Bill Text: IN HB1462 | 2013 | Regular Session | Amended
Bill Title: Economic development.
Spectrum: Slight Partisan Bill (Republican 3-1)
Status: (Introduced - Dead) 2013-02-07 - Representatives Bacon and Battles added as coauthors [HB1462 Detail]
Download: Indiana-2013-HB1462-Amended.html
Citations Affected: IC 6-3.1; IC 6-3.5; IC 36-7.
Synopsis: Economic development. Permits a venture capital
investment tax credit that has been certified by the Indiana economic
development corporation to be applied against tax liability when the
qualified investment capital is provided regardless of whether the total
amount of tax credits applied by all taxpayers in a particular calendar
year exceeds $12,500,000. Permits the office of community and rural
affairs to designate an applicant rural county as a rural
entrepreneurship area development incentives area. Provides for the
distribution of adjusted gross income taxes annually paid by employees
working in an area for a new business and by the new business itself to
the rural county for the development of new business opportunities in
the rural county, including transfers to local or regional venture capital
funds. Limits the amount that may be distributed to a particular county
in any year to $500,000.
Effective: Upon passage; January 1, 2013 (retroactive); July 1, 2013.
January 22, 2013, read first time and referred to Committee on Commerce, Small Business
and Economic Development.
February 7, 2013, amended, reported _ Do Pass. Referred to Committee on Ways and
Means pursuant to Rule 127.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
(b) Notwithstanding the other provisions of this chapter, a taxpayer is not entitled to a credit for providing qualified investment capital to
a qualified Indiana business after December 31, 2016. However, this
subsection may not be construed to prevent a taxpayer from carrying
over to a taxable year beginning after December 31, 2016, an unused
tax credit attributable to an investment occurring before January 1,
2017.
(b) The application required under subsection (a) must include:
(1) the name and address of the taxpayer;
(2) the name and address of each proposed recipient of the taxpayer's proposed investment;
(3) the amount of the proposed investment;
(4) a copy of the certification issued under section 7 of this chapter that the proposed recipient is a qualified Indiana business; and
(5) any other information required by the Indiana economic development corporation.
(c) If the Indiana economic development corporation determines that:
(1) the proposed investment would qualify the taxpayer for a credit under this chapter; and
(2) the amount of the proposed investment would not result in the total amount of tax credits certified
the corporation shall certify the taxpayer's proposed investment plan.
(d) To receive a credit under this chapter, the taxpayer must provide qualified investment capital to a qualified Indiana business according to the taxpayer's certified investment plan within two (2) years after the date on which the Indiana economic development corporation certifies the investment plan.
(e) Upon making the investment required under subsection (d), the taxpayer shall provide proof of the investment to the Indiana economic development corporation.
(f) Upon receiving proof of a taxpayer's investment under subsection (e), the Indiana economic development corporation shall issue the taxpayer a certificate indicating that the taxpayer has fulfilled the
requirements of the corporation and that the taxpayer is entitled to a
credit under this chapter.
(g) A taxpayer forfeits the right to a tax credit attributable to an
investment certified under subsection (c) if the taxpayer fails to make
the proposed investment within the period required under subsection
(d).
(1) Economic development.
(2) The development of new technology.
(3) Industrial and commercial growth.
(4) Employment opportunities.
(5) The diversification of industry and commerce.
The fostering of economic development and the development of new technology under this section or section 13.6 of this chapter for the benefit of the general public, including industrial and commercial enterprises, is a public purpose.
(b) The fiscal bodies of two (2) or more counties or municipalities may, by resolution, do the following:
(1) Determine that part or all the taxes received by the units under this chapter should be combined to foster:
(A) economic development;
(B) the development of new technology; and
(C) industrial and commercial growth.
(2) Establish a regional venture capital fund.
(c) Each unit participating in a regional venture capital fund established under subsection (b) may deposit the following in the fund:
(1) Taxes distributed to the unit under this chapter.
(2) The proceeds of public or private grants.
(3) Revenues received by a county under IC 36-7-37.
(d) A regional venture capital fund shall be administered by a governing board. The expenses of administering the fund shall be paid from money in the fund. The governing board shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public money may be invested. Interest that accrues from these investments shall be deposited into the fund. The
fund is subject to an annual audit by the state board of accounts. The
fund shall bear the full costs of the audit.
