HB 1244

                                                           Introduced Version
          HOUSE BILL No. 1244
                _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-21.2-8; IC 36-7.
Synopsis: Tax increment financing. Provides that 10% of the excess
property tax proceeds collected in an allocation area must be allocated
among school corporations, libraries, and taxing units that provide
police services, fire protection, emergency medical service, or public
safety services in the allocation area.
Effective: July 1, 2026.
                               Novak
   January 5, 2026, read first time and referred to Committee on Ways and Means.
2026  IN 1244—LS 6938/DI 125
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 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 2025 Regular Session of the General Assembly.
                   HOUSE BILL No. 1244
    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)(5);
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);
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, 2026]: Sec. 12.7. (a) Not later than December
16 1 each year, the redevelopment commissioners shall file with the
17 department of local government finance and with the unit's executive
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1 and fiscal body a report setting out a spending plan for the next
2 calendar year describing planned expenditures. The spending plan must
3 be filed in the manner prescribed by the department of local
4 government finance.
5    (b) A redevelopment commission may use money from the
6 redevelopment commission's allocation fund described in section
7 39(b)(4) 39(b)(5) of this chapter and any other fund maintained by the
8 redevelopment commission only for the purposes provided in the
9 annual spending plan described in subsection (a).
10    (c) The department of local government finance shall, before
11 February 1, 2025, and before February 1 of each year thereafter, submit
12 a report of the redevelopment commissions that failed to submit the
13 spending plan required under subsection (a) to the legislative services
14 agency for distribution to the members of the legislative council. The
15 report must be in an electronic format under IC 5-14-6.
16    SECTION 3. IC 36-7-14-15.5, AS AMENDED BY P.L.236-2023,
17 SECTION 174, IS AMENDED TO READ AS FOLLOWS
18 [EFFECTIVE JULY 1, 2026]: Sec. 15.5. (a) This section applies to a
19 county having a population of more than two hundred fifty thousand
20 (250,000) and less than three hundred thousand (300,000).
21    (b) In adopting a declaratory resolution under section 15 of this
22 chapter, a redevelopment commission may include a provision stating
23 that the redevelopment project area is considered to include one (1) or
24 more additional areas outside the boundaries of the redevelopment
25 project area if the redevelopment commission makes the following
26 findings and the requirements of subsection (c) are met:
27(1) One (1) or more taxpayers presently located within the
28boundaries of the redevelopment project area are expected within
29one (1) year to relocate all or part of their operations outside the
30boundaries of the redevelopment project area and have expressed
31an interest in relocating all or part of their operations within the
32boundaries of an additional area.
33(2) The relocation described in subdivision (1) will contribute to
34the continuation of the conditions described in IC 36-7-1-3 in the
35redevelopment project area.
36(3) For purposes of this section, it will be of public utility and
37benefit to include the additional areas as part of the
38redevelopment project area.
39    (c) Each additional area must be designated by the redevelopment
40 commission as a redevelopment project area or an economic
41 development area under this chapter.
42    (d) Notwithstanding section 3 of this chapter, the additional areas
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1 shall be considered to be a part of the redevelopment special taxing
2 district under the jurisdiction of the redevelopment commission. Any
3 excess property taxes that the commission has determined may be paid
4 to taxing units under section 39(b)(5) 39(b)(6) of this chapter shall be
5 paid to the taxing units from which the excess property taxes were
6 derived. All powers of the redevelopment commission authorized under
7 this chapter may be exercised by the redevelopment commission in
8 additional areas under its jurisdiction.
9     (e) The declaratory resolution must include a statement of the
10 general boundaries of each additional area. However, it is sufficient to
11 describe those boundaries by location in relation to public ways,
12 streams, or otherwise, as determined by the commissioners.
13     (f) The declaratory resolution may include a provision with respect
14 to the allocation and distribution of property taxes with respect to one
15 (1) or more of the additional areas in the manner provided in section 39
16 of this chapter. If the redevelopment commission includes such a
17 provision in the resolution, allocation areas in the redevelopment
18 project area and in the additional areas considered to be part of the
19 redevelopment project area shall be considered a single allocation area
20 for purposes of this chapter.
21     (g) The additional areas must be located within the same county as
22 the redevelopment project area but are not otherwise required to be
23 within the jurisdiction of the redevelopment commission, if the
24 redevelopment commission obtains the consent by ordinance of:
25(1) the county legislative body, for each additional area located
26within the unincorporated part of the county; or
27(2) the legislative body of the city or town affected, for each
28additional area located within a city or town.
29 In granting its consent, the legislative body shall approve the plan of
30 development or redevelopment relating to the additional area.
31     (h) A declaratory resolution previously adopted may be amended to
32 include a provision to include additional areas as set forth in this
33 section and an allocation provision under section 39 of this chapter
34 with respect to one (1) or more of the additional areas in accordance
35 with sections 15, 16, and 17 of this chapter.
36     (i) The redevelopment commission may amend the allocation
37 provision of a declaratory resolution in accordance with sections 15,
38 16, and 17 of this chapter to change the assessment date that
39 determines the base assessed value of property in the allocation area to
40 any assessment date following the effective date of the allocation
41 provision of the declaratory resolution. Such a change may relate to the
42 assessment date that determines the base assessed value of that portion
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1 of the allocation area that is located in the redevelopment project area
2 alone, that portion of the allocation area that is located in an additional
3 area alone, or the entire allocation area.
4     SECTION 4. IC 36-7-14-25.1, AS AMENDED BY P.L.236-2023,
5 SECTION 176, IS AMENDED TO READ AS FOLLOWS
6 [EFFECTIVE JULY 1, 2026]: Sec. 25.1. (a) In addition to other
7 methods of raising money for property acquisition or redevelopment in
8 a redevelopment project area, and in anticipation of the special tax to
9 be levied under section 27 of this chapter, the taxes allocated under
10 section 39 of this chapter, or other revenues of the district, or any
11 combination of these sources, the redevelopment commission may, by
12 bond resolution and subject to subsections (c) and (p), issue the bonds
13 of the special taxing district in the name of the unit. The amount of the
14 bonds may not exceed the total, as estimated by the commission, of all
15 expenses reasonably incurred in connection with the acquisition and
16 redevelopment of the property, including:
17(1) the total cost of all land, rights-of-way, and other property to
18be acquired and redeveloped;
19(2) all reasonable and necessary architectural, engineering, legal,
20financing, accounting, advertising, bond discount, and
21supervisory expenses related to the acquisition and redevelopment
22of the property or the issuance of bonds;
23(3) capitalized interest permitted by this chapter and a debt
24service reserve for the bonds to the extent the redevelopment
25commission determines that a reserve is reasonably required; and
26(4) expenses that the redevelopment commission is required or
27permitted to pay under IC 8-23-17.
28     (b) If the redevelopment commission plans to acquire different
29 parcels of land or let different contracts for redevelopment work at
30 approximately the same time, whether under one (1) or more
31 resolutions, the commission may provide for the total cost in one (1)
32 issue of bonds.
33     (c) The legislative body of the unit must adopt a resolution that
34 specifies the public purpose of the bond, the use of the bond proceeds,
35 the maximum principal amount of the bond, the term of the bond, and
36 the maximum interest rate or rates of the bond, any provision for
37 redemption before maturity, and any provision for the payment of
38 capitalized interest. The bonds must be dated as set forth in the bond
39 resolution and negotiable, subject to the requirements of the bond
40 resolution for registering the bonds. The resolution authorizing the
41 bonds must state:
42(1) the denominations of the bonds;
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1(2) the place or places at which the bonds are payable; and
2(3) the term of the bonds, which may not exceed:
3(A) fifty (50) years, for bonds issued before July 1, 2008;
4(B) thirty (30) years, for bonds issued after June 30, 2008, to
5finance:
6(i) an integrated coal gasification powerplant (as defined in
7IC 6-3.1-29-6);
8(ii) a part of an integrated coal gasification powerplant (as
9defined in IC 6-3.1-29-6); or
10(iii) property used in the operation or maintenance of an
11integrated coal gasification powerplant (as defined in
12IC 6-3.1-29-6);
13that received a certificate of public convenience and necessity
14from the Indiana utility regulatory commission under
15IC 8-1-8.5 et seq. before July 1, 2008;
16(C) thirty-five (35) years, for bonds issued after June 30, 2019,
17to finance a project that is located in a redevelopment project
18area, an economic development area, or an urban renewal
19project area and that includes, as part of the project, the use
20and repurposing of two (2) or more buildings and structures
21that are:
22(i) at least seventy-five (75) years old; and
23(ii) located at a site at which manufacturing previously
24occurred over a period of at least seventy-five (75) years; or
25(D) twenty-five (25) years, for bonds issued after June 30,
262008, that are not described in clause (B) or (C).
27 The bond resolution may also state that the bonds are redeemable
28 before maturity with or without a premium, as determined by the
29 redevelopment commission.
30     (d) The redevelopment commission shall certify a copy of the
31 resolution authorizing the bonds to the municipal or county fiscal
32 officer, who shall then prepare the bonds, subject to subsections (c) and
33 (p). The seal of the unit must be impressed on the bonds, or a facsimile
34 of the seal must be printed on the bonds.
