SB 278

                                                             Introduced Version
           SENATE BILL No. 278
                 _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-15-1.1; IC 6-3.6-4-3; IC 8-22-3.5;
IC 32-21-5-7; IC 36-7.
Synopsis: Tax increment financing. Provides for various tax increment
financing neutralization procedures for certain tax increment financing
areas. Specifically, provides that for certain tax increment financing
districts, in an appeal of the assessed value of a property: (1) the county
or township assessor in conjunction with the preliminary informal
meeting; or (2) the county board in conjunction with an appeal hearing
by the county board; may request a taxpayer to provide income data
necessary to determine the assessed value under the income
capitalization approach. If requested, a taxpayer shall provide income
data within 60 days of the request. Provides that an adopting body must
annually, on or before November 10, report to the department of local
government finance (DLGF), in a manner determined by the DLGF: (1)
the total amount of debt outstanding; (2) the annual amount of debt due
for each remaining year the debt will be outstanding; and (3) the
estimated payoff year for all debt backed by the local income tax. An
adopting body shall provide an indication of all debt obligations
outstanding that are not supported by any secondary backing source.
Provides that the DLGF shall post the information required on the
DLGF's computer gateway. Redefines "residential property" for certain
tax increment financing districts. Provides that the DLGF may require
a redevelopment commission (and other tax increment financing
bodies) to submit required documentation to neutralize the base
assessed value. Any supporting documentation the redevelopment
commission is required to submit to support the base assessed value
neutralization calculation must be completed and submitted to the
DLGF by July 15 of each year. Provides that if the redevelopment
                      (Continued next page)
Effective: July 1, 2026; July 1, 2027; January 1, 2028.
                              Baldwin
   January 8, 2026, read first time and referred to Committee on Tax and Fiscal Policy.
2026  IN 278—LS 7069/DI 134
Digest Continued
commission does not submit the required documentation by the
deadline in a given year, then 5% of the excess assessed value shall be
allocated to the respective taxing units in the year the deadline is
missed. Provides that the original owner of each nonowner-occupied
residential property subject to the 2% tax cap, that is located in the tax
increment financing area and is excluded from the base assessed value,
shall upon completion of construction enter into a written agreement
with the redevelopment commission indicating the owner shall be
obligated to pay the property tax for the portion of outstanding bonds
in the tax increment financing district attributable to the property until
the term length of the original outstanding bond is retired. Provides that
the written agreement with the redevelopment commission shall be
considered a lien on the property and shall be included as part of the
residential real estate sales disclosure. Provides that if the property is
subsequently sold as a homestead property and becomes subject to the
1% tax cap, the new owner shall be responsible for the lien on the
property attributable to the written agreement with the redevelopment
commission, and the new homestead property owner shall be obligated
to fulfill the terms of the written agreement including the payment of
the property tax liability included in the agreement. Provides that,
notwithstanding any other law, for taxing districts that include multiple
tax increment financing districts, the original tax increment financing
district does not expire and stays active only for the purpose of
satisfying outstanding bonds issued by the subsequent tax increment
financing district, only if the redevelopment commission completes the
following requirements: (1) Provides written appeals to and receives
the approval of the DLGF. (2) Provides written notice to the state board
of accounts of the appeal.
2026  IN 278—LS 7069/DI 134
                                                                                       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.
                   SENATE BILL No. 278
    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 6-1.1-15-1.1, AS AMENDED BY P.L.9-2024,
2 SECTION 167, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2026]: Sec. 1.1. (a) A taxpayer may appeal an
4 assessment of a taxpayer's tangible property by filing a notice in writing
5 with the township assessor, or the county assessor if the township is not
6 served by a township assessor. Except as provided in subsections (e)
7 and (h), an appeal under this section may raise any claim of an error
8 related to the following:
9(1) The assessed value of the property.
10(2) The assessment was against the wrong person.
11(3) The approval denial or omission of a deduction, credit,
12exemption, abatement, or tax cap.
13(4) A clerical, mathematical, or typographical mistake.
14(5) The description of the real property.
15(6) The legality or constitutionality of a property tax or
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                                       2
1assessment.
2 A written notice under this section must be made on a form designated
3 by the department of local government finance. A taxpayer must file a
4 separate petition for each parcel.
5     (b) A taxpayer may appeal an error in the assessed value of the
6 property under subsection (a)(1) any time after the official's action, but
7 not later than the following:
8(1) For assessments before January 1, 2019, the earlier of:
9(A) forty-five (45) days after the date on which the notice of
10assessment is mailed by the county; or
11(B) forty-five (45) days after the date on which the tax
12statement is mailed by the county treasurer, regardless of
13whether the assessing official changes the taxpayer's
14assessment.
15(2) For assessments of real property, after December 31, 2018, the
16earlier of:
17(A) June 15 of the assessment year, if the notice of assessment
18is mailed by the county before May 1 of the assessment year;
19or
20(B) June 15 of the year in which the tax statement is mailed by
21the county treasurer, if the notice of assessment is mailed by
22the county on or after May 1 of the assessment year.
23(3) For assessments of personal property, forty-five (45) days after
24the date on which the county mails the notice under
25IC 6-1.1-3-20.
26 A taxpayer may appeal an error in the assessment under subsection
27 (a)(2), (a)(3), (a)(4), (a)(5), or (a)(6) not later than three (3) years after
28 the taxes were first due.
29     (c) Except as provided in subsection (d), an appeal under this
30 section applies only to the tax year corresponding to the tax statement
31 or other notice of action.
32     (d) An appeal under this section applies to a prior tax year if a
33 county official took action regarding a prior tax year, and such action
34 is reflected for the first time in the tax statement. A taxpayer who has
35 timely filed a written notice of appeal under this section may be
36 required to file a petition for each tax year, and each petition filed later
37 must be considered timely.
38     (e) A taxpayer may not appeal under this section any claim of error
39 related to the following:
40(1) The denial of a deduction, exemption, abatement, or credit if
41the authority to approve or deny is not vested in the county board,
42county auditor, county assessor, or township assessor.
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                                     3
1(2) The calculation of interest and penalties.
2(3) A matter under subsection (a) if a separate appeal or review
3process is statutorily prescribed.
4 However, a claim may be raised under this section regarding the
5 omission or application of a deduction approved by an authority other
6 than the county board, county auditor, county assessor, or township
7 assessor.
8    (f) The filing of a written notice under this section constitutes a
9 request by the taxpayer for a preliminary informal meeting with the
10 township assessor, or the county assessor if the township is not served
11 by a township assessor.
12    (g) A county or township official who receives a written notice
13 under this section shall forward the notice to:
14(1) the county board; and
15(2) the county auditor, if the taxpayer raises a claim regarding a
16matter that is in the discretion of the county auditor.
17    (h) A taxpayer may not raise any claim in an appeal under this
18 section related to the legality or constitutionality of:
19(1) a user fee (as defined in IC 33-23-1-10.5);
20(2) any other charge, fee, or rate imposed by a political
21subdivision under any other law; or
22(3) any tax imposed by a political subdivision other than a
23property tax.
24    (i) This subsection applies only to an appeal based on a claim of
25 error in the determination of property that is or is not eligible for a
26 standard homestead deduction under IC 6-1.1-12-37 and only for an
27 assessment date occurring before January 1, 2024. A taxpayer may
28 appeal an error in the assessment of property as described in this
29 subsection any time after the official's action, but not later than one (1)
30 year after the date on which the property that is the subject of the
31 appeal was assessed.
32    (j) In an appeal of the assessed value of a property:
33(1) the county or township assessor in conjunction with the
34preliminary informal meeting; or
35(2) the county board in conjunction with an appeal hearing by
36the county board may request a taxpayer to provide income
37data necessary to determine the assessed value under the
38income capitalization approach. If requested, a taxpayer shall
39provide income data within sixty (60) days of the request.
40    SECTION 2. IC 6-3.6-4-3, AS ADDED BY P.L.243-2015,
41 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
42 JULY 1, 2026]: Sec. 3. (a) If there are bonds or leases outstanding that
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                                     4
1 are payable from a tax imposed under IC 6-3.5-1.1 (before its repeal
2 January 1, 2017), IC 6-3.5-6 (before its repeal January 1, 2017),
3 IC 6-3.5-7 (before its repeal January 1, 2017), IC 6-3.6-6, or IC 6-3.6-7
4 (but not IC 6-3.6-5), the adopting body may not reduce the tax rate
5 below a rate that would produce one and twenty-five hundredths (1.25)
6 times the total of the highest annual outstanding debt service plus the
7 highest annual lease payments plus any amount required under the
8 agreements for the bonds or leases to be deposited in a sinking fund or
9 other reserve, unless:
10(1) the adopting body; or
11(2) any city, town, or county;
12 pledges all or a part of its share of revenues from the tax imposed under
13 IC 6-3.6-6 or IC 6-3.6-7 (but not IC 6-3.6-5) for the life of the bonds or
14 the term of the lease, in an amount that is sufficient, when combined
15 with the amount pledged by the city, town, or county that issued the
16 bonds, to produce one and twenty-five hundredths (1.25) times the total
17 of the highest annual outstanding debt service plus the highest annual
18 lease payments plus the amount required under the agreements for the
19 bonds or leases to be deposited in a sinking fund or other reserve.
20     (b) An adopting body must annually, on or before November 10,
21 report to the department of local government finance, in a manner
22 determined by the department of local government finance:
23(1) the total amount of debt outstanding;
24(2) the annual amount of debt due for each remaining year the
25debt will be outstanding; and
26(3) the estimated payoff year for all debt backed by the local
27income tax. An adopting body shall provide an indication of
28all debt obligations outstanding that are not supported by any
29secondary backing source.
30     (c) The department of local government finance shall post the
31 information required under subsection (b) on the department's
32 computer gateway.
33     SECTION 3. IC 6-3.6-4-3, AS AMENDED BY P.L.68-2025,
34 SECTION 115, IS AMENDED TO READ AS FOLLOWS
35 [EFFECTIVE JANUARY 1, 2028]: Sec. 3. (a) If there are bonds or
36 leases outstanding that are payable from a tax imposed under
37 IC 6-3.5-1.1 (before its repeal January 1, 2017), IC 6-3.5-6 (before its
38 repeal January 1, 2017), IC 6-3.5-7 (before its repeal January 1, 2017),
39 IC 6-3.6-6, or IC 6-3.6-7, the adopting body may not reduce the tax rate
40 below a rate that would produce one and twenty-five hundredths (1.25)
41 times the total of the highest annual outstanding debt service plus the
42 highest annual lease payments plus any amount required under the
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                                    5
1 agreements for the bonds or leases to be deposited in a sinking fund or
2 other reserve, unless:
3(1) the adopting body; or
4(2) any city, town, or county;
5 pledges all or a part of its share of revenues from the tax imposed under
6 IC 6-3.6-6 or IC 6-3.6-7 for the life of the bonds or the term of the
7 lease, in an amount that is sufficient, when combined with the amount
8 pledged by the city, town, or county that issued the bonds, to produce
9 one and twenty-five hundredths (1.25) times the total of the highest
10 annual outstanding debt service plus the highest annual lease payments
11 plus the amount required under the agreements for the bonds or leases
12 to be deposited in a sinking fund or other reserve.
13    (b) An adopting body must annually, on or before November 10,
14 report to the department of local government finance, in a manner
15 determined by the department of local government finance:
16(1) the total amount of debt outstanding;
17(2) the annual amount of debt due for each remaining year the
18debt will be outstanding; and
19(3) the estimated payoff year for all debt backed by the local
20income tax. An adopting body shall provide an indication of
21all debt obligations outstanding that are not supported by any
22secondary backing source.
23    (c) The department of local government finance shall post the
24 information required under subsection (b) on the department's
25 computer gateway.
26    SECTION 4. IC 8-22-3.5-9, AS AMENDED BY P.L.174-2022,
27 SECTION 50, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JULY 1, 2026]: Sec. 9. (a) As used in this section, "base assessed
29 value" means, subject to subsection (k):
30(1) the net assessed value of all the tangible property as finally
31determined for the assessment date immediately preceding the
32effective date of the allocation provision of the commission's
33resolution adopted under section 5 or 9.5 of this chapter,
34notwithstanding the date of the final action taken under section 6
35of this chapter; plus
36(2) to the extent it is not included in subdivision (1), the net
37assessed value of property that is assessed as residential property
38under the rules of the department of local government finance,
39within the airport development zone, as finally determined for the
40current assessment date.
41 However, subdivision (2) applies only to an airport development zone
42 established after June 30, 1997, and the portion of an airport
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                                    6
1 development zone established before June 30, 1997, that is added to an
2 existing airport development zone.
3     (b) A resolution adopted under section 5 of this chapter and
4 confirmed under section 6 of this chapter must include a provision with
5 respect to the allocation and distribution of property taxes for the
6 purposes and in the manner provided in this section.
7     (c) The allocation provision must:
8(1) apply to the entire airport development zone; and
9(2) require that any property tax on taxable tangible property
10subsequently levied by or for the benefit of any public body
11entitled to a distribution of property taxes in the airport
12development zone be allocated and distributed as provided in
13subsections (d) and (e).
14     (d) Except as otherwise provided in this section:
15(1) the proceeds of the taxes attributable to the lesser of:
16(A) the assessed value of the tangible property for the
17assessment date with respect to which the allocation and
18distribution is made; or
19(B) the base assessed value;
20shall be allocated and, when collected, paid into the funds of the
21respective taxing units; and
22(2) the excess of the proceeds of the property taxes imposed for
23the assessment date with respect to which the allocation and
24distribution are made that are attributable to taxes imposed after
25being approved by the voters in a referendum or local public
26question conducted after April 30, 2010, not otherwise included
27in subdivision (1) shall be allocated to and, when collected, paid
28into the funds of the taxing unit for which the referendum or local
29public question was conducted.
30     (e) All of the property tax proceeds in excess of those described in
31 subsection (d) shall be allocated to the eligible entity for the airport
32 development zone and, when collected, paid into special funds as
33 follows:
34(1) The commission may determine that a portion of tax proceeds
35shall be allocated to a training grant fund to be expended by the
36commission without appropriation solely for the purpose of
37reimbursing training expenses incurred by public or private
38entities in the training of employees for the qualified airport
39development project.
40(2) The commission may determine that a portion of tax proceeds
41shall be allocated to a debt service fund and dedicated to the
42payment of principal and interest on revenue bonds or a loan
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                                     7
1contract of the board of aviation commissioners or airport
2authority for a qualified airport development project, to the
3payment of leases for a qualified airport development project, or
4to the payment of principal and interest on bonds issued by an
5eligible entity to pay for qualified airport development projects in
6the airport development zone or serving the airport development
7zone.
8(3) The commission may determine that a part of the tax proceeds
9shall be allocated to a project fund and used to pay expenses
10incurred by the commission for a qualified airport development
11project that is in the airport development zone or is serving the
12airport development zone.
13(4) Except as provided in subsection (f), all remaining tax
14proceeds after allocations are made under subdivisions (1), (2),
15and (3) shall be allocated to a project fund and dedicated to the
16reimbursement of expenditures made by the commission for a
17qualified airport development project that is in the airport
18development zone or is serving the airport development zone.
19     (f) Before July 15 of each year, the commission shall do the
20 following:
21(1) Determine the amount, if any, by which tax proceeds allocated
22to the project fund in subsection (e)(3) in the following year will
23exceed the amount necessary to satisfy amounts required under
24subsection (e).
25(2) Provide a written notice to the county auditor and the officers
26who are authorized to fix budgets, tax rates, and tax levies under
27IC 6-1.1-17-5 for each of the other taxing units that is wholly or
28partly located within the allocation area. The notice must:
29(A) state the amount, if any, of excess tax proceeds that the
30commission has determined may be allocated to the respective
31taxing units in the manner prescribed in subsection (d)(1); or
32(B) state that the commission has determined that there are no
33excess tax proceeds that may be allocated to the respective
34taxing units in the manner prescribed in subsection (d)(1).
35The county auditor shall allocate to the respective taxing units the
36amount, if any, of excess tax proceeds determined by the
37commission.
38     (g) When money in the debt service fund and in the project fund is
39 sufficient to pay all outstanding principal and interest (to the earliest
40 date on which the obligations can be redeemed) on revenue bonds
41 issued by the board of aviation commissioners or airport authority for
42 the financing of qualified airport development projects, all lease rentals
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1 payable on leases of qualified airport development projects, and all
2 costs and expenditures associated with all qualified airport
3 development projects, money in the debt service fund and in the project
4 fund in excess of those amounts shall be paid to the respective taxing
5 units in the manner prescribed by subsection (d)(1).
6     (h) Property tax proceeds allocable to the debt service fund under
7 subsection (e)(2) must, subject to subsection (g), be irrevocably
8 pledged by the eligible entity for the purpose set forth in subsection
9 (e)(2).
10     (i) Notwithstanding any other law, each assessor shall, upon petition
11 of the commission, reassess the taxable tangible property situated upon
12 or in, or added to, the airport development zone effective on the next
13 assessment date after the petition.
