*SB0166.2*
Reprinted
February 1, 2022
SENATE BILL No. 166
_____
DIGEST OF SB 166 (Updated January 31, 2022 4:28 pm - DI 134)
Citations Affected: IC 5-23; IC 6-1.1; IC 6-2.5.
Synopsis: Public-private agreements. Provides, in certain counties
exceeding a specified population parameter, that a governmental body
may enter into a public-private agreement with respect to a
transportation project. Provides that any public-private agreement with
respect to a transportation project may use availability payments to
finance all or a portion of the project. Provides that a governmental
body may also enter into a development agreement with a private party
for the development, construction, and financing of a privately owned
and operated transportation or infrastructure project if the development
agreement meets certain conditions. Specifies the contents of public-
private agreements for transportation facilities or transportation
projects and establishes requirements for the operator of the
transportation facility or transportation project. Provides for a property
tax exemption and a sales tax exemption. Defines terms.
Effective: July 1, 2022; January 1, 2023.
Walker K, Holdman, Ford Jon
January 4, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
January 25, 2022, amended, reported favorably — Do Pass.
January 31, 2022, read second time, amended, ordered engrossed.
SB 166—LS 6587/DI 134 Reprinted
February 1, 2022
Second Regular Session of the 122nd General Assembly (2022)
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 2021 Regular Session of the General Assembly.
SENATE BILL No. 166
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 5-23-2-1.5 IS ADDED TO THE INDIANA CODE
2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
3 1, 2022]: Sec. 1.5. "Availability payment" means any funding
4 stream, whether from a private, local, state, or federal source that
5 the governmental body is authorized to use for the construction,
6 maintenance, financing, or operations of any transportation
7 infrastructure located within the boundaries of the governmental
8 body.
9 SECTION 2. IC 5-23-2-5.5 IS ADDED TO THE INDIANA CODE
10 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
11 1, 2022]: Sec. 5.5. "Develop" means to plan, design, finance, lease,
12 acquire, install, construct, or expand under a public-private
13 agreement.
14 SECTION 3. IC 5-23-2-6.3 IS ADDED TO THE INDIANA CODE
15 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
16 1, 2022]: Sec. 6.3. "Material default" means a nonperformance of
17 its duties by the operator of a public-private agreement which
SB 166—LS 6587/DI 134 2
1 jeopardizes adequate service to the public from the project.
2 SECTION 4. IC 5-23-2-6.9 IS ADDED TO THE INDIANA CODE
3 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
4 1, 2022]: Sec. 6.9. "Operate" means to finance, maintain, improve,
5 equip, modify, or repair.
6 SECTION 5. IC 5-23-2-15.3 IS ADDED TO THE INDIANA CODE
7 AS NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
8 1, 2022]: Sec. 15.3. "Qualifying project" refers to either of the
9 following:
10 (1) A transportation facility.
11 (2) A transportation project.
12 SECTION 6. IC 5-23-2-15.5 IS ADDED TO THE INDIANA CODE
13 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
14 1, 2022]: Sec. 15.5. (a) "Revenues" means the income, earnings,
15 lease payments, or other service payments relating to the
16 development or operation of a transportation facility or
17 transportation project.
18 (b) The term includes, but is not limited to, money received as
19 grants or otherwise from the governmental body, the federal
20 government, the state, a public entity, or an agency or
21 instrumentality thereof in aid of the qualifying project.
22 SECTION 7. IC 5-23-2-17 IS ADDED TO THE INDIANA CODE
23 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
24 1, 2022]: Sec. 17. "Transportation facility" means any new or
25 existing road, highway, toll highway, bridge, tunnel, or intermodal
26 facility, located in the jurisdiction of a governmental body.
27 SECTION 8. IC 5-23-2-18 IS ADDED TO THE INDIANA CODE
28 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
29 1, 2022]: Sec. 18. "Transportation project" means any combination
30 of the development, financing, or operation with respect to all or
31 a portion of any transportation facility located in the jurisdiction
32 of a governmental body.
