*HB1561.1*
February 17, 2025
HOUSE BILL No. 1561
_____
DIGEST OF HB 1561 (Updated February 17, 2025 7:07 pm - DI 134)
Citations Affected: IC 6-1.1; IC 36-7; IC 36-7.5; noncode.
Synopsis: Tax increment financing. Provides that a redevelopment
commission may use money from certain funds for the purpose of
paying more toward debt service obligations, in order to retire debt
service earlier, regardless of whether that use is listed in the
redevelopment commission's annual spending plan. Provides that a
redevelopment commission making accelerated debt payments may
retain the assessed value associated with the original debt service
schedule. Provides that early debt retirement applies only if the early
defeasance of debt is allowed according to the bond issuance
documents. Provides that allocated property tax proceeds that are
otherwise authorized to be expended for purposes related to a
redevelopment project that is located outside the boundaries of the
allocation area may be expended for those purposes only if the
redevelopment commission immediately at the conclusion of a public
hearing adopts a declaratory resolution, and the applicable legislative
body votes to approve the declaratory resolution that finds that it has
been clearly demonstrated that the expenditure: (1) will directly benefit
the allocation area; or (2) will result in the creation or retention of jobs
in the private sector and provide an estimate of how many jobs will be
created or retained over a specified time period. Provides that the
expenditure allowance does not apply to any transfer of property tax
proceeds to a school corporation, an accredited or nonaccredited public
or private school, or a charter school. Prohibits a redevelopment
commission from adopting an amendment to a declaratory resolution
(Continued next page)
Effective: Upon passage; January 1, 2025 (retroactive); July 1, 2025;
July 1, 2026.
Clere, Dant Chesser, Judy, Pryor
January 21, 2025, read first time and referred to Committee on Ways and Means.
February 17, 2025, amended, reported — Do Pass.
HB 1561—LS 7746/DI 134 Digest Continued
that contains an allocation area provision that extends the expiration
date of the allocation area provision. Provides that after the expiration
of a previous allocation area provision, a redevelopment commission
may adopt a declaratory resolution, or an amendment to a declaratory
resolution, that contains a new allocation area provision with a new
expiration date, and for which the county auditor in which the unit is
located shall compute the base assessed value for the allocation area
using the assessment date immediately preceding the effective date of
the new allocation provision of the declaratory resolution or
amendment. Allows a redevelopment commission to, pursuant to the
approval of the local legislative body, create an account for a specific
infrastructure purpose. Requires a redevelopment commission to
provide to the unit's executive and fiscal body an analysis of revenues
and expenditures on a per allocation basis and correlate the analysis
with the required spending plan. Provides that in jurisdictions where a
redevelopment commission has not returned any amount of assessed
value in the preceding three years, the redevelopment commission must
identify relief measures that could be implemented to alleviate taxpayer
burdens. Exempts jurisdictions where the excess assessed value
determined by a redevelopment commission is expected to generate
less than 200% of the amount of allocated tax proceeds necessary to
make, when due, principal and interest payments on certain bonds plus
the amount for certain other purposes. Requires a redevelopment
commission to report its findings in its annual report. Requires a
redevelopment commission to include an invitation to overlapping
taxing units to participate in the hearing regarding the redevelopment
project. Requires the redevelopment commission to include a record of
overlapping taxing unit attendance in its annual report to the
department of local government finance. Provides that the adoption of
a declaratory resolution and subsequent legislative body approval are
not required if the expenditures for purposes related to a redevelopment
project that is located outside the boundaries of the allocation area are
for: (1) infrastructure; (2) utilities; (3) drainage; or (4) environmental
remediation. Enumerates permissible infrastructure maintenance
expenditures. Provides that a redevelopment commission may use its
discretion, where excess assessed value amounts are not already
explicitly set aside for use within the current calendar year for a
purpose under a current development plan, to allocate excess assessed
value amounts to the respective taxing units rather than reserving those
excess assessed value amounts for future or indefinite purposes.
Provides that, with regard to the prohibition of a redevelopment
commission adopting an amendment to a declaratory judgment that
contains an allocation area provision that extends the expiration date
of the allocation area provision, a redevelopment commission is not
prevented from removing parcels from an existing allocation area
before its expiration date or adding parcels to a new allocation area.
HB 1561—LS 7746/DI 134HB 1561—LS 7746/DI 134 February 17, 2025
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.
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 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1561
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 6-1.1-21.2-8, AS AMENDED BY P.L.236-2023,
2 SECTION 40, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 8. As used in this chapter, "special fund" means:
4 (1) the special funds referred to in IC 6-1.1-39-5;
5 (2) the special funds referred to in IC 8-22-3.5-9(e);
6 (3) the allocation fund referred to in IC 36-7-14-39(b)(4);
7 IC 36-7-14-39(b)(3);
8 (4) the allocation fund referred to in IC 36-7-14.5-12.5(d);
9 (5) the special fund referred to in IC 36-7-15.1-26(b)(3); or
10 (6) the special fund referred to in IC 36-7-15.1-53(b)(3).
11 (7) the allocation fund referred to in IC 36-7-30-25(b)(3); or
12 (8) the allocation fund referred to in IC 36-7-30.5-30(b)(3).
13 SECTION 2. IC 36-7-14-12.7, AS ADDED BY P.L.236-2023,
14 SECTION 172, IS AMENDED TO READ AS FOLLOWS
15 [EFFECTIVE JULY 1, 2025]: Sec. 12.7. (a) Not later than December
HB 1561—LS 7746/DI 134 2
1 September 1 each year, the redevelopment commissioners shall file
2 with the department of local government finance and with the unit's
3 executive and fiscal body a report setting out a spending plan for the
4 next calendar year describing planned expenditures. The spending plan
5 must be filed in the manner prescribed by the department of local
6 government finance.
7 (b) Except as provided in subsection (c), a redevelopment
8 commission may use money from the redevelopment commission's
9 allocation fund described in section 39(b)(4) 39(b)(3) of this chapter
10 and any other fund maintained by the redevelopment commission only
11 for the purposes provided in the annual spending plan described in
12 subsection (a).
13 (c) A redevelopment commission may use money from funds
14 described in subsection (b) for the purpose of paying more toward
15 debt service obligations, in order to retire debt service earlier,
16 regardless of whether that use is listed in the annual spending plan
17 described in subsection (a). A redevelopment commission making
18 accelerated debt payments under this subsection may retain the
19 assessed value associated with the original debt service schedule.
20 (d) Early debt retirement described in subsection (c) applies
21 only if the early defeasance of debt is allowed according to the
22 bond issuance documents.
23 (c) (e) The department of local government finance shall, before
24 February 1, 2025, and before February 1 of each year thereafter, submit
25 a report of the redevelopment commissions that failed to submit the
26 spending plan required under subsection (a) to the legislative services
27 agency for distribution to the members of the legislative council. The
28 report must be in an electronic format under IC 5-14-6.
29 SECTION 3. IC 36-7-14-13, AS AMENDED BY P.L.236-2023,
30 SECTION 173, IS AMENDED TO READ AS FOLLOWS
31 [EFFECTIVE JULY 1, 2026]: Sec. 13. (a) Not later than April 15 of
32 each year, the redevelopment commissioners or their designees shall:
33 (1) file with the unit's executive and fiscal body a report setting
34 out their activities during the preceding calendar year;
35 (2) The redevelopment commissioners or their designees shall
36 also present the report to the unit's fiscal body at a public meeting;
37 and
38 (3) provide an analysis of revenues and expenditures on a per
39 allocation area basis and correlate that analysis with the
40 required spending plan under section 12.7 of this chapter.
41 (b) The report of the commissioners of a municipal redevelopment
42 commission must show the names of the then qualified and acting
HB 1561—LS 7746/DI 134 3
1 commissioners, the names of the officers of that body, the number of
2 regular employees and their fixed salaries or compensation, the amount
3 of the expenditures made during the preceding year and their general
4 purpose, an accounting of the tax increment revenues expended by any
5 entity receiving the tax increment revenues as a grant or loan from the
6 commission, the amount of funds on hand at the close of the calendar
7 year, and other information necessary to disclose the activities of the
8 commissioners and the results obtained.
9 (c) The report of the commissioners of a county redevelopment
10 commission must show all the information required by subsection (b),
11 plus the names of any commissioners appointed to or removed from
12 office during the preceding calendar year.
13 (d) A copy of each report filed under this section must be submitted
14 to the department of local government finance in an electronic format.
15 (e) The report required under subsection (a) must also include the
16 following information set forth for each tax increment financing district
17 regarding the previous year:
18 (1) Revenues received.
19 (2) Expenses paid.
20 (3) Fund balances.
21 (4) The amount and maturity date for all outstanding obligations.
22 (5) The amount paid on outstanding obligations.
23 (6) A list of all the parcels and the depreciable personal property
24 of any designated taxpayer included in each tax increment
25 financing district allocation area and the base assessed value and
26 incremental assessed value for each parcel and the depreciable
27 personal property of any designated taxpayer in the list.
28 (7) To the extent that the following information has not previously
29 been provided to the department of local government finance:
30 (A) The year in which the tax increment financing district was
31 established.
32 (B) The section of the Indiana Code under which the tax
33 increment financing district was established.
34 (C) Whether the tax increment financing district is part of an
35 area needing redevelopment, an economic development area,
36 a redevelopment project area, or an urban renewal project
37 area.
38 (D) If applicable, the year in which the boundaries of the tax
39 increment financing district were changed and a description of
40 those changes.
41 (E) The date on which the tax increment financing district will
42 expire.
HB 1561—LS 7746/DI 134 4
1 (F) A copy of each resolution adopted by the redevelopment
2 commission that establishes or alters the tax increment
3 financing district.
4 (8) Amounts distributed to other units, if applicable.
5 (9) Only in the case of an allocation area established for a
6 residential housing development program, the number of houses
7 completed under the residential housing development program
8 and the average price of the houses sold in the allocation area.
9 (f) A redevelopment commission and a department of
10 redevelopment are subject to the same laws, rules, and ordinances of
11 a general nature that apply to all other commissions or departments of
12 the unit.
13 (g) This subsection applies only to calendar years beginning
14 after December 31, 2026. In jurisdictions where a redevelopment
15 commission has not returned any amount of assessed value in the
16 preceding three (3) years, the redevelopment commission shall
17 identify measures that are feasible for implementation in the
18 following year to prioritize reducing tax rates and alleviating
19 circuit breaker reductions. The requirement under this subsection
20 does not apply to jurisdictions where the excess assessed value
21 determined by a commission is expected to generate less than two
22 hundred percent (200%) of the amount of allocated tax proceeds
23 necessary to make, when due, principal and interest payments on
24 certain bonds plus the amount for certain other purposes. A
25 redevelopment commission shall report its findings under this
26 subsection in the annual report required under this section.
27 (h) For a tax increment financing allocation area established on
28 or after July 1, 2026, if a proposed redevelopment project area is
29 not taxable at the time of the allocation area being established, any
30 property taxes that would be paid on undeveloped land shall be
31 included in the base assessed value for the purposes of determining
32 property tax levy distributions to the appropriate local units.
33 SECTION 4. IC 36-7-14-13.5 IS ADDED TO THE INDIANA
34 CODE AS A NEW SECTION TO READ AS FOLLOWS
35 [EFFECTIVE JULY 1, 2026]: Sec. 13.5. Any necessary documents
36 required to be uploaded to the department of local government
37 finance or the transparency web portal must be submitted on or
38 before July 1, 2026, for an document required to be uploaded after
39 January 1, 2025.
40 SECTION 5. IC 36-7-14-15.5, AS AMENDED BY P.L.236-2023,
41 SECTION 174, IS AMENDED TO READ AS FOLLOWS
42 [EFFECTIVE JULY 1, 2026]: Sec. 15.5. (a) This section applies to a
HB 1561—LS 7746/DI 134 5
1 county having a population of more than two hundred fifty thousand
2 (250,000) and less than three hundred thousand (300,000).
3 (b) In adopting a declaratory resolution under section 15 of this
4 chapter, a redevelopment commission may include a provision stating
5 that the redevelopment project area is considered to include one (1) or
6 more additional areas outside the boundaries of the redevelopment
7 project area if the redevelopment commission makes the following
8 findings and the requirements of subsection (c) are met:
9 (1) One (1) or more taxpayers presently located within the
10 boundaries of the redevelopment project area are expected within
11 one (1) year to relocate all or part of their operations outside the
12 boundaries of the redevelopment project area and have expressed
13 an interest in relocating all or part of their operations within the
14 boundaries of an additional area.
15 (2) The relocation described in subdivision (1) will contribute to
16 the continuation of the conditions described in IC 36-7-1-3 in the
17 redevelopment project area.
18 (3) For purposes of this section, it will be of public utility and
19 benefit to include the additional areas as part of the
20 redevelopment project area.
21 (c) Each additional area must be designated by the redevelopment
22 commission as a redevelopment project area or an economic
23 development area under this chapter.
24 (d) Notwithstanding section 3 of this chapter, the additional areas
25 shall be considered to be a part of the redevelopment special taxing
26 district under the jurisdiction of the redevelopment commission. Any
27 excess property taxes that the commission has determined may be paid
28 to taxing units under section 39(b)(5) 39(b)(4) of this chapter shall be
29 paid to the taxing units from which the excess property taxes were
30 derived. All powers of the redevelopment commission authorized under
31 this chapter may be exercised by the redevelopment commission in
32 additional areas under its jurisdiction.
33 (e) The declaratory resolution must include a statement of the
34 general boundaries of each additional area. However, it is sufficient to
35 describe those boundaries by location in relation to public ways,
36 streams, or otherwise, as determined by the commissioners.
37 (f) The declaratory resolution may include a provision with respect
38 to the allocation and distribution of property taxes with respect to one
39 (1) or more of the additional areas in the manner provided in section 39
40 of this chapter. If the redevelopment commission includes such a
41 provision in the resolution, allocation areas in the redevelopment
42 project area and in the additional areas considered to be part of the
HB 1561—LS 7746/DI 134 6
1 redevelopment project area shall be considered a single allocation area
2 for purposes of this chapter.
3 (g) The additional areas must be located within the same county as
4 the redevelopment project area but are not otherwise required to be
5 within the jurisdiction of the redevelopment commission, if the
6 redevelopment commission obtains the consent by ordinance of:
7 (1) the county legislative body, for each additional area located
8 within the unincorporated part of the county; or
9 (2) the legislative body of the city or town affected, for each
10 additional area located within a city or town.
11 In granting its consent, the legislative body shall approve the plan of
12 development or redevelopment relating to the additional area.
13 (h) A declaratory resolution previously adopted may be amended to
14 include a provision to include additional areas as set forth in this
15 section and an allocation provision under section 39 of this chapter
16 with respect to one (1) or more of the additional areas in accordance
17 with sections 15, 16, and 17 of this chapter.
18 (i) The redevelopment commission may amend the allocation
19 provision of a declaratory resolution in accordance with sections 15,
20 16, and 17 of this chapter to change the assessment date that
21 determines the base assessed value of property in the allocation area to
22 any assessment date following the effective date of the allocation
23 provision of the declaratory resolution. Such a change may relate to the
24 assessment date that determines the base assessed value of that portion
25 of the allocation area that is located in the redevelopment project area
26 alone, that portion of the allocation area that is located in an additional
27 area alone, or the entire allocation area.
28 SECTION 6. IC 36-7-14-17, AS AMENDED BY P.L.257-2019,
29 SECTION 115, IS AMENDED TO READ AS FOLLOWS
30 [EFFECTIVE JULY 1, 2026]: Sec. 17. (a) After receipt of the written
31 order of approval of the plan commission and approval of the
32 municipal legislative body or county executive, the redevelopment
33 commission shall publish notice of the adoption and substance of the
34 resolution in accordance with IC 5-3-1. The notice must:
35 (1) state that maps and plats have been prepared and can be
36 inspected at the office of the department; and
37 (2) name a date when the commission will:
38 (A) receive and hear remonstrances and objections from
39 persons interested in or affected by the proceedings pertaining
40 to the proposed project or other actions to be taken under the
41 resolution; and
42 (B) determine the public utility and benefit of the proposed
HB 1561—LS 7746/DI 134 7
1 project or other actions; and
2 (3) include an invitation to overlapping taxing units to attend
3 and participate in the hearing. The hearing shall include an
4 illustration of the projected effect on circuit breaker
5 reductions of the release of ten percent (10%), twenty percent
6 (20%), and thirty percent (30%), respectively, of assessed
7 value from the allocation area. The completion of the
8 foregoing illustration may be paid from tax increment
9 financing funds. The hearing shall include an opportunity for
10 participant discussion and public comment. The commission
11 shall include a record of overlapping taxing unit attendance
12 in its annual report to the department of local government
13 finance.
