*SB0370.1*
January 26, 2022
SENATE BILL No. 370
_____
DIGEST OF SB 370 (Updated January 25, 2022 10:42 am - DI 129)
Citations Affected: IC 36-7.
Synopsis: Community infrastructure improvement districts. Creates
a procedure to establish a community infrastructure improvement
district (district). Specifies that the procedure added by the bill
allowing for the establishment of a district does not authorize the unit
to establish a district that overlaps with an economic improvement
district. Requires a petition for the establishment of a district to include
a rate and methodology 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 a community infrastructure 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 the
board's issuance of revenue bonds.
Effective: July 1, 2022.
Buchanan, Baldwin, Busch, Lanane,
Randolph Lonnie M
January 11, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
January 25, 2022, amended, reported favorably — Do Pass.
SB 370—LS 6998/DI 120 January 26, 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. 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 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2022]:
4 Chapter 22.1. Community Infrastructure Improvement
5 Districts
6 Sec. 1. (a) This chapter applies to all units except townships.
7 (b) This chapter does not authorize a unit to establish a
8 community infrastructure improvement district that overlaps with
9 an economic improvement district established under IC 36-7-22.
10 Sec. 1.5. As used in this chapter, "assessment" means a charge
11 determined under section 11(a) of this chapter by applying the
12 percentage of benefit apportioned to a parcel within a community
13 infrastructure improvement district to the cost associated with
14 economic development projects giving rise to such benefits. Costs
15 subject to assessment for these purposes include all costs of the
16 economic improvement projects as well as financing and
17 administrative costs. In the case of bonds or notes issued pursuant
SB 370—LS 6998/DI 120 2
1 to section 23 of this chapter, financing costs shall include, without
2 limitation, principal and interest, related reserve funds, cost of
3 insurance, and costs associated with ancillary financial
4 arrangements with respect to the bonds or notes.
5 Sec. 2. As used in this chapter, "board" refers to a community
6 infrastructure improvement board established under section 10 of
7 this chapter.
8 Sec. 3. As used in this chapter, "economic improvement project"
9 means the following:
10 (1) Planning or managing development or improvement
11 activities.
12 (2) Designing, landscaping, beautifying, constructing, or
13 maintaining public areas, public improvements, or public
14 ways (including designing, constructing, or maintaining
15 lighting, infrastructure, utility facilities, improvements, and
16 equipment, water facilities, improvements, and equipment,
17 sewage facilities, improvements, and equipment, streets, or
18 sidewalks for a public area or public way).
19 (3) Promoting commercial activity or public events.
20 (4) Supporting business recruitment and development.
21 (5) Providing security for public areas.
22 (6) Acquiring, constructing, or maintaining parking facilities.
23 (7) Constructing, rehabilitating, or repairing residential
24 property, including improvements related to the habitability
25 of the residential property.
26 (8) Acquiring, constructing, rehabilitating, or repairing
27 redevelopment projects, economic development facilities
28 described in IC 36-7-11.9-3, pollution control facilities
29 described in IC 36-7-11.9-9, or other local improvements.
30 (9) Constructing, rehabilitating, or repairing industrial or
31 commercial property associated with a qualified
32 redevelopment site (as defined in IC 6-3.1-34-6).
33 Sec. 3.2. As used in this chapter, "projected assessed value"
34 means:
35 (1) with respect to the community infrastructure
36 improvement district, an assessed value of the property within
37 the community infrastructure improvement district, plus the
38 as-built projected assessed value of the economic development
39 project to be constructed in the community infrastructure
40 improvement district as determined pursuant to a third party
41 evaluation accepted by the legislative body; and
42 (2) with respect to an individual parcel, the as-built (or
SB 370—LS 6998/DI 120 3
1 as-improved, as appropriate) projected assessed value of the
2 parcel as determined pursuant to a third party evaluation
3 accepted by the legislative body;
4 including in both cases the assessed value of a property subject to
5 a voluntary assessment agreement as set forth in section 7(e) of this
6 chapter.
7 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 community infrastructure
13 improvement district under section 4 of 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 Sec. 4. (a) A person that intends to file a petition for the
41 establishment of a community infrastructure improvement district
42 under this section must first provide written notice to the clerk (as
SB 370—LS 6998/DI 120 4
1 defined in IC 36-1-2) in the case of a municipality, or the county
2 auditor, in the case of a county, of the person's intent before
3 initiating the petition process.
4 (b) A petition for the establishment of a community
5 infrastructure improvement district may be filed with the clerk of
6 the municipality or the county auditor not later than one hundred
7 twenty (120) days after the date on which the notice of intent for
8 the petition is filed with the clerk of the municipality or the county
9 auditor under subsection (a). The petition must include the
10 following information:
11 (1) The boundaries of the proposed district, including the
12 boundaries of any zones to be established under section 5(b)
13 of this chapter.
14 (2) The name and address of each parcel and owner of land
15 within the proposed district and a description of the existing
16 land use and zoning classification of each parcel.
17 (3) A detailed description of the economic improvement
18 projects to be carried out within the proposed district, the
19 estimated cost of these projects, and the benefits to accrue to
20 the property owners within the district.
21 (4) A plan for the application of assessment revenue to the
22 cost of the economic improvement projects within the district.
