Introduced Version
HOUSE BILL No. 1473
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 36-4-3.
Synopsis: Pocket annexations. Allows a municipality to annex
unincorporated property that is completely surrounded by the
municipality. Requires the municipality to: (1) adopt an annexation
fiscal plan; (2) provide notice to landowners in the territory; and (3)
hold a public hearing.
Effective: July 1, 2025.
Steuerwald
January 21, 2025, read first time and referred to Committee on Local Government.
2025 IN 1473—LS 7649/DI 87 Introduced
First Regular Session of the 124th General Assembly (2025)
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.
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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 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1473
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 36-4-3-1.7, AS AMENDED BY P.L.70-2022,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 1.7. (a) This section applies only to an annexation
4 ordinance adopted after June 30, 2015. This section does not apply to
5 an annexation under section 3.7 or 5.1 of this chapter.
6 (b) Not earlier than six (6) months before a municipality introduces
7 an annexation ordinance, the municipality shall conduct an outreach
8 program to inform citizens regarding the proposed annexation. For an
9 annexation under section 3 or 4 of this chapter, the outreach program
10 must conduct at least six (6) public information meetings regarding the
11 proposed annexation. For an annexation under section 5 or 5.2 of this
12 chapter, the outreach program must conduct at least three (3) public
13 information meetings regarding the proposed annexation. The public
14 information meetings must provide citizens with the following
15 information:
16 (1) Maps showing the proposed boundaries of the annexation
17 territory.
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1 (2) Proposed plans for extension of capital and noncapital
2 services in the annexation territory, including proposed dates of
3 extension. In the case of an annexation under section 5.2 of this
4 chapter, a copy of the preliminary written fiscal plan.
5 (3) Expected fiscal impact on taxpayers in the annexation
6 territory, including any increase in taxes and fees.
7 (c) The municipality shall provide notice of the dates, times, and
8 locations of the outreach program meetings. The municipality shall
9 publish the notice of the meetings under IC 5-3-1, including the date,
10 time, and location of the meetings, except that notice must be published
11 not later than thirty (30) days before the date of each meeting. The
12 municipality shall also send notice to each owner of land within the
13 annexation territory not later than thirty (30) days before the date of the
14 first meeting of the outreach program. The notice to landowners shall
15 be sent by first class mail, certified mail with return receipt requested,
16 or any other means of delivery that includes a return receipt and must
17 include the following information:
18 (1) The notice must inform the landowner that the municipality is
19 proposing to annex territory that includes the landowner's
20 property.
21 (2) The municipality is conducting an outreach program for the
22 purpose of providing information to landowners and the public
23 regarding the proposed annexation.
24 (3) The date, time, and location of the meetings to be conducted
25 under the outreach program.
26 (d) The notice shall be sent to the address of the landowner as listed
27 on the tax duplicate. If the municipality provides evidence that the
28 notice was sent:
29 (1) by certified mail, with return receipt requested or any other
30 means of delivery that includes a return receipt; and
31 (2) in accordance with this section;
32 it is not necessary that the landowner accept receipt of the notice. If a
33 remonstrance is filed under section 11 of this chapter, the municipality
34 shall file with the court proof that notices were sent to landowners
35 under this section and proof of publication.
36 (e) The notice required under this section is in addition to any notice
37 required under sections 2.1 and 2.2 of this chapter.
38 SECTION 2. IC 36-4-3-2.2, AS AMENDED BY P.L.70-2022,
39 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
40 JULY 1, 2025]: Sec. 2.2. (a) This section does not apply to an
41 annexation under section 4(a)(2), 4(a)(3), 4(b), or 4(h) of this chapter
42 or an annexation described in section 5.1 of this chapter.
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1 (b) Before a municipality may annex territory, the municipality shall
2 provide written notice of the hearing required under section 2.1 of this
3 chapter. Except as provided in subsections (f) and (g), the notice must
4 be sent by:
5 (1) certified mail, return receipt requested; or
6 (2) any other means of delivery that includes a return receipt;
7 at least sixty (60) days before the date of the hearing to each owner of
8 real property, as shown on the county auditor's current tax list, whose
9 real property is located within the territory proposed to be annexed.
10 (c) For purposes of an annexation of territory described in section
11 2.5 of this chapter, if the hearing required under section 2.1 of this
12 chapter is conducted after June 30, 2010, the notice required by this
13 section must also be sent to each owner of real property, as shown on
14 the county auditor's current tax list, whose real property is adjacent to
15 contiguous areas of rights-of-way of the public highway that are only
16 included in the annexation of territory by operation of section 2.5 of
17 this chapter on the side of the public highway that is not part of the
18 annexed territory.