14 All persons affected in any manner by the hearing, including all
15 taxpayers of the special taxing district, shall be considered notified of
16 the pendency of the hearing and of subsequent acts, hearings,
17 adjournments, and orders of the commission by the notice given under
18 this section.
19 (b) A copy of the notice of the hearing on the resolution shall be
20 filed in the office of the unit's plan commission, board of zoning
21 appeals, works board, park board, and building commissioner, and any
22 other departments, bodies, or officers of the unit having to do with unit
23 planning, variances from zoning ordinances, land use, or the issuance
24 of building permits. These agencies and officers shall take notice of the
25 pendency of the hearing and, until the commission confirms, modifies
26 and confirms, or rescinds the resolution, or the confirmation of the
27 resolution is set aside on appeal, may not:
28 (1) authorize any construction on property or sewers in the area
29 described in the resolution, including substantial modifications,
30 rebuilding, conversion, enlargement, additions, and major
31 structural improvements; or
32 (2) take any action regarding the zoning or rezoning of property,
33 or the opening, closing, or improvement of streets, alleys, or
34 boulevards in the area described in the resolution.
35 This subsection does not prohibit the granting of permits for ordinary
36 maintenance or minor remodeling, or for changes necessary for the
37 continued occupancy of buildings in the area.
38 (c) If the resolution to be considered at the hearing includes a
39 provision establishing or amending an allocation provision under
40 section 39 of this chapter, the redevelopment commission shall file the
41 following information with each taxing unit that is wholly or partly
42 located within the allocation area:
HB 1561—LS 7746/DI 134 8
1 (1) A copy of the notice required by subsection (a).
2 (2) A statement disclosing the impact of the allocation area,
3 including the following:
4 (A) The estimated economic benefits and costs incurred by the
5 allocation area, as measured by increased employment and
6 anticipated growth of real property assessed values.
7 (B) The anticipated impact on tax revenues of each taxing unit.
8 The redevelopment commission shall file the information required by
9 this subsection with the officers of the taxing unit who are authorized
10 to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 at least ten
11 (10) days before the date of the hearing.
12 (d) At the hearing, which may be adjourned from time to time, the
13 redevelopment commission shall hear all persons interested in the
14 proceedings and shall consider all written remonstrances and
15 objections that have been filed. After considering the evidence
16 presented, the commission shall take final action determining the
17 public utility and benefit of the proposed project or other actions to be
18 taken under the resolution, and confirming, modifying and confirming,
19 or rescinding the resolution. The final action taken by the commission
20 shall be recorded and is final and conclusive, except that an appeal may
21 be taken in the manner prescribed by section 18 of this chapter.
22 (e) If the redevelopment commission adopts the resolution and the
23 resolution includes a provision establishing or amending an allocation
24 provision under section 39 of this chapter, the redevelopment
25 commission shall file a copy of the resolution with both the auditor of
26 the county in which the unit is located and the department of local
27 government finance, together with any supporting documents that are
28 relevant to the computation of assessed values in the allocation area,
29 within thirty (30) days after the date on which the redevelopment
30 commission takes final action on the resolution.
31 SECTION 7. IC 36-7-14-25.1, AS AMENDED BY P.L.236-2023,
32 SECTION 176, IS AMENDED TO READ AS FOLLOWS
33 [EFFECTIVE JULY 1, 2026]: Sec. 25.1. (a) In addition to other
34 methods of raising money for property acquisition or redevelopment in
35 a redevelopment project area, and in anticipation of the special tax to
36 be levied under section 27 of this chapter, the taxes allocated under
37 section 39 of this chapter, or other revenues of the district, or any
38 combination of these sources, the redevelopment commission may, by
39 bond resolution and subject to subsections (c) and (p), issue the bonds
40 of the special taxing district in the name of the unit. The amount of the
41 bonds may not exceed the total, as estimated by the commission, of all
42 expenses reasonably incurred in connection with the acquisition and
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1 redevelopment of the property, including:
2 (1) the total cost of all land, rights-of-way, and other property to
3 be acquired and redeveloped;
4 (2) all reasonable and necessary architectural, engineering, legal,
5 financing, accounting, advertising, bond discount, and
6 supervisory expenses related to the acquisition and redevelopment
7 of the property or the issuance of bonds;
8 (3) capitalized interest permitted by this chapter and a debt
9 service reserve for the bonds to the extent the redevelopment
10 commission determines that a reserve is reasonably required; and
11 (4) expenses that the redevelopment commission is required or
12 permitted to pay under IC 8-23-17.
13 (b) If the redevelopment commission plans to acquire different
14 parcels of land or let different contracts for redevelopment work at
15 approximately the same time, whether under one (1) or more
16 resolutions, the commission may provide for the total cost in one (1)
17 issue of bonds.
18 (c) The legislative body of the unit must adopt a resolution that
19 specifies the public purpose of the bond, the use of the bond proceeds,
20 the maximum principal amount of the bond, the term of the bond, and
21 the maximum interest rate or rates of the bond, any provision for
22 redemption before maturity, and any provision for the payment of
23 capitalized interest. The bonds must be dated as set forth in the bond
24 resolution and negotiable, subject to the requirements of the bond
25 resolution for registering the bonds. The resolution authorizing the
26 bonds must state:
27 (1) the denominations of the bonds;
28 (2) the place or places at which the bonds are payable; and
29 (3) the term of the bonds, which may not exceed:
30 (A) fifty (50) years, for bonds issued before July 1, 2008;
31 (B) thirty (30) years, for bonds issued after June 30, 2008, to
32 finance:
33 (i) an integrated coal gasification powerplant (as defined in
34 IC 6-3.1-29-6);
35 (ii) a part of an integrated coal gasification powerplant (as
36 defined in IC 6-3.1-29-6); or
37 (iii) property used in the operation or maintenance of an
38 integrated coal gasification powerplant (as defined in
39 IC 6-3.1-29-6);
40 that received a certificate of public convenience and necessity
41 from the Indiana utility regulatory commission under
42 IC 8-1-8.5 et seq. before July 1, 2008;
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1 (C) thirty-five (35) years, for bonds issued after June 30, 2019,
2 to finance a project that is located in a redevelopment project
3 area, an economic development area, or an urban renewal
4 project area and that includes, as part of the project, the use
5 and repurposing of two (2) or more buildings and structures
6 that are:
7 (i) at least seventy-five (75) years old; and
8 (ii) located at a site at which manufacturing previously
9 occurred over a period of at least seventy-five (75) years; or
10 (D) twenty-five (25) years, for bonds issued after June 30,
11 2008, that are not described in clause (B) or (C).
12 The bond resolution may also state that the bonds are redeemable
13 before maturity with or without a premium, as determined by the
14 redevelopment commission.
15 (d) The redevelopment commission shall certify a copy of the
16 resolution authorizing the bonds to the municipal or county fiscal
17 officer, who shall then prepare the bonds, subject to subsections (c) and
18 (p). The seal of the unit must be impressed on the bonds, or a facsimile
19 of the seal must be printed on the bonds.
20 (e) The bonds must be executed by the appropriate officer of the
21 unit and attested by the municipal or county fiscal officer.
22 (f) The bonds are exempt from taxation for all purposes.
23 (g) The municipal or county fiscal officer shall give notice of the
24 sale of the bonds by publication in accordance with IC 5-3-1. The
25 municipal fiscal officer, or county fiscal officer or executive, shall sell
26 the bonds to the highest bidder, but may not sell them for less than
27 ninety-seven percent (97%) of their par value. However, bonds payable
28 solely or in part from tax proceeds allocated under section 39(b)(4)
29 39(b)(3) of this chapter, or other revenues of the district may be sold
30 at a private negotiated sale.
31 (h) Except as provided in subsection (i), a redevelopment
32 commission may not issue the bonds when the total issue, including
33 bonds already issued and to be issued, exceeds two percent (2%) of the
34 adjusted value of the taxable property in the special taxing district, as
35 determined under IC 36-1-15.
36 (i) The bonds are not a corporate obligation of the unit but are an
37 indebtedness of the taxing district. The bonds and interest are payable,
38 as set forth in the bond resolution of the redevelopment commission:
39 (1) from a special tax levied upon all of the property in the taxing
40 district, as provided by section 27 of this chapter;
41 (2) from the tax proceeds allocated under section 39(b)(4)
42 39(b)(3) of this chapter;
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1 (3) from other revenues available to the redevelopment
2 commission; or
3 (4) from a combination of the methods stated in subdivisions (1)
4 through (3).
5 If the bonds are payable solely from the tax proceeds allocated under
6 section 39(b)(4) 39(b)(3) of this chapter, other revenues of the
7 redevelopment commission, or any combination of these sources, they
8 may be issued in any amount not to exceed the maximum amount
9 approved by the legislative body in the resolution described in
10 subsection (c).
11 (j) Proceeds from the sale of bonds may be used to pay the cost of
12 interest on the bonds for a period not to exceed five (5) years from the
13 date of issuance.
14 (k) All laws relating to the giving of notice of the issuance of bonds,
15 the giving of notice of a hearing on the appropriation of the proceeds
16 of the bonds, the right of taxpayers to appear and be heard on the
17 proposed appropriation, and the approval of the appropriation by the
18 department of local government finance apply to all bonds issued under
19 this chapter that are payable from the special benefits tax levied
20 pursuant to section 27 of this chapter or from taxes allocated under
21 section 39 of this chapter.
22 (l) All laws relating to:
23 (1) the filing of petitions requesting the issuance of bonds; and
24 (2) the right of:
25 (A) taxpayers and voters to remonstrate against the issuance of
26 bonds in the case of a proposed bond issue described by
27 IC 6-1.1-20-3.1(a); or
28 (B) voters to vote on the issuance of bonds in the case of a
29 proposed bond issue described by IC 6-1.1-20-3.5(a);
30 apply to bonds issued under this chapter except for bonds payable
31 solely from tax proceeds allocated under section 39(b)(4) 39(b)(3) of
32 this chapter, other revenues of the redevelopment commission, or any
33 combination of these sources.
34 (m) If a debt service reserve is created from the proceeds of bonds,
35 the debt service reserve may be used to pay principal and interest on
36 the bonds as provided in the bond resolution.
37 (n) Any amount remaining in the debt service reserve after all of the
38 bonds of the issue for which the debt service reserve was established
39 have matured shall be:
40 (1) deposited in the allocation fund established under section
41 39(b)(4) 39(b)(3) of this chapter; and
42 (2) to the extent permitted by law, transferred to the county or
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1 municipality that established the department of redevelopment for
2 use in reducing the county's or municipality's property tax levies
3 for debt service.
4 (o) If bonds are issued under this chapter that are payable solely or
5 in part from revenues to the redevelopment commission from a project
6 or projects, the redevelopment commission may adopt a resolution or
7 trust indenture or enter into covenants as is customary in the issuance
8 of revenue bonds. The resolution or trust indenture may pledge or
9 assign the revenues from the project or projects, but may not convey or
10 mortgage any project or parts of a project. The resolution or trust
11 indenture may also contain any provisions for protecting and enforcing
12 the rights and remedies of the bond owners as may be reasonable and
13 proper and not in violation of law, including covenants setting forth the
14 duties of the redevelopment commission. The redevelopment
15 commission may establish fees and charges for the use of any project
16 and covenant with the owners of any bonds to set those fees and
17 charges at a rate sufficient to protect the interest of the owners of the
18 bonds. Any revenue bonds issued by the redevelopment commission
19 that are payable solely from revenues of the commission shall contain
20 a statement to that effect in the form of bond.
21 (p) If the total principal amount of bonds authorized by a resolution
22 of the redevelopment commission adopted before July 1, 2008, is equal
23 to or greater than three million dollars ($3,000,000), the bonds may not
24 be issued without the approval, by resolution, of the legislative body of
25 the unit. Bonds authorized in any principal amount by a resolution of
26 the redevelopment commission adopted after June 30, 2008, may not
27 be issued without the approval of the legislative body of the unit.
28 SECTION 8. IC 36-7-14-26, AS AMENDED BY P.L.236-2023,
29 SECTION 177, IS AMENDED TO READ AS FOLLOWS
30 [EFFECTIVE JULY 1, 2026]: Sec. 26. (a) All proceeds from the sale
31 of bonds under section 25.1 of this chapter shall be kept as a separate
32 and specific fund to pay the expenses incurred in connection with the
33 acquisition and redevelopment of property. The fund shall be known as
34 the redevelopment district capital fund. Any surplus of funds remaining
35 after all expenses are paid shall be paid into and become a part of the
36 redevelopment district bond fund established under section 27 of this
37 chapter.
38 (b) All gifts or donations that are given or paid to the department of
39 redevelopment or to the unit for redevelopment purposes shall be
40 promptly deposited to the credit of the redevelopment district capital
41 fund. The redevelopment commission may use these gifts and
42 donations for the purposes of this chapter.
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1 (c) Before the eleventh day of each calendar month the fiscal officer
2 shall notify the redevelopment commission and the officers of the unit
3 who have duties in respect to the funds and accounts of the unit of the
4 amount standing to the credit of the redevelopment district capital fund
5 at the close of business on the last day of the preceding month.
6 (d) A redevelopment commission shall deposit in the allocation fund
7 established under section 39(b)(4) 39(b)(3) of this chapter of an
8 allocation area the proceeds from the sale or leasing of property in the
9 area under section 22 of this chapter if:
10 (1) there are outstanding bonds that were issued to pay costs of
11 redevelopment in the allocation area; and
12 (2) the bonds are payable solely or in part from tax proceeds
13 allocated under section 39(b)(4) 39(b)(3) of this chapter.
14 SECTION 9. IC 36-7-14-27, AS AMENDED BY P.L.236-2023,
15 SECTION 178, IS AMENDED TO READ AS FOLLOWS
16 [EFFECTIVE JULY 1, 2026]: Sec. 27. (a) This section applies only to:
17 (1) bonds that are issued under section 25.1 of this chapter; and
18 (2) leases entered into under section 25.2 of this chapter;
19 which are payable from a special tax levied upon all of the property in
20 the special taxing district. This section does not apply to bonds or
21 leases that are payable solely from tax proceeds allocated under section
22 39(b)(4) 39(b)(3) of this chapter, other revenues of the redevelopment
23 commission, or any combination of these sources.
24 (b) The redevelopment commission, with the prior approval of the
25 legislative body, shall levy each year a special tax on all of the property
26 of the redevelopment taxing district, in such a manner as to meet and
27 pay the principal of the bonds as they mature, together with all accruing
28 interest on the bonds or lease rental payments under section 25.2 of this
29 chapter. The commission shall cause the tax levied to be certified to the
30 proper officers as other tax levies are certified, and to the auditor of the
31 county in which the redevelopment district is located, before the
32 second day of October in each year. The tax shall be estimated and
33 entered on the tax duplicate by the county auditor and shall be collected
34 and enforced by the county treasurer in the same manner as other state
35 and county taxes are estimated, entered, collected, and enforced. The
36 amount of the tax levied to pay bonds or lease rentals payable from the
37 tax levied under this section shall be reduced by any amount available
38 in the allocation fund established under section 39(b)(4) 39(b)(3) of
39 this chapter or other revenues of the redevelopment commission to the
40 extent such revenues have been set aside in the redevelopment bond
41 fund.
42 (c) As the tax is collected, it shall be accumulated in a separate fund
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1 to be known as the redevelopment district bond fund and shall be
2 applied to the payment of the bonds as they mature and the interest on
3 the bonds as it accrues, or to make lease payments and to no other
4 purpose. All accumulations of the fund before their use for the payment
5 of bonds and interest or to make lease payments shall be deposited with
6 the depository or depositories for other public funds of the unit in
7 accordance with IC 5-13, unless they are invested under IC 5-13-9.
8 (d) If there are no outstanding bonds that are payable solely or in
9 part from tax proceeds allocated under section 39(b)(4) 39(b)(3) of this
10 chapter and that were issued to pay costs of redevelopment in an
11 allocation area that is located wholly or in part in the special taxing
12 district, then all proceeds from the sale or leasing of property in the
13 allocation area under section 22 of this chapter shall be paid into the
14 redevelopment district bond fund and become a part of that fund. In
15 arriving at the tax levy for any year, the redevelopment commission
16 shall take into account the amount of the proceeds deposited under this
17 subsection and remaining on hand.
18 (e) The tax levies provided for in this section are reviewable by
19 other bodies vested by law with the authority to ascertain that the levies
20 are sufficient to raise the amount that, with other amounts available, is
21 sufficient to meet the payments under the lease payable from the levy
22 of taxes.