23 (5) A proposed formula for determining the percentage of the
24 total benefit to be received by each parcel of real property
25 within the district, in the manner provided by section 5 of this
26 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 (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
33 less than ninety (90) days from the date the petition is filed with the
34 clerk of the municipality or the county auditor.
35 Sec. 5. (a) The benefits accruing to parcels of real property
36 within a community infrastructure improvement district may be
37 apportioned among those parcels on any basis reasonably
38 representative of the diffusion of benefits from the economic
39 improvement project, including the following:
40 (1) Proximity of the parcel to the project.
41 (2) Accessibility of the parcel to the project.
42 (3) True cash value of the parcel.
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1 (4) True cash value of any improvement on the parcel.
2 (5) Age of any improvement on the parcel.
3 (6) Land use class of the parcel.
4 (7) Equivalent units, including, in the case of an apartment
5 building, the number of units in the building.
6 (8) Parcel square footage.
7 (9) Parcel front footage.
8 (10) Gross floor area.
9 (11) Benefit availability.
10 (12) Impervious surface area.
11 (13) Other similar factors.
12 The apportionment of benefits under this subsection may be
13 adjusted by zone or land use as provided in subsections (b) and (c).
14 (b) If the benefit of the economic development project varies
15 from one (1) area to another within the community infrastructure
16 improvement district, up to three (3) zones may be established
17 within the district to delineate the approximate difference in
18 beneficial impact, and benefits may be apportioned accordingly.
19 (c) In order to encourage the retention or development of
20 various land uses within the district, assessments may be adjusted
21 according to the zoning classification of the property.
22 Sec. 6. (a) After receipt of a petition under section 4 of this
23 chapter, the clerk of the municipality or county auditor shall, in the
24 manner provided by IC 5-3-1, publish notice of a hearing on the
25 proposed community infrastructure improvement district. The
26 clerk of the municipality or the county auditor shall mail a copy of
27 the notice to each owner of real property within the proposed
28 community infrastructure improvement district. The notice must
29 include the boundaries of the proposed district, a description of the
30 proposed projects, the proposed formula for determining the
31 percentage of the total benefit to be received by each parcel of
32 property, and the hearing date. The date of the hearing may not be
33 more than sixty (60) days after the date on which the notice is
34 mailed.
35 (b) At the public hearing under subsection (a), the legislative
36 body shall hear all owners of real property in the proposed district
37 (who appear and request to be heard) upon the questions of:
38 (1) the sufficiency of the notice;
39 (2) whether the proposed economic improvement projects are
40 of public utility and benefit;
41 (3) whether the formula to be used for the assessment of
42 special benefits is appropriate; and
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1 (4) whether the district contains all, or more or less than all,
2 of the property specially benefited by the proposed project.
3 Sec. 7. (a) After conducting a hearing on the proposed
4 community infrastructure improvement district, the legislative
5 body may adopt an ordinance establishing the community
6 infrastructure improvement district if it determines that:
7 (1) the petition meets the requirements of this section and
8 sections 4 and 5 of this chapter;
9 (2) the economic improvement projects to be undertaken in
10 the district will provide special benefits to property owners in
11 the district and will be of public utility and benefit;
12 (3) the benefits provided by the project will be new benefits
13 that do not replace benefits existing before the establishment
14 of the district;
15 (4) the formula to be used for the assessment of benefits is
16 appropriate; and
17 (5) aggregate assessments under this chapter do not exceed
18 thirty percent (30%) of the projected assessed value of
19 property within the district.
20 (b) The legislative body may adopt the ordinance only if it
21 determines that the petition has been signed by:
22 (1) at least sixty percent (60%) of the owners of real property
23 within the proposed district; and
24 (2) the owners of real property constituting at least sixty
25 percent (60%) of the total assessed valuation in the proposed
26 district.
27 (c) Unless an owner of property has entered into a voluntary
28 assessment agreement associated with the economic improvement
29 project, the signature of a person shall not be considered in
30 determining whether the requirements under subsection (b) are
31 met if the person's property:
32 (1) is:
33 (A) owned by a nonprofit entity and is exempt from
34 property taxation under IC 6-1.1-10-16;
35 (B) owned by this state or a state agency or leased to a
36 state agency and is exempt from property taxation under
37 IC 6-1.1-10 or any other law; or
38 (C) owned by a political subdivision of this state and is
39 exempt from property taxation under IC 6-1.1-10 or any
40 other law; or
41 (2) would be exempt from assessments under the ordinance.
42 (d) In addition, unless an owner of property has entered into a
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1 voluntary assessment agreement, neither the parcel of real
2 property nor the assessed value of any property may be considered
3 in determining the total parcels of real property or the total
4 assessed value of property in the proposed district for purposes of
5 determining whether the requirements under subsection (b) are
6 met if the property:
7 (1) is:
8 (A) owned by a nonprofit entity and is exempt from
9 property taxation under IC 6-1.1-10-16;
10 (B) owned by this state or a state agency or leased to a
11 state agency and is exempt from property taxation under
12 IC 6-1.1-10 or any other law; or
13 (C) owned by a political subdivision of this state and is
14 exempt from property taxation under IC 6-1.1-10 or any
15 other law; or
16 (2) would be exempt from assessment under the ordinance.
17 (e) The assessed value of a property subject to a voluntary
18 assessment agreement is the most recent of valuations from either
19 the county assessor or a third party evaluation accepted by the
20 legislative body.