35     (e) The bonds must be executed by the appropriate officer of the
36 unit and attested by the municipal or county fiscal officer.
37     (f) The bonds are exempt from taxation for all purposes.
38     (g) The municipal or county fiscal officer shall give notice of the
39 sale of the bonds by publication in accordance with IC 5-3-1. The
40 municipal fiscal officer, or county fiscal officer or executive, shall sell
41 the bonds to the highest bidder, but may not sell them for less than
42 ninety-seven percent (97%) of their par value. However, bonds payable
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1 solely or in part from tax proceeds allocated under section 39(b)(4)
2 39(b)(5) of this chapter, or other revenues of the district may be sold
3 at a private negotiated sale.
4     (h) Except as provided in subsection (i), a redevelopment
5 commission may not issue the bonds when the total issue, including
6 bonds already issued and to be issued, exceeds two percent (2%) of the
7 adjusted value of the taxable property in the special taxing district, as
8 determined under IC 36-1-15.
9     (i) The bonds are not a corporate obligation of the unit but are an
10 indebtedness of the taxing district. The bonds and interest are payable,
11 as set forth in the bond resolution of the redevelopment commission:
12(1) from a special tax levied upon all of the property in the taxing
13district, as provided by section 27 of this chapter;
14(2) from the tax proceeds allocated under section 39(b)(4)
1539(b)(5) of this chapter;
16(3) from other revenues available to the redevelopment
17commission; or
18(4) from a combination of the methods stated in subdivisions (1)
19through (3).
20 If the bonds are payable solely from the tax proceeds allocated under
21 section 39(b)(4) 39(b)(5) of this chapter, other revenues of the
22 redevelopment commission, or any combination of these sources, they
23 may be issued in any amount not to exceed the maximum amount
24 approved by the legislative body in the resolution described in
25 subsection (c).
26     (j) Proceeds from the sale of bonds may be used to pay the cost of
27 interest on the bonds for a period not to exceed five (5) years from the
28 date of issuance.
29     (k) All laws relating to the giving of notice of the issuance of bonds,
30 the giving of notice of a hearing on the appropriation of the proceeds
31 of the bonds, the right of taxpayers to appear and be heard on the
32 proposed appropriation, and the approval of the appropriation by the
33 department of local government finance apply to all bonds issued under
34 this chapter that are payable from the special benefits tax levied
35 pursuant to section 27 of this chapter or from taxes allocated under
36 section 39 of this chapter.
37     (l) All laws relating to:
38(1) the filing of petitions requesting the issuance of bonds; and
39(2) the right of:
40(A) taxpayers and voters to remonstrate against the issuance of
41bonds in the case of a proposed bond issue described by
42IC 6-1.1-20-3.1(a); or
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1(B) voters to vote on the issuance of bonds in the case of a
2proposed bond issue described by IC 6-1.1-20-3.5(a);
3 apply to bonds issued under this chapter except for bonds payable
4 solely from tax proceeds allocated under section 39(b)(4) 39(b)(5) of
5 this chapter, other revenues of the redevelopment commission, or any
6 combination of these sources.
7     (m) If a debt service reserve is created from the proceeds of bonds,
8 the debt service reserve may be used to pay principal and interest on
9 the bonds as provided in the bond resolution.
10     (n) Any amount remaining in the debt service reserve after all of the
11 bonds of the issue for which the debt service reserve was established
12 have matured shall be:
13(1) deposited in the allocation fund established under section
1439(b)(4) 39(b)(5) of this chapter; and
15(2) to the extent permitted by law, transferred to the county or
16municipality that established the department of redevelopment for
17use in reducing the county's or municipality's property tax levies
18for debt service.
19     (o) If bonds are issued under this chapter that are payable solely or
20 in part from revenues to the redevelopment commission from a project
21 or projects, the redevelopment commission may adopt a resolution or
22 trust indenture or enter into covenants as is customary in the issuance
23 of revenue bonds. The resolution or trust indenture may pledge or
24 assign the revenues from the project or projects, but may not convey or
25 mortgage any project or parts of a project. The resolution or trust
26 indenture may also contain any provisions for protecting and enforcing
27 the rights and remedies of the bond owners as may be reasonable and
28 proper and not in violation of law, including covenants setting forth the
29 duties of the redevelopment commission. The redevelopment
30 commission may establish fees and charges for the use of any project
31 and covenant with the owners of any bonds to set those fees and
32 charges at a rate sufficient to protect the interest of the owners of the
33 bonds. Any revenue bonds issued by the redevelopment commission
34 that are payable solely from revenues of the commission shall contain
35 a statement to that effect in the form of bond.
36     (p) If the total principal amount of bonds authorized by a resolution
37 of the redevelopment commission adopted before July 1, 2008, is equal
38 to or greater than three million dollars ($3,000,000), the bonds may not
39 be issued without the approval, by resolution, of the legislative body of
40 the unit. Bonds authorized in any principal amount by a resolution of
41 the redevelopment commission adopted after June 30, 2008, may not
42 be issued without the approval of the legislative body of the unit.
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1     SECTION 5. IC 36-7-14-26, AS AMENDED BY P.L.236-2023,
2 SECTION 177, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2026]: Sec. 26. (a) All proceeds from the sale
4 of bonds under section 25.1 of this chapter shall be kept as a separate
5 and specific fund to pay the expenses incurred in connection with the
6 acquisition and redevelopment of property. The fund shall be known as
7 the redevelopment district capital fund. Any surplus of funds remaining
8 after all expenses are paid shall be paid into and become a part of the
9 redevelopment district bond fund established under section 27 of this
10 chapter.
11     (b) All gifts or donations that are given or paid to the department of
12 redevelopment or to the unit for redevelopment purposes shall be
13 promptly deposited to the credit of the redevelopment district capital
14 fund. The redevelopment commission may use these gifts and
15 donations for the purposes of this chapter.
16     (c) Before the eleventh day of each calendar month the fiscal officer
17 shall notify the redevelopment commission and the officers of the unit
18 who have duties in respect to the funds and accounts of the unit of the
19 amount standing to the credit of the redevelopment district capital fund
20 at the close of business on the last day of the preceding month.
21     (d) A redevelopment commission shall deposit in the allocation fund
22 established under section 39(b)(4) 39(b)(5) of this chapter of an
23 allocation area the proceeds from the sale or leasing of property in the
24 area under section 22 of this chapter if:
25(1) there are outstanding bonds that were issued to pay costs of
26redevelopment in the allocation area; and
27(2) the bonds are payable solely or in part from tax proceeds
28allocated under section 39(b)(4) 39(b)(5) of this chapter.
29     SECTION 6. IC 36-7-14-27, AS AMENDED BY P.L.236-2023,
30 SECTION 178, IS AMENDED TO READ AS FOLLOWS
31 [EFFECTIVE JULY 1, 2026]: Sec. 27. (a) This section applies only to:
32(1) bonds that are issued under section 25.1 of this chapter; and
33(2) leases entered into under section 25.2 of this chapter;
34 which are payable from a special tax levied upon all of the property in
35 the special taxing district. This section does not apply to bonds or
36 leases that are payable solely from tax proceeds allocated under section
37 39(b)(4) 39(b)(5) of this chapter, other revenues of the redevelopment
38 commission, or any combination of these sources.
39     (b) The redevelopment commission, with the prior approval of the
40 legislative body, shall levy each year a special tax on all of the property
41 of the redevelopment taxing district, in such a manner as to meet and
42 pay the principal of the bonds as they mature, together with all accruing
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1 interest on the bonds or lease rental payments under section 25.2 of this
2 chapter. The commission shall cause the tax levied to be certified to the
3 proper officers as other tax levies are certified, and to the auditor of the
4 county in which the redevelopment district is located, before the
5 second day of October in each year. The tax shall be estimated and
6 entered on the tax duplicate by the county auditor and shall be collected
7 and enforced by the county treasurer in the same manner as other state
8 and county taxes are estimated, entered, collected, and enforced. The
9 amount of the tax levied to pay bonds or lease rentals payable from the
10 tax levied under this section shall be reduced by any amount available
11 in the allocation fund established under section 39(b)(4) 39(b)(5) of
12 this chapter or other revenues of the redevelopment commission to the
13 extent such revenues have been set aside in the redevelopment bond
14 fund.
15     (c) As the tax is collected, it shall be accumulated in a separate fund
16 to be known as the redevelopment district bond fund and shall be
17 applied to the payment of the bonds as they mature and the interest on
18 the bonds as it accrues, or to make lease payments and to no other
19 purpose. All accumulations of the fund before their use for the payment
20 of bonds and interest or to make lease payments shall be deposited with
21 the depository or depositories for other public funds of the unit in
22 accordance with IC 5-13, unless they are invested under IC 5-13-9.