19 (d) The notice required by this section must include the following:
20 (1) A legal description of the real property proposed to be
21 annexed.
22 (2) The date, time, location, and subject of the hearing.
23 (3) A map showing the current municipal boundaries and the
24 proposed municipal boundaries.
25 (4) Current zoning classifications for the area proposed to be
26 annexed and any proposed zoning changes for the area proposed
27 to be annexed.
28 (5) A detailed summary of the fiscal plan, described in section 13
29 of this chapter, if applicable.
30 (6) The location where the public may inspect and copy the fiscal
31 plan, if applicable.
32 (7) A statement that the municipality will provide a copy of the
33 fiscal plan, if applicable, after the fiscal plan is adopted
34 immediately to any landowner in the annexed territory who
35 requests a copy.
36 (8) The name and telephone number of a representative of the
37 municipality who may be contacted for further information.
38 (e) If the municipality complies with this section, the notice is not
39 invalidated if the owner does not receive the notice.
40 (f) This subsection applies to an annexation under section 3 or 4 of
41 this chapter in which all property owners within the area to be annexed
42 provide written consent to the annexation. The written notice described
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1 in this section must be sent by:
2 (1) certified mail, return receipt requested; or
3 (2) any other means of delivery that includes a return receipt;
4 not later than twenty (20) days before the date of the hearing to each
5 owner of real property, as shown on the county auditor's current tax list,
6 whose real property is located within the territory proposed to be
7 annexed.
8 (g) This subsection applies to an annexation under section 3.7 or 5.2
9 of this chapter. The written notice described in this section must be sent
10 by:
11 (1) certified mail, return receipt requested; or
12 (2) any other means of delivery that includes a return receipt;
13 not later than thirty (30) days before the date of the hearing to each
14 owner of real property, as shown on the county auditor's current tax list,
15 whose real property is located within the territory proposed to be
16 annexed.
17 SECTION 3. IC 36-4-3-3.1, AS AMENDED BY P.L.70-2022,
18 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JULY 1, 2025]: Sec. 3.1. (a) This section does not apply to an
20 annexation under section 4(a)(2), 4(a)(3), 4(b), 4(h), or 4.1 of this
21 chapter.
22 (b) A municipality shall develop and adopt a written fiscal plan and
23 establish a definite policy by resolution of the legislative body that
24 meets the requirements set forth in section 13 of this chapter.
25 (c) Except as provided in subsection (d) and section 5.2 of this
26 chapter, the municipality shall establish and adopt the written fiscal
27 plan before mailing the notification to landowners in the territory
28 proposed to be annexed under section 2.2 of this chapter.
29 (d) In an annexation under section 3.7, 5, or 5.1 of this chapter, the
30 municipality shall establish and adopt the written fiscal plan before
31 adopting the annexation ordinance.
32 SECTION 4. IC 36-4-3-3.7 IS ADDED TO THE INDIANA CODE
33 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
34 1, 2025]: Sec. 3.7. (a) This section applies to an annexation, if the
35 annexation territory is surrounded on all sides by the municipality.
36 (b) A municipality may annex territory by adopting an
37 annexation ordinance under section 3 or 4 of this chapter after
38 complying with sections 2.1 and 2.2 of this chapter.
39 SECTION 5. IC 36-4-3-7, AS AMENDED BY THE TECHNICAL
40 CORRECTIONS BILL OF THE 2025 GENERAL ASSEMBLY, IS
41 AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2025]:
42 Sec. 7. (a) After an ordinance is adopted under section 3, 3.7, 4, 5, 5.1,
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1 or 5.2 of this chapter, it must be published in the manner prescribed by
2 IC 5-3-1. Except as provided in subsection (b), (c), or (e), in the
3 absence of remonstrance and appeal under section 11 or 15.5 of this
4 chapter, the ordinance takes effect at least ninety (90) days after its
5 publication and upon the filing required by section 22(a) of this
6 chapter.
7 (b) For the purposes of this section, territory that has been:
8 (1) added to an existing fire protection district under
9 IC 36-8-11-11; or
10 (2) approved by ordinance of the county legislative body to be
11 added to an existing fire protection district under IC 36-8-11-11,
12 notwithstanding that the territory's addition to the fire protection
13 district has not yet taken effect;
14 shall be considered a part of the fire protection district as of the date
15 that the fire protection district was originally established.
