Introduced Version
SENATE BILL No. 370
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 36-7-22.
Synopsis: Economic improvement districts. Requires a petition for the
establishment of an economic improvement district (district) to include
a rate and methodology report (report). Specifies the contents of the
report. Specifies the basis upon which benefits accruing to parcels of
real property within a district may be apportioned among those parcels.
Requires a determination that the aggregate assessments within a
district do not exceed 30% of the projected assessed value of property
within the district before a legislative body may adopt an ordinance to
establish a district. Requires an economic improvement board (board)
to assist the county treasurer in order to make certain specified
determinations and designations regarding annual assessments within
a district. Adds specific provisions that apply to a board's issuance of
revenue bonds. Makes clarifying changes.
Effective: July 1, 2022.
Buchanan, Baldwin, Busch
January 11, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
2022 IN 370—LS 6998/DI 120 Introduced
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. 370
A BILL FOR AN ACT to amend the Indiana Code concerning local
government.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 36-7-22-1.5 IS ADDED TO THE INDIANA CODE
2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
3 1, 2022]: Sec. 1.5. As used in this chapter, "assessment" means a
4 charge determined under section 12(a) of this chapter by applying
5 the percentage of benefit apportioned to a parcel within an
6 economic improvement district to the cost associated with
7 economic development projects giving rise to such benefits. Costs
8 subject to assessment for these purposes include all costs of the
9 economic improvement projects as well as financing and
10 administrative costs. In the case of bonds or notes issued pursuant
11 to section 24 of this chapter, financing costs shall include, without
12 limitation, principal and interest, related reserve funds, cost of
13 insurance, and costs associated with ancillary financial
14 arrangements with respect to the bonds or notes.
15 SECTION 2. IC 36-7-22-2.5 IS ADDED TO THE INDIANA CODE
16 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
17 1, 2022]: Sec. 2.5. As used in this chapter, "economic development
2022 IN 370—LS 6998/DI 120 2
1 project" means the projects of the economic development plan,
2 including the economic improvement projects and other, related
3 improvements that do not otherwise qualify as an economic
4 improvement project under section 3 of this chapter.
5 SECTION 3. IC 36-7-22-3, AS AMENDED BY P.L.38-2021,
6 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2022]: Sec. 3. As used in this chapter, "economic
8 improvement project" means the following:
9 (1) Planning or managing development or improvement activities.
10 (2) Designing, landscaping, beautifying, constructing, or
11 maintaining public areas, public improvements, or public ways
12 (including designing, constructing, or maintaining lighting,
13 infrastructure, utility facilities, improvements, and equipment,
14 water facilities, improvements, and equipment, sewage facilities,
15 improvements, and equipment, streets, or sidewalks for a public
16 area or public way).
17 (3) Promoting commercial activity or public events.
18 (4) Supporting business recruitment and development.
19 (5) Providing security for public areas.
20 (6) Acquiring, constructing, or maintaining parking facilities.
21 (7) Constructing, rehabilitating, or repairing residential property,
22 including improvements related to the habitability of the
23 residential property.
24 (8) Acquiring, constructing, rehabilitating, or repairing
25 redevelopment projects, economic development facilities
26 described in IC 36-7-11.9-3, pollution control facilities described
27 in IC 36-7-11.9-9, or other local improvements.
28 (9) Constructing, rehabilitating, or repairing industrial or
29 commercial property associated with a qualified
30 redevelopment site (as defined in IC 6-3.1-34-6).
31 SECTION 4. IC 36-7-22-3.2 IS ADDED TO THE INDIANA CODE
32 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
33 1, 2022]: Sec. 3.2. As used in this chapter, "projected assessed
34 value" means:
35 (1) with respect to the district, an assessed value of the
36 property within the district, plus the as-built projected
37 assessed value of the economic development project to be
38 constructed in the district as determined pursuant to a third
39 party evaluation accepted by the legislative body; and
40 (2) with respect to an individual parcel, the as-built (or
41 as-improved, as appropriate) projected assessed value of the
42 parcel as determined pursuant to a third party evaluation
2022 IN 370—LS 6998/DI 120 3
1 accepted by the legislative body;
2 including in both cases the assessed value of a property subject to
3 a voluntary assessment agreement as set forth in section 7(e) of this
4 chapter.
5 SECTION 5. IC 36-7-22-3.4 IS ADDED TO THE INDIANA CODE
6 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
7 1, 2022]: Sec. 3.4. As used in this chapter, "rate and method
8 apportionment report" means a report relating to a developer's
9 planned economic development of the subject parcels, which must
10 set forth at least the following:
11 (1) A list of parcels consistent with the parcels identified in the
12 petition for the establishment of the district under section 4 of
13 this chapter.