(e) The fiscal body of each participating unit shall approve an
interlocal agreement created under IC 36-1-7 establishing the terms for
the administration of the regional venture capital fund. The terms must
include the following:
(1) The membership of the governing board.
(2) The amount of each unit's contribution to the fund.
(3) The procedures and criteria under which the governing board
may loan or grant money from the fund.
(4) The procedures for the dissolution of the fund and for the
distribution of money remaining in the fund at the time of the
dissolution.
(f) An interlocal agreement made by the participating units under
subsection (e) must provide that:
(1) each of the participating units is represented by at least one (1)
member of the governing board; and
(2) the membership of the governing board is established on a
bipartisan basis so that the number of the members of the
governing board who are members of one (1) political party may
not exceed the number of members of the governing board
required to establish a quorum.
(g) A majority of the governing board constitutes a quorum, and the
concurrence of a majority of the governing board is necessary to
authorize any action.
(h) An interlocal agreement made by the participating units under
subsection (e) must be submitted to the Indiana economic development
corporation for approval before the participating units may contribute
to the fund.
(i) A majority of members of a governing board of a regional
venture capital fund established under this section must have at least
five (5) years of experience in business, finance, or venture capital.
(j) The governing board of the fund may loan or grant money from
the fund to a private or public entity if the governing board finds that
the loan or grant will be used by the borrower or grantee for at least one
(1) of the following economic development purposes:
(1) To promote significant employment opportunities for the
residents of the units participating in the regional venture capital
fund.
(2) To attract a major new business enterprise to a participating
unit.
(3) To develop, retain, or expand a significant business enterprise
in a participating unit.
(k) The expenditures of a borrower or grantee of money from a
regional venture capital fund that are considered to be for an economic
development purpose include expenditures for any of the following:
(1) Research and development of technology.
(2) Job training and education.
(3) Acquisition of property interests.
(4) Infrastructure improvements.
(5) New buildings or structures.
(6) Rehabilitation, renovation, or enlargement of buildings or
structures.
(7) Machinery, equipment, and furnishings.
(8) Funding small business development with respect to:
(A) prototype products or processes;
(B) marketing studies to determine the feasibility of new
products or processes; or
(C) business plans for the development and production of new
products or processes.
(b) A unit establishing a local venture capital fund under subsection (a) may deposit the following in the fund:
(1) Taxes distributed to the unit under this chapter.
(2) The proceeds of public or private grants.
(3) Revenues received by a county under IC 36-7-37.
(c) A local venture capital fund shall be administered by a governing board. The expenses of administering the fund shall be paid from money in the fund. The governing board shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public money may be invested. Interest that accrues from these investments shall be deposited into the fund. The fund is subject to an annual audit by the state board of accounts. The fund shall bear the full costs of the audit.
(d) The fiscal body of a unit establishing a local venture capital fund under subsection (a) shall establish the terms for the administration of the local venture capital fund. The terms must include the following:
(1) The membership of the governing board.
(2) The amount of the unit's contribution to the fund.
(3) The procedures and criteria under which the governing board may loan or grant money from the fund.
(4) The procedures for the dissolution of the fund and for the distribution of money remaining in the fund at the time of the dissolution.
(e) A unit establishing a local venture capital fund under subsection (a) must be represented by at least one (1) member of the governing board.
(f) The membership of the governing board must be established on a bipartisan basis so that the number of the members of the governing board who are members of one (1) political party may not exceed the number of members of the governing board required to establish a quorum.
(g) A majority of the governing board constitutes a quorum, and the concurrence of a majority of the governing board is necessary to authorize any action.
(h) The terms established under subsection (d) for the administration of the local venture capital fund must be submitted to the Indiana economic development corporation for approval before a unit may contribute to the fund.
(i) A majority of members of a governing board of a local venture capital fund established under this section must have at least five (5) years of experience in business, finance, or venture capital.
(j) The governing board of the fund may loan or grant money from the fund to a private or public entity if the governing board finds that the loan or grant will be used by the borrower or grantee for at least one (1) of the following economic development purposes:
(1) To promote significant employment opportunities for the residents of the unit establishing the local venture capital fund.
(2) To attract a major new business enterprise to the unit.
(3) To develop, retain, or expand a significant business enterprise in the unit.
(k) The expenditures of a borrower or grantee of money from a local venture capital fund that are considered to be for an economic development purpose include expenditures for any of the following:
(1) Research and development of technology.
(2) Job training and education.
(3) Acquisition of property interests.
