PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2002 Regular Session of the General Assembly.

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     AN ACT to amend the Indiana Code concerning state and local finance and to make an appropriation.

    SECTION 1. IC 4-4-6.1-1.1, AS AMENDED BY P.L.73-2000, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 1.1. As used in this chapter, "zone business" means any entity that accesses at least one (1) tax credit or exemption incentive available under this chapter, IC 6-1.1-20.8, IC 6-2.1-3-32, or IC 6-3-3-10.

SOURCE: IC 4-4-28-14; (02)EH1001.2.2. -->     SECTION 2. IC 4-4-28-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 14. (a) An account must earn interest at a rate that is competitive in the county where the account is located.
    (b) Interest earned on an account during a taxable year is not subject to taxation under IC 6-2.1, IC 6-3 or IC 6-5.5.

SOURCE: IC 4-10-13-3; (02)EH1001.2.3. -->     SECTION 3. IC 4-10-13-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 3. The Indiana department of state revenue is hereby authorized and directed to prepare and publish each year the following report, which shall contain the following data and information:
        (1) a recital of the number of taxpayers, the amount of gross collections, the amount of net collections, the amount of refunds,

the amount of collection allowances, the amount of administrative costs, and the amount of delinquencies by type of tax collected by the department.
        (2) Relative to the gross income tax, a recital of the number of taxpayers, the total amount of gross income tax collected, the total amount of exemptions allowed and the total amount of nontaxable income. It shall also include a recital of the number of taxpayers and the total amount of gross income tax received from farmers, manufacturing interests, wholesalers, retailers, transportation and communication interest, public utilities, financial and insurance interests, real estate interests, personal service businesses, and salaries and wages received from every other source to the extent such information is available from gross income tax returns.
        (3) A breakdown of gross income tax collections received from corporate taxpayers, from unincorporated businesses, from income taxed at the rate of three eighths of one per cent (3/8%) and one and one-half per cent (1 1/2%), and from types of businesses as described in subsection (2) of this section.
Such report shall be made available for inspection as soon as it is prepared and shall be published, in the manner hereinafter provided, by the Indiana state department of revenue not later than December 31st, 31 following the end of each fiscal year.

SOURCE: IC 4-10-21; (02)EH1001.2.5. -->     SECTION 4. IC 4-10-21 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]:
     Chapter 21. Business Cycle State Spending Controls
    Sec. 1. As used in this chapter, "state spending cap" refers to the state spending cap determined under section 2 of this chapter.
    Sec. 2. (a) For the state fiscal year beginning July 1, 2003, and ending June 30, 2004, the state spending cap is equal to the result determined under STEP THREE of the following formula:
        STEP ONE: Determine the sum of the total of the appropriations made from the state general fund and the property tax replacement fund (including continuing appropriations) for the state fiscal year beginning July 1, 2002, and ending June 30, 2003.
        STEP TWO: Subtract from the STEP ONE result two hundred forty-three million dollars ($243,000,000), which is the amount of certain reversions made by state agencies.
        STEP THREE: Multiply the STEP TWO result by one and thirty-five thousandths (1.035).
    (b) For the state fiscal year beginning July 1, 2004, and ending

June 30, 2005, the state spending cap is equal to the product of the result determined under subsection (a) multiplied by one and thirty-five thousandths (1.035).
    (c) The state spending cap for a state fiscal year beginning after June 30, 2005, is equal to the product of the state spending growth quotient for the state fiscal year determined under section 3 of this chapter multiplied by the state spending cap for the immediately preceding state fiscal year.
    (d) The state spending cap imposed under this section is increased in the initial state fiscal year in which the state receives additional revenue for deposit in the state general fund or property tax replacement fund as a result of the enactment of a law that:
        (1) establishes a new tax or fee after June 30, 2002;
        (2) increases the rate of a previously enacted tax or fee after June 30, 2002; or
        (3) reduces or eliminates an exemption, a deduction, or a credit against a previously enacted tax or fee after June 30, 2002.
The amount of the increase is equal to the average revenue that the budget agency estimates will be raised by the legislative action in the initial two (2) full state fiscal years in which the legislative change is in effect.
    (e) The state spending cap imposed under this section is decreased in the initial state fiscal year in which the state is affected by a decrease in revenue deposited in the state general fund or property tax replacement fund as the result of the enactment of a law that:
        (1) eliminates a tax or fee after June 30, 2002;
        (2) eliminates any part of a tax rate or fee after June 30, 2002; or
        (3) establishes or increases an exemption, a deduction, or a credit against a tax or fee after June 30, 2002.
The amount of the decrease is equal to the average revenue that the budget agency estimates will be lost as a result of the legislative action in the initial two (2) full state fiscal years in which the legislative change is in effect.
    Sec. 3. The budget agency shall compute a new state spending growth quotient under this section before December 31 in 2004 and each even-numbered year thereafter. The state spending growth quotient determined under this section applies to each of the state fiscal years in the immediately following biennial budget period. The state spending growth quotient to be used in the biennial

budget period is the amount determined under STEP FOUR of the following formula:
        STEP ONE: For each of the six (6) calendar years immediately preceding the beginning of the first state fiscal year in a biennial budget period, divide the Indiana nonfarm personal income for the calendar year by the Indiana nonfarm personal income for the calendar year immediately preceding that calendar year.
        STEP TWO: Determine the sum of the STEP ONE results.
        STEP THREE: Divide the STEP TWO result by six (6).
        STEP FOUR: Determine the lesser of the following:
            (A) The STEP THREE quotient.
            (B) One and six-hundredths (1.06).
    Sec. 4. For purposes of section 3 of this chapter, Indiana nonfarm personal income is the estimate of total nonfarm personal income for Indiana in a calendar year as computed by the federal Bureau of Economic Analysis before December 31 immediately preceding the beginning of the first state fiscal year in a biennial budget period, using any:
        (1) actual data available for the calendar year; and
        (2) estimated data for the calendar year whenever actual data is not available.
    Sec. 5. (a) The maximum total amount that may be expended in a state fiscal year from the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund is the least of the following:
        (1) Subject to sections 6 and 7 of this chapter, the state spending cap for the state fiscal year.
        (2) The amount appropriated by the general assembly from the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund.
        (3) The amount of money available in the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund to pay expenditures.
    (b) Subject to sections 6 and 7 of this chapter, if the state spending cap for the state fiscal year is less than the amount appropriated by the general assembly in the state fiscal year from the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund, the budget agency shall reduce the amounts available for expenditure from the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund

in the state fiscal year by using the procedures in IC 4-13-2-18.
    Sec. 6. The following expenditures that would otherwise be subject to this chapter shall be excluded from all computations and determinations related to a state spending cap:
        (1) Expenditures derived from money deposited in the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund from any of the following:
            (A) Gifts.
            (B) Federal funds.
            (C) Dedicated funds.
            (D) Intergovernmental transfers.
            (E) Damage awards.
            (F) Property sales.
        (2) Expenditures for any of the following:
            (A) Transfers of money among the state general fund, the property tax replacement fund, and the counter-cyclical revenue and economic stabilization fund.
            (B) Reserve fund deposits.
            (C) Refunds of intergovernmental transfers.
            (D) Payment of judgments against the state and settlement payments made to avoid a judgment against the state, other than a judgment or settlement payment for failure to pay a contractual obligation or a personnel expenditure.
            (E) Distributions or allocations of state tax revenues to a unit of local government under IC 36-7-13, IC 36-7-26, IC 36-7-27, IC 36-7-31, or IC 36-7-31.3.
            (F) Motor vehicle excise tax replacement payments that are derived from amounts transferred to the state general fund from the lottery and gaming surplus account of the build Indiana fund.
            (G) Distributions of state tax revenues collected under IC 7.1 that are payable to cities and towns.
    Sec. 7. (a) An appropriation otherwise subject to the state spending cap limitation imposed by section 5 of this chapter shall be treated as exempt from the state spending cap limitation only if the general assembly specifically exempts the appropriation from the state spending cap in clear and unambiguous language contained in the bill making the appropriation.
    (b) The following language shall be treated as meeting the requirements of subsection (a):
        "The general assembly waives the state spending cap