14     (j) Notwithstanding any other law, the assessed value of all taxable
15 tangible property in the airport development zone, for purposes of tax
16 limitation, property tax replacement, and formulation of the budget, tax
17 rate, and tax levy for each political subdivision in which the property
18 is located is the lesser of:
19(1) the assessed value of the tangible property as valued without
20regard to this section; or
21(2) the base assessed value.
22     (k) If the commission confirms, or modifies and confirms, a
23 resolution under section 6 of this chapter and the commission makes
24 either of the filings required under section 6(c) of this chapter after the
25 first anniversary of the effective date of the allocation provision, the
26 auditor of the county in which the airport development zone is located
27 shall compute the base assessed value for the allocation area using the
28 assessment date immediately preceding the later of:
29(1) the date on which the documents are filed with the county
30auditor; or
31(2) the date on which the documents are filed with the department
32of local government finance.
33     (l) For an airport development zone established after June 30, 2024,
34 "residential property" refers to the assessed value of property that is
35 allocated to the one percent (1%) homestead land and improvement
36 categories in the county tax and billing software system. along with the
37 residential assessed value as defined for purposes of calculating the
38 rate for the local income tax property tax relief credit designated for
39 residential property under IC 6-3.6-5-6(d)(3).
40     SECTION 5. IC 8-22-3.5-9, AS AMENDED BY P.L.68-2025,
41 SECTION 196, IS AMENDED TO READ AS FOLLOWS
42 [EFFECTIVE JULY 1, 2027]: Sec. 9. (a) As used in this section, "base
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                                    9
1 assessed value" means, subject to subsection (k):
2(1) the net assessed value of all the tangible property as finally
3determined for the assessment date immediately preceding the
4effective date of the allocation provision of the commission's
5resolution adopted under section 5 or 9.5 of this chapter,
6notwithstanding the date of the final action taken under section 6
7of this chapter; plus
8(2) to the extent it is not included in subdivision (1), the net
9assessed value of property that is assessed as residential property
10under the rules of the department of local government finance,
11within the airport development zone, as finally determined for the
12current assessment date.
13 However, subdivision (2) applies only to an airport development zone
14 established after June 30, 1997, and the portion of an airport
15 development zone established before June 30, 1997, that is added to an
16 existing airport development zone.
17    (b) A resolution adopted under section 5 of this chapter and
18 confirmed under section 6 of this chapter must include a provision with
19 respect to the allocation and distribution of property taxes for the
20 purposes and in the manner provided in this section.
21    (c) The allocation provision must:
22(1) apply to the entire airport development zone; and
23(2) require that any property tax on taxable tangible property
24subsequently levied by or for the benefit of any public body
25entitled to a distribution of property taxes in the airport
26development zone be allocated and distributed as provided in
27subsections (d) and (e).
28    (d) Except as otherwise provided in this section:
29(1) the proceeds of the taxes attributable to the lesser of:
30(A) the assessed value of the tangible property for the
31assessment date with respect to which the allocation and
32distribution is made; or
33(B) the base assessed value;
34shall be allocated and, when collected, paid into the funds of the
35respective taxing units; and
36(2) the excess of the proceeds of the property taxes imposed for
37the assessment date with respect to which the allocation and
38distribution are made that are attributable to taxes imposed after
39being approved by the voters in a referendum or local public
40question conducted after April 30, 2010, not otherwise included
41in subdivision (1) shall be allocated to and, when collected, paid
42into the funds of the taxing unit for which the referendum or local
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                                    10
1public question was conducted.
2     (e) All of the property tax proceeds in excess of those described in
3 subsection (d) shall be allocated to the eligible entity for the airport
4 development zone and, when collected, paid into special funds as
5 follows:
6(1) The commission may determine that a portion of tax proceeds
7shall be allocated to a training grant fund to be expended by the
8commission without appropriation solely for the purpose of
9reimbursing training expenses incurred by public or private
10entities in the training of employees for the qualified airport
11development project.
12(2) The commission may determine that a portion of tax proceeds
13shall be allocated to a debt service fund and dedicated to the
14payment of principal and interest on revenue bonds or a loan
15contract of the board of aviation commissioners or airport
16authority for a qualified airport development project, to the
17payment of leases for a qualified airport development project, or
18to the payment of principal and interest on bonds issued by an
19eligible entity to pay for qualified airport development projects in
20the airport development zone or serving the airport development
21zone.
22(3) The commission may determine that a part of the tax proceeds
23shall be allocated to a project fund and used to pay expenses
24incurred by the commission for a qualified airport development
25project that is in the airport development zone or is serving the
26airport development zone.
27(4) Except as provided in subsection (f), all remaining tax
28proceeds after allocations are made under subdivisions (1), (2),
29and (3) shall be allocated to a project fund and dedicated to the
30reimbursement of expenditures made by the commission for a
31qualified airport development project that is in the airport
32development zone or is serving the airport development zone.
33     (f) Before July 15 of each year, the commission shall do the
34 following:
35(1) Determine the amount, if any, by which tax proceeds allocated
36to the project fund in subsection (e)(3) in the following year will
37exceed the amount necessary to satisfy amounts required under
38subsection (e).
39(2) Provide a written notice to the county auditor and the officers
40who are authorized to fix budgets, tax rates, and tax levies under
41IC 6-1.1-17-5 for each of the other taxing units that is wholly or
42partly located within the allocation area. The notice must:
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1(A) state the amount, if any, of excess tax proceeds that the
2commission has determined may be allocated to the respective
3taxing units in the manner prescribed in subsection (d)(1); or
4(B) state that the commission has determined that there are no
5excess tax proceeds that may be allocated to the respective
6taxing units in the manner prescribed in subsection (d)(1).
7The county auditor shall allocate to the respective taxing units the
8amount, if any, of excess tax proceeds determined by the
9commission.
10     (g) When money in the debt service fund and in the project fund is
11 sufficient to pay all outstanding principal and interest (to the earliest
12 date on which the obligations can be redeemed) on revenue bonds
13 issued by the board of aviation commissioners or airport authority for
14 the financing of qualified airport development projects, all lease rentals
15 payable on leases of qualified airport development projects, and all
16 costs and expenditures associated with all qualified airport
17 development projects, money in the debt service fund and in the project
18 fund in excess of those amounts shall be paid to the respective taxing
19 units in the manner prescribed by subsection (d)(1).
20     (h) Property tax proceeds allocable to the debt service fund under
21 subsection (e)(2) must, subject to subsection (g), be irrevocably
22 pledged by the eligible entity for the purpose set forth in subsection
23 (e)(2).
24     (i) Notwithstanding any other law, each assessor shall, upon petition
25 of the commission, reassess the taxable tangible property situated upon
26 or in, or added to, the airport development zone effective on the next
27 assessment date after the petition.
28     (j) Notwithstanding any other law, the assessed value of all taxable
29 tangible property in the airport development zone, for purposes of tax
30 limitation, property tax replacement, and formulation of the budget, tax
31 rate, and tax levy for each political subdivision in which the property
32 is located is the lesser of:
33(1) the assessed value of the tangible property as valued without
34regard to this section; or
35(2) the base assessed value.
36     (k) If the commission confirms, or modifies and confirms, a
37 resolution under section 6 of this chapter and the commission makes
38 either of the filings required under section 6(c) of this chapter after the
39 first anniversary of the effective date of the allocation provision, the
40 auditor of the county in which the airport development zone is located
41 shall compute the base assessed value for the allocation area using the
42 assessment date immediately preceding the later of:
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1(1) the date on which the documents are filed with the county
2auditor; or
3(2) the date on which the documents are filed with the department
4of local government finance.
5     (l) For an airport development zone established after June 30, 2024,
6 "residential property" refers to the assessed value of property that is
7 allocated to the one percent (1%) homestead land and improvement
8 categories in the county tax and billing software system. along with the
9 residential assessed value as defined for purposes of calculating the
10 rate for the local income tax property tax relief credit designated for
11 residential property under IC 6-3.6-5-6(d)(3) (before its expiration).
12     SECTION 6. IC 8-22-3.5-9.3, AS ADDED BY P.L.123-2024,
13 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
14 JULY 1, 2026]: Sec. 9.3. (a) Notwithstanding any other law, if the
15 Indiana economic development corporation subsequently designates
16 territory that is located in an existing allocation area under this chapter
17 as an innovation development district under IC 36-7-32.5, the
18 allocation area may not be renewed or extended under this chapter until
19 the term of the innovation development district expires.
20     (b) Notwithstanding any other law, for taxing districts that
21 include multiple tax increment financing districts under this
22 chapter, the original tax increment financing district does not
23 expire and stays active only for the purpose of satisfying
24 outstanding bonds issued by the subsequent tax increment
25 financing district, only if the commission completes the following
26 requirements:
27(1) Provides a written appeal to and receives the approval of
28the department of local government finance.
29(2) Provides written notice to the state board of accounts of
30the appeal.
31     SECTION 7. IC 8-22-3.5-9.8, AS ADDED BY P.L.249-2015,
32 SECTION 23, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2026]: Sec. 9.8. (a) A commission may enter into a written
34 agreement with a taxpayer who owns, or is otherwise obligated to pay
35 property taxes on, tangible property that is or will be located in an
36 allocation area established under this chapter in which the taxpayer
37 waives review of any assessment of the taxpayer's tangible property
38 that is located in the allocation area for an assessment date that occurs
39 during the term of any specified bond or lease obligations that are
40 payable from property taxes in accordance with an allocation provision
41 for the allocation area and any applicable statute, ordinance, or
42 resolution. An agreement described in this section may precede the
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1 establishment of the allocation area or the determination to issue bonds
2 or enter into leases payable from the allocated property taxes.
3     (b) The original owner of each nonowner-occupied residential
4 property subject to the two percent (2%) tax cap, that is located in
5 the tax increment financing area and is excluded from the base
6 assessed value, shall upon completion of construction enter into a
7 written agreement with the commission indicating the owner shall
8 be obligated to pay the property tax for the portion of outstanding
9 bonds in the tax increment financing district attributable to the
10 property until the term length of the original outstanding bond is
11 retired. The written agreement with the commission shall be
12 considered a lien on the property and shall be included as part of
13 the residential real estate sales disclosure under IC 32-21-5. If the
14 property is subsequently sold as a homestead property and
15 becomes subject to the one percent (1%) tax cap, the new owner
16 shall be responsible for the lien on the property attributable to the
17 written agreement with the commission, and the new homestead
18 property owner shall be obligated to fulfill the terms of the written
19 agreement including the payment of the property tax liability
20 included in the agreement.
21     SECTION 8. IC 8-22-3.5-11, AS AMENDED BY P.L.86-2018,
22 SECTION 144, IS AMENDED TO READ AS FOLLOWS
23 [EFFECTIVE JULY 1, 2026]: Sec. 11. (a) The state board of accounts
24 and the department of local government finance shall make the rules
25 and prescribe the forms and procedures that the state board of accounts
26 and department consider appropriate for the implementation of this
27 chapter.
28     (b) After each reassessment under IC 6-1.1-4, the department of
29 local government finance shall adjust the base assessed value (as
30 defined in section 9 of this chapter) one (1) time to neutralize any effect
31 of the reassessment on the property tax proceeds allocated to the airport
32 development zone's special funds under section 9 of this chapter.
33     (c) After each annual adjustment under IC 6-1.1-4-4.5, the
34 department of local government finance shall adjust the base assessed
35 value (as defined in section 9 of this chapter) to neutralize any effect
36 of the annual adjustment on the property tax proceeds allocated to the
37 airport development zone's special funds under section 9 of this
38 chapter.
39     (d) The department of local government finance may require the
40 commission to submit required documentation to neutralize the
41 base assessed value under subsection (c). Any supporting
42 documentation the commission is required to submit to support the
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1 base assessed value neutralization calculation must be completed
2 and submitted to the department of local government finance by
3 July 15 of each year.
4    (e) If the commission does not submit the required
5 documentation under subsection (d) by the deadline described in
6 subsection (d) in a given year, then five percent (5%) of the excess
7 assessed value shall be allocated to the respective taxing units in
8 the manner prescribed by section 9(d)(1) of this chapter in the year
9 the deadline described in subsection (d) is missed.
10    SECTION 9. IC 32-21-5-7, AS AMENDED BY P.L.186-2025,
11 SECTION 166, IS AMENDED TO READ AS FOLLOWS
12 [EFFECTIVE JULY 1, 2026]: Sec. 7. (a) The Indiana real estate
13 commission established by IC 25-34.1-2-1 shall adopt a specific
14 disclosure form that contains the following:
15      (1) Disclosure by the owner of the known condition of the
16      following:
17(A) The foundation.
18(B) The mechanical systems.
19(C) The roof.
20(D) The structure.
21(E) The water and sewer systems.
22(F) Additions that may require improvements to the sewage
23disposal system.
24(G) Other areas that the Indiana real estate commission
25determines are appropriate.
26      (2) Disclosure by the owner of known:
27(A) contamination caused by the manufacture of a controlled
28substance (as defined by IC 35-48-1.1-7) on the property that
29has not been certified as decontaminated by a qualified
30inspector who is certified under IC 16-19-3.1; or
31(B) manufacture of methamphetamine or dumping of waste
32from the manufacture of methamphetamine in a residential
33structure on the property.
34      (3) A notice to the prospective buyer that contains substantially
35      the following language:
36      "The prospective buyer and the owner may wish to obtain
37      professional advice or inspections of the property and provide for
38      appropriate provisions in a contract between them concerning any
39      advice, inspections, defects, or warranties obtained on the
40      property.".
41      (4) A notice to the prospective buyer that contains substantially
42      the following language:
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1      "The representations in this form are the representations of the
2      owner and are not the representations of the agent, if any. This
3      information is for disclosure only and is not intended to be a part
4      of any contract between the buyer and owner.".
5      (5) A disclosure by the owner that an airport is located within a
6      geographical distance from the property as determined by the
7      Indiana real estate commission. The commission may consider the
8      differences between an airport serving commercial airlines and an
9      airport that does not serve commercial airlines in determining the
10      distance to be disclosed.
11      (6) A disclosure by the owner that:
12(A) the property is located near a military installation, within
13a state area of interest (as defined in IC 36-7-30.2-6), and may
14be impacted to some degree by the effects of the installation's
15military operations; and
16(B) local laws may restrict use and development of the
17property to promote compatibility with military installation
18operations.
19      (7) If the owner has personal knowledge of the fact that all or a
20      portion of the real estate is located within a community's flood
21      plain boundaries, as indicated in a Federal Emergency
22      Management Agency Flood Insurance Rate Map, a disclosure by
23      the owner of that fact.
24      (8) A disclosure by the owner that the property is located within
25      a locally designated historic district under IC 36-7-11.
26      (9) A disclosure by the owner of a conservation easement (as
27      defined in IC 32-23-5-2).
28      (10) A disclosure by the owner if the property has a lien
29      pursuant to a written agreement with a redevelopment
30      commission or reuse authority under any of the following:
31(A) IC 8-22-3.5-9.8(b).
32(B) IC 36-7-14-39.6(b).
33(C) IC 36-7-15.1-26.6(b).
34(D) IC 36-7-30-26.5(b).
35(E) IC 36-7-30.5-31.5(b).
36    (b) Responsibility for the disclosure required under subsection
37 (a)(6) rests solely with the owner of the property and no liability for the
38 owner's failure to make the required disclosure shall accrue to any third
39 party. Failure of the owner to make the required disclosure under
40 subsection (a)(6) shall not:
41      (1) invalidate the transfer of the property; or
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1(2) create any encumbrance or lien upon any legal or equitable
2title to the property.
3     SECTION 10. IC 36-7-14-39, AS AMENDED BY P.L.181-2025,
4 SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5 JULY 1, 2026]: Sec. 39. (a) As used in this section:
6     "Allocation area" means that part of a redevelopment project area
7 to which an allocation provision of a declaratory resolution adopted
8 under section 15 of this chapter refers for purposes of distribution and
9 allocation of property taxes.
10     "Base assessed value" means, subject to subsection (j), the
11 following:
12(1) If an allocation provision is adopted after June 30, 1995, in a
13declaratory resolution or an amendment to a declaratory
14resolution establishing an economic development area:
15(A) the net assessed value of all the property as finally
16determined for the assessment date immediately preceding the
17effective date of the allocation provision of the declaratory
18resolution, as adjusted under subsection (h); plus
19(B) to the extent that it is not included in clause (A), the net
20assessed value of property that is assessed as residential
21property under the rules of the department of local government
22finance, within the allocation area, as finally determined for
23the current assessment date.
24(2) If an allocation provision is adopted after June 30, 1997, in a
25declaratory resolution or an amendment to a declaratory
26resolution establishing a redevelopment project area:
27(A) the net assessed value of all the property as finally
28determined for the assessment date immediately preceding the
29effective date of the allocation provision of the declaratory
30resolution, as adjusted under subsection (h); plus
31(B) to the extent that it is not included in clause (A), the net
32assessed value of property that is assessed as residential
33property under the rules of the department of local government
34finance, as finally determined for the current assessment date.