33 SECTION 9. IC 5-23-8 IS ADDED TO THE INDIANA CODE AS
34 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
35 1, 2022]:
36 Chapter 8. Transportation and Infrastructure Projects
37 Sec. 0.5. This chapter applies to public-private agreements in
38 counties that have a population of more than one hundred
39 ninety-nine thousand (199,000) persons, according to the most
40 recent United States decennial census.
41 Sec. 1. (a) A governmental body may enter into a public-private
42 agreement with respect to a transportation project, if the
SB 166—LS 6587/DI 134 3
1 governmental body complies with the statutory requirements
2 under this article. Any public-private agreement with respect to a
3 transportation project may use availability payments to finance all
4 or a portion of the project.
5 (b) A governmental body may also enter into a development
6 agreement with a private party for the development, construction,
7 and financing of a privately owned and operated transportation or
8 infrastructure project if the development agreement:
9 (1) does not obligate the governmental body to spend any
10 public funds for the privately owned and operated
11 transportation or infrastructure project;
12 (2) obligates the private party to operate the transportation or
13 infrastructure project without limitation on the persons, class
14 of persons, or vehicles using the project, except as may be
15 dictated by safety, security, design, and load capacities of the
16 project; and
17 (3) obligates the private party to permit local, state, and
18 federal emergency vehicles, including vehicles operated by
19 police, fire, emergency medical services, and sheriff
20 personnel, to use the transportation project without tolls or
21 fees.
22 Sec. 2. (a) Before developing or operating the transportation
23 facility or transportation project, the operator must enter into a
24 public-private agreement with the governmental body. The
25 public-private agreement must provide for the following:
26 (1) Delivery of performance and payment bonds, letters of
27 credit, or other security acceptable to the governmental body
28 in connection with the development or operation of the
29 project in the form and amount required by IC 5-23-3-2(a)(8).
30 (2) Review of the design for the qualifying project by the
31 governmental body and, if the design conforms to standards
32 acceptable to the governmental body, the approval of the
33 governmental body. This subdivision does not require the
34 operator to complete the design of the qualifying project
35 before the execution of the public-private agreement.
36 (3) Inspection of the qualifying project by the governmental
37 body to ensure that the operator's activities are acceptable to
38 the governmental body as outlined in the public-private
39 agreement.
40 (4) Maintenance of a policy of public liability insurance, a
41 copy of which must be filed with the governmental body and
42 accompanied by proofs of coverage, or self-insurance, each in
SB 166—LS 6587/DI 134 4
1 the form and amount satisfactory to the governmental body
2 and reasonably sufficient to ensure coverage of tort liability
3 to the public and employees and to enable the continued
4 operation of the qualifying project.
5 (5) Monitoring by the governmental body of the maintenance
6 practices to be performed by the operator to ensure that the
7 qualifying project is properly maintained.
8 (6) Periodic filing by the operator of the appropriate financial
9 statements that pertain to the qualifying project.
10 (7) Procedures that govern the rights and responsibilities of
11 the governmental body and the operator in the course of the
12 construction and operation of the qualifying project and in
13 the event of the termination of the public-private agreement
14 or a material default by the operator. The procedures must
15 include conditions that govern the assumption of the duties
16 and responsibilities of the operator by an entity that funded,
17 in whole or part, the qualifying project or by the
18 governmental body, and must provide for the transfer or
19 purchase of property or other interests of the operator by the
20 governmental body.
21 (8) Have safeguards in place to ensure that additional costs or
22 service disruptions are not imposed on the public in the event
23 of material default or cancellation of the public-private
24 agreement by the governmental body.
25 (9) Have safeguards in place to ensure that the governmental
26 body or operator has the opportunity to add capacity to the
27 proposed project or other facilities serving similar
28 predominantly public purposes.
29 (10) Duties of the operator, including the terms and conditions
30 that the governmental body determines serve the public
31 purpose of this section.
