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Indiana Senate Bill SB0104

Indiana 2025 Regular Session

Indiana Senate Bill SB0104 Compare Versions

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1-*SB0104.2*
2-Reprinted
3-February 7, 2025
1+*SB0104.1*
2+January 29, 2025
43 SENATE BILL No. 104
54 _____
6-DIGEST OF SB 104 (Updated February 6, 2025 2:48 pm - DI 129)
5+DIGEST OF SB 104 (Updated January 28, 2025 11:50 am - DI 140)
76 Citations Affected: IC 36-7.
87 Synopsis: Residential tax increment financing. Provides, in the case
98 of an allocation provision adopted after June 30, 2025, for a residential
109 housing development program, that the redevelopment commission
1110 (commission) shall annually transfer at least 5% of the aggregate
12-allocated tax proceeds from the allocation area to the unit that
13-established the commission. Specifies that the unit must use the
14-revenue for police and fire services that serve the allocation area.
11+allocated tax proceeds from the allocation area to the general fund of
12+the unit that established the commission to assist that unit in the
13+payment of costs incurred for the provision of police, fire, and
14+ambulance services within the allocation area.
1515 Effective: July 1, 2025.
16-Niemeyer, Dernulc, Bohacek,
17-Randolph Lonnie M
16+Niemeyer, Dernulc, Bohacek
1817 January 8, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
1918 January 28, 2025, reported favorably — Do Pass.
20-February 6, 2025, read second time, amended, ordered engrossed.
21-SB 104—LS 6221/DI 129 Reprinted
22-February 7, 2025
19+SB 104—LS 6221/DI 129 January 29, 2025
2320 First Regular Session of the 124th General Assembly (2025)
2421 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
2522 Constitution) is being amended, the text of the existing provision will appear in this style type,
2623 additions will appear in this style type, and deletions will appear in this style type.
2724 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
2825 provision adopted), the text of the new provision will appear in this style type. Also, the
2926 word NEW will appear in that style type in the introductory clause of each SECTION that adds
3027 a new provision to the Indiana Code or the Indiana Constitution.
3128 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
3229 between statutes enacted by the 2024 Regular Session of the General Assembly.
3330 SENATE BILL No. 104
3431 A BILL FOR AN ACT to amend the Indiana Code concerning
3532 taxation.
3633 Be it enacted by the General Assembly of the State of Indiana:
37-1 SECTION 1. IC 36-7-14-53, AS AMENDED BY P.L.204-2023,
38-2 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39-3 JULY 1, 2025]: Sec. 53. (a) A commission may establish a residential
40-4 housing development program by resolution for the construction of new
41-5 residential housing or the renovation of existing residential housing in
42-6 an area within the jurisdiction of the commission.
43-7 (b) The program, which may include any relevant elements the
44-8 commission considers appropriate, may be adopted as part of a
45-9 redevelopment plan or amendment to a redevelopment plan, and must
46-10 establish an allocation area for purposes of sections 39 and 56 of this
47-11 chapter for the accomplishment of the program. The program must be
48-12 approved by the municipal legislative body or county executive as
49-13 specified in section 17 of this chapter.
50-14 (c) The notice and hearing provisions of sections 17 and 17.5 of this
51-15 chapter, including notice under section 17(c) of this chapter to a taxing
52-16 unit that is wholly or partly located within an allocation area, apply to
53-17 the resolution adopted under subsection (b). Judicial review of the
34+1 SECTION 1. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
35+2 SECTION 183, IS AMENDED TO READ AS FOLLOWS
36+3 [EFFECTIVE JULY 1, 2025]: Sec. 56. (a) This section applies only to
37+4 a residential housing development program authorized by section 53 of
38+5 this chapter.
39+6 (b) Notwithstanding section 39(a) of this chapter, with respect to the
40+7 allocation and distribution of property taxes for the accomplishment of
41+8 the purposes of a residential housing development program adopted
42+9 under section 53 of this chapter, "base assessed value" means the net
43+10 assessed value of all of the property, other than personal property, as
44+11 finally determined for the assessment date immediately preceding the
45+12 effective date of the allocation provision, as adjusted under section
46+13 39(h) of this chapter.
47+14 (c) This subsection applies to an allocation provision adopted
48+15 after June 30, 2025, for a residential housing development program
49+16 adopted under section 53 of this chapter. An allocation provision
50+17 described in this subsection must provide that the commission shall
5451 SB 104—LS 6221/DI 129 2
55-1 resolution may be made under section 18 of this chapter.