35(3) If:
36(A) an allocation provision adopted before June 30, 1995, in
37a declaratory resolution or an amendment to a declaratory
38resolution establishing a redevelopment project area expires
39after June 30, 1997; and
40(B) after June 30, 1997, a new allocation provision is included
41in an amendment to the declaratory resolution;
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1the net assessed value of all the property as finally determined for
2the assessment date immediately preceding the effective date of
3the allocation provision adopted after June 30, 1997, as adjusted
4under subsection (h).
5(4) Except as provided in subdivision (5), for all other allocation
6areas, the net assessed value of all the property as finally
7determined for the assessment date immediately preceding the
8effective date of the allocation provision of the declaratory
9resolution, as adjusted under subsection (h).
10(5) If an allocation area established in an economic development
11area before July 1, 1995, is expanded after June 30, 1995, the
12definition in subdivision (1) applies to the expanded part of the
13area added after June 30, 1995.
14(6) If an allocation area established in a redevelopment project
15area before July 1, 1997, is expanded after June 30, 1997, the
16definition in subdivision (2) applies to the expanded part of the
17area added after June 30, 1997.
18 Except as provided in section 39.3 of this chapter, "property taxes"
19 means taxes imposed under IC 6-1.1 on real property. However, upon
20 approval by a resolution of the redevelopment commission adopted
21 before June 1, 1987, "property taxes" also includes taxes imposed
22 under IC 6-1.1 on depreciable personal property. If a redevelopment
23 commission adopted before June 1, 1987, a resolution to include within
24 the definition of property taxes, taxes imposed under IC 6-1.1 on
25 depreciable personal property that has a useful life in excess of eight
26 (8) years, the commission may by resolution determine the percentage
27 of taxes imposed under IC 6-1.1 on all depreciable personal property
28 that will be included within the definition of property taxes. However,
29 the percentage included must not exceed twenty-five percent (25%) of
30 the taxes imposed under IC 6-1.1 on all depreciable personal property.
31     (b) A declaratory resolution adopted under section 15 of this chapter
32 on or before the allocation deadline determined under subsection (i)
33 may include a provision with respect to the allocation and distribution
34 of property taxes for the purposes and in the manner provided in this
35 section. A declaratory resolution previously adopted may include an
36 allocation provision by the amendment of that declaratory resolution on
37 or before the allocation deadline determined under subsection (i) in
38 accordance with the procedures required for its original adoption. A
39 declaratory resolution or amendment that establishes an allocation
40 provision must include a specific finding of fact, supported by
41 evidence, that the adoption of the allocation provision will result in
42 new property taxes in the area that would not have been generated but
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1 for the adoption of the allocation provision. For an allocation area
2 established before July 1, 1995, the expiration date of any allocation
3 provisions for the allocation area is June 30, 2025, or the last date of
4 any obligations that are outstanding on July 1, 2015, whichever is later.
5 A declaratory resolution or an amendment that establishes an allocation
6 provision after June 30, 1995, must specify an expiration date for the
7 allocation provision. For an allocation area established before July 1,
8 2008, the expiration date may not be more than thirty (30) years after
9 the date on which the allocation provision is established. For an
10 allocation area established after June 30, 2008, the expiration date may
11 not be more than twenty-five (25) years after the date on which the first
12 obligation was incurred to pay principal and interest on bonds or lease
13 rentals on leases payable from tax increment revenues. However, with
14 respect to bonds or other obligations that were issued before July 1,
15 2008, if any of the bonds or other obligations that were scheduled when
16 issued to mature before the specified expiration date and that are
17 payable only from allocated tax proceeds with respect to the allocation
18 area remain outstanding as of the expiration date, the allocation
19 provision does not expire until all of the bonds or other obligations are
20 no longer outstanding. Notwithstanding any other law, in the case of an
21 allocation area that is established after June 30, 2019, and that is
22 located in a redevelopment project area described in section
23 25.1(c)(3)(C) of this chapter, an economic development area described
24 in section 25.1(c)(3)(C) of this chapter, or an urban renewal project
25 area described in section 25.1(c)(3)(C) of this chapter, the expiration
26 date of the allocation provision may not be more than thirty-five (35)
27 years after the date on which the allocation provision is established.
28 The allocation provision may apply to all or part of the redevelopment
29 project area. The allocation provision must require that any property
30 taxes subsequently levied by or for the benefit of any public body
31 entitled to a distribution of property taxes on taxable property in the
32 allocation area be allocated and distributed as follows:
33(1) Except as otherwise provided in this section, the proceeds of
34the taxes attributable to the lesser of:
35(A) the assessed value of the property for the assessment date
36with respect to which the allocation and distribution is made;
37or
38(B) the base assessed value;
39shall be allocated to and, when collected, paid into the funds of
40the respective taxing units.
41(2) This subdivision applies to a fire protection territory
42established after December 31, 2022. If a unit becomes a
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1participating unit of a fire protection territory that is established
2after a declaratory resolution is adopted under section 15 of this
3chapter, the excess of the proceeds of the property taxes
4attributable to an increase in the property tax rate for the
5participating unit of a fire protection territory:
6(A) except as otherwise provided by this subdivision, shall be
7determined as follows:
8STEP ONE: Divide the unit's tax rate for fire protection for
9the year before the establishment of the fire protection
10territory by the participating unit's tax rate as part of the fire
11protection territory.
12STEP TWO: Subtract the STEP ONE amount from one (1).
13STEP THREE: Multiply the STEP TWO amount by the
14allocated property tax attributable to the participating unit of
15the fire protection territory; and
16(B) to the extent not otherwise included in subdivisions (1)
17and (3), the amount determined under STEP THREE of clause
18(A) shall be allocated to and distributed in the form of an
19allocated property tax revenue pass back to the participating
20unit of the fire protection territory for the assessment date with
21respect to which the allocation is made.
22However, if the redevelopment commission determines that it is
23unable to meet its debt service obligations with regards to the
24allocation area without all or part of the allocated property tax
25revenue pass back to the participating unit of a fire protection area
26under this subdivision, then the allocated property tax revenue
27pass back under this subdivision shall be reduced by the amount
28necessary for the redevelopment commission to meet its debt
29service obligations of the allocation area. The calculation under
30this subdivision must be made by the redevelopment commission
31in collaboration with the county auditor and the applicable fire
32protection territory. Any calculation determined according to
33clause (A) must be submitted to the department of local
34government finance in the manner prescribed by the department
35of local government finance. The department of local government
36finance shall verify the accuracy of each calculation.
37(3) The excess of the proceeds of the property taxes imposed for
38the assessment date with respect to which the allocation and
39distribution is made that are attributable to taxes imposed after
40being approved by the voters in a referendum or local public
41question conducted after April 30, 2010, not otherwise included
42in subdivisions (1) and (2) shall be allocated to and, when
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1collected, paid into the funds of the taxing unit for which the
2referendum or local public question was conducted.
3(4) Except as otherwise provided in this section, property tax
4proceeds in excess of those described in subdivisions (1), (2), and
5(3) shall be allocated to the redevelopment district and, when
6collected, paid into an allocation fund for that allocation area that
7may be used by the redevelopment district only to do one (1) or
8more of the following:
9(A) Pay the principal of and interest on any obligations
10payable solely from allocated tax proceeds which are incurred
11by the redevelopment district for the purpose of financing or
12refinancing the redevelopment of that allocation area.
13(B) Establish, augment, or restore the debt service reserve for
14bonds payable solely or in part from allocated tax proceeds in
15that allocation area.
16(C) Pay the principal of and interest on bonds payable from
17allocated tax proceeds in that allocation area and from the
18special tax levied under section 27 of this chapter.
19(D) Pay the principal of and interest on bonds issued by the
20unit to pay for local public improvements that are physically
21located in or physically connected to that allocation area.
22(E) Pay premiums on the redemption before maturity of bonds
23payable solely or in part from allocated tax proceeds in that
24allocation area.
25(F) Make payments on leases payable from allocated tax
26proceeds in that allocation area under section 25.2 of this
27chapter.
28(G) Reimburse the unit for expenditures made by it for local
29public improvements (which include buildings, parking
30facilities, and other items described in section 25.1(a) of this
31chapter) that are physically located in or physically connected
32to that allocation area.
33(H) Reimburse the unit for rentals paid by it for a building or
34parking facility that is physically located in or physically
35connected to that allocation area under any lease entered into
36under IC 36-1-10.
37(I) For property taxes first due and payable before January 1,
382009, pay all or a part of a property tax replacement credit to
39taxpayers in an allocation area as determined by the
40redevelopment commission. This credit equals the amount
41determined under the following STEPS for each taxpayer in a
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1taxing district (as defined in IC 6-1.1-1-20) that contains all or
2part of the allocation area:
3STEP ONE: Determine that part of the sum of the amounts
4under IC 6-1.1-21-2(g)(1)(A), IC 6-1.1-21-2(g)(2),
5IC 6-1.1-21-2(g)(3), IC 6-1.1-21-2(g)(4), and
6IC 6-1.1-21-2(g)(5) (before their repeal) that is attributable to
7the taxing district.
8STEP TWO: Divide:
9(i) that part of each county's eligible property tax
10replacement amount (as defined in IC 6-1.1-21-2 (before its
11repeal)) for that year as determined under IC 6-1.1-21-4
12(before its repeal) that is attributable to the taxing district;
13by
14(ii) the STEP ONE sum.
15STEP THREE: Multiply:
16(i) the STEP TWO quotient; times
17(ii) the total amount of the taxpayer's taxes (as defined in
18IC 6-1.1-21-2 (before its repeal)) levied in the taxing district
19that have been allocated during that year to an allocation
20fund under this section.
21If not all the taxpayers in an allocation area receive the credit
22in full, each taxpayer in the allocation area is entitled to
23receive the same proportion of the credit. A taxpayer may not
24receive a credit under this section and a credit under section
2539.5 of this chapter (before its repeal) in the same year.
26(J) Pay expenses incurred by the redevelopment commission
27for local public improvements that are in the allocation area or
28serving the allocation area. Public improvements include
29buildings, parking facilities, and other items described in
30section 25.1(a) of this chapter.
31(K) Reimburse public and private entities for expenses
32incurred in training employees of industrial facilities that are
33located:
34(i) in the allocation area; and
35(ii) on a parcel of real property that has been classified as
36industrial property under the rules of the department of local
37government finance.
38However, the total amount of money spent for this purpose in
39any year may not exceed the total amount of money in the
40allocation fund that is attributable to property taxes paid by the
41industrial facilities described in this clause. The
42reimbursements under this clause must be made within three
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1(3) years after the date on which the investments that are the
2basis for the increment financing are made.
3(L) Pay the costs of carrying out an eligible efficiency project
4(as defined in IC 36-9-41-1.5) within the unit that established
5the redevelopment commission. However, property tax
6proceeds may be used under this clause to pay the costs of
7carrying out an eligible efficiency project only if those
8property tax proceeds exceed the amount necessary to do the
9following:
10(i) Make, when due, any payments required under clauses
11(A) through (K), including any payments of principal and
12interest on bonds and other obligations payable under this
13subdivision, any payments of premiums under this
14subdivision on the redemption before maturity of bonds, and
15any payments on leases payable under this subdivision.
16(ii) Make any reimbursements required under this
17subdivision.
18(iii) Pay any expenses required under this subdivision.
19(iv) Establish, augment, or restore any debt service reserve
20under this subdivision.
21(M) Expend money and provide financial assistance as
22authorized in section 12.2(a)(27) of this chapter.
23(N) Expend revenues that are allocated for police and fire
24services on both capital expenditures and operating expenses
25as authorized in section 12.2(a)(28) of this chapter.
26The allocation fund may not be used for operating expenses of the
27commission.
28(5) Except as provided in subsection (g), before June 15 of each
29year, the commission shall do the following:
30(A) Determine the amount, if any, by which the assessed value
31of the taxable property in the allocation area for the most
32recent assessment date minus the base assessed value, when
33multiplied by the estimated tax rate of the allocation area, will
34exceed the amount of assessed value needed to produce the
35property taxes necessary to make, when due, principal and
36interest payments on bonds described in subdivision (4), plus
37the amount necessary for other purposes described in
38subdivision (4).
39(B) Provide a written notice to the county auditor, the fiscal
40body of the county or municipality that established the
41department of redevelopment, and the officers who are
42authorized to fix budgets, tax rates, and tax levies under
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1IC 6-1.1-17-5 for each of the other taxing units that is wholly
2or partly located within the allocation area. The county auditor,
3upon receiving the notice, shall forward this notice (in an
4electronic format) to the department of local government
5finance not later than June 15 of each year. The notice must:
6(i) state the amount, if any, of excess assessed value that the
7commission has determined may be allocated to the
8respective taxing units in the manner prescribed in
9subdivision (1); or
10(ii) state that the commission has determined that there is no
11excess assessed value that may be allocated to the respective
12taxing units in the manner prescribed in subdivision (1).
13The county auditor shall allocate to the respective taxing units
14the amount, if any, of excess assessed value determined by the
15commission. The commission may not authorize an allocation
16of assessed value to the respective taxing units under this
17subdivision if to do so would endanger the interests of the
18holders of bonds described in subdivision (4) or lessors under
19section 25.3 of this chapter.
20(C) If:
21(i) the amount of excess assessed value determined by the
22commission is expected to generate more than two hundred
23percent (200%) of the amount of allocated tax proceeds
24necessary to make, when due, principal and interest
25payments on bonds described in subdivision (4); plus
26(ii) the amount necessary for other purposes described in
27subdivision (4);
28the commission shall submit to the legislative body of the unit
29its determination of the excess assessed value that the
30commission proposes to allocate to the respective taxing units
31in the manner prescribed in subdivision (1). The legislative
32body of the unit may approve the commission's determination
33or modify the amount of the excess assessed value that will be
34allocated to the respective taxing units in the manner
35prescribed in subdivision (1).
36(6) Notwithstanding subdivision (5), in the case of an allocation
37area that is established after June 30, 2019, and that is located in
38a redevelopment project area described in section 25.1(c)(3)(C)
39of this chapter, an economic development area described in
40section 25.1(c)(3)(C) of this chapter, or an urban renewal project
41area described in section 25.1(c)(3)(C) of this chapter, for each
42year the allocation provision is in effect, if the amount of excess
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1assessed value determined by the commission under subdivision
2(5)(A) is expected to generate more than two hundred percent
3(200%) of:
4(A) the amount of allocated tax proceeds necessary to make,
5when due, principal and interest payments on bonds described
6in subdivision (4) for the project; plus
7(B) the amount necessary for other purposes described in
8subdivision (4) for the project;
9the amount of the excess assessed value that generates more than
10two hundred percent (200%) of the amounts described in clauses
11(A) and (B) shall be allocated to the respective taxing units in the
12manner prescribed by subdivision (1).
13     (c) For the purpose of allocating taxes levied by or for any taxing
14 unit or units, the assessed value of taxable property in a territory in the
15 allocation area that is annexed by any taxing unit after the effective
16 date of the allocation provision of the declaratory resolution is the
17 lesser of:
18(1) the assessed value of the property for the assessment date with
19respect to which the allocation and distribution is made; or
20(2) the base assessed value.
21     (d) Property tax proceeds allocable to the redevelopment district
22 under subsection (b)(4) may, subject to subsection (b)(5), be
23 irrevocably pledged by the redevelopment district for payment as set
24 forth in subsection (b)(4).
25     (e) Notwithstanding any other law, each assessor shall, upon
26 petition of the redevelopment commission, reassess the taxable
27 property situated upon or in, or added to, the allocation area, effective
28 on the next assessment date after the petition.
29     (f) Notwithstanding any other law, the assessed value of all taxable
30 property in the allocation area, for purposes of tax limitation, property
31 tax replacement, and formulation of the budget, tax rate, and tax levy
32 for each political subdivision in which the property is located is the
33 lesser of:
34(1) the assessed value of the property as valued without regard to
35this section; or
36(2) the base assessed value.
37     (g) If any part of the allocation area is located in an enterprise zone
38 created under IC 5-28-15, the unit that designated the allocation area
39 shall create funds as specified in this subsection. A unit that has
40 obligations, bonds, or leases payable from allocated tax proceeds under
41 subsection (b)(4) shall establish an allocation fund for the purposes
42 specified in subsection (b)(4) and a special zone fund. Such a unit
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1 shall, until the end of the enterprise zone phase out period, deposit each
2 year in the special zone fund any amount in the allocation fund derived
3 from property tax proceeds in excess of those described in subsection
4 (b)(1), (b)(2), and (b)(3) from property located in the enterprise zone
5 that exceeds the amount sufficient for the purposes specified in
6 subsection (b)(4) for the year. The amount sufficient for purposes
7 specified in subsection (b)(4) for the year shall be determined based on
8 the pro rata portion of such current property tax proceeds from the part
9 of the enterprise zone that is within the allocation area as compared to
10 all such current property tax proceeds derived from the allocation area.
