Congratulations to the Indiana General Assembly! These good men and women, unexpectedly, have taken a step forward toward rationality. Or so it would seem.
By a vote of 93-0 in the House and 41-8 in the Senate they approved House Bill (HB) 1020, authored by Rep. Eric Koch (R-Bedford). In the Senate the bill was sponsored by Sen. Brandt Hershman (R- Buck Creek) who chairs the bi-partisan Commission on State Tax and Financing Policy.
HB 1020 provides for a study of economic development incentives awarded by the state, counties, cities and towns to companies locating or expanding in Indiana.
The study charges the Commission “to review, analyze and evaluate … incentives … provided to encourage economic development or to alter, reward or subsidize a particular action or behavior by a tax incentive recipient.”
This is a wide-ranging mandate written in that special language, which can be understood only by legislators. The Commission is to provide a comprehensive review of incentives over a five-year period beginning when the current legislative session is complete. The “non-partisan Legislative Services Agency (LSA) is to conduct the evaluation and analysis of each incentive” reviewed by the Commission.
What criteria will be used by LSA in the evaluation? What factors will be analyzed? The bill leaves this open and we must presume that LSA will decide these questions, perhaps with guidance from the Commission. And who, if anyone, will guide the Commission?
This ambitious program is to “cover exemptions, deductions, credits, preferential rates and other tax benefits that:
• reduce the amount of a tax that would otherwise be due the state;
• result in a tax refund in excess of any tax due; or
• reduce the amount of property taxes that would otherwise be due to a political subdivision of the state.”
Further, the review would cover programs that “provide improvements or to retire bonds” for sports facilities, revitalization areas, enterprise zones, or tax increment financing districts.