(4) Infrastructure improvements.
(5) New buildings or structures.
(6) Rehabilitation, renovation, or enlargement of buildings or structures.
(7) Machinery, equipment, and furnishings.
(8) Funding small business development with respect to:
(A) prototype products or processes;
(B) marketing studies to determine the feasibility of new products or processes; or
(C) business plans for the development and production of new products or processes.
Chapter 37. Rural Entrepreneurship Area Development Incentives
Sec. 1. This chapter applies to a rural county.
Sec. 2. The purpose of this chapter is to:
(1) establish and fund programs to identify entrepreneurs with marketable ideas; and
(2) support the organization and development of new businesses in rural counties.
Sec. 3. The general assembly finds that establishing and supporting new businesses in rural counties serve a public purpose that benefits the general welfare of rural counties by encouraging investment, job creation and retention, economic growth, and more diverse economies.
Sec. 4. As used in this chapter, "agreement" refers to an agreement between the office and a county establishing the terms and conditions governing an area established under this chapter.
Sec. 5. As used in this chapter, "area" refers to a rural entrepreneurship area development incentives area established under this chapter.
Sec. 6. As used in this chapter, "corporation" refers to the Indiana economic development corporation.
Sec. 7. As used in this chapter, "department" refers to the department of state revenue.
Sec. 8. As used in this chapter, "income tax incremental revenue" means the remainder of:
(1) the sum of:
(A) the total amount of state adjusted gross income taxes paid by employees of new businesses employed in any part of the territory comprising an area with respect to wages and salary earned for work in the area for a particular state fiscal year; plus
(B) the total amount of state adjusted gross income taxes paid by new businesses located in any part of the territory comprising an area with respect to income sourced to the
area for a particular state fiscal year; minus
(2) the tax credits awarded by the corporation under
IC 6-3.1-13 to new businesses operating in the territory
comprising an area as the result of wages earned for work in
any part of the territory comprising an area for the state
fiscal year;
as determined by the department.
Sec. 9. As used in this chapter, "incubator" means a facility in
which space may be leased by a tenant and in which management
provides access to business development services for use by
tenants.
Sec. 10. As used in this chapter, "office" refers to the office of
community and rural affairs established by IC 4-4-9.7-4.
Sec. 11. As used in this chapter, "new business" refers to a
business entity certified by the office as a new business under
section 19 of this chapter.
Sec. 12. As used in this chapter, "READI fund" refers to a rural
entrepreneurship area development incentives fund established by
a rural county under section 23 of this chapter.
Sec. 13. As used in this chapter, "rural county" refers to a
county having a population of less than fifty thousand (50,000).
Sec. 14. As used in this chapter, "tax incentive zone" refers to
the territory of any of the following:
(1) A community revitalization enhancement district
established under IC 36-7-13.
(2) A professional sports and convention development area
established under IC 36-7-31.3.
(3) A certified technology park established under IC 36-7-32.
(4) Any other area in which a law permits adjusted gross
income taxes imposed on a taxable event in the area to be
distributed to an employer located in the area or a political
subdivision in the area for a local business, economic
development, or a governmental purpose.
Sec. 15. A rural county may apply to the office for designation
of the county as a rural entrepreneurship area development
incentives area. The application must:
(1) be in a form specified by the office;
(2) include an ordinance of the county legislative body
designating the territory of the county that is outside the
boundaries of a tax incentive zone as an area; and
(3) include information that the office determines necessary
for evaluating the application under section 16 of this chapter.
Sec. 16. (a) The office may approve an application from a rural
county and designate the county as an area if the county:
(1) submits a written plan for supporting entrepreneurship
and the establishment of new businesses in the area that meets
the requirements of the office; and
(2) agrees in writing to the terms and conditions specified by
the office.
(b) The territory of an area designated under this section
consists of all the territory in the county that is outside the
boundaries of a tax incentive zone.
Sec. 17. An area is established on the date on which the county
approved under section 16 of this chapter and the office enter into
a written agreement specifying the terms and conditions governing
the area. An area continues in existence until the earliest of the
following:
(1) January 1, 2024.
(2) The date specified in an ordinance adopted by the
legislative body for the county nominating the county for
designation as an area.
(3) The date that the office terminates the area under section
21 of this chapter.
Sec. 18. The office shall send a certified copy of the designation
of a county as an area to the department.
