Economic Development: Implementation of Incentives (Once the Businesses Arrive)

This is the third article in a series on economic development.

Local incentives are used during the attraction and negotiation phase of a project to reduce overall site and business costs and may be the tie breaker between site locations. After a company has chosen its preferred community, implementing those incentives is the final step.

Implementation of various incentives is explained below. Please keep in mind that the actual processes are complex and will require assistance from legal and financial professionals:

• Tax Abatement. The fiscal body must first create an Economic Revitalization Area ("ERA") through financial and legal steps. Following the tax abatement application, a Statement of Benefits (SB-1) must be filed and approved by local officials prior to the initiation of the project. Once the project is approved, the company will file a one-time certified deduction form with the county auditor. Each year the company must file compliance, personal property tax abatement, and 103 personal property tax return forms with the county assessor's office.

• Tax Increment Financing (TIF). TIF bonds are often issued to fund infrastructure improvements or other incentives to attract companies. Legal and administrative steps are necessary to establish the TIF area, including adoption of resolutions, publication of notices, a public hearing, approvals from different governmental bodies, and filings with the county auditor. Additional legal steps pertain to the issuance of bonds. Prior to bond issuance, you may need additional negotiations regarding credit enhancement and additional security to market TIF Bonds.
   
• Tax Credits. Tax credits offered by the Indiana Economic Development Corporation (IEDC) include: Economic Development for a Growing Economy, Hoosier Business Investment, Headquarters Relocation, Clean Energy, Industrial Recovery and Venture Capital Investment Tax Credits. For more information on requirements to receive tax credits from the State and its agencies, visit www.in.gov/iedc. In addition, the local economic development professional and the company should be in direct contact with their IEDC - Business Development office field representative during the negotiations of a state incentive and any applicable state tax credits. The company and the State need to estimate the value of tax credits for each particular company.
   
• Job Training Programs. Companies often set up temporary headquarters for hiring purposes and may use State assistance (through IEDC and Workforce Development) to train employees for a specialized skill set or use local colleges, such as Ivy Tech.
   
• Permitting and Site Preparation. If a company selects a "shovel-ready" site, the site will already have received State permits. If not, the local economic development organization and the IEDC field representative can assist with obtaining permits.