*SB0104.2*
Reprinted
February 7, 2025
SENATE BILL No. 104
_____
DIGEST OF SB 104 (Updated February 6, 2025 2:48 pm - DI 129)
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 unit that
established the commission. Specifies that the unit must use the
revenue for police and fire services that serve the allocation area.
Effective: July 1, 2025.
Niemeyer, Dernulc, Bohacek,
Randolph Lonnie M
January 8, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
January 28, 2025, reported favorably — Do Pass.
February 6, 2025, read second time, amended, ordered engrossed.
SB 104—LS 6221/DI 129 Reprinted
February 7, 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.
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 36-7-14-53, AS AMENDED BY P.L.204-2023,
2 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 53. (a) A commission may establish a residential
4 housing development program by resolution for the construction of new
5 residential housing or the renovation of existing residential housing in
6 an area within the jurisdiction of the commission.
7 (b) The program, which may include any relevant elements the
8 commission considers appropriate, may be adopted as part of a
9 redevelopment plan or amendment to a redevelopment plan, and must
10 establish an allocation area for purposes of sections 39 and 56 of this
11 chapter for the accomplishment of the program. The program must be
12 approved by the municipal legislative body or county executive as
13 specified in section 17 of this chapter.
14 (c) The notice and hearing provisions of sections 17 and 17.5 of this
15 chapter, including notice under section 17(c) of this chapter to a taxing
16 unit that is wholly or partly located within an allocation area, apply to
17 the resolution adopted under subsection (b). Judicial review of the
SB 104—LS 6221/DI 129 2
1 resolution may be made under section 18 of this chapter.
2 (d) Before formal submission of any residential housing
3 development program to the commission, the department of
4 redevelopment shall:
5 (1) consult with persons interested in or affected by the proposed
6 program, including the superintendents and governing body
7 presidents of all school corporations located within the proposed
8 allocation area;
9 (2) provide the affected neighborhood associations, residents, and
10 township assessors with an adequate opportunity to participate in
11 an advisory role in planning, implementing, and evaluating the
12 proposed program; and
13 (3) hold at least one (1) public meeting to obtain the views of
14 neighborhood associations and residents of the affected
15 neighborhood. The department of redevelopment shall send notice
16 thirty (30) days prior to the public meeting to the fiscal officer of
17 all affected taxing units and to the superintendents and governing
18 body presidents of all school corporations located within the
19 proposed allocation area.
20 (e) A residential housing development program established under
21 this section must terminate not later than the earlier of:
22 (1) twenty (20) years after the date on which the first obligation
23 was incurred to pay principal and interest on bonds or lease
24 rentals on leases payable from tax increment revenues from the
25 program; or
26 (2) the date on which the bond obligations or lease rentals
27 described in subdivision (1) are satisfied.
28 (f) A county or municipality may request from the department of
29 local government finance a report, if it exists, describing the effect of
30 current assessed value allocated to tax increment financing allocation
31 areas on the amount of the tax levy or proceeds and the credit for
32 excessive property taxes under IC 6-1.1-20.6 for the taxing units within
33 the boundaries of the residential housing development program.
34 SECTION 2. IC 36-7-14-56, AS AMENDED BY P.L.236-2023,
35 SECTION 183, IS AMENDED TO READ AS FOLLOWS
36 [EFFECTIVE JULY 1, 2025]: Sec. 56. (a) This section applies only to
37 a residential housing development program authorized by section 53 of
38 this chapter.
39 (b) Notwithstanding section 39(a) of this chapter, with respect to the
40 allocation and distribution of property taxes for the accomplishment of
41 the purposes of a residential housing development program adopted
42 under section 53 of this chapter, "base assessed value" means the net
SB 104—LS 6221/DI 129 3
1 assessed value of all of the property, other than personal property, as
2 finally determined for the assessment date immediately preceding the
3 effective date of the allocation provision, as adjusted under section
4 39(h) of this chapter.
5 (c) This subsection applies to an allocation provision adopted
6 after June 30, 2025, for a residential housing development program
7 adopted under section 53 of this chapter. An allocation provision
8 described in this subsection must provide that the commission shall
9 annually transfer at least five percent (5%) of the aggregate
10 allocated tax proceeds from the allocation area to the unit that
11 established the commission. The unit must use the revenue in
12 accordance with section 12.2(a)(28) of this chapter for police and
13 fire services that serve the allocation area.
14 (c) (d) The allocation fund established under section 39(b) of this
15 chapter for the allocation area for a residential housing development
16 program adopted under section 53 of this chapter may be used only for
17 purposes 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 roads, and sidewalks) or local public improvements in, serving,
21 or benefiting a residential housing development project.
22 (2) The acquisition of real property and interests in real property
23 for rehabilitation purposes 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 residential
31 housing development program established under section 53 of
32 this chapter 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
SB 104—LS 6221/DI 129 4
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 (d) (e) Notwithstanding section 39(b) of this chapter, the
12 commission shall, relative to the allocation fund established under
13 section 39(b) of this chapter for an allocation area for a residential
14 housing development program adopted under section 53 of this chapter,
15 do the following before June 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 transfer required under subsection (c);
23 (A) (B) make the distribution required under section 39(b)(2)
24 and 39(b)(3) of this chapter;
25 (B) (C) make, when due, principal and interest payments on
26 bonds described in section 39(b)(4) of this chapter;
27 (C) (D) pay the amount necessary for other purposes described
28 in section 39(b)(4) of this chapter; and
29 (D) (E) reimburse the county or municipality for anticipated
30 expenditures described in subsection (c)(2). (d)(2).
