LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6587 NOTE PREPARED: Jan 25, 2022
BILL NUMBER: SB 166 BILL AMENDED: Jan 25, 2022
SUBJECT: Public-Private Agreements.
FIRST AUTHOR: Sen. Walker K BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: (Amended) This bill provides, in certain counties exceeding a specified
population parameter, that a governmental body may enter into a public-private agreement (P3) with respect
to a transportation project.
The bill 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. It 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.
The bill 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.
It provides for a property tax exemption and a sales tax exemption.
The bill also defines terms.
Effective Date: July 1, 2022.
Explanation of State Expenditures: (Revised) This bill allows the state and educational institutions to enter
into P3 agreements and development agreements for transportation projects in Marion, Lake, Allen,
Hamilton, St. Joseph, and Elkhart counties. Any impact on state expenditures depends on the scope of
projects that the state might undertake as P3s or by development agreements and how they might differ if
the state constructed these projects via conventional means.
SB 166 1 Explanation of State Revenues: (Revised) Availability Payments: This bill permits P3 transportation
projects to use availability payments to finance the project in Marion, Lake, Allen, Hamilton, St. Joseph, and
Elkhart counties. If availability payments are received then state revenues could increase. Any impact on
state revenues would depend on the nature of the P3 agreement reached between the state and the vendor.
(Revised) Sales Tax: The sale of tangible personal property will be exempt from sales tax if it is incorporated
into a transportation facility under a P3 or development agreement entered into on or after January 1, 2023.
Under current law, the sale of tangible personal property to be added to a structure or facility is exempt if
the ultimate purchaser or recipient of the property would be exempt if they had purchased the property
directly from the supplier. So, under the bill, tangible personal property will be exempt from sales tax
regardless of whether it is used as part of a conventional project, a P3, or a development project.
Explanation of Local Expenditures: (Revised) This bill allows local units to enter into P3 agreements and
development agreements for transportation projects in Marion, Lake, Allen, Hamilton, St. Joseph, and
Elkhart counties. Any impact on local expenditures depends on the scope of projects that a local unit might
undertake as P3s or under development agreements and how they might differ if the unit constructed these
projects via conventional means.
Explanation of Local Revenues: (Revised) Availability Payments: This bill permits P3 transportation
projects to use availability payments to finance the project in Marion, Lake, Allen, Hamilton, St. Joseph, and
Elkhart counties. If availability payments are received then local revenues could increase. Any impact on
revenues would depend on the nature of the P3 agreement reached between a local unit of government and
the vendor.
(Revised) Property Tax: The bill exempts real and personal property from property tax if it is used as a part
of, or incorporated into, a transportation facility under a P3 or development agreement. Under current law,
real and personal property owned by the state or local government is exempt from property tax. So, under
the bill, the property will be exempt from property tax regardless of whether it is a part of a conventional
project, a P3, or a development project.
State Agencies Affected: State agencies that may build a transportation project.
Local Agencies Affected: Local units that may build a transportation project.
Information Sources:
Fiscal Analyst: Bob Sigalow, 317-232-9859; Bill Brumbach, 317-232-9559; Lauren Tanselle, 317-232-
9586.
SB 166 2