14 (2) A statement of:
15 (A) the proposed assessment formula under section 4(b)(5)
16 of this chapter;
17 (B) the apportionment of benefits under section 5(a) of this
18 chapter; and
19 (C) zones or other classifications, if any, relating to the
20 formula under clause (A) or the apportionment under
21 clause (B).
22 (3) The proposed total assessment per parcel, including:
23 (A) the lump sum payment amount if the assessment is
24 payable as a lump sum;
25 (B) the method for converting a lump sum assessment to
26 annual installments, if applicable; and
27 (C) a schedule of annual installments and an
28 accompanying amortization schedule of the assessment, if
29 any.
30 (4) A statement of the basis and methodology for reassessment
31 in the case of a parcel division or consolidation of the assessed
32 property, status of development or the completion of
33 improvements associated with the assessed property or
34 changes in zoning classification of the property, and any
35 resulting assessment changes.
36 (5) The proposed maximum number of years during which the
37 assessment may be paid in annual installments.
38 (6) The proposed method for establishing the assessment for
39 the initial year and each year thereafter.
40 SECTION 6. IC 36-7-22-4, AS AMENDED BY P.L.207-2018,
41 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
42 JULY 1, 2022]: Sec. 4. (a) A person that intends to file a petition for
2022 IN 370—LS 6998/DI 120 4
1 the establishment of an economic improvement district under this
2 section must first provide written notice to the clerk (as defined in
3 IC 36-1-2) in the case of a municipality, or the county auditor, in the
4 case of a county, of the person's intent before initiating the petition
5 process.
6 (b) A petition for the establishment of an economic improvement
7 district may be filed with the clerk of the municipality or the county
8 auditor not later than one hundred twenty (120) days after the date on
9 which the notice of intent for the petition is filed with the clerk of the
10 municipality or the county auditor under subsection (a). The petition
11 must include the following information:
12 (1) The boundaries of the proposed district, including the
13 boundaries of any zones to be established under section 5(b) of
14 this chapter.
15 (2) The name and address of each parcel and owner of land within
16 the proposed district and a description of the existing land use and
17 zoning classification of each parcel.
18 (3) A detailed description of the economic improvement projects
19 to be carried out within the proposed district, the estimated cost
20 of these projects, and the benefits to accrue to the property owners
21 within the district.
22 (4) A plan for the application of assessment revenue to the cost of
23 the economic improvement projects within the district.
24 (5) A proposed formula for determining the percentage of the
25 total benefit to be received by each parcel of real property within
26 the district, in the manner provided by section 5 of this chapter.
27 (6) The number of years in which assessments will be levied.
28 (7) A proposed list of members for the board.
29 (c) The petition shall be accompanied by a rate and method
30 apportionment report.
31 (c) (d) The clerk of the municipality or the county auditor shall
32 retain the paper copy of a petition filed under this section for not less
33 than ninety (90) days from the date the petition is filed with the clerk
34 of the municipality or the county auditor.
35 SECTION 7. IC 36-7-22-5 IS AMENDED TO READ AS
36 FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 5. (a) The benefits
37 accruing to parcels of real property within an economic improvement
38 district may be apportioned among those parcels on any basis
39 reasonably representative of the diffusion of benefits from the
40 economic improvement project, including the following:
41 (1) Proximity of the parcel to the project.
42 (2) Accessibility of the parcel to the project.
2022 IN 370—LS 6998/DI 120 5
1 (3) True cash value of the parcel.
2 (4) True cash value of any improvement on the parcel.
3 (5) Age of any improvement on the parcel.
4 (6) Land use class of the parcel.
5 (7) Equivalent units, including, in the case of an apartment
6 building, the number of units in the building.
7 (8) Parcel square footage.
8 (9) Parcel front footage.
9 (10) Gross floor area.
10 (11) Benefit availability.
11 (12) Impervious surface area.
12 (6) (13) Other similar factors.
13 The apportionment of benefits under this subsection may be adjusted
14 by zone or land use as provided in subsections (b) and (c).
15 (b) If the benefit of the economic development project varies from
16 one (1) area to another within the economic improvement district, up
17 to three (3) zones may be established within the district to delineate the
18 approximate difference in beneficial impact, and benefits may be
19 apportioned accordingly.
20 (c) In order to encourage the retention or development of various
21 land uses within the district, assessments may be adjusted according to
22 the zoning classification of the property.