23     (d) If there are no outstanding bonds that are payable solely or in
24 part from tax proceeds allocated under section 39(b)(4) 39(b)(5) of this
25 chapter and that were issued to pay costs of redevelopment in an
26 allocation area that is located wholly or in part in the special taxing
27 district, then all proceeds from the sale or leasing of property in the
28 allocation area under section 22 of this chapter shall be paid into the
29 redevelopment district bond fund and become a part of that fund. In
30 arriving at the tax levy for any year, the redevelopment commission
31 shall take into account the amount of the proceeds deposited under this
32 subsection and remaining on hand.
33     (e) The tax levies provided for in this section are reviewable by
34 other bodies vested by law with the authority to ascertain that the levies
35 are sufficient to raise the amount that, with other amounts available, is
36 sufficient to meet the payments under the lease payable from the levy
37 of taxes.
38     SECTION 7. IC 36-7-14-39, AS AMENDED BY P.L.181-2025,
39 SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
40 JULY 1, 2026]: Sec. 39. (a) As used in this section:
41     "Allocation area" means that part of a redevelopment project area
42 to which an allocation provision of a declaratory resolution adopted
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1 under section 15 of this chapter refers for purposes of distribution and
2 allocation of property taxes.
3     "Base assessed value" means, subject to subsection (j), the
4 following:
5(1) If an allocation provision is adopted after June 30, 1995, in a
6declaratory resolution or an amendment to a declaratory
7resolution establishing an economic development area:
8(A) the net assessed value of all the property as finally
9determined for the assessment date immediately preceding the
10effective date of the allocation provision of the declaratory
11resolution, as adjusted under subsection (h); plus
12(B) to the extent that it is not included in clause (A), the net
13assessed value of property that is assessed as residential
14property under the rules of the department of local government
15finance, within the allocation area, as finally determined for
16the current assessment date.
17(2) If an allocation provision is adopted after June 30, 1997, in a
18declaratory resolution or an amendment to a declaratory
19resolution establishing a redevelopment project area:
20(A) the net assessed value of all the property as finally
21determined for the assessment date immediately preceding the
22effective date of the allocation provision of the declaratory
23resolution, as adjusted under subsection (h); plus
24(B) to the extent that it is not included in clause (A), the net
25assessed value of property that is assessed as residential
26property under the rules of the department of local government
27finance, as finally determined for the current assessment date.
28(3) If:
29(A) an allocation provision adopted before June 30, 1995, in
30a declaratory resolution or an amendment to a declaratory
31resolution establishing a redevelopment project area expires
32after June 30, 1997; and
33(B) after June 30, 1997, a new allocation provision is included
34in an amendment to the declaratory resolution;
35the net assessed value of all the property as finally determined for
36the assessment date immediately preceding the effective date of
37the allocation provision adopted after June 30, 1997, as adjusted
38under subsection (h).
39(4) Except as provided in subdivision (5), for all other allocation
40areas, the net assessed value of all the property as finally
41determined for the assessment date immediately preceding the
42effective date of the allocation provision of the declaratory
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1resolution, as adjusted under subsection (h).
2(5) If an allocation area established in an economic development
3area before July 1, 1995, is expanded after June 30, 1995, the
4definition in subdivision (1) applies to the expanded part of the
5area added after June 30, 1995.
6(6) If an allocation area established in a redevelopment project
7area before July 1, 1997, is expanded after June 30, 1997, the
8definition in subdivision (2) applies to the expanded part of the
9area added after June 30, 1997.
10 Except as provided in section 39.3 of this chapter, "property taxes"
11 means taxes imposed under IC 6-1.1 on real property. However, upon
12 approval by a resolution of the redevelopment commission adopted
13 before June 1, 1987, "property taxes" also includes taxes imposed
14 under IC 6-1.1 on depreciable personal property. If a redevelopment
15 commission adopted before June 1, 1987, a resolution to include within
16 the definition of property taxes, taxes imposed under IC 6-1.1 on
17 depreciable personal property that has a useful life in excess of eight
18 (8) years, the commission may by resolution determine the percentage
19 of taxes imposed under IC 6-1.1 on all depreciable personal property
20 that will be included within the definition of property taxes. However,
21 the percentage included must not exceed twenty-five percent (25%) of
22 the taxes imposed under IC 6-1.1 on all depreciable personal property.
23     (b) A declaratory resolution adopted under section 15 of this chapter
24 on or before the allocation deadline determined under subsection (i)
25 may include a provision with respect to the allocation and distribution
26 of property taxes for the purposes and in the manner provided in this
27 section. A declaratory resolution previously adopted may include an
28 allocation provision by the amendment of that declaratory resolution on
29 or before the allocation deadline determined under subsection (i) in
30 accordance with the procedures required for its original adoption. A
31 declaratory resolution or amendment that establishes an allocation
32 provision must include a specific finding of fact, supported by
33 evidence, that the adoption of the allocation provision will result in
34 new property taxes in the area that would not have been generated but
35 for the adoption of the allocation provision. For an allocation area
36 established before July 1, 1995, the expiration date of any allocation
37 provisions for the allocation area is June 30, 2025, or the last date of
38 any obligations that are outstanding on July 1, 2015, whichever is later.
39 A declaratory resolution or an amendment that establishes an allocation
40 provision after June 30, 1995, must specify an expiration date for the
41 allocation provision. For an allocation area established before July 1,
42 2008, the expiration date may not be more than thirty (30) years after
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1 the date on which the allocation provision is established. For an
2 allocation area established after June 30, 2008, the expiration date may
3 not be more than twenty-five (25) years after the date on which the first
4 obligation was incurred to pay principal and interest on bonds or lease
5 rentals on leases payable from tax increment revenues. However, with
6 respect to bonds or other obligations that were issued before July 1,
7 2008, if any of the bonds or other obligations that were scheduled when
8 issued to mature before the specified expiration date and that are
9 payable only from allocated tax proceeds with respect to the allocation
10 area remain outstanding as of the expiration date, the allocation
11 provision does not expire until all of the bonds or other obligations are
12 no longer outstanding. Notwithstanding any other law, in the case of an
13 allocation area that is established after June 30, 2019, and that is
14 located in a redevelopment project area described in section
15 25.1(c)(3)(C) of this chapter, an economic development area described
16 in section 25.1(c)(3)(C) of this chapter, or an urban renewal project
17 area described in section 25.1(c)(3)(C) of this chapter, the expiration
18 date of the allocation provision may not be more than thirty-five (35)
19 years after the date on which the allocation provision is established.
20 The allocation provision may apply to all or part of the redevelopment
21 project area. The allocation provision must require that any property
22 taxes subsequently levied by or for the benefit of any public body
23 entitled to a distribution of property taxes on taxable property in the
24 allocation area be allocated and distributed as follows:
25(1) Except as otherwise provided in this section, the proceeds of
26the taxes attributable to the lesser of:
27(A) the assessed value of the property for the assessment date
28with respect to which the allocation and distribution is made;
29or
30(B) the base assessed value;
31shall be allocated to and, when collected, paid into the funds of
32the respective taxing units.
33(2) This subdivision applies to a fire protection territory
34established after December 31, 2022. If a unit becomes a
35participating unit of a fire protection territory that is established
36after a declaratory resolution is adopted under section 15 of this
37chapter, the excess of the proceeds of the property taxes
38attributable to an increase in the property tax rate for the
39participating unit of a fire protection territory:
40(A) except as otherwise provided by this subdivision, shall be
41determined as follows:
42STEP ONE: Divide the unit's tax rate for fire protection for
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1the year before the establishment of the fire protection
2territory by the participating unit's tax rate as part of the fire
3protection territory.
4STEP TWO: Subtract the STEP ONE amount from one (1).
5STEP THREE: Multiply the STEP TWO amount by the
6allocated property tax attributable to the participating unit of
7the fire protection territory; and
8(B) to the extent not otherwise included in subdivisions (1)
9and (3), the amount determined under STEP THREE of clause
10(A) shall be allocated to and distributed in the form of an
11allocated property tax revenue pass back to the participating
12unit of the fire protection territory for the assessment date with
13respect to which the allocation is made.
14However, if the redevelopment commission determines that it is
15unable to meet its debt service obligations with regards to the
16allocation area without all or part of the allocated property tax
17revenue pass back to the participating unit of a fire protection area
18under this subdivision, then the allocated property tax revenue
19pass back under this subdivision shall be reduced by the amount
20necessary for the redevelopment commission to meet its debt
21service obligations of the allocation area. The calculation under
22this subdivision must be made by the redevelopment commission
23in collaboration with the county auditor and the applicable fire
24protection territory. Any calculation determined according to
25clause (A) must be submitted to the department of local
26government finance in the manner prescribed by the department
27of local government finance. The department of local government
28finance shall verify the accuracy of each calculation.
29(3) The excess of the proceeds of the property taxes imposed for
30the assessment date with respect to which the allocation and
31distribution is made that are attributable to taxes imposed after
32being approved by the voters in a referendum or local public
33question conducted after April 30, 2010, not otherwise included
34in subdivisions (1) and (2) shall be allocated to and, when
35collected, paid into the funds of the taxing unit for which the
36referendum or local public question was conducted.