21 Sec. 8. (a) An ordinance adopted under section 7 of this chapter
22 may be repealed or amended only after notice of the proposed
23 repeal or amendment is published and mailed in the manner
24 provided by section 6 of this chapter. However, in no event shall
25 any ordinance adopted under this chapter be repealed or amended
26 if there is any outstanding debt payable from assessments.
27 (b) Notwithstanding subsection (a), an ordinance adopted under
28 section 7 of this chapter may be amended to add additional,
29 contiguous parcels to which benefits of economic improvement
30 projects accrue at the request of the owner or owners of such
31 parcels. If an ordinance is amended under this subsection, the rate
32 and method of apportionment report shall be amended to reflect
33 the revised list of parcels and related assessments, and notice must
34 be provided under section 11(b) of this chapter.
35 Sec. 9. An ordinance adopted under section 7 of this chapter
36 may provide that businesses established within the district after the
37 creation of the district are exempt from special assessments for a
38 period not to exceed one (1) year.
39 Sec. 10. An ordinance adopted under section 7 of this chapter
40 must establish a community infrastructure improvement board to
41 be appointed by the legislative body. The board must have at least
42 three (3) members, and a majority of the board members must own
SB 370—LS 6998/DI 120 8
1 real property within the district. However, if there is only one (1)
2 property owner within a district, the legislative body shall appoint
3 one (1) member to the community infrastructure improvement
4 board who owns real property within the district and not more
5 than two (2) other members who are not required to own real
6 property within the district.
7 Sec. 11. (a) The following apply:
8 (1) The board shall use the formula approved by the
9 legislative body under section 7(a)(4) of this chapter to
10 determine the percentage of benefit to be received by each
11 parcel of real property within the community infrastructure
12 improvement district. The board shall apply the percentage
13 determined for each parcel to the total amount that is to be
14 defrayed by special assessment and determine the special
15 assessment for each parcel.
16 (2) In the event of a reassessment as provided in section 3.4(4)
17 of this chapter, the next assessment installment will include an
18 additional amount owed, if any, equal to the difference
19 between the amount originally calculated in subdivision (1)
20 and the amount calculated pursuant to subdivision (1) using
21 the reassessment methodology described in the rate and
22 method of apportionment report.
23 (b) Promptly after determining the proposed assessment for
24 each parcel, the board shall mail notice to each owner of property
25 to be assessed. The notice must:
26 (1) describe any potential proposed special assessment and
27 estimates of related annual installments thereof, including any
28 method by which the assessments or installments may change
29 depending on factors as set forth in the rate and method of
30 apportionment report;
31 (2) state that the rate and method of apportionment report
32 and the proposed special assessment on each parcel of real
33 property in the community infrastructure improvement
34 district is on file and can be seen in the board's office;
35 (3) state the time and place where written remonstrances
36 against the special assessment may be filed;
37 (4) set forth the time and place where the board will hear any
38 owner of assessed real property who has filed a remonstrance
39 before the hearing date; and
40 (5) state that the board, after hearing evidence, may decrease,
41 or leave unchanged, the special assessment on any parcel.
42 (c) The notices must be deposited in the mail twenty (20) days
SB 370—LS 6998/DI 120 9
1 before the hearing date. The notices to the owners must be
2 addressed as the names and addresses appear on the tax duplicates
3 and the records of the county auditor.
4 (d) At the time fixed in the notice, the board shall hear any
5 owner of assessed real property who has filed a written
6 remonstrance before the date of the hearing. The hearing may be
7 continued from time to time as long as is necessary to hear the
8 owners.
9 (e) The board shall render its decision by either confirming or
10 decreasing each special assessment by setting opposite each name,
11 parcel, and proposed assessment, the amount of the assessment as
12 determined by the board. However, if the total of the special
13 assessments exceeds the amount needed, the board shall make a
14 prorated reduction in each special assessment.
15 (f) Except as provided in section 12 of this chapter, the signing
16 of the special assessment schedule by a majority of the members of
17 the board and the delivery of the schedule to the county auditor
18 constitute a final and conclusive determination of the benefits that
19 are assessed.
20 (g) Each special assessment is a lien on the real property that is
21 assessed, second only to ad valorem property taxes levied on that
22 property.
23 (h) The board shall certify to the county auditor the schedule of
24 special assessments of benefits. For purposes of providing
25 substantiation of the deductibility of a special assessment for
26 federal adjusted gross income tax purposes under Section 164 of
27 the Internal Revenue Code, the board shall, to the extent
28 practicable, supplement the schedule of special assessments
29 provided to the county auditor with a statement that identifies the
30 part of each special assessment that is allocable to interest,
31 maintenance, and repair charges. If the board provides the county
32 auditor with the statement, the county auditor shall show, on the
33 tax statement, the part of the special assessment that is for interest
34 and maintenance and repair items separately from the remainder
35 of the special assessment.
36 (i) An assessment or reassessment, interest, the expense of
37 collection, and reasonable attorney's fees, if incurred, is:
38 (1) a lien that is effective from the date of the ordinance or
39 order levying the assessment until the assessment is paid;
40 (2) a lien that is subject to and subordinate to:
41 (A) all liens and encumbrances existing at the time the
42 assessment lien becomes effective; and
SB 370—LS 6998/DI 120 10
1 (B) any later extension or amendment of the liens and
2 encumbrances existing at the time assessment lien became
3 effective;
4 (3) a lien that runs with the land and that portion of an
5 assessment payment that has not yet come due is not
6 eliminated by transfer of the parcel to a tax exempt owner;
7 and
8 (4) an assessment lien that may be enforced by the governing
9 body in the same manner that mortgages are foreclosed.
