Economic Incentives and Compliance Report INDIANA ECONOMIC DEVELOPMENT CORPORATION
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Economic Incentives and Compliance Report INDIANA ECONOMIC DEVELOPMENT CORPORATION For the Reporting Period January 1, 2005 – June 30, 2013 Indiana Economic Development Corporation | One North Capitol, Suite 700 | Indianapolis, Indiana 46204 800.463.8081 | tel 317.232.8800 | fax 317.232.4146 | iedc.in.gov ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 in thousands of new jobs for A MESSAGE FROM: Hoosiers and an improved standard of living. How do we do that? This report will give you the details so you are better able to understand how your tax dollars Dear Fellow Hoosiers: are being used to make your State The Indiana Economic better for you and your family. Development Corporation, which Our goal is to support and was formed in 2005 to succeed the VICTOR P. SMITH encourage our business economy, SECRETARY OF COMMERCE Department of Commerce, in alignment with the goals outlined continues to excel in new and in Governor Pence’s Roadmap for innovative ways. We’re a team of Making Indiana the State that professionals: sales managers, Works. See the Roadmap at marketing specialists, strategists, www.in.gov/gov/2530.htm. These and financial analysts to name a include increasing private sector few. We are the State that Works. employment, attracting new Our strategy has been a investment especially in certain resounding success. Since 2005, as sectors (manufacturing, the following report shows, we’ve agriculture, life sciences and played an integral role in bringing logistics), and improving our ERIC DODEN Hoosier workforce. PRESIDENT new businesses to Indiana, resulting Page 1 ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 To accomplish those goals, we understanding, stating how many performing and if they are meeting work with established contacts, jobs the company plans to create, or exceeding expectations. They and we cultivate new contacts. at what wage level, and by what are required to do this once a year We attend trade shows across the date. After the letter is signed, the – with detailed information about country in targeted industries, such company submits data about its jobs, wages, and investment. The as life sciences and IT. We work employment. We verify the data, closer the company is to meeting with our international offices – in six and then we enter into an official its goals, the more tax credits the countries -- to encourage foreign agreement describing the tax company receives. investment into the State of credits and grant money that can You should know that a tax credit is Indiana. be earned in exchange for not a dollar being taken out of the performance. Indiana is a great place to live and State treasury. It’s a decision that work. With our Right to Work laws Typically, the agreements are long- we will not require a tax to be paid and declining corporate income term, usually up to 12 years in in exchange for the economic tax rates, we’ve got an attractive duration. After all, we don’t give benefit. So, when a company is climate for economic growth. tax credits and grant dollars certified $100,000 in tax credits, if without a genuine commitment in the company properly claims the A part of creating an attractive return from the companies. We credit on its tax return, the State of climate is the ability of our State to view these projects as long-term Indiana would not get $100,000 offer financial incentives. We partnerships designed to create that it would otherwise be entitled allocate tax credits to companies incentives for companies to remain to receive in the form of tax which hire and invest, and we here in Indiana. revenue. extend grants to companies which train our Hoosiers. When we make During the term of the agreement, Some credits work more like cash – an offer of financial incentives, we we require companies to let us EDGE is like this – because it is tied provide a memorandum of know how their plans are to withholdings that companies Page 2 ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 collect. Other credits work only Please contact us when you have against tax liability – like HBI – which a question about what we do or means the company has to have how we work. We are here to help, taxable income on its tax return and we appreciate your thoughts (the company is profiting, not and ideas to help keep us as the losing) before the company can State that Works. claim the tax credit. This measure ensures that the State is not at risk Sincerely, for something the company cannot pay. In that way, the credits create a greater return as the companies hire more Hoosiers, and more dollars are flow into our Victor P. Smith communities to support housing, Secretary of Commerce retail, schools, and more. This return on our investment becomes a part of our economy and enhances our lifestyle, making this the State that Works. Eric R. Doden President Page 3 ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 INTRODUCTION The IEDC has