First Regular Session of the 124th General Assembly (2025)
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between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 525
AN ACT to amend the Indiana Code concerning local government.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 36-4-3-4, AS AMENDED BY SEA 491-2025,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 4. (a) The legislative body of a municipality may,
by ordinance, annex any of the following:
(1) Territory that is contiguous to the municipality.
(2) Territory that is not contiguous to the municipality and is
occupied by a municipally owned or operated as either of the
following:
(A) An airport or landing field.
(B) A wastewater treatment facility or water treatment facility.
After a municipality annexes territory under this clause, the
municipality may annex additional territory to enlarge the
territory for the use of the wastewater treatment facility or
water treatment facility only if the county legislative body
approves that use of the additional territory by ordinance.
(3) Territory that is not contiguous to the municipality but is
found by the legislative body to be occupied by:
(A) a municipally owned or regulated sanitary landfill, golf
course, or hospital;
(B) a police station of the municipality; or
(C) a solar electric generating facility that is or will be
interconnected to an electric utility owned by the municipality.
However, if territory annexed under subdivision (2) or (3) ceases to be
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used for the purpose for which the territory was annexed for at least
one (1) year, the territory reverts to the jurisdiction of the unit having
jurisdiction before the annexation if the unit that had jurisdiction over
the territory still exists. If the unit no longer exists, the territory reverts
to the jurisdiction of the unit that would currently have jurisdiction over
the territory if the annexation had not occurred. The clerk of the
municipality shall notify the offices required to receive notice of a
disannexation under section 19 of this chapter when the territory
reverts to the jurisdiction of the unit having jurisdiction before the
annexation. Territory that is annexed under subdivision (2) (including
territory that is enlarged under subdivision (2)(B) for the use of the
wastewater treatment facility or water treatment facility) or subdivision
(3) may not be considered a part of the municipality for purposes of
annexing additional territory.
(b) This subsection applies to the following:
(1) A municipality in a county having a population of more than
sixty-six thousand six hundred (66,600) and less than seventy
thousand (70,000).
(2) A municipality in a county having a population of more than
eighty-two thousand (82,000) and less than eighty-three thousand
(83,000).
(3) A municipality in a county having a population of more than
eighty thousand four hundred (80,400) and less than eighty-two
thousand (82,000).
(4) A municipality in a county having a population of more than
forty-six thousand (46,000) and less than forty-six thousand four
hundred (46,400).
(5) A municipality in a county having a population of more than
thirty-seven thousand (37,000) and less than thirty-seven
thousand nine hundred (37,900).
(6) A municipality in a county having a population of more than
thirty-six thousand five hundred (36,500) and less than thirty-six
thousand seven hundred (36,700).
(7) A municipality in a county having a population of more than
thirty-two thousand (32,000) and less than thirty-three thousand
(33,000).
(8) A municipality in a county having a population of more than
twenty-three thousand (23,000) and less than twenty-three
thousand three hundred seventy-five (23,375).
(9) A municipality in a county having a population of more than
two hundred thousand (200,000) and less than two hundred fifty
thousand (250,000).
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(10) A municipality in a county having a population of more than
two hundred fifty thousand (250,000) and less than three hundred
thousand (300,000).
(11) A municipality in a county having a population of more than
thirty thousand nine hundred (30,900) and less than thirty-two
thousand (32,000).
(12) A municipality in a county having a population of more than
eighty thousand (80,000) and less than eighty thousand four
hundred (80,400).
(13) A city having a population of more than five thousand one
hundred forty (5,140) and less than five thousand two hundred
(5,200).
Except as provided in subsection (c), the legislative body of a
municipality to which this subsection applies may, by ordinance, annex
territory that is not contiguous to the municipality, has its entire area
not more than two (2) miles from the municipality's boundary, is to be
used for an industrial park containing one (1) or more businesses, and
is either owned by the municipality or by a property owner who
consents to the annexation. However, if territory annexed under this
subsection is not used as an industrial park within five (5) years after
the date of passage of the annexation ordinance, or if the territory
ceases to be used as an industrial park for at least one (1) year, the
territory reverts to the jurisdiction of the unit having jurisdiction before
the annexation if the unit that had jurisdiction over the territory still
exists. If the unit no longer exists, the territory reverts to the
jurisdiction of the unit that would currently have jurisdiction over the
territory if the annexation had not occurred. The clerk of the
municipality shall notify the offices entitled to receive notice of a
disannexation under section 19 of this chapter when the territory
reverts to the jurisdiction of the unit having jurisdiction before the
annexation.
(c) A city in a county with a population of more than two hundred
fifty thousand (250,000) and less than three hundred thousand
(300,000) may not annex territory as prescribed in subsection (b) until
the territory is zoned by the county for industrial purposes.
