Bill Text: IN HB1496 | 2013 | Regular Session | Introduced
Bill Title: Rural entrepreneurship areas.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2013-01-22 - First reading: referred to Committee on Ways and Means [HB1496 Detail]
Download: Indiana-2013-HB1496-Introduced.html
Citations Affected: IC 6-3.5-7; IC 36-7-37.
Synopsis: Rural entrepreneurship areas. Permits a rural county, with
the approval of the Indiana economic development corporation (IEDC),
to designate the county as a rural entrepreneurship area development
incentives area (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. Makes an
annual appropriation.
Effective: Upon passage.
January 22, 2013, read first time and referred to Committee on Ways and Means.
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A BILL FOR AN ACT to amend the Indiana Code concerning local
government and to make an appropriation.
(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 county with a population of less than fifty thousand (50,000).
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 establishment and support of new businesses in rural counties serve a public purpose and are of benefit to the general welfare of a rural county by encouraging investment, job creation and retention, and economic growth and diversity.
Sec. 4. As used in this chapter, "agreement" refers to an
agreement between the IEDC and a county under this chapter.
Sec. 5. As used in this chapter, "area" refers to a rural
entrepreneurship area development incentive area established
under this chapter.
Sec. 6. As used in this chapter, "fund":
(1) for purposes of section 19 of this chapter, refers to the
rural entrepreneurship area development incentives fund
established by the treasurer of state for a county; and
(2) for purposes of sections of this chapter other than section
19 of this chapter, refers to a rural entrepreneurship area
development incentives fund established by a rural county.
Sec. 7. As used in this chapter, "IEDC" refers to the Indiana
economic development corporation.
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 (other than a tax
incentive zone) with respect to wages and salary earned for
work in the area (other than in a tax incentive zone) 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 (other than a tax incentive zone) with
respect to income sourced to the area (other than a tax
incentive zone) for a particular state fiscal year; minus
(2) the tax credits awarded under IC 6-3.1-13 by the IEDC to
new businesses operating in the territory in an area (other
than a tax incentive zone) that is not part of a tax incentive
zone as the result of wages earned for work in any part of the
territory comprising an area (other than in a tax incentive
zone) for the state fiscal year;
as determined by the department of state revenue.
Sec. 9. As used in this chapter, "incubator" means a facility in
which space may be leased by a tenant and in which the
management of the facility provides access to business development
services for use by tenants.
Sec. 10. As used in this chapter, "new business" means a
business that:
(1) is established or organized to do business in Indiana less
than one (1) year before the business locates business
operations in an area;
(2) initially locates business operations in an area after the
date the area is designated as an area by the IEDC;
(3) conducts business operations in the area to provide goods
or services for profit; and
(4) meets any other criteria specified by the IEDC.
Sec. 11. As used in this chapter, "rural county" refers to a
county described in section 1 of this chapter.
Sec. 12. As used in this chapter, "tax incentive zone" refers to
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 governmental purpose.
Sec. 13. A rural county may apply to the IEDC for designation
of the county as a rural entrepreneurship area development
incentives area. The application must:
(1) be in a form specified by the IEDC; and
(2) include information that the IEDC determines necessary
to make the determinations required under section 14 of this
chapter.
Sec. 14. The IEDC may grant an application from a rural
county under section 13 of this chapter 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 IEDC; and
(2) agrees to the terms and conditions specified by the IEDC.
Sec. 15. The IEDC shall send a copy of a designation under
section 14 of this chapter to the department of state revenue.
Sec. 16. The IEDC may terminate an area designation 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. 17. An area is established when the IEDC 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, 2024.
(2) The date specified in an ordinance adopted by the
legislative body for the county.
(3) The date that the IEDC terminates the area designation,
if the IEDC determines after a hearing that the county has
violated the terms and conditions specified for the area by the
IEDC.
Sec. 18. 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 to the fund
established for that county.
Sec. 19. (a) The treasurer of state shall establish a fund for each
county that is designated as 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 the 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 a county shall be distributed to the
county for deposit in the county's rural entrepreneurship area
development incentives fund established under section 20 of this
chapter.
(e) A sufficient amount is annually appropriated from the fund
established under subsection (a) for a county to make the
distributions required to be made to that county by this section.
Sec. 20. (a) Each county that is designated as 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 21 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
fund.
(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. 21. (a) A county that is designated as an area may establish
a revolving fund to provide loans to new businesses in the county.
(b) The county may loan money in the revolving fund
established under this section to a new business in the county 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.
(2) Attracting a new business to the county.
(3) Retaining or expanding the operations of a new business
in the county.
(c) The county may make a loan from the revolving fund
established under this section on 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. 22. 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. 23. 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. 24. A county that is designated as 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 IEDC 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. 25. The state board of accounts shall audit a fund at least one (1) time before July 1, 2019, and one (1) time after June 30, 2019, and before January 1, 2024, 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. 26. Upon termination of an area, the balance of any fund established for the area under section 20 or 21 of this chapter and any amounts due to either fund shall be transferred to the state general fund.
Sec. 27. Notwithstanding any other law, a tax incentive zone may not be established or expanded in a county:
(1) after the date the county is designated as an area; and
(2) before the date the area terminates;
without the approval of the county legislative body.
Sec. 28. This chapter expires January 1, 2024.