56-2 (d) Before formal submission of any residential housing
57-3 development program to the commission, the department of
58-4 redevelopment shall:
59-5 (1) consult with persons interested in or affected by the proposed
60-6 program, including the superintendents and governing body
61-7 presidents of all school corporations located within the proposed
62-8 allocation area;
63-9 (2) provide the affected neighborhood associations, residents, and
64-10 township assessors with an adequate opportunity to participate in
65-11 an advisory role in planning, implementing, and evaluating the
66-12 proposed program; and
67-13 (3) hold at least one (1) public meeting to obtain the views of
68-14 neighborhood associations and residents of the affected
69-15 neighborhood. The department of redevelopment shall send notice
70-16 thirty (30) days prior to the public meeting to the fiscal officer of
71-17 all affected taxing units and to the superintendents and governing
72-18 body presidents of all school corporations located within the
73-19 proposed allocation area.
74-20 (e) A residential housing development program established under
75-21 this section must terminate not later than the earlier of:
76-22 (1) twenty (20) years after the date on which the first obligation
77-23 was incurred to pay principal and interest on bonds or lease
78-24 rentals on leases payable from tax increment revenues from the
79-25 program; or
80-26 (2) the date on which the bond obligations or lease rentals
81-27 described in subdivision (1) are satisfied.
82-28 (f) A county or municipality may request from the department of
83-29 local government finance a report, if it exists, describing the effect of
84-30 current assessed value allocated to tax increment financing allocation
85-31 areas on the amount of the tax levy or proceeds and the credit for
86-32 excessive property taxes under IC 6-1.1-20.6 for the taxing units within
87-33 the boundaries of the residential housing development program.
88-34 SECTION 2. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
89-35 SECTION 183, IS AMENDED TO READ AS FOLLOWS
90-36 [EFFECTIVE JULY 1, 2025]: Sec. 56. (a) This section applies only to
91-37 a residential housing development program authorized by section 53 of
92-38 this chapter.
93-39 (b) Notwithstanding section 39(a) of this chapter, with respect to the
94-40 allocation and distribution of property taxes for the accomplishment of
95-41 the purposes of a residential housing development program adopted
96-42 under section 53 of this chapter, "base assessed value" means the net
52+1 annually transfer at least five percent (5%) of the aggregate
53+2 allocated tax proceeds from the allocation area to the general fund
54+3 of the unit that established the commission to assist that unit in the
55+4 payment of costs incurred for the provision of police, fire, and
56+5 ambulance services within the allocation area.
57+6 (c) (d) The allocation fund established under section 39(b) of this
58+7 chapter for the allocation area for a residential housing development
59+8 program adopted under section 53 of this chapter may be used only for
60+9 purposes related to the accomplishment of the purposes of the program,
61+10 including, but not limited to, the following:
62+11 (1) The construction of any infrastructure (including streets,
63+12 roads, and sidewalks) or local public improvements in, serving,
64+13 or benefiting a residential housing development project.
65+14 (2) The acquisition of real property and interests in real property
66+15 for rehabilitation purposes within the allocation area.
67+16 (3) The preparation of real property in anticipation of
68+17 development of the real property within the allocation area.
69+18 (4) To do any of the following:
70+19 (A) Pay the principal of and interest on bonds or any other
71+20 obligations payable from allocated tax proceeds in the
72+21 allocation area that are incurred by the redevelopment district
73+22 for the purpose of financing or refinancing the residential
74+23 housing development program established under section 53 of
75+24 this chapter for the allocation area.
76+25 (B) Establish, augment, or restore the debt service reserve for
77+26 bonds payable solely or in part from allocated tax proceeds in
78+27 the allocation area.
79+28 (C) Pay the principal of and interest on bonds payable from
80+29 allocated tax proceeds in the allocation area and from the
81+30 special tax levied under section 27 of this chapter.
82+31 (D) Pay the principal of and interest on bonds issued by the
83+32 unit to pay for local public improvements that are physically
84+33 located in or physically connected to the allocation area.
85+34 (E) Pay premiums on the redemption before maturity of bonds
86+35 payable solely or in part from allocated tax proceeds in the
87+36 allocation area.
88+37 (F) Make payments on leases payable from allocated tax
89+38 proceeds in the allocation area under section 25.2 of this
90+39 chapter.