10 (j) Delinquent installments of the assessment shall incur interest,
11 penalties, and attorney's fees in the same manner as delinquent ad
12 valorem taxes.
13 (k) The owner of assessed property, including those by way of
14 voluntary assessment, may pay at any time all or any part of the
15 assessment, with interest that has accrued on the assessment, on
16 any lot or parcel.
17 Sec. 12. (a) Any owner of real property in a community
18 infrastructure improvement district may file an action contesting
19 the validity of:
20 (1) the ordinance adopted under section 7 of this chapter; or
21 (2) the assessment schedule adopted under section 11 of this
22 chapter.
23 (b) An action under this section must be filed:
24 (1) in the circuit or superior court of the county in which the
25 community infrastructure improvement district is located;
26 and
27 (2) within thirty (30) days after adoption of either the
28 ordinance or assessment schedule, respectively.
29 Sec. 13. Within thirty (30) days after the county auditor receives
30 the certification of final scheduled assessments for the completion
31 of the economic improvement project, the auditor shall deliver a
32 copy of the certificate to the county treasurer. Each year, the
33 board, which may work through a third party administrator, shall
34 assist the county treasurer in order to:
35 (1) prepare an annual assessment roll, which shall reflect
36 which parcels, if any, have fully paid any applicable
37 assessment and therefore no longer owe an assessment
38 installment;
39 (2) designate which parcels are assessed, and in what
40 amounts, going forward;
41 (3) establish annual assessment installments consistent with
42 the rate and method apportionment report; and
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1 (4) calculate and add to the annual assessment installments
2 due any penalties, interest, fees, payments owed under section
3 11(a)(2) of this chapter, and other amounts due.
4 Each year, the treasurer shall add the full annual assessment
5 installment due in that year to the tax statements of the person
6 owning the property affected by the assessment, designating it in
7 a manner distinct from general taxes.
8 Sec. 14. Assessments collected under this chapter shall be paid
9 to the board.
10 Sec. 15. (a) The board shall establish a community
11 infrastructure improvement fund and shall deposit in this fund all
12 assessments received under this chapter and any other amounts
13 received by the board.
14 (b) Money in the community infrastructure improvement fund
15 may be used only for the purposes specified in the ordinance
16 establishing the community infrastructure improvement district.
17 Any money earned from investment of money in the fund becomes
18 a part of the fund.
19 Sec. 16. (a) Before November 1 of each year, the board shall
20 prepare and submit to the fiscal body a budget for the following
21 calendar year governing the board's projected expenditures from
22 the community infrastructure improvement fund. Such budget
23 must include amounts to pay debt service on any bonds supported
24 by assessments and assessment installments until such bonds are
25 paid in full. The fiscal body may approve, modify, or reject the
26 proposed budget.
27 (b) The board may make an expenditure from the community
28 infrastructure improvement fund only if the expenditure was
29 approved by the fiscal body in its review of the board's budget or
30 was otherwise approved by the fiscal body.
31 Sec. 17. The board must comply with IC 36-1-12 when
32 contracting for public works.
33 Sec. 18. The board may enter into lease or contractual
34 agreements, or both, with governmental, not-for-profit, or other
35 private entities for the purpose of carrying out economic
36 improvement projects.
37 Sec. 19. If the ordinance that established a community
38 infrastructure improvement district is repealed, the assets and
39 liabilities of the community infrastructure improvement district
40 shall be disposed of in the manner determined by the unit.
41 However, liabilities incurred by the community infrastructure
42 improvement district are not an obligation of the unit and are
SB 370—LS 6998/DI 120 12
1 payable only from the special assessments and other revenues of
2 the district.
3 Sec. 20. The board shall submit an annual report to the
4 legislative body and the fiscal body before February 15 of each
5 year. The report must summarize the board's activities and
6 expenditures during the preceding calendar year.
7 Sec. 21. The board may:
8 (1) exercise of any of the powers of a unit under IC 36-7-12-18
9 or IC 36-7-12-18.5; or
10 (2) issue revenue bonds under section 23 of this chapter;
11 to finance an economic improvement project.
12 Sec. 22. Upon acceptance or rejection of a proposed community
13 infrastructure improvement district following a petition under this
14 chapter, the resulting district (or the person that files the petition,
15 if the proposed district is rejected) shall, at the request of the unit,
16 reimburse the unit for all or part of the reasonable expenses
17 incurred by the unit to comply with this chapter. The legislative
18 body of the unit may choose not to collect all or part of the
19 reasonable expenses incurred to comply with this chapter.
20 Sec. 23. (a) In accordance with section 21 of this chapter, the
21 board may issue bonds or notes payable from assessments assessed
22 under this chapter to finance economic improvement projects. The
23 bonds or notes may be publicly offered or privately placed in the
24 manner determined by the board. Such assessments are not ad
25 valorem property taxes and any bonds or notes payable from the
26 assessment revenue are not general obligations of the unit that
27 established the community infrastructure improvement district.
28 (b) The board may enter into ancillary financial agreements
29 relating to and in furtherance of its issuance of bonds or notes
30 under this chapter, including agreements with the unit that
31 established the district.