(d) Notwithstanding any other law, territory that is annexed under
subsection (b) or (h) is not considered a part of the municipality for the
purposes of:
(1) annexing additional territory:
(A) in a county that is not described by clause (B); or
(B) in a county having a population of more than two hundred
fifty thousand (250,000) and less than three hundred thousand
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(300,000), unless the boundaries of the noncontiguous territory
become contiguous to the city, as allowed by Indiana law;
(2) expanding the municipality's extraterritorial jurisdictional
area; or
(3) changing an assigned service area under IC 8-1-2.3-6(1).
(e) As used in this section, "airport" and "landing field" have the
meanings prescribed by IC 8-22-1.
(f) As used in this section, "hospital" has the meaning prescribed by
IC 16-18-2-179(b).
(g) An ordinance adopted under this section must assign the
territory annexed by the ordinance to at least one (1) municipal
legislative body district.
(h) This subsection applies to a city having a population of more
than twenty-eight thousand (28,000) and less than twenty-nine
thousand (29,000). The city legislative body may, by ordinance, annex
territory that:
(1) is not contiguous to the city;
(2) has its entire area not more than eight (8) miles from the city's
boundary;
(3) does not extend more than:
(A) one and one-half (1 1/2) miles to the west;
(B) three-fourths (3/4) mile to the east;
(C) one-half (1/2) mile to the north; or
(D) one-half (1/2) mile to the south;
of an interchange of an interstate highway (as designated by the
federal highway authorities) and a state highway (as designated
by the state highway authorities); and
(4) is owned by the city or by a property owner that consents to
the annexation.
(i) This subsection applies to a city having a population of more
than thirty-four thousand (34,000) and less than thirty-four thousand
five hundred (34,500). The city legislative body may, by ordinance,
annex territory under section 5.1 of this chapter:
(1) that is not contiguous to the city;
(2) that is south of the southernmost boundary of the city;
(3) the entire area of which is not more than four (4) miles from
the city's boundary; and
(4) that does not extend more than one (1) mile to the east of a
state highway (as designated by the state highway authorities).
Territory annexed under this subsection is not considered a part of the
city for purposes of annexation of additional territory. A city may not
require connection to a sewer installed to provide service to territory
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annexed under this subsection.
(j) A third class city municipality may annex a residential
development under section 5.2 of this chapter that is not contiguous to
the city. municipality.
SECTION 2. IC 36-4-3-5.2, AS AMENDED BY P.L.82-2023,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 5.2. (a) As used in this section, "homeowners
association" means a corporation that satisfies all of the following:
(1) The corporation is exempt from federal income taxation under
26 U.S.C. 528.
(2) The control and management of the corporation is vested in a
board of directors.
(3) The corporation is organized and operated exclusively for the
benefit of two (2) or more persons who each own:
(A) a dwelling in fee simple; or
(B) a commercial building in fee simple;
within the residential development.
(4) The purpose of the corporation is to:
(A) own, maintain, and operate common areas and facilities;
(B) administer and enforce covenants and restrictions on
property; and
(C) collect and distribute assessments on property;
located within the residential development.
(5) The corporation acts in accordance with the articles, bylaws,
or other documents governing the corporation to:
(A) adopt and enforce rules and regulations necessary for the
enjoyment of common areas, recreation facilities, and other
amenities located within the residential development; and
(B) exercise the corporation's power to:
(i) levy assessments on property within the residential
development; and
(ii) collect assessments on property located within the
residential development by enforcing the corporation's lien
and foreclosure rights.
(b) As used in this section, "municipality" means:
(1) a third class city; or
(2) a town having a population of more than thirty thousand
(30,000) located in a county having a population of more than
one hundred seventy-four thousand (174,000) and less than
one hundred eighty thousand (180,000).
(b) (c) As used in this section, "residential development" means a
parcel of land that is subdivided or will be subdivided upon collection
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of the annexation into:
(1) lots, parcels, tracts, units, or interests that:
(A) include an existing Class 2 structure (as defined in
IC 22-12-1-5); or
(B) are designated for the construction of a Class 2 structure;
each of which is encumbered by substantively identical restrictive
covenants concerning one (1) or more servient estates located
within the boundaries of the original undivided parcel, or other
governing document of record;
(2) lots, parcels, tracts, units, or interests that:
(A) include an existing Class 1 structure (as defined in
IC 22-12-1-4); or
(B) are designated for the construction of a Class 1 structure;
and
(3) a common area.
(c) (d) In addition to annexing territory under section 3, 4, 5, or 5.1
of this chapter, a third class city may annex a residential development
and a public highway right-of-way that connects the residential
development to the corporate limits of the third class city. A town
described in subsection (b)(2) may annex a residential
development. An annexation by a third class city or a town under
this section must satisfy if all of the following: are satisfied:
(1) This subdivision applies only to an annexation by a
municipality. The residential development is governed by a
homeowners association.
(2) The residential development has at least any combination of:
(A) three hundred (300) proposed or existing, or both, single
family lots within the proposed or existing residential
developments, in the case of an annexation by a third class
city; or
(B) five hundred (500) proposed or existing, or both, single
family lots within the proposed or existing residential
developments, in the case of an annexation by a town
described in subsection (b)(2).