23 SECTION 8. IC 36-7-22-7, AS AMENDED BY P.L.207-2018,
24 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
25 JULY 1, 2022]: Sec. 7. (a) After conducting a hearing on the proposed
26 economic improvement district, the legislative body may adopt an
27 ordinance establishing the economic improvement district if it
28 determines that:
29 (1) the petition meets the requirements of this section and sections
30 4 and 5 of this chapter;
31 (2) the economic improvement projects to be undertaken in the
32 district will provide special benefits to property owners in the
33 district and will be of public utility and benefit;
34 (3) the benefits provided by the project will be new benefits that
35 do not replace benefits existing before the establishment of the
36 district; and
37 (4) the formula to be used for the assessment of benefits is
38 appropriate; and
39 (5) aggregate assessments under this chapter do not exceed
40 thirty percent (30%) of the projected assessed value of
41 property within the district.
42 (b) The legislative body may adopt the ordinance only if it
2022 IN 370—LS 6998/DI 120 6
1 determines that the petition has been signed by:
2 (1) at least sixty percent (60%) of the owners of real property
3 within the proposed district; and
4 (2) the owners of real property constituting at least sixty percent
5 (60%) of the total assessed valuation in the proposed district.
6 (c) The signature of a person whose property: Unless an owner of
7 property has entered into a voluntary assessment agreement
8 associated with the economic improvement project, the signature
9 of a person shall not be considered in determining whether the
10 requirements under subsection (b) are met if the person's
11 property:
12 (1) is:
13 (A) owned by a nonprofit entity and is exempt from property
14 taxation under IC 6-1.1-10-16;
15 (B) owned by this state or a state agency or leased to a state
16 agency and is exempt from property taxation under
17 IC 6-1.1-10 or any other law; or
18 (C) owned by a political subdivision of this state and is exempt
19 from property taxation under IC 6-1.1-10 or any other law; or
20 (2) would be exempt from assessments under the ordinance.
21 may not be considered in determining whether the requirements of
22 subsection (b) are met.
23 (d) In addition, the assessed valuation of any property that: unless
24 an owner of property has entered into a voluntary assessment
25 agreement, neither the parcel of real property nor the assessed
26 value of any property may be considered in determining the total
27 parcels of real property or the total assessed value of property in
28 the proposed district for purposes of determining whether the
29 requirements under subsection (b) are met if the property:
30 (1) is:
31 (A) owned by a nonprofit entity and is exempt from property
32 taxation under IC 6-1.1-10-16;
33 (B) owned by this state or a state agency or leased to a state
34 agency and is exempt from property taxation under
35 IC 6-1.1-10 or any other law; or
36 (C) owned by a political subdivision of this state and is exempt
37 from property taxation under IC 6-1.1-10 or any other law; or
38 (2) would be exempt from assessment under the ordinance.
39 may not be considered in determining the total assessed valuation in
40 the proposed district.
41 (e) The assessed value of a property subject to a voluntary
42 assessment agreement is the most recent of valuations from either
2022 IN 370—LS 6998/DI 120 7
1 the county assessor or a third party evaluation accepted by the
2 legislative body.
3 SECTION 9. IC 36-7-22-9, AS AMENDED BY P.L.207-2018,
4 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5 JULY 1, 2022]: Sec. 9. (a) Subject to subsection (b), An ordinance
6 adopted under section 7 of this chapter may be repealed or amended
7 only after notice of the proposed repeal or amendment is published and
8 mailed in the manner provided by section 6 of this chapter. However,
9 in no event shall any ordinance adopted under this chapter be
10 repealed or amended if there is any outstanding debt payable from
11 assessments.
12 (b) Beginning after June 30, 2018, the legislative body of a unit may
13 not pass an amending ordinance to increase the boundaries of a district.
14 (b) Notwithstanding subsection (a), an ordinance adopted under
15 section 7 of this chapter may be amended to add additional,
16 contiguous parcels to which benefits of economic improvement
17 projects accrue at the request of the owner or owners of such
18 parcels. If an ordinance is amended under this subsection, the rate
19 and method of apportionment report shall be amended to reflect
20 the revised list of parcels and related assessments, and notice must
21 be provided under section 12(b) of this chapter.
22 SECTION 10. IC 36-7-22-11, AS AMENDED BY P.L.113-2010,
23 SECTION 136, IS AMENDED TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2022]: Sec. 11. An ordinance adopted under
25 section 7 of this chapter must establish an economic improvement
26 board to be appointed by the legislative body. The board must have at
27 least three (3) members, and a majority of the board members must
28 own real property within the district. However, if there is only one (1)
29 property owner within a district, formed before March 1, 2010, the
30 legislative body shall appoint one (1) member to the economic
31 improvement board who owns real property within the district and not
32 more than two (2) other members who are not required to own real
33 property within the district. After, February 28, 2010, a district formed
34 under this chapter must have at least one (1) parcel of real property that
35 is not owned by an owner of other parcels of real property in the
36 district.