limitation imposed by IC 4-10-21-5 for the state fiscal year beginning July 1, (insert the applicable year), and ending June 30, (insert the applicable year), for the following appropriation: (insert the language of the appropriation). Notwithstanding IC 4-10-21-5(a)(1), the budget agency may allot appropriations for the appropriation without making any reduction under IC 4-10-21-5(b).".
    (c) Language in a bill such as "Notwithstanding IC 4-10-21" or "IC 4-10-21 does not apply to this appropriation" shall not be treated as meeting the requirements of subsection (a). The budget agency may consider the language described in this subsection or other language that does not meet the requirements of subsection (a) only in determining which appropriations to make available for expenditure under section 5(b) of this chapter.
    Sec. 8. Not earlier than December 1 and not later than the first session day of the general assembly after December 31 of each even-numbered year, the budget agency shall submit a report in writing to the executive director of the legislative services agency that includes at least the following information:
        (1) The state spending cap for each of the state fiscal years in the immediately following biennial budget period.
        (2) The supporting data and calculations necessary for a person to independently verify the manner in which the state spending caps described in subdivision (1) were determined.

SOURCE: IC 4-30-18-2; (02)EH1001.2.8. -->     SECTION 5. IC 4-30-18-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 2. Except as provided in IC 6-3-2, state and local taxes, regardless of their type, may not be imposed upon any prize paid or payable under this article or upon the sale of any lottery ticket under this article.
    SECTION 6. IC 4-33-2-5.6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 5.6. "Cruise" means operation of a riverboat for a gambling operation while the riverboat is not moored to a dock.

SOURCE: IC 4-33-2-7; (02)MO1001186.10. -->     SECTION 7. IC 4-33-2-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 7. "Dock" means the location where an excursion a riverboat moors for the purpose of embarking passengers for and disembarking passengers from a gambling excursion. the riverboat.

SOURCE: IC 4-33-2-7.5; (02)MO1001186.11. -->     SECTION 8. IC 4-33-2-7.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 7.5. "Flexible scheduling" refers to the practice of conducting gambling games and allowing the continuous ingress

and egress of passengers for the purpose of gambling while a riverboat is docked.

SOURCE: IC 4-33-2-8; (02)MO1001186.12. -->     SECTION 9. IC 4-33-2-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 8. "Gambling excursion" means the time during which gambling games may be operated on a riverboat that has not implemented flexible scheduling under IC 4-33-6-21.

SOURCE: IC 4-33-4-10; (02)MO1001186.13. -->     SECTION 10. IC 4-33-4-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 10. If a riverboat cruises, the commission shall authorize the route of a the riverboat and the stops, if any, that the riverboat may make while on a cruise.

SOURCE: IC 4-33-4-21.2; (02)MO1001186.14. -->     SECTION 11. IC 4-33-4-21.2, AS AMENDED BY P.L.215-2001, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 21.2. (a) The Indiana gaming commission shall require a licensed owner to conspicuously display the number of the toll free telephone line described in IC 4-33-12-6 in the following locations:
        (1) On each admission ticket to a riverboat gambling excursion. if tickets are issued.
        (2) On a poster or placard that is on display in a public area of each riverboat where gambling games are conducted.
    (b) The toll free telephone line described in IC 4-33-12-6 must be:
        (1) maintained by the division of mental health and addiction under IC 12-23-1-6; and
        (2) funded by the addiction services fund established by IC 12-23-2-2.
    (c) The commission may adopt rules under IC 4-22-2 necessary to carry out this section.

SOURCE: IC 4-33-6-9; (02)MO1001186.15. -->     SECTION 12. IC 4-33-6-9 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 9. (a) A licensed owner must post a bond with the commission at least sixty (60) days before the commencement of regular gambling on the riverboat. excursions.
    (b) The bond shall be furnished in:
        (1) cash or negotiable securities;
        (2) a surety bond:
            (A) with a surety company approved by the commission; and
            (B) guaranteed by a satisfactory guarantor; or
        (3) an irrevocable letter of credit issued by a banking institution of Indiana acceptable to the commission.
    (c) If a bond is furnished in cash or negotiable securities, the principal shall be placed without restriction at the disposal of the commission, but income inures to the benefit of the licensee.
    (d) The bond:

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        (1) is subject to the approval of the commission;
        (2) must be in an amount that the commission determines will adequately reflect the amount that a local community will expend for infrastructure and other facilities associated with a riverboat operation; and
        (3) must be payable to the commission as obligee for use in payment of the licensed owner's financial obligations to the local community, the state, and other aggrieved parties, as determined by the rules of the commission.
    (e) If after a hearing (after at least five (5) days written notice) the commission determines that the amount of a licensed owner's bond is insufficient, the licensed owner shall upon written demand of the commission file a new bond.
    (f) The commission may require a licensed owner to file a new bond with a satisfactory surety in the same form and amount if:
        (1) liability on the old bond is discharged or reduced by judgment rendered, payment made, or otherwise; or
        (2) in the opinion of the commission any surety on the old bond becomes unsatisfactory.
    (g) If a new bond obtained under subsection (e) or (f) is unsatisfactory, the commission shall cancel the owner's license. If the new bond is satisfactorily furnished, the commission shall release in writing the surety on the old bond from any liability accruing after the effective date of the new bond.
    (h) A bond is released on the condition that the licensed owner remains at the site for which the owner's license is granted for the lesser of:
        (1) five (5) years; or
        (2) the date the commission grants a license to another licensed owner to operate from the site for which the bond was posted.
    (i) A licensed owner who does not meet the requirements of subsection (h) forfeits a bond filed under this section. The proceeds of a bond that is in default under this subsection are paid to the commission for the benefit of the local unit from which the riverboat operated.
    (j) The total and aggregate liability of the surety on a bond is limited to the amount specified in the bond, and the continuous nature of the bond may in no event be construed as allowing the liability of the surety under a bond to accumulate for each successive approval period during which the bond is in force.
    (k) A bond filed under this section is released sixty (60) days after:
        (1) the time has run under subsection (h); and

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        (2) a written request is submitted by the licensed owner.

SOURCE: IC 4-33-6-10; (02)MO1001186.16. -->     SECTION 13. IC 4-33-6-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 10. (a) An owner's license issued under this chapter permits the holder to own and operate one (1) riverboat and equipment for each license.
    (b) The holder of an owner's license issued under this chapter may implement flexible scheduling for the operation of the holder's riverboat under section 21 of this chapter.
    (c) An owner's license issued under this chapter must specify the place where the riverboat must operate and dock. However, the commission may permit the riverboat to dock at a temporary dock in the applicable city for a specific period of time not to exceed one (1) year after the owner's license is issued.
    (c) (d) An owner's initial license expires five (5) years after the effective date of the license.

SOURCE: IC 4-33-6-11; (02)MO1001186.17. -->     SECTION 14. IC 4-33-6-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 11. The commission may revoke an owner's license if:
        (1) the licensee begins regular riverboat excursions operations more than twelve (12) months after receiving the commission's approval of the application for the license; and
        (2) the commission determines that the revocation of the license is in the best interests of Indiana.

SOURCE: IC 4-33-6-21; (02)MO1001186.18. -->     SECTION 15. IC 4-33-6-21 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 21. A licensed owner may submit a plan for flexible scheduling to the commission by a date designated by the commission. Upon receipt of an appropriate plan, the commission shall authorize flexible scheduling and the licensed owner shall implement the flexible scheduling plan by the date designated by the commission.

