*SB0104.1*
January 29, 2025
SENATE BILL No. 104
_____
DIGEST OF SB 104 (Updated January 28, 2025 11:50 am - DI 140)
Citations Affected: IC 36-7.
Synopsis: Residential tax increment financing. Provides, in the case
of an allocation provision adopted after June 30, 2025, for a residential
housing development program, that the redevelopment commission
(commission) shall annually transfer at least 5% of the aggregate
allocated tax proceeds from the allocation area to the general fund of
the unit that established the commission to assist that unit in the
payment of costs incurred for the provision of police, fire, and
ambulance services within the allocation area.
Effective: July 1, 2025.
Niemeyer, Dernulc, Bohacek
January 8, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
January 28, 2025, reported favorably — Do Pass.
SB 104—LS 6221/DI 129 January 29, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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SENATE BILL No. 104
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
2 SECTION 183, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2025]: Sec. 56. (a) This section applies only to
4 a residential housing development program authorized by section 53 of
5 this chapter.
6 (b) Notwithstanding section 39(a) of this chapter, with respect to the
7 allocation and distribution of property taxes for the accomplishment of
8 the purposes of a residential housing development program adopted
9 under section 53 of this chapter, "base assessed value" means the net
10 assessed value of all of the property, other than personal property, as
11 finally determined for the assessment date immediately preceding the
12 effective date of the allocation provision, as adjusted under section
13 39(h) of this chapter.
14 (c) This subsection applies to an allocation provision adopted
15 after June 30, 2025, for a residential housing development program
16 adopted under section 53 of this chapter. An allocation provision
17 described in this subsection must provide that the commission shall
SB 104—LS 6221/DI 129 2
1 annually transfer at least five percent (5%) of the aggregate
2 allocated tax proceeds from the allocation area to the general fund
3 of the unit that established the commission to assist that unit in the
4 payment of costs incurred for the provision of police, fire, and
5 ambulance services within the allocation area.
6 (c) (d) The allocation fund established under section 39(b) of this
7 chapter for the allocation area for a residential housing development
8 program adopted under section 53 of this chapter may be used only for
9 purposes related to the accomplishment of the purposes of the program,
10 including, but not limited to, the following:
11 (1) The construction of any infrastructure (including streets,
12 roads, and sidewalks) or local public improvements in, serving,
13 or benefiting a residential housing development project.
14 (2) The acquisition of real property and interests in real property
15 for rehabilitation purposes within the allocation area.
16 (3) The preparation of real property in anticipation of
17 development of the real property within the allocation area.
18 (4) To do any of the following:
19 (A) Pay the principal of and interest on bonds or any other
20 obligations payable from allocated tax proceeds in the
21 allocation area that are incurred by the redevelopment district
22 for the purpose of financing or refinancing the residential
23 housing development program established under section 53 of
24 this chapter for the allocation area.
25 (B) Establish, augment, or restore the debt service reserve for
26 bonds payable solely or in part from allocated tax proceeds in
27 the allocation area.
28 (C) Pay the principal of and interest on bonds payable from
29 allocated tax proceeds in the allocation area and from the
30 special tax levied under section 27 of this chapter.
31 (D) Pay the principal of and interest on bonds issued by the
32 unit to pay for local public improvements that are physically
33 located in or physically connected to the allocation area.
34 (E) Pay premiums on the redemption before maturity of bonds
35 payable solely or in part from allocated tax proceeds in the
36 allocation area.
37 (F) Make payments on leases payable from allocated tax
38 proceeds in the allocation area under section 25.2 of this
39 chapter.
40 (G) Reimburse the unit for expenditures made by the unit for
41 local public improvements (which include buildings, parking
42 facilities, and other items described in section 25.1(a) of this
SB 104—LS 6221/DI 129 3
1 chapter) that are physically located in or physically connected
2 to the allocation area.
3 (d) (e) Notwithstanding section 39(b) of this chapter, the
4 commission shall, relative to the allocation fund established under
5 section 39(b) of this chapter for an allocation area for a residential
6 housing development program adopted under section 53 of this chapter,
7 do the following before June 15 of each year:
8 (1) Determine the amount, if any, by which the assessed value of
9 the taxable property in the allocation area for the most recent
10 assessment date minus the base assessed value, when multiplied
11 by the estimated tax rate of the allocation area, will exceed the
12 amount of assessed value needed to produce the property taxes
13 necessary to:
14 (A) make the transfer required under subsection (c);
15 (A) (B) make the distribution required under section 39(b)(2)
16 and 39(b)(3) of this chapter;
17 (B) (C) make, when due, principal and interest payments on
18 bonds described in section 39(b)(4) of this chapter;
19 (C) (D) pay the amount necessary for other purposes described
20 in section 39(b)(4) of this chapter; and
21 (D) (E) reimburse the county or municipality for anticipated
22 expenditures described in subsection (c)(2). (d)(2).
23 (2) Provide a written notice to the county auditor, the fiscal body
24 of the county or municipality that established the department of
25 redevelopment, the officers who are authorized to fix budgets, tax
26 rates, and tax levies under IC 6-1.1-17-5 for each of the other
27 taxing units that are wholly or partly located within the allocation
28 area, and (in an electronic format) the department of local
29 government finance. The notice must:
30 (A) state the amount, if any, of excess property taxes that the
31 commission has determined may be paid to the respective
32 taxing units in the manner prescribed in section 39(b)(1) of
33 this chapter; or
34 (B) state that the commission has determined that there is no
35 excess assessed value that may be allocated to the respective
36 taxing units in the manner prescribed in subdivision (1).
37 The county auditor shall allocate to the respective taxing units the
38 amount, if any, of excess assessed value determined by the
39 commission.
40 (e) (f) If the amount of excess assessed value determined by the
41 commission is expected to generate more than two hundred percent
42 (200%) of the amount of allocated tax proceeds:
SB 104—LS 6221/DI 129 4
1 (1) necessary to make, when due, principal and interest payments
2 on bonds described in section 39(b)(4) of this chapter; plus
3 (2) the amount necessary for other purposes described in section
4 39(b)(4) of this chapter;
5 the commission shall submit to the county or municipal legislative
6 body its determination of the excess assessed value that the
7 commission proposes to allocate to the respective taxing units in the
8 manner prescribed in subsection (d)(2). (e)(2). The county or municipal
9 legislative body may approve the commission's determination or
10 modify the amount of the excess assessed value that will be allocated
11 to the respective taxing units in the manner prescribed in subsection
12 (d)(2). (e)(2).
13 (f) (g) An allocation area must terminate on the date the residential
14 housing development program is terminated as set forth in section
15 53(e) of this chapter.
SB 104—LS 6221/DI 129 5
COMMITTEE REPORT
Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred Senate Bill No. 104, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill DO PASS.
(Reference is to SB 104 as introduced.)
HOLDMAN, Chairperson
Committee Vote: Yeas 11, Nays 0
SB 104—LS 6221/DI 129