32 (c) Bonds or notes issued under this chapter shall include
33 provisions for redemptions from property owners who choose to
34 make one-time lump sum assessment prepayments on the
35 unamortized portion of any assessment applicable to their
36 property.
37 (d) Bonds or notes issued under this chapter are subject to the
38 following limitations:
39 (1) The bonds or notes may be issued for a period not to
40 exceed thirty-five (35) years.
41 (2) The average life of the bonds or notes may not exceed one
42 hundred twenty percent (120%) of the average economic life
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1 of the improvements for which the bonds or notes are issued.
SB 370—LS 6998/DI 120 14
COMMITTEE REPORT
Madam President: The Senate Committee on Tax and Fiscal Policy,
to which was referred Senate Bill No. 370, 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, delete lines 1 through 17, begin a new paragraph and insert:
"SECTION 2. IC 36-7-22.1 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2022]:
Chapter 22.1. Community Infrastructure Improvement
Districts
Sec. 1. (a) This chapter applies to all units except townships.
(b) This chapter does not authorize a unit to establish a
community infrastructure improvement district that overlaps with
an economic improvement district established under IC 36-7-22.
Sec. 1.5. As used in this chapter, "assessment" means a charge
determined under section 11(a) of this chapter by applying the
percentage of benefit apportioned to a parcel within a community
infrastructure improvement district to the cost associated with
economic development projects giving rise to such benefits. Costs
subject to assessment for these purposes include all costs of the
economic improvement projects as well as financing and
administrative costs. In the case of bonds or notes issued pursuant
to section 23 of this chapter, financing costs shall include, without
limitation, principal and interest, related reserve funds, cost of
insurance, and costs associated with ancillary financial
arrangements with respect to the bonds or notes.
Sec. 2. As used in this chapter, "board" refers to a community
infrastructure improvement board established under section 10 of
this chapter.
Sec. 3. As used in this chapter, "economic improvement project"
means the following:
(1) Planning or managing development or improvement
activities.
(2) Designing, landscaping, beautifying, constructing, or
maintaining public areas, public improvements, or public
ways (including designing, constructing, or maintaining
lighting, infrastructure, utility facilities, improvements, and
equipment, water facilities, improvements, and equipment,
sewage facilities, improvements, and equipment, streets, or
sidewalks for a public area or public way).
(3) Promoting commercial activity or public events.
SB 370—LS 6998/DI 120 15
(4) Supporting business recruitment and development.
(5) Providing security for public areas.
(6) Acquiring, constructing, or maintaining parking facilities.
(7) Constructing, rehabilitating, or repairing residential
property, including improvements related to the habitability
of the residential property.
(8) Acquiring, constructing, rehabilitating, or repairing
redevelopment projects, economic development facilities
described in IC 36-7-11.9-3, pollution control facilities
described in IC 36-7-11.9-9, or other local improvements.
(9) Constructing, rehabilitating, or repairing industrial or
commercial property associated with a qualified
redevelopment site (as defined in IC 6-3.1-34-6).".
Page 2, delete lines 1 through 32.
Page 2, line 33, delete "1, 2022]:".
Page 2, line 33, begin a new paragraph beginning with "Sec 3.2.".
Page 2, line 35, delete "district," and insert "community
infrastructure improvement district,".
Page 2, line 36, delete "district," and insert "community
infrastructure improvement district,".
Page 2, line 38, delete "district" and insert "community
infrastructure improvement district".
Page 3, delete lines 5 through 42, begin a new paragraph and insert:
"Sec. 3.4. As used in this chapter, "rate and method
apportionment report" means a report relating to a developer's
planned economic development of the subject parcels, which must
set forth at least the following:
(1) A list of parcels consistent with the parcels identified in the
petition for the establishment of the community infrastructure
improvement district under section 4 of this chapter.
(2) A statement of:
(A) the proposed assessment formula under section 4(b)(5)
of this chapter;
(B) the apportionment of benefits under section 5(a) of this
chapter; and
(C) zones or other classifications, if any, relating to the
formula under clause (A) or the apportionment under
clause (B).
(3) The proposed total assessment per parcel, including:
(A) the lump sum payment amount if the assessment is
payable as a lump sum;
(B) the method for converting a lump sum assessment to
SB 370—LS 6998/DI 120 16
annual installments, if applicable; and
(C) a schedule of annual installments and an
accompanying amortization schedule of the assessment, if
any.
(4) A statement of the basis and methodology for reassessment
in the case of a parcel division or consolidation of the assessed
property, status of development or the completion of
improvements associated with the assessed property or
changes in zoning classification of the property, and any
resulting assessment changes.
(5) The proposed maximum number of years during which the
assessment may be paid in annual installments.
(6) The proposed method for establishing the assessment for
the initial year and each year thereafter.
Sec. 4. (a) A person that intends to file a petition for the
establishment of a community infrastructure improvement district
under this section must first provide written notice to the clerk (as
defined in IC 36-1-2) in the case of a municipality, or the county
auditor, in the case of a county, of the person's intent before
initiating the petition process.
(b) A petition for the establishment of a community
infrastructure improvement district may be filed with the clerk of
the municipality or the county auditor not later than one hundred
twenty (120) days after the date on which the notice of intent for
the petition is filed with the clerk of the municipality or the county
auditor under subsection (a). The petition must include the
following information:
(1) The boundaries of the proposed district, including the
boundaries of any zones to be established under section 5(b)
of this chapter.
