Chapter 3.115
TAX PHASE-INS AND GUIDELINES
Sections:
3.115.030 Application process and statement of benefits.
3.115.040 Administration of tax phase-in program.
3.115.060 Tax deduction – Real estate.
3.115.080 Residentially distressed areas.
3.115.090 Subsequent statements of benefits.
3.115.100 Compliance with projections and statement of benefits.
3.115.110 Severability and effective date.
3.115.010 Definitions.
(A) Economic Revitalization Area. Pursuant to IC 6-1.1-12.1-1, an “economic revitalization area” is defined as an area that has become undesirable for, or impossible of, normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements or character of occupancy, age, obsolescence, substandard buildings, or other factors which have impaired values or prevent a normal development of property or use of property. The term “economic revitalization area” also includes:
(1) Any area where a facility or a group of facilities that are technologically, economically, or energy obsolete are located and where the obsolescence may lead to a decline in employment and tax revenues; and
(2) A residentially distressed area, except as otherwise provided in IC 6-1.1-12.1 et seq.
(B) Residentially Distressed Area. A residentially distressed area designation has the same effect as designating an area as an economic revitalization area, except as otherwise specified in IC 6-1.1-12.1-2.
(C) Economic Development Target Area. Pursuant to IC 6-1.1-12.1-7, an “economic development target area” is defined as an area that (1) has become undesirable or impossible for normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements or character of occupancy, age, obsolescence, substandard buildings, or other factors that have impaired values or prevent a normal development of property or use of property; (2) has been designated as a registered historic district; or (3) encompasses buildings, structures, sites, or other facilities that meet certain historic standards. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.020 Eligibility.
(A) Qualifying Areas. A project applying for a property tax phase-in must qualify in a geographic area defined as an economic revitalization area, residentially distressed area, or economic development target area pursuant to IC 6-1.1-12.1 et seq.
(B) Eligible Property. Pursuant to IC 6-1.1-12.1 et seq., the following properties shall be eligible for the Evansville tax phase-in program:
(1) New (nonretail, nonresidential) buildings;
(2) Improvements to existing (nonretail, nonresidential) buildings;
(3) New manufacturing equipment, new logistical distribution equipment, new information technology equipment, and new research and development equipment; and
(4) Certain eligible vacant buildings.
(C) Ineligible Property. Pursuant to IC 6-1.1-12.1-3(e), the following properties shall not be eligible for the Evansville tax phase-in program:
(1) Private or commercial golf courses;
(2) Country clubs;
(3) Massage parlors;
(4) Tennis clubs;
(5) Skating facilities (including roller skating, skateboarding, or ice skating);
(6) Racquet sport facilities (including any handball or racquetball court);
(7) Hot tub facilities;
(8) Suntan facilities;
(9) Racetracks;
(10) Facilities whose primary purpose is (a) retail food and beverage service, (b) automobile sales or service, or (c) other retail; unless located in an economic development target area;
(11) Residential Facilities, unless (a) located in an economic development target area, (b) located in a residentially distressed area, or (c) the facility is a multifamily facility that contains at least 20 percent of the units available for use by low and moderate income individuals; and
(12) A package liquor store that holds a liquor dealer’s permit under IC 7.1-3-10 or any other entity that is required to operate under a license issued under IC 7.1.
(D) Tax Allocation Areas. Certain areas of the City have been, or may in the future be, designated as “tax allocation areas” pursuant to IC 36-7-14-39 through the adoption of redevelopment plans with tax increment financing provisions. Areas within a tax allocation area shall not be considered for declaration as an economic development target area unless said tax phase-in is approved by a resolution of the Evansville Economic Development Commission and City Council. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.030 Application process and statement of benefits.
(A) Forms. A person seeking declaration of an area as an economic revitalization area, a residentially distressed area, or an economic development target area shall file a statement of benefits and an application with the Department of Metropolitan Development (the “DMD”) or its designee on the form or forms which may be prescribed by DMD and/or the State Board of Tax Commissioners.
(B) Deadlines. The application must be filed with DMD or its designee prior to commencement of the project or the ordering of any equipment. “Commencement of the project” shall mean prior to the issuance of a building permit for real estate improvements. “Ordering of any equipment” shall mean issuance of the purchase order for equipment or other commitment to purchase or obtain the equipment by the applicant.
(C) Fees. The application form(s) shall be submitted in a quantity as may be specified by DMD. For projects seeking phase-in for real estate improvements, a site plan shall also be submitted, which shows all buildings, parking areas, driveways, etc. Listed below is the fee schedule to submit a tax phase-in application. Such amount must be submitted with the application.
|
Investment |
Fee |
|---|---|
|
Real Property |
$750.00 |
|
Personal Property |
$500.00 |
|
Residential: |
|
|
One to four units |
Cost of Publication |
|
Five or more units |
$500.00 |
[Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.040 Administration of tax phase-in program.