32 (b) The public-private agreement under this chapter may
33 include the following:
34 (1) An agreement by the governmental body to make grants
35 or loans to the operator from amounts received from the
36 federal, state, or local government or an agency or
37 instrumentality thereof.
38 (2) A provision under which each entity agrees to provide
39 notice of default and cure rights for the benefit of the other
40 entity, including, but not limited to, a provision regarding
41 unavoidable delays.
42 (3) A provision that terminates the authority and duties of the
SB 166—LS 6587/DI 134 5
1 operator under this section and dedicates the qualifying
2 project to the governmental body.
3 Sec. 3. (a) The operator shall do the following:
4 (1) Develop or operate the qualifying project in a manner that
5 is acceptable to the governmental body in accordance with the
6 provisions of the public-private agreement.
7 (2) Maintain or provide by contract for the maintenance or
8 improvement of the qualifying project if required by the
9 public-private agreement.
10 (3) Cooperate with the governmental body in making best
11 efforts to establish interconnection between the qualifying
12 project and any other facility or infrastructure as requested
13 by the governmental body in accordance with the provisions
14 of the public-private agreement.
15 (4) Comply with the operating agreement.
16 (b) Each private facility that is constructed under this section
17 must comply with the requirements of the following:
18 (1) Federal, state, and local laws.
19 (2) State, regional, and local comprehensive plans.
20 (3) The governmental body's rules, procedures, and standards
21 for facilities.
22 (4) All other conditions that the governmental body
23 determines to be in the public's best interest and that are
24 included in the public-private agreement.
25 (c) The governmental body may provide services to the operator
26 at its option. An agreement for maintenance and other services
27 entered into under this section must provide for full
28 reimbursement for services rendered for qualifying projects.
29 (d) An operator of a qualifying project may provide additional
30 services for the qualifying project to the public or to other private
31 entities if the provision of additional services does not impair the
32 operator's ability to meet its commitments to the governmental
33 body under the public-private agreement.
34 SECTION 10. IC 6-1.1-10-49 IS ADDED TO THE INDIANA
35 CODE AS A NEW SECTION TO READ AS FOLLOWS
36 [EFFECTIVE JULY 1, 2022]: Sec. 49. (a) This section applies to
37 assessment dates occurring after December 31, 2022.
38 (b) Tangible property (including without limitation, land,
39 personal property, real property, and improvements to land) is
40 exempt from property taxation if the property is used as a part of
41 or incorporated into a transportation facility (as defined
42 IC 5-23-2-17) under a public-private agreement executed in
SB 166—LS 6587/DI 134 6
1 accordance with IC 5-23-8-1(a) or a development agreement
2 executed in accordance with IC 5-23-8-1(b).
3 (c) The application of the exemption described in subsection (b)
4 shall apply to otherwise qualifying tangible property irrespective
5 of the owner or taxpayer of the property or when such property
6 was placed in service.
7 SECTION 11. IC 6-2.5-5-56 IS ADDED TO THE INDIANA CODE
8 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
9 JANUARY 1, 2023]: Sec. 56. (a) Transactions involving tangible
10 personal property are exempt from the state gross retail tax if the
11 person acquiring the property acquires it for incorporation into a
12 transportation facility (as defined in IC 5-23-2-17) under a:
13 (1) public-private agreement executed in accordance with
14 IC 5-23-8-1(a); or
15 (2) development agreement executed in accordance with
16 IC 5-23-8-1(b).
17 (b) The exemption described in subsection (a) shall not apply to
18 the extent that the applicable public-private agreement or
19 development agreement is entered into before January 1, 2023.
SB 166—LS 6587/DI 134 7
COMMITTEE REPORT
Madam President: The Senate Committee on Tax and Fiscal Policy,
to which was referred Senate Bill No. 166, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
"SECTION 1. IC 5-23-2-1.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 1.5. "Availability payment" means any funding
stream, whether from a private, local, state, or federal source that
the governmental body is authorized to use for the construction,
maintenance, financing, or operations of any transportation
infrastructure located within the boundaries of the governmental
body.
