State of Indiana Incentives
The Indiana Economic Development Corporation (IEDC) is the state's lead economic development organization. The IEDC has many incentive programs available for companies creating jobs and raising income in Indiana. Economic development incentives include tax credits based on job creation and capital investment, training grants, and public infrastructure assistance.
The Economic Revolving Loan Fund
The City of Anderson, in cooperation with local banks, offers a low interest rate loan program for businesses located in Anderson. The Anderson Revolving Loan Fund offers loans up to $100,00 at rates as low as four percentage points below the prime rate.
Funds may be borrowed for up to 20 years, although loans are ballooned every two years for a reevaluation. Borrowers must create at least one job for every $10,000 borrowed from the revolving loan fund. The program requires that a participating bank loan at least 67 percent of the loan. Bank terms are negotiated under normal loan conditions and criteria. If the bank will consider the loan on its own merit, the revolving loan fund cannot help.
If the bank determines that it will make the loan only with the revolving loan fund assistance, it submits a request to the fund for up to 33 percent of the loan or $100,000, whichever is less. Typically, the revolving loan fund portion of the loan is subordinate to the bank portion of the loan. The Anderson Economic Development Revolving Loan Fund Board with review the request and either accept or reject the loan request. Revolving loan fund monies can be used for many purposes, including buildings, machinery and equipment, and/or working capital.
The Enterprise Zone
The purpose of the Enterprise Zone program in the state of Indiana is to stimulate reinvestment within a designated disadvantaged zone and to create jobs for zone residents. An enterprise zone may consist of up to three contiguous square miles.
There are 15 enterprise zones in Indiana. These include zones in Anderson, Bloomington, East Chicago, Elkhart, Evansville, Fort Wayne, Gary, Hammond, Indianapolis, Kokomo, Madison, Michigan City, Muncie, Richmond and South Bend.
The Indiana Enterprize Zone Board oversees the Enterprise Zone programs in each locality. In order to stimulate reinvestment and create jobs with the zones, businesses located within an enterprise zone are eligible for certain tax benefits.
These tax benefits include:
No property tax on business inventory.
Exemption from Indiana Gross Income Tax on the increase in receipts from the base year.
State Income Tax Credit (up to 30 percent of purchase price) for individuals purchasing an ownership interest in an enterprise zone business.
State Income Tax Credit on lender interest income (up to 5 percent).
State Income Tax Credit based on wages paid to qualified employees. The credit is the lesser of 10 percent of the increase in wages paid over the base year, or $1,500 times the number of qualified employees.
Qualified employees wages are exempt from State Income Tax.
Property Tax Abatement
Property Tax Abatement is authorized under Indiana Code 6-1.1-12.l in the form of deductions from assessed valuation. Any property owner in a locally designated economic revitalization area who makes improvements to real property or installs new manufacturing equipment is eligible for property tax abatement. Land does not qualify for abatement. Used manufacturing equipment may also qualify as long as such equipment is new to the state of Indiana. Equipment not used in direct production, such as office equipment, does not qualify for abatement.
The Job Training Partnership Act (JTPA)
The Job Training Partnership Act (JTPA) is a federally funded program offering employment and training services to disadvantaged youth and adults, older workers, and dislocated workers. The purpose of JTPA is to help people who want a better life get the education and training necessary to prepare for and obtain employment.
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The JPTA program provides job training assistance to economically disadvantaged youth, adults and older workers. In Madison County, the organization which delivers JTPA services is JobSource. To make a greater impact on Madison County's disadvantaged population, JobSource targets JTPA services to specific groups such as high school dropouts, single parents, individuals with disabilities, displaced homemakers, individuals age 55+, criminal offenders, and recovering substance abusers. Program eligibility is based on household income and/or barriers to employment.
The JTPA provides the following types of assistance:
Help in establishing a job goal and deciding on the best training to reach that goal
Information on available training and education opportunities
Financial assistance to cover the cost of tuition, books, and/or other training-related expenses.
A JTPA case manager to help with any problems that might occur throughout the participant's training and job search.
JTPA programs provide training for occupations that are considered to be "in demand", based on labor market information. Training is expected to lead reasonable employment opportunities upon completion. The length of training will vary among participants, according to individual need.
Tax Increment Financing (TIF)
Tax Increment Financing (TIF) provides for the temporary allocation to redevelopment or economic districts of increased tax proceeds in an allocation area generated by increases in assessed value. Thus, TIF permits cities, towns, or counties to use increased tax revenues stimulated by redevelopment or economic development to pay for the capital improvements needed to induce the redevelopment or economic development.
The use of TIF is initiated by the declaration of a tax allocation area by a county, city, or town redevelopment commission. Property Tax assessments are frozen at pre-development levels in the allocation area. Municipal bonds are then issued to finance the public improvements. As property values in the allocation area increase as a result of new development, the increment tax revenues are used to meet debt service on issued bonds.
Once the bonds have been paid off, the taxes collected from the allocation area are distributed to the remaining taxing districts. Bonds payable from TIF may be used to finance the cost of redevelopment and the construction of public improvements in the redevelopment area or for projects that directly serve or benefit the area.
Proceeds may also be used for training. Bond amounts are determined by the size of the project and the amount of the increment available.
The 1992 General Assembly passed legislation allowing depreciable personal property (machinery and equipment) to be used in computing the increment in addition to real property.