31 (2) Provide a written notice to the county auditor, the fiscal body
32 of the county or municipality that established the department of
33 redevelopment, the officers who are authorized to fix budgets, tax
34 rates, and tax levies under IC 6-1.1-17-5 for each of the other
35 taxing units that are wholly or partly located within the allocation
36 area, and (in an electronic format) the department of local
37 government finance. The notice must:
38 (A) state the amount, if any, of excess property taxes that the
39 commission has determined may be paid to the respective
40 taxing units in the manner prescribed in section 39(b)(1) of
41 this chapter; or
42 (B) state that the commission has determined that there is no
SB 104—LS 6221/DI 129 5
1 excess assessed value that may be allocated to the respective
2 taxing units in the manner prescribed in subdivision (1).
3 The county auditor shall allocate to the respective taxing units the
4 amount, if any, of excess assessed value determined by the
5 commission.
6 (e) (f) If the amount of excess assessed value determined by the
7 commission is expected to generate more than two hundred percent
8 (200%) of the amount of allocated tax proceeds:
9 (1) necessary to make, when due, principal and interest payments
10 on bonds described in section 39(b)(4) of this chapter; plus
11 (2) the amount necessary for other purposes described in section
12 39(b)(4) of this chapter;
13 the commission shall submit to the county or municipal legislative
14 body its determination of the excess assessed value that the
15 commission proposes to allocate to the respective taxing units in the
16 manner prescribed in subsection (d)(2). (e)(2). The county or municipal
17 legislative body may approve the commission's determination or
18 modify the amount of the excess assessed value that will be allocated
19 to the respective taxing units in the manner prescribed in subsection
20 (d)(2). (e)(2).
21 (f) (g) An allocation area must terminate on the date the residential
22 housing development program is terminated as set forth in section
23 53(e) of this chapter.
SB 104—LS 6221/DI 129 6
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
_____
SENATE MOTION
Mr. President: I move that Senate Bill 104 be amended to read as
follows:
Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
"SECTION 1. IC 36-7-14-53, AS AMENDED BY P.L.204-2023,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 53. (a) A commission may establish a residential
housing development program by resolution for the construction of new
residential housing or the renovation of existing residential housing in
an area within the jurisdiction of the commission.
(b) The program, which may include any relevant elements the
commission considers appropriate, may be adopted as part of a
redevelopment plan or amendment to a redevelopment plan, and must
establish an allocation area for purposes of sections 39 and 56 of this
chapter for the accomplishment of the program. The program must be
approved by the municipal legislative body or county executive as
specified in section 17 of this chapter.
(c) The notice and hearing provisions of sections 17 and 17.5 of this
chapter, including notice under section 17(c) of this chapter to a taxing
unit that is wholly or partly located within an allocation area, apply to
the resolution adopted under subsection (b). Judicial review of the
resolution may be made under section 18 of this chapter.
(d) Before formal submission of any residential housing
development program to the commission, the department of
redevelopment shall:
(1) consult with persons interested in or affected by the proposed
program, including the superintendents and governing body
SB 104—LS 6221/DI 129 7
presidents of all school corporations located within the proposed
allocation area;
(2) provide the affected neighborhood associations, residents, and
township assessors with an adequate opportunity to participate in
an advisory role in planning, implementing, and evaluating the
proposed program; and
(3) hold at least one (1) public meeting to obtain the views of
neighborhood associations and residents of the affected
neighborhood. The department of redevelopment shall send notice
thirty (30) days prior to the public meeting to the fiscal officer of
all affected taxing units and to the superintendents and governing
body presidents of all school corporations located within the
proposed allocation area.
(e) A residential housing development program established under
this section must terminate not later than the earlier of:
(1) twenty (20) years after the date on which the first obligation
was incurred to pay principal and interest on bonds or lease
rentals on leases payable from tax increment revenues from the
program; or
(2) the date on which the bond obligations or lease rentals
described in subdivision (1) are satisfied.
(f) A county or municipality may request from the department of
local government finance a report, if it exists, describing the effect of
current assessed value allocated to tax increment financing allocation
areas on the amount of the tax levy or proceeds and the credit for
excessive property taxes under IC 6-1.1-20.6 for the taxing units within
the boundaries of the residential housing development program.".
Page 2, line 2, delete "general fund".
Page 2, line 3, delete "of the".
Page 2, line 3, delete "commission to assist that unit in the" and
insert "commission. The unit must use the revenue in accordance
with section 12.2(a)(28) of this chapter for police and fire services
that serve the allocation area.".
Page 2, delete lines 4 through 5.
Renumber all SECTIONS consecutively.
(Reference is to SB 104 as printed January 29, 2025.)
NIEMEYER
SB 104—LS 6221/DI 129