91+40 (G) Reimburse the unit for expenditures made by the unit for
92+41 local public improvements (which include buildings, parking
93+42 facilities, and other items described in section 25.1(a) of this
9794 SB 104—LS 6221/DI 129 3
98-1 assessed value of all of the property, other than personal property, as
99-2 finally determined for the assessment date immediately preceding the
100-3 effective date of the allocation provision, as adjusted under section
101-4 39(h) of this chapter.
102-5 (c) This subsection applies to an allocation provision adopted
103-6 after June 30, 2025, for a residential housing development program
104-7 adopted under section 53 of this chapter. An allocation provision
105-8 described in this subsection must provide that the commission shall
106-9 annually transfer at least five percent (5%) of the aggregate
107-10 allocated tax proceeds from the allocation area to the unit that
108-11 established the commission. The unit must use the revenue in
109-12 accordance with section 12.2(a)(28) of this chapter for police and
110-13 fire services that serve the allocation area.
111-14 (c) (d) The allocation fund established under section 39(b) of this
112-15 chapter for the allocation area for a residential housing development
113-16 program adopted under section 53 of this chapter may be used only for
114-17 purposes related to the accomplishment of the purposes of the program,
115-18 including, but not limited to, the following:
116-19 (1) The construction of any infrastructure (including streets,
117-20 roads, and sidewalks) or local public improvements in, serving,
118-21 or benefiting a residential housing development project.
119-22 (2) The acquisition of real property and interests in real property
120-23 for rehabilitation purposes within the allocation area.
121-24 (3) The preparation of real property in anticipation of
122-25 development of the real property within the allocation area.
123-26 (4) To do any of the following:
124-27 (A) Pay the principal of and interest on bonds or any other
125-28 obligations payable from allocated tax proceeds in the
126-29 allocation area that are incurred by the redevelopment district
127-30 for the purpose of financing or refinancing the residential
128-31 housing development program established under section 53 of
129-32 this chapter for the allocation area.
130-33 (B) Establish, augment, or restore the debt service reserve for
131-34 bonds payable solely or in part from allocated tax proceeds in
132-35 the allocation area.
133-36 (C) Pay the principal of and interest on bonds payable from
134-37 allocated tax proceeds in the allocation area and from the
135-38 special tax levied under section 27 of this chapter.
136-39 (D) Pay the principal of and interest on bonds issued by the
137-40 unit to pay for local public improvements that are physically
138-41 located in or physically connected to the allocation area.
139-42 (E) Pay premiums on the redemption before maturity of bonds
95+1 chapter) that are physically located in or physically connected
96+2 to the allocation area.
97+3 (d) (e) Notwithstanding section 39(b) of this chapter, the
98+4 commission shall, relative to the allocation fund established under
99+5 section 39(b) of this chapter for an allocation area for a residential
100+6 housing development program adopted under section 53 of this chapter,
101+7 do the following before June 15 of each year:
102+8 (1) Determine the amount, if any, by which the assessed value of
103+9 the taxable property in the allocation area for the most recent
104+10 assessment date minus the base assessed value, when multiplied
105+11 by the estimated tax rate of the allocation area, will exceed the
106+12 amount of assessed value needed to produce the property taxes
107+13 necessary to:
108+14 (A) make the transfer required under subsection (c);
109+15 (A) (B) make the distribution required under section 39(b)(2)
110+16 and 39(b)(3) of this chapter;
111+17 (B) (C) make, when due, principal and interest payments on
112+18 bonds described in section 39(b)(4) of this chapter;
113+19 (C) (D) pay the amount necessary for other purposes described
114+20 in section 39(b)(4) of this chapter; and
115+21 (D) (E) reimburse the county or municipality for anticipated
116+22 expenditures described in subsection (c)(2). (d)(2).
117+23 (2) Provide a written notice to the county auditor, the fiscal body
118+24 of the county or municipality that established the department of
119+25 redevelopment, the officers who are authorized to fix budgets, tax
120+26 rates, and tax levies under IC 6-1.1-17-5 for each of the other
121+27 taxing units that are wholly or partly located within the allocation
122+28 area, and (in an electronic format) the department of local
123+29 government finance. The notice must:
124+30 (A) state the amount, if any, of excess property taxes that the
125+31 commission has determined may be paid to the respective
126+32 taxing units in the manner prescribed in section 39(b)(1) of
127+33 this chapter; or
128+34 (B) state that the commission has determined that there is no
129+35 excess assessed value that may be allocated to the respective
130+36 taxing units in the manner prescribed in subdivision (1).
