Ineligibility for credit to extent of reduction or cessation of
operations in Indiana; eligibility determinations; criteria; appeals
Sec. 5. (a) A taxpayer is not entitled to claim the credit provided
by this chapter to the extent that the taxpayer substantially reduces
or ceases its operations in Indiana in order to relocate them within
the district. Determinations under this section shall be made by the
department. The department shall adopt a proposed order concerning
a taxpayer's eligibility for the credit based on subsection (b) and the
following criteria:
(1) A site-specific economic activity, including sales, leasing,
service, manufacturing, production, storage of inventory, or any
activity involving permanent full-time or part-time employees,
shall be considered a business operation.
(2) With respect to an operation located outside the district
(referred to in this section as a "nondistrict operation"), any of
the following that occurs during the twelve (12) months before
the completion of the physical relocation of all or part of the
activity described in subdivision (1) from the nondistrict
operation to the district as compared with the twelve (12)
months before that twelve (12) months shall be considered a
substantial reduction:
(A) A reduction in the average number of full-time or
part-time employees of the lesser of one hundred (100)
employees or twenty-five percent (25%) of all employees.
(B) A twenty-five percent (25%) reduction in the average
number of goods manufactured or produced.
(C) A twenty-five percent (25%) reduction in the average
value of services provided.
(D) A ten percent (10%) reduction in the average value of
stored inventory.
(E) A twenty-five percent (25%) reduction in the average
amount of gross income.
(b) Notwithstanding subsection (a), a taxpayer that would
otherwise be disqualified under subsection (a) is eligible for the
credit provided by this chapter if the taxpayer meets at least one (1)
of the following conditions:
(1) The taxpayer relocates all or part of its nondistrict operation
for any of the following reasons:
(A) The lease on property necessary for the nondistrict
operation has been involuntarily lost through no fault of the
taxpayer.
(B) The space available at the location of the nondistrict
operation cannot accommodate planned expansion needed
by the taxpayer.
(C) The building for the nondistrict operation has been
certified as uninhabitable by a state or local building
authority.
(D) The building for the nondistrict operation has been
totally destroyed through no fault of the taxpayer.
(E) The renovation and construction costs at the location of
the nondistrict operation are more than one and one-half (1
1/2) times the costs of purchase, renovation, and
construction of a facility in the district, as certified by three
(3) independent estimates.
(F) The taxpayer had existing operations in the district and
the nondistrict operations relocated to the district are an
expansion of the taxpayer's operations in the district.
A taxpayer is eligible for benefits and incentives under clause
(C) or (D) only if renovation and construction costs at the
location of the nondistrict operation are more than one and
one-half (1 1/2) times the cost of purchase, renovation, and
construction of a facility in the district. These costs must be
certified by three (3) independent estimates.
(2) The taxpayer has not terminated or reduced the pension or
health insurance obligations payable to employees or former
employees of the nondistrict operation without the consent of
the employees.
(c) The department shall cause to be delivered to the taxpayer and
to any person who testified before the department in favor of
disqualification of the taxpayer a copy of the department's proposed
order. The taxpayer and these persons shall be considered parties for
purposes of this section.
(d) A party who wishes to appeal the proposed order of the
department shall, within ten (10) days after the party's receipt of the
proposed order, file written objections with the department. The
department shall immediately forward copies of the objections to the
director of the budget agency and the board of the Indiana economic
development corporation. A hearing panel composed of the
commissioner of the department or the commissioner's designee, the
director of the budget agency or the director's designee, and the
president of the Indiana economic development corporation or the
president's designee shall set the objections for oral argument and
give notice to the parties. A party at its own expense may cause to be
filed with the hearing panel a transcript of the oral testimony or any
other part of the record of the proceedings. The oral argument shall
be on the record filed with the hearing panel. The hearing panel may
hear additional evidence or remand the action to the department with
instructions appropriate to the expeditious and proper disposition of
the action. The hearing panel may adopt the proposed order of the
department, may amend or modify the proposed order, or may make
such order or determination as is proper on the record. The
affirmative votes of at least two (2) members of the hearing panel are
required for the hearing panel to take action on any measure. The
taxpayer may appeal the decision of the hearing panel to the tax court
in the same manner that a final determination of the department may
be appealed under IC 33-26.
(e) If no objections are filed, the department may adopt the
proposed order without oral argument.
(f) A determination that a taxpayer is not entitled to the credit
provided by this chapter as a result of a substantial reduction or
cessation of operations applies to credits that would otherwise arise
in the taxable year in which the substantial reduction or cessation
occurs and in all subsequent years.
As added by P.L.125-1998, SEC.3. Amended by P.L.81-2004, SEC.30
and P.L.90-2004, SEC.2; P.L.4-2005, SEC.95.
Last modified: May 28, 2006