11 A unit that has no obligations, bonds, or leases payable from allocated
12 tax proceeds under subsection (b)(4) shall establish a special zone fund
13 and deposit all the property tax proceeds in excess of those described
14 in subsection (b)(1), (b)(2), and (b)(3) in the fund derived from
15 property tax proceeds in excess of those described in subsection (b)(1),
16 (b)(2), and (b)(3) from property located in the enterprise zone. The unit
17 that creates the special zone fund shall use the fund (based on the
18 recommendations of the urban enterprise association) for programs in
19 job training, job enrichment, and basic skill development that are
20 designed to benefit residents and employers in the enterprise zone or
21 other purposes specified in subsection (b)(4), except that where
22 reference is made in subsection (b)(4) to allocation area it shall refer
23 for purposes of payments from the special zone fund only to that part
24 of the allocation area that is also located in the enterprise zone. Those
25 programs shall reserve at least one-half (1/2) of their enrollment in any
26 session for residents of the enterprise zone.
27     (h) The state board of accounts and department of local government
28 finance shall make the rules and prescribe the forms and procedures
29 that they consider expedient for the implementation of this chapter.
30 After each reassessment in an area under a reassessment plan prepared
31 under IC 6-1.1-4-4.2, the department of local government finance shall
32 adjust the base assessed value one (1) time to neutralize any effect of
33 the reassessment of the real property in the area on the property tax
34 proceeds allocated to the redevelopment district under this section.
35 After each annual adjustment under IC 6-1.1-4-4.5, the department of
36 local government finance shall adjust the base assessed value one (1)
37 time to neutralize any effect of the annual adjustment on the property
38 tax proceeds allocated to the redevelopment district under this section.
39 However, the adjustments under this subsection:
40(1) may not include the effect of phasing in assessed value due to
41property tax abatements under IC 6-1.1-12.1;
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1(2) may not produce less property tax proceeds allocable to the
2redevelopment district under subsection (b)(4) than would
3otherwise have been received if the reassessment under the
4reassessment plan or the annual adjustment had not occurred; and
5(3) may decrease base assessed value only to the extent that
6assessed values in the allocation area have been decreased due to
7annual adjustments or the reassessment under the reassessment
8plan.
9 Assessed value increases attributable to the application of an abatement
10 schedule under IC 6-1.1-12.1 may not be included in the base assessed
11 value of an allocation area. The department of local government
12 finance may prescribe procedures for county and township officials to
13 follow to assist the department in making the adjustments. The
14 department of local government finance may require the
15 redevelopment commission to submit required documentation to
16 neutralize the base assessed value. Any supporting documentation
17 the redevelopment commission is required to submit to support the
18 base assessed value neutralization calculation must be completed
19 and submitted to the department of local government finance by
20 July 15 of each year. If the redevelopment commission does not
21 submit the required documentation under this subsection by the
22 deadline described in this subsection in a given year, then five
23 percent (5%) of the excess assessed value shall be allocated to the
24 respective taxing units in the year the deadline described in this
25 subsection is missed.
26     (i) The allocation deadline referred to in subsection (b) is
27 determined in the following manner:
28(1) The initial allocation deadline is December 31, 2011.
29(2) Subject to subdivision (3), the initial allocation deadline and
30subsequent allocation deadlines are automatically extended in
31increments of five (5) years, so that allocation deadlines
32subsequent to the initial allocation deadline fall on December 31,
332016, and December 31 of each fifth year thereafter.
34(3) At least one (1) year before the date of an allocation deadline
35determined under subdivision (2), the general assembly may enact
36a law that:
37(A) terminates the automatic extension of allocation deadlines
38under subdivision (2); and
39(B) specifically designates a particular date as the final
40allocation deadline.
41     (j) If a redevelopment commission adopts a declaratory resolution
42 or an amendment to a declaratory resolution that contains an allocation
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1 provision and the redevelopment commission makes either of the
2 filings required under section 17(e) of this chapter after the first
3 anniversary of the effective date of the allocation provision, the auditor
4 of the county in which the unit is located shall compute the base
5 assessed value for the allocation area using the assessment date
6 immediately preceding the later of:
7(1) the date on which the documents are filed with the county
8auditor; or
9(2) the date on which the documents are filed with the department
10of local government finance.
11     (k) For an allocation area established after June 30, 2025,
12 "residential property" refers to the assessed value of property that is
13 allocated to the one percent (1%) homestead land and improvement
14 categories in the county tax and billing software system.
15     SECTION 11. IC 36-7-14-39.6, AS ADDED BY P.L.249-2015,
16 SECTION 26, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2026]: Sec. 39.6. (a) A redevelopment commission may enter
18 into a written agreement with a taxpayer who owns, or is otherwise
19 obligated to pay property taxes on, tangible property that is or will be
20 located in an allocation area established under this chapter in which the
21 taxpayer waives review of any assessment of the taxpayer's tangible
22 property that is located in the allocation area for an assessment date
23 that occurs during the term of any specified bond or lease obligations
24 that are payable from property taxes in accordance with an allocation
25 provision for the allocation area and any applicable statute, ordinance,
26 or resolution. An agreement described in this section may precede the
27 establishment of the allocation area or the determination to issue bonds
28 or enter into leases payable from the allocated property taxes.
29     (b) The original owner of each nonowner-occupied residential
30 property subject to the two percent (2%) tax cap, that is located in
31 the tax increment financing area and is excluded from the base
32 assessed value, shall upon completion of construction enter into a
33 written agreement with the redevelopment commission indicating
34 the owner shall be obligated to pay the property tax for the portion
35 of outstanding bonds in the tax increment financing district
36 attributable to the property until the term length of the original
37 outstanding bond is retired. The written agreement with the
38 redevelopment commission shall be considered a lien on the
39 property and shall be included as part of the residential real estate
40 sales disclosure under IC 32-21-5. If the property is subsequently
41 sold as a homestead property and becomes subject to the one
42 percent (1%) tax cap, the new owner shall be responsible for the
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1 lien on the property attributable to the written agreement with the
2 redevelopment commission, and the new homestead property
3 owner shall be obligated to fulfill the terms of the written
4 agreement including the payment of the property tax liability
5 included in the agreement.
6     SECTION 12. IC 36-7-14-39.8, AS ADDED BY P.L.123-2024,
7 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
8 JULY 1, 2026]: Sec. 39.8. (a) Notwithstanding any other law, if the
9 Indiana economic development corporation subsequently designates
10 territory that is located in an existing allocation area under this chapter
11 as an innovation development district under IC 36-7-32.5, the
12 allocation area may not be renewed or extended under this chapter until
13 the term of the innovation development district expires.
14     (b) Notwithstanding any other law, for taxing districts that
15 include multiple tax increment financing districts under this
16 chapter, the original tax increment financing district does not
17 expire and stays active only for the purpose of satisfying
18 outstanding bonds issued by the subsequent tax increment
19 financing district, only if the redevelopment commission completes
20 the following requirements:
21(1) Provides a written appeal to and receives the approval of
22the department of local government finance.
23(2) Provides written notice to the state board of accounts of
24the appeal.
25     SECTION 13. IC 36-7-15.1-26, AS AMENDED BY .L.174-2022,
26 SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
27 JULY 1, 2026]: Sec. 26. (a) As used in this section:
28     "Allocation area" means that part of a redevelopment project area
29 to which an allocation provision of a resolution adopted under section
30 8 of this chapter refers for purposes of distribution and allocation of
31 property taxes.
32     "Base assessed value" means, subject to subsection (j), the
33 following:
34(1) If an allocation provision is adopted after June 30, 1995, in a
35declaratory resolution or an amendment to a declaratory
36resolution establishing an economic development area:
37(A) the net assessed value of all the property as finally
38determined for the assessment date immediately preceding the
39effective date of the allocation provision of the declaratory
40resolution, as adjusted under subsection (h); plus
41(B) to the extent that it is not included in clause (A), the net
42assessed value of property that is assessed as residential
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1property under the rules of the department of local government
2finance, within the allocation area, as finally determined for
3the current assessment date.
4      (2) If an allocation provision is adopted after June 30, 1997, in a
5      declaratory resolution or an amendment to a declaratory
6      resolution establishing a redevelopment project area:
7(A) the net assessed value of all the property as finally
8determined for the assessment date immediately preceding the
9effective date of the allocation provision of the declaratory
10resolution, as adjusted under subsection (h); plus
11(B) to the extent that it is not included in clause (A), the net
12assessed value of property that is assessed as residential
13property under the rules of the department of local government
14finance, within the allocation area, as finally determined for
15the current assessment date.
16      (3) If:
17(A) an allocation provision adopted before June 30, 1995, in
18a declaratory resolution or an amendment to a declaratory
19resolution establishing a redevelopment project area expires
20after June 30, 1997; and
21(B) after June 30, 1997, a new allocation provision is included
22in an amendment to the declaratory resolution;
23      the net assessed value of all the property as finally determined for
24      the assessment date immediately preceding the effective date of
25      the allocation provision adopted after June 30, 1997, as adjusted
26      under subsection (h).
27      (4) Except as provided in subdivision (5), for all other allocation
28      areas, the net assessed value of all the property as finally
29      determined for the assessment date immediately preceding the
30      effective date of the allocation provision of the declaratory
31      resolution, as adjusted under subsection (h).
32      (5) If an allocation area established in an economic development
33      area before July 1, 1995, is expanded after June 30, 1995, the
34      definition in subdivision (1) applies to the expanded part of the
35      area added after June 30, 1995.
36      (6) If an allocation area established in a redevelopment project
37      area before July 1, 1997, is expanded after June 30, 1997, the
38      definition in subdivision (2) applies to the expanded part of the
39      area added after June 30, 1997.
40 Except as provided in section 26.2 of this chapter, "property taxes"
41 means taxes imposed under IC 6-1.1 on real property. However, upon
42 approval by a resolution of the redevelopment commission adopted
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1 before June 1, 1987, "property taxes" also includes taxes imposed
2 under IC 6-1.1 on depreciable personal property. If a redevelopment
3 commission adopted before June 1, 1987, a resolution to include within
4 the definition of property taxes, taxes imposed under IC 6-1.1 on
5 depreciable personal property that has a useful life in excess of eight
6 (8) years, the commission may by resolution determine the percentage
7 of taxes imposed under IC 6-1.1 on all depreciable personal property
8 that will be included within the definition of property taxes. However,
9 the percentage included must not exceed twenty-five percent (25%) of
10 the taxes imposed under IC 6-1.1 on all depreciable personal property.
11     (b) A resolution adopted under section 8 of this chapter on or before
12 the allocation deadline determined under subsection (i) may include a
13 provision with respect to the allocation and distribution of property
14 taxes for the purposes and in the manner provided in this section. A
15 resolution previously adopted may include an allocation provision by
16 the amendment of that resolution on or before the allocation deadline
17 determined under subsection (i) in accordance with the procedures
18 required for its original adoption. A declaratory resolution or
19 amendment that establishes an allocation provision must include a
20 specific finding of fact, supported by evidence, that the adoption of the
21 allocation provision will result in new property taxes in the area that
22 would not have been generated but for the adoption of the allocation
23 provision. For an allocation area established before July 1, 1995, the
24 expiration date of any allocation provisions for the allocation area is
25 June 30, 2025, or the last date of any obligations that are outstanding
26 on July 1, 2015, whichever is later. However, for an allocation area
27 identified as the Consolidated Allocation Area in the report submitted
28 in 2013 to the fiscal body under section 36.3 of this chapter, the
29 expiration date of any allocation provisions for the allocation area is
30 January 1, 2051. A declaratory resolution or an amendment that
31 establishes an allocation provision after June 30, 1995, must specify an
32 expiration date for the allocation provision. For an allocation area
33 established before July 1, 2008, the expiration date may not be more
34 than thirty (30) years after the date on which the allocation provision
35 is established. For an allocation area established after June 30, 2008,
36 the expiration date may not be more than twenty-five (25) years after
37 the date on which the first obligation was incurred to pay principal and
38 interest on bonds or lease rentals on leases payable from tax increment
39 revenues. However, with respect to bonds or other obligations that were
40 issued before July 1, 2008, if any of the bonds or other obligations that
41 were scheduled when issued to mature before the specified expiration
42 date and that are payable only from allocated tax proceeds with respect
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1 to the allocation area remain outstanding as of the expiration date, the
2 allocation provision does not expire until all of the bonds or other
3 obligations are no longer outstanding. The allocation provision may
4 apply to all or part of the redevelopment project area. The allocation
5 provision must require that any property taxes subsequently levied by
6 or for the benefit of any public body entitled to a distribution of
7 property taxes on taxable property in the allocation area be allocated
8 and distributed as follows:
9(1) Except as otherwise provided in this section, the proceeds of
10the taxes attributable to the lesser of:
11(A) the assessed value of the property for the assessment date
12with respect to which the allocation and distribution is made;
13or
14(B) the base assessed value;
15shall be allocated to and, when collected, paid into the funds of
16the respective taxing units.
17(2) The excess of the proceeds of the property taxes imposed for
18the assessment date with respect to which the allocation and
19distribution is made that are attributable to taxes imposed after
20being approved by the voters in a referendum or local public
21question conducted after April 30, 2010, not otherwise included
22in subdivision (1) shall be allocated to and, when collected, paid
23into the funds of the taxing unit for which the referendum or local
24public question was conducted.
25(3) Except as otherwise provided in this section, property tax
26proceeds in excess of those described in subdivisions (1) and (2)
27shall be allocated to the redevelopment district and, when
28collected, paid into a special fund for that allocation area that may
29be used by the redevelopment district only to do one (1) or more
30of the following:
31(A) Pay the principal of and interest on any obligations
32payable solely from allocated tax proceeds that are incurred by
33the redevelopment district for the purpose of financing or
34refinancing the redevelopment of that allocation area.
35(B) Establish, augment, or restore the debt service reserve for
36bonds payable solely or in part from allocated tax proceeds in
37that allocation area.
38(C) Pay the principal of and interest on bonds payable from
39allocated tax proceeds in that allocation area and from the
40special tax levied under section 19 of this chapter.
41(D) Pay the principal of and interest on bonds issued by the
42consolidated city to pay for local public improvements that are
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1physically located in or physically connected to that allocation
2area.
3(E) Pay premiums on the redemption before maturity of bonds
4payable solely or in part from allocated tax proceeds in that
5allocation area.
6(F) Make payments on leases payable from allocated tax
7proceeds in that allocation area under section 17.1 of this
8chapter.
9(G) Reimburse the consolidated city for expenditures for local
10public improvements (which include buildings, parking
11facilities, and other items set forth in section 17 of this
12chapter) that are physically located in or physically connected
13to that allocation area.
14(H) Reimburse the unit for rentals paid by it for a building or
15parking facility that is physically located in or physically
16connected to that allocation area under any lease entered into
17under IC 36-1-10.
18(I) Reimburse public and private entities for expenses incurred
19in training employees of industrial facilities that are located:
20(i) in the allocation area; and
21(ii) on a parcel of real property that has been classified as
22industrial property under the rules of the department of local
23government finance.
24However, the total amount of money spent for this purpose in
25any year may not exceed the total amount of money in the
26allocation fund that is attributable to property taxes paid by the
27industrial facilities described in this clause. The
28reimbursements under this clause must be made within three
29(3) years after the date on which the investments that are the
30basis for the increment financing are made.
31(J) Pay the costs of carrying out an eligible efficiency project
32(as defined in IC 36-9-41-1.5) within the unit that established
33the redevelopment commission. However, property tax
34proceeds may be used under this clause to pay the costs of
35carrying out an eligible efficiency project only if those
36property tax proceeds exceed the amount necessary to do the
37following:
38(i) Make, when due, any payments required under clauses
39(A) through (I), including any payments of principal and
40interest on bonds and other obligations payable under this
41subdivision, any payments of premiums under this
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1subdivision on the redemption before maturity of bonds, and
2any payments on leases payable under this subdivision.
3(ii) Make any reimbursements required under this
4subdivision.
5(iii) Pay any expenses required under this subdivision.
6(iv) Establish, augment, or restore any debt service reserve
7under this subdivision.
8(K) Expend money and provide financial assistance as
9authorized in section 7(a)(21) of this chapter.
10The special fund may not be used for operating expenses of the
11commission.
12(4) Before June 15 of each year, the commission shall do the
13following:
14(A) Determine the amount, if any, by which the assessed value
15of the taxable property in the allocation area for the most
16recent assessment date minus the base assessed value, when
17multiplied by the estimated tax rate of the allocation area will
18exceed the amount of assessed value needed to provide the
19property taxes necessary to make, when due, principal and
20interest payments on bonds described in subdivision (3) plus
21the amount necessary for other purposes described in
22subdivision (3) and subsection (g).
23(B) Provide a written notice to the county auditor, the
24legislative body of the consolidated city, the officers who are
25authorized to fix budgets, tax rates, and tax levies under
26IC 6-1.1-17-5 for each of the other taxing units that is wholly
27or partly located within the allocation area, and (in an
28electronic format) the department of local government finance.
