the state or political subdivision of
96	95		7 providing the tax incentive, analyzing the benefits realized by
97	96		8 the state or political subdivision from providing the tax
98	97		9 incentive.
99	98		10 (B) A cost-benefit comparison of the state and local revenue
100	99		11 foregone and property taxes shifted to other taxpayers as a
101	100		12 result of allowing the tax incentive, compared to tax revenue
102	101		13 generated by the taxpayer receiving the incentive, including
103	102		14 direct taxes applied to the taxpayer and taxes applied to the
104	103		15 taxpayer's employees.
105	104		16 (C) An estimate of the number of jobs that were the direct
106	105		17 result of the tax incentive.
107	106		18 (D) For any tax incentive that is reviewed or approved by the
108	107		19 Indiana economic development corporation, a statement by the
109	108		20 chief executive officer of the Indiana economic development
110	109		21 corporation as to whether the statutory and programmatic
111	110		22 goals of the tax incentive are being met, with obstacles to these
112	111		23 goals identified, if possible.
113	112		24 (7) The methodology and assumptions used in carrying out the
114	113		25 reviews, analyses, and evaluations required under this subsection.
115	114		26 (8) The estimated cost to the state to administer the tax incentive.
116	115		27 (9) An estimate of the extent to which benefits of the tax incentive
117	116		28 remained in Indiana or flowed outside Indiana.
118	117		29 (10) Whether the effectiveness of the tax incentive could be
119	118		30 determined more definitively if the general assembly were to
120	119		31 clarify or modify the tax incentive's goals and intended purpose.
121	120		32 (11) Whether measuring the economic impact is significantly
122	121		33 limited due to data constraints and whether any changes in statute
123	122		34 would facilitate data collection in a way that would allow for
124	123		35 better review, analysis, or evaluation.
125	124		36 (12) An estimate of the indirect economic benefit or activity
126	125		37 stimulated by the tax incentive.
127	126		38 (13) Any additional review, analysis, or evaluation that the
128	127		39 legislative services agency considers advisable, including
129	128		40 comparisons with tax incentives offered by other states if those
130	129		41 comparisons would add value to the review, analysis, and
131	130		42 evaluation.
132		-	SB 452—LS 6998/DI 120 4
	131	+	2025 IN 452—LS 6998/DI 120 4
133	132		1 The legislative services agency may request a state or local official or
134	133		2 a state agency, a political subdivision, a body corporate and politic, or
135	134		3 a county or municipal redevelopment commission to furnish
136	135		4 information necessary to complete the tax incentive review, analysis,
137	136		5 and evaluation required by this section. An official or entity presented
138	137		6 with a request from the legislative services agency under this
139	138		7 subsection shall cooperate with the legislative services agency in
140	139		8 providing the requested information. An official or entity may require
141	140		9 that the legislative services agency adhere to the provider's rules, if any,
142	141		10 that concern the confidential nature of the information.
143	142		11 (d) The legislative services agency shall, before October 1 of each
144	143		12 year, submit a report to the legislative council, in an electronic format
145	144		13 under IC 5-14-6, and to the interim study committee on fiscal policy
146	145		14 established by IC 2-5-1.3-4 containing the results of the legislative
147	146		15 services agency's review, analysis, and evaluation. The report must
148	147		16 include at least the following:
149	148		17 (1) A detailed description of the review, analysis, and evaluation
150	149		18 for each tax incentive reviewed.
151	150		19 (2) Information to be used by the general assembly to determine
152	151		20 whether a reviewed tax incentive should be continued, modified,
153	152		21 or terminated, the basis for the recommendation, and the expected
154	153		22 impact of the recommendation on the state's economy.
155	154		23 (3) Information to be used by the general assembly to better align
156	155		24 a reviewed tax incentive with the original intent of the legislation
157	156		25 that enacted the tax incentive.
158	157		26 The report required by this subsection must not disclose any
159	158		27 proprietary or otherwise confidential taxpayer information.
160	159		28 (e) The interim study committee on fiscal policy shall do the
161	160		29 following:
162	161		30 (1) Hold at least one (1) public hearing after September 30 and
163	162		31 before November 1 of each year at which:
164	163		32 (A) the legislative services agency presents the review,
165	164		33 analysis, and evaluation of tax incentives; and
166	165		34 (B) the interim study committee receives information
167	166		35 concerning tax incentives.
168	167		36 (2) Submit to the legislative council, in an electronic format under
169	168		37 IC 5-14-6, any recommendations made by the interim study
170	169		38 committee that are related to the legislative services agency's
171	170		39 review, analysis, and evaluation of tax incentives prepared under
172	171		40 this section.
173	172		41 (f) The general assembly shall use the legislative services agency's
174	173		42 report under this section and the interim study committee on fiscal
175		-	SB 452—LS 6998/DI 120 5
	174	+	2025 IN 452—LS 6998/DI 120 5
176	175		1 policy's recommendations under this section to determine whether a
177	176		2 particular tax incentive:
178	177		3 (1) is successful;
179	178		4 (2) is provided at a cost that can be accommodated by the state's
180	179		5 biennial budget; and
181	180		6 (3) should be continued, amended, or repealed.
182	181		7 (g) The legislative services agency shall establish and maintain a
183	182		8 system for making available to the public information about the amount
184	183		9 and effectiveness of tax incentives.
185	184		10 (h) The legislative services agency shall develop and publish on the
186	185		11 general assembly's website a multi-year schedule that lists all tax
187	186		12 incentives and indicates the year when the report will be published for
188	187		13 each tax incentive reviewed. The legislative services agency may revise
189	188		14 the schedule as long as the legislative services agency provides for a
190	189		15 systematic review, analysis, and evaluation of all tax incentives and
191	190		16 that each tax incentive is reviewed at least once. every seven (7) years.
192	191		17 (i) This section expires December 31, 2025.
193		-	SB 452—LS 6998/DI 120 6
194		-	COMMITTEE REPORT
195		-	Mr. President: The Senate Committee on Tax and Fiscal Policy, to
196		-	which was referred Senate Bill No. 452, has had the same under
197		-	consideration and begs leave to report the same back to the Senate with
198		-	the recommendation that said bill DO PASS.
199		-	(Reference is to SB 452 as introduced.)
200		-
201		-	HOLDMAN, Chairperson
202		-	Committee Vote: Yeas 13, Nays 0
203		-	SB 452—LS 6998/DI 120
	192	+	2025 IN 452—LS 6998/DI 120