SECTION 2. IC 5-23-2-5.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 5.5. "Develop" means to plan, design, finance, lease,
acquire, install, construct, or expand under a public-private
agreement.
SECTION 3. IC 5-23-2-6.3 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 6.3. "Material default" means a nonperformance of
its duties by the operator of a public-private agreement which
jeopardizes adequate service to the public from the project.
SECTION 4. IC 5-23-2-6.9 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 6.9. "Operate" means to finance, maintain, improve,
equip, modify, or repair.
SECTION 5. IC 5-23-2-15.3 IS ADDED TO THE INDIANA CODE
AS NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 15.3. "Qualifying project" refers to either of the
following:
(1) A transportation facility.
(2) A transportation project.
SECTION 5. IC 5-23-2-15.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 15.5. (a) "Revenues" means the income, earnings,
lease payments, or other service payments relating to the
development or operation of a transportation facility or
transportation project.
(b) The term includes, but is not limited to, money received as
SB 166—LS 6587/DI 134 8
grants or otherwise from the governmental body, the federal
government, the state, a public entity, or an agency or
instrumentality thereof in aid of the qualifying project.".
Page 1, line 6, delete "under" and insert "located in".
Page 1, line 12, delete "under" and insert "located in".
Page 2, line 1, delete "Sec. 1." and insert "Sec. 0.5. This chapter
applies to public-private agreements in counties that have a
population of more than one hundred ninety-nine thousand
(199,000) persons, according to the most recent United States
decennial census.
Sec. 1.".
Page 2, line 5, delete "tolling or".
Page 2, line 18, delete "or" and insert "and".
Page 2, delete lines 24 through 42, begin a new paragraph and
insert:
"Sec. 2. (a) Before developing or operating the transportation
facility or transportation project, the operator must enter into a
public-private agreement with the governmental body. The
public-private agreement must provide for the following:
(1) Delivery of performance and payment bonds, letters of
credit, or other security acceptable to the governmental body
in connection with the development or operation of the
project in the form and amount required by IC 5-23-3-2(a)(8).
(2) Review of the design for the qualifying project by the
governmental body and, if the design conforms to standards
acceptable to the governmental body, the approval of the
governmental body. This subdivision does not require the
operator to complete the design of the qualifying project
before the execution of the public-private agreement.
(3) Inspection of the qualifying project by the governmental
body to ensure that the operator's activities are acceptable to
the governmental body as outlined in the public-private
agreement.
(4) Maintenance of a policy of public liability insurance, a
copy of which must be filed with the governmental body and
accompanied by proofs of coverage, or self-insurance, each in
the form and amount satisfactory to the governmental body
and reasonably sufficient to ensure coverage of tort liability
to the public and employees and to enable the continued
operation of the qualifying project.
(5) Monitoring by the governmental body of the maintenance
practices to be performed by the operator to ensure that the
SB 166—LS 6587/DI 134 9
qualifying project is properly maintained.
(6) Periodic filing by the operator of the appropriate financial
statements that pertain to the qualifying project.
(7) Procedures that govern the rights and responsibilities of
the governmental body and the operator in the course of the
construction and operation of the qualifying project and in
the event of the termination of the public-private agreement
or a material default by the operator. The procedures must
include conditions that govern the assumption of the duties
and responsibilities of the operator by an entity that funded,
in whole or part, the qualifying project or by the
governmental body, and must provide for the transfer or
purchase of property or other interests of the operator by the
governmental body.
(8) Have safeguards in place to ensure that additional costs or
service disruptions are not imposed on the public in the event
of material default or cancellation of the public-private
agreement by the governmental body.
(9) Have safeguards in place to ensure that the governmental
body or operator has the opportunity to add capacity to the
proposed project or other facilities serving similar
predominantly public purposes.