SOURCE: IC 4-33-9-2; (02)MO1001186.19. -->     SECTION 16. IC 4-33-9-2, AS AMENDED BY P.L.20-1995, SECTION 15, AND P.L.55-1995, SECTION 3, IS CORRECTED AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 2. (a) This section does not apply to a riverboat that has implemented flexible scheduling under IC 4-33-6-21.
     (b) Except as provided in subsections (b), (c) and (c), (d), gambling may not be conducted while a riverboat is docked.
    (b) (c) If the master of the riverboat reasonably determines and certifies in writing that:
        (1) specific weather conditions, water conditions, or traffic conditions present a danger to the riverboat and the riverboat's

passengers and crew;
        (2) either the vessel or the docking facility is undergoing mechanical or structural repair;
        (3) water traffic conditions present a danger to:
            (A) the riverboat, riverboat passengers, and crew; or
            (B) other vessels on the water; or
        (4) the master has been notified that a condition exists that would cause a violation of federal law if the riverboat were to cruise;
the riverboat may remain docked and gaming may take place until the master determines that the conditions have sufficiently diminished or been corrected for the riverboat to safely proceed or the duration of the authorized excursion has expired.
    (c) (d) The commission shall by rule permit gambling to be conducted for periods of not more than thirty (30) minutes during passenger embarkation and not more than thirty (30) minutes during passenger disembarkation.

SOURCE: IC 4-33-9-3; (02)MO1001186.20. -->     SECTION 17. IC 4-33-9-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 3. (a) Except as provided in subsection (b), a riverboat excursions cruise may not exceed four (4) hours for a round trip.
    (b) Subsection (a) does not apply to an extended cruise that is expressly approved by the commission.

SOURCE: IC 4-33-9-14; (02)MO1001186.21. -->     SECTION 18. IC 4-33-9-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 14. (a) This section applies only to a riverboat that operates from a county that is contiguous to the Ohio River.
    (b) A gambling excursion cruise is permitted only when the navigable waterway for which the riverboat is licensed is navigable, as determined by the commission in consultation with the United States Army Corps of Engineers.

SOURCE: IC 4-33-10-1; (02)MO1001186.22. -->     SECTION 19. IC 4-33-10-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 1. (a) A person who knowingly or intentionally:
        (1) makes a false statement on an application submitted under this article;
        (2) operates a gambling excursion operation or a cruise in which wagering is conducted or is to be conducted in a manner other than the manner required under this article;
        (3) permits a person less than twenty-one (21) years of age to make a wager;
         (4) aids, induces, or causes a person less than twenty-one (21) years of age who is not an employee of the riverboat gambling

operation to enter or attempt to enter a riverboat;
        (4) (5) wagers or accepts a wager at a location other than a riverboat; or
        (5) (6) makes a false statement on an application submitted to the commission under this article;
commits a Class A misdemeanor.
     (b) A person who:
        (1) is not an employee of the riverboat gambling operation;
        (2) is less than twenty-one (21) years of age; and
        (3) knowingly or intentionally enters or attempts to enter a riverboat;
commits a Class A misdemeanor.

SOURCE: IC 4-33-10-5; (02)MO1001186.23. -->     SECTION 20. IC 4-33-10-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 5. An action to prosecute a crime occurring on a riverboat while the riverboat is moored at a dock or during a gambling excursion cruise shall be tried in the county of the dock where the riverboat is based. was moored or the cruise was initiated.

SOURCE: IC 4-33-12-1; (02)MO1001186.24. -->     SECTION 21. IC 4-33-12-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 1. (a) This subsection does not apply to a riverboat that has implemented flexible scheduling under IC 4-33-6-21. A tax is imposed on admissions to gambling excursions authorized under this article at a rate of three dollars ($3) for each person admitted to the gambling excursion. This admission tax is imposed upon the licensed owner conducting the gambling excursion.
    (b) This subsection applies only to a riverboat that has implemented flexible scheduling under IC 4-33-6-21. A tax is imposed on the admissions to a riverboat that has implemented flexible scheduling under IC 4-33-6-21 at a rate of three dollars ($3) for each person admitted to the riverboat. This admission tax is imposed upon the licensed owner operating the riverboat.

SOURCE: IC 4-33-12-2; (02)MO1001186.25. -->     SECTION 22. IC 4-33-12-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 2. (a) This section does not apply to a riverboat that has implemented flexible scheduling under IC 4-33-6-21.
     (b) If tickets are issued that may be used for admission to more than one (1) gambling excursion, the admission tax must be paid for each person using the ticket on each gambling excursion for which the ticket is used.
    (b) (c) If free passes or complimentary admission tickets are issued, a person who has been issued an owner's license shall pay the same tax

on the passes or complimentary tickets as if the passes or tickets were sold at the regular admission rate.

SOURCE: IC 4-33-12-6; (02)MO1001186.26. -->     SECTION 23. IC 4-33-12-6, AS AMENDED BY P.L.178-2002, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 6. (a) The department shall place in the state general fund the tax revenue collected under this chapter.
    (b) Except as provided by subsections (c) and (d) and IC 6-3.1-20-7, the treasurer of state shall quarterly pay the following amounts:
        (1) Except as provided in subsection (k), one dollar ($1) of the admissions tax collected by the licensed owner for each person embarking on a gambling excursion during the quarter or admitted to a riverboat that has implemented flexible scheduling under IC 4-33-6-21 during the quarter shall be paid to:
            (A) the city in which the riverboat is docked, if the city:
                (i) is located in a county having a population of more than one hundred ten thousand (110,000) but less than one hundred fifteen thousand (115,000); or
                (ii) is contiguous to the Ohio River and is the largest city in the county; and
            (B) the county in which the riverboat is docked, if the riverboat is not docked in a city described in clause (A).
        (2) Except as provided in subsection (k), one dollar ($1) of the admissions tax collected by the licensed owner for each person :
             (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the county in which the riverboat is docked. In the case of a county described in subdivision (1)(B), this one dollar ($1) is in addition to the one dollar ($1) received under subdivision (1)(B).
        (3) Except as provided in subsection (k), ten cents ($0.10) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the county convention and visitors bureau or promotion fund for the county in which the riverboat is docked.
        (4) Except as provided in subsection (k), fifteen cents ($0.15) of the admissions tax collected by the licensed owner for each

person :
             (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during a quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the state fair commission, for use in any activity that the commission is authorized to carry out under IC 15-1.5-3.
        (5) Except as provided in subsection (k), ten cents ($0.10) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the division of mental health and addiction. The division shall allocate at least twenty-five percent (25%) of the funds derived from the admissions tax to the prevention and treatment of compulsive gambling.
        (6) Except as provided in subsection (k), sixty-five cents ($0.65) of the admissions tax collected by the licensed owner for each person embarking on a gambling excursion during the quarter or admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21 shall be paid to the Indiana horse racing commission to be distributed as follows, in amounts determined by the Indiana horse racing commission, for the promotion and operation of horse racing in Indiana:
            (A) To one (1) or more breed development funds established by the Indiana horse racing commission under IC 4-31-11-10.
            (B) To a racetrack that was approved by the Indiana horse racing commission under IC 4-31. The commission may make a grant under this clause only for purses, promotions, and routine operations of the racetrack. No grants shall be made for long term capital investment or construction and no grants shall be made before the racetrack becomes operational and is offering a racing schedule.
    (c) With respect to tax revenue collected from a riverboat that operates on Patoka Lake, the treasurer of state shall quarterly pay the following amounts:
        (1) The counties described in IC 4-33-1-1(3) shall receive one dollar ($1) of the admissions tax collected for each person :
            (A) embarking on a gambling excursion during the quarter; or