16 (c) This subsection applies only to a fire protection district
17 established after July 1, 1987. This subsection does not apply to an
18 annexation under subsection (g). (f). Whenever a municipality annexes
19 territory, all or part of which lies within a fire protection district (IC
20 36-8-11), the annexation ordinance (in the absence of remonstrance
21 and appeal under section 11 or 15.5 of this chapter) takes effect the
22 second January 1 that follows the date the ordinance is adopted and
23 upon the filing required by section 22(a) of this chapter. The
24 municipality shall:
25 (1) provide fire protection to that territory beginning the date the
26 ordinance is effective; and
27 (2) send written notice to the fire protection district of the date the
28 municipality will begin to provide fire protection to the annexed
29 territory within ten (10) days of the date the ordinance is adopted.
30 (d) This subsection applies only to a fire protection district
31 established after July 1, 1987. This subsection does not apply to an
32 annexation under subsection (g). (f). If the fire protection district from
33 which a municipality annexes territory is indebted or has outstanding
34 unpaid bonds or other obligations at the time the annexation is
35 effective, the municipality is liable for and shall pay that indebtedness
36 in the same ratio as the assessed valuation of the property in the
37 annexed territory (that is part of the fire protection district) bears to the
38 assessed valuation of all property in the fire protection district, as
39 shown by the most recent assessment for taxation before the
40 annexation, unless the assessed property within the municipality is
41 already liable for the indebtedness. The annexing municipality shall
42 pay its indebtedness under this section to the board of fire trustees. If
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1 the indebtedness consists of outstanding unpaid bonds or notes of the
2 fire protection district, the payments to the board of fire trustees shall
3 be made as the principal or interest on the bonds or notes becomes due.
4 (e) This subsection applies to an annexation initiated by property
5 owners under section 5.1 of this chapter in which all property owners
6 within the area to be annexed petition the municipality to be annexed.
7 Subject to subsection (c), and in the absence of an appeal under section
8 15.5 of this chapter, an annexation ordinance takes effect at least thirty
9 (30) days after its publication and upon the filing required by section
10 22(a) of this chapter.
11 (f) Whenever a municipality annexes territory that lies within a fire
12 protection district that has a total net assessed value (as determined by
13 the county auditor) of more than one billion dollars ($1,000,000,000)
14 on the date the annexation ordinance is adopted:
15 (1) the annexed area shall remain a part of the fire protection
16 district after the annexation takes effect; and
17 (2) the fire protection district shall continue to provide fire
18 protection services to the annexed area.
19 The municipality shall not tax the annexed territory for fire protection
20 services. The annexing municipality shall establish a special fire fund
21 for all fire protection services that are provided by the municipality
22 within the area of the municipality that is not within the fire protection
23 district, and which shall not be assessed to the annexed special taxing
24 district. The annexed territory that lies within the fire protection district
25 shall continue to be part of the fire protection district special taxing
26 district.
27 SECTION 6. IC 36-4-3-8 IS AMENDED TO READ AS FOLLOWS
28 [EFFECTIVE JULY 1, 2025]: Sec. 8. (a) This section does not apply
29 to an ordinance adopted under section 3.7, 5, or 5.1 of this chapter.
30 (b) An ordinance adopted under section 3 or 4 of this chapter must
31 include terms and conditions fairly calculated to make the annexation
32 equitable to the property owners and residents of the municipality and
33 the annexed territory. The terms and conditions may include:
34 (1) postponing the effective date of the annexation for not more
35 than three (3) years; and
36 (2) establishing equitable provisions for the future management
37 and improvement of the annexed territory and for the rendering of
38 needed services.
39 (c) This subsection applies to territory sought to be annexed that
40 meets all of the following requirements:
41 (1) The resident population density of the territory is at least three
42 (3) persons per acre.
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1 (2) The territory is subdivided or is parceled through separate
2 ownerships into lots or parcels such that at least sixty percent
3 (60%) of the total number of lots and parcels are not more than
4 one (1) acre.
5 This subsection does not apply to an ordinance annexing territory
6 described in section 4(a)(2), 4(a)(3), 4(b), or 4(h) of this chapter. The
7 ordinance must include terms and conditions impounding in a special
8 fund all of the municipal property taxes imposed on the annexed
9 territory after the annexation takes effect that are not used to meet the
10 basic services described in section 13(d)(4) and 13(d)(5) of this chapter
11 for a period of at least three (3) years. The impounded property taxes
12 must be used to provide additional services that were not specified in
13 the plan of annexation. The impounded property taxes in the fund shall
14 be expended as set forth in this section, not later than five (5) years
15 after the annexation becomes effective.