23 SECTION 10. IC 36-7-14-29.6 IS ADDED TO THE INDIANA
24 CODE AS A NEW SECTION TO READ AS FOLLOWS
25 [EFFECTIVE UPON PASSAGE]: Sec. 29.6. (a) Except as provided
26 in subsections (b) and (c), property tax proceeds allocated under
27 this chapter that are otherwise authorized under this chapter to be
28 expended for purposes related to a redevelopment project that is
29 located outside the boundaries of the allocation area may be
30 expended for those purposes only if the redevelopment commission
31 immediately at the conclusion of the public hearing required under
32 section 17 of this chapter adopts a declaratory resolution, and the
33 applicable legislative body votes to approve the declaratory
34 resolution, that finds that it has been clearly demonstrated that the
35 expenditure:
36 (1) will directly benefit the allocation area; or
37 (2) will result in the creation or retention of jobs in the private
38 sector, and provides an estimate of how many jobs will be
39 created or retained over a specified time period.
40 (b) This section does not apply to any transfer of property tax
41 proceeds to a school corporation, an accredited or nonaccredited
42 public or private school, or a charter school, including a transfer
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1 of property tax proceeds for a program under IC 36-7-25-7.
2 (c) The adoption of a declaratory resolution and subsequent
3 legislative body approval described in subsection (a) are not
4 required if the expenditures for purposes related to a
5 redevelopment project that is located outside the boundaries of the
6 allocation area are for:
7 (1) infrastructure;
8 (2) utilities;
9 (3) drainage; or
10 (4) environmental remediation.
11 SECTION 11. IC 36-7-14-39, AS AMENDED BY P.L.136-2024,
12 SECTION 54, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
13 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 39. (a) As used in this
14 section:
15 "Allocation area" means that part of a redevelopment project area
16 to which an allocation provision of a declaratory resolution adopted
17 under section 15 of this chapter refers for purposes of distribution and
18 allocation of property taxes.
19 "Base assessed value" means, subject to subsection (j), the
20 following:
21 (1) If an allocation provision is adopted after June 30, 1995, in a
22 declaratory resolution or an amendment to a declaratory
23 resolution establishing an economic development area:
24 (A) the net assessed value of all the property as finally
25 determined for the assessment date immediately preceding the
26 effective date of the allocation provision of the declaratory
27 resolution, as adjusted under subsection (h); plus
28 (B) to the extent that it is not included in clause (A), the net
29 assessed value of property that is assessed as residential
30 property under the rules of the department of local government
31 finance, within the allocation area, as finally determined for
32 the current assessment date.
33 (2) If an allocation provision is adopted after June 30, 1997, in a
34 declaratory resolution or an amendment to a declaratory
35 resolution establishing a redevelopment project area:
36 (A) the net assessed value of all the property as finally
37 determined for the assessment date immediately preceding the
38 effective date of the allocation provision of the declaratory
39 resolution, as adjusted under subsection (h); plus
40 (B) to the extent that it is not included in clause (A), the net
41 assessed value of property that is assessed as residential
42 property under the rules of the department of local government
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1 finance, as finally determined for the current assessment date.
2 (3) If:
3 (A) an allocation provision adopted before June 30, 1995, in
4 a declaratory resolution or an amendment to a declaratory
5 resolution establishing a redevelopment project area expires
6 after June 30, 1997; and
7 (B) after June 30, 1997, a new allocation provision is included
8 in an amendment to the declaratory resolution;
9 the net assessed value of all the property as finally determined for
10 the assessment date immediately preceding the effective date of
11 the allocation provision adopted after June 30, 1997, as adjusted
12 under subsection (h).
13 (4) Except as provided in subdivision (5), for all other allocation
14 areas, the net assessed value of all the property as finally
15 determined for the assessment date immediately preceding the
16 effective date of the allocation provision of the declaratory
17 resolution, as adjusted under subsection (h).
18 (5) If an allocation area established in an economic development
19 area before July 1, 1995, is expanded after June 30, 1995, the
20 definition in subdivision (1) applies to the expanded part of the
21 area added after June 30, 1995.
22 (6) If an allocation area established in a redevelopment project
23 area before July 1, 1997, is expanded after June 30, 1997, the
24 definition in subdivision (2) applies to the expanded part of the
25 area added after June 30, 1997.
26 Except as provided in section 39.3 of this chapter, "property taxes"
27 means taxes imposed under IC 6-1.1 on real property. However, upon
28 approval by a resolution of the redevelopment commission adopted
29 before June 1, 1987, "property taxes" also includes taxes imposed
30 under IC 6-1.1 on depreciable personal property. If a redevelopment
31 commission adopted before June 1, 1987, a resolution to include within
32 the definition of property taxes, taxes imposed under IC 6-1.1 on
33 depreciable personal property that has a useful life in excess of eight
34 (8) years, the commission may by resolution determine the percentage
35 of taxes imposed under IC 6-1.1 on all depreciable personal property
36 that will be included within the definition of property taxes. However,
37 the percentage included must not exceed twenty-five percent (25%) of
38 the taxes imposed under IC 6-1.1 on all depreciable personal property.
39 (b) A declaratory resolution adopted under section 15 of this chapter
40 on or before the allocation deadline determined under subsection (i)
41 may include a provision with respect to the allocation and distribution
42 of property taxes for the purposes and in the manner provided in this
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1 section. A declaratory resolution previously adopted may include an
2 allocation provision by the amendment of that declaratory resolution on
3 or before the allocation deadline determined under subsection (i) in
4 accordance with the procedures required for its original adoption. A
5 declaratory resolution or amendment that establishes an allocation
6 provision must include a specific finding of fact, supported by
7 evidence, that the adoption of the allocation provision will result in
8 new property taxes in the area that would not have been generated but
9 for the adoption of the allocation provision. For an allocation area
10 established before July 1, 1995, the expiration date of any allocation
11 provisions for the allocation area is June 30, 2025, or the last date of
12 any obligations that are outstanding on July 1, 2015, whichever is later.
13 A declaratory resolution or an amendment that establishes an allocation
14 provision after June 30, 1995, must specify an expiration date for the
15 allocation provision. For an allocation area established before July 1,
16 2008, the expiration date may not be more than thirty (30) years after
17 the date on which the allocation provision is established. For an
18 allocation area established after June 30, 2008, the expiration date may
19 not be more than twenty-five (25) years after the date on which the first
20 obligation was incurred to pay principal and interest on bonds or lease
21 rentals on leases payable from tax increment revenues. However, with
22 respect to bonds or other obligations that were issued before July 1,
23 2008, if any of the bonds or other obligations that were scheduled when
24 issued to mature before the specified expiration date and that are
25 payable only from allocated tax proceeds with respect to the allocation
26 area remain outstanding as of the expiration date, the allocation
27 provision does not expire until all of the bonds or other obligations are
28 no longer outstanding. Notwithstanding any other law, in the case of an
29 allocation area that is established after June 30, 2019, and that is
30 located in a redevelopment project area described in section
31 25.1(c)(3)(C) of this chapter, an economic development area described
32 in section 25.1(c)(3)(C) of this chapter, or an urban renewal project
33 area described in section 25.1(c)(3)(C) of this chapter, the expiration
34 date of the allocation provision may not be more than thirty-five (35)
35 years after the date on which the allocation provision is established.
36 The allocation provision may apply to all or part of the redevelopment
37 project area. The allocation provision must require that any property
38 taxes subsequently levied by or for the benefit of any public body
39 entitled to a distribution of property taxes on taxable property in the
40 allocation area be allocated and distributed as follows:
41 (1) Except as otherwise provided in this section, the proceeds of
42 the taxes attributable to the lesser of:
HB 1561—LS 7746/DI 134 18
1 (A) the assessed value of the property for the assessment date
2 with respect to which the allocation and distribution is made;
3 or
4 (B) the base assessed value;
5 shall be allocated to and, when collected, paid into the funds of
6 the respective taxing units.
7 (2) This subdivision applies to a fire protection territory
8 established after December 31, 2022. If a unit becomes a
9 participating unit of a fire protection territory that is established
10 after a declaratory resolution is adopted under section 15 of this
11 chapter, the excess of the proceeds of the property taxes
12 attributable to an increase in the property tax rate for the
13 participating unit of a fire protection territory:
14 (A) except as otherwise provided by this subdivision, shall be
15 determined as follows:
16 STEP ONE: Divide the unit's tax rate for fire protection for
17 the year before the establishment of the fire protection
18 territory by the participating unit's tax rate as part of the fire
19 protection territory.
20 STEP TWO: Subtract the STEP ONE amount from one (1).
21 STEP THREE: Multiply the STEP TWO amount by the
22 allocated property tax attributable to the participating unit of
23 the fire protection territory; and
24 (B) to the extent not otherwise included in subdivisions (1)
25 and (3), the amount determined under STEP THREE of clause
26 (A) shall be allocated to and distributed in the form of an
27 allocated property tax revenue pass back to the participating
28 unit of the fire protection territory for the assessment date with
29 respect to which the allocation is made.
30 However, if the redevelopment commission determines that it is
31 unable to meet its debt service obligations with regards to the
32 allocation area without all or part of the allocated property tax
33 revenue pass back to the participating unit of a fire protection area
34 under this subdivision, then the allocated property tax revenue
35 pass back under this subdivision shall be reduced by the amount
36 necessary for the redevelopment commission to meet its debt
37 service obligations of the allocation area. The calculation under
38 this subdivision must be made by the redevelopment commission
39 in collaboration with the county auditor and the applicable fire
40 protection territory. Any calculation determined according to
41 clause (A) must be submitted to the department of local
42 government finance in the manner prescribed by the department
HB 1561—LS 7746/DI 134 19
1 of local government finance. The department of local government
2 finance shall verify the accuracy of each calculation.
3 (3) (2) The excess of the proceeds of the property taxes imposed
4 for the assessment date with respect to which the allocation and
5 distribution is made that are attributable to taxes imposed after
6 being approved by the voters in a referendum or local public
7 question conducted after April 30, 2010, not otherwise included
8 in subdivisions (1) and (2) subdivision (1) shall be allocated to
9 and, when collected, paid into the funds of the taxing unit for
10 which the referendum or local public question was conducted.
11 (4) (3) Except as otherwise provided in this section, property tax
12 proceeds in excess of those described in subdivisions (1), (2), and
13 (3) (1) and (2) shall be allocated to the redevelopment district
14 and, when collected, paid into an allocation fund for that
15 allocation area that may be used by the redevelopment district
16 only to do one (1) or more of the following:
17 (A) Pay the principal of and interest on any obligations
18 payable solely from allocated tax proceeds which are incurred
19 by the redevelopment district for the purpose of financing or
20 refinancing the redevelopment of that allocation area.
21 (B) Establish, augment, or restore the debt service reserve for
22 bonds payable solely or in part from allocated tax proceeds in
23 that allocation area.
24 (C) Pay the principal of and interest on bonds payable from
25 allocated tax proceeds in that allocation area and from the
26 special tax levied under section 27 of this chapter.
27 (D) Pay the principal of and interest on bonds issued by the
28 unit to pay for local public improvements that are physically
29 located in or physically connected to that allocation area.
30 (E) Pay premiums on the redemption before maturity of bonds
31 payable solely or in part from allocated tax proceeds in that
32 allocation area.
33 (F) Make payments on leases payable from allocated tax
34 proceeds in that allocation area under section 25.2 of this
35 chapter.
36 (G) Reimburse the unit for expenditures made by it for local
37 public improvements (which include buildings, parking
38 facilities, and other items described in section 25.1(a) of this
39 chapter) that are physically located in or physically connected
40 to that allocation area.
41 (H) Reimburse the unit for rentals paid by it for a building or
42 parking facility that is physically located in or physically
HB 1561—LS 7746/DI 134 20
1 connected to that allocation area under any lease entered into
2 under IC 36-1-10.
3 (I) For property taxes first due and payable before January 1,
4 2009, pay all or a part of a property tax replacement credit to
5 taxpayers in an allocation area as determined by the
6 redevelopment commission. This credit equals the amount
7 determined under the following STEPS for each taxpayer in a
8 taxing district (as defined in IC 6-1.1-1-20) that contains all or
9 part of the allocation area:
10 STEP ONE: Determine that part of the sum of the amounts
11 under IC 6-1.1-21-2(g)(1)(A), IC 6-1.1-21-2(g)(2),
12 IC 6-1.1-21-2(g)(3), IC 6-1.1-21-2(g)(4), and
13 IC 6-1.1-21-2(g)(5) (before their repeal) that is attributable to
14 the taxing district.
15 STEP TWO: Divide:
16 (i) that part of each county's eligible property tax
17 replacement amount (as defined in IC 6-1.1-21-2 (before its
18 repeal)) for that year as determined under IC 6-1.1-21-4
19 (before its repeal) that is attributable to the taxing district;
20 by
21 (ii) the STEP ONE sum.
22 STEP THREE: Multiply:
23 (i) the STEP TWO quotient; times
24 (ii) the total amount of the taxpayer's taxes (as defined in
25 IC 6-1.1-21-2 (before its repeal)) levied in the taxing district
26 that have been allocated during that year to an allocation
27 fund under this section.
28 If not all the taxpayers in an allocation area receive the credit
29 in full, each taxpayer in the allocation area is entitled to
30 receive the same proportion of the credit. A taxpayer may not
31 receive a credit under this section and a credit under section
32 39.5 of this chapter (before its repeal) in the same year.
33 (J) Pay expenses incurred by the redevelopment commission
34 for local public improvements that are in the allocation area or
35 serving the allocation area. Public improvements include
36 buildings, parking facilities, and other items described in
37 section 25.1(a) of this chapter.
38 (K) Reimburse public and private entities for expenses
39 incurred in training employees of industrial facilities that are
40 located:
41 (i) in the allocation area; and
42 (ii) on a parcel of real property that has been classified as
HB 1561—LS 7746/DI 134 21
1 industrial property under the rules of the department of local
2 government finance.
3 However, the total amount of money spent for this purpose in
4 any year may not exceed the total amount of money in the
5 allocation fund that is attributable to property taxes paid by the
6 industrial facilities described in this clause. The
7 reimbursements under this clause must be made within three
8 (3) years after the date on which the investments that are the
9 basis for the increment financing are made.
10 (L) Pay the costs of carrying out an eligible efficiency project
11 (as defined in IC 36-9-41-1.5) within the unit that established
12 the redevelopment commission. However, property tax
13 proceeds may be used under this clause to pay the costs of
14 carrying out an eligible efficiency project only if those
15 property tax proceeds exceed the amount necessary to do the
16 following:
17 (i) Make, when due, any payments required under clauses
18 (A) through (K), including any payments of principal and
19 interest on bonds and other obligations payable under this
20 subdivision, any payments of premiums under this
21 subdivision on the redemption before maturity of bonds, and
22 any payments on leases payable under this subdivision.
23 (ii) Make any reimbursements required under this
24 subdivision.
25 (iii) Pay any expenses required under this subdivision.
26 (iv) Establish, augment, or restore any debt service reserve
27 under this subdivision.
28 (M) Expend money and provide financial assistance as
29 authorized in section 12.2(a)(27) of this chapter.
30 (N) Expend revenues that are allocated for police and fire
31 services on both capital expenditures and operating expenses
32 as authorized in section 12.2(a)(28) of this chapter.
33 (O) Expend money for the maintenance of an
34 infrastructure project within a tax increment financing
35 district if the infrastructure project was originally funded
36 or supported by tax increment financing funds and if the
37 use of the funds is limited to the remaining life of the
38 project. Maintenance expenses eligible under this clause
39 include:
40 (i) road and sidewalk repair and upkeep;
41 (ii) street lighting and landscaping;
42 (iii) trail maintenance;
HB 1561—LS 7746/DI 134 22
1 (iv) trash collection;
2 (v) retaining wall stabilization;
3 (vi) parking facilities;
4 (vii) administrative expenses of the commission that
5 would not otherwise have been incurred but for the tax
6 increment financing project; and
7 (viii) other tax increment financing funded facilities.
8 This clause does not relieve an underlying taxing unit of its
9 maintenance obligations for infrastructure projects not
10 funded by tax increment financing or after the expiration
11 of the allocation area.
12 The allocation fund may not be used for operating expenses of the
13 commission.