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             (B) admitted to the riverboat during the quarter (if the riverboat has implemented flexible scheduling).
        This amount shall be divided equally among the counties described in IC 4-33-1-1(3).
        (2) The Patoka Lake development account established under IC 4-33-15 shall receive one dollar ($1) of the admissions tax collected for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to the riverboat during the quarter (if the riverboat has implemented flexible scheduling).
        (3) The resource conservation and development program that:
            (A) is established under 16 U.S.C. 3451 et seq.; and
            (B) serves the Patoka Lake area;
        shall receive forty cents ($0.40) of the admissions tax collected for each person embarking on a gambling excursion during the quarter or admitted to the riverboat during the quarter (if the riverboat has implemented flexible scheduling).
        (4) The state general fund shall receive fifty cents ($0.50) of the admissions tax collected for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to the riverboat during the quarter (if the riverboat has implemented flexible scheduling).
        (5) The division of mental health and addiction shall receive ten cents ($0.10) of the admissions tax collected for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to the riverboat during the quarter (if the riverboat has implemented flexible scheduling).
        The division shall allocate at least twenty-five percent (25%) of the funds derived from the admissions tax to the prevention and treatment of compulsive gambling.
    (d) With respect to tax revenue collected from a riverboat that operates from a county having a population of more than four hundred thousand (400,000) but less than seven hundred thousand (700,000), the treasurer of state shall quarterly pay the following amounts:
        (1) Except as provided in subsection (k), one dollar ($1) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has

implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the city in which the riverboat is docked.
        (2) Except as provided in subsection (k), one dollar ($1) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the county in which the riverboat is docked.
        (3) Except as provided in subsection (k), nine cents ($0.09) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the county convention and visitors bureau or promotion fund for the county in which the riverboat is docked.
        (4) Except as provided in subsection (k), one cents cent ($0.01) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the northwest Indiana law enforcement training center.
        (5) Except as provided in subsection (k), fifteen cents ($0.15) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on a gambling excursion during the quarter; or
            (B) admitted to a riverboat during a quarter that has implemented flexible scheduling under IC 4-33-6-21;
        shall be paid to the state fair commission for use in any activity that the commission is authorized to carry out under IC 15-1.5-3.
        (6) Except as provided in subsection (k), ten cents ($0.10) of the admissions tax collected by the licensed owner for each person :
            (A) embarking on gambling excursion during the quarter; or
            (B) admitted to a a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21;

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        shall be paid to the division of mental health and addiction. The division shall allocate at least twenty-five percent (25%) of the funds derived from the admissions tax to the prevention and treatment of compulsive gambling.
        (7) Except as provided in subsection (k), sixty-five cents ($0.65) of the admissions tax collected by the licensed owner for each person embarking on a gambling excursion during the quarter or admitted to a riverboat during the quarter that has implemented flexible scheduling under IC 4-33-6-21 shall be paid to the Indiana horse racing commission to be distributed as follows, in amounts determined by the Indiana horse racing commission, for the promotion and operation of horse racing in Indiana:
            (A) To one (1) or more breed development funds established by the Indiana horse racing commission under IC 4-31-11-10.
            (B) To a racetrack that was approved by the Indiana horse racing commission under IC 4-31. The commission may make a grant under this clause only for purses, promotions, and routine operations of the racetrack. No grants shall be made for long term capital investment or construction, and no grants shall be made before the racetrack becomes operational and is offering a racing schedule.
    (e) Money paid to a unit of local government under subsection (b)(1) through (b)(2), (c)(1), or (d)(1) through (d)(2):
        (1) must be paid to the fiscal officer of the unit and may be deposited in the unit's general fund or riverboat fund established under IC 36-1-8-9, or both;
        (2) may not be used to reduce the unit's maximum levy under IC 6-1.1-18.5, but may be used at the discretion of the unit to reduce the property tax levy of the unit for a particular year;
        (3) may be used for any legal or corporate purpose of the unit, including the pledge of money to bonds, leases, or other obligations under IC 5-1-14-4; and
        (4) is considered miscellaneous revenue.
    (f) Money paid by the treasurer of state under subsection (b)(3) or (d)(3) shall be:
        (1) deposited in:
            (A) the county convention and visitor promotion fund; or
            (B) the county's general fund if the county does not have a convention and visitor promotion fund; and
        (2) used only for the tourism promotion, advertising, and economic development activities of the county and community.

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    (g) Money received by the division of mental health and addiction under subsections (b)(5), (c)(5), and (d)(6):
        (1) is annually appropriated to the division of mental health and addiction;
        (2) shall be distributed to the division of mental health and addiction at times during each state fiscal year determined by the budget agency; and
        (3) shall be used by the division of mental health and addiction for programs and facilities for the prevention and treatment of addictions to drugs, alcohol, and compulsive gambling, including the creation and maintenance of a toll free telephone line to provide the public with information about these addictions. The division shall allocate at least twenty-five percent (25%) of the money received to the prevention and treatment of compulsive gambling.
     (h) This subsection applies to the following:
        (1) Each entity receiving money under subsection (b).
        (2) Each entity receiving money under subsection (d)(1) through (d)(2).
        (3) Each entity receiving money under subsection (d)(5) through (d)(7).
The treasurer of state shall determine the total amount of money paid by the treasurer of state to an entity subject to this subsection during the state fiscal year 2002. The amount determined under this subsection is the base year revenue for each entity subject to this subsection. The treasurer of state shall certify the base year revenue determined under this subsection to each entity subject to this subsection.
    (i) This subsection applies to an entity receiving money under subsection (d)(3) or (d)(4). The treasurer of state shall determine the total amount of money paid by the treasurer of state to the entity described in subsection (d)(3) during state fiscal year 2002. The amount determined under this subsection multiplied by nine-tenths (0.9) is the base year revenue for the entity described in subsection (d)(3). The amount determined under this subsection multiplied by one-tenth (0.1) is the base year revenue for the entity described in subsection (d)(4). The treasurer of state shall certify the base year revenue determined under this subsection to each entity subject to this subsection.
    (j) For state fiscal years beginning after June 30, 2002, the total amount of money distributed to an entity under this section during a state fiscal year may not exceed the entity's base year revenue as

determined under subsection (h) or (i). If the treasurer of state determines that the total amount of money distributed to an entity under this section during a state fiscal year is less than the entity's base year revenue, the treasurer of state shall make a supplemental distribution to the entity under IC 4-33-13-5(f).
    (k) For state fiscal years beginning after June 30, 2002, the treasurer of state shall pay that part of the riverboat admissions taxes that:
        (1) exceed a particular entity's base year revenue; and
        (2) would otherwise be due to the entity under this section;
to the property tax replacement fund instead of to the entity.

SOURCE: IC 4-33-13-1; (02)MO1001186.27. -->     SECTION 24. IC 4-33-13-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 1. (a) This section does not apply to a riverboat that has implemented flexible scheduling under IC 4-33-6-21.
     (b) A tax is imposed on the adjusted gross receipts received from gambling games authorized under this article at the rate of twenty twenty-two and five-tenths percent (20%) (22.5%) of the amount of the adjusted gross receipts.
    (b) (c) The licensed owner shall remit the tax imposed by this chapter to the department before the close of the business day following the day the wagers are made.
    (c) (d) The department may require payment under this section to be made by electronic funds transfer (as defined in IC 4-8.1-2-7(e)).
    (d) (e) If the department requires taxes to be remitted under this chapter through electronic funds transfer, the department may allow the licensed owner to file a monthly report to reconcile the amounts remitted to the department.
    (e) (f) The department may allow taxes remitted under this section to be reported on the same form used for taxes paid under IC 4-33-12.

SOURCE: IC 4-33-13-1.5; (02)MO1001186.28. -->     SECTION 25. IC 4-33-13-1.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 1.5. (a) This section applies only to a riverboat that has implemented flexible scheduling under IC 4-33-6-21.
    (b) A graduated tax is imposed on the adjusted gross receipts received from gambling games authorized under this article as follows:
        (1) Fifteen percent (15%) of the first twenty-five million dollars ($25,000,000) of adjusted gross receipts received during the period beginning July 1 of each year and ending June 30 of the following year.