131+37 The county auditor shall allocate to the respective taxing units the
132+38 amount, if any, of excess assessed value determined by the
133+39 commission.
134+40 (e) (f) If the amount of excess assessed value determined by the
135+41 commission is expected to generate more than two hundred percent
136+42 (200%) of the amount of allocated tax proceeds:
140137 SB 104—LS 6221/DI 129 4
141-1 payable solely or in part from allocated tax proceeds in the
142-2 allocation area.
143-3 (F) Make payments on leases payable from allocated tax
144-4 proceeds in the allocation area under section 25.2 of this
145-5 chapter.
146-6 (G) Reimburse the unit for expenditures made by the unit for
147-7 local public improvements (which include buildings, parking
148-8 facilities, and other items described in section 25.1(a) of this
149-9 chapter) that are physically located in or physically connected
150-10 to the allocation area.
151-11 (d) (e) Notwithstanding section 39(b) of this chapter, the
152-12 commission shall, relative to the allocation fund established under
153-13 section 39(b) of this chapter for an allocation area for a residential
154-14 housing development program adopted under section 53 of this chapter,
155-15 do the following before June 15 of each year:
156-16 (1) Determine the amount, if any, by which the assessed value of
157-17 the taxable property in the allocation area for the most recent
158-18 assessment date minus the base assessed value, when multiplied
159-19 by the estimated tax rate of the allocation area, will exceed the
160-20 amount of assessed value needed to produce the property taxes
161-21 necessary to:
162-22 (A) make the transfer required under subsection (c);
163-23 (A) (B) make the distribution required under section 39(b)(2)
164-24 and 39(b)(3) of this chapter;
165-25 (B) (C) make, when due, principal and interest payments on
166-26 bonds described in section 39(b)(4) of this chapter;
167-27 (C) (D) pay the amount necessary for other purposes described
168-28 in section 39(b)(4) of this chapter; and
169-29 (D) (E) reimburse the county or municipality for anticipated
170-30 expenditures described in subsection (c)(2). (d)(2).
171-31 (2) Provide a written notice to the county auditor, the fiscal body
172-32 of the county or municipality that established the department of
173-33 redevelopment, the officers who are authorized to fix budgets, tax
174-34 rates, and tax levies under IC 6-1.1-17-5 for each of the other
175-35 taxing units that are wholly or partly located within the allocation
176-36 area, and (in an electronic format) the department of local
177-37 government finance. The notice must:
178-38 (A) state the amount, if any, of excess property taxes that the
179-39 commission has determined may be paid to the respective
180-40 taxing units in the manner prescribed in section 39(b)(1) of
181-41 this chapter; or
182-42 (B) state that the commission has determined that there is no
138+1 (1) necessary to make, when due, principal and interest payments
139+2 on bonds described in section 39(b)(4) of this chapter; plus
140+3 (2) the amount necessary for other purposes described in section
141+4 39(b)(4) of this chapter;
142+5 the commission shall submit to the county or municipal legislative
143+6 body its determination of the excess assessed value that the
144+7 commission proposes to allocate to the respective taxing units in the
145+8 manner prescribed in subsection (d)(2). (e)(2). The county or municipal
146+9 legislative body may approve the commission's determination or
147+10 modify the amount of the excess assessed value that will be allocated
148+11 to the respective taxing units in the manner prescribed in subsection
149+12 (d)(2). (e)(2).
150+13 (f) (g) An allocation area must terminate on the date the residential
151+14 housing development program is terminated as set forth in section
152+15 53(e) of this chapter.
183153 SB 104—LS 6221/DI 129 5
184-1 excess assessed value that may be allocated to the respective
185-2 taxing units in the manner prescribed in subdivision (1).
186-3 The county auditor shall allocate to the respective taxing units the
187-4 amount, if any, of excess assessed value determined by the
188-5 commission.
189-6 (e) (f) If the amount of excess assessed value determined by the
190-7 commission is expected to generate more than two hundred percent
191-8 (200%) of the amount of allocated tax proceeds:
192-9 (1) necessary to make, when due, principal and interest payments
193-10 on bonds described in section 39(b)(4) of this chapter; plus
194-11 (2) the amount necessary for other purposes described in section
195-12 39(b)(4) of this chapter;
196-13 the commission shall submit to the county or municipal legislative
197-14 body its determination of the excess assessed value that the
198-15 commission proposes to allocate to the respective taxing units in the
199-16 manner prescribed in subsection (d)(2). (e)(2). The county or municipal
200-17 legislative body may approve the commission's determination or
201-18 modify the amount of the excess assessed value that will be allocated
202-19 to the respective taxing units in the manner prescribed in subsection
203-20 (d)(2). (e)(2).