29The notice must:
30(i) state the amount, if any, of excess assessed value that the
31commission has determined may be allocated to the
32respective taxing units in the manner prescribed in
33subdivision (1); or
34(ii) state that the commission has determined that there is no
35excess assessed value that may be allocated to the respective
36taxing units in the manner prescribed in subdivision (1).
37The county auditor shall allocate to the respective taxing units
38the amount, if any, of excess assessed value determined by the
39commission. The commission may not authorize an allocation
40to the respective taxing units under this subdivision if to do so
41would endanger the interests of the holders of bonds described
42in subdivision (3).
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1(C) If:
2(i) the amount of excess assessed value determined by the
3commission is expected to generate more than two hundred
4percent (200%) of the amount of allocated tax proceeds
5necessary to make, when due, principal and interest
6payments on bonds described in subdivision (3); plus
7(ii) the amount necessary for other purposes described in
8subdivision (3) and subsection (g);
9the commission shall submit to the legislative body of the unit
10the commission's determination of the excess assessed value
11that the commission proposes to allocate to the respective
12taxing units in the manner prescribed in subdivision (1). The
13legislative body of the unit may approve the commission's
14determination or modify the amount of the excess assessed
15value that will be allocated to the respective taxing units in the
16manner prescribed in subdivision (1).
17     (c) For the purpose of allocating taxes levied by or for any taxing
18 unit or units, the assessed value of taxable property in a territory in the
19 allocation area that is annexed by any taxing unit after the effective
20 date of the allocation provision of the resolution is the lesser of:
21(1) the assessed value of the property for the assessment date with
22respect to which the allocation and distribution is made; or
23(2) the base assessed value.
24     (d) Property tax proceeds allocable to the redevelopment district
25 under subsection (b)(3) may, subject to subsection (b)(4), be
26 irrevocably pledged by the redevelopment district for payment as set
27 forth in subsection (b)(3).
28     (e) Notwithstanding any other law, each assessor shall, upon
29 petition of the commission, reassess the taxable property situated upon
30 or in, or added to, the allocation area, effective on the next assessment
31 date after the petition.
32     (f) Notwithstanding any other law, the assessed value of all taxable
33 property in the allocation area, for purposes of tax limitation, property
34 tax replacement, and formulation of the budget, tax rate, and tax levy
35 for each political subdivision in which the property is located is the
36 lesser of:
37(1) the assessed value of the property as valued without regard to
38this section; or
39(2) the base assessed value.
40     (g) If any part of the allocation area is located in an enterprise zone
41 created under IC 5-28-15, the unit that designated the allocation area
42 shall create funds as specified in this subsection. A unit that has
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                                    35
1 obligations, bonds, or leases payable from allocated tax proceeds under
2 subsection (b)(3) shall establish an allocation fund for the purposes
3 specified in subsection (b)(3) and a special zone fund. Such a unit
4 shall, until the end of the enterprise zone phase out period, deposit each
5 year in the special zone fund the amount in the allocation fund derived
6 from property tax proceeds in excess of those described in subsection
7 (b)(1) and (b)(2) from property located in the enterprise zone that
8 exceeds the amount sufficient for the purposes specified in subsection
9 (b)(3) for the year. A unit that has no obligations, bonds, or leases
10 payable from allocated tax proceeds under subsection (b)(3) shall
11 establish a special zone fund and deposit all the property tax proceeds
12 in excess of those described in subsection (b)(1) and (b)(2) in the fund
13 derived from property tax proceeds in excess of those described in
14 subsection (b)(1) and (b)(2) from property located in the enterprise
15 zone. The unit that creates the special zone fund shall use the fund,
16 based on the recommendations of the urban enterprise association, for
17 one (1) or more of the following purposes:
18(1) To pay for programs in job training, job enrichment, and basic
19skill development designed to benefit residents and employers in
20the enterprise zone. The programs must reserve at least one-half
21(1/2) of the enrollment in any session for residents of the
22enterprise zone.
23(2) To make loans and grants for the purpose of stimulating
24business activity in the enterprise zone or providing employment
25for enterprise zone residents in the enterprise zone. These loans
26and grants may be made to the following:
27(A) Businesses operating in the enterprise zone.
28(B) Businesses that will move their operations to the enterprise
29zone if such a loan or grant is made.
30(3) To provide funds to carry out other purposes specified in
31subsection (b)(3). However, where reference is made in
32subsection (b)(3) to the allocation area, the reference refers for
33purposes of payments from the special zone fund only to that part
34of the allocation area that is also located in the enterprise zone.
35     (h) The state board of accounts and department of local government
36 finance shall make the rules and prescribe the forms and procedures
37 that they consider expedient for the implementation of this chapter.
38 After each reassessment under a reassessment plan prepared under
39 IC 6-1.1-4-4.2, the department of local government finance shall adjust
40 the base assessed value one (1) time to neutralize any effect of the
41 reassessment of the real property in the area on the property tax
42 proceeds allocated to the redevelopment district under this section.
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                                    36
1 After each annual adjustment under IC 6-1.1-4-4.5, the department of
2 local government finance shall adjust the base assessed value to
3 neutralize any effect of the annual adjustment on the property tax
4 proceeds allocated to the redevelopment district under this section.
5 However, the adjustments under this subsection may not include the
6 effect of property tax abatements under IC 6-1.1-12.1, and these
7 adjustments may not produce less property tax proceeds allocable to
8 the redevelopment district under subsection (b)(3) than would
9 otherwise have been received if the reassessment under the
10 reassessment plan or annual adjustment had not occurred. The
11 department of local government finance may prescribe procedures for
12 county and township officials to follow to assist the department in
13 making the adjustments. The department of local government
14 finance may require the redevelopment commission to submit
15 required documentation to neutralize the base assessed value. Any
16 supporting documentation the redevelopment commission is
17 required to submit to support the base assessed value
18 neutralization calculation must be completed and submitted to the
19 department of local government finance by July 15 of each year. If
20 the redevelopment commission does not submit the required
21 documentation under this subsection by the deadline described in
22 this subsection in a given year, then five percent (5%) of the excess
23 assessed value shall be allocated to the respective taxing units in
24 the year the deadline described in this subsection is missed.
25    (i) The allocation deadline referred to in subsection (b) is
26 determined in the following manner:
27(1) The initial allocation deadline is December 31, 2011.
28(2) Subject to subdivision (3), the initial allocation deadline and
29subsequent allocation deadlines are automatically extended in
30increments of five (5) years, so that allocation deadlines
31subsequent to the initial allocation deadline fall on December 31,
322016, and December 31 of each fifth year thereafter.
33(3) At least one (1) year before the date of an allocation deadline
34determined under subdivision (2), the general assembly may enact
35a law that:
36(A) terminates the automatic extension of allocation deadlines
37under subdivision (2); and
38(B) specifically designates a particular date as the final
39allocation deadline.
40    (j) If the commission adopts a declaratory resolution or an
41 amendment to a declaratory resolution that contains an allocation
42 provision and the commission makes either of the filings required
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                                    37
1 under section 10(e) of this chapter after the first anniversary of the
2 effective date of the allocation provision, the auditor of the county in
3 which the unit is located shall compute the base assessed value for the
4 allocation area using the assessment date immediately preceding the
5 later of:
6(1) the date on which the documents are filed with the county
7auditor; or
8(2) the date on which the documents are filed with the department
9of local government finance.
10     (k) For an allocation area established after June 30, 2024,
11 "residential property" refers to the assessed value of property that is
12 allocated to the one percent (1%) homestead land and improvement
13 categories in the county tax and billing software system. along with the
14 residential assessed value as defined for purposes of calculating the
15 rate for the local income tax property tax relief credit designated for
16 residential property under IC 6-3.6-5-6(d)(3).
17     SECTION 14. IC 36-7-15.1-26, AS AMENDED BY P.L.68-2025,
18 SECTION 235, IS AMENDED TO READ AS FOLLOWS
19 [EFFECTIVE JULY 1, 2027]: Sec. 26.(a) As used in this section:
20     "Allocation area" means that part of a redevelopment project area
21 to which an allocation provision of a resolution adopted under section
22 8 of this chapter refers for purposes of distribution and allocation of
23 property taxes.
24     "Base assessed value" means, subject to subsection (j), the
25 following:
26(1) If an allocation provision is adopted after June 30, 1995, in a
27declaratory resolution or an amendment to a declaratory
28resolution establishing an economic development area:
29(A) the net assessed value of all the property as finally
30determined for the assessment date immediately preceding the
31effective date of the allocation provision of the declaratory
32resolution, as adjusted under subsection (h); plus
33(B) to the extent that it is not included in clause (A), the net
34assessed value of property that is assessed as residential
35property under the rules of the department of local government
36finance, within the allocation area, as finally determined for
37the current assessment date.
38(2) If an allocation provision is adopted after June 30, 1997, in a
39declaratory resolution or an amendment to a declaratory
40resolution establishing a redevelopment project area:
41(A) the net assessed value of all the property as finally
42determined for the assessment date immediately preceding the
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1effective date of the allocation provision of the declaratory
2resolution, as adjusted under subsection (h); plus
3(B) to the extent that it is not included in clause (A), the net
4assessed value of property that is assessed as residential
5property under the rules of the department of local government
6finance, within the allocation area, as finally determined for
7the current assessment date.
8(3) If:
9(A) an allocation provision adopted before June 30, 1995, in
10a declaratory resolution or an amendment to a declaratory
11resolution establishing a redevelopment project area expires
12after June 30, 1997; and
13(B) after June 30, 1997, a new allocation provision is included
14in an amendment to the declaratory resolution;
15the net assessed value of all the property as finally determined for
16the assessment date immediately preceding the effective date of
17the allocation provision adopted after June 30, 1997, as adjusted
18under subsection (h).
19(4) Except as provided in subdivision (5), for all other allocation
20areas, 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).
24(5) If an allocation area established in an economic development
25area before July 1, 1995, is expanded after June 30, 1995, the
26definition in subdivision (1) applies to the expanded part of the
27area added after June 30, 1995.
28(6) If an allocation area established in a redevelopment project
29area before July 1, 1997, is expanded after June 30, 1997, the
30definition in subdivision (2) applies to the expanded part of the
31area added after June 30, 1997.
32 Except as provided in section 26.2 of this chapter, "property taxes"
33 means taxes imposed under IC 6-1.1 on real property. However, upon
34 approval by a resolution of the redevelopment commission adopted
35 before June 1, 1987, "property taxes" also includes taxes imposed
36 under IC 6-1.1 on depreciable personal property. If a redevelopment
37 commission adopted before June 1, 1987, a resolution to include within
38 the definition of property taxes, taxes imposed under IC 6-1.1 on
39 depreciable personal property that has a useful life in excess of eight
40 (8) years, the commission may by resolution determine the percentage
41 of taxes imposed under IC 6-1.1 on all depreciable personal property
42 that will be included within the definition of property taxes. However,
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1 the percentage included must not exceed twenty-five percent (25%) of
2 the taxes imposed under IC 6-1.1 on all depreciable personal property.
3     (b) A resolution adopted under section 8 of this chapter on or before
4 the allocation deadline determined under subsection (i) may include a
5 provision with respect to the allocation and distribution of property
6 taxes for the purposes and in the manner provided in this section. A
7 resolution previously adopted may include an allocation provision by
8 the amendment of that resolution on or before the allocation deadline
9 determined under subsection (i) in accordance with the procedures
10 required for its original adoption. A declaratory resolution or
11 amendment that establishes an allocation provision must include a
12 specific finding of fact, supported by evidence, that the adoption of the
13 allocation provision will result in new property taxes in the area that
14 would not have been generated but for the adoption of the allocation
15 provision. For an allocation area established before July 1, 1995, the
16 expiration date of any allocation provisions for the allocation area is
17 June 30, 2025, or the last date of any obligations that are outstanding
18 on July 1, 2015, whichever is later. However, for an allocation area
19 identified as the Consolidated Allocation Area in the report submitted
20 in 2013 to the fiscal body under section 36.3 of this chapter, the
21 expiration date of any allocation provisions for the allocation area is
22 January 1, 2051. A declaratory resolution or an amendment that
23 establishes an allocation provision after June 30, 1995, must specify an
24 expiration date for the allocation provision. For an allocation area
25 established before July 1, 2008, the expiration date may not be more
26 than thirty (30) years after the date on which the allocation provision
27 is established. For an allocation area established after June 30, 2008,
28 the expiration date may not be more than twenty-five (25) years after
29 the date on which the first obligation was incurred to pay principal and
30 interest on bonds or lease rentals on leases payable from tax increment
31 revenues. However, with respect to bonds or other obligations that were
32 issued before July 1, 2008, if any of the bonds or other obligations that
33 were scheduled when issued to mature before the specified expiration
34 date and that are payable only from allocated tax proceeds with respect
35 to the allocation area remain outstanding as of the expiration date, the
36 allocation provision does not expire until all of the bonds or other
37 obligations are no longer outstanding. The allocation provision may
38 apply to all or part of the redevelopment project area. The allocation
39 provision must require that any property taxes subsequently levied by
40 or for the benefit of any public body entitled to a distribution of
41 property taxes on taxable property in the allocation area be allocated
42 and distributed as follows:
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1(1) Except as otherwise provided in this section, the proceeds of
2the taxes attributable to the lesser of:
3(A) the assessed value of the property for the assessment date
4with respect to which the allocation and distribution is made;
5or
6(B) the base assessed value;
7shall be allocated to and, when collected, paid into the funds of
8the respective taxing units.
9(2) The excess of the proceeds of the property taxes imposed for
10the assessment date with respect to which the allocation and
11distribution is made that are attributable to taxes imposed after
12being approved by the voters in a referendum or local public
13question conducted after April 30, 2010, not otherwise included
14in subdivision (1) shall be allocated to and, when collected, paid
15into the funds of the taxing unit for which the referendum or local
16public question was conducted.
17(3) Except as otherwise provided in this section, property tax
18proceeds in excess of those described in subdivisions (1) and (2)
19shall be allocated to the redevelopment district and, when
20collected, paid into a special fund for that allocation area that may
21be used by the redevelopment district only to do one (1) or more
22of the following:
23(A) Pay the principal of and interest on any obligations
24payable solely from allocated tax proceeds that are incurred by
25the 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 19 of this chapter.
33(D) Pay the principal of and interest on bonds issued by the
34consolidated city to pay for local public improvements that are
35physically located in or physically connected to that allocation
36area.
37(E) Pay premiums on the redemption before maturity of bonds
38payable solely or in part from allocated tax proceeds in that
39allocation area.
40(F) Make payments on leases payable from allocated tax
41proceeds in that allocation area under section 17.1 of this
42chapter.
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1(G) Reimburse the consolidated city for expenditures for local
2public improvements (which include buildings, parking
3facilities, and other items set forth in section 17 of this
4chapter) that are physically located in or physically connected
5to that allocation area.
6(H) Reimburse the unit for rentals paid by it for a building or
7parking facility that is physically located in or physically
8connected to that allocation area under any lease entered into
9under IC 36-1-10.
10(I) Reimburse public and private entities for expenses incurred
11in training employees of industrial facilities that are located:
12(i) in the allocation area; and
13(ii) on a parcel of real property that has been classified as
14industrial property under the rules of the department of local
15government finance.
16However, the total amount of money spent for this purpose in
17any year may not exceed the total amount of money in the
18allocation fund that is attributable to property taxes paid by the
19industrial facilities described in this clause. The
20reimbursements under this clause must be made within three
21(3) years after the date on which the investments that are the
22basis for the increment financing are made.
23(J) Pay the costs of carrying out an eligible efficiency project
24(as defined in IC 36-9-41-1.5) within the unit that established
25the redevelopment commission. However, property tax
26proceeds may be used under this clause to pay the costs of
27carrying out an eligible efficiency project only if those
28property tax proceeds exceed the amount necessary to do the
29following:
30(i) Make, when due, any payments required under clauses
31(A) through (I), including any payments of principal and
32interest on bonds and other obligations payable under this
33subdivision, any payments of premiums under this
34subdivision on the redemption before maturity of bonds, and
35any payments on leases payable under this subdivision.
36(ii) Make any reimbursements required under this
37subdivision.
38(iii) Pay any expenses required under this subdivision.
39(iv) Establish, augment, or restore any debt service reserve
40under this subdivision.
41(K) Expend money and provide financial assistance as
42authorized in section 7(a)(21) of this chapter.
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1The special fund may not be used for operating expenses of the
2commission.
3(4) Before June 15 of each year, the commission shall do the
4following:
5(A) Determine the amount, if any, by which the assessed value
6of the taxable property in the allocation area for the most
7recent assessment date minus the base assessed value, when
8multiplied by the estimated tax rate of the allocation area will
9exceed the amount of assessed value needed to provide the
10property taxes necessary to make, when due, principal and
11interest payments on bonds described in subdivision (3) plus
12the amount necessary for other purposes described in
13subdivision (3) and subsection (g).
14(B) Provide a written notice to the county auditor, the
15legislative body of the consolidated city, the officers who are
16authorized to fix budgets, tax rates, and tax levies under
17IC 6-1.1-17-5 for each of the other taxing units that is wholly
18or partly located within the allocation area, and (in an
19electronic format) the department of local government finance.