adopted these them, followed by the supporting improvements in response to data and a glossary that explains suggestions made in an The Indiana Economic the meaning of each of the terms independent review conducted Development Corporation has used frequently throughout the last year. This review also expanded the compliance report report. suggested that the IEDC use in further efforts to increase operational terms that are transparency of its operations. The report will be posted on the consistent and easy to understand. Transparency provides an IEDC’s transparency website, opportunity for greater public https://transparency.iedc.in.gov/P participation and allows for ages/default.aspx, in the continued improvement. “Additional Public Information” This report covers the grants, loans, section. This posting is consistent and tax credit programs with Indiana Code 5-28-6-2(b)(8), 5- administered by the IEDC. This 14-6-4. In addition, the portal report provides information contains real-time data, so please required by Indiana Code § 5–28– refer to it for updates to the 28, amended effective July 1, 2013. information contained within this This report canvasses active project report. information as far back as 2005, As a result, this report includes which was the inception of the The IEDC invites suggestions and easy-to-read descriptions of the IEDC as the successor the Indiana feedback on how we can programs included within this Department of Commerce. continue to improve. Please visit us report, pertinent details about at www.iedc.in.gov. Page 4 ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 TABLE OF CONTENTS Industrial Recovery Tax Credit Hoosier Alternative Fuel Vehicle (IC 6-3.1-11)..........................................18 Section 1: Job Creation Incentives Manufacturer (IC 6-3.1-31.9-22).......14 Local Economic Development Jobs Realization..................................6 HQ Relocation (IC 6-3.1-30)...….….…15 Organization Fund (IC 5-28-11)..........18 Recaptures..........................................7 New Employer (IC 6-3.1-33)…….........15 Small Business Development Fund Claimed Credits and Paid Local Option Hiring Incentive (IC 5-28-18-8(9))....................................18 Grants...................................................7 (IC 6-3.5-9).............................................15 Small Business Incubator Program EDGE (IC 5-28-21-21)......................................18 Section 2: Other Economic EDGE for creation (IC 6-3.1-13)..........8 Development Programs South Central Indiana Regional EDGE for retention (IC 6-3.1-13).........9 Partnership Fund Economic Development Fund (IC 4-33-12-6(c)(1)(G)).........................19 HBI (IC 6-3.1-26)....................................10 (IC 5-28-8)..........................................16 Technology Development Grant SEF, INSPIRE, and TECH (IC 5-28-7)......11 Certified Technology Parks (IC 5-28-10)............................................19 (IC 36-7-32)............................................16 Capital Investment (IC 6-3.1-13.5).....12 Trade Show Assistance Program Incentive Payment (IC 5-28-6-2).........12 Enterprise Zone Loan Interest Credit (IC 5-28-14)............................................19 (IC 6-3.1-7).............................................16 CReED (IC 6-3.1-19)..............................12 Venture Capital Investment Tax Credit Coal Gasification Technology (IC 6-3.1-24)...........................................19 BDLF (IC 5-28-32)..................................13 Investment Tax Credit (IC 6-3.1-29)....17 IDPGF (IC 5-28-30)................................13 Indiana Life Sciences Fund Section 3: Incentive Recipient Fuels: Biofuels and Alternative Fuels (PL 234-2007).........................................17 Spreadsheet...................................20-72 Biodiesel Production(IC 6-3.1-27-8)..14 Industrial Development Grant Fund (IC 5-28-25)............................................17 Blended Biodiesel (6-3.1-27-9)..........14 Section 4: Glossary..............................73 Ethanol Production (6-3.1-28)...........14 Industrial Development Loan Fund (IC 5-28-9)..............................................17 Page 5 ECONOMIC INCENTIVES AND COMPLIANCE REPORT For the Reporting Period January 1, 2005 – June 30, 2013 SECTION 1: Jobs Realization. companies decide they do not want One of the measurements of the the incentives -- we cannot report JOB CREATION IEDC’s success is the new job growth in whether those jobs are still present Indiana. The IEDC doesn’t create jobs because we no longer have a INCENTIVES – companies do – and the IEDC strives contract. This section reports on active incentive to encourage companies to continue agreements for job creation incentives to create jobs. One of the initial steps In reporting our jobs realization rate, programs for the time period from in this process is to bring a new project we have taken into consideration that January 1, 2005 to June 30, 2013, to Indiana. When a company is ready we can only accurately report those except where otherwise noted.