LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6081 NOTE PREPARED: Apr 6, 2021
BILL NUMBER: HB 1025 BILL AMENDED:
SUBJECT: Enterprise Zone Renewals.
FIRST AUTHOR: Rep. Pressel BILL STATUS: Enrolled
FIRST SPONSOR: Sen. Bohacek
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides that an Enterprise Zone may be renewed for an additional five
year period if the fiscal body of the municipality in which the Enterprise Zone is located adopts a resolution
to renew the Enterprise Zone. It provides that a zone business located in the renewed Enterprise Zone may
only access the property tax deduction incentive.
Effective Date: July 1, 2021.
Explanation of State Expenditures:
Explanation of State Revenues: Currently, there are two state tax incentives through the Enterprise Zone
program. Those two incentives may not be accessed through the extension provided in this bill. Therefore,
this bill would have no fiscal impact related to state revenues.
Explanation of Local Expenditures:
Explanation of Local Revenues: This bill allows a municipal fiscal body to adopt a resolution to renew
an existing Enterprise Zone for an additional five years regardless of the number of times it has been
previously renewed. However, the proposed extension only allows access to the Enterprise Zone Investment
Deduction. This bill would not have an effect on the current terms granted to Enterprise Zones until those
terms are exhausted.
The fiscal impact of this proposal would depend on whether the fiscal body of the municipality decides to
request a renewal of the current term for an Enterprise Zone. If the fiscal body decides not to request a
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renewal, then there is no fiscal impact under this bill. If, on the other hand, the fiscal body of the municipality
decides to renew under this provision, then businesses would continue to receive the Enterprise Zone
property tax deduction for qualified investments.
Additional information: Enterprise Zones were initially designated for 10 years with the potential for two
five-year renewals. A 2016 law allowed an additional extension of one year under certain stipulations. In
2019, the General Assembly provided that the Indiana Economic Development Corporation (IEDC) could
renew an Enterprise Zone that is established in an inactive or closed military base for not more than 10 years.
That bill qualified four Enterprise Zones that had expired or were going to sunset to receive extensions.
Beginning on January 1, 2019, administrative responsibilities for the Enterprise Zone program were shifted
from the IEDC to the local enterprise zone associations.
A taxpayer must file a certified application for the Enterprise Zone Investment Deduction with the county
auditor. The Enterprise Zone Investment Deduction amount for qualified investments is equal to the increase
in real and personal property assessed value at an Enterprise Zone or an Entrepreneur and Enterprise District
location, as compared to the value in the calendar year before a qualified investment was made. The
following shows the number of Enterprise Zone Investment Deduction claims and the net tax impact of those
claims from 2019 through 2020.
Pay Year Number of Claims Net Tax Impact
2019 450 18,905,494
2020 442 20,782,569
State Agencies Affected:
Local Agencies Affected: County auditors; Local taxing units and school corporations.
Information Sources: County auditors; LSA, Indiana Tax Incentive Review 2020.
Fiscal Analyst: Seth Payton, 233-3546.
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Statutes affected:
1. Introduced House Bill (H): 5-28-15-10
2. House Bill (H): 5-28-15-10
3. House Bill (S): 5-28-15-10
4. House Bill (S): 5-28-15-10
5. Enrolled House Bill (H): 5-28-15-10