204-21 (f) (g) An allocation area must terminate on the date the residential
205-22 housing development program is terminated as set forth in section
206-23 53(e) of this chapter.
207-SB 104—LS 6221/DI 129 6
208154 COMMITTEE REPORT
209155 Mr. President: The Senate Committee on Tax and Fiscal Policy, to
210156 which was referred Senate Bill No. 104, has had the same under
211157 consideration and begs leave to report the same back to the Senate with
212158 the recommendation that said bill DO PASS.
213159 (Reference is to SB 104 as introduced.)
214160
215161 HOLDMAN, Chairperson
216162 Committee Vote: Yeas 11, Nays 0
217-_____
218-SENATE MOTION
219-Mr. President: I move that Senate Bill 104 be amended to read as
220-follows:
221-Page 1, between the enacting clause and line 1, begin a new
222-paragraph and insert:
223-"SECTION 1. IC 36-7-14-53, AS AMENDED BY P.L.204-2023,
224-SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
225-JULY 1, 2025]: Sec. 53. (a) A commission may establish a residential
226-housing development program by resolution for the construction of new
227-residential housing or the renovation of existing residential housing in
228-an area within the jurisdiction of the commission.
229-(b) The program, which may include any relevant elements the
230-commission considers appropriate, may be adopted as part of a
231-redevelopment plan or amendment to a redevelopment plan, and must
232-establish an allocation area for purposes of sections 39 and 56 of this
233-chapter for the accomplishment of the program. The program must be
234-approved by the municipal legislative body or county executive as
235-specified in section 17 of this chapter.
236-(c) The notice and hearing provisions of sections 17 and 17.5 of this
237-chapter, including notice under section 17(c) of this chapter to a taxing
238-unit that is wholly or partly located within an allocation area, apply to
239-the resolution adopted under subsection (b). Judicial review of the
240-resolution may be made under section 18 of this chapter.
241-(d) Before formal submission of any residential housing
242-development program to the commission, the department of
243-redevelopment shall:
244-(1) consult with persons interested in or affected by the proposed
245-program, including the superintendents and governing body
246-SB 104—LS 6221/DI 129 7
247-presidents of all school corporations located within the proposed
248-allocation area;
249-(2) provide the affected neighborhood associations, residents, and
250-township assessors with an adequate opportunity to participate in
251-an advisory role in planning, implementing, and evaluating the
252-proposed program; and
253-(3) hold at least one (1) public meeting to obtain the views of
254-neighborhood associations and residents of the affected
255-neighborhood. The department of redevelopment shall send notice
256-thirty (30) days prior to the public meeting to the fiscal officer of
257-all affected taxing units and to the superintendents and governing
258-body presidents of all school corporations located within the
259-proposed allocation area.
260-(e) A residential housing development program established under
261-this section must terminate not later than the earlier of:
262-(1) twenty (20) years after the date on which the first obligation
263-was incurred to pay principal and interest on bonds or lease
264-rentals on leases payable from tax increment revenues from the
265-program; or
266-(2) the date on which the bond obligations or lease rentals
267-described in subdivision (1) are satisfied.
268-(f) A county or municipality may request from the department of
269-local government finance a report, if it exists, describing the effect of
270-current assessed value allocated to tax increment financing allocation
271-areas on the amount of the tax levy or proceeds and the credit for
272-excessive property taxes under IC 6-1.1-20.6 for the taxing units within
273-the boundaries of the residential housing development program.".
274-Page 2, line 2, delete "general fund".
275-Page 2, line 3, delete "of the".
276-Page 2, line 3, delete "commission to assist that unit in the" and
277-insert "commission. The unit must use the revenue in accordance
278-with section 12.2(a)(28) of this chapter for police and fire services
279-that serve the allocation area.".
280-Page 2, delete lines 4 through 5.
281-Renumber all SECTIONS consecutively.
282-(Reference is to SB 104 as printed January 29, 2025.)
283-NIEMEYER
284163 SB 104—LS 6221/DI 129