16 SECTION 7. IC 36-4-3-13, AS AMENDED BY P.L.70-2022,
17 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
18 JULY 1, 2025]: Sec. 13. (a) Except as provided in subsection (e), at the
19 hearing under section 12 of this chapter, the court shall order a
20 proposed annexation to take place if the following requirements are
21 met:
22 (1) The requirements of either subsection (b) or (c).
23 (2) The requirements of subsection (d).
24 (3) The requirements of subsection (i).
25 (b) The requirements of this subsection are met if the evidence
26 establishes the following:
27 (1) That the territory sought to be annexed is contiguous to the
28 municipality.
29 (2) One (1) of the following:
30 (A) The resident population density of the territory sought to
31 be annexed is at least three (3) persons per acre.
32 (B) Sixty percent (60%) of the territory is subdivided.
33 (C) The territory is zoned for commercial, business, or
34 industrial uses.
35 (c) The requirements of this subsection are met if the evidence
36 establishes one (1) of the following:
37 (1) That the territory sought to be annexed is:
38 (A) contiguous to the municipality as required by section 1.5
39 of this chapter, except that at least one-fourth (1/4), instead of
40 one-eighth (1/8), of the aggregate external boundaries of the
41 territory sought to be annexed must coincide with the
42 boundaries of the municipality; and
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1 (B) needed and can be used by the municipality for its
2 development in the reasonably near future.
3 (2) This subdivision applies only to an annexation for which an
4 annexation ordinance is adopted after December 31, 2016. That
5 the territory sought to be annexed involves an economic
6 development project and the requirements of section 11.4 of this
7 chapter are met.
8 (3) The territory is described in section 5.2 of this chapter.
9 (d) The requirements of this subsection are met if the evidence
10 establishes that the municipality has developed and adopted a written
11 fiscal plan and has established a definite policy, by resolution of the
12 legislative body as set forth in section 3.1 of this chapter. The fiscal
13 plan must show the following:
14 (1) The cost estimates of planned services to be furnished to the
15 territory to be annexed. The plan must present itemized estimated
16 costs for each municipal department or agency.
17 (2) The method or methods of financing the planned services. The
18 plan must explain how specific and detailed expenses will be
19 funded and must indicate the taxes, grants, and other funding to
20 be used.
21 (3) The plan for the organization and extension of services. The
22 plan must detail the specific services that will be provided and the
23 dates the services will begin.
24 (4) That planned services of a noncapital nature, including police
25 protection, fire protection, street and road maintenance, and other
26 noncapital services normally provided within the corporate
27 boundaries, will be provided to the annexed territory within one
28 (1) year after the effective date of annexation and that they will be
29 provided in a manner equivalent in standard and scope to those
30 noncapital services provided to areas within the corporate
31 boundaries regardless of similar topography, patterns of land use,
32 and population density.
33 (5) That services of a capital improvement nature, including street
34 construction, street lighting, sewer facilities, water facilities, and
35 storm water drainage facilities, will be provided to the annexed
36 territory within three (3) years after the effective date of the
37 annexation in the same manner as those services are provided to
38 areas within the corporate boundaries, regardless of similar
39 topography, patterns of land use, and population density, and in
40 a manner consistent with federal, state, and local laws,
41 procedures, and planning criteria.
42 (6) This subdivision applies to a fiscal plan prepared after June
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1 30, 2015. The estimated effect of the proposed annexation on
2 taxpayers in each of the political subdivisions to which the
3 proposed annexation applies, including the expected tax rates, tax
4 levies, expenditure levels, service levels, and annual debt service
5 payments in those political subdivisions for four (4) years after
6 the effective date of the annexation.
7 (7) This subdivision applies to a fiscal plan prepared after June
8 30, 2015. The estimated effect the proposed annexation will have
9 on municipal finances, specifically how municipal tax revenues
10 will be affected by the annexation for four (4) years after the
11 effective date of the annexation.
12 (8) This subdivision applies to a fiscal plan prepared after June
13 30, 2015. Any estimated effects on political subdivisions in the
14 county that are not part of the annexation and on taxpayers
15 located in those political subdivisions for four (4) years after the
16 effective date of the annexation.