37 SECTION 11. IC 36-7-22-12, AS AMENDED BY P.L.207-2018,
38 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 JULY 1, 2022]: Sec. 12. (a) The following apply:
40 (1) The board shall use the formula approved by the legislative
41 body under section 7(a)(4) of this chapter to determine the
42 percentage of benefit to be received by each parcel of real
2022 IN 370—LS 6998/DI 120 8
1 property within the economic improvement district. The board
2 shall apply the percentage determined for each parcel to the total
3 amount that is to be defrayed by special assessment and determine
4 the special assessment for each parcel.
5 (2) In the event of a reassessment as provided in section 3.4(4)
6 of this chapter, the next assessment installment will include an
7 additional amount owed, if any, equal to the difference
8 between the amount originally calculated in subdivision (1)
9 and the amount calculated pursuant to subdivision (1) using
10 the reassessment methodology described in the rate and
11 method of apportionment report.
12 (b) Promptly after determining the proposed assessment for each
13 parcel, the board shall mail notice to each owner of property to be
14 assessed. This The notice must:
15 (1) set forth the amount of the proposed special assessment;
16 (1) describe any potential proposed special assessment and
17 estimates of related annual installments thereof, including any
18 method by which the assessments or installments may change
19 depending on factors as set forth in the rate and method of
20 apportionment report;
21 (2) state that the rate and method of apportionment report and
22 the proposed special assessment on each parcel of real property
23 in the economic improvement district is on file and can be seen in
24 the board's office;
25 (3) state the time and place where written remonstrances against
26 the special assessment may be filed;
27 (4) set forth the time and place where the board will hear any
28 owner of assessed real property who has filed a remonstrance
29 before the hearing date; and
30 (5) state that the board, after hearing evidence, may decrease, or
31 leave unchanged, the special assessment on any parcel.
32 (c) The notices must be deposited in the mail twenty (20) days
33 before the hearing date. The notices to the owners must be addressed
34 as the names and addresses appear on the tax duplicates and the
35 records of the county auditor.
36 (d) At the time fixed in the notice, the board shall hear any owner
37 of assessed real property who has filed a written remonstrance before
38 the date of the hearing. The hearing may be continued from time to
39 time as long as is necessary to hear the owners.
40 (e) The board shall render its decision by either confirming or
41 decreasing each special assessment by setting opposite each name,
42 parcel, and proposed assessment, the amount of the assessment as
2022 IN 370—LS 6998/DI 120 9
1 determined by the board. However, if the total of the special
2 assessments exceeds the amount needed, the board shall make a
3 prorated reduction in each special assessment.
4 (f) Except as provided in section 13 of this chapter, the signing of
5 the special assessment schedule by a majority of the members of the
6 board and the delivery of the schedule to the county auditor constitute
7 a final and conclusive determination of the benefits that are assessed.
8 (g) Each special assessment is a lien on the real property that is
9 assessed, second only to ad valorem property taxes levied on that
10 property.
11 (h) The board shall certify to the county auditor the schedule of
12 special assessments of benefits. For purposes of providing
13 substantiation of the deductibility of a special assessment for federal
14 adjusted gross income tax purposes under Section 164 of the Internal
15 Revenue Code, the board shall, to the extent practicable, supplement
16 the schedule of special assessments provided to the county auditor with
17 a statement that identifies the part of each special assessment that is
18 allocable to interest, maintenance, and repair charges. If the board
19 provides the county auditor with the statement, the county auditor shall
20 show, on the tax statement, the part of the special assessment that is for
21 interest and maintenance and repair items separately from the
22 remainder of the special assessment.
23 (i) An assessment or reassessment, interest, the expense of
24 collection, and reasonable attorney's fees, if incurred, is:
25 (1) a personal liability of and charge against the owners of the
26 property regardless of whether the owners are named;
27 (2) a lien that is effective from the date of the ordinance or
28 order levying the assessment until the assessment is paid;
29 (3) a lien that runs with the land and that portion of an
30 assessment payment that has not yet come due is not
31 eliminated by transfer of the parcel to a tax exempt owner or
32 by foreclosure of an ad valorem tax lien; and
33 (4) an assessment lien that may be enforced by the governing
34 body in the same manner that an ad valorem tax lien may be
35 enforced by the governing body. Foreclosure of accrued
36 installments does not eliminate the outstanding principal
37 balance of the assessment. Any purchaser of the property in
38 foreclosure takes the property subject to the assessment lien
39 and any associated obligations.