14 (5) (4) Except as provided in subsection (g), before June 15 of
15 each year, the commission shall do the following: following shall
16 occur:
17 (A) Determine The commission shall determine the amount,
18 if any, by which the assessed value of the taxable property in
19 the allocation area for the most recent assessment date minus
20 the base assessed value, when multiplied by the estimated tax
21 rate of the allocation area, will exceed the amount of assessed
22 value needed to produce the property taxes necessary to make,
23 when due, principal and interest payments on bonds described
24 in subdivision (4), (3), plus the amount necessary for other
25 purposes described in subdivision (4). (3).
26 (B) Provide The commission shall provide a written notice to
27 the county auditor, the fiscal body of the county or
28 municipality that established the department of
29 redevelopment, and the officers who are authorized to fix
30 budgets, tax rates, and tax levies under IC 6-1.1-17-5 for each
31 of the other taxing units that is wholly or partly located within
32 the allocation area. The county auditor, upon receiving the
33 notice, shall forward this notice (in an electronic format) to the
34 department of local government finance not later than June 15
35 of each year. The notice must:
36 (i) state the amount, if any, of excess assessed value that the
37 commission has determined may be allocated to the
38 respective taxing units in the manner prescribed in
39 subdivision (1); or
40 (ii) state that the commission has determined that there is no
41 excess assessed value that may be allocated to the respective
42 taxing units in the manner prescribed in subdivision (1).
HB 1561—LS 7746/DI 134 23
1 The county auditor shall allocate to the respective taxing units
2 the amount, if any, of excess assessed value determined by the
3 commission. The commission may not authorize an allocation
4 of assessed value to the respective taxing units under this
5 subdivision if to do so would endanger the interests of the
6 holders of bonds described in subdivision (4) (3) or lessors
7 under section 25.3 of this chapter.
8 (C) The commission shall, if:
9 (i) the amount of excess assessed value determined by the
10 commission is expected to generate more than two hundred
11 percent (200%) of the amount of allocated tax proceeds
12 necessary to make, when due, principal and interest
13 payments on bonds described in subdivision (4); (3); plus
14 (ii) the amount necessary for other purposes described in
15 subdivision (4); (3);
16 the commission shall submit to the legislative body of the unit
17 its determination of the excess assessed value that the
18 commission proposes to allocate to the respective taxing units
19 in the manner prescribed in subdivision (1). The legislative
20 body of the unit may approve the commission's determination
21 or modify the amount of the excess assessed value that will be
22 allocated to the respective taxing units in the manner
23 prescribed in subdivision (1). Where excess assessed value
24 amounts are not already explicitly set aside for use within
25 the current calendar year for a purpose under the current
26 development plan, the commission may use its discretion
27 in allocating excess assessed value amounts to the
28 respective taxing units rather than reserving those excess
29 assessed value amounts for future or indefinite purposes.
30 (D) The commission shall annually compile a report with
31 attendance and communication information regarding
32 other taxing units and submit it to the department of local
33 government finance. The department of local government
34 finance shall include the information contained in the
35 reports in its annual report to the legislative services
36 agency required under section 12.7(c) of this chapter.
37 (6) (5) Notwithstanding subdivision (5), (4), in the case of an
38 allocation area that is established after June 30, 2019, and that is
39 located in a redevelopment project area described in section
40 25.1(c)(3)(C) of this chapter, an economic development area
41 described in section 25.1(c)(3)(C) of this chapter, or an urban
42 renewal project area described in section 25.1(c)(3)(C) of this
HB 1561—LS 7746/DI 134 24
1 chapter, for each year the allocation provision is in effect, if the
2 amount of excess assessed value determined by the commission
3 under subdivision (5)(A) (4)(A) is expected to generate more than
4 two hundred percent (200%) of:
5 (A) the amount of allocated tax proceeds necessary to make,
6 when due, principal and interest payments on bonds described
7 in subdivision (4) (3) for the project; plus
8 (B) the amount necessary for other purposes described in
9 subdivision (4) (3) for the project;
10 the amount of the excess assessed value that generates more than
11 two hundred percent (200%) of the amounts described in clauses
12 (A) and (B) shall be allocated to the respective taxing units in the
13 manner prescribed by subdivision (1).
14 (c) For the purpose of allocating taxes levied by or for any taxing
15 unit or units, the assessed value of taxable property in a territory in the
16 allocation area that is annexed by any taxing unit after the effective
17 date of the allocation provision of the declaratory resolution is the
18 lesser of:
19 (1) the assessed value of the property for the assessment date with
20 respect to which the allocation and distribution is made; or
21 (2) the base assessed value.
22 (d) Property tax proceeds allocable to the redevelopment district
23 under subsection (b)(4) (b)(3) may, subject to subsection (b)(5), (b)(4),
24 be irrevocably pledged by the redevelopment district for payment as set
25 forth in subsection (b)(4). (b)(3).
26 (e) Notwithstanding any other law, each assessor shall, upon
27 petition of the redevelopment commission, reassess the taxable
28 property situated upon or in, or added to, the allocation area, effective
29 on the next assessment date after the petition.
30 (f) Notwithstanding any other law, the assessed value of all taxable
31 property in the allocation area, for purposes of tax limitation, property
32 tax replacement, and formulation of the budget, tax rate, and tax levy
33 for each political subdivision in which the property is located is the
34 lesser of:
35 (1) the assessed value of the property as valued without regard to
36 this section; or
37 (2) the base assessed value.
38 (g) If any part of the allocation area is located in an enterprise zone
39 created under IC 5-28-15, the unit that designated the allocation area
40 shall create funds as specified in this subsection. A unit that has
41 obligations, bonds, or leases payable from allocated tax proceeds under
42 subsection (b)(4) (b)(3) shall establish an allocation fund for the
HB 1561—LS 7746/DI 134 25
1 purposes specified in subsection (b)(4) (b)(3) and a special zone fund.
2 Such a unit shall, until the end of the enterprise zone phase out period,
3 deposit each year in the special zone fund any amount in the allocation
4 fund derived from property tax proceeds in excess of those described
5 in subsection (b)(1), (b)(2), and (b)(3) (b)(1) and (b)(2) from property
6 located in the enterprise zone that exceeds the amount sufficient for the
7 purposes specified in subsection (b)(4) (b)(3) for the year. The amount
8 sufficient for purposes specified in subsection (b)(4) (b)(3) for the year
9 shall be determined based on the pro rata portion of such current
10 property tax proceeds from the part of the enterprise zone that is within
11 the allocation area as compared to all such current property tax
12 proceeds derived from the allocation area. A unit that has no
13 obligations, bonds, or leases payable from allocated tax proceeds under
14 subsection (b)(4) (b)(3) shall establish a special zone fund and deposit
15 all the property tax proceeds in excess of those described in subsection
16 (b)(1), (b)(2), and (b)(3) (b)(1) and (b)(2) in the fund derived from
17 property tax proceeds in excess of those described in subsection (b)(1),
18 (b)(2), and (b)(3) (b)(1) and (b)(2) from property located in the
19 enterprise zone. The unit that creates the special zone fund shall use the
20 fund (based on the recommendations of the urban enterprise
21 association) for programs in job training, job enrichment, and basic
22 skill development that are designed to benefit residents and employers
23 in the enterprise zone or other purposes specified in subsection (b)(4),
24 (b)(3), except that where reference is made in subsection (b)(4) (b)(3)
25 to allocation area it shall refer for purposes of payments from the
26 special zone fund only to that part of the allocation area that is also
27 located in the enterprise zone. Those programs shall reserve at least
28 one-half (1/2) of their enrollment in any session for residents of the
29 enterprise zone.
30 (h) The state board of accounts and department of local government
31 finance shall make the rules and prescribe the forms and procedures
32 that they consider expedient for the implementation of this chapter.
33 After each reassessment in an area under a reassessment plan prepared
34 under IC 6-1.1-4-4.2, the department of local government finance shall
35 adjust the base assessed value one (1) time to neutralize any effect of
36 the reassessment of the real property in the area on the property tax
37 proceeds allocated to the redevelopment district under this section.
38 After each annual adjustment under IC 6-1.1-4-4.5, the department of
39 local government finance shall adjust the base assessed value one (1)
40 time to neutralize any effect of the annual adjustment on the property
41 tax proceeds allocated to the redevelopment district under this section.
42 However, the adjustments under this subsection:
HB 1561—LS 7746/DI 134 26
1 (1) may not include the effect of phasing in assessed value due to
2 property tax abatements under IC 6-1.1-12.1;
3 (2) may not produce less property tax proceeds allocable to the
4 redevelopment district under subsection (b)(4) (b)(3) than would
5 otherwise have been received if the reassessment under the
6 reassessment plan or the annual adjustment had not occurred; and
7 (3) may decrease base assessed value only to the extent that
8 assessed values in the allocation area have been decreased due to
9 annual adjustments or the reassessment under the reassessment
10 plan.
11 Assessed value increases attributable to the application of an abatement
12 schedule under IC 6-1.1-12.1 may not be included in the base assessed
13 value of an allocation area. The department of local government
14 finance may prescribe procedures for county and township officials to
15 follow to assist the department in making the adjustments.
16 (i) The allocation deadline referred to in subsection (b) is
17 determined in the following manner:
18 (1) The initial allocation deadline is December 31, 2011.
19 (2) Subject to subdivision (3), the initial allocation deadline and
20 subsequent allocation deadlines are automatically extended in
21 increments of five (5) years, so that allocation deadlines
22 subsequent to the initial allocation deadline fall on December 31,
23 2016, and December 31 of each fifth year thereafter.
24 (3) At least one (1) year before the date of an allocation deadline
25 determined under subdivision (2), the general assembly may enact
26 a law that:
27 (A) terminates the automatic extension of allocation deadlines
28 under subdivision (2); and
29 (B) specifically designates a particular date as the final
30 allocation deadline.
31 (j) If a redevelopment commission adopts a declaratory resolution
32 or an amendment to a declaratory resolution that contains an allocation
33 provision and the redevelopment commission makes either of the
34 filings required under section 17(e) of this chapter after the first
35 anniversary of the effective date of the allocation provision, the auditor
36 of the county in which the unit is located shall compute the base
37 assessed value for the allocation area using the assessment date
38 immediately preceding the later of:
39 (1) the date on which the documents are filed with the county
40 auditor; or
41 (2) the date on which the documents are filed with the department
42 of local government finance.
HB 1561—LS 7746/DI 134 27
1 (k) For an allocation area established after June 30, 2025,
2 "residential property" refers to the assessed value of property that is
3 allocated to the one percent (1%) homestead land and improvement
4 categories in the county tax and billing software system, along with the
5 residential assessed value as defined for purposes of calculating the
6 rate for the local income tax property tax relief credit designated for
7 residential property under IC 6-3.6-5-6(d)(3).
8 (l) This subsection applies to an allocation area established in
9 accordance with section 15 of this chapter before July 1, 2025. The
10 redevelopment commission is strongly encouraged to make
11 allocations to a school corporation.
12 (m) This subsection does not prevent a redevelopment
13 commission from removing parcels from an existing allocation
14 area before its expiration date or adding parcels to a new
15 allocation area. A redevelopment commission may not adopt an
16 amendment to a declaratory resolution that contains an allocation
17 area provision that extends the expiration date of the allocation
18 area provision, as provided in subsection (b). However, after the
19 expiration of a previous allocation area provision, a redevelopment
20 commission may adopt a declaratory resolution, or an amendment
21 to a declaratory resolution, that contains a new allocation area
22 provision with a new expiration date, and for which the county
23 auditor in which the unit is located shall compute the base assessed
24 value for the allocation area using the assessment date immediately
25 preceding the effective date of the new allocation provision of the
26 declaratory resolution or amendment.
27 (n) A redevelopment commission may, pursuant to the approval
28 of the local legislative body, create an account for a specific
29 infrastructure purpose.
30 SECTION 12. IC 36-7-14-39.7 IS ADDED TO THE INDIANA
31 CODE AS A NEW SECTION TO READ AS FOLLOWS
32 [EFFECTIVE JULY 1, 2026]: Sec. 39.7. Notwithstanding any other
33 law, tax increment revenue may be deposited into a capital account
34 fund for planned capital projects. Funds deposited into such an
35 account shall be excluded from rate and levy calculations otherwise
36 required under this chapter.
37 SECTION 13. IC 36-7-14-40.5 IS ADDED TO THE INDIANA
38 CODE AS A NEW SECTION TO READ AS FOLLOWS
39 [EFFECTIVE JULY 1, 2026]: Sec. 40.5. (a) For purposes of this
40 section, an economically distressed census tract is one established
41 under the federal new markets tax credits under Section 45D of the
42 Internal Revenue Code.
HB 1561—LS 7746/DI 134 28
1 (b) Notwithstanding any other law, a redevelopment commission
2 may combine housing tax increment financing with traditional tax
3 increment financing within an economically distressed census tract
4 to promote economic development and housing stability.
5 (c) Within an economically distressed census tract, a
6 redevelopment commission may establish a new tax increment
7 financing district and acquire additional parcels for up to five (5)
8 years following the initial establishment of the tax increment
9 financing district without additional approvals.
10 (d) Within an economically distressed census tract, a
11 redevelopment commission may make a finding to utilize tax
12 increment financing for projects deemed to enhance quality of life
13 and quality of place.
14 SECTION 14. IC 36-7-14-48, AS AMENDED BY P.L.236-2023,
15 SECTION 180, IS AMENDED TO READ AS FOLLOWS
16 [EFFECTIVE JULY 1, 2026]: Sec. 48. (a) Notwithstanding section
17 39(a) of this chapter, with respect to the allocation and distribution of
18 property taxes for the accomplishment of a program adopted under
19 section 45 of this chapter, "base assessed value" means, subject to
20 section 39(j) of this chapter, the net assessed value of all of the
21 property, other than personal property, as finally determined for the
22 assessment date immediately preceding the effective date of the
23 allocation provision, as adjusted under section 39(h) of this chapter.
24 (b) The allocation fund established under section 39(b) of this
25 chapter for the allocation area for a program adopted under section 45
26 of this chapter may be used only for purposes related to the
27 accomplishment of the program, including the following:
28 (1) The construction, rehabilitation, or repair of residential units
29 within the allocation area.
30 (2) The construction, reconstruction, or repair of any
31 infrastructure (including streets, sidewalks, and sewers) within or
32 serving the allocation area.
33 (3) The acquisition of real property and interests in real property
34 within the allocation area.
35 (4) The demolition of real property within the allocation area.
36 (5) The provision of financial assistance to enable individuals and
37 families to purchase or lease residential units within the allocation
38 area. However, financial assistance may be provided only to those
39 individuals and families whose income is at or below the county's
40 median income for individuals and families, respectively.
41 (6) The provision of financial assistance to neighborhood
42 development corporations to permit them to provide financial
HB 1561—LS 7746/DI 134 29
1 assistance for the purposes described in subdivision (5).
2 (7) For property taxes first due and payable before January 1,
3 2009, providing each taxpayer in the allocation area a credit for
4 property tax replacement as determined under subsections (c) and
5 (d). However, the commission may provide this credit only if the
6 municipal legislative body (in the case of a redevelopment
7 commission established by a municipality) or the county
8 executive (in the case of a redevelopment commission established
9 by a county) establishes the credit by ordinance adopted in the
10 year before the year in which the credit is provided.
11 (c) The maximum credit that may be provided under subsection
12 (b)(7) to a taxpayer in a taxing district that contains all or part of an
13 allocation area established for a program adopted under section 45 of
14 this chapter shall be determined as follows:
15 STEP ONE: Determine that part of the sum of the amounts
16 described in IC 6-1.1-21-2(g)(1)(A) and IC 6-1.1-21-2(g)(2)
17 through IC 6-1.1-21-2(g)(5) (before their repeal) that is
18 attributable to the taxing district.
19 STEP TWO: Divide:
20 (A) that part of each county's eligible property tax replacement
21 amount (as defined in IC 6-1.1-21-2) (before its repeal) for
22 that year as determined under IC 6-1.1-21-4(a)(1) (before its
23 repeal) that is attributable to the taxing district; by
24 (B) the amount determined under STEP ONE.
25 STEP THREE: Multiply:
26 (A) the STEP TWO quotient; by
27 (B) the taxpayer's taxes (as defined in IC 6-1.1-21-2) (before
28 its repeal) levied in the taxing district allocated to the
29 allocation fund, including the amount that would have been
30 allocated but for the credit.
31 (d) The commission may determine to grant to taxpayers in an
32 allocation area from its allocation fund a credit under this section, as
33 calculated under subsection (c). Except as provided in subsection (g),
34 one-half (1/2) of the credit shall be applied to each installment of taxes
35 (as defined in IC 6-1.1-21-2) (before its repeal) that under
36 IC 6-1.1-22-9 are due and payable in a year. The commission must
37 provide for the credit annually by a resolution and must find in the
38 resolution the following:
39 (1) That the money to be collected and deposited in the allocation
40 fund, based upon historical collection rates, after granting the
41 credit will equal the amounts payable for contractual obligations
42 from the fund, plus ten percent (10%) of those amounts.