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        (2) Twenty percent (20%) of the adjusted gross receipts in excess of twenty-five million dollars ($25,000,000) but not exceeding fifty million dollars ($50,000,000) received during the period beginning July 1 of each year and ending June 30 of the following year.
        (3) Twenty-five percent (25%) of the adjusted gross receipts in excess of fifty million dollars ($50,000,000) but not exceeding seventy-five million dollars ($75,000,000) received during the period beginning July 1 of each year and ending June 30 of the following year.
        (4) Thirty percent (30%) of the adjusted gross receipts in excess of seventy-five million dollars ($75,000,000) but not exceeding one hundred fifty million dollars ($150,000,000) received during the period beginning July 1 of each year and ending June 30 of the following year.
        (5) Thirty-five percent (35%) of all adjusted gross receipts in excess of one hundred fifty million dollars ($150,000,000).
The tax rates imposed under this section apply to adjusted gross receipts received beginning the date flexible scheduling is implemented under IC 4-33-6-21.
    (c) The licensed owner shall remit the tax imposed by this chapter to the department before the close of the business day following the day the wagers are made.
    (d) The department may require payment under this section to be made by electronic funds transfer (as defined in IC 4-8.1-2-7(f)).
    (e) If the department requires taxes to be remitted under this chapter through electronic funds transfer, the department may allow the licensed owner to file a monthly report to reconcile the amounts remitted to the department.
    (f) The department may allow taxes remitted under this section to be reported on the same form used for taxes paid under IC 4-33-12.

SOURCE: IC 4-33-13-5; (02)MO1001186.29. -->     SECTION 26. IC 4-33-13-5, AS AMENDED BY P.L.186-2002, SECTION 11, AND AS AMENDED BY P.L.178-2002, SECTION 3, IS CORRECTED AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 5. (a) After funds are appropriated under section 4 of this chapter, each month the treasurer of state shall distribute the tax revenue deposited in the state gaming fund under this chapter to the following:
        (1) The first thirty-three million dollars ($33,000,000) of tax revenues collected under this chapter shall be set aside for revenue sharing under subsection (d).

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        (2) Subject to subsection (b), twenty-five percent (25%) of the remaining tax revenue remitted by each licensed owner shall be paid:
            (A) to the city that is designated as the home dock of the riverboat from which the tax revenue was collected, in the case of:
                (i) a city described in IC 4-33-12-6(b)(1)(A); or
                (ii) a city located in a county having a population of more than four hundred thousand (400,000) but less than seven hundred thousand (700,000);
            (B) in equal shares to the counties described in IC 4-33-1-1(3), in the case of a riverboat whose home dock is on Patoka Lake; or
            (C) to the county that is designated as the home dock of the riverboat from which the tax revenue was collected, in the case of a riverboat whose home dock is not in a city described in clause (A) or a county described in clause (B). and
        (2) (3) Seventy-five percent (75%) of Subject to subsection (c), the remainder of the tax revenue remitted by each licensed owner shall be paid to the build Indiana fund. lottery and gaming surplus account. property tax replacement fund.
    (b) For each city and county receiving money under subsection (a)(2)(A) or (a)(2)(C), the treasurer of state shall determine the total amount of money paid by the treasurer of state to the city or county during the state fiscal year 2002. The amount determined is the base year revenue for the city or county. The treasurer of state shall certify the base year revenue determined under this subsection to the city or county. The total amount of money distributed to a city or county under this section during a state fiscal year may not exceed the entity's base year revenue. For each state fiscal year beginning after June 30, 2002, the treasurer of state shall pay that part of the riverboat wagering taxes that:
        (1) exceeds a particular city or county's base year revenue; and
        (2) would otherwise be due to the city or county under this section;
to the property tax replacement fund instead of to the city or county.
     (c) Each state fiscal year the treasurer of state shall transfer from the tax revenue remitted to the property tax replacement fund under subsection (a)(3) to the build Indiana fund an amount that when added to the following may not exceed two hundred fifty

million dollars ($250,000,000):
        (1) Surplus lottery revenues under IC 4-30-17-3.
        (2) Surplus revenue from the charity gaming enforcement fund under IC 4-32-10-6.
        (3) Tax revenue from pari-mutuel wagering under IC 4-31-9-3.
The treasurer of state shall make transfers on a monthly basis as needed to meet the obligations of the build Indiana fund. If in any state fiscal year insufficient money is transferred to the property tax replacement fund under subsection (a)(3) to comply with this subsection, the treasurer of state shall reduce the amount transferred to the build Indiana fund to the amount available in the property tax replacement fund from the transfers under subsection (a)(3) for the state fiscal year.
     (d) Before August 15 of 2003 and each year thereafter, the treasurer of state shall distribute the wagering taxes set aside for revenue sharing under subsection (a)(1) to the county treasurer of each county that does not have a riverboat according to the ratio that the county's population bears to the total population of the counties that do not have a riverboat. The county treasurer shall distribute the money received by the county under this subsection as follows:
        (1) To each city located in the county according to the ratio the city's population bears to the total population of the county.
        (2) To each town located in the county according to the ratio the town's population bears to the total population of the county.
        (3) After the distributions required in subdivisions (1) and (2) are made, the remainder shall be retained by the county.
    (e) Money received by a city, town, or county under subsection (d) may be used only:
        (1) to reduce the property tax levy of the city, town, or county for a particular year (a property tax reduction under this subdivision does not reduce the maximum levy of the city, town, or county under IC 6-1.1-18.5);
        (2) for deposit in a special fund or allocation fund created under IC 8-22-3.5, IC 36-7-14, IC 36-7-14.5, IC 36-7-15.1, and IC 36-7-30 to provide funding for additional credits for property tax replacement in property tax increment allocation areas;
        (3) to fund sewer and water projects, including storm water

management projects; or
        (4) for police and fire pensions.
However, not more than twenty percent (20%) of the money received under subsection (d) may be used for the purpose described in subdivision (4).
     (f) Before September 15 of 2003 and each year thereafter, the treasurer of state shall determine the total amount of money distributed to an entity under IC 4-33-12-6 during the preceding state fiscal year. If the treasurer of state determines that the total amount of money distributed to an entity under IC 4-33-12-6 during the preceding state fiscal year was less than the entity's base year revenue (as determined under IC 4-33-12-6), the treasurer of state shall make a supplemental distribution to the entity from taxes collected under this chapter and deposited into the property tax replacement fund. The amount of the supplemental distribution is equal to the difference between the entity's base year revenue (as determined under IC 4-33-12-6) and the total amount of money distributed to the entity during the preceding state fiscal year under IC 4-33-12-6.

SOURCE: IC 4-33-18; (02)MO1001186.30. -->     SECTION 27. IC 4-33-18 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]:
     Chapter 18. Indiana Department of Gaming Research
    Sec. 1. As used in this chapter, "department" means the Indiana department of gaming research.
    Sec. 2. The Indiana department of gaming research is established as an agency of the state of Indiana for the purpose of enhancing the gaming industry in Indiana through research and analysis.
    Sec. 3. The department is under the control of the governor, who shall appoint or employ the executive director and other persons that the governor considers necessary.
    Sec. 4. (a) The executive director, with the governor's approval, may employ individuals as are necessary to perform the various functions of the department.
    (b) The executive director and the budget agency shall set the compensation for the department's employees.
    Sec. 5. The department shall research and analyze data and public policy issues relating to all aspects of gaming in Indiana for the enhancement of:
        (1) the Indiana lottery under IC 4-30;
        (2) pari-mutuel horse racing under IC 4-31;

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        (3) charity gaming under IC 4-32; and
        (4) riverboat casino gambling under IC 4-33.
    Sec. 6. The department shall study and make findings and recommendations on the following:
        (1) Alternative methods of taxing gaming entities, including taxes based upon the size of a riverboat or the number of gaming positions on board a riverboat.
        (2) The impact of flexible boarding on the gaming industry.
        (3) The impact of breed development programs and sire stakes racing in Indiana.
        (4) Any other issue considered appropriate by the department or suggested by:
            (A) the Indiana lottery commission;
            (B) the Indiana horse racing commission;
            (C) the department of state revenue; or
            (D) the Indiana gaming commission.
    Sec. 7. The executive director shall submit the department's findings and recommendations to the governor and the legislative council.
    Sec. 8. The department shall impose an annual fee of twenty-five thousand dollars ($25,000) upon the following:
        (1) Each licensed owner operating a riverboat in Indiana.
        (2) Each permit holder (as defined in IC 4-31-2-14) operating a live pari-mutuel horse racing facility in Indiana.
    Sec. 9. (a) Nothing in this chapter may be construed to limit the powers or responsibilities of:
        (1) the Indiana lottery commission under IC 4-30;
        (2) the Indiana horse racing commission under IC 4-31;
        (3) the department of state revenue under IC 4-32; or
        (4) the Indiana gaming commission under IC 4-33.
    (b) The department may not exercise any administrative or regulatory powers with respect to:
        (1) the Indiana lottery under IC 4-30;
        (2) pari-mutuel horse racing under IC 4-31;
        (3) charity gaming under IC 4-32; or
        (4) riverboat casino gambling under IC 4-33.