17 (9) This subdivision applies to a fiscal plan prepared after June
18 30, 2015. A list of all parcels of property in the annexation
19 territory and the following information regarding each parcel:
20 (A) The name of the owner of the parcel.
21 (B) The parcel identification number.
22 (C) The most recent assessed value of the parcel.
23 (D) The existence of a known waiver of the right to
24 remonstrate on the parcel. This clause applies only to a fiscal
25 plan prepared after June 30, 2016.
26 (e) At the hearing under section 12 of this chapter, the court shall do
27 the following:
28 (1) Consider evidence on the conditions listed in subdivision (2).
29 (2) Order a proposed annexation not to take place if the court
30 finds that all of the following conditions that are applicable to the
31 annexation exist in the territory proposed to be annexed:
32 (A) This clause applies only to an annexation for which an
33 annexation ordinance was adopted before July 1, 2015. The
34 following services are adequately furnished by a provider
35 other than the municipality seeking the annexation:
36 (i) Police and fire protection.
37 (ii) Street and road maintenance.
38 (B) The annexation will have a significant financial impact on
39 the residents or owners of land. The court may not consider:
40 (i) the personal finances; or
41 (ii) the business finances;
42 of a resident or owner of land. The personal and business
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1 financial records of the residents or owners of land, including
2 state, federal, and local income tax returns, may not be subject
3 to a subpoena or discovery proceedings.
4 (C) The annexation is not in the best interests of the owners of
5 land in the territory proposed to be annexed as set forth in
6 subsection (f).
7 (D) This clause applies only to an annexation for which an
8 annexation ordinance is adopted before July 1, 2015. One (1)
9 of the following opposes the annexation:
10 (i) At least sixty-five percent (65%) of the owners of land in
11 the territory proposed to be annexed.
12 (ii) The owners of more than seventy-five percent (75%) in
13 assessed valuation of the land in the territory proposed to be
14 annexed.
15 Evidence of opposition may be expressed by any owner of land
16 in the territory proposed to be annexed.
17 (E) This clause applies only to an annexation for which an
18 annexation ordinance is adopted after June 30, 2015. One (1)
19 of the following opposes the annexation:
20 (i) At least fifty-one percent (51%) of the owners of land in
21 the territory proposed to be annexed.
22 (ii) The owners of more than sixty percent (60%) in assessed
23 valuation of the land in the territory proposed to be annexed.
24 The remonstrance petitions filed with the court under section
25 11 of this chapter are evidence of the number of owners of
26 land that oppose the annexation, minus any written revocations
27 of remonstrances that are filed with the court under section 11
28 of this chapter.
29 (F) This clause applies only to an annexation for which an
30 annexation ordinance is adopted before July 1, 2015. This
31 clause applies only to an annexation in which eighty percent
32 (80%) of the boundary of the territory proposed to be annexed
33 is contiguous to the municipality and the territory consists of
34 not more than one hundred (100) parcels. At least seventy-five
35 percent (75%) of the owners of land in the territory proposed
36 to be annexed oppose the annexation as determined under
37 section 11(b) of this chapter.
38 (f) The municipality under subsection (e)(2)(C) bears the burden of
39 proving that the annexation is in the best interests of the owners of land
40 in the territory proposed to be annexed. In determining this issue, the
41 court may consider whether the municipality has extended sewer or
42 water services to the entire territory to be annexed:
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1 (1) within the three (3) years preceding the date of the
2 introduction of the annexation ordinance; or
3 (2) under a contract in lieu of annexation entered into under
4 IC 36-4-3-21.
5 The court may not consider the provision of water services as a result
6 of an order by the Indiana utility regulatory commission to constitute
7 the provision of water services to the territory to be annexed.
8 (g) The most recent:
9 (1) federal decennial census;
10 (2) federal special census;
11 (3) special tabulation; or
12 (4) corrected population count;
13 shall be used as evidence of resident population density for purposes
14 of subsection (b)(2)(A), but this evidence may be rebutted by other
15 evidence of population density.
16 (h) A municipality that prepares a fiscal plan after June 30, 2015,
17 must comply with this subsection. A municipality may not amend the
18 fiscal plan after the date that a remonstrance is filed with the court
19 under section 11 of this chapter, unless amendment of the fiscal plan
20 is consented to by at least sixty-five percent (65%) of the persons who
21 signed the remonstrance petition.
22 (i) The municipality must submit proof that the municipality has
23 complied with:
24 (1) the outreach program requirements and notice requirements
25 of section 1.7 of this chapter; and
26 (2) the requirements of section 11.1 of this chapter.
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