HB 1561—LS 7746/DI 134 30
1 (2) If bonds payable from the fund are outstanding, that there is
2 a debt service reserve for the bonds that at least equals the amount
3 of the credit to be granted.
4 (3) If bonds of a lessor under section 25.2 of this chapter or under
5 IC 36-1-10 are outstanding and if lease rentals are payable from
6 the fund, that there is a debt service reserve for those bonds that
7 at least equals the amount of the credit to be granted.
8 If the tax increment is insufficient to grant the credit in full, the
9 commission may grant the credit in part, prorated among all taxpayers.
10 (e) Notwithstanding section 39(b) of this chapter, the allocation
11 fund established under section 39(b) of this chapter for the allocation
12 area for a program adopted under section 45 of this chapter may only
13 be used to do one (1) or more of the following:
14 (1) Accomplish one (1) or more of the actions set forth in section
15 39(b)(4)(A) 39(b)(3)(A) through 39(b)(4)(H) 39(b)(3)(H) and
16 39(b)(4)(J) 39(b)(3)(J) of this chapter for property that is
17 residential in nature.
18 (2) Reimburse the county or municipality for expenditures made
19 by the county or municipality in order to accomplish the housing
20 program in that allocation area.
21 The allocation fund may not be used for operating expenses of the
22 commission.
23 (f) Notwithstanding section 39(b) of this chapter, the commission
24 shall, relative to the allocation fund established under section 39(b) of
25 this chapter for an allocation area for a program adopted under section
26 45 of this chapter, do the following before June September 15 of each
27 year:
28 (1) Determine the amount, if any, by which the assessed value of
29 the taxable property in the allocation area for the most recent
30 assessment date minus the base assessed value, when multiplied
31 by the estimated tax rate of the allocation area, will exceed the
32 amount of assessed value needed to produce the property taxes
33 necessary to:
34 (A) make the distribution required under section 39(b)(2) and
35 39(b)(3) of this chapter;
36 (B) make, when due, principal and interest payments on bonds
37 described in section 39(b)(4) 39(b)(3) of this chapter;
38 (C) pay the amount necessary for other purposes described in
39 section 39(b)(4) 39(b)(3) of this chapter; and
40 (D) reimburse the county or municipality for anticipated
41 expenditures described in subsection (e)(2).
42 (2) Provide a written notice to the county auditor, the fiscal body
HB 1561—LS 7746/DI 134 31
1 of the county or municipality that established the department of
2 redevelopment, and the officers who are authorized to fix budgets,
3 tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
4 taxing units that is wholly or partly located within the allocation
5 area. The county auditor, upon receiving the notice, shall forward
6 this notice (in an electronic format) to the department of local
7 government finance not later than June September 15 of each
8 year. The notice must:
9 (A) state the amount, if any, of excess property taxes that the
10 commission has determined may be paid to the respective
11 taxing units in the manner prescribed in section 39(b)(1) of
12 this chapter; or
13 (B) state that the commission has determined that there is no
14 excess assessed value that may be allocated to the respective
15 taxing units in the manner prescribed in subdivision (1).
16 The county auditor shall allocate to the respective taxing units the
17 amount, if any, of excess assessed value determined by the
18 commission.
19 (3) If:
20 (A) the amount of excess assessed value determined by the
21 commission is expected to generate more than two hundred
22 percent (200%) of the amount of allocated tax proceeds
23 necessary to make, when due, principal and interest payments
24 on bonds described in subdivision (1); plus
25 (B) the amount necessary for other purposes described in
26 subdivision (1);
27 the commission shall submit to the legislative body of the unit its
28 determination of the excess assessed value that the commission
29 proposes to allocate to the respective taxing units in the manner
30 prescribed in subdivision (2). The legislative body of the unit may
31 approve the commission's determination or modify the amount of
32 the excess assessed value that will be allocated to the respective
33 taxing units in the manner prescribed in subdivision (2).
34 (g) This subsection applies to an allocation area only to the extent
35 that the net assessed value of property that is assessed as residential
36 property under the rules of the department of local government finance
37 is not included in the base assessed value. If property tax installments
38 with respect to a homestead (as defined in IC 6-1.1-12-37) are due in
39 installments established by the department of local government finance
40 under IC 6-1.1-22-9.5, each taxpayer subject to those installments in an
41 allocation area is entitled to an additional credit under subsection (d)
42 for the taxes (as defined in IC 6-1.1-21-2) (before its repeal) due in
HB 1561—LS 7746/DI 134 32
1 installments. The credit shall be applied in the same proportion to each
2 installment of taxes (as defined in IC 6-1.1-21-2) (before its repeal).
3 SECTION 15. IC 36-7-14-52, AS AMENDED BY P.L.236-2023,
4 SECTION 181, IS AMENDED TO READ AS FOLLOWS
5 [EFFECTIVE JULY 1, 2026]: Sec. 52. (a) Notwithstanding section
6 39(a) of this chapter, with respect to the allocation and distribution of
7 property taxes for the accomplishment of the purposes of an
8 age-restricted housing program adopted under section 49 of this
9 chapter, "base assessed value" means, subject to section 39(j) of this
10 chapter, the net assessed value of all of the property, other than
11 personal property, as finally determined for the assessment date
12 immediately preceding the effective date of the allocation provision, as
13 adjusted under section 39(h) of this chapter.
14 (b) The allocation fund established under section 39(b) of this
15 chapter for the allocation area for an age-restricted housing program
16 adopted under section 49 of this chapter may be used only for purposes
17 related to the accomplishment of the purposes of the program,
18 including, but not limited to, the following:
19 (1) The construction of any infrastructure (including streets,
20 sidewalks, and sewers) or local public improvements in, serving,
21 or benefiting the allocation area.
22 (2) The acquisition of real property and interests in real property
23 within the allocation area.
24 (3) The preparation of real property in anticipation of
25 development of the real property within the allocation area.
26 (4) To do any of the following:
27 (A) Pay the principal of and interest on bonds or any other
28 obligations payable from allocated tax proceeds in the
29 allocation area that are incurred by the redevelopment district
30 for the purpose of financing or refinancing the age-restricted
31 housing program established under section 49 of this chapter
32 for the allocation area.
33 (B) Establish, augment, or restore the debt service reserve for
34 bonds payable solely or in part from allocated tax proceeds in
35 the allocation area.
36 (C) Pay the principal of and interest on bonds payable from
37 allocated tax proceeds in the allocation area and from the
38 special tax levied under section 27 of this chapter.
39 (D) Pay the principal of and interest on bonds issued by the
40 unit to pay for local public improvements that are physically
41 located in or physically connected to the allocation area.
42 (E) Pay premiums on the redemption before maturity of bonds
HB 1561—LS 7746/DI 134 33
1 payable solely or in part from allocated tax proceeds in the
2 allocation area.
3 (F) Make payments on leases payable from allocated tax
4 proceeds in the allocation area under section 25.2 of this
5 chapter.
6 (G) Reimburse the unit for expenditures made by the unit for
7 local public improvements (which include buildings, parking
8 facilities, and other items described in section 25.1(a) of this
9 chapter) that are physically located in or physically connected
10 to the allocation area.
11 (c) Notwithstanding section 39(b) of this chapter, the commission
12 shall, relative to the allocation fund established under section 39(b) of
13 this chapter for an allocation area for an age-restricted housing program
14 adopted under section 49 of this chapter, do the following before June
15 September 15 of each year:
16 (1) Determine the amount, if any, by which the assessed value of
17 the taxable property in the allocation area for the most recent
18 assessment date minus the base assessed value, when multiplied
19 by the estimated tax rate of the allocation area, will exceed the
20 amount of assessed value needed to produce the property taxes
21 necessary to:
22 (A) make the distribution required under section 39(b)(2) and
23 39(b)(3) of this chapter;
24 (B) make, when due, principal and interest payments on bonds
25 described in section 39(b)(4) 39(b)(3) of this chapter;
26 (C) pay the amount necessary for other purposes described in
27 section 39(b)(4) 39(b)(3) of this chapter; and
28 (D) reimburse the county or municipality for anticipated
29 expenditures described in subsection (b)(2).
30 (2) Provide a written notice to the county auditor, the fiscal body
31 of the county or municipality that established the department of
32 redevelopment, and the officers who are authorized to fix budgets,
33 tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
34 taxing units that is wholly or partly located within the allocation
35 area. The county auditor, upon receiving the notice, shall forward
36 this notice (in an electronic format) to the department of local
37 government finance not later than June September 15 of each
38 year. The notice must:
39 (A) state the amount, if any, of excess property taxes that the
40 commission has determined may be paid to the respective
41 taxing units in the manner prescribed in section 39(b)(1) of
42 this chapter; or
HB 1561—LS 7746/DI 134 34
1 (B) state that the commission has determined that there is no
2 excess assessed value that may be allocated to the respective
3 taxing units in the manner prescribed in subdivision (1).
4 The county auditor shall allocate to the respective taxing units the
5 amount, if any, of excess assessed value determined by the
6 commission.
7 SECTION 16. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
8 SECTION 183, IS AMENDED TO READ AS FOLLOWS
9 [EFFECTIVE JULY 1, 2026]: Sec. 56. (a) This section applies only to
10 a residential housing development program authorized by section 53 of
11 this chapter.
12 (b) Notwithstanding section 39(a) of this chapter, with respect to the
13 allocation and distribution of property taxes for the accomplishment of
14 the purposes of a residential housing development program adopted
15 under section 53 of this chapter, "base assessed value" means the net
16 assessed value of all of the property, other than personal property, as
17 finally determined for the assessment date immediately preceding the
18 effective date of the allocation provision, as adjusted under section
19 39(h) of this chapter.
20 (c) The allocation fund established under section 39(b) of this
21 chapter for the allocation area for a residential housing development
22 program adopted under section 53 of this chapter may be used only for
23 purposes related to the accomplishment of the purposes of the program,
24 including, but not limited to, the following:
25 (1) The construction of any infrastructure (including streets,
26 roads, and sidewalks) or local public improvements in, serving,
27 or benefiting a residential housing development project.
28 (2) The acquisition of real property and interests in real property
29 for rehabilitation purposes within the allocation area.
30 (3) The preparation of real property in anticipation of
31 development of the real property within the allocation area.
32 (4) To do any of the following:
33 (A) Pay the principal of and interest on bonds or any other
34 obligations payable from allocated tax proceeds in the
35 allocation area that are incurred by the redevelopment district
36 for the purpose of financing or refinancing the residential
37 housing development program established under section 53 of
38 this chapter for the allocation area.
39 (B) Establish, augment, or restore the debt service reserve for
40 bonds payable solely or in part from allocated tax proceeds in
41 the allocation area.
42 (C) Pay the principal of and interest on bonds payable from
HB 1561—LS 7746/DI 134 35
1 allocated tax proceeds in the allocation area and from the
2 special tax levied under section 27 of this chapter.
3 (D) Pay the principal of and interest on bonds issued by the
4 unit to pay for local public improvements that are physically
5 located in or physically connected to the allocation area.
6 (E) Pay premiums on the redemption before maturity of bonds
7 payable solely or in part from allocated tax proceeds in the
8 allocation area.
9 (F) Make payments on leases payable from allocated tax
10 proceeds in the allocation area under section 25.2 of this
11 chapter.
12 (G) Reimburse the unit for expenditures made by the unit for
13 local public improvements (which include buildings, parking
14 facilities, and other items described in section 25.1(a) of this
15 chapter) that are physically located in or physically connected
16 to the allocation area.
17 (d) Notwithstanding section 39(b) of this chapter, the commission
18 shall, relative to the allocation fund established under section 39(b) of
19 this chapter for an allocation area for a residential housing
20 development program adopted under section 53 of this chapter, do the
21 following before June September 15 of each year:
22 (1) Determine the amount, if any, by which the assessed value of
23 the taxable property in the allocation area for the most recent
24 assessment date minus the base assessed value, when multiplied
25 by the estimated tax rate of the allocation area, will exceed the
26 amount of assessed value needed to produce the property taxes
27 necessary to:
28 (A) make the distribution required under section 39(b)(2) and
29 39(b)(3) of this chapter;
30 (B) make, when due, principal and interest payments on bonds
31 described in section 39(b)(4) 39(b)(3) of this chapter;
32 (C) pay the amount necessary for other purposes described in
33 section 39(b)(4) 39(b)(3) of this chapter; and
34 (D) reimburse the county or municipality for anticipated
35 expenditures described in subsection (c)(2).
36 (2) Provide a written notice to the county auditor, the fiscal body
37 of the county or municipality that established the department of
38 redevelopment, the officers who are authorized to fix budgets, tax
39 rates, and tax levies under IC 6-1.1-17-5 for each of the other
40 taxing units that are wholly or partly located within the allocation
41 area, and (in an electronic format) the department of local
42 government finance. The notice must:
HB 1561—LS 7746/DI 134 36
1 (A) state the amount, if any, of excess property taxes that the
2 commission has determined may be paid to the respective
3 taxing units in the manner prescribed in section 39(b)(1) of
4 this chapter; or
5 (B) state that the commission has determined that there is no
6 excess assessed value that may be allocated to the respective
7 taxing units in the manner prescribed in subdivision (1).
8 The county auditor shall allocate to the respective taxing units the
9 amount, if any, of excess assessed value determined by the
10 commission.
11 (e) If the amount of excess assessed value determined by the
12 commission is expected to generate more than two hundred percent
13 (200%) of the amount of allocated tax proceeds:
14 (1) necessary to make, when due, principal and interest payments
15 on bonds described in section 39(b)(4) 39(b)(3) of this chapter;
16 plus
17 (2) the amount necessary for other purposes described in section
18 39(b)(4) 39(b)(3) of this chapter;
19 the commission shall submit to the county or municipal legislative
20 body its determination of the excess assessed value that the
21 commission proposes to allocate to the respective taxing units in the
22 manner prescribed in subsection (d)(2). The county or municipal
23 legislative body may approve the commission's determination or
24 modify the amount of the excess assessed value that will be allocated
25 to the respective taxing units in the manner prescribed in subsection
26 (d)(2).
27 (f) An allocation area must terminate on the date the residential
28 housing development program is terminated as set forth in section
29 53(e) of this chapter.
30 SECTION 17. IC 36-7.5-4.5-18, AS AMENDED BY P.L.236-2023,
31 SECTION 194, IS AMENDED TO READ AS FOLLOWS
32 [EFFECTIVE JULY 1, 2026]: Sec. 18. If a district is established, the
33 following apply to the administration and use of incremental property
34 tax revenue by the development authority, or a redevelopment
35 commission in the case of a district located in a cash participant
36 county, in the district:
37 (1) The department of local government finance shall adjust the
38 base assessed value to neutralize any effect of a reassessment and
39 the annual adjustment of the real property in the district in the
40 same manner as provided in IC 36-7-14-39(h).
41 (2) Proceeds of the property taxes approved by the voters in a
42 referendum or local public question shall be allocated to and,
HB 1561—LS 7746/DI 134 37
1 when collected, paid into the funds of the taxing unit for which
2 the referendum or local public question was conducted in the
3 same manner as provided in IC 36-7-14-39(b)(3).
4 IC 36-7-14-39(b)(2).
5 (3) Incremental property tax revenue may be used only for one (1)
6 or more of the following purposes for a district:
7 (A) To finance the improvement, construction, reconstruction,
8 renovation, and acquisition of real and personal property
9 improvements within a district.
10 (B) To pay the principal of and interest on any obligations that
11 are incurred for the purpose of financing or refinancing
12 development in the district, including local public
13 improvements that are physically located in or physically
14 connected to the district.
15 (C) To establish, augment, or restore the debt service reserve
16 for bonds payable solely or in part from incremental property
17 tax revenue from the district.
18 (D) To pay premiums on the redemption before maturity of
19 bonds payable solely or in part from incremental property tax
20 revenue from the district.
21 (E) To make payments on leases payable from incremental
22 property tax revenue from the district.
23 (F) To reimburse a municipality in which a district is located
24 for expenditures made by the municipality for local public
25 improvements that are physically located in or physically
26 connected to the district.
27 (G) To reimburse a municipality for rentals paid by the
28 municipality for a building or parking facility that is physically
29 located in or physically connected to the district under any
30 lease entered into under IC 36-1-10.
31 (H) To pay expenses incurred by the development authority for
32 local public improvements that are in the district or serving the
33 district.
