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 7045 NOTE PREPARED: Jan 10, 2022
BILL NUMBER: SB 386 BILL AMENDED:
SUBJECT: Land Banks.
FIRST AUTHOR: Sen. Lanane BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: Land Bank Boards: The bill makes various changes to the statutes governing land
banks that concern certain land bank powers, objectives, and duties. It provides (except in a county
containing a consolidated city) that only a majority of directors appointed to the board of a land bank must
be residents of the county, second class city, or third class city. It provides, in the case of a land bank created
by an interlocal agreement, that only a majority of the members of the board of the land bank must be
residents of the applicable eligible units that establish the land bank.
Land Bank Advisory Committees: The bill provides that a land bank may establish advisory committees
composed of specified community members to consult with and advise the land bank on: (1) properties
within the territory of the land bank that are imposing the greatest harm on residents and neighborhoods; (2)
resident and neighborhood priorities for new uses of land bank properties; and (3) options for potential
transferees of land bank properties.
Interlocal Agreements: The bill provides, subject to certain limitations, that a land bank may use an interlocal
agreement to establish processes to improve the quality of title and marketability of property the land bank
owns to extinguish any liens that exist on the property. It provides that, if a land bank enters into an interlocal
agreement, any employees of an eligible unit who may be contracted to provide staffing services to the land
bank pursuant to the interlocal agreement retain their status as public employees of the eligible unit.
Neighborhood Investment Fee: The bill allows a county fiscal body in a county in which there is at least one
land bank (except in a county containing a consolidated city) to adopt an ordinance requiring every person
who wishes to participate in a tax sale as a bidder to pay a neighborhood investment fee of not more than
$150. It provides that, if a county fiscal body adopts an ordinance authorizing the imposition of a
SB 386 1 neighborhood investment fee, the county treasurer shall establish the neighborhood investment fee fund and
specifies the manner in which neighborhood investment fees collected are to be distributed from the fund
to land banks.
Additional Property Tax Penalty: The bill allows a county fiscal body in a county in which there is at least
one land bank (except in a county containing a consolidated city) to adopt an ordinance to impose, in addition
to the 5% penalty for delinquent real property taxes, an additional penalty of not more than 3% for a total
penalty that may not exceed 8% of the amount of delinquent real property taxes (additional penalty
ordinance). It provides that delinquent tax payments attributable to real property used as a principal place
of residence and receiving the homestead standard deduction for the most recent assessment date are exempt
from an additional penalty ordinance. It specifies the manner in which the amounts collected attributable to
an additional penalty imposed on delinquent real property taxes are to be distributed to land banks.
Effective Date: July 1, 2022.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures: Neighborhood Investment Fee and Additional Property Tax Penalty:
In counties, other than Marion County, that have adopted ordinances, workload could increase for county
treasurers to establish and administer neighborhood investment fee funds and/or to distribute the proceeds
to land banks (semiannually) and for county treasurers to distribute the additional delinquent real property
tax penalties (quarterly) to land banks. County treasurers would need to determine the distribution of funds
for counties that have more than one land bank established in the county (distributed proportionally based
on population).
Explanation of Local Revenues: Neighborhood Investment Fee: Revenues could increase for land banks
in counties, other than Marion County, that have adopted ordinances to establish a neighborhood investment
fee of not more than $150 for every person who wishes to participate in a tax sale as a bidder. Land banks
are to receive these funds semiannually. The bill specifies that for counties with more than one land bank,
funds are to be distributed proportionally, based on the population of the land bank territory as compared to
the population of the entire county.
Additional Property Tax Penalty: Revenues could increase for land banks in counties, other than Marion
County, that have adopted ordinances to impose an additional penalty (of not more than 3%) for delinquent
real property taxes. This additional penalty may not be imposed on real property used as a principal place
of residence and receiving a homestead standard deduction. Land banks are to receive these additional tax
penalty funds quarterly. The bill specifies that for counties with more than one land bank, funds are to be
distributed proportionally, based on the population of the land bank territory as compared to the population
of the entire county.
Interlocal Agreements: The duty of a land bank to convey real property to a municipality before offering or
conveying the real property to another individual or entity, which currently applies to a county land bank,
is extended by the bill to apply to a land bank created by an interlocal agreement between two or more
contiguous counties. To the extent that this is not current practice or to the extent that conveying the real
property to the municipality would impact the price at which a land bank conveys the real property, revenues
to interlocal land banks could be impacted. The impact would vary by locality.
SB 386 2 State Agencies Affected:
Local Agencies Affected: Counties, land banks.
Information Sources:
Fiscal Analyst: Heather Puletz, 317-234-9484.
SB 386 3