Citations Affected: IC 6-3.1; IC 6-3.5; IC 36-7.
Synopsis: Rural entrepreneurship area development incentives.
Permits a venture capital investment tax credit that has been certified
by the 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 a rural county,
with the approval of the economic development corporation, to
designate the county as a rural entrepreneurship area development
incentives area. Provides for the transfer 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. Limits the amount that
may be transferred in any year to $500,000.
Effective: Upon passage; January 1, 2012 (retroactive).
January 9, 2012, read first time and referred to Committee on Commerce, Small Business
and Economic Development.
January 27, 2012, amended, reported _ Do Pass; referred to Committee on Ways and
Means pursuant to House Rule 127.
January 27, 2012, referral withdrawn.
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration and to make an appropriation.
a qualified Indiana business after December 31, 2014. However, this
subsection may not be construed to prevent a taxpayer from carrying
over to a taxable year beginning after December 31, 2014, an unused
tax credit attributable to an investment occurring before January 1,
2015.
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.
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;
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 governmental purpose.
Sec. 14. A rural county may apply to the corporation for
designation of the county as a rural entrepreneurship area
development incentives area. The application must:
(1) be in a form specified by the corporation; and
(2) include information that the corporation determines
necessary to make the determinations required under section
15 of this chapter.
Sec. 15. The corporation may grant 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 corporation; and
(2) agrees to the terms and conditions specified by the
corporation.
Sec. 16. The corporation shall send a copy of the designation to
the department of state revenue.
Sec. 17. The corporation may terminate an area for a violation
of the terms and conditions established for designating the county
as an area, only after giving the county an opportunity for a
hearing.
Sec. 18. An area is established when the corporation grants a
county's application to designate the county as an area. An area
continues in existence until the occurrence of the earliest of the
following:
(1) January 1, 2023.
(2) The date specified in an ordinance adopted by the
legislative body for the county designating the county as an
area.
(3) The date that the corporation terminates the area, if the
corporation determines after a hearing that the area has
violated the terms and conditions specified for the area by the
corporation.
Sec. 19. Before the first business day in October of each year,
the department of state revenue shall calculate the income tax
incremental revenue for the preceding state fiscal year for each
area designated under this chapter. The department of state
revenue shall direct the treasurer of state to transfer the sum of the
amounts determined under this section for each area in a county to
the fund established for that county.
Sec. 20. (a) The treasurer of state shall establish a fund for each
county that establishes an area. The fund shall be administered by
the treasurer of state. Money in the fund does not revert to the
state general fund at the end of a state fiscal year.
(b) Subject to subsection (c), the income tax incremental
revenue attributable to an area established in a county shall be
deposited during each state fiscal year in the fund established for
the county under subsection (a) until the amount deposited equals
the maximum amount specified in subsection (c).
(c) Not more than a total of five hundred thousand dollars
($500,000) may be deposited in a fund for a county in any one (1)
state fiscal year.
(d) On or before the twentieth day of each month, all amounts
held in the fund established for an area shall be distributed to the
county establishing the area for deposit in the county's rural
entrepreneurship area development incentives fund established
under section 21 of this chapter.
(e) A sufficient amount is annually appropriated to make the
transfers required by this section.
Sec. 21. (a) Each county that establishes an area under this
chapter shall establish a rural entrepreneurship area development
incentives fund for the county to receive money distributed to the
county under this chapter.
(b) Money deposited in the 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 22 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) Direct incentives and cost reimbursement to assist with the
start-up of new businesses approved by the county legislative
body.
(c) The fund may not be used for the administrative expenses of
the fund.
Sec. 22. (a) A county that designates the county 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. 23. A county may not issue bonds that:
(1) pledge money deposited in the county's fund to repayment
of interest or principal on the bonds; or
(2) guarantee repayment of any public or private obligation
from money in the fund.
Sec. 24. 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. 25. A county that establishes an area shall send to the
department of state revenue:
(1) a certified copy of the designation of the county as an area;
(2) a certified copy of any agreement entered into with the
corporation for the area; and
(3) a complete list of the new business employers in the area
(excluding any part of the area that is in a tax incentive zone),
including any other identifying information required by the
department of state revenue.
The county shall update the list provided under subdivision (3) at
least annually before July 1 of each year.
Sec. 26. The state board of accounts shall audit a fund at least
one (1) time before July 1, 2018, and one (1) time after June 30,
2018, and before January 1, 2023, to determine whether:
(1) the appropriate amount of revenue was transferred from
the state to the county; and
(2) money in the fund was used for purposes permitted under
this chapter.
Sec. 27. Upon termination of an area, the balance of any fund
established under section 21 or 22 of this chapter and any amounts
due to either fund shall be transferred to the state general fund.
Sec. 28. 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. 29. This chapter expires January 1, 2023.