(10) Duties of the operator, including the terms and conditions
that the governmental body determines serve the public
purpose of this section.
(b) The public-private agreement under this chapter may
include the following:
(1) An agreement by the governmental body to make grants
or loans to the operator from amounts received from the
federal, state, or local government or an agency or
instrumentality thereof.
(2) A provision under which each entity agrees to provide
notice of default and cure rights for the benefit of the other
entity, including, but not limited to, a provision regarding
unavoidable delays.
(3) A provision that terminates the authority and duties of the
operator under this section and dedicates the qualifying
project to the governmental body.
Sec. 3. (a) The operator shall do the following:
(1) Develop or operate the qualifying project in a manner that
is acceptable to the governmental body in accordance with the
provisions of the public- private agreement.
SB 166—LS 6587/DI 134 10
(2) Maintain or provide by contract for the maintenance or
improvement of the qualifying project if required by the
public-private agreement.
(3) Cooperate with the governmental body in making best
efforts to establish interconnection between the qualifying
project and any other facility or infrastructure as requested
by the governmental body in accordance with the provisions
of the public-private agreement.
(4) Comply with the operating agreement.
(b) Each private facility that is constructed under this section
must comply with the requirements of the following:
(1) Federal, state, and local laws.
(2) State, regional, and local comprehensive plans.
(3) The governmental body's rules, procedures, and standards
for facilities.
(4) All other conditions that the governmental body
determines to be in the public's best interest and that are
included in the public-private agreement.
(c) The governmental body may provide services to the operator
at its option. An agreement for maintenance and other services
entered into under this section must provide for full
reimbursement for services rendered for qualifying projects.
(d) A operator of a qualifying project may provide additional
services for the qualifying project to the public or to other private
entities if the provision of additional services does not impair the
operator's ability to meet its commitments to the governmental
body under the public-private agreement.
SECTION 4. IC 6-1.1-10-49 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2022]: Sec. 49. (a) This section applies to assessment dates
occurring after December 31, 2022.
(b) Tangible property (including without limitation, land,
personal property, real property, and improvements to land) is
exempt from property taxation if the property is used as a part of
or incorporated into a transportation facility (as defined
IC 5-23-2-17) under a public-private agreement executed in
accordance with IC 5-23-8-1(a) or a development agreement
executed in accordance with IC 5-23-8-1(b).
(c) The application of the exemption described in subsection (b)
shall apply to otherwise qualifying tangible property irrespective
of the owner or taxpayer of the property or when such property
was placed in service.
SB 166—LS 6587/DI 134 11
SECTION 5. IC 6-2.5-5-56 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2023]: Sec. 56. (a) Transactions involving tangible
personal property are exempt from the state gross retail tax if the
person acquiring the property acquires it for incorporation into a
transportation facility (as defined in IC 5-23-2-17) under a:
(1) public-private agreement executed in accordance with
IC 5-23-8-1(a); or
(2) development agreement executed in accordance with
IC 5-23-8-1(b).
(b) The exemption described in subsection (a) shall not apply to
the extent that the applicable public-private agreement or
development agreement is entered into before January 1, 2023.".
Page 3, delete lines 1 through 17.
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 166 as introduced.)
HOLDMAN, Chairperson
Committee Vote: Yeas 13, Nays 0.
_____
SENATE MOTION
Madam President: I move that Senate Bill 166 be amended to read
as follows:
Page 2, line 25, after "tunnel," insert "or".
Page 2, line 26, delete "intercity or high speed passenger or
commercial rail, or".
Page 2, line 27, delete "other transportation facility or
infrastructure,".
Page 5, line 8, delete "public- private" and insert "public-private".
Page 5, line 31, after "(d)" delete "A" and insert "An".
Renumber all SECTIONS consecutively.
(Reference is to SB 166 as printed January 26, 2022.)
WALKER K
SB 166—LS 6587/DI 134