40 (j) Delinquent installments of the assessment shall incur interest,
41 penalties, and attorney's fees in the same manner as delinquent ad
42 valorem taxes.
2022 IN 370—LS 6998/DI 120 10
1 (k) The owner of assessed property, including those by way of
2 voluntary assessment, may pay at any time all or any part of the
3 assessment, with interest that has accrued on the assessment, on
4 any lot or parcel.
5 SECTION 12. IC 36-7-22-13 IS AMENDED TO READ AS
6 FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 13. (a) Any owner of
7 real property in an economic improvement district may file an action
8 contesting the validity of:
9 (1) the ordinance adopted under section 7 of this chapter; or
10 (2) the assessment schedule adopted under section 12 of this
11 chapter.
12 (b) An action under this section must be filed:
13 (1) in the circuit or superior court of the county in which the
14 economic improvement district is located; and
15 (2) within thirty (30) days after adoption of either the ordinance
16 or assessment schedule, respectively.
17 SECTION 13. IC 36-7-22-14 IS AMENDED TO READ AS
18 FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 14. Within thirty (30)
19 days after the county auditor receives the certification of final
20 scheduled assessments for the completion of the economic
21 improvement project, the auditor shall deliver a copy of the certificate
22 to the county treasurer. Each year, the board, which may work
23 through a third party administrator, shall assist the county
24 treasurer in order to:
25 (1) prepare an annual assessment roll, which shall reflect
26 which parcels, if any, have fully paid any applicable
27 assessment and therefore no longer owe an assessment
28 installment;
29 (2) designate which parcels are assessed, and in what
30 amounts, going forward;
31 (3) establish annual assessment installments consistent with
32 the rate and method apportionment report; and
33 (4) calculate and add to the annual assessment installments
34 due any penalties, interest, fees, payments owed under section
35 12(a)(2) of this chapter, and other amounts due.
36 Each year, the treasurer shall add the full annual assessment
37 installment due in that year to the tax statements of the person owning
38 the property affected by the assessment, designating it in a manner
39 distinct from general taxes.
40 SECTION 14. IC 36-7-22-17 IS AMENDED TO READ AS
41 FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 17. (a) Before
42 November 1 of each year, the board shall prepare and submit to the
2022 IN 370—LS 6998/DI 120 11
1 fiscal body a budget for the following calendar year governing the
2 board's projected expenditures from the economic improvement fund.
3 Such budget must include amounts to pay debt service on any
4 bonds supported by assessments and assessment installments until
5 such bonds are paid in full. The fiscal body may approve, modify, or
6 reject the proposed budget.
7 (b) The board may make an expenditure from the economic
8 improvement fund only if the expenditure was approved by the fiscal
9 body in its review of the board's budget or was otherwise approved by
10 the fiscal body.
11 SECTION 15. IC 36-7-22-22, AS ADDED BY P.L.131-2008,
12 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
13 JULY 1, 2022]: Sec. 22. The board may:
14 (1) exercise of any of the powers of a unit under IC 36-7-12-18 or
15 IC 36-7-12-18.5; or
16 (2) issue revenue bonds under section 24 of this chapter;
17 to finance an economic improvement project.
18 SECTION 16. IC 36-7-22-24 IS ADDED TO THE INDIANA
19 CODE AS A NEW SECTION TO READ AS FOLLOWS
20 [EFFECTIVE JULY 1, 2022]: Sec. 24. (a) In accordance with section
21 22 of this chapter, the board may issue bonds or notes payable
22 from assessments assessed under this chapter to finance economic
23 improvement projects. The bonds or notes may be publicly offered
24 or privately placed in the manner determined by the board. Such
25 assessments are not ad valorem property taxes and any bonds or
26 notes payable from the assessment revenue are not general
27 obligations of the unit that established the economic improvement
28 district.
29 (b) The board may enter into ancillary financial agreements
30 relating to and in furtherance of its issuance of bonds or notes
31 under this chapter, including agreements with the unit that
32 established the district.
33 (c) Bonds or notes issued under this chapter shall include
34 provisions for redemptions from property owners who choose to
35 make one-time lump sum assessment prepayments on the
36 unamortized portion of any assessment applicable to their
37 property.
38 (d) Bonds or notes issued under this chapter are subject to the
39 following limitations:
40 (1) The bonds or notes may be issued for a period not to
41 exceed thirty-five (35) years.
42 (2) The average life of the bonds or notes may not exceed one
2022 IN 370—LS 6998/DI 120 12
1 hundred twenty percent (120%) of the average economic life
2 of the improvements for which the bonds or notes are issued.
2022 IN 370—LS 6998/DI 120