37(4) This subdivision applies to an allocation area established
38after June 30, 2026. Of the property tax proceeds in excess of
39those described in subdivisions (1), (2), and (3), and before the
40proceeds may be used for the purposes in subdivision (5), at
41least ten percent (10%) of the property tax proceeds shall be
42allocated to and, when collected, distributed according to the
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1following:
2(A) One-third (1/3) shall be allocated among each school
3corporation with territory in the allocation area.
4(B) One-third (1/3) shall be allocated among each library
5located in the allocation area.
6(C) One-third (1/3) shall be allocated among each taxing
7unit that provides police services, fire protection,
8emergency medical service, or public safety services in the
9allocation area.
10Money allocated under this subdivision may be used for
11operating or capital expenditures required for providing
12services in the allocation area. If an entity described in clause
13(A) through (C) does not exist for a particular allocation area,
14the corresponding amount that would have been allocated
15under the applicable clause shall instead be evenly divided
16among the entities described in the remaining clauses.
17(4) (5) Except as otherwise provided in this section, property tax
18proceeds in excess of those described in subdivisions (1), (2), and
19(3), and (4) shall be allocated to the redevelopment district and,
20when collected, paid into an allocation fund for that allocation
21area that may be used by the redevelopment district only to do one
22(1) or more of the following:
23(A) Pay the principal of and interest on any obligations
24payable solely from allocated tax proceeds which are incurred
25by the redevelopment district for the purpose of financing or
26refinancing the redevelopment of that allocation area.
27(B) Establish, augment, or restore the debt service reserve for
28bonds payable solely or in part from allocated tax proceeds in
29that allocation area.
30(C) Pay the principal of and interest on bonds payable from
31allocated tax proceeds in that allocation area and from the
32special tax levied under section 27 of this chapter.
33(D) Pay the principal of and interest on bonds issued by the
34unit to pay for local public improvements that are physically
35located in or physically connected to that allocation area.
36(E) Pay premiums on the redemption before maturity of bonds
37payable solely or in part from allocated tax proceeds in that
38allocation area.
39(F) Make payments on leases payable from allocated tax
40proceeds in that allocation area under section 25.2 of this
41chapter.
42(G) Reimburse the unit for expenditures made by it for local
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1public improvements (which include buildings, parking
2facilities, and other items described in section 25.1(a) of this
3chapter) that are physically located in or physically connected
4to that allocation area.
5(H) Reimburse the unit for rentals paid by it for a building or
6parking facility that is physically located in or physically
7connected to that allocation area under any lease entered into
8under IC 36-1-10.
9(I) For property taxes first due and payable before January 1,
102009, pay all or a part of a property tax replacement credit to
11taxpayers in an allocation area as determined by the
12redevelopment commission. This credit equals the amount
13determined under the following STEPS for each taxpayer in a
14taxing district (as defined in IC 6-1.1-1-20) that contains all or
15part of the allocation area:
16STEP ONE: Determine that part of the sum of the amounts
17under IC 6-1.1-21-2(g)(1)(A), IC 6-1.1-21-2(g)(2),
18IC 6-1.1-21-2(g)(3), IC 6-1.1-21-2(g)(4), and
19IC 6-1.1-21-2(g)(5) (before their repeal) that is attributable to
20the taxing district.
21STEP TWO: Divide:
22(i) that part of each county's eligible property tax
23replacement amount (as defined in IC 6-1.1-21-2 (before its
24repeal)) for that year as determined under IC 6-1.1-21-4
25(before its repeal) that is attributable to the taxing district;
26by
27(ii) the STEP ONE sum.
28STEP THREE: Multiply:
29(i) the STEP TWO quotient; times
30(ii) the total amount of the taxpayer's taxes (as defined in
31IC 6-1.1-21-2 (before its repeal)) levied in the taxing district
32that have been allocated during that year to an allocation
33fund under this section.
34If not all the taxpayers in an allocation area receive the credit
35in full, each taxpayer in the allocation area is entitled to
36receive the same proportion of the credit. A taxpayer may not
37receive a credit under this section and a credit under section
3839.5 of this chapter (before its repeal) in the same year.
39(J) Pay expenses incurred by the redevelopment commission
40for local public improvements that are in the allocation area or
41serving the allocation area. Public improvements include
42buildings, parking facilities, and other items described in
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1section 25.1(a) of this chapter.
2(K) Reimburse public and private entities for expenses
3incurred in training employees of industrial facilities that are
4located:
5(i) in the allocation area; and
6(ii) on a parcel of real property that has been classified as
7industrial property under the rules of the department of local
8government finance.
9However, the total amount of money spent for this purpose in
10any year may not exceed the total amount of money in the
11allocation fund that is attributable to property taxes paid by the
12industrial facilities described in this clause. The
13reimbursements under this clause must be made within three
14(3) years after the date on which the investments that are the
15basis for the increment financing are made.
16(L) Pay the costs of carrying out an eligible efficiency project
17(as defined in IC 36-9-41-1.5) within the unit that established
18the redevelopment commission. However, property tax
19proceeds may be used under this clause to pay the costs of
20carrying out an eligible efficiency project only if those
21property tax proceeds exceed the amount necessary to do the
22following:
23(i) Make, when due, any payments required under clauses
24(A) through (K), including any payments of principal and
25interest on bonds and other obligations payable under this
26subdivision, any payments of premiums under this
27subdivision on the redemption before maturity of bonds, and
28any payments on leases payable under this subdivision.
29(ii) Make any reimbursements required under this
30subdivision.
31(iii) Pay any expenses required under this subdivision.
32(iv) Establish, augment, or restore any debt service reserve
33under this subdivision.
34(M) Expend money and provide financial assistance as
35authorized in section 12.2(a)(27) of this chapter.
36(N) Expend revenues that are allocated for police and fire
37services on both capital expenditures and operating expenses
38as authorized in section 12.2(a)(28) of this chapter.
39The allocation fund may not be used for operating expenses of the
40commission.
41(5) (6) Except as provided in subsection (g), before June 15 of
42each year, the commission shall do the following:
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1(A) Determine the amount, if any, by which the assessed value
2of the taxable property in the allocation area for the most
3recent assessment date minus the base assessed value, when
4multiplied by the estimated tax rate of the allocation area, will
5exceed the amount of assessed value needed to produce the
6property taxes necessary to make, when due, principal and
7interest payments on bonds described in subdivision (4), (5),
8plus the amount necessary for other purposes described in
9subdivision (4) (5) and the amount described in subsection
10(l).
11(B) Provide a written notice to the county auditor, the fiscal
12body of the county or municipality that established the
13department of redevelopment, and the officers who are
14authorized to fix budgets, tax rates, and tax levies under
15IC 6-1.1-17-5 for each of the other taxing units that is wholly
16or partly located within the allocation area. The county auditor,
17upon receiving the notice, shall forward this notice (in an
18electronic format) to the department of local government
19finance not later than June 15 of each year. The notice must:
20(i) state the amount, if any, of excess assessed value that the
21commission has determined may be allocated to the
22respective taxing units in the manner prescribed in
23subdivision (1); or
24(ii) state that the commission has determined that there is no
25excess assessed value that may be allocated to the respective
26taxing units in the manner prescribed in subdivision (1).
27The county auditor shall allocate to the respective taxing units
28the amount, if any, of excess assessed value determined by the
29commission. The commission may not authorize an allocation
30of assessed value to the respective taxing units under this
31subdivision if to do so would endanger the interests of the
32holders of bonds described in subdivision (4) (5) or lessors
33under section 25.3 of this chapter.
34(C) If:
35(i) the amount of excess assessed value determined by the
36commission is expected to generate more than two hundred
37percent (200%) of the amount of allocated tax proceeds
38necessary to make, when due, principal and interest
39payments on bonds described in subdivision (4); (5); plus
40(ii) the amount necessary for other purposes described in
41subdivision (4); (5);
42the commission shall submit to the legislative body of the unit
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1its determination of the excess assessed value that the
2commission proposes to allocate to the respective taxing units
3in the manner prescribed in subdivision (1). The legislative
4body of the unit may approve the commission's determination
5or modify the amount of the excess assessed value that will be
6allocated to the respective taxing units in the manner
7prescribed in subdivision (1).
8(6) (7) Notwithstanding subdivision (5), (6), in the case of an
9allocation area that is established after June 30, 2019, and that is
10located in a redevelopment project area described in section
1125.1(c)(3)(C) of this chapter, an economic development area
12described in section 25.1(c)(3)(C) of this chapter, or an urban
13renewal project area described in section 25.1(c)(3)(C) of this
14chapter, for each year the allocation provision is in effect, if the
15amount of excess assessed value determined by the commission
16under subdivision (5)(A) (6)(A) is expected to generate more than
17two hundred percent (200%) of:
18(A) the amount of allocated tax proceeds necessary to make,
19when due, principal and interest payments on bonds described
20in subdivision (4) (5) for the project; plus
21(B) the amount necessary for other purposes described in
22subdivision (4) (5) for the project; plus
23(C) the amount necessary for the purpose described in
24subsection (l);
25the amount of the excess assessed value that generates more than
26two hundred percent (200%) of the amounts described in clauses
27(A), and (B), and (C) shall be allocated to the respective taxing
28units in the manner prescribed by subdivision (1).