(2) The name and address of each parcel and owner of land
within the proposed district and a description of the existing
land use and zoning classification of each parcel.
(3) A detailed description of the economic improvement
projects to be carried out within the proposed district, the
estimated cost of these projects, and the benefits to accrue to
the property owners within the district.
(4) A plan for the application of assessment revenue to the
cost of the economic improvement projects within the district.
(5) A proposed formula for determining the percentage of the
total benefit to be received by each parcel of real property
within the district, in the manner provided by section 5 of this
SB 370—LS 6998/DI 120 17
chapter.
(6) The number of years in which assessments will be levied.
(7) A proposed list of members for the board.
(c) The petition shall be accompanied by a rate and method
apportionment report.
(d) The clerk of the municipality or the county auditor shall
retain the paper copy of a petition filed under this section for not
less than ninety (90) days from the date the petition is filed with the
clerk of the municipality or the county auditor.
Sec. 5. (a) The benefits accruing to parcels of real property
within a community infrastructure improvement district may be
apportioned among those parcels on any basis reasonably
representative of the diffusion of benefits from the economic
improvement project, including the following:
(1) Proximity of the parcel to the project.
(2) Accessibility of the parcel to the project.
(3) True cash value of the parcel.
(4) True cash value of any improvement on the parcel.
(5) Age of any improvement on the parcel.
(6) Land use class of the parcel.
(7) Equivalent units, including, in the case of an apartment
building, the number of units in the building.
(8) Parcel square footage.
(9) Parcel front footage.
(10) Gross floor area.
(11) Benefit availability.
(12) Impervious surface area.
(13) Other similar factors.
The apportionment of benefits under this subsection may be
adjusted by zone or land use as provided in subsections (b) and (c).
(b) If the benefit of the economic development project varies
from one (1) area to another within the community infrastructure
improvement district, up to three (3) zones may be established
within the district to delineate the approximate difference in
beneficial impact, and benefits may be apportioned accordingly.
(c) In order to encourage the retention or development of
various land uses within the district, assessments may be adjusted
according to the zoning classification of the property.
Sec. 6. (a) After receipt of a petition under section 4 of this
chapter, the clerk of the municipality or county auditor shall, in the
manner provided by IC 5-3-1, publish notice of a hearing on the
proposed community infrastructure improvement district. The
SB 370—LS 6998/DI 120 18
clerk of the municipality or the county auditor shall mail a copy of
the notice to each owner of real property within the proposed
community infrastructure improvement district. The notice must
include the boundaries of the proposed district, a description of the
proposed projects, the proposed formula for determining the
percentage of the total benefit to be received by each parcel of
property, and the hearing date. The date of the hearing may not be
more than sixty (60) days after the date on which the notice is
mailed.
(b) At the public hearing under subsection (a), the legislative
body shall hear all owners of real property in the proposed district
(who appear and request to be heard) upon the questions of:
(1) the sufficiency of the notice;
(2) whether the proposed economic improvement projects are
of public utility and benefit;
(3) whether the formula to be used for the assessment of
special benefits is appropriate; and
(4) whether the district contains all, or more or less than all,
of the property specially benefited by the proposed project.
Sec. 7. (a) After conducting a hearing on the proposed
community infrastructure improvement district, the legislative
body may adopt an ordinance establishing the community
infrastructure improvement district if it determines that:
(1) the petition meets the requirements of this section and
sections 4 and 5 of this chapter;
(2) the economic improvement projects to be undertaken in
the district will provide special benefits to property owners in
the district and will be of public utility and benefit;
(3) the benefits provided by the project will be new benefits
that do not replace benefits existing before the establishment
of the district;
(4) the formula to be used for the assessment of benefits is
appropriate; and
(5) aggregate assessments under this chapter do not exceed
thirty percent (30%) of the projected assessed value of
property within the district.
(b) The legislative body may adopt the ordinance only if it
determines that the petition has been signed by:
(1) at least sixty percent (60%) of the owners of real property
within the proposed district; and
(2) the owners of real property constituting at least sixty
percent (60%) of the total assessed valuation in the proposed
SB 370—LS 6998/DI 120 19
district.
(c) Unless an owner of property has entered into a voluntary
assessment agreement associated with the economic improvement
project, the signature of a person shall not be considered in
determining whether the requirements under subsection (b) are
met if the person's property:
(1) is:
(A) owned by a nonprofit entity and is exempt from
property taxation under IC 6-1.1-10-16;
(B) owned by this state or a state agency or leased to a
state agency and is exempt from property taxation under
IC 6-1.1-10 or any other law; or
(C) owned by a political subdivision of this state and is
exempt from property taxation under IC 6-1.1-10 or any
other law; or
(2) would be exempt from assessments under the ordinance.
(d) In addition, unless an owner of property has entered into a
voluntary assessment agreement, neither the parcel of real
property nor the assessed value of any property may be considered
in determining the total parcels of real property or the total
assessed value of property in the proposed district for purposes of
determining whether the requirements under subsection (b) are
met if the property:
(1) is:
(A) owned by a nonprofit entity and is exempt from
property taxation under IC 6-1.1-10-16;
(B) owned by this state or a state agency or leased to a
state agency and is exempt from property taxation under
IC 6-1.1-10 or any other law; or
(C) owned by a political subdivision of this state and is
exempt from property taxation under IC 6-1.1-10 or any
other law; or
(2) would be exempt from assessment under the ordinance.