SOURCE: IC 6-1.1-3-22; (02)EH1001.2.13. -->     SECTION 28. IC 6-1.1-3-22 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 22. (a) Except to the extent that it conflicts with a statute, 50 IAC 4.2 (as in effect January 1, 2001) is incorporated by reference into this section.
    (b) Tangible personal property within the scope of 50 IAC 4.2

(as in effect January 1, 2001) shall be assessed on the assessment dates in calendar years 2003 and thereafter in conformity with 50 IAC 4.2 (as in effect January 1, 2001).
    (c) The publisher of the Indiana Administrative Code may continue to publish 50 IAC 4.2 (as in effect January 1, 2001) in the Indiana Administrative Code.
    (d) 50 IAC 4.3 and any other rule to the extent that it conflicts with this section is void.
    (e) A reference in 50 IAC 4.2 to a governmental entity that has been terminated or a statute that has been repealed or amended shall be treated as a reference to its successor.

SOURCE: IC 6-1.1-8-44; (02)EH1001.2.14. -->     SECTION 29. IC 6-1.1-8-44 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 44. (a) Except to the extent that it conflicts with a statute, 50 IAC 5.1 (as in effect January 1, 2001) is incorporated by reference into this section.
    (b) Tangible personal property within the scope of 50 IAC 5.1 (as in effect January 1, 2001) shall be assessed on the assessment dates in calendar years 2003 and thereafter in conformity with 50 IAC 5.1 (as in effect January 1, 2001).
    (c) The publisher of the Indiana Administrative Code may continue to publish 50 IAC 5.1 (as in effect January 1, 2001) in the Indiana Administrative Code.
    (d) 50 IAC 5.2 and any other rule to the extent that it conflicts with this section is void.
    (e) A reference in 50 IAC 5.1 to a governmental entity that has been terminated or a statute that has been repealed or amended shall be treated as a reference to its successor.

SOURCE: IC 6-1.1-10-29; (02)EH1001.2.15. -->     SECTION 30. IC 6-1.1-10-29, AS AMENDED BY P.L.90-2002, SECTION 100, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 29. (a) As used in this section, "manufacturer" or "processor" means a person that performs an operation or continuous series of operations on raw materials, goods, or other personal property to alter the raw materials, goods, or other personal property into a new or changed state or form. The operation may be performed by hand, machinery, or a chemical process directed or controlled by an individual. The terms include a person that:
        (1) dries or prepares grain for storage or delivery; or
        (2) publishes books or other printed materials.
    (b) Personal property owned by a manufacturer or processor is exempt from property taxation if the owner is able to show by adequate records that the property:

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        (1) is stored and remains in its original package in an in-state warehouse for the purpose of shipment, without further processing, to an out-of-state destination; or
        (2) is inventory (as defined in IC 6-1.1-3-11) that will be used in an operation or a continuous series of operations to alter the personal property into a new or changed state or form and the resulting personal property will be shipped, or will be incorporated into personal property that will be shipped, to an out-of-state destination; or
        (3) consists of books or other printed materials that are stored at an in-state commercial printer's facility for the purpose of shipment, without further processing, to an out-of-state destination.
    (c) Personal property that is manufactured in Indiana and that would be exempt under subsection (b), (b)(1), except that it is not stored in its original package, is exempt from property taxation if the owner can establish in accordance with exempt inventory procedures, regulations, and rules of the department of local government finance that:
        (1) the property is ready for shipment without additional manufacturing or processing, except for packaging; and
        (2) either:
            (A) the property will be damaged or have its value impaired if it is stored in its original package; or
            (B) the final packaging of finished inventory items is not practical until receipt of a final customer order because fulfillment of the customer order requires the accumulation of a number of distinct finished inventory items into a single shipping package.
    (d) A manufacturer or processor that possesses personal property owned by another person may claim an exemption under subsection (b) or (c) if:
        (1) the manufacturer or processor includes the property on the manufacturer's or processor's personal property tax return; and
        (2) the manufacturer or processor is able to show that the owner of the personal property would otherwise have qualified for an exemption under subsection (b) (b)(1), (b)(3), or (c).

SOURCE: IC 6-1.1-10-29.5; (02)EH1001.2.16. -->     SECTION 31. IC 6-1.1-10-29.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 29.5. (a) For purposes of determining under sections 29, 29.3, 30(a), and 30(c) of this chapter the amount and type of personal property that is shipped or transshipped to an out-of-state destination, the term "adequate record" includes a designation on a bill of lading, freight bill,

delivery receipt, manifest, packing slip, or an equivalent document, or a final entry in the records of the taxpayer indicating that property is held for shipment to an out-of-state destination. Such a designation for out-of-state shipment is sufficient for purposes of section 29, 29.3, 30(a), or 30(c) of this chapter even though the specific out-of-state destination of the property is not included in the designation and even though the destination of the property is unknown on the assessment date.
    (b) For the purpose of substantiating the amount of his personal property which is exempt from property taxation under section 29, 29.3, 30(a), or 30(c) of this chapter on the basis that it is being shipped or transshipped to an out-of-state destination, a taxpayer shall maintain records that reflect the specific type and amount of personal property claimed to be exempt so that the taxpayer's taxable personal property may be distinguished from his exempt personal property. In lieu of specific identification of the taxpayer's personal property that is shipped or transshipped to an out-of-state destination, the taxpayer may elect to establish the value of his exempt personal property by utilizing an allocation method whereby the exempt personal property is determined by dividing:
        (1) the value of the taxpayer's property shipped from the in-state warehouse to out-of-state destinations during the twelve (12) month period ending with the assessment date; by
        (2) the total value of all shipments of the taxpayer's property from the in-state warehouse during the same period of time;
and applying this ratio to the taxpayer's total inventory of personal property that has been placed in the in-state warehouse, that is in the in-state warehouse as of the assessment date, and that meets the other requirements for an exemption under section 29, 29.3, 30(a), or 30(c) of this chapter. If the taxpayer uses the allocation method, he shall keep records which adequately establish the validity of the allocation.
    (c) If the taxpayer elects to keep a specific inventory under subsection (b), he shall maintain additional records which reflect:
        (1) an accurate inventory of all personal property stored in an in-state warehouse; i.e., both inventory destined for points outside the state and inventory destined for points within the state;
        (2) the date of deposit of the inventory in the in-state warehouse;
        (3) the date of withdrawal of the inventory from the in-state warehouse; and
        (4) the point of ultimate destination of the shipments, if known.
    (d) For the purposes of this section, the term "warehouse" includes a commercial printer's facility.

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     (e) A taxpayer may use an allocation percentage to claim an exemption under section 29(b)(2) of this chapter for a part of the person's personal property if the taxpayer's business records substantiate that the allocation percentage accurately reflects the part of the personal property that will:
        (1) be used in an operation or a continuous series of operations to alter the personal property into a new or changed state or form; and
        (2) in its new or changed state or form be:
            (A) shipped; or
            (B) incorporated into personal property that will be shipped;
        to an out-of-state destination.
The percentage may include personal property that is sold to another processor or manufacturer if the personal property is incorporated into the personal property of the buyer and that personal property is shipped out of state.