29     (c) For the purpose of allocating taxes levied by or for any taxing
30 unit or units, the assessed value of taxable property in a territory in the
31 allocation area that is annexed by any taxing unit after the effective
32 date of the allocation provision of the declaratory resolution is the
33 lesser of:
34(1) the assessed value of the property for the assessment date with
35respect to which the allocation and distribution is made; or
36(2) the base assessed value.
37     (d) Property tax proceeds allocable to the redevelopment district
38 under subsection (b)(4) (b)(5) may, subject to subsection (b)(5), (b)(6),
39 be irrevocably pledged by the redevelopment district for payment as set
40 forth in subsection (b)(4). (b)(5).
41     (e) Notwithstanding any other law, each assessor shall, upon
42 petition of the redevelopment commission, reassess the taxable
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1 property situated upon or in, or added to, the allocation area, effective
2 on the next assessment date after the petition.
3     (f) Notwithstanding any other law, the assessed value of all taxable
4 property in the allocation area, for purposes of tax limitation, property
5 tax replacement, and formulation of the budget, tax rate, and tax levy
6 for each political subdivision in which the property is located is the
7 lesser of:
8(1) the assessed value of the property as valued without regard to
9this section; or
10(2) the base assessed value.
11     (g) If any part of the allocation area is located in an enterprise zone
12 created under IC 5-28-15, the unit that designated the allocation area
13 shall create funds as specified in this subsection. A unit that has
14 obligations, bonds, or leases payable from allocated tax proceeds under
15 subsection (b)(4) (b)(5) shall establish an allocation fund for the
16 purposes specified in subsection (b)(4) (b)(5) and a special zone fund.
17 Such a unit shall, until the end of the enterprise zone phase out period,
18 deposit each year in the special zone fund any amount in the allocation
19 fund derived from property tax proceeds in excess of those described
20 in subsection (b)(1), (b)(2), and (b)(3) from property located in the
21 enterprise zone that exceeds the amount sufficient for the purposes
22 specified in subsection (b)(4) (b)(5) for the year. The amount sufficient
23 for purposes specified in subsection (b)(4) (b)(5) for the year shall be
24 determined based on the pro rata portion of such current property tax
25 proceeds from the part of the enterprise zone that is within the
26 allocation area as compared to all such current property tax proceeds
27 derived from the allocation area. A unit that has no obligations, bonds,
28 or leases payable from allocated tax proceeds under subsection (b)(4)
29 (b)(5) shall establish a special zone fund and deposit all the property
30 tax proceeds in excess of those described in subsection (b)(1), (b)(2),
31 and (b)(3) in the fund derived from property tax proceeds in excess of
32 those described in subsection (b)(1), (b)(2), and (b)(3) from property
33 located in the enterprise zone. The unit that creates the special zone
34 fund shall use the fund (based on the recommendations of the urban
35 enterprise association) for programs in job training, job enrichment,
36 and basic skill development that are designed to benefit residents and
37 employers in the enterprise zone or other purposes specified in
38 subsection (b)(4), (b)(5), except that where reference is made in
39 subsection (b)(4) (b)(5) to allocation area it shall refer for purposes of
40 payments from the special zone fund only to that part of the allocation
41 area that is also located in the enterprise zone. Those programs shall
42 reserve at least one-half (1/2) of their enrollment in any session for
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1 residents of the enterprise zone.
2     (h) The state board of accounts and department of local government
3 finance shall make the rules and prescribe the forms and procedures
4 that they consider expedient for the implementation of this chapter.
5 After each reassessment in an area under a reassessment plan prepared
6 under IC 6-1.1-4-4.2, the department of local government finance shall
7 adjust the base assessed value one (1) time to neutralize any effect of
8 the reassessment of the real property in the area on the property tax
9 proceeds allocated to the redevelopment district under this section.
10 After each annual adjustment under IC 6-1.1-4-4.5, the department of
11 local government finance shall adjust the base assessed value one (1)
12 time to neutralize any effect of the annual adjustment on the property
13 tax proceeds allocated to the redevelopment district under this section.
14 However, the adjustments under this subsection:
15(1) may not include the effect of phasing in assessed value due to
16property tax abatements under IC 6-1.1-12.1;
17(2) may not produce less property tax proceeds allocable to the
18redevelopment district under subsection (b)(4) (b)(5) than would
19otherwise have been received if the reassessment under the
20reassessment plan or the annual adjustment had not occurred; and
21(3) may decrease base assessed value only to the extent that
22assessed values in the allocation area have been decreased due to
23annual adjustments or the reassessment under the reassessment
24plan.
25 Assessed value increases attributable to the application of an abatement
26 schedule under IC 6-1.1-12.1 may not be included in the base assessed
27 value of an allocation area. The department of local government
28 finance may prescribe procedures for county and township officials to
29 follow to assist the department in making the adjustments.
30     (i) The allocation deadline referred to in subsection (b) is
31 determined in the following manner:
32(1) The initial allocation deadline is December 31, 2011.
33(2) Subject to subdivision (3), the initial allocation deadline and
34subsequent allocation deadlines are automatically extended in
35increments of five (5) years, so that allocation deadlines
36subsequent to the initial allocation deadline fall on December 31,
372016, and December 31 of each fifth year thereafter.
38(3) At least one (1) year before the date of an allocation deadline
39determined under subdivision (2), the general assembly may enact
40a law that:
41(A) terminates the automatic extension of allocation deadlines
42under subdivision (2); and
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1(B) specifically designates a particular date as the final
2allocation deadline.
3     (j) If a redevelopment commission adopts a declaratory resolution
4 or an amendment to a declaratory resolution that contains an allocation
5 provision and the redevelopment commission makes either of the
6 filings required under section 17(e) of this chapter after the first
7 anniversary of the effective date of the allocation provision, the auditor
8 of the county in which the unit is located shall compute the base
9 assessed value for the allocation area using the assessment date
10 immediately preceding the later of:
11(1) the date on which the documents are filed with the county
12auditor; or
13(2) the date on which the documents are filed with the department
14of local government finance.
15     (k) For an allocation area established after June 30, 2025,
16 "residential property" refers to the assessed value of property that is
17 allocated to the one percent (1%) homestead land and improvement
18 categories in the county tax and billing software system.
19     (l) This subsection applies to an allocation area established
20 before July 1, 2026. Of the property tax proceeds in excess of those
21 described in subsection (b)(1), (b)(2), and (b)(3), plus the amount
22 of property tax proceeds necessary to make, when due, principal
23 and interest payments on bonds described in subsection (b)(5) in
24 each year, at least ten percent (10%) of the excess property tax
25 proceeds shall be allocated to and, when collected, distributed
26 according to the following:
27(1) One-third (1/3) shall be allocated among each school
28corporation with territory in the allocation area.
29(2) One-third (1/3) shall be allocated among each library
30located in the allocation area.
31(3) One-third (1/3) shall be allocated among each taxing unit
32that provides police services, fire protection, emergency
33medical service, or public safety services in the allocation
34area.
35 Money allocated under this subsection may be used for operating
36 or capital expenditures required for providing services in the
37 allocation area. If an entity described in subdivisions (1) through
38 (3) does not exist for a particular allocation area, the
39 corresponding amount that would have been allocated under the
40 applicable subdivision shall instead be evenly divided among the
41 entities described in the remaining subdivisions.
42     SECTION 8. IC 36-7-14-48, AS AMENDED BY P.L.236-2023,
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                                    22
1 SECTION 180, IS AMENDED TO READ AS FOLLOWS
2 [EFFECTIVE JULY 1, 2026]: Sec. 48. (a) Notwithstanding section
3 39(a) of this chapter, with respect to the allocation and distribution of
4 property taxes for the accomplishment of a program adopted under
5 section 45 of this chapter, "base assessed value" means, subject to
6 section 39(j) of this chapter, the net assessed value of all of the
7 property, other than personal property, as finally determined for the
8 assessment date immediately preceding the effective date of the
9 allocation provision, as adjusted under section 39(h) of this chapter.
10    (b) The allocation fund established under section 39(b) of this
11 chapter for the allocation area for a program adopted under section 45
12 of this chapter may be used only for purposes related to the
13 accomplishment of the program, including the following:
14(1) The construction, rehabilitation, or repair of residential units
15within the allocation area.
16(2) The construction, reconstruction, or repair of any
17infrastructure (including streets, sidewalks, and sewers) within or
18serving the allocation area.
19(3) The acquisition of real property and interests in real property
20within the allocation area.
21(4) The demolition of real property within the allocation area.
22(5) The provision of financial assistance to enable individuals and
23families to purchase or lease residential units within the allocation
24area. However, financial assistance may be provided only to those
25individuals and families whose income is at or below the county's
26median income for individuals and families, respectively.
27(6) The provision of financial assistance to neighborhood
28development corporations to permit them to provide financial
29assistance for the purposes described in subdivision (5).