(3) This subdivision applies only to an annexation by a
municipality. The residential development is located in its
entirety not more than four and five-tenths (4.5) miles outside the
third class city's municipality's corporate boundaries.
(4) This subdivision applies only to an annexation by a third
class city. The residential development dwellings are or will be
upon construction connected to the third class city's sewer or
water service.
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(5) This subdivision applies only to an annexation by a
municipality. The residential development includes a commercial
area containing or proposed to contain buildings intended to be
used and operated for commercial purposes.
(6) This subdivision applies only to an annexation by a third
class city. The residential development is adjacent to the public
highway right-of-way.
(7) This subdivision applies only to an annexation by a third
class city. The public highway that connects the residential
development to the corporate limits of the city is part of the state
highway system (as defined in IC 8-23-1-40).
(8) This subdivision applies only to an annexation by a third
class city. The city's annexation territory includes only the public
highway right-of-way and the residential development.
(9) The aggregate external boundary of the annexation territory
that coincides with the boundary of the municipality third class
city is greater than zero (0).
(10) This subdivision applies only to an annexation by a town
described in subsection (b)(2). An existing sewer line extends
from the residential development to the corporate limits of the
town. The residential development is or will be upon
construction connected to the town's sewer and water service.
(11) This subdivision applies only to an annexation by a town
described in subsection (b)(2). The cost of construction of the
residential development is at least five hundred million dollars
($500,000,000).
(12) The aggregate external boundary of the annexation
territory that coincides with the boundary of the town
described in subsection (b)(2) is zero (0).
(d) (e) Unless the articles, bylaws, or other governing documents of
the homeowners association expressly provide otherwise, the board of
directors of the homeowners association may file a petition with the
legislative body of the third class city municipality requesting the city
municipality to annex all property within the residential development.
The annexation may proceed only if the third class city municipality
adopts a resolution approving the initiation of the annexation process
not more than sixty (60) days after the petition is filed. If the third class
city municipality does not adopt a resolution within the sixty (60) day
period, the petition is void.
(e) (f) If the legislative body of the third class city municipality
adopts a resolution approving initiation of the annexation, the city
municipality shall prepare a written preliminary fiscal plan that must
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be made available to the public at each of the outreach program
meetings under section 1.7 of this chapter.
(f) (g) Upon completion of the outreach program meetings and
before mailing the notification to landowners under section 2.2 of this
chapter, the legislative body of the third class city municipality shall
adopt a written fiscal plan by resolution that incorporates any revisions
to the preliminary fiscal plan.
(g) (h) The third class city municipality shall hold a public hearing
not earlier than thirty (30) days after the date the annexation ordinance
is introduced. All interested parties must have the opportunity to testify
as to the proposed annexation. Notice of the hearing shall be:
(1) published in accordance with IC 5-3-1 except that the notice
shall be published at least thirty (30) days before the hearing; and
(2) mailed as set forth in section 2.2 of this chapter.
A third class city municipality may adopt an ordinance not earlier than
thirty (30) days or not later than sixty (60) days after the legislative
body of the third class city municipality has held the public hearing
under this subsection.
(h) (i) A landowner may file a remonstrance against the annexation
as provided in section 11 of this chapter.
(i) (j) Territory annexed under this section may not be considered
a part of the third class city for purposes of annexing additional
territory under section 3 or 4 of this chapter. However, territory
annexed under this chapter shall be considered a part of the third class
city for purposes of annexing additional territory under section 5 or 5.1
of this chapter.
(j) (k) For purposes of an annexation by a third class city under
this section:
(1) section 1.5 of this chapter does not apply; and
(2) the landowner of the public highway right-of-way that is part
of the state highway system (as defined in IC 8-23-1-40) is
considered to be the state of Indiana.
(l) The redevelopment commission of a town described in
subsection (b)(2) may only enact a housing tax increment financing
district in Liberty Township in Hendricks County if the housing
tax increment financing district is approved by a resolution passed
by the Mill Creek School Corporation.
(m) The following apply only to an annexation by a town
described in subsection (b)(2):
(1) Any territory that is annexed under this section may not
be considered a part of the town for purposes of annexing
additional territory under section 3 or 4 of this chapter.
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However, any part of the unincorporated area (including any
property occupied by the sewer line under subsection (d)(10))
that:
(A) adjoins the boundaries of the annexation territory; and
(B) extends one-half (1/2) mile from the boundaries of the
annexation territory;
may only be annexed by the town if the annexation is under
section 5.1 of this chapter.
(2) Any part of the unincorporated area (including any
property occupied by the sewer line under subsection (d)(10))
that extends:
(A) outside the one-half (1/2) mile area described in
subdivision (1); and
(B) to the corporate limits of the town;
is not a part of the annexation territory or the town for
purposes of annexing additional territory under this chapter.
SEA 525 — CC 1 President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: Time:
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