(e) The assessed value of a property subject to a voluntary
assessment agreement is the most recent of valuations from either
the county assessor or a third party evaluation accepted by the
legislative body.
Sec. 8. (a) An ordinance adopted under section 7 of this chapter
may be repealed or amended only after notice of the proposed
repeal or amendment is published and mailed in the manner
provided by section 6 of this chapter. However, in no event shall
any ordinance adopted under this chapter be repealed or amended
SB 370—LS 6998/DI 120 20
if there is any outstanding debt payable from assessments.
(b) Notwithstanding subsection (a), an ordinance adopted under
section 7 of this chapter may be amended to add additional,
contiguous parcels to which benefits of economic improvement
projects accrue at the request of the owner or owners of such
parcels. If an ordinance is amended under this subsection, the rate
and method of apportionment report shall be amended to reflect
the revised list of parcels and related assessments, and notice must
be provided under section 11(b) of this chapter.
Sec. 9. An ordinance adopted under section 7 of this chapter
may provide that businesses established within the district after the
creation of the district are exempt from special assessments for a
period not to exceed one (1) year.
Sec. 10. An ordinance adopted under section 7 of this chapter
must establish a community infrastructure improvement board to
be appointed by the legislative body. The board must have at least
three (3) members, and a majority of the board members must own
real property within the district. However, if there is only one (1)
property owner within a district, the legislative body shall appoint
one (1) member to the community infrastructure improvement
board who owns real property within the district and not more
than two (2) other members who are not required to own real
property within the district.
Sec. 11. (a) The following apply:
(1) The board shall use the formula approved by the
legislative body under section 7(a)(4) of this chapter to
determine the percentage of benefit to be received by each
parcel of real property within the community infrastructure
improvement district. The board shall apply the percentage
determined for each parcel to the total amount that is to be
defrayed by special assessment and determine the special
assessment for each parcel.
(2) In the event of a reassessment as provided in section 3.4(4)
of this chapter, the next assessment installment will include an
additional amount owed, if any, equal to the difference
between the amount originally calculated in subdivision (1)
and the amount calculated pursuant to subdivision (1) using
the reassessment methodology described in the rate and
method of apportionment report.
(b) Promptly after determining the proposed assessment for
each parcel, the board shall mail notice to each owner of property
to be assessed. The notice must:
SB 370—LS 6998/DI 120 21
(1) describe any potential proposed special assessment and
estimates of related annual installments thereof, including any
method by which the assessments or installments may change
depending on factors as set forth in the rate and method of
apportionment report;
(2) state that the rate and method of apportionment report
and the proposed special assessment on each parcel of real
property in the community infrastructure improvement
district is on file and can be seen in the board's office;
(3) state the time and place where written remonstrances
against the special assessment may be filed;
(4) set forth the time and place where the board will hear any
owner of assessed real property who has filed a remonstrance
before the hearing date; and
(5) state that the board, after hearing evidence, may decrease,
or leave unchanged, the special assessment on any parcel.
(c) The notices must be deposited in the mail twenty (20) days
before the hearing date. The notices to the owners must be
addressed as the names and addresses appear on the tax duplicates
and the records of the county auditor.
(d) At the time fixed in the notice, the board shall hear any
owner of assessed real property who has filed a written
remonstrance before the date of the hearing. The hearing may be
continued from time to time as long as is necessary to hear the
owners.
(e) The board shall render its decision by either confirming or
decreasing each special assessment by setting opposite each name,
parcel, and proposed assessment, the amount of the assessment as
determined by the board. However, if the total of the special
assessments exceeds the amount needed, the board shall make a
prorated reduction in each special assessment.
(f) Except as provided in section 12 of this chapter, the signing
of the special assessment schedule by a majority of the members of
the board and the delivery of the schedule to the county auditor
constitute a final and conclusive determination of the benefits that
are assessed.
(g) Each special assessment is a lien on the real property that is
assessed, second only to ad valorem property taxes levied on that
property.
(h) The board shall certify to the county auditor the schedule of
special assessments of benefits. For purposes of providing
substantiation of the deductibility of a special assessment for
SB 370—LS 6998/DI 120 22
federal adjusted gross income tax purposes under Section 164 of
the Internal Revenue Code, the board shall, to the extent
practicable, supplement the schedule of special assessments
provided to the county auditor with a statement that identifies the
part of each special assessment that is allocable to interest,
maintenance, and repair charges. If the board provides the county
auditor with the statement, the county auditor shall show, on the
tax statement, the part of the special assessment that is for interest
and maintenance and repair items separately from the remainder
of the special assessment.
(i) An assessment or reassessment, interest, the expense of
collection, and reasonable attorney's fees, if incurred, is:
(1) a lien that is effective from the date of the ordinance or
order levying the assessment until the assessment is paid;
(2) a lien that is subject to and subordinate to:
(A) all liens and encumbrances existing at the time the
assessment lien becomes effective; and
(B) any later extension or amendment of the liens and
encumbrances existing at the time assessment lien became
effective;
(3) a lien that runs with the land and that portion of an
assessment payment that has not yet come due is not
eliminated by transfer of the parcel to a tax exempt owner;
and
(4) an assessment lien that may be enforced by the governing
body in the same manner that mortgages are foreclosed.