30(7) For property taxes first due and payable before January 1,
312009, providing each taxpayer in the allocation area a credit for
32property tax replacement as determined under subsections (c) and
33(d). However, the commission may provide this credit only if the
34municipal legislative body (in the case of a redevelopment
35commission established by a municipality) or the county
36executive (in the case of a redevelopment commission established
37by a county) establishes the credit by ordinance adopted in the
38year before the year in which the credit is provided.
39    (c) The maximum credit that may be provided under subsection
40 (b)(7) to a taxpayer in a taxing district that contains all or part of an
41 allocation area established for a program adopted under section 45 of
42 this chapter shall be determined as follows:
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1STEP ONE: Determine that part of the sum of the amounts
2described in IC 6-1.1-21-2(g)(1)(A) and IC 6-1.1-21-2(g)(2)
3through IC 6-1.1-21-2(g)(5) (before their repeal) that is
4attributable to the taxing district.
5STEP TWO: Divide:
6(A) that part of each county's eligible property tax replacement
7amount (as defined in IC 6-1.1-21-2) (before its repeal) for
8that year as determined under IC 6-1.1-21-4(a)(1) (before its
9repeal) that is attributable to the taxing district; by
10(B) the amount determined under STEP ONE.
11STEP THREE: Multiply:
12(A) the STEP TWO quotient; by
13(B) the taxpayer's taxes (as defined in IC 6-1.1-21-2) (before
14its repeal) levied in the taxing district allocated to the
15allocation fund, including the amount that would have been
16allocated but for the credit.
17     (d) The commission may determine to grant to taxpayers in an
18 allocation area from its allocation fund a credit under this section, as
19 calculated under subsection (c). Except as provided in subsection (g),
20 one-half (1/2) of the credit shall be applied to each installment of taxes
21 (as defined in IC 6-1.1-21-2) (before its repeal) that under
22 IC 6-1.1-22-9 are due and payable in a year. The commission must
23 provide for the credit annually by a resolution and must find in the
24 resolution the following:
25(1) That the money to be collected and deposited in the allocation
26fund, based upon historical collection rates, after granting the
27credit will equal the amounts payable for contractual obligations
28from the fund, plus ten percent (10%) of those amounts.
29(2) If bonds payable from the fund are outstanding, that there is
30a debt service reserve for the bonds that at least equals the amount
31of the credit to be granted.
32(3) If bonds of a lessor under section 25.2 of this chapter or under
33IC 36-1-10 are outstanding and if lease rentals are payable from
34the fund, that there is a debt service reserve for those bonds that
35at least equals the amount of the credit to be granted.
36 If the tax increment is insufficient to grant the credit in full, the
37 commission may grant the credit in part, prorated among all taxpayers.
38     (e) Notwithstanding section 39(b) of this chapter, the allocation
39 fund established under section 39(b) of this chapter for the allocation
40 area for a program adopted under section 45 of this chapter may only
41 be used to do one (1) or more of the following:
42(1) Accomplish one (1) or more of the actions set forth in section
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139(b)(4)(A) 39(b)(5)(A) through 39(b)(4)(H) 39(b)(5)(H) and
239(b)(4)(J) 39(b)(5)(J) of this chapter for property that is
3residential in nature.
4(2) Reimburse the county or municipality for expenditures made
5by the county or municipality in order to accomplish the housing
6program in that allocation area.
7 The allocation fund may not be used for operating expenses of the
8 commission.
9    (f) Notwithstanding section 39(b) of this chapter, the commission
10 shall, relative to the allocation fund established under section 39(b) of
11 this chapter for an allocation area for a program adopted under section
12 45 of this chapter, do the following before June 15 of each year:
13(1) Determine the amount, if any, by which the assessed value of
14the taxable property in the allocation area for the most recent
15assessment date minus the base assessed value, when multiplied
16by the estimated tax rate of the allocation area, will exceed the
17amount of assessed value needed to produce the property taxes
18necessary to:
19(A) make the distribution required under section 39(b)(2) and
2039(b)(3) of this chapter;
21(B) make, when due, principal and interest payments on bonds
22described in section 39(b)(4) 39(b)(5) of this chapter;
23(C) pay the amount necessary for other purposes described in
24section 39(b)(4) 39(b)(5) of this chapter; and
25(D) reimburse the county or municipality for anticipated
26expenditures described in subsection (e)(2).
27(2) Provide a written notice to the county auditor, the fiscal body
28of the county or municipality that established the department of
29redevelopment, and the officers who are authorized to fix budgets,
30tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
31taxing units that is wholly or partly located within the allocation
32area. The county auditor, upon receiving the notice, shall forward
33this notice (in an electronic format) to the department of local
34government finance not later than June 15 of each year. The
35notice must:
36(A) state the amount, if any, of excess property taxes that the
37commission has determined may be paid to the respective
38taxing units in the manner prescribed in section 39(b)(1) of
39this chapter; or
40(B) state that the commission has determined that there is no
41excess assessed value that may be allocated to the respective
42taxing units in the manner prescribed in subdivision (1).
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1The county auditor shall allocate to the respective taxing units the
2amount, if any, of excess assessed value determined by the
3commission.
4(3) If:
5(A) the amount of excess assessed value determined by the
6commission is expected to generate more than two hundred
7percent (200%) of the amount of allocated tax proceeds
8necessary to make, when due, principal and interest payments
9on bonds described in subdivision (1); plus
10(B) the amount necessary for other purposes described in
11subdivision (1);
12the commission shall submit to the legislative body of the unit its
13determination of the excess assessed value that the commission
14proposes to allocate to the respective taxing units in the manner
15prescribed in subdivision (2). The legislative body of the unit may
16approve the commission's determination or modify the amount of
17the excess assessed value that will be allocated to the respective
18taxing units in the manner prescribed in subdivision (2).
19     (g) This subsection applies to an allocation area only to the extent
20 that the net assessed value of property that is assessed as residential
21 property under the rules of the department of local government finance
22 is not included in the base assessed value. If property tax installments
23 with respect to a homestead (as defined in IC 6-1.1-12-37) are due in
24 installments established by the department of local government finance
25 under IC 6-1.1-22-9.5, each taxpayer subject to those installments in an
26 allocation area is entitled to an additional credit under subsection (d)
27 for the taxes (as defined in IC 6-1.1-21-2) (before its repeal) due in
28 installments. The credit shall be applied in the same proportion to each
29 installment of taxes (as defined in IC 6-1.1-21-2) (before its repeal).
30     SECTION 9. IC 36-7-14-52, AS AMENDED BY P.L.236-2023,
31 SECTION 181, IS AMENDED TO READ AS FOLLOWS
32 [EFFECTIVE JULY 1, 2026]: Sec. 52. (a) Notwithstanding section
33 39(a) of this chapter, with respect to the allocation and distribution of
34 property taxes for the accomplishment of the purposes of an
35 age-restricted housing program adopted under section 49 of this
36 chapter, "base assessed value" means, subject to section 39(j) of this
37 chapter, the net assessed value of all of the property, other than
38 personal property, as finally determined for the assessment date
39 immediately preceding the effective date of the allocation provision, as
40 adjusted under section 39(h) of this chapter.
41     (b) The allocation fund established under section 39(b) of this
42 chapter for the allocation area for an age-restricted housing program
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                                    26
1 adopted under section 49 of this chapter may be used only for purposes
2 related to the accomplishment of the purposes of the program,
3 including, but not limited to, the following:
4(1) The construction of any infrastructure (including streets,
5sidewalks, and sewers) or local public improvements in, serving,
6or benefiting the allocation area.
7(2) The acquisition of real property and interests in real property
8within the allocation area.
9(3) The preparation of real property in anticipation of
10development of the real property within the allocation area.
11(4) To do any of the following:
12(A) Pay the principal of and interest on bonds or any other
13obligations payable from allocated tax proceeds in the
14allocation area that are incurred by the redevelopment district
15for the purpose of financing or refinancing the age-restricted
16housing program established under section 49 of this chapter
17for the allocation area.
18(B) Establish, augment, or restore the debt service reserve for
19bonds payable solely or in part from allocated tax proceeds in
20the allocation area.
21(C) Pay the principal of and interest on bonds payable from
22allocated tax proceeds in the allocation area and from the
23special tax levied under section 27 of this chapter.
24(D) Pay the principal of and interest on bonds issued by the
25unit to pay for local public improvements that are physically
26located in or physically connected to the allocation area.
27(E) Pay premiums on the redemption before maturity of bonds
28payable solely or in part from allocated tax proceeds in the
29allocation area.
30(F) Make payments on leases payable from allocated tax
31proceeds in the allocation area under section 25.2 of this
32chapter.
33(G) Reimburse the unit for expenditures made by the unit for
34local public improvements (which include buildings, parking
35facilities, and other items described in section 25.1(a) of this
36chapter) that are physically located in or physically connected
37to the allocation area.