34 SECTION 18. [EFFECTIVE JULY 1, 2026] (a) The general
35 assembly urges local units to work together to find common
36 ground regarding the use of tax increment financing to promote
37 shared community objectives, while providing for the release of
38 assessed value from allocation areas whenever feasible in a manner
39 consistent with shared community objectives.
40 (b) This SECTION expires June 30, 2028.
41 SECTION 19. An emergency is declared for this act.
HB 1561—LS 7746/DI 134 38
COMMITTEE REPORT
Mr. Speaker: Your Committee on Ways and Means, to which was
referred House Bill 1561, has had the same under consideration and
begs leave to report the same back to the House with the
recommendation that said bill be amended as follows:
Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
"SECTION 1. IC 6-1.1-21.2-8, AS AMENDED BY P.L.236-2023,
SECTION 40, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 8. As used in this chapter, "special fund" means:
(1) the special funds referred to in IC 6-1.1-39-5;
(2) the special funds referred to in IC 8-22-3.5-9(e);
(3) the allocation fund referred to in IC 36-7-14-39(b)(4);
IC 36-7-14-39(b)(3);
(4) the allocation fund referred to in IC 36-7-14.5-12.5(d);
(5) the special fund referred to in IC 36-7-15.1-26(b)(3); or
(6) the special fund referred to in IC 36-7-15.1-53(b)(3).
(7) the allocation fund referred to in IC 36-7-30-25(b)(3); or
(8) the allocation fund referred to in IC 36-7-30.5-30(b)(3).".
Page 1, line 3, strike "December" and insert "September".
Page 1, line 12, strike "39(b)(4)" and insert "39(b)(3)".
Page 2, between lines 16 and 17, begin a new paragraph and insert:
"SECTION 2. IC 36-7-14-13, AS AMENDED BY P.L.236-2023,
SECTION 173, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 13. (a) Not later than April 15 of
each year, the redevelopment commissioners or their designees shall:
(1) file with the unit's executive and fiscal body a report setting
out their activities during the preceding calendar year;
(2) The redevelopment commissioners or their designees shall
also present the report to the unit's fiscal body at a public meeting;
and
(3) provide an analysis of revenues and expenditures on a per
allocation area basis and correlate that analysis with the
required spending plan under section 12.7 of this chapter.
(b) The report of the commissioners of a municipal redevelopment
commission must show the names of the then qualified and acting
commissioners, the names of the officers of that body, the number of
regular employees and their fixed salaries or compensation, the amount
of the expenditures made during the preceding year and their general
purpose, an accounting of the tax increment revenues expended by any
entity receiving the tax increment revenues as a grant or loan from the
HB 1561—LS 7746/DI 134 39
commission, the amount of funds on hand at the close of the calendar
year, and other information necessary to disclose the activities of the
commissioners and the results obtained.
(c) The report of the commissioners of a county redevelopment
commission must show all the information required by subsection (b),
plus the names of any commissioners appointed to or removed from
office during the preceding calendar year.
(d) A copy of each report filed under this section must be submitted
to the department of local government finance in an electronic format.
(e) The report required under subsection (a) must also include the
following information set forth for each tax increment financing district
regarding the previous year:
(1) Revenues received.
(2) Expenses paid.
(3) Fund balances.
(4) The amount and maturity date for all outstanding obligations.
(5) The amount paid on outstanding obligations.
(6) A list of all the parcels and the depreciable personal property
of any designated taxpayer included in each tax increment
financing district allocation area and the base assessed value and
incremental assessed value for each parcel and the depreciable
personal property of any designated taxpayer in the list.
(7) To the extent that the following information has not previously
been provided to the department of local government finance:
(A) The year in which the tax increment financing district was
established.
(B) The section of the Indiana Code under which the tax
increment financing district was established.
(C) Whether the tax increment financing district is part of an
area needing redevelopment, an economic development area,
a redevelopment project area, or an urban renewal project
area.
(D) If applicable, the year in which the boundaries of the tax
increment financing district were changed and a description of
those changes.
(E) The date on which the tax increment financing district will
expire.
(F) A copy of each resolution adopted by the redevelopment
commission that establishes or alters the tax increment
financing district.
(8) Amounts distributed to other units, if applicable.
(9) Only in the case of an allocation area established for a
HB 1561—LS 7746/DI 134 40
residential housing development program, the number of houses
completed under the residential housing development program
and the average price of the houses sold in the allocation area.
(f) A redevelopment commission and a department of
redevelopment are subject to the same laws, rules, and ordinances of
a general nature that apply to all other commissions or departments of
the unit.
(g) This subsection applies only to calendar years beginning
after December 31, 2026. In jurisdictions where a redevelopment
commission has not returned any amount of assessed value in the
preceding three (3) years, the redevelopment commission shall
identify measures that are feasible for implementation in the
following year to prioritize reducing tax rates and alleviating
circuit breaker reductions. The requirement under this subsection
does not apply to jurisdictions where the excess assessed value
determined by a commission is expected to generate less than two
hundred percent (200%) of the amount of allocated tax proceeds
necessary to make, when due, principal and interest payments on
certain bonds plus the amount for certain other purposes. A
redevelopment commission shall report its findings under this
subsection in the annual report required under this section.
(h) For a tax increment financing allocation area established on
or after July 1, 2026, if a proposed redevelopment project area is
not taxable at the time of the allocation area being established, any
property taxes that would be paid on undeveloped land shall be
included in the base assessed value for the purposes of determining
property tax levy distributions to the appropriate local units.
SECTION 3. IC 36-7-14-13.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 13.5. Any necessary documents
required to be uploaded to the department of local government
finance or the transparency web portal must be submitted on or
before July 1, 2026, for an document required to be uploaded after
January 1, 2025.
SECTION 4. IC 36-7-14-15.5, AS AMENDED BY P.L.236-2023,
SECTION 174, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 15.5. (a) This section applies to a
county having a population of more than two hundred fifty thousand
(250,000) and less than three hundred thousand (300,000).
(b) In adopting a declaratory resolution under section 15 of this
chapter, a redevelopment commission may include a provision stating
that the redevelopment project area is considered to include one (1) or
HB 1561—LS 7746/DI 134 41
more additional areas outside the boundaries of the redevelopment
project area if the redevelopment commission makes the following
findings and the requirements of subsection (c) are met:
(1) One (1) or more taxpayers presently located within the
boundaries of the redevelopment project area are expected within
one (1) year to relocate all or part of their operations outside the
boundaries of the redevelopment project area and have expressed
an interest in relocating all or part of their operations within the
boundaries of an additional area.
(2) The relocation described in subdivision (1) will contribute to
the continuation of the conditions described in IC 36-7-1-3 in the
redevelopment project area.
(3) For purposes of this section, it will be of public utility and
benefit to include the additional areas as part of the
redevelopment project area.
(c) Each additional area must be designated by the redevelopment
commission as a redevelopment project area or an economic
development area under this chapter.
(d) Notwithstanding section 3 of this chapter, the additional areas
shall be considered to be a part of the redevelopment special taxing
district under the jurisdiction of the redevelopment commission. Any
excess property taxes that the commission has determined may be paid
to taxing units under section 39(b)(5) 39(b)(4) of this chapter shall be
paid to the taxing units from which the excess property taxes were
derived. All powers of the redevelopment commission authorized under
this chapter may be exercised by the redevelopment commission in
additional areas under its jurisdiction.
(e) The declaratory resolution must include a statement of the
general boundaries of each additional area. However, it is sufficient to
describe those boundaries by location in relation to public ways,
streams, or otherwise, as determined by the commissioners.
(f) The declaratory resolution may include a provision with respect
to the allocation and distribution of property taxes with respect to one
(1) or more of the additional areas in the manner provided in section 39
of this chapter. If the redevelopment commission includes such a
provision in the resolution, allocation areas in the redevelopment
project area and in the additional areas considered to be part of the
redevelopment project area shall be considered a single allocation area
for purposes of this chapter.
(g) The additional areas must be located within the same county as
the redevelopment project area but are not otherwise required to be
within the jurisdiction of the redevelopment commission, if the
HB 1561—LS 7746/DI 134 42
redevelopment commission obtains the consent by ordinance of:
(1) the county legislative body, for each additional area located
within the unincorporated part of the county; or
(2) the legislative body of the city or town affected, for each
additional area located within a city or town.
In granting its consent, the legislative body shall approve the plan of
development or redevelopment relating to the additional area.
(h) A declaratory resolution previously adopted may be amended to
include a provision to include additional areas as set forth in this
section and an allocation provision under section 39 of this chapter
with respect to one (1) or more of the additional areas in accordance
with sections 15, 16, and 17 of this chapter.
(i) The redevelopment commission may amend the allocation
provision of a declaratory resolution in accordance with sections 15,
16, and 17 of this chapter to change the assessment date that
determines the base assessed value of property in the allocation area to
any assessment date following the effective date of the allocation
provision of the declaratory resolution. Such a change may relate to the
assessment date that determines the base assessed value of that portion
of the allocation area that is located in the redevelopment project area
alone, that portion of the allocation area that is located in an additional
area alone, or the entire allocation area.
SECTION 5. IC 36-7-14-17, AS AMENDED BY P.L.257-2019,
SECTION 115, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 17. (a) After receipt of the written
order of approval of the plan commission and approval of the
municipal legislative body or county executive, the redevelopment
commission shall publish notice of the adoption and substance of the
resolution in accordance with IC 5-3-1. The notice must:
(1) state that maps and plats have been prepared and can be
inspected at the office of the department; and
(2) name a date when the commission will:
(A) receive and hear remonstrances and objections from
persons interested in or affected by the proceedings pertaining
to the proposed project or other actions to be taken under the
resolution; and
(B) determine the public utility and benefit of the proposed
project or other actions; and
(3) include an invitation to overlapping taxing units to attend
and participate in the hearing. The hearing shall include an
illustration of the projected effect on circuit breaker
reductions of the release of ten percent (10%), twenty percent
HB 1561—LS 7746/DI 134 43
(20%), and thirty percent (30%), respectively, of assessed
value from the allocation area. The completion of the
foregoing illustration may be paid from tax increment
financing funds. The hearing shall include an opportunity for
participant discussion and public comment. The commission
shall include a record of overlapping taxing unit attendance
in its annual report to the department of local government
finance.
All persons affected in any manner by the hearing, including all
taxpayers of the special taxing district, shall be considered notified of
the pendency of the hearing and of subsequent acts, hearings,
adjournments, and orders of the commission by the notice given under
this section.
(b) A copy of the notice of the hearing on the resolution shall be
filed in the office of the unit's plan commission, board of zoning
appeals, works board, park board, and building commissioner, and any
other departments, bodies, or officers of the unit having to do with unit
planning, variances from zoning ordinances, land use, or the issuance
of building permits. These agencies and officers shall take notice of the
pendency of the hearing and, until the commission confirms, modifies
and confirms, or rescinds the resolution, or the confirmation of the
resolution is set aside on appeal, may not:
(1) authorize any construction on property or sewers in the area
described in the resolution, including substantial modifications,
rebuilding, conversion, enlargement, additions, and major
structural improvements; or
(2) take any action regarding the zoning or rezoning of property,
or the opening, closing, or improvement of streets, alleys, or
boulevards in the area described in the resolution.
This subsection does not prohibit the granting of permits for ordinary
maintenance or minor remodeling, or for changes necessary for the
continued occupancy of buildings in the area.
(c) If the resolution to be considered at the hearing includes a
provision establishing or amending an allocation provision under
section 39 of this chapter, the redevelopment commission shall file the
following information with each taxing unit that is wholly or partly
located within the allocation area:
(1) A copy of the notice required by subsection (a).
(2) A statement disclosing the impact of the allocation area,
including the following:
(A) The estimated economic benefits and costs incurred by the
allocation area, as measured by increased employment and
HB 1561—LS 7746/DI 134 44
anticipated growth of real property assessed values.
(B) The anticipated impact on tax revenues of each taxing unit.
The redevelopment commission shall file the information required by
this subsection with the officers of the taxing unit who are authorized
to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 at least ten
(10) days before the date of the hearing.
(d) At the hearing, which may be adjourned from time to time, the
redevelopment commission shall hear all persons interested in the
proceedings and shall consider all written remonstrances and
objections that have been filed. After considering the evidence
presented, the commission shall take final action determining the
public utility and benefit of the proposed project or other actions to be
taken under the resolution, and confirming, modifying and confirming,
or rescinding the resolution. The final action taken by the commission
shall be recorded and is final and conclusive, except that an appeal may
be taken in the manner prescribed by section 18 of this chapter.
(e) If the redevelopment commission adopts the resolution and the
resolution includes a provision establishing or amending an allocation
provision under section 39 of this chapter, the redevelopment
commission shall file a copy of the resolution with both the auditor of
the county in which the unit is located and the department of local
government finance, together with any supporting documents that are
relevant to the computation of assessed values in the allocation area,
within thirty (30) days after the date on which the redevelopment
commission takes final action on the resolution.
SECTION 6. IC 36-7-14-25.1, AS AMENDED BY P.L.236-2023,
SECTION 176, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 25.1. (a) In addition to other
methods of raising money for property acquisition or redevelopment in
a redevelopment project area, and in anticipation of the special tax to
be levied under section 27 of this chapter, the taxes allocated under
section 39 of this chapter, or other revenues of the district, or any
combination of these sources, the redevelopment commission may, by
bond resolution and subject to subsections (c) and (p), issue the bonds
of the special taxing district in the name of the unit. The amount of the
bonds may not exceed the total, as estimated by the commission, of all
expenses reasonably incurred in connection with the acquisition and
redevelopment of the property, including:
(1) the total cost of all land, rights-of-way, and other property to
be acquired and redeveloped;
(2) all reasonable and necessary architectural, engineering, legal,
financing, accounting, advertising, bond discount, and
HB 1561—LS 7746/DI 134 45
supervisory expenses related to the acquisition and redevelopment
of the property or the issuance of bonds;
(3) capitalized interest permitted by this chapter and a debt
service reserve for the bonds to the extent the redevelopment
commission determines that a reserve is reasonably required; and
(4) expenses that the redevelopment commission is required or
permitted to pay under IC 8-23-17.
(b) If the redevelopment commission plans to acquire different
parcels of land or let different contracts for redevelopment work at
approximately the same time, whether under one (1) or more
resolutions, the commission may provide for the total cost in one (1)
issue of bonds.
(c) The legislative body of the unit must adopt a resolution that
specifies the public purpose of the bond, the use of the bond proceeds,
the maximum principal amount of the bond, the term of the bond, and
the maximum interest rate or rates of the bond, any provision for
redemption before maturity, and any provision for the payment of
capitalized interest. The bonds must be dated as set forth in the bond
resolution and negotiable, subject to the requirements of the bond
resolution for registering the bonds. The resolution authorizing the
bonds must state:
(1) the denominations of the bonds;
(2) the place or places at which the bonds are payable; and
(3) the term of the bonds, which may not exceed:
(A) fifty (50) years, for bonds issued before July 1, 2008;
(B) thirty (30) years, for bonds issued after June 30, 2008, to
finance:
(i) an integrated coal gasification powerplant (as defined in
IC 6-3.1-29-6);
(ii) a part of an integrated coal gasification powerplant (as
defined in IC 6-3.1-29-6); or
(iii) property used in the operation or maintenance of an
integrated coal gasification powerplant (as defined in
IC 6-3.1-29-6);
that received a certificate of public convenience and necessity
from the Indiana utility regulatory commission under
IC 8-1-8.5 et seq. before July 1, 2008;
(C) thirty-five (35) years, for bonds issued after June 30, 2019,
to finance a project that is located in a redevelopment project
area, an economic development area, or an urban renewal
project area and that includes, as part of the project, the use
and repurposing of two (2) or more buildings and structures
HB 1561—LS 7746/DI 134 46
that are:
(i) at least seventy-five (75) years old; and
(ii) located at a site at which manufacturing previously
occurred over a period of at least seventy-five (75) years; or
(D) twenty-five (25) years, for bonds issued after June 30,
2008, that are not described in clause (B) or (C).
The bond resolution may also state that the bonds are redeemable
before maturity with or without a premium, as determined by the
redevelopment commission.
(d) The redevelopment commission shall certify a copy of the
resolution authorizing the bonds to the municipal or county fiscal
officer, who shall then prepare the bonds, subject to subsections (c) and
(p). The seal of the unit must be impressed on the bonds, or a facsimile
of the seal must be printed on the bonds.
(e) The bonds must be executed by the appropriate officer of the
unit and attested by the municipal or county fiscal officer.
(f) The bonds are exempt from taxation for all purposes.