(A) DMD shall be the primary administrator of the City’s tax phase-in program. However, DMD may in its discretion duly appoint and designate a not-for-profit entity to manage the administration of the tax phase-in program.
(B) DMD or its designee shall review each application for completeness and accuracy, gather and provide additional information needed by the City Council to make an appropriate decision, analyze the application and supplemental material, and comment generally on the acceptability of the tax phase-in request. DMD or its designee shall assess the impact of abatement on the feasibility of the project and/or the competitiveness of a development site in relation to competing sites outside of Evansville.
(C) DMD or its designee shall score the application based on the applicable tax phase-in scoring established by DMD or its designee and approved by City Council. This score will be used as a guide to determine the abatement schedule and a maximum allowable abatement term.
(D) DMD or its designee may prepare the required resolution(s) or ordinance(s) for each tax phase-in project. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.050 Establishing an economic revitalization area, residentially distressed area, or economic development target area.
(A) Preliminary Resolution. In order to establish an economic revitalization area or a residentially distressed area, the City Council must first pass a preliminary resolution. As required by IC 6-1.1-12.1 et seq., the preliminary resolution shall:
(1) Indicate whether the designation is for real estate improvements, new manufacturing equipment, new research and development equipment, new logistical distribution equipment, or new information technology;
(2) Clearly identify the designated area by parcel number and a simplified description of property boundaries;
(3) Specify the length of time during which the designation shall be in effect and include the abatement schedule; and
(4) Address any expiration date when the designation ceases to exist or other limitations or conditions.
(B) Notice. After approving a preliminary resolution to establish an economic revitalization area or a residentially distressed area, DMD or its designee shall publish a notice of adoption including (1) the substance of the preliminary resolution; and (2) appropriate information about the City Council’s public hearing on the matter where the City Council will confirm, modify, or rescind the preliminary resolution. Such notice shall be provided to each taxing unit that has authority to levy property taxes in the economic revitalization area or residentially distressed area.
(C) Hearing and Confirmatory Resolution. Following approval and adoption of a preliminary resolution, the City Council shall determine whether the qualifications for an economic revitalization area or a residentially distressed area are met and confirm, modify, or rescind the preliminary resolution. This determination should occur at a public hearing for which notice has been provided. If confirmed, a confirmatory resolution is passed.
(D) Economic Development Target Area. In order to establish an economic development target area, the City Council must pass a designating ordinance pursuant to IC 6-1.1-12.1-7 after receiving a favorable recommendation by the Economic Development Commission. No more than 15 percent of the City’s total geographic territory may be designated in an economic development target area. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.060 Tax deduction – Real estate.
(A) Certified Deduction Application. Pursuant to IC 6-1.1-12.1-5, the owner of property which has been declared to be an “economic revitalization area” and who desires to obtain the tax deduction provided by IC 6-1.1-12.1-3 for “property” must file a certified deduction application, on forms prescribed by the State Board of Tax Commissioners, with the County Auditor before May 10th (except as otherwise provided in IC 6-1.1-12.1-5(b) or (e)) of the year in which the addition to the assessed value is made.
(B) Length of Deduction. Projects for which the statement of benefits was approved on or after July 1, 2000 (except as provided in IC 6-1.1-12.1-3(a)), for redevelopment or rehabilitation are eligible for a deduction from the increase in assessed value for a period of one to 10 years. Projects for which the statement of benefits was approved before July 1, 2000, for redevelopment or rehabilitation are eligible for a deduction from the increase in assessed value for periods of three, six, or 10 years. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.070 Tax deduction – Manufacturing equipment, research and development equipment, logistical distribution equipment, and information technology.
(A) Certified Deduction Application. The owner of property which has been declared to be an “economic revitalization area” and who desires to obtain the tax deduction provided by IC 6-1.1-12.1-5.4 for “new manufacturing equipment” must file a certified deduction application, on forms prescribed by the State Board of Tax Commissioners, with the County Auditor. A deduction application must be filed in the year in which the new manufacturing equipment is installed and in each of the following years for which abatement is sought.
(B) Length of Deduction. For projects for which the statement of benefits was approved on or after July 1, 2000, as provided in IC 6-1.1-12.1-4.5(c), an owner of new manufacturing equipment is eligible for a deduction from the assessed value of that equipment for a period of one to 10 years. Projects for which the statement of benefits was approved prior to July 1, 2000, for redevelopment or rehabilitation are eligible for a deduction from the increase in assessed value for periods of five or 10 years. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.080 Residentially distressed areas.
(A) Length of Deduction. IC 6-1.1-12.1-2 provides the maximum length of time allowable for deduction within a designated residentially distressed area.
(B) Amount of Deduction. The annual amount of deduction that a property owner is eligible to receive within a designated residentially distressed area shall be calculated in accordance with IC 6-1.1-12.1-4.1. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.090 Subsequent statements of benefits.