38    (c) Notwithstanding section 39(b) of this chapter, the commission
39 shall, relative to the allocation fund established under section 39(b) of
40 this chapter for an allocation area for an age-restricted housing program
41 adopted under section 49 of this chapter, do the following before June
42 15 of each year:
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1(1) Determine the amount, if any, by which the assessed value of
2the taxable property in the allocation area for the most recent
3assessment date minus the base assessed value, when multiplied
4by the estimated tax rate of the allocation area, will exceed the
5amount of assessed value needed to produce the property taxes
6necessary to:
7(A) make the distribution required under section 39(b)(2) and
839(b)(3) of this chapter;
9(B) make, when due, principal and interest payments on bonds
10described in section 39(b)(4) 39(b)(5) of this chapter;
11(C) pay the amount necessary for other purposes described in
12section 39(b)(4) 39(b)(5) of this chapter; and
13(D) reimburse the county or municipality for anticipated
14expenditures described in subsection (b)(2).
15(2) Provide a written notice to the county auditor, the fiscal body
16of the county or municipality that established the department of
17redevelopment, and the officers who are authorized to fix budgets,
18tax rates, and tax levies under IC 6-1.1-17-5 for each of the other
19taxing units that is wholly or partly located within the allocation
20area. The county auditor, upon receiving the notice, shall forward
21this notice (in an electronic format) to the department of local
22government finance not later than June 15 of each year. The
23notice must:
24(A) state the amount, if any, of excess property taxes that the
25commission has determined may be paid to the respective
26taxing units in the manner prescribed in section 39(b)(1) of
27this chapter; or
28(B) state that the commission has determined that there is no
29excess assessed value that may be allocated to the respective
30taxing units in the manner prescribed in subdivision (1).
31 The county auditor shall allocate to the respective taxing units the
32 amount, if any, of excess assessed value determined by the
33 commission.
34     SECTION 10. 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, 2026]: 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
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                                    28
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) The allocation fund established under section 39(b) of this
6 chapter for the allocation area for a residential housing development
7 program adopted under section 53 of this chapter may be used only for
8 purposes related to the accomplishment of the purposes of the program,
9 including, but not limited to, the following:
10(1) The construction of any infrastructure (including streets,
11roads, and sidewalks) or local public improvements in, serving,
12or benefiting a residential housing development project.
13(2) The acquisition of real property and interests in real property
14for rehabilitation purposes within the allocation area.
15(3) The preparation of real property in anticipation of
16development of the real property within the allocation area.
17(4) To do any of the following:
18(A) Pay the principal of and interest on bonds or any other
19obligations payable from allocated tax proceeds in the
20allocation area that are incurred by the redevelopment district
21for the purpose of financing or refinancing the residential
22housing development program established under section 53 of
23this chapter for the allocation area.
24(B) Establish, augment, or restore the debt service reserve for
25bonds payable solely or in part from allocated tax proceeds in
26the allocation area.
27(C) Pay the principal of and interest on bonds payable from
28allocated tax proceeds in the allocation area and from the
29special tax levied under section 27 of this chapter.
30(D) Pay the principal of and interest on bonds issued by the
31unit to pay for local public improvements that are physically
32located in or physically connected to the allocation area.
33(E) Pay premiums on the redemption before maturity of bonds
34payable solely or in part from allocated tax proceeds in the
35allocation area.
36(F) Make payments on leases payable from allocated tax
37proceeds in the allocation area under section 25.2 of this
38chapter.
39(G) Reimburse the unit for expenditures made by the unit for
40local public improvements (which include buildings, parking
41facilities, and other items described in section 25.1(a) of this
42chapter) that are physically located in or physically connected
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                                    29
1to the allocation area.
2     (d) Notwithstanding section 39(b) of this chapter, the commission
3 shall, relative to the allocation fund established under section 39(b) of
4 this chapter for an allocation area for a residential housing
5 development program adopted under section 53 of this chapter, do the
6 following before June 15 of each year:
7(1) Determine the amount, if any, by which the assessed value of
8the taxable property in the allocation area for the most recent
9assessment date minus the base assessed value, when multiplied
10by the estimated tax rate of the allocation area, will exceed the
11amount of assessed value needed to produce the property taxes
12necessary to:
13(A) make the distribution required under section 39(b)(2) and
1439(b)(3) of this chapter;
15(B) make, when due, principal and interest payments on bonds
16described in section 39(b)(4) 39(b)(5) of this chapter;
17(C) pay the amount necessary for other purposes described in
18section 39(b)(4) 39(b)(5) of this chapter; and
19(D) reimburse the county or municipality for anticipated
20expenditures described in subsection (c)(2).
21(2) Provide a written notice to the county auditor, the fiscal body
22of the county or municipality that established the department of
23redevelopment, the officers who are authorized to fix budgets, tax
24rates, and tax levies under IC 6-1.1-17-5 for each of the other
25taxing units that are wholly or partly located within the allocation
26area, and (in an electronic format) the department of local
27government finance. The notice must:
28(A) state the amount, if any, of excess property taxes that the
29commission has determined may be paid to the respective
30taxing units in the manner prescribed in section 39(b)(1) of
31this chapter; or
32(B) state that the commission has determined that there is no
33excess assessed value that may be allocated to the respective
34taxing units in the manner prescribed in subdivision (1).
35 The county auditor shall allocate to the respective taxing units the
36 amount, if any, of excess assessed value determined by the
37 commission.
38     (e) If the amount of excess assessed value determined by the
39 commission is expected to generate more than two hundred percent
40 (200%) of the amount of allocated tax proceeds:
41(1) necessary to make, when due, principal and interest payments
42on bonds described in section 39(b)(4) 39(b)(5) of this chapter;
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                                    30
1plus
2(2) the amount necessary for other purposes described in section
339(b)(4) 39(b)(5) of this chapter;
4 the commission shall submit to the county or municipal legislative
5 body its determination of the excess assessed value that the
6 commission proposes to allocate to the respective taxing units in the
7 manner prescribed in subsection (d)(2). The county or municipal
8 legislative body may approve the commission's determination or
9 modify the amount of the excess assessed value that will be allocated
10 to the respective taxing units in the manner prescribed in subsection
11 (d)(2).
12     (f) An allocation area must terminate on the date the residential
13 housing development program is terminated as set forth in section
14 53(e) of this chapter.
15     SECTION 11. IC 36-7-14.5-12.5, AS AMENDED BY
16 P.L.156-2024, SECTION 34, IS AMENDED TO READ AS
17 FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 12.5. (a) This section
18 applies only to an authority in a county having a United States
19 government military base that is scheduled for closing or is completely
20 or partially inactive or closed.
21     (b) In order to accomplish the purposes set forth in section 11 of this
22 chapter, an authority may create an economic development area:
23(1) by following the procedures set forth in IC 36-7-14-41 for the
24establishment of an economic development area by a
25redevelopment commission; and
26(2) with the same effect as if the economic development area was
27created by a redevelopment commission.
28 The area established under this section shall be established only in the
29 area where a United States government military base that is scheduled
30 for closing or is completely or partially inactive or closed is or was
31 located.
32     (c) In order to accomplish the purposes set forth in section 11 of this
33 chapter, an authority may do the following in a manner that serves an
34 economic development area created under this section:
35(1) Acquire by purchase, exchange, gift, grant, condemnation, or
36lease, or any combination of methods, any personal property or
37interest in real property needed for the redevelopment of
38economic development areas located within the corporate
39boundaries of the unit.
40(2) Hold, use, sell (by conveyance by deed, land sale contract, or
41other instrument), exchange, lease, rent, or otherwise dispose of
42property acquired for use in the redevelopment of economic
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                                       31
1development areas on the terms and conditions that the authority
2considers best for the unit and the unit's inhabitants.
3(3) Sell, lease, or grant interests in all or part of the real property
4acquired for redevelopment purposes to any other department of
5the unit or to any other governmental agency for public ways,
6levees, sewerage, parks, playgrounds, schools, and other public
7purposes on any terms that may be agreed on.
8(4) Clear real property acquired for redevelopment purposes.
9(5) Repair and maintain structures acquired for redevelopment
10purposes.
11(6) Remodel, rebuild, enlarge, or make major structural
12improvements on structures acquired for redevelopment purposes.
13(7) Survey or examine any land to determine whether the land
14should be included within an economic development area to be
15acquired for redevelopment purposes and to determine the value
16of that land.
17(8) Appear before any other department or agency of the unit, or
18before any other governmental agency in respect to any matter
19affecting:
20(A) real property acquired or being acquired for
21redevelopment purposes; or
22(B) any economic development area within the jurisdiction of
23the authority.
24(9) Institute or defend in the name of the unit any civil action, but
25all actions against the authority must be brought in the circuit or
26superior court of the county where the authority is located.
27(10) Use any legal or equitable remedy that is necessary or
28considered proper to protect and enforce the rights of and perform
29the duties of the authority.
30(11) Exercise the power of eminent domain in the name of and
31within the corporate boundaries of the unit subject to the same
32conditions and procedures that apply to the exercise of the power
33of eminent domain by a redevelopment commission under
34IC 36-7-14.
35(12) Appoint an executive director, appraisers, real estate experts,
36engineers, architects, surveyors, and attorneys.