(g) The municipal or county fiscal officer shall give notice of the
sale of the bonds by publication in accordance with IC 5-3-1. The
municipal fiscal officer, or county fiscal officer or executive, shall sell
the bonds to the highest bidder, but may not sell them for less than
ninety-seven percent (97%) of their par value. However, bonds payable
solely or in part from tax proceeds allocated under section 39(b)(4)
39(b)(3) of this chapter, or other revenues of the district may be sold
at a private negotiated sale.
(h) Except as provided in subsection (i), a redevelopment
commission may not issue the bonds when the total issue, including
bonds already issued and to be issued, exceeds two percent (2%) of the
adjusted value of the taxable property in the special taxing district, as
determined under IC 36-1-15.
(i) The bonds are not a corporate obligation of the unit but are an
indebtedness of the taxing district. The bonds and interest are payable,
as set forth in the bond resolution of the redevelopment commission:
(1) from a special tax levied upon all of the property in the taxing
district, as provided by section 27 of this chapter;
(2) from the tax proceeds allocated under section 39(b)(4)
39(b)(3) of this chapter;
(3) from other revenues available to the redevelopment
commission; or
(4) from a combination of the methods stated in subdivisions (1)
through (3).
If the bonds are payable solely from the tax proceeds allocated under
HB 1561—LS 7746/DI 134 47
section 39(b)(4) 39(b)(3) of this chapter, other revenues of the
redevelopment commission, or any combination of these sources, they
may be issued in any amount not to exceed the maximum amount
approved by the legislative body in the resolution described in
subsection (c).
(j) Proceeds from the sale of bonds may be used to pay the cost of
interest on the bonds for a period not to exceed five (5) years from the
date of issuance.
(k) All laws relating to the giving of notice of the issuance of bonds,
the giving of notice of a hearing on the appropriation of the proceeds
of the bonds, the right of taxpayers to appear and be heard on the
proposed appropriation, and the approval of the appropriation by the
department of local government finance apply to all bonds issued under
this chapter that are payable from the special benefits tax levied
pursuant to section 27 of this chapter or from taxes allocated under
section 39 of this chapter.
(l) All laws relating to:
(1) the filing of petitions requesting the issuance of bonds; and
(2) the right of:
(A) taxpayers and voters to remonstrate against the issuance of
bonds in the case of a proposed bond issue described by
IC 6-1.1-20-3.1(a); or
(B) voters to vote on the issuance of bonds in the case of a
proposed bond issue described by IC 6-1.1-20-3.5(a);
apply to bonds issued under this chapter except for bonds payable
solely from tax proceeds allocated under section 39(b)(4) 39(b)(3) of
this chapter, other revenues of the redevelopment commission, or any
combination of these sources.
(m) If a debt service reserve is created from the proceeds of bonds,
the debt service reserve may be used to pay principal and interest on
the bonds as provided in the bond resolution.
(n) Any amount remaining in the debt service reserve after all of the
bonds of the issue for which the debt service reserve was established
have matured shall be:
(1) deposited in the allocation fund established under section
39(b)(4) 39(b)(3) of this chapter; and
(2) to the extent permitted by law, transferred to the county or
municipality that established the department of redevelopment for
use in reducing the county's or municipality's property tax levies
for debt service.
(o) If bonds are issued under this chapter that are payable solely or
in part from revenues to the redevelopment commission from a project
HB 1561—LS 7746/DI 134 48
or projects, the redevelopment commission may adopt a resolution or
trust indenture or enter into covenants as is customary in the issuance
of revenue bonds. The resolution or trust indenture may pledge or
assign the revenues from the project or projects, but may not convey or
mortgage any project or parts of a project. The resolution or trust
indenture may also contain any provisions for protecting and enforcing
the rights and remedies of the bond owners as may be reasonable and
proper and not in violation of law, including covenants setting forth the
duties of the redevelopment commission. The redevelopment
commission may establish fees and charges for the use of any project
and covenant with the owners of any bonds to set those fees and
charges at a rate sufficient to protect the interest of the owners of the
bonds. Any revenue bonds issued by the redevelopment commission
that are payable solely from revenues of the commission shall contain
a statement to that effect in the form of bond.
(p) If the total principal amount of bonds authorized by a resolution
of the redevelopment commission adopted before July 1, 2008, is equal
to or greater than three million dollars ($3,000,000), the bonds may not
be issued without the approval, by resolution, of the legislative body of
the unit. Bonds authorized in any principal amount by a resolution of
the redevelopment commission adopted after June 30, 2008, may not
be issued without the approval of the legislative body of the unit.
SECTION 7. IC 36-7-14-26, AS AMENDED BY P.L.236-2023,
SECTION 177, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 26. (a) All proceeds from the sale
of bonds under section 25.1 of this chapter shall be kept as a separate
and specific fund to pay the expenses incurred in connection with the
acquisition and redevelopment of property. The fund shall be known as
the redevelopment district capital fund. Any surplus of funds remaining
after all expenses are paid shall be paid into and become a part of the
redevelopment district bond fund established under section 27 of this
chapter.
(b) All gifts or donations that are given or paid to the department of
redevelopment or to the unit for redevelopment purposes shall be
promptly deposited to the credit of the redevelopment district capital
fund. The redevelopment commission may use these gifts and
donations for the purposes of this chapter.
(c) Before the eleventh day of each calendar month the fiscal officer
shall notify the redevelopment commission and the officers of the unit
who have duties in respect to the funds and accounts of the unit of the
amount standing to the credit of the redevelopment district capital fund
at the close of business on the last day of the preceding month.
HB 1561—LS 7746/DI 134 49
(d) A redevelopment commission shall deposit in the allocation fund
established under section 39(b)(4) 39(b)(3) of this chapter of an
allocation area the proceeds from the sale or leasing of property in the
area under section 22 of this chapter if:
(1) there are outstanding bonds that were issued to pay costs of
redevelopment in the allocation area; and
(2) the bonds are payable solely or in part from tax proceeds
allocated under section 39(b)(4) 39(b)(3) of this chapter.
SECTION 8. IC 36-7-14-27, AS AMENDED BY P.L.236-2023,
SECTION 178, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 27. (a) This section applies only to:
(1) bonds that are issued under section 25.1 of this chapter; and
(2) leases entered into under section 25.2 of this chapter;
which are payable from a special tax levied upon all of the property in
the special taxing district. This section does not apply to bonds or
leases that are payable solely from tax proceeds allocated under section
39(b)(4) 39(b)(3) of this chapter, other revenues of the redevelopment
commission, or any combination of these sources.
(b) The redevelopment commission, with the prior approval of the
legislative body, shall levy each year a special tax on all of the property
of the redevelopment taxing district, in such a manner as to meet and
pay the principal of the bonds as they mature, together with all accruing
interest on the bonds or lease rental payments under section 25.2 of this
chapter. The commission shall cause the tax levied to be certified to the
proper officers as other tax levies are certified, and to the auditor of the
county in which the redevelopment district is located, before the
second day of October in each year. The tax shall be estimated and
entered on the tax duplicate by the county auditor and shall be collected
and enforced by the county treasurer in the same manner as other state
and county taxes are estimated, entered, collected, and enforced. The
amount of the tax levied to pay bonds or lease rentals payable from the
tax levied under this section shall be reduced by any amount available
in the allocation fund established under section 39(b)(4) 39(b)(3) of
this chapter or other revenues of the redevelopment commission to the
extent such revenues have been set aside in the redevelopment bond
fund.
(c) As the tax is collected, it shall be accumulated in a separate fund
to be known as the redevelopment district bond fund and shall be
applied to the payment of the bonds as they mature and the interest on
the bonds as it accrues, or to make lease payments and to no other
purpose. All accumulations of the fund before their use for the payment
of bonds and interest or to make lease payments shall be deposited with
HB 1561—LS 7746/DI 134 50
the depository or depositories for other public funds of the unit in
accordance with IC 5-13, unless they are invested under IC 5-13-9.
(d) If there are no outstanding bonds that are payable solely or in
part from tax proceeds allocated under section 39(b)(4) 39(b)(3) of this
chapter and that were issued to pay costs of redevelopment in an
allocation area that is located wholly or in part in the special taxing
district, then all proceeds from the sale or leasing of property in the
allocation area under section 22 of this chapter shall be paid into the
redevelopment district bond fund and become a part of that fund. In
arriving at the tax levy for any year, the redevelopment commission
shall take into account the amount of the proceeds deposited under this
subsection and remaining on hand.
(e) The tax levies provided for in this section are reviewable by
other bodies vested by law with the authority to ascertain that the levies
are sufficient to raise the amount that, with other amounts available, is
sufficient to meet the payments under the lease payable from the levy
of taxes.".
Page 2, line 20, delete "subsection (b)," and insert "subsections (b)
and (c),".
Page 2, between lines 37 and 38, begin a new paragraph and insert:
"(c) The adoption of a declaratory resolution and subsequent
legislative body approval described in subsection (a) are not
required if the expenditures for purposes related to a
redevelopment project that is located outside the boundaries of the
allocation area are for:
(1) infrastructure;
(2) utilities;
(3) drainage; or
(4) environmental remediation.".
Page 5, strike lines 34 through 42.
Page 6, strike lines 1 through 29.
Page 6, line 30, strike "(3)" and insert "(2)".
Page 6, line 35, strike "subdivisions (1) and (2)" and insert
"subdivision (1)".
Page 6, line 38, strike "(4)" and insert "(3)".
Page 6, line 39, strike "(1), (2), and".
Page 6, line 40, strike "(3)" and insert "(1) and (2)".
Page 9, between lines 17 and 18, begin a new line double block
indented and insert:
"(O) Expend money for the maintenance of an
infrastructure project within a tax increment financing
district if the infrastructure project was originally funded
HB 1561—LS 7746/DI 134 51
or supported by tax increment financing funds and if the
use of the funds is limited to the remaining life of the
project. Maintenance expenses eligible under this clause
include:
(i) road and sidewalk repair and upkeep;
(ii) street lighting and landscaping;
(iii) trail maintenance;
(iv) trash collection;
(v) retaining wall stabilization;
(vi) parking facilities;
(vii) administrative expenses of the commission that
would not otherwise have been incurred but for the tax
increment financing project; and
(viii) other tax increment financing funded facilities.
This clause does not relieve an underlying taxing unit of its
maintenance obligations for infrastructure projects not
funded by tax increment financing or after the expiration
of the allocation area.".
Page 9, line 20, strike "(5)" and insert "(4)".
Page 9, line 21, strike "commission shall do the following:" and
insert "following shall occur:".
Page 9, line 22, strike "Determine" and insert "The commission
shall determine".
Page 9, line 28, strike "(4)," and insert "(3),".
Page 9, line 30, strike "(4)." and insert "(3).".
Page 9, line 31, strike "Provide" and insert "The commission shall
provide".
Page 10, line 10, strike "(4)" and insert "(3)".
Page 10, line 12, delete "If:" and insert "The commission shall, if:".
Page 10, line 17, strike "(4);" and insert "(3);".
Page 10, line 19, strike "(4);" and insert "(3);".
Page 10, line 20, strike "the commission shall".
Page 10, line 22, reset in roman "allocate to the respective taxing
units".
Page 10, line 23, reset in roman "in the manner prescribed in
subdivision (1).".
Page 10, line 23, delete "use for nondebt,".
Page 10, delete lines 24 through 26.
Page 10, line 27, delete "subdivision (1).".
Page 10, line 30, after "(1)." insert "Where excess assessed value
amounts are not already explicitly set aside for use within the
current calendar year for a purpose under the current
HB 1561—LS 7746/DI 134 52
development plan, the commission may use its discretion in
allocating excess assessed value amounts to the respective taxing
units rather than reserving those excess assessed value amounts for
future or indefinite purposes.".
Page 10, between lines 30 and 31, begin a new line double block
indented and insert:
"(D) The commission shall annually compile a report with
attendance and communication information regarding
other taxing units and submit it to the department of local
government finance. The department of local government
finance shall include the information contained in the
reports in its annual report to the legislative services
agency required under section 12.7(c) of this chapter.".
Page 10, line 31, strike "(6)" and insert "(5)".
Page 10, line 31, strike "(5)," and insert "(4),".
Page 10, line 39, strike "(5)(A)" and insert "(4)(A)".
Page 11, line 1, strike "(4)" and insert "(3)".
Page 11, line 3, strike "(4)" and insert "(3)".
Page 11, line 17, strike "(b)(4)" and insert "(b)(3)".
Page 11, line 17, strike "(b)(5)," and insert "(b)(4),".
Page 11, line 19, strike "(b)(4)." and insert "(b)(3).".
Page 11, line 36, strike "(b)(4)" and insert "(b)(3)".
Page 11, line 37, strike "(b)(4)" and insert "(b)(3)".
Page 11, line 41, strike "(b)(1), (b)(2), and (b)(3)" and insert "(b)(1)
and (b)(2)".
Page 12, line 1, strike "(b)(4)" and insert "(b)(3)".
Page 12, line 2, strike "(b)(4)" and insert "(b)(3)".
Page 12, line 7, strike "(b)(4)" and insert "(b)(3)".
Page 12, line 9, strike "(b)(1), (b)(2), and (b)(3)" and insert "(b)(1)
and (b)(2)".
Page 12, line 10, strike "(b)(1),".
Page 12, line 11, strike "(b)(2), and (b)(3)" and insert "(b)(1) and
(b)(2)".
Page 12, line 16, strike "(b)(4)," and insert "(b)(3),".
Page 12, line 17, strike "(b)(4)" and insert "(b)(3)".
Page 12, line 38, strike "(b)(4)" and insert "(b)(3)".
Page 14, line 4, after "(m)" insert "This subsection does not
prevent a redevelopment commission from removing parcels from
an existing allocation area before its expiration date or adding
parcels to a new allocation area.".
Page 14, between lines 18 and 19, begin a new paragraph and insert:
"SECTION 10. IC 36-7-14-39.7 IS ADDED TO THE INDIANA
HB 1561—LS 7746/DI 134 53
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 39.7. Notwithstanding any other
law, tax increment revenue may be deposited into a capital account
fund for planned capital projects. Funds deposited into such an
account shall be excluded from rate and levy calculations otherwise
required under this chapter.
SECTION 11. IC 36-7-14-40.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 40.5. (a) For purposes of this
section, an economically distressed census tract is one established
under the federal new markets tax credits under Section 45D of the
Internal Revenue Code.
(b) Notwithstanding any other law, a redevelopment commission
may combine housing tax increment financing with traditional tax
increment financing within an economically distressed census tract
to promote economic development and housing stability.
(c) Within an economically distressed census tract, a
redevelopment commission may establish a new tax increment
financing district and acquire additional parcels for up to five (5)
years following the initial establishment of the tax increment
financing district without additional approvals.
(d) Within an economically distressed census tract, a
redevelopment commission may make a finding to utilize tax
increment financing for projects deemed to enhance quality of life
and quality of place.
SECTION 12. IC 36-7-14-48, AS AMENDED BY P.L.236-2023,
SECTION 180, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 48. (a) Notwithstanding section
39(a) of this chapter, with respect to the allocation and distribution of
property taxes for the accomplishment of a program adopted under
section 45 of this chapter, "base assessed value" means, subject to
section 39(j) of this chapter, the net assessed value of all of the
property, other than personal property, as finally determined for the
assessment date immediately preceding the effective date of the
allocation provision, as adjusted under section 39(h) of this chapter.
(b) The allocation fund established under section 39(b) of this
chapter for the allocation area for a program adopted under section 45
of this chapter may be used only for purposes related to the
accomplishment of the program, including the following:
(1) The construction, rehabilitation, or repair of residential units
within the allocation area.
(2) The construction, reconstruction, or repair of any
HB 1561—LS 7746/DI 134 54
infrastructure (including streets, sidewalks, and sewers) within or
serving the allocation area.
(3) The acquisition of real property and interests in real property
within the allocation area.
(4) The demolition of real property within the allocation area.
(5) The provision of financial assistance to enable individuals and
families to purchase or lease residential units within the allocation
area. However, financial assistance may be provided only to those
individuals and families whose income is at or below the county's
median income for individuals and families, respectively.
(6) The provision of financial assistance to neighborhood
development corporations to permit them to provide financial
assistance for the purposes described in subdivision (5).
(7) For property taxes first due and payable before January 1,
2009, providing each taxpayer in the allocation area a credit for
property tax replacement as determined under subsections (c) and
(d). However, the commission may provide this credit only if the
municipal legislative body (in the case of a redevelopment
commission established by a municipality) or the county
executive (in the case of a redevelopment commission established
by a county) establishes the credit by ordinance adopted in the
year before the year in which the credit is provided.