(j) Delinquent installments of the assessment shall incur interest,
penalties, and attorney's fees in the same manner as delinquent ad
valorem taxes.
(k) The owner of assessed property, including those by way of
voluntary assessment, may pay at any time all or any part of the
assessment, with interest that has accrued on the assessment, on
any lot or parcel.
Sec. 12. (a) Any owner of real property in a community
infrastructure improvement district may file an action contesting
the validity of:
(1) the ordinance adopted under section 7 of this chapter; or
(2) the assessment schedule adopted under section 11 of this
chapter.
(b) An action under this section must be filed:
(1) in the circuit or superior court of the county in which the
community infrastructure improvement district is located;
SB 370—LS 6998/DI 120 23
and
(2) within thirty (30) days after adoption of either the
ordinance or assessment schedule, respectively.
Sec. 13. Within thirty (30) days after the county auditor receives
the certification of final scheduled assessments for the completion
of the economic improvement project, the auditor shall deliver a
copy of the certificate to the county treasurer. Each year, the
board, which may work through a third party administrator, shall
assist the county treasurer in order to:
(1) prepare an annual assessment roll, which shall reflect
which parcels, if any, have fully paid any applicable
assessment and therefore no longer owe an assessment
installment;
(2) designate which parcels are assessed, and in what
amounts, going forward;
(3) establish annual assessment installments consistent with
the rate and method apportionment report; and
(4) calculate and add to the annual assessment installments
due any penalties, interest, fees, payments owed under section
11(a)(2) of this chapter, and other amounts due.
Each year, the treasurer shall add the full annual assessment
installment due in that year to the tax statements of the person
owning the property affected by the assessment, designating it in
a manner distinct from general taxes.
Sec. 14. Assessments collected under this chapter shall be paid
to the board.
Sec. 15. (a) The board shall establish a community
infrastructure improvement fund and shall deposit in this fund all
assessments received under this chapter and any other amounts
received by the board.
(b) Money in the community infrastructure improvement fund
may be used only for the purposes specified in the ordinance
establishing the community infrastructure improvement district.
Any money earned from investment of money in the fund becomes
a part of the fund.
Sec. 16. (a) Before November 1 of each year, the board shall
prepare and submit to the fiscal body a budget for the following
calendar year governing the board's projected expenditures from
the community infrastructure improvement fund. Such budget
must include amounts to pay debt service on any bonds supported
by assessments and assessment installments until such bonds are
paid in full. The fiscal body may approve, modify, or reject the
SB 370—LS 6998/DI 120 24
proposed budget.
(b) The board may make an expenditure from the community
infrastructure improvement fund only if the expenditure was
approved by the fiscal body in its review of the board's budget or
was otherwise approved by the fiscal body.
Sec. 17. The board must comply with IC 36-1-12 when
contracting for public works.
Sec. 18. The board may enter into lease or contractual
agreements, or both, with governmental, not-for-profit, or other
private entities for the purpose of carrying out economic
improvement projects.
Sec. 19. If the ordinance that established a community
infrastructure improvement district is repealed, the assets and
liabilities of the community infrastructure improvement district
shall be disposed of in the manner determined by the unit.
However, liabilities incurred by the community infrastructure
improvement district are not an obligation of the unit and are
payable only from the special assessments and other revenues of
the district.
Sec. 20. The board shall submit an annual report to the
legislative body and the fiscal body before February 15 of each
year. The report must summarize the board's activities and
expenditures during the preceding calendar year.
Sec. 21. The board may:
(1) exercise of any of the powers of a unit under IC 36-7-12-18
or IC 36-7-12-18.5; or
(2) issue revenue bonds under section 23 of this chapter;
to finance an economic improvement project.
Sec. 22. Upon acceptance or rejection of a proposed community
infrastructure improvement district following a petition under this
chapter, the resulting district (or the person that files the petition,
if the proposed district is rejected) shall, at the request of the unit,
reimburse the unit for all or part of the reasonable expenses
incurred by the unit to comply with this chapter. The legislative
body of the unit may choose not to collect all or part of the
reasonable expenses incurred to comply with this chapter.
Sec. 23. (a) In accordance with section 21 of this chapter, the
board may issue bonds or notes payable from assessments assessed
under this chapter to finance economic improvement projects. The
bonds or notes may be publicly offered or privately placed in the
manner determined by the board. Such assessments are not ad
valorem property taxes and any bonds or notes payable from the
SB 370—LS 6998/DI 120 25
assessment revenue are not general obligations of the unit that
established the community infrastructure improvement district.
(b) The board may enter into ancillary financial agreements
relating to and in furtherance of its issuance of bonds or notes
under this chapter, including agreements with the unit that
established the district.
(c) Bonds or notes issued under this chapter shall include
provisions for redemptions from property owners who choose to
make one-time lump sum assessment prepayments on the
unamortized portion of any assessment applicable to their
property.
(d) Bonds or notes issued under this chapter are subject to the
following limitations:
(1) The bonds or notes may be issued for a period not to
exceed thirty-five (35) years.
(2) The average life of the bonds or notes may not exceed one
hundred twenty percent (120%) of the average economic life
of the improvements for which the bonds or notes are issued.".
Delete pages 4 through 12.
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 370 as introduced.)
HOLDMAN, Chairperson
Committee Vote: Yeas 12, Nays 0.
SB 370—LS 6998/DI 120