SOURCE: IC 6-1.1-12-37; (02)EH1001.2.17. -->     SECTION 32. IC 6-1.1-12-37, AS AMENDED BY P.L.291-2001, SECTION 142, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2003]: Sec. 37. (a) Each year a person who is entitled to receive the homestead credit provided under IC 6-1.1-20.9 for property taxes payable in the following year is entitled to a standard deduction from the assessed value of the real property, mobile home not assessed as real property, or manufactured home not assessed as real property that qualifies for the homestead credit. The auditor of the county shall record and make the deduction for the person qualifying for the deduction.
    (b) Except as provided in section 40.5 of this chapter, the total amount of the deduction that a person may receive under this section for a particular year is the lesser of:
        (1) one-half (1/2) of the assessed value of the real property, mobile home not assessed as real property, or manufactured home not assessed as real property; or
        (2) six thirty-five thousand dollars ($6,000). ($35,000).
    (c) A person who has sold real property, a mobile home not assessed as real property, or a manufactured home not assessed as real property to another person under a contract that provides that the contract buyer is to pay the property taxes on the real property, mobile home, or manufactured home may not claim the deduction provided under this section with respect to that real property, mobile home, or manufactured home.

SOURCE: IC 6-1.1-12-41; (02)EH1001.2.18. -->     SECTION 33. IC 6-1.1-12-41 IS ADDED TO THE INDIANA

CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 41. (a) This section does not apply to assessment years beginning after December 31, 2005.
    (b) As used in this section, "assessed value of inventory" means the assessed value determined after the application of any deductions or adjustments that apply by statute or rule to the assessment of inventory, other than the deduction allowed under subsection (f).
    (c) As used in this section, "county income tax council" means a council established by IC 6-3.5-6-2.
    (d) As used in this section, "fiscal body" has the meaning set forth in IC 36-1-2-6.
    (e) As used in this section, "inventory" has the meaning set forth in IC 6-1.1-3-11.
    (f) An ordinance may be adopted in a county to provide that a deduction applies to the assessed value of inventory located in the county. The deduction is equal to one hundred percent (100%) of the assessed value of inventory located in the county for the appropriate year of assessment. An ordinance adopted under this subsection must be adopted before January 1 of a calendar year beginning after December 31, 2002. An ordinance adopted under this section in a particular year applies to each subsequent assessment year ending before January 1, 2006. An ordinance adopted under this section may be consolidated with an ordinance adopted under IC 6-3.5-7-25 or IC 6-3.5-7-26. The consolidation of an ordinance adopted under this section with an ordinance adopted under IC 6-3.5-7-26 does not cause the ordinance adopted under IC 6-3.5-7-26 to expire after December 31, 2005.
    (g) An ordinance may not be adopted under subsection (f) after March 30, 2004. However, an ordinance adopted under this section may be amended after March 30, 2004, to consolidate an ordinance adopted under IC 6-3.5-7-26.
    (h) The entity that may adopt the ordinance permitted under subsection (f) is:
        (1) the county income tax council if the county option income tax is in effect on January 1 of the year in which an ordinance under this section is adopted;
        (2) the county fiscal body if the county adjusted gross income tax is in effect on January 1 of the year in which an ordinance under this section is adopted; or
        (3) the county income tax council or the county fiscal body, whichever acts first, for a county not covered by subdivision

(1) or (2).
To adopt an ordinance under subsection (f), a county income tax council shall use the procedures set forth in IC 6-3.5-6 concerning the imposition of the county option income tax. The entity that adopts the ordinance shall provide a certified copy of the ordinance to the department of local government finance before February 1.
    (i) A taxpayer is not required to file an application to qualify for the deduction permitted under subsection (f).
    (j) The department of local government finance shall incorporate the deduction established in this section in the personal property return form to be used each year for filing under IC 6-1.1-3-7 or IC 6-1.1-3-7.5 to permit the taxpayer to enter the deduction on the form. If a taxpayer fails to enter the deduction on the form, the township assessor shall:
        (1) determine the amount of the deduction; and
        (2) within the period established in IC 6-1.1-16-1, issue a notice of assessment to the taxpayer that reflects the application of the deduction to the inventory assessment.
    (k) The deduction established in this section must be applied to any inventory assessment made by:
        (1) an assessing official;
        (2) a county property tax board of appeals; or
        (3) the department of local government finance.

SOURCE: IC 6-1.1-12-42; (02)EH1001.2.19. -->     SECTION 34. IC 6-1.1-12-42 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 42. (a) As used in this section, "assessed value of inventory" means the assessed value determined after the application of any deductions or adjustments that apply by statute or rule to the assessment of inventory, other than the deduction established in subsection (c).
    (b) As used in this section, "inventory" has the meaning set forth in IC 6-1.1-3-11.
    (c) A taxpayer is entitled to a deduction from assessed value equal to one hundred percent (100%) of the taxpayer's assessed value of inventory beginning with assessments made in 2006 for property taxes first due and payable in 2007.
    (d) A taxpayer is not required to file an application to qualify for the deduction established by this section.
    (e) The department of local government finance shall incorporate the deduction established by this section in the personal property return form to be used each year for filing under IC 6-1.1-3-7 or IC 6-1.1-3-7.5 to permit the taxpayer to enter the

deduction on the form. If a taxpayer fails to enter the deduction on the form, the township assessor shall:
        (1) determine the amount of the deduction; and
        (2) within the period established in IC 6-1.1-16-1, issue a notice of assessment to the taxpayer that reflects the application of the deduction to the inventory assessment.
    (f) The deduction established by this section must be applied to any inventory assessment made by:
        (1) an assessing official;
        (2) a county property tax assessment board of appeals; or
        (3) the department of local government finance.

SOURCE: IC 6-1.1-18.5-2; (02)EH1001.2.20. -->     SECTION 35. IC 6-1.1-18.5-2, AS AMENDED BY P.L.198-2001, SECTION 52, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 2. (a) This subsection applies to a calendar year ending before January 1, 2006. As used in this section, "Indiana nonfarm personal income" means the estimate of total nonfarm personal income for Indiana in a calendar year as computed by the federal Bureau of Economic Analysis using any actual data for the calendar year and any estimated data determined appropriate by the federal Bureau of Economic Analysis.
    (b) For purposes of determining a civil taxing unit's maximum permissible ad valorem property tax levy for an ensuing calendar year, the civil taxing unit shall use the assessed value growth quotient determined in the last STEP of the following STEPS:
        STEP ONE: Determine the three (3) calendar years that most immediately precede the ensuing calendar year and in which a statewide general reassessment of real property does not first become effective.
        STEP TWO: Compute separately, for each of the calendar years determined in STEP ONE, the quotient (rounded to the nearest ten-thousandth) of the civil taxing unit's total assessed value of all taxable property in the particular calendar year, divided by the civil taxing unit's total assessed value of all taxable property in the calendar year immediately preceding the particular calendar year.
        STEP THREE: Divide the sum of the three (3) quotients computed in STEP TWO by three (3).
        STEP FOUR: Determine the greater of the result computed in STEP THREE or one and five-hundredths (1.05).
        STEP FIVE: Determine the lesser of the result computed in STEP FOUR or one and one-tenth (1.1).
    (b) This subsection applies to a calendar year beginning after December 31, 2005. For purposes of determining a civil taxing unit's