37(13) Appoint clerks, guards, laborers, and other employees the
38authority considers advisable, except that those appointments
39must be made in accordance with the merit system of the unit if
40such a system exists.
41(14) Prescribe the duties and regulate the compensation of
42employees of the authority.
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                                    32
1(15) Provide a pension and retirement system for employees of
2the authority by using the public employees' retirement fund or a
3retirement plan approved by the United States Department of
4Housing and Urban Development.
5(16) Discharge and appoint successors to employees of the
6authority subject to subdivision (13).
7(17) Rent offices for use of the department or authority, or accept
8the use of offices furnished by the unit.
9(18) Equip the offices of the authority with the necessary
10furniture, furnishings, equipment, records, and supplies.
11(19) Design, order, contract for, and construct, reconstruct,
12improve, or renovate the following:
13(A) Any local public improvement or structure that is
14necessary for redevelopment purposes or economic
15development within the corporate boundaries of the unit.
16(B) Any structure that enhances development or economic
17development.
18(20) Contract for the construction, extension, or improvement of
19pedestrian skyways (as defined in IC 36-7-14-12.2(c)).
20(21) Accept loans, grants, and other forms of financial assistance
21from, or contract with, the federal government, the state
22government, a municipal corporation, a special taxing district, a
23foundation, or any other source.
24(22) Make and enter into all contracts and agreements necessary
25or incidental to the performance of the duties of the authority and
26the execution of the powers of the authority under this chapter.
27(23) Take any action necessary to implement the purpose of the
28authority.
29(24) Provide financial assistance, in the manner that best serves
30the purposes set forth in section 11 of this chapter, including
31grants and loans, to enable private enterprise to develop,
32redevelop, and reuse military base property or otherwise enable
33private enterprise to provide social and economic benefits to the
34citizens of the unit.
35     (d) An authority may designate all or a portion of an economic
36 development area created under this section as an allocation area by
37 following the procedures set forth in IC 36-7-14-39 for the
38 establishment of an allocation area by a redevelopment commission.
39 The allocation provision may modify the definition of "property taxes"
40 under IC 36-7-14-39(a) to include taxes imposed under IC 6-1.1 on the
41 depreciable personal property located and taxable on the site of
42 operations of designated taxpayers in accordance with the procedures
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                                    33
1 applicable to a commission under IC 36-7-14-39.3. IC 36-7-14-39.3
2 applies to such a modification. An allocation area established by an
3 authority under this section is a special taxing district authorized by the
4 general assembly to enable the unit to provide special benefits to
5 taxpayers in the allocation area by promoting economic development
6 that is of public use and benefit. For allocation areas established for an
7 economic development area created under this section after June 30,
8 1997, and to the expanded portion of an allocation area for an
9 economic development area that was established before June 30, 1997,
10 and that is expanded under this section after June 30, 1997, the net
11 assessed value of property that is assessed as residential property under
12 the rules of the department of local government finance, as finally
13 determined for any assessment date, must be allocated. All of the
14 provisions of IC 36-7-14-39 apply to an allocation area created under
15 this section, except that the authority shall be vested with the rights and
16 duties of a commission as referenced in those sections, except that the
17 expiration date of any allocation provision for the allocation area is the
18 later of July 1, 2016, or the expiration date determined under
19 IC 36-7-14-39(b), and except that, notwithstanding
20 IC 36-7-14-39(b)(4), IC 36-7-14-39(b)(5), property tax proceeds paid
21 into the allocation fund may be used by the authority only to do one (1)
22 or more of the following:
23(1) Pay the principal of and interest and redemption premium on
24any obligations incurred by the special taxing district or any other
25entity for the purpose of financing or refinancing military base
26reuse activities in or serving or benefiting that allocation area.
27(2) Establish, augment, or restore the debt service reserve for
28obligations payable solely or in part from allocated tax proceeds
29in that allocation area or from other revenues of the authority
30(including lease rental revenues).
31(3) Make payments on leases payable solely or in part from
32allocated tax proceeds in that allocation area.
33(4) Reimburse any other governmental body for expenditures
34made by it that benefits or provides for local public improvements
35or structures in or serving or benefiting that allocation area.
36(5) Pay expenses incurred by the authority that benefit or provide
37for local public improvements or structures that are in the
38allocation area or serving or benefiting the allocation area. For
39purposes of paying expenses incurred by the authority under this
40subsection, the expiration date of an allocation area may be
41extended to January 15, 2050, by resolution of the county fiscal
42body.
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                                    34
1      (6) Reimburse public and private entities for expenses incurred in
2      training employees of industrial facilities that are located:
3(A) in the allocation area; and
4(B) on a parcel of real property that has been classified as
5industrial property under the rules of the department of local
6government finance.
7      However, the total amount of money spent for this purpose in any
8      year may not exceed the total amount of money in the allocation
9      fund that is attributable to property taxes paid by the industrial
10      facilities described in clause (B). The reimbursements under this
11      subdivision must be made within three (3) years after the date on
12      which the investments that are the basis for the increment
13      financing are made.
14    (e) In addition to other methods of raising money for property
15 acquisition, redevelopment, or economic development activities in or
16 directly serving or benefiting an economic development area created
17 by an authority under this section, and in anticipation of the taxes
18 allocated under subsection (d), other revenues of the authority, or any
19 combination of these sources, the authority may, by resolution, issue
20 the bonds of the special taxing district in the name of the unit. Bonds
21 issued under this section may be issued in any amount without
22 limitation. The following apply if such a resolution is adopted:
23      (1) The authority shall certify a copy of the resolution authorizing
24      the bonds to the municipal or county fiscal officer, who shall then
25      prepare the bonds. The seal of the unit must be impressed on the
26      bonds, or a facsimile of the seal must be printed on the bonds.
27      (2) The bonds must be executed by the appropriate officer of the
28      unit and attested by the unit's fiscal officer.
29      (3) The bonds are exempt from taxation for all purposes.
30      (4) Bonds issued under this section may be sold at public sale in
31      accordance with IC 5-1-11 or at a negotiated sale.
32      (5) The bonds are not a corporate obligation of the unit but are an
33      indebtedness of the taxing district. The bonds and interest are
34      payable, as set forth in the bond resolution of the authority:
35(A) from the tax proceeds allocated under subsection (d);
36(B) from other revenues available to the authority; or
37(C) from a combination of the methods stated in clauses (A)
38and (B).
39      (6) Proceeds from the sale of bonds may be used to pay the cost
40      of interest on the bonds for a period not to exceed five (5) years
41      from the date of issuance.
42      (7) Laws relating to the filing of petitions requesting the issuance
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                                     35
1of bonds and the right of taxpayers and voters to remonstrate
2against the issuance of bonds do not apply to bonds issued under
3this section.
4(8) If a debt service reserve is created from the proceeds of bonds,
5the debt service reserve may be used to pay principal and interest
6on the bonds as provided in the bond resolution.
7(9) If bonds are issued under this chapter that are payable solely
8or in part from revenues to the authority from a project or
9projects, the authority may adopt a resolution or trust indenture or
10enter into covenants as is customary in the issuance of revenue
11bonds. The resolution or trust indenture may pledge or assign the
12revenues from the project or projects. The resolution or trust
13indenture may also contain any provisions for protecting and
14enforcing the rights and remedies of the bond owners as may be
15reasonable and proper and not in violation of law, including
16covenants setting forth the duties of the authority. The authority
17may establish fees and charges for the use of any project and
18covenant with the owners of any bonds to set those fees and
19charges at a rate sufficient to protect the interest of the owners of
20the bonds. Any revenue bonds issued by the authority that are
21payable solely from revenues of the authority shall contain a
22statement to that effect in the form of bond.
23     (f) Notwithstanding section 8(a) of this chapter, an ordinance
24 adopted under section 11 of this chapter may provide, or be amended
25 to provide, that the board of directors of the authority shall be
26 composed of not fewer than three (3) nor more than eleven (11)
27 members, who must be residents of or be employed at a place of
28 employment located within the unit. The members shall be appointed
29 by the executive of the unit.
30     (g) The acquisition of real and personal property by an authority
31 under this section is not subject to the provisions of IC 5-22,
32 IC 36-1-10.5, IC 36-7-14-19, or any other statutes governing the
33 purchase of property by public bodies or their agencies.
34     (h) An authority may negotiate for the sale, lease, or other
35 disposition of real and personal property without complying with the
36 provisions of IC 5-22-22, IC 36-1-11, IC 36-7-14-22, or any other
37 statute governing the disposition of public property.
38     (i) Notwithstanding any other law, utility services provided within
39 an economic development area established under this section are
40 subject to regulation by the appropriate regulatory agencies unless the
41 utility service is provided by a utility that provides utility service solely
42 within the geographic boundaries of an existing or a closed military
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                                    36
1 installation, in which case the utility service is not subject to regulation
2 for purposes of rate making, regulation, service delivery, or issuance of
3 bonds or other forms of indebtedness. However, this exemption from
4 regulation does not apply to utility service if the service is generated,
5 treated, or produced outside the boundaries of the existing or closed
6 military installation.
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