Sec. 19. The office shall determine whether a business in a rural
county is a new business and may certify the business as a new
business if the office determines that the new business meets all the
following criteria:
(1) The business is established or organized to do business in
Indiana less than one (1) year before the business locates
business operations in an area.
(2) The business initially locates business operations in an
area after the date the area is designated as an area by the
office.
(3) The business conducts business operations in the area to
provide goods or services for profit.
(4) The business meets any other criteria specified by the
office.
Sec. 20. (a) The county auditor of a county designated as an area
shall send to the department:
(1) a certified copy of the designation of the county as an area;
(2) a certified copy of the agreement entered into with the
office for the area; and
(3) a complete list of the new business employers in the area,
including any other identifying information required by the
department.
(b) The county auditor shall update the list provided to the
department under subsection (a)(3) at least annually before July 1
of each year.
Sec. 21. The office may not terminate an area for a violation of
the agreement described in section 17 of this chapter until the
office has conducted a public hearing for the purpose of giving all
interested parties an opportunity to comment on the proposal to
terminate the area. Notice of the hearing must be given at least
fourteen (14) days before the hearing in accordance with
IC 5-14-1.5-5(b).
Sec. 22. (a) Before the first business day in October of each year,
the department shall:
(1) calculate the income tax incremental revenue for the
preceding state fiscal year for each area designated under this
chapter; and
(2) direct the treasurer of state to distribute the amount
determined under subdivision (1) for each area to the county
treasurer of the county designating the area.
However, the amount distributed in a particular state fiscal year
to a particular county under this section may not exceed five
hundred thousand dollars ($500,000).
(b) A sufficient amount is annually appropriated from the state
general fund to make the distributions required by this section.
Sec. 23. (a) Each county that establishes an area under this
chapter shall establish a rural entrepreneurship area development
incentives (READI) fund for the county to receive money
distributed under section 22 of this chapter.
(b) Money deposited in the READI fund may be used by the
county only for one (1) or more of the following purposes:
(1) Transferring money to a revolving fund established under
section 24 of this chapter for purposes of the revolving fund.
(2) Transferring money to a regional venture capital fund
established under IC 6-3.5-7-13.5 or a local venture capital
fund established under IC 6-3.5-7-13.6 for purposes of the
funds.
(3) Incubator development and operation.
(4) Accelerator development and operation.
(5) Small business support services.
(6) Assisting in the deployment of high speed Internet service
(as defined by IC 5-28-33-2) within the county.
(c) The fund may not be used for the administrative expenses of
the fund.
Sec. 24. (a) A county designated as an area may establish a
revolving fund to provide loans to new businesses in the county's
area.
(b) The county may loan money in the revolving fund
established under this section to a new business if the county fiscal
body finds that the loan will be used by the new business for one (1)
or more of the following economic development purposes:
(1) Promoting significant opportunities for the gainful
employment of Indiana residents in the county's area.
(2) Attracting a new business to the county's area.
(3) Retaining or expanding the operations of a new business
in the county's area.
(c) The county may make the loan from a revolving fund
established under this section on the terms approved by the county
fiscal body.
(d) Amounts paid on a loan made from a revolving fund
established under this section shall be deposited in the revolving
fund.
Sec. 25. A county may not issue bonds that:
(1) pledge money deposited in the county's READI fund to
repayment of interest or principal on the bonds; or
(2) guarantee repayment of any public or private obligation
from money in the READI fund.
Sec. 26. Two (2) or more counties may enter into a written
agreement under this section to jointly carry out the purposes of
this chapter in the counties that are parties to the agreement.
Sec. 27. (a) The state board of accounts shall audit each READI
fund every two (2) years to determine whether:
(1) the appropriate amount of revenue is being transferred
from the state to the county; and
(2) money in the county's READI fund is being used for
purposes permitted by this chapter.
(b) The state board of accounts shall audit each revolving fund
established under this chapter every two (2) years to determine
whether loans are being made and repaid in compliance with any
applicable statutes and the terms imposed by the county fiscal body
under section 24 of this chapter.
Sec. 28. Upon termination of an area, the balance of any READI
fund or revolving loan fund established under section 24 of this
chapter and any amounts due to either fund shall be transferred to
the state general fund.
Sec. 29. Notwithstanding any other law, a tax incentive zone
may not be established or expanded in a county:
(1) after the date an area is established in the county; and
(2) before the date the area terminates;
without the approval of the county legislative body.
Sec. 30. This chapter expires January 1, 2024.