In the event that a business decides to initiate a tax phase-in for an additional investment which was not included in its tax phase-in application and is of the same type of investment (real estate improvements, new manufacturing equipment, research and development equipment, new logistical distribution equipment, or new information technology) for which the economic revitalization area was designated and said designation is still in effect, the business shall submit a new statement of benefits form to DMD before initiating the additional investment. DMD or its designee shall prepare a resolution for City Council action to approve the subsequent statement of benefits. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.100 Compliance with projections and statement of benefits.
(A) Required Submission. Pursuant to IC 6-1.1-12.1-5.9, certain projects shall submit information showing the extent to which there has been compliance with the statement of benefits. Within 45 days from receipt of the information concerning compliance with a statement of benefits, DMD or its designee may determine whether the property owner seeking tax phase-in has substantially complied with the statement of benefits previously approved by the City Council. Further, an applicant for the City’s tax phase-in program may be required to enter into and execute a memorandum of agreement (“MOA”) whereby applicant agrees to (1) supply additional information requested by the City to verify that the applicant has complied with its obligations, (2) terminate any designations or phase-ins if applicant fails to comply with, or does not meet, its obligations, and (3) provide City with liquidated damages or a clawback equal to the amount of all the savings received through the date of such termination. The City’s rights and options pursuant to the MOA shall be separate from, and in addition to, any other rights of review or clawback set forth in this chapter.
(B) Compliance Review. Upon receipt of Form CF-1/PP and other information concerning compliance with a statement of benefits, DMD or its designee shall compare projected investment and job retention and/or creation on the statement of benefits with actual investment and employment information supplied concerning compliance with the statement of benefits. If it does not appear that the taxpayer has substantially complied with the statement of benefits, DMD or its designee shall contact the taxpayer to obtain additional information as to the reasons that taxpayer did not substantially comply with the statement of benefits, whether the taxpayer made reasonable efforts to substantially comply, and whether any failure to comply was caused by factors beyond the control of the taxpayer (such as declines in demand for the property owner’s products or services). DMD shall transmit the compliance review form to the City Council President and Finance Committee Chair.
(C) City Council Review. DMD or its designee shall be responsible for reviewing the compliance review forms. Based on such review and a recommendation by DMD or its designee, City Council shall be responsible for making determinations as to whether a taxpayer has substantially complied with its statement of benefits; and holding hearings for those taxpayers who do not appear to have substantially complied with their statement of benefits. If City Council determines that the taxpayer has not substantially complied with the statement of benefits, it shall establish a date for a compliance hearing.
(D) Hearing Notice. For those projects for which City Council has established a compliance hearing date, DMD or its designee shall prepare a written notice which shall be sent to the taxpayer by certified mail, return receipt requested, and if the project includes new manufacturing equipment or research and development equipment, to the State Board of Tax Commissioners. Said notice shall include the information required by IC 6-1.1-12.1-5.9.
(E) Resolution to Terminate Deduction. For those projects for which a compliance hearing is scheduled, DMD or its designee shall prepare and file a resolution to terminate deduction. Said resolution shall be filed so that it is scheduled for second (and if applicable, third) reading on the scheduled hearing date.
(F) Compliance Hearing. On the scheduled hearing date City Council shall conduct a compliance hearing to determine whether the property owner has made reasonable efforts to substantially comply with the statement of benefits and whether any failure to comply was caused by factors beyond the control of the taxpayer.
(G) City Council Recommendations and Action.
(1) If City Council determines that the taxpayer did not substantially comply with the statement of benefits and that such failure to comply was not caused by factors beyond the control of the taxpayer, City Council shall adopt a resolution terminating the property owner’s tax deduction. If City Council adopts such a resolution, the deduction does not apply to the next installment of property taxes owed by the property owner or to any subsequent installment of property taxes.
(2) If City Council determines that the taxpayer did substantially comply with the statement of benefits or that failure to comply was caused by factors beyond control of the taxpayer, City Council shall not pass such a resolution to terminate the deduction.
(3) If the resolution to terminate the deduction is adopted by City Council, DMD shall transmit copies of the resolution to the taxpayer, the Vanderburgh County Auditor and, if the deduction was for new manufacturing equipment, to the State Board of Tax Commissioners. The taxpayer shall also be notified of the amount of total annual deduction to be paid back plus interest at the current prime rate times the number of years deduction was claimed. Such amount will be due 30 days after resolution to terminate is passed. Failure to pay will constitute grounds for a lawsuit to recover amount owed. The City hereby incorporates the provisions of IC 6-1.1-12.1-12 as an alternate remedy if the owner meets the criteria established herein. [Ord. F-2017-13 § 1, passed 8-15-17.]
3.115.110 Severability and effective date.
If any provision of this chapter is found to be invalid, the remaining provisions of this chapter shall not be affected by such a determination. These other provisions of this chapter shall remain in full force and effect without the invalid provision. The ordinance codified in this chapter shall be in full force and effect on the day of its final passage and adoption. [Ord. F-2017-13 § 1, passed 8-15-17.]