maximum permissible ad valorem property tax levy for an ensuing calendar year, the civil taxing unit shall use the assessed value growth quotient determined in the last STEP of the following STEPS:
        STEP ONE: Determine the three (3) calendar years that most immediately precede the ensuing calendar year and in which a statewide general reassessment of real property does not first become effective.
        STEP TWO: Compute separately, for each of the calendar years determined in STEP ONE, the quotient (rounded to the nearest ten-thousandth) of the civil taxing unit's total unadjusted assessed value of all taxable property in the particular calendar year, divided by the civil taxing unit's total unadjusted assessed value of all taxable property in the calendar year immediately preceding the particular calendar year.
        STEP THREE: Divide the sum of the three (3) quotients computed in STEP TWO by three (3).
        STEP FOUR: Determine the greater of the result computed in STEP THREE or one and five-hundredths (1.05).
        STEP FIVE: Determine the lesser of the result computed in STEP FOUR or one and one-tenth (1.1).
    (c) This subsection applies to a calendar year ending before January 1, 2006. If the assessed values of taxable property used in determining a civil taxing unit's property taxes that are first due and payable in a particular calendar year are significantly increased over the assessed values used for the immediately preceding calendar year's property taxes due to the settlement of litigation concerning the general reassessment of that civil taxing unit's real property, then for purposes of determining that civil taxing unit's assessed value growth quotient for an ensuing calendar year, the department of local government finance shall replace the quotient described in STEP TWO of subsection (a) for that particular calendar year. The department of local government finance shall replace that quotient with one that as accurately as possible will reflect the actual growth in the civil taxing unit's assessed values of real property from the immediately preceding calendar year to that particular calendar year.
    (d) This subsection applies to a calendar year beginning after December 31, 2005. If the unadjusted assessed values of taxable property used in determining a civil taxing unit's property taxes that are first due and payable in a particular calendar year are significantly increased over the unadjusted assessed values used for the immediately preceding calendar year's property taxes due to the settlement of litigation concerning the general reassessment of that civil taxing unit's

real property, then for purposes of determining that civil taxing unit's assessed value growth quotient for an ensuing calendar year, the department of local government finance shall replace the quotient described in STEP TWO of subsection (b) for that particular calendar year. The department of local government finance shall replace that quotient with one that, as accurately as possible, will reflect the actual growth in the civil taxing unit's unadjusted assessed values of real property from the immediately preceding calendar year to that particular calendar year.
        STEP ONE: For each of the six (6) calendar years immediately preceding the year in which a budget is adopted under IC 6-1.1-17-5 for the ensuing calendar year, divide the Indiana nonfarm personal income for the calendar year by the Indiana nonfarm personal income for the calendar year immediately preceding that calendar year, rounding to the nearest one-thousandth (0.001).
        STEP TWO: Determine the sum of the STEP ONE results.
        STEP THREE: Divide the STEP TWO result by six (6), rounding to the nearest one-thousandth (0.001).
        STEP FOUR: Determine the lesser of the following:
            (A) The STEP THREE quotient.
            (B) One and six-hundredths (1.06).

SOURCE: IC 6-1.1-18.5-3; (02)EH1001.2.21. -->     SECTION 36. IC 6-1.1-18.5-3, AS AMENDED BY P.L.1-2002, SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 3. (a) Except as otherwise provided in this chapter and IC 6-3.5-8-12, a civil taxing unit that is treated as not being located in an adopting county under section 4 of this chapter may not impose an ad valorem property tax levy for an ensuing calendar year that exceeds the amount determined in the last STEP of the following STEPS:
        STEP ONE: Add the civil taxing unit's maximum permissible ad valorem property tax levy for the preceding calendar year to the part of the civil taxing unit's certified share, if any, that was used to reduce the civil taxing unit's ad valorem property tax levy under STEP EIGHT of subsection (b) for that preceding calendar year.
        STEP TWO: Multiply the amount determined in STEP ONE by the amount determined in either the last STEP of section 2(a) of this chapter for calendar years ending before January 1, 2006, or the last STEP of section 2(b) of this chapter. for calendar years beginning after December 31, 2005.
        STEP THREE: Determine the lesser of one and fifteen hundredths (1.15) or the quotient (rounded to the nearest ten-thousandth), of

the assessed value of all taxable property subject to the civil taxing unit's ad valorem property tax levy for the ensuing calendar year, divided by the assessed value of all taxable property that is subject to the civil taxing unit's ad valorem property tax levy for the ensuing calendar year and that is contained within the geographic area that was subject to the civil taxing unit's ad valorem property tax levy in the preceding calendar year.
        STEP FOUR: Determine the greater of the amount determined in STEP THREE or one (1).
        STEP FIVE: Multiply the amount determined in STEP TWO by the amount determined in STEP FOUR.
        STEP SIX: Add the amount determined under STEP TWO to the amount determined under subsection (c).
        STEP SEVEN: Determine the greater of the amount determined under STEP FIVE or the amount determined under STEP SIX.
    (b) Except as otherwise provided in this chapter and IC 6-3.5-8-12, a civil taxing unit that is treated as being located in an adopting county under section 4 of this chapter may not impose an ad valorem property tax levy for an ensuing calendar year that exceeds the amount determined in the last STEP of the following STEPS:
        STEP ONE: Add the civil taxing unit's maximum permissible ad valorem property tax levy for the preceding calendar year to the part of the civil taxing unit's certified share, if any, used to reduce the civil taxing unit's ad valorem property tax levy under STEP EIGHT of this subsection for that preceding calendar year.
        STEP TWO: Multiply the amount determined in STEP ONE by the amount determined in either the last STEP of section 2(a) of this chapter for calendar years ending before January 1, 2006, or the last STEP of section 2(b) of this chapter. for calendar years beginning after December 31, 2005.
        STEP THREE: Determine the lesser of one and fifteen hundredths (1.15) or the quotient of the assessed value of all taxable property subject to the civil taxing unit's ad valorem property tax levy for the ensuing calendar year divided by the assessed value of all taxable property that is subject to the civil taxing unit's ad valorem property tax levy for the ensuing calendar year and that is contained within the geographic area that was subject to the civil taxing unit's ad valorem property tax levy in the preceding calendar year.
        STEP FOUR: Determine the greater of the amount determined in STEP THREE or one (1).
        STEP FIVE: Multiply the amount determined in STEP TWO by

the amount determined in STEP FOUR.
        STEP SIX: Add the amount determined under STEP TWO to the amount determined under subsection (c).
        STEP SEVEN: Determine the greater of the amount determined under STEP FIVE or the amount determined under STEP SIX.
        STEP EIGHT: Subtract the amount determined under STEP FIVE of subsection (e) from the amount determined under STEP SEVEN of this subsection.
    (c) If a civil taxing unit in the immediately preceding calendar year provided an area outside its boundaries with services on a contractual basis and in the ensuing calendar year that area has been annexed by the civil taxing unit, the amount to be entered under STEP SIX of subsection (a) or STEP SIX of subsection (b), as the case may be, equals the amount paid by the annexed area during the immediately preceding calendar year for services that the civil taxing unit must provide to that area during the ensuing calendar year as a result of the annexation. In all other cases, the amount to be entered under STEP SIX of subsection (a) or STEP SIX of subsection (b), as the case may be, equals zero (0).
    (d) This subsection applies only to civil taxing units located in a county having a county adjusted gross income tax rate for resident county taxpayers (as defined in IC 6-3.5-1.1-1) of one percent (1%) as of January 1 of the ensuing calendar year. For each civil taxing unit, the amount to be added to the amount determined in subsection (e), STEP FOUR, is determined using the following formula:
        STEP ONE: Multiply the civil taxing unit's maximum permissible ad valorem property tax levy for the preceding calendar year by two percent (2%).
        STEP TWO: For the determination year, the amount to be used as the STEP TWO amount is the amount determined in subsection (f) for the civil taxing unit. For each year following the determination year the STEP TWO amount is the lesser of:
            (A) the amount determined in STEP ONE; or
            (B) the amount determined in subsection (f) for the civil taxing unit.
        STEP THREE: Determine the greater of:
            (A) zero (0); or
            (B) the civil taxing unit's certified share for the ensuing calendar year minus the greater of:
                (i) the civil taxing unit's certified share for the calendar year that immediately precedes the ensuing calendar year; or
                (ii) the civil taxing unit's base year certified share.

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        STEP FOUR: Determine the greater of:
            (A) zero (0); or
            (B) the amount determined in STEP TWO minus the amount determined in STEP THREE.
Add the amount determined in STEP FOUR to the amount determined in subsection (e), STEP THREE, as provided in subsection (e), STEP FOUR.
    (e) For each civil taxing unit, the amount to be subtracted under subsection (b), STEP EIGHT, is determined using the following formula:
        STEP ONE: Determine the lesser of the civil taxing unit's base year certified share for the ensuing calendar year, as determined under section 5 of this chapter, or the civil taxing u