(c) The maximum credit that may be provided under subsection
(b)(7) to a taxpayer in a taxing district that contains all or part of an
allocation area established for a program adopted under section 45 of
this chapter shall be determined as follows:
STEP ONE: Determine that part of the sum of the amounts
described in IC 6-1.1-21-2(g)(1)(A) and IC 6-1.1-21-2(g)(2)
through IC 6-1.1-21-2(g)(5) (before their repeal) that is
attributable to the taxing district.
STEP TWO: Divide:
(A) that part of each county's eligible property tax replacement
amount (as defined in IC 6-1.1-21-2) (before its repeal) for
that year as determined under IC 6-1.1-21-4(a)(1) (before its
repeal) that is attributable to the taxing district; by
(B) the amount determined under STEP ONE.
STEP THREE: Multiply:
(A) the STEP TWO quotient; by
(B) the taxpayer's taxes (as defined in IC 6-1.1-21-2) (before
its repeal) levied in the taxing district allocated to the
allocation fund, including the amount that would have been
allocated but for the credit.
HB 1561—LS 7746/DI 134 55
(d) The commission may determine to grant to taxpayers in an
allocation area from its allocation fund a credit under this section, as
calculated under subsection (c). Except as provided in subsection (g),
one-half (1/2) of the credit shall be applied to each installment of taxes
(as defined in IC 6-1.1-21-2) (before its repeal) that under
IC 6-1.1-22-9 are due and payable in a year. The commission must
provide for the credit annually by a resolution and must find in the
resolution the following:
(1) That the money to be collected and deposited in the allocation
fund, based upon historical collection rates, after granting the
credit will equal the amounts payable for contractual obligations
from the fund, plus ten percent (10%) of those amounts.
(2) If bonds payable from the fund are outstanding, that there is
a debt service reserve for the bonds that at least equals the amount
of the credit to be granted.
(3) If bonds of a lessor under section 25.2 of this chapter or under
IC 36-1-10 are outstanding and if lease rentals are payable from
the fund, that there is a debt service reserve for those bonds that
at least equals the amount of the credit to be granted.
If the tax increment is insufficient to grant the credit in full, the
commission may grant the credit in part, prorated among all taxpayers.
(e) Notwithstanding section 39(b) of this chapter, the allocation
fund established under section 39(b) of this chapter for the allocation
area for a program adopted under section 45 of this chapter may only
be used to do one (1) or more of the following:
(1) Accomplish one (1) or more of the actions set forth in section
39(b)(4)(A) 39(b)(3)(A) through 39(b)(4)(H) 39(b)(3)(H) and
39(b)(4)(J) 39(b)(3)(J) of this chapter for property that is
residential in nature.
(2) Reimburse the county or municipality for expenditures made
by the county or municipality in order to accomplish the housing
program in that allocation area.
The allocation fund may not be used for operating expenses of the
commission.
(f) Notwithstanding section 39(b) of this chapter, the commission
shall, relative to the allocation fund established under section 39(b) of
this chapter for an allocation area for a program adopted under section
45 of this chapter, do the following before June September 15 of each
year:
(1) Determine the amount, if any, by which the assessed value of
the taxable property in the allocation area for the most recent
assessment date minus the base assessed value, when multiplied
HB 1561—LS 7746/DI 134 56
by the estimated tax rate of the allocation area, will exceed the
amount of assessed value needed to produce the property taxes
necessary to:
(A) make the distribution required under section 39(b)(2) and
39(b)(3) of this chapter;
(B) make, when due, principal and interest payments on bonds
described in section 39(b)(4) 39(b)(3) of this chapter;
(C) pay the amount necessary for other purposes described in
section 39(b)(4) 39(b)(3) of this chapter; and
(D) reimburse the county or municipality for anticipated
expenditures described in subsection (e)(2).
(2) Provide a written notice to the county auditor, the fiscal body
of the county or municipality that established the department of
redevelopment, and the officers who are authorized to fix budgets,
tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
taxing units that is wholly or partly located within the allocation
area. The county auditor, upon receiving the notice, shall forward
this notice (in an electronic format) to the department of local
government finance not later than June September 15 of each
year. The notice must:
(A) state the amount, if any, of excess property taxes that the
commission has determined may be paid to the respective
taxing units in the manner prescribed in section 39(b)(1) of
this chapter; or
(B) state that the commission has determined that there is no
excess assessed value that may be allocated to the respective
taxing units in the manner prescribed in subdivision (1).
The county auditor shall allocate to the respective taxing units the
amount, if any, of excess assessed value determined by the
commission.
(3) If:
(A) the amount of excess assessed value determined by the
commission is expected to generate more than two hundred
percent (200%) of the amount of allocated tax proceeds
necessary to make, when due, principal and interest payments
on bonds described in subdivision (1); plus
(B) the amount necessary for other purposes described in
subdivision (1);
the commission shall submit to the legislative body of the unit its
determination of the excess assessed value that the commission
proposes to allocate to the respective taxing units in the manner
prescribed in subdivision (2). The legislative body of the unit may
HB 1561—LS 7746/DI 134 57
approve the commission's determination or modify the amount of
the excess assessed value that will be allocated to the respective
taxing units in the manner prescribed in subdivision (2).
(g) This subsection applies to an allocation area only to the extent
that the net assessed value of property that is assessed as residential
property under the rules of the department of local government finance
is not included in the base assessed value. If property tax installments
with respect to a homestead (as defined in IC 6-1.1-12-37) are due in
installments established by the department of local government finance
under IC 6-1.1-22-9.5, each taxpayer subject to those installments in an
allocation area is entitled to an additional credit under subsection (d)
for the taxes (as defined in IC 6-1.1-21-2) (before its repeal) due in
installments. The credit shall be applied in the same proportion to each
installment of taxes (as defined in IC 6-1.1-21-2) (before its repeal).
SECTION 13. IC 36-7-14-52, AS AMENDED BY P.L.236-2023,
SECTION 181, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 52. (a) Notwithstanding section
39(a) of this chapter, with respect to the allocation and distribution of
property taxes for the accomplishment of the purposes of an
age-restricted housing program adopted under section 49 of this
chapter, "base assessed value" means, subject to section 39(j) of this
chapter, the net assessed value of all of the property, other than
personal property, as finally determined for the assessment date
immediately preceding the effective date of the allocation provision, as
adjusted under section 39(h) of this chapter.
(b) The allocation fund established under section 39(b) of this
chapter for the allocation area for an age-restricted housing program
adopted under section 49 of this chapter may be used only for purposes
related to the accomplishment of the purposes of the program,
including, but not limited to, the following:
(1) The construction of any infrastructure (including streets,
sidewalks, and sewers) or local public improvements in, serving,
or benefiting the allocation area.
(2) The acquisition of real property and interests in real property
within the allocation area.
(3) The preparation of real property in anticipation of
development of the real property within the allocation area.
(4) To do any of the following:
(A) Pay the principal of and interest on bonds or any other
obligations payable from allocated tax proceeds in the
allocation area that are incurred by the redevelopment district
for the purpose of financing or refinancing the age-restricted
HB 1561—LS 7746/DI 134 58
housing program established under section 49 of this chapter
for the allocation area.
(B) Establish, augment, or restore the debt service reserve for
bonds payable solely or in part from allocated tax proceeds in
the allocation area.
(C) Pay the principal of and interest on bonds payable from
allocated tax proceeds in the allocation area and from the
special tax levied under section 27 of this chapter.
(D) Pay the principal of and interest on bonds issued by the
unit to pay for local public improvements that are physically
located in or physically connected to the allocation area.
(E) Pay premiums on the redemption before maturity of bonds
payable solely or in part from allocated tax proceeds in the
allocation area.
(F) Make payments on leases payable from allocated tax
proceeds in the allocation area under section 25.2 of this
chapter.
(G) Reimburse the unit for expenditures made by the unit for
local public improvements (which include buildings, parking
facilities, and other items described in section 25.1(a) of this
chapter) that are physically located in or physically connected
to the allocation area.
(c) Notwithstanding section 39(b) of this chapter, the commission
shall, relative to the allocation fund established under section 39(b) of
this chapter for an allocation area for an age-restricted housing program
adopted under section 49 of this chapter, do the following before June
September 15 of each year:
(1) Determine the amount, if any, by which the assessed value of
the taxable property in the allocation area for the most recent
assessment date minus the base assessed value, when multiplied
by the estimated tax rate of the allocation area, will exceed the
amount of assessed value needed to produce the property taxes
necessary to:
(A) make the distribution required under section 39(b)(2) and
39(b)(3) of this chapter;
(B) make, when due, principal and interest payments on bonds
described in section 39(b)(4) 39(b)(3) of this chapter;
(C) pay the amount necessary for other purposes described in
section 39(b)(4) 39(b)(3) of this chapter; and
(D) reimburse the county or municipality for anticipated
expenditures described in subsection (b)(2).
(2) Provide a written notice to the county auditor, the fiscal body
HB 1561—LS 7746/DI 134 59
of the county or municipality that established the department of
redevelopment, and the officers who are authorized to fix budgets,
tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
taxing units that is wholly or partly located within the allocation
area. The county auditor, upon receiving the notice, shall forward
this notice (in an electronic format) to the department of local
government finance not later than June September 15 of each
year. The notice must:
(A) state the amount, if any, of excess property taxes that the
commission has determined may be paid to the respective
taxing units in the manner prescribed in section 39(b)(1) of
this chapter; or
(B) state that the commission has determined that there is no
excess assessed value that may be allocated to the respective
taxing units in the manner prescribed in subdivision (1).
The county auditor shall allocate to the respective taxing units the
amount, if any, of excess assessed value determined by the
commission.
SECTION 14. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
SECTION 183, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 56. (a) This section applies only to
a residential housing development program authorized by section 53 of
this chapter.
(b) Notwithstanding section 39(a) of this chapter, with respect to the
allocation and distribution of property taxes for the accomplishment of
the purposes of a residential housing development program adopted
under section 53 of this chapter, "base assessed value" means the net
assessed value of all of the property, other than personal property, as
finally determined for the assessment date immediately preceding the
effective date of the allocation provision, as adjusted under section
39(h) of this chapter.
(c) The allocation fund established under section 39(b) of this
chapter for the allocation area for a residential housing development
program adopted under section 53 of this chapter may be used only for
purposes related to the accomplishment of the purposes of the program,
including, but not limited to, the following:
(1) The construction of any infrastructure (including streets,
roads, and sidewalks) or local public improvements in, serving,
or benefiting a residential housing development project.
(2) The acquisition of real property and interests in real property
for rehabilitation purposes within the allocation area.
(3) The preparation of real property in anticipation of
HB 1561—LS 7746/DI 134 60
development of the real property within the allocation area.
(4) To do any of the following:
(A) Pay the principal of and interest on bonds or any other
obligations payable from allocated tax proceeds in the
allocation area that are incurred by the redevelopment district
for the purpose of financing or refinancing the residential
housing development program established under section 53 of
this chapter for the allocation area.
(B) Establish, augment, or restore the debt service reserve for
bonds payable solely or in part from allocated tax proceeds in
the allocation area.
(C) Pay the principal of and interest on bonds payable from
allocated tax proceeds in the allocation area and from the
special tax levied under section 27 of this chapter.
(D) Pay the principal of and interest on bonds issued by the
unit to pay for local public improvements that are physically
located in or physically connected to the allocation area.
(E) Pay premiums on the redemption before maturity of bonds
payable solely or in part from allocated tax proceeds in the
allocation area.
(F) Make payments on leases payable from allocated tax
proceeds in the allocation area under section 25.2 of this
chapter.
(G) Reimburse the unit for expenditures made by the unit for
local public improvements (which include buildings, parking
facilities, and other items described in section 25.1(a) of this
chapter) that are physically located in or physically connected
to the allocation area.
(d) Notwithstanding section 39(b) of this chapter, the commission
shall, relative to the allocation fund established under section 39(b) of
this chapter for an allocation area for a residential housing
development program adopted under section 53 of this chapter, do the
following before June September 15 of each year:
(1) Determine the amount, if any, by which the assessed value of
the taxable property in the allocation area for the most recent
assessment date minus the base assessed value, when multiplied
by the estimated tax rate of the allocation area, will exceed the
amount of assessed value needed to produce the property taxes
necessary to:
(A) make the distribution required under section 39(b)(2) and
39(b)(3) of this chapter;
(B) make, when due, principal and interest payments on bonds
HB 1561—LS 7746/DI 134 61
described in section 39(b)(4) 39(b)(3) of this chapter;
(C) pay the amount necessary for other purposes described in
section 39(b)(4) 39(b)(3) of this chapter; and
(D) reimburse the county or municipality for anticipated
expenditures described in subsection (c)(2).
(2) Provide a written notice to the county auditor, the fiscal body
of the county or municipality that established the department of
redevelopment, the officers who are authorized to fix budgets, tax
rates, and tax levies under IC 6-1.1-17-5 for each of the other
taxing units that are wholly or partly located within the allocation
area, and (in an electronic format) the department of local
government finance. The notice must:
(A) state the amount, if any, of excess property taxes that the
commission has determined may be paid to the respective
taxing units in the manner prescribed in section 39(b)(1) of
this chapter; or
(B) state that the commission has determined that there is no
excess assessed value that may be allocated to the respective
taxing units in the manner prescribed in subdivision (1).
The county auditor shall allocate to the respective taxing units the
amount, if any, of excess assessed value determined by the
commission.
(e) If the amount of excess assessed value determined by the
commission is expected to generate more than two hundred percent
(200%) of the amount of allocated tax proceeds:
(1) necessary to make, when due, principal and interest payments
on bonds described in section 39(b)(4) 39(b)(3) of this chapter;
plus
(2) the amount necessary for other purposes described in section
39(b)(4) 39(b)(3) of this chapter;
the commission shall submit to the county or municipal legislative
body its determination of the excess assessed value that the
commission proposes to allocate to the respective taxing units in the
manner prescribed in subsection (d)(2). The county or municipal
legislative body may approve the commission's determination or
modify the amount of the excess assessed value that will be allocated
to the respective taxing units in the manner prescribed in subsection
(d)(2).
(f) An allocation area must terminate on the date the residential
housing development program is terminated as set forth in section
53(e) of this chapter.
SECTION 10. IC 36-7.5-4.5-18, AS AMENDED BY P.L.236-2023,
HB 1561—LS 7746/DI 134 62
SECTION 194, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 18. If a district is established, the
following apply to the administration and use of incremental property
tax revenue by the development authority, or a redevelopment
commission in the case of a district located in a cash participant
county, in the district:
(1) The department of local government finance shall adjust the
base assessed value to neutralize any effect of a reassessment and
the annual adjustment of the real property in the district in the
same manner as provided in IC 36-7-14-39(h).
(2) Proceeds of the property taxes approved by the voters in a
referendum or local public question shall be allocated to and,
when collected, paid into the funds of the taxing unit for which
the referendum or local public question was conducted in the
same manner as provided in IC 36-7-14-39(b)(3).
IC 36-7-14-39(b)(2).
(3) Incremental property tax revenue may be used only for one (1)
or more of the following purposes for a district:
(A) To finance the improvement, construction, reconstruction,
renovation, and acquisition of real and personal property
improvements within a district.
(B) To pay the principal of and interest on any obligations that
are incurred for the purpose of financing or refinancing
development in the district, including local public
improvements that are physically located in or physically
connected to the district.
(C) To establish, augment, or restore the debt service reserve
for bonds payable solely or in part from incremental property
tax revenue from the district.
(D) To pay premiums on the redemption before maturity of
bonds payable solely or in part from incremental property tax
revenue from the district.
(E) To make payments on leases payable from incremental
property tax revenue from the district.
(F) To reimburse a municipality in which a district is located
for expenditures made by the municipality for local public
improvements that are physically located in or physically
connected to the district.
(G) To reimburse a municipality for rentals paid by the
municipality for a building or parking facility that is physically
located in or physically connected to the district under any
lease entered into under IC 36-1-10.
HB 1561—LS 7746/DI 134 63
(H) To pay expenses incurred by the development authority for
local public improvements that are in the district or serving the
district.
SECTION 11. [EFFECTIVE JULY 1, 2026] (a) The general
assembly urges local units to work together to find common
ground regarding the use of tax increment financing to promote
shared community objectives, while providing for the release of
assessed value from allocation areas whenever feasible in a manner
consistent with shared community objectives.
(b) This SECTION expires June 30, 2028.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to HB 1561 as introduced.)
THOMPSON
Committee Vote: yeas 17, nays 6.
HB 1561—LS 7746/DI 134