20The notice must:
21(i) state the amount, if any, of excess assessed value that the
22commission has determined may be allocated to the
23respective taxing units in the manner prescribed in
24subdivision (1); or
25(ii) state that the commission has determined that there is no
26excess assessed value that may be allocated to the respective
27taxing units in the manner prescribed in subdivision (1).
28The county auditor shall allocate to the respective taxing units
29the amount, if any, of excess assessed value determined by the
30commission. The commission may not authorize an allocation
31to the respective taxing units under this subdivision if to do so
32would endanger the interests of the holders of bonds described
33in subdivision (3).
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 (3); plus
40(ii) the amount necessary for other purposes described in
41subdivision (3) and subsection (g);
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1the commission shall submit to the legislative body of the unit
2the commission's determination of the excess assessed value
3that the commission proposes to allocate to the respective
4taxing units in the manner prescribed in subdivision (1). The
5legislative body of the unit may approve the commission's
6determination or modify the amount of the excess assessed
7value that will be allocated to the respective taxing units in the
8manner prescribed in subdivision (1).
9     (c) For the purpose of allocating taxes levied by or for any taxing
10 unit or units, the assessed value of taxable property in a territory in the
11 allocation area that is annexed by any taxing unit after the effective
12 date of the allocation provision of the resolution is the lesser of:
13(1) the assessed value of the property for the assessment date with
14respect to which the allocation and distribution is made; or
15(2) the base assessed value.
16     (d) Property tax proceeds allocable to the redevelopment district
17 under subsection (b)(3) may, subject to subsection (b)(4), be
18 irrevocably pledged by the redevelopment district for payment as set
19 forth in subsection (b)(3).
20     (e) Notwithstanding any other law, each assessor shall, upon
21 petition of the commission, reassess the taxable property situated upon
22 or in, or added to, the allocation area, effective on the next assessment
23 date after the petition.
24     (f) Notwithstanding any other law, the assessed value of all taxable
25 property in the allocation area, for purposes of tax limitation, property
26 tax replacement, and formulation of the budget, tax rate, and tax levy
27 for each political subdivision in which the property is located is the
28 lesser of:
29(1) the assessed value of the property as valued without regard to
30this section; or
31(2) the base assessed value.
32     (g) If any part of the allocation area is located in an enterprise zone
33 created under IC 5-28-15, the unit that designated the allocation area
34 shall create funds as specified in this subsection. A unit that has
35 obligations, bonds, or leases payable from allocated tax proceeds under
36 subsection (b)(3) shall establish an allocation fund for the purposes
37 specified in subsection (b)(3) and a special zone fund. Such a unit
38 shall, until the end of the enterprise zone phase out period, deposit each
39 year in the special zone fund the amount in the allocation fund derived
40 from property tax proceeds in excess of those described in subsection
41 (b)(1) and (b)(2) from property located in the enterprise zone that
42 exceeds the amount sufficient for the purposes specified in subsection
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1 (b)(3) for the year. A unit that has no obligations, bonds, or leases
2 payable from allocated tax proceeds under subsection (b)(3) shall
3 establish a special zone fund and deposit all the property tax proceeds
4 in excess of those described in subsection (b)(1) and (b)(2) in the fund
5 derived from property tax proceeds in excess of those described in
6 subsection (b)(1) and (b)(2) from property located in the enterprise
7 zone. The unit that creates the special zone fund shall use the fund,
8 based on the recommendations of the urban enterprise association, for
9 one (1) or more of the following purposes:
10(1) To pay for programs in job training, job enrichment, and basic
11skill development designed to benefit residents and employers in
12the enterprise zone. The programs must reserve at least one-half
13(1/2) of the enrollment in any session for residents of the
14enterprise zone.
15(2) To make loans and grants for the purpose of stimulating
16business activity in the enterprise zone or providing employment
17for enterprise zone residents in the enterprise zone. These loans
18and grants may be made to the following:
19(A) Businesses operating in the enterprise zone.
20(B) Businesses that will move their operations to the enterprise
21zone if such a loan or grant is made.
22(3) To provide funds to carry out other purposes specified in
23subsection (b)(3). However, where reference is made in
24subsection (b)(3) to the allocation area, the reference refers for
25purposes of payments from the special zone fund only to that part
26of the allocation area that is also located in the enterprise zone.
27     (h) The state board of accounts and department of local government
28 finance shall make the rules and prescribe the forms and procedures
29 that they consider expedient for the implementation of this chapter.
30 After each reassessment under a reassessment plan prepared under
31 IC 6-1.1-4-4.2, the department of local government finance shall adjust
32 the base assessed value one (1) time to neutralize any effect of the
33 reassessment of the real property in the area on the property tax
34 proceeds allocated to the redevelopment district under this section.
35 After each annual adjustment under IC 6-1.1-4-4.5, the department of
36 local government finance shall adjust the base assessed value to
37 neutralize any effect of the annual adjustment on the property tax
38 proceeds allocated to the redevelopment district under this section.
39 However, the adjustments under this subsection may not include the
40 effect of property tax abatements under IC 6-1.1-12.1, and these
41 adjustments may not produce less property tax proceeds allocable to
42 the redevelopment district under subsection (b)(3) than would
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1 otherwise have been received if the reassessment under the
2 reassessment plan or annual adjustment had not occurred. The
3 department of local government finance may prescribe procedures for
4 county and township officials to follow to assist the department in
5 making the adjustments. The department of local government
6 finance may require the redevelopment commission to submit
7 required documentation to neutralize the base assessed value. Any
8 supporting documentation the redevelopment commission is
9 required to submit to support the base assessed value
10 neutralization calculation must be completed and submitted to the
11 department of local government finance by July 15 of each year. If
12 the redevelopment commission does not submit the required
13 documentation under this subsection by the deadline described in
14 this subsection in a given year, then five percent (5%) of the excess
15 assessed value shall be allocated to the respective taxing units in
16 the year the deadline described in this subsection is missed.
17     (i) The allocation deadline referred to in subsection (b) is
18 determined in the following manner:
19(1) The initial allocation deadline is December 31, 2011.
20(2) Subject to subdivision (3), the initial allocation deadline and
21subsequent allocation deadlines are automatically extended in
22increments of five (5) years, so that allocation deadlines
23subsequent to the initial allocation deadline fall on December 31,
242016, and December 31 of each fifth year thereafter.
25(3) At least one (1) year before the date of an allocation deadline
26determined under subdivision (2), the general assembly may enact
27a law that:
28(A) terminates the automatic extension of allocation deadlines
29under subdivision (2); and
30(B) specifically designates a particular date as the final
31allocation deadline.
32     (j) If the commission adopts a declaratory resolution or an
33 amendment to a declaratory resolution that contains an allocation
34 provision and the commission makes either of the filings required
35 under section 10(e) of this chapter after the first anniversary of the
36 effective date of the allocation provision, the auditor of the county in
37 which the unit is located shall compute the base assessed value for the
38 allocation area using the assessment date immediately preceding the
39 later of:
40(1) the date on which the documents are filed with the county
41auditor; or
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1(2) the date on which the documents are filed with the department
2of local government finance.
3    (k) For an allocation area established after June 30, 2024,
4 "residential property" refers to the assessed value of property that is
5 allocated to the one percent (1%) homestead land and improvement
6 categories in the county tax and billing software system. along with the
7 residential assessed value as defined for purposes of calculating the
8 rate for the local income tax property tax relief credit designated for
9 residential property under IC 6-3.6-5-6(d)(3) (before its expiration).
10    SECTION 15. IC 36-7-15.1-26.6, AS ADDED BY P.L.249-2015,
11 SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
12 JULY 1, 2026]: Sec. 26.6. (a) The commission may enter into a written
13 agreement with a taxpayer who owns, or is otherwise obligated to pay
14 property taxes on, tangible property that is or will be located in an
15 allocation area established under this chapter in which the taxpayer
16 waives review of any assessment of the taxpayer's tangible property
17 that is located in the allocation area for an assessment date that occurs
18 during the term of any specified bond or lease obligations that are
19 payable from property taxes in accordance with an allocation provision
20 for the allocation area and any applicable statute, ordinance, or
21 resolution. An agreement described in this section may precede the
22 establishment of the allocation area or the determination to issue bonds
23 or enter into leases payable from the allocated property taxes.
24    (b) The original owner of each nonowner-occupied residential
25 property subject to the two percent (2%) tax cap, that is located in
26 the tax increment financing area and is excluded from the base
27 assessed value, shall upon completion of construction enter into a
28 written agreement with the redevelopment commission indicating
29 the owner shall be obligated to pay the property tax for the portion
30 of outstanding bonds in the tax increment financing district
31 attributable to the property until the term length of the original
32 outstanding bond is retired. The written agreement with the
33 redevelopment commission shall be considered a lien on the
34 property and shall be included as part of the residential real estate
35 sales disclosure under IC 32-21-5. If the property is subsequently
36 sold as a homestead property and becomes subject to the one
37 percent (1%) tax cap, the new owner shall be responsible for the
38 lien on the property attributable to the written agreement with the
39 redevelopment commission, and the new homestead property
40 owner shall be obligated to fulfill the terms of the written
41 agreement including the payment of the property tax liability
42 included in the agreement.
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                                    47
1     SECTION 16. IC 36-7-15.1-26.8, AS ADDED BY P.L.123-2024,
2 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 26.8. (a) Notwithstanding any other law, if the
4 Indiana economic development corporation subsequently designates
5 territory that is located in an existing allocation area under this chapter
6 as an innovation development district under IC 36-7-32.5, the
7 allocation area may not be renewed or extended under this chapter until
8 the term of the innovation development district expires.
9     (b) Notwithstanding any other law, for taxing districts that
10 include multiple tax increment financing districts under this
11 chapter, the original tax increment financing district does not
12 expire and stays active only for the purpose of satisfying
13 outstanding bonds issued by the subsequent tax increment
14 financing district, only if the redevelopment commission completes
15 the following requirements:
16(1) Provides a written appeal to and receives the approval of
17the department of local government finance.
18(2) Provides written notice to the state board of accounts of
19the appeal.
20     SECTION 17. IC 36-7-15.1-53, AS AMENDED BY P.L.174-2022,
21 SECTION 73, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2026]: Sec. 53. (a) As used in this section:
23     "Allocation area" means that part of a redevelopment project area
24 to which an allocation provision of a resolution adopted under section
25 40 of this chapter refers for purposes of distribution and allocation of
26 property taxes.
27     "Base assessed value" means, subject to subsection (j):
28(1) the net assessed value of all the property as finally determined
29for the assessment date immediately preceding the effective date
30of the allocation provision of the declaratory resolution, as
31adjusted under subsection (h); plus
32(2) to the extent that it is not included in subdivision (1), the net
33assessed value of property that is assessed as residential property
34under the rules of the department of local government finance, as
35finally determined for the current assessment date.
36 Except as provided in section 55 of this chapter, "property taxes"
37 means taxes imposed under IC 6-1.1 on real property.
38     (b) A resolution adopted under section 40 of this chapter on or
39 before the allocation deadline determined under subsection (i) may
40 include a provision with respect to the allocation and distribution of
41 property taxes for the purposes and in the manner provided in this
42 section. A resolution previously adopted may include an allocation
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                                    48
1 provision by the amendment of that resolution on or before the
2 allocation deadline determined under subsection (i) in accordance with
3 the procedures required for its original adoption. A declaratory
4 resolution or an amendment that establishes an allocation provision
5 must be approved by resolution of the legislative body of the excluded
6 city and must specify an expiration date for the allocation provision.
7 For an allocation area established before July 1, 2008, the expiration
8 date may not be more than thirty (30) years after the date on which the
9 allocation provision is established. For an allocation area established
10 after June 30, 2008, the expiration date may not be more than
11 twenty-five (25) years after the date on which the first obligation was
12 incurred to pay principal and interest on bonds or lease rentals on
13 leases payable from tax increment revenues. However, with respect to
14 bonds or other obligations that were issued before July 1, 2008, if any
15 of the bonds or other obligations that were scheduled when issued to
16 mature before the specified expiration date and that are payable only
17 from allocated tax proceeds with respect to the allocation area remain
18 outstanding as of the expiration date, the allocation provision does not
19 expire until all of the bonds or other obligations are no longer
20 outstanding. The allocation provision may apply to all or part of the
21 redevelopment project area. The allocation provision must require that
22 any property taxes subsequently levied by or for the benefit of any
23 public body entitled to a distribution of property taxes on taxable
24 property in the 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) The excess of the proceeds of the property taxes imposed for
34the assessment date with respect to which the allocation and
35distribution is made that are attributable to taxes imposed after
36being approved by the voters in a referendum or local public
37question conducted after April 30, 2010, not otherwise included
38in subdivision (1) shall be allocated to and, when collected, paid
39into the funds of the taxing unit for which the referendum or local
40public question was conducted.
41(3) Except as otherwise provided in this section, property tax
42proceeds in excess of those described in subdivisions (1) and (2)
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1shall be allocated to the redevelopment district and, when
2collected, paid into a special fund for that allocation area that may
3be used by the redevelopment district only to do one (1) or more
4of the following:
5(A) Pay the principal of and interest on any obligations
6payable solely from allocated tax proceeds that are incurred by
7the redevelopment district for the purpose of financing or
8refinancing the redevelopment of that allocation area.
9(B) Establish, augment, or restore the debt service reserve for
10bonds payable solely or in part from allocated tax proceeds in
11that allocation area.
12(C) Pay the principal of and interest on bonds payable from
13allocated tax proceeds in that allocation area and from the
14special tax levied under section 50 of this chapter.
15(D) Pay the principal of and interest on bonds issued by the
16excluded city to pay for local public improvements that are
17physically located in or physically connected to that allocation
18area.
19(E) Pay premiums on the redemption before maturity of bonds
20payable solely or in part from allocated tax proceeds in that
21allocation area.
22(F) Make payments on leases payable from allocated tax
23proceeds in that allocation area under section 46 of this
24chapter.
25(G) Reimburse the excluded city for expenditures for local
26public improvements (which include buildings, park facilities,
27and other items set forth in section 45 of this chapter) that are
28physically located in or physically connected to that allocation
29area.
30(H) Reimburse the unit for rentals paid by it for a building or
31parking facility that is physically located in or physically
32connected to that allocation area under any lease entered into
33under IC 36-1-10.
34(I) Reimburse public and private entities for expenses incurred
35in training employees of industrial facilities that are located:
36(i) in the allocation area; and
37(ii) on a parcel of real property that has been classified as
38industrial property under the rules of the department of local
39government finance.
40However, the total amount of money spent for this purpose in
41any year may not exceed the total amount of money in the
42allocation fund that is attributable to property taxes paid by the
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1industrial facilities described in this clause. The
2reimbursements under this clause must be made within three
3(3) years after the date on which the investments that are the
4basis for the increment financing are made.
5The special fund may not be used for operating expenses of the
6commission.
7(4) Before June 15 of each year, the commission shall do the
8following:
9(A) Determine the amount, if any, by which the assessed value
10of the taxable property in the allocation area for the most
11recent assessment date minus the base assessed value, when
12multiplied by the estimated tax rate of the allocation area, will
13exceed the amount of assessed value needed to provide the
14property taxes necessary to make, when due, principal and
15interest payments on bonds described in subdivision (3) plus
16the amount necessary for other purposes described in
17subdivision (3) and subsection (g).
18(B) Provide a written notice to the county auditor, the fiscal
19body of the county or municipality that established the
20department of redevelopment, the officers who are authorized
21to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for
22each of the other taxing units that is wholly or partly located
23within the allocation area, and (in an electronic format) the
24department of local government finance. The notice must:
25(i) state the amount, if any, of excess assessed value that the
26commission has determined may be allocated to the
27respective taxing units in the manner prescribed in
28subdivision (1); or
29(ii) state that the commission has determined that there is no
30excess assessed value that may be allocated to the respective
31taxing units in the manner prescribed in subdivision (1).
32The county auditor shall allocate to the respective taxing units
33the amount, if any, of excess assessed value determined by the
34commission. The commission may not authorize an allocation
35to the respective taxing units under this subdivision if to do so
36would endanger the interests of the holders of bonds described
37in subdivision (3).
38    (c) For the purpose of allocating taxes levied by or for any taxing
39 unit or units, the assessed value of taxable property in a territory in the
40 allocation area that is annexed by any taxing unit after the effective
41 date of the allocation provision of the resolution is the lesser of:
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1(1) the assessed value of the property for the assessment date with
2respect to which the allocation and distribution is made; or
3(2) the base assessed value.
4     (d) Property tax proceeds allocable to the redevelopment district
5 under subsection (b)(3) may, subject to subsection (b)(4), be
6 irrevocably pledged by the redevelopment district for payment as set
7 forth in subsection (b)(3).
8     (e) Notwithstanding any other law, each assessor shall, upon
9 petition of the commission, reassess the taxable property situated upon
10 or in, or added to, the allocation area, effective on the next assessment
11 date after the petition.
12     (f) Notwithstanding any other law, the assessed value of all taxable
13 property in the allocation area, for purposes of tax limitation, property
14 tax replacement, and formulation of the budget, tax rate, and tax levy
15 for each political subdivision in which the property is located, is the
16 lesser of:
17(1) the assessed value of the property as valued without regard to
18this section; or
19(2) the base assessed value.
20     (g) If any part of the allocation area is located in an enterprise zone
21 created under IC 5-28-15, the unit that designated the allocation area
22 shall create funds as specified in this subsection. A unit that has
23 obligations, bonds, or leases payable from allocated tax proceeds under
24 subsection (b)(3) shall establish an allocation fund for the purposes
25 specified in subsection (b)(3) and a special zone fund. Such a unit
26 shall, until the end of the enterprise zone phase out period, deposit each
27 year in the special zone fund the amount in the allocation fund derived
28 from property tax proceeds in excess of those described in subsection
29 (b)(1) and (b)(2) from property located in the enterprise zone that
30 exceeds the amount sufficient for the purposes specified in subsection
31 (b)(3) for the year. A unit that has no obligations, bonds, or leases
32 payable from allocated tax proceeds under subsection (b)(3) shall
33 establish a special zone fund and deposit all the property tax proceeds
34 in excess of those described in subsection (b)(1) and (b)(2) in the fund
35 derived from property tax proceeds in excess of those described in
36 subsection (b)(1) and (b)(2) from property located in the enterprise
37 zone. The unit that creates the special zone fund shall use the fund,
38 based on the recommendations of the urban enterprise association, for
39 one (1) or more of the following purposes:
40(1) To pay for programs in job training, job enrichment, and basic
41skill development designed to benefit residents and employers in
42the enterprise zone. The programs must reserve at least one-half
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1(1/2) of the enrollment in any session for residents of the
2enterprise zone.
3(2) To make loans and grants for the purpose of stimulating
4business activity in the enterprise zone or providing employment
5for enterprise zone residents in an enterprise zone. These loans
6and grants may be made to the following:
7(A) Businesses operating in the enterprise zone.
8(B) Businesses that will move their operations to the enterprise
9zone if such a loan or grant is made.
10(3) To provide funds to carry out other purposes specified in
11subsection (b)(3). However, where reference is made in
12subsection (b)(3) to the allocation area, the reference refers, for
13purposes of payments from the special zone fund, only to that part
14of the allocation area that is also located in the enterprise zone.
15    (h) The state board of accounts and department of local government
16 finance shall make the rules and prescribe the forms and procedures
17 that they consider expedient for the implementation of this chapter.
18 After each reassessment of real property in an area under a county's
19 reassessment plan prepared under IC 6-1.1-4-4.2, the department of
20 local government finance shall adjust the base assessed value one (1)
21 time to neutralize any effect of the reassessment of the real property in
22 the area on the property tax proceeds allocated to the redevelopment
23 district under this section. After each annual adjustment under
24 IC 6-1.1-4-4.5, the department of local government finance shall adjust
25 the base assessed value to neutralize any effect of the annual
26 adjustment on the property tax proceeds allocated to the redevelopment
27 district under this section. However, the adjustments under this
28 subsection may not include the effect of property tax abatements under
29 IC 6-1.1-12.1, and these adjustments may not produce less property tax
30 proceeds allocable to the redevelopment district under subsection
31 (b)(3) than would otherwise have been received if the reassessment
32 under the county's reassessment plan or annual adjustment had not
33 occurred. The department of local government finance may prescribe
34 procedures for county and township officials to follow to assist the
35 department in making the adjustments. The department of local
36 government finance may require the redevelopment commission to
37 submit required documentation to neutralize the base assessed
38 value. Any supporting documentation the redevelopment
39 commission is required to submit to support the base assessed
40 value neutralization calculation must be completed and submitted
41 to the department of local government finance by July 15 of each
42 year. If the redevelopment commission does not submit the
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1 required documentation under this subsection by the deadline
2 described in this subsection in a given year, then five percent (5%)
3 of the excess assessed value shall be allocated to the respective
4 taxing units in the year the deadline described in this subsection is
5 missed.
6     (i) The allocation deadline referred to in subsection (b) is
7 determined in the following manner:
8(1) The initial allocation deadline is December 31, 2011.
9(2) Subject to subdivision (3), the initial allocation deadline and
10subsequent allocation deadlines are automatically extended in
11increments of five (5) years, so that allocation deadlines
12subsequent to the initial allocation deadline fall on December 31,
132016, and December 31 of each fifth year thereafter.
14(3) At least one (1) year before the date of an allocation deadline
15determined under subdivision (2), the general assembly may enact
16a law that:
17(A) terminates the automatic extension of allocation deadlines
18under subdivision (2); and
19(B) specifically designates a particular date as the final
20allocation deadline.
21     (j) If the commission adopts a declaratory resolution or an
22 amendment to a declaratory resolution that contains an allocation
23 provision and the commission makes either of the filings required
24 under section 10(e) of this chapter after the first anniversary of the
25 effective date of the allocation provision, the auditor of the county in
26 which the unit is located shall compute the base assessed value for the
27 allocation area using the assessment date immediately preceding the
28 later of:
29(1) the date on which the documents are filed with the county
30auditor; or
31(2) the date on which the documents are filed with the department
32of local government finance.
33     (k) For an allocation area established after June 30, 2024,
34 "residential property" refers to the assessed value of property that is
35 allocated to the one percent (1%) homestead land and improvement
36 categories in the county tax and billing software system. along with the
37 residential assessed value as defined for purposes of calculating the
38 rate for the local income tax property tax relief credit designated for
39 residential property under IC 6-3.6-5-6(d)(3).
40     SECTION 18. IC 36-7-15.1-53, AS AMENDED BY P.L.68-2025,
41 SECTION 236, IS AMENDED TO READ AS FOLLOWS
42 [EFFECTIVE JULY 1, 2027]: Sec. 53. (a) As used in this section:
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                                    54
1     "Allocation area" means that part of a redevelopment project area
2 to which an allocation provision of a resolution adopted under section
3 40 of this chapter refers for purposes of distribution and allocation of
4 property taxes.
5     "Base assessed value" means, subject to subsection (j):
6(1) the net assessed value of all the property as finally determined
7for the assessment date immediately preceding the effective date
8of the allocation provision of the declaratory resolution, as
9adjusted under subsection (h); plus
10(2) to the extent that it is not included in subdivision (1), the net
11assessed value of property that is assessed as residential property
12under the rules of the department of local government finance, as
13finally determined for the current assessment date.
14 Except as provided in section 55 of this chapter, "property taxes"
15 means taxes imposed under IC 6-1.1 on real property.
16     (b) A resolution adopted under section 40 of this chapter on or
17 before the allocation deadline determined under subsection (i) may
18 include a provision with respect to the allocation and distribution of
19 property taxes for the purposes and in the manner provided in this
20 section. A resolution previously adopted may include an allocation
21 provision by the amendment of that resolution on or before the
22 allocation deadline determined under subsection (i) in accordance with
23 the procedures required for its original adoption. A declaratory
24 resolution or an amendment that establishes an allocation provision
25 must be approved by resolution of the legislative body of the excluded
26 city and must specify an expiration date for the allocation provision.
27 For an allocation area established before July 1, 2008, the expiration
28 date may not be more than thirty (30) years after the date on which the
29 allocation provision is established. For an allocation area established
30 after June 30, 2008, the expiration date may not be more than
31 twenty-five (25) years after the date on which the first obligation was
32 incurred to pay principal and interest on bonds or lease rentals on
33 leases payable from tax increment revenues. However, with respect to
34 bonds or other obligations that were issued before July 1, 2008, if any
35 of the bonds or other obligations that were scheduled when issued to
36 mature before the specified expiration date and that are payable only
37 from allocated tax proceeds with respect to the allocation area remain
38 outstanding as of the expiration date, the allocation provision does not
39 expire until all of the bonds or other obligations are no longer
40 outstanding. The allocation provision may apply to all or part of the
41 redevelopment project area. The allocation provision must require that
42 any property taxes subsequently levied by or for the benefit of any
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1 public body entitled to a distribution of property taxes on taxable
2 property in the allocation area be allocated and distributed as follows:
3      (1) Except as otherwise provided in this section, the proceeds of
4      the taxes attributable to the lesser of:
5(A) the assessed value of the property for the assessment date
6with respect to which the allocation and distribution is made;
7or
8(B) the base assessed value;
9      shall be allocated to and, when collected, paid into the funds of
10      the respective taxing units.
11      (2) The excess of the proceeds of the property taxes imposed for
12      the assessment date with respect to which the allocation and
13      distribution is made that are attributable to taxes imposed after
14      being approved by the voters in a referendum or local public
15      question conducted after April 30, 2010, not otherwise included
16      in subdivision (1) shall be allocated to and, when collected, paid
17      into the funds of the taxing unit for which the referendum or local
18      public question was conducted.
19      (3) Except as otherwise provided in this section, property tax
20      proceeds in excess of those described in subdivisions (1) and (2)
21      shall be allocated to the redevelopment district and, when
22      collected, paid into a special fund for that allocation area that may
23      be used by the redevelopment district only to do one (1) or more
24      of the following:
25(A) Pay the principal of and interest on any obligations
26payable solely from allocated tax proceeds that are incurred by
27the redevelopment district for the purpose of financing or
28refinancing the redevelopment of that allocation area.
29(B) Establish, augment, or restore the debt service reserve for
30bonds payable solely or in part from allocated tax proceeds in
31that allocation area.
32(C) Pay the principal of and interest on bonds payable from
33allocated tax proceeds in that allocation area and from the
34special tax levied under section 50 of this chapter.
35(D) Pay the principal of and interest on bonds issued by the
36excluded city to pay for local public improvements that are
37physically located in or physically connected to that allocation
38area.
39(E) Pay premiums on the redemption before maturity of bonds
40payable solely or in part from allocated tax proceeds in that
41allocation area.
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1(F) Make payments on leases payable from allocated tax
2proceeds in that allocation area under section 46 of this
3chapter.
4(G) Reimburse the excluded city for expenditures for local
5public improvements (which include buildings, park facilities,
6and other items set forth in section 45 of this chapter) that are
7physically located in or physically connected to that allocation
8area.
9(H) Reimburse the unit for rentals paid by it for a building or
10parking facility that is physically located in or physically
11connected to that allocation area under any lease entered into
12under IC 36-1-10.
13(I) Reimburse public and private entities for expenses incurred
14in training employees of industrial facilities that are located:
15(i) in the allocation area; and
16(ii) on a parcel of real property that has been classified as
17industrial property under the rules of the department of local
18government finance.
19However, the total amount of money spent for this purpose in
20any year may not exceed the total amount of money in the
21allocation fund that is attributable to property taxes paid by the
22industrial facilities described in this clause. The
23reimbursements under this clause must be made within three
24(3) years after the date on which the investments that are the
25basis for the increment financing are made.
26The special fund may not be used for operating expenses of the
27commission.
28(4) Before June 15 of each year, the commission shall do the
29following:
30(A) Determine the amount, if any, by which the assessed value
31of the taxable property in the allocation area for the most
32recent assessment date minus the base assessed value, when
33multiplied by the estimated tax rate of the allocation area, will
34exceed the amount of assessed value needed to provide the
35property taxes necessary to make, when due, principal and
36interest payments on bonds described in subdivision (3) plus
37the amount necessary for other purposes described in
38subdivision (3) and subsection (g).
39(B) Provide a written notice to the county auditor, the fiscal
40body of the county or municipality that established the
41department of redevelopment, the officers who are authorized
42to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for
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                                     57
1each of the other taxing units that is wholly or partly located
2within the allocation area, and (in an electronic format) the
3department of local government finance. The notice must:
4(i) state the amount, if any, of excess assessed value that the
5commission has determined may be allocated to the
6respective taxing units in the manner prescribed in
7subdivision (1); or
8(ii) state that the commission has determined that there is no
9excess assessed value that may be allocated to the respective
10taxing units in the manner prescribed in subdivision (1).
11The county auditor shall allocate to the respective taxing units
12the amount, if any, of excess assessed value determined by the
13commission. The commission may not authorize an allocation
14to the respective taxing units under this subdivision if to do so
15would endanger the interests of the holders of bonds described
16in subdivision (3).
17     (c) For the purpose of allocating taxes levied by or for any taxing
18 unit or units, the assessed value of taxable property in a territory in the
19 allocation area that is annexed by any taxing unit after the effective
20 date of the allocation provision of the resolution is the lesser of:
21(1) the assessed value of the property for the assessment date with
22respect to which the allocation and distribution is made; or
23(2) the base assessed value.
24     (d) Property tax proceeds allocable to the redevelopment district
25 under subsection (b)(3) may, subject to subsection (b)(4), be
26 irrevocably pledged by the redevelopment district for payment as set
27 forth in subsection (b)(3).
28     (e) Notwithstanding any other law, each assessor shall, upon
29 petition of the commission, reassess the taxable property situated upon
30 or in, or added to, the allocation area, effective on the next assessment
31 date after the petition.
32     (f) Notwithstanding any other law, the assessed value of all taxable
33 property in the allocation area, for purposes of tax limitation, property
34 tax replacement, and formulation of the budget, tax rate, and tax levy
35 for each political subdivision in which the property is located, is the
36 lesser of:
37(1) the assessed value of the property as valued without regard to
38this section; or
39(2) the base assessed value.
40     (g) If any part of the allocation area is located in an enterprise zone
41 created under IC 5-28-15, the unit that designated the allocation area
42 shall create funds as specified in this subsection. A unit that has
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                                    58
1 obligations, bonds, or leases payable from allocated tax proceeds under
2 subsection (b)(3) shall establish an allocation fund for the purposes
3 specified in subsection (b)(3) and a special zone fund. Such a unit
4 shall, until the end of the enterprise zone phase out period, deposit each
5 year in the special zone fund the amount in the allocation fund derived
6 from property tax proceeds in excess of those described in subsection
7 (b)(1) and (b)(2) from property located in the enterprise zone that
8 exceeds the amount sufficient for the purposes specified in subsection
9 (b)(3) for the year. A unit that has no obligations, bonds, or leases
10 payable from allocated tax proceeds under subsection (b)(3) shall
11 establish a special zone fund and deposit all the property tax proceeds
12 in excess of those described in subsection (b)(1) and (b)(2) in the fund
13 derived from property tax proceeds in excess of those described in
14 subsection (b)(1) and (b)(2) from property located in the enterprise
15 zone. The unit that creates the special zone fund shall use the fund,
16 based on the recommendations of the urban enterprise association, for
17 one (1) or more of the following purposes:
18(1) To pay for programs in job training, job enrichment, and basic
19skill development designed to benefit residents and employers in
20the enterprise zone. The programs must reserve at least one-half
21(1/2) of the enrollment in any session for residents of the
22enterprise zone.
23(2) To make loans and grants for the purpose of stimulating
24business activity in the enterprise zone or providing employment
25for enterprise zone residents in an enterprise zone. These loans
26and grants may be made to the following:
27(A) Businesses operating in the enterprise zone.
28(B) Businesses that will move their operations to the enterprise
29zone if such a loan or grant is made.
30(3) To provide funds to carry out other purposes specified in
31subsection (b)(3). However, where reference is made in
32subsection (b)(3) to the allocation area, the reference refers, for
33purposes of payments from the special zone fund, only to that part
34of the allocation area that is also located in the enterprise zone.
35     (h) The state board of accounts and department of local government
36 finance shall make the rules and prescribe the forms and procedures
37 that they consider expedient for the implementation of this chapter.
38 After each reassessment of real property in an area under a county's
39 reassessment plan prepared under IC 6-1.1-4-4.2, the department of
40 local government finance shall adjust the base assessed value one (1)
41 time to neutralize any effect of the reassessment of the real property in
42 the area on the property tax proceeds allocated to the redevelopment
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1 district under this section. After each annual adjustment under
2 IC 6-1.1-4-4.5, the department of local government finance shall adjust
3 the base assessed value to neutralize any effect of the annual
4 adjustment on the property tax proceeds allocated to the redevelopment
5 district under this section. However, the adjustments under this
6 subsection may not include the effect of property tax abatements under
7 IC 6-1.1-12.1, and these adjustments may not produce less property tax
8 proceeds allocable to the redevelopment district under subsection
9 (b)(3) than would otherwise have been received if the reassessment
10 under the county's reassessment plan or annual adjustment had not
11 occurred. The department of local government finance may prescribe
12 procedures for county and township officials to follow to assist the
13 department in making the adjustments. The department of local
14 government finance may require the redevelopment commission to
15 submit required documentation to neutralize the base assessed
16 value. Any supporting documentation the redevelopment
17 commission is required to submit to support the base assessed
18 value neutralization calculation must be completed and submitted
19 to the department of local government finance by July 15 of each
20 year. If the redevelopment commission does not submit the
21 required documentation under this subsection by the deadline
22 described in this subsection in a given year, then five percent (5%)
23 of the excess assessed value shall be allocated to the respective
24 taxing units in the year the deadline described in this subsection is
25 missed.
26    (i) The allocation deadline referred to in subsection (b) is
27 determined in the following manner:
28(1) The initial allocation deadline is December 31, 2011.
29(2) Subject to subdivision (3), the initial allocation deadline and
30subsequent allocation deadlines are automatically extended in
31increments of five (5) years, so that allocation deadlines
32subsequent to the initial allocation deadline fall on December 31,
332016, and December 31 of each fifth year thereafter.
34(3) At least one (1) year before the date of an allocation deadline
35determined under subdivision (2), the general assembly may enact
36a law that:
37(A) terminates the automatic extension of allocation deadlines
38under subdivision (2); and
39(B) specifically designates a particular date as the final
40allocation deadline.
41    (j) If the commission adopts a declaratory resolution or an
42 amendment to a declaratory resolution that contains an allocation
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                                     60
1 provision and the commission makes either of the filings required
2 under section 10(e) of this chapter after the first anniversary of the
3 effective date of the allocation provision, the auditor of the county in
4 which the unit is located shall compute the base assessed value for the
5 allocation area using the assessment date immediately preceding the
6 later of:
7(1) the date on which the documents are filed with the county
8auditor; or
9(2) the date on which the documents are filed with the department
10of local government finance.
11     (k) For an allocation area established after June 30, 2024,
12 "residential property" refers to the assessed value of property that is
13 allocated to the one percent (1%) homestead land and improvement
14 categories in the county tax and billing software system. along with the
15 residential assessed value as defined for purposes of calculating the
16 rate for the local income tax property tax relief credit designated for
17 residential property under IC 6-3.6-5-6(d)(3) (before its expiration).
18     SECTION 19. IC 36-7-30-25, AS AMENDED BY P.L.174-2022,
19 SECTION 74, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20 JULY 1, 2026]: Sec. 25. (a) The following definitions apply throughout
21 this section:
22(1) "Allocation area" means that part of a military base reuse area
23to which an allocation provision of a declaratory resolution
24adopted under section 10 of this chapter refers for purposes of
25distribution and allocation of property taxes.
26(2) "Base assessed value" means, subject to subsection (i):
27(A) the net assessed value of all the property as finally
28determined for the assessment date immediately preceding the
29adoption date of the allocation provision of the declaratory
30resolution, as adjusted under subsection (h); plus
31(B) to the extent that it is not included in clause (A) or (C), the
32net assessed value of any and all parcels or classes of parcels
33identified as part of the base assessed value in the declaratory
34resolution or an amendment thereto, as finally determined for
35any subsequent assessment date; plus
36(C) to the extent that it is not included in clause (A) or (B), the
37net assessed value of property that is assessed as residential
38property under the rules of the department of local government
39finance, within the allocation area, as finally determined for
40the current assessment date.
41Clause (C) applies only to allocation areas established in a
42military reuse area after June 30, 1997, and to the part of an
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                                    61
1allocation area that was established before June 30, 1997, and that
2is added to an existing allocation area after June 30, 1997.
3(3) "Property taxes" means taxes imposed under IC 6-1.1 on real
4property.
5     (b) A declaratory resolution adopted under section 10 of this chapter
6 before the date set forth in IC 36-7-14-39(b) pertaining to declaratory
7 resolutions adopted under IC 36-7-14-15 may include a provision with
8 respect to the allocation and distribution of property taxes for the
9 purposes and in the manner provided in this section. A declaratory
10 resolution previously adopted may include an allocation provision by
11 the amendment of that declaratory resolution in accordance with the
12 procedures set forth in section 13 of this chapter. The allocation
13 provision may apply to all or part of the military base reuse area. The
14 allocation provision must require that any property taxes subsequently
15 levied by or for the benefit of any public body entitled to a distribution
16 of property taxes on taxable property in the allocation area be allocated
17 and distributed as follows:
18(1) Except as otherwise provided in this section, the proceeds of
19the taxes attributable to the lesser of:
20(A) the assessed value of the property for the assessment date
21with respect to which the allocation and distribution is made;
22or
23(B) the base assessed value;
24shall be allocated to and, when collected, paid into the funds of
25the respective taxing units.
26(2) The excess of the proceeds of the property taxes imposed for
27the assessment date with respect to which the allocation and
28distribution are made that are attributable to taxes imposed after
29being approved by the voters in a referendum or local public
30question conducted after April 30, 2010, not otherwise included
31in subdivision (1) shall be allocated to and, when collected, paid
32into the funds of the taxing unit for which the referendum or local
33public question was conducted.
34(3) Except as otherwise provided in this section, property tax
35proceeds in excess of those described in subdivisions (1) and (2)
36shall be allocated to the military base reuse district and, when
37collected, paid into an allocation fund for that allocation area that
38may be used by the military base reuse district and only to do one
39(1) or more of the following:
40(A) Pay the principal of and interest and redemption premium
41on any obligations incurred by the military base reuse district
42or any other entity for the purpose of financing or refinancing
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1military base reuse activities in or directly serving or
2benefiting that allocation area.
3(B) Establish, augment, or restore the debt service reserve for
4bonds payable solely or in part from allocated tax proceeds in
5that allocation area or from other revenues of the reuse
6authority, including lease rental revenues.
7(C) Make payments on leases payable solely or in part from
8allocated tax proceeds in that allocation area.
9(D) Reimburse any other governmental body for expenditures
10made for local public improvements (or structures) in or
11directly serving or benefiting that allocation area.
12(E) Pay expenses incurred by the reuse authority, any other
13department of the unit, or a department of another
14governmental entity for local public improvements or
15structures that are in the allocation area or directly serving or
16benefiting the allocation area, including expenses for the
17operation and maintenance of these local public improvements
18or structures if the reuse authority determines those operation
19and maintenance expenses are necessary or desirable to carry
20out the purposes of this chapter.
21(F) Reimburse public and private entities for expenses
22incurred in training employees of industrial facilities that are
23located:
24(i) in the allocation area; and
25(ii) on a parcel of real property that has been classified as
26industrial property under the rules of the department of local
27government finance.
28However, the total amount of money spent for this purpose in
29any year may not exceed the total amount of money in the
30allocation fund that is attributable to property taxes paid by the
31industrial facilities described in this clause. The
32reimbursements under this clause must be made not more than
33three (3) years after the date on which the investments that are
34the basis for the increment financing are made.
35(G) Expend money and provide financial assistance as
36authorized in section 9(a)(25) of this chapter.
37Except as provided in clause (E), the allocation fund may not be
38used for operating expenses of the reuse authority.
39(4) Except as provided in subsection (g), before July 15 of each
40year the reuse authority shall do the following:
41(A) Determine the amount, if any, by which property taxes
42payable to the allocation fund in the following year will exceed
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1the amount of property taxes necessary to make, when due,
2principal and interest payments on bonds described in
3subdivision (3) plus the amount necessary for other purposes
4described in subdivision (3).
5(B) Provide a written notice to the county auditor, the fiscal
6body of the unit that established the reuse authority, and the
7officers who are authorized to fix budgets, tax rates, and tax
8levies under IC 6-1.1-17-5 for each of the other taxing units
9that is wholly or partly located within the allocation area. The
10notice must:
11(i) state the amount, if any, of excess property taxes that the
12reuse authority has determined may be paid to the respective
13taxing units in the manner prescribed in subdivision (1); or
14(ii) state that the reuse authority has determined that there
15are no excess property tax proceeds that may be allocated to
16the respective taxing units in the manner prescribed in
17subdivision (1).
18The county auditor shall allocate to the respective taxing units
19the amount, if any, of excess property tax proceeds determined
20by the reuse authority. The reuse authority may not authorize
21a payment to the respective taxing units under this subdivision
22if to do so would endanger the interest of the holders of bonds
23described in subdivision (3) or lessors under section 19 of this
24chapter.
25     (c) For the purpose of allocating taxes levied by or for any taxing
26 unit or units, the assessed value of taxable property in a territory in the
27 allocation area that is annexed by a taxing unit after the effective date
28 of the allocation provision of the declaratory resolution is the lesser of:
29(1) the assessed value of the property for the assessment date with
30respect to which the allocation and distribution is made; or
31(2) the base assessed value.
32     (d) Property tax proceeds allocable to the military base reuse district
33 under subsection (b)(3) may, subject to subsection (b)(4), be
34 irrevocably pledged by the military base reuse district for payment as
35 set forth in subsection (b)(3).
36     (e) Notwithstanding any other law, each assessor shall, upon
37 petition of the reuse authority, reassess the taxable property situated
38 upon or in or added to the allocation area, effective on the next
39 assessment date after the petition.
40     (f) Notwithstanding any other law, the assessed value of all taxable
41 property in the allocation area, for purposes of tax limitation, property
42 tax replacement, and the making of the budget, tax rate, and tax levy
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1 for each political subdivision in which the property is located is the
2 lesser of:
3(1) the assessed value of the property as valued without regard to
4this section; or
5(2) the base assessed value.
6     (g) If any part of the allocation area is located in an enterprise zone
7 created under IC 5-28-15, the unit that designated the allocation area
8 shall create funds as specified in this subsection. A unit that has
9 obligations, bonds, or leases payable from allocated tax proceeds under
10 subsection (b)(3) shall establish an allocation fund for the purposes
11 specified in subsection (b)(3) and a special zone fund. Such a unit
12 shall, until the end of the enterprise zone phase out period, deposit each
13 year in the special zone fund any amount in the allocation fund derived
14 from property tax proceeds in excess of those described in subsection
15 (b)(1) and (b)(2) from property located in the enterprise zone that
16 exceeds the amount sufficient for the purposes specified in subsection
17 (b)(3) for the year. The amount sufficient for purposes specified in
18 subsection (b)(3) for the year shall be determined based on the pro rata
19 part of such current property tax proceeds from the part of the
20 enterprise zone that is within the allocation area as compared to all
21 such current property tax proceeds derived from the allocation area. A
22 unit that does not have obligations, bonds, or leases payable from
23 allocated tax proceeds under subsection (b)(3) shall establish a special
24 zone fund and deposit all the property tax proceeds in excess of those
25 described in subsection (b)(1) and (b)(2) that are derived from property
26 in the enterprise zone in the fund. The unit that creates the special zone
27 fund shall use the fund (based on the recommendations of the urban
28 enterprise association) for programs in job training, job enrichment,
29 and basic skill development that are designed to benefit residents and
30 employers in the enterprise zone or other purposes specified in
31 subsection (b)(3), except that where reference is made in subsection
32 (b)(3) to allocation area it shall refer for purposes of payments from the
33 special zone fund only to that part of the allocation area that is also
34 located in the enterprise zone. The programs shall reserve at least
35 one-half (1/2) of their enrollment in any session for residents of the
36 enterprise zone.
37     (h) After each reassessment of real property in an area under the
38 county's reassessment plan under IC 6-1.1-4-4.2, the department of
39 local government finance shall adjust the base assessed value one (1)
40 time to neutralize any effect of the reassessment of the real property in
41 the area on the property tax proceeds allocated to the military base
42 reuse district under this section. After each annual adjustment under
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1 IC 6-1.1-4-4.5, the department of local government finance shall adjust
2 the base assessed value to neutralize any effect of the annual
3 adjustment on the property tax proceeds allocated to the military base
4 reuse district under this section. However, the adjustments under this
5 subsection may not include the effect of property tax abatements under
6 IC 6-1.1-12.1, and these adjustments may not produce less property tax
7 proceeds allocable to the military base reuse district under subsection
8 (b)(3) than would otherwise have been received if the reassessment
9 under the county's reassessment plan or annual adjustment had not
10 occurred. The department of local government finance may prescribe
11 procedures for county and township officials to follow to assist the
12 department in making the adjustments. The department of local
13 government finance may require the reuse authority to submit
14 required documentation to neutralize the base assessed value. Any
15 supporting documentation the reuse authority is required to
16 submit to support the base assessed value neutralization
17 calculation must be completed and submitted to the department of
18 local government finance by July 15 of each year. If the reuse
19 authority does not submit the required documentation under this
20 subsection by the deadline described in this subsection in a given
21 year, then five percent (5%) of the excess assessed value shall be
22 allocated to the respective taxing units in the year the deadline
23 described in this subsection is missed.
24    (i) If the reuse authority adopts a declaratory resolution or an
25 amendment to a declaratory resolution that contains an allocation
26 provision and the reuse authority makes either of the filings required
27 under section 12(c) or 13(f) of this chapter after the first anniversary of
28 the effective date of the allocation provision, the auditor of the county
29 in which the military base reuse district is located shall compute the
30 base assessed value for the allocation area using the assessment date
31 immediately preceding the later of:
32(1) the date on which the documents are filed with the county
33auditor; or
34(2) the date on which the documents are filed with the department
35of local government finance.
36    (j) For an allocation area established after June 30, 2024,
37 "residential property" refers to the assessed value of property that is
38 allocated to the one percent (1%) homestead land and improvement
39 categories in the county tax and billing software system. along with the
40 residential assessed value as defined for purposes of calculating the
41 rate for the local income tax property tax relief credit designated for
42 residential property under IC 6-3.6-5-6(d)(3).
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1     SECTION 20. IC 36-7-30-25, AS AMENDED BY P.L.68-2025,
2 SECTION 237, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2027]: Sec. 25. (a) The following definitions
4 apply throughout this section:
5(1) "Allocation area" means that part of a military base reuse area
6to which an allocation provision of a declaratory resolution
7adopted under section 10 of this chapter refers for purposes of
8distribution and allocation of property taxes.
9(2) "Base assessed value" means, subject to subsection (i):
10(A) the net assessed value of all the property as finally
11determined for the assessment date immediately preceding the
12adoption date of the allocation provision of the declaratory
13resolution, as adjusted under subsection (h); plus
14(B) to the extent that it is not included in clause (A) or (C), the
15net assessed value of any and all parcels or classes of parcels
16identified as part of the base assessed value in the declaratory
17resolution or an amendment thereto, as finally determined for
18any subsequent assessment date; plus
19(C) to the extent that it is not included in clause (A) or (B), the
20net assessed value of property that is assessed as residential
21property under the rules of the department of local government
22finance, within the allocation area, as finally determined for
23the current assessment date.
24Clause (C) applies only to allocation areas established in a
25military reuse area after June 30, 1997, and to the part of an
26allocation area that was established before June 30, 1997, and that
27is added to an existing allocation area after June 30, 1997.
28(3) "Property taxes" means taxes imposed under IC 6-1.1 on real
29property.
30     (b) A declaratory resolution adopted under section 10 of this chapter
31 before the date set forth in IC 36-7-14-39(b) pertaining to declaratory
32 resolutions adopted under IC 36-7-14-15 may include a provision with
33 respect to the allocation and distribution of property taxes for the
34 purposes and in the manner provided in this section. A declaratory
35 resolution previously adopted may include an allocation provision by
36 the amendment of that declaratory resolution in accordance with the
37 procedures set forth in section 13 of this chapter. The allocation
38 provision may apply to all or part of the military base reuse area. The
39 allocation provision must require that any property taxes subsequently
40 levied by or for the benefit of any public body entitled to a distribution
41 of property taxes on taxable property in the allocation area be allocated
42 and distributed as follows:
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1(1) Except as otherwise provided in this section, the proceeds of
2the taxes attributable to the lesser of:
3(A) the assessed value of the property for the assessment date
4with respect to which the allocation and distribution is made;
5or
6(B) the base assessed value;
7shall be allocated to and, when collected, paid into the funds of
8the respective taxing units.
9(2) The excess of the proceeds of the property taxes imposed for
10the assessment date with respect to which the allocation and
11distribution are made that are attributable to taxes imposed after
12being approved by the voters in a referendum or local public
13question conducted after April 30, 2010, not otherwise included
14in subdivision (1) shall be allocated to and, when collected, paid
15into the funds of the taxing unit for which the referendum or local
16public question was conducted.
17(3) Except as otherwise provided in this section, property tax
18proceeds in excess of those described in subdivisions (1) and (2)
19shall be allocated to the military base reuse district and, when
20collected, paid into an allocation fund for that allocation area that
21may be used by the military base reuse district and only to do one
22(1) or more of the following:
23(A) Pay the principal of and interest and redemption premium
24on any obligations incurred by the military base reuse district
25or any other entity for the purpose of financing or refinancing
26military base reuse activities in or directly serving or
27benefiting that allocation area.
28(B) Establish, augment, or restore the debt service reserve for
29bonds payable solely or in part from allocated tax proceeds in
30that allocation area or from other revenues of the reuse
31authority, including lease rental revenues.
32(C) Make payments on leases payable solely or in part from
33allocated tax proceeds in that allocation area.
34(D) Reimburse any other governmental body for expenditures
35made for local public improvements (or structures) in or
36directly serving or benefiting that allocation area.
37(E) Pay expenses incurred by the reuse authority, any other
38department of the unit, or a department of another
39governmental entity for local public improvements or
40structures that are in the allocation area or directly serving or
41benefiting the allocation area, including expenses for the
42operation and maintenance of these local public improvements
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                                      68
1or structures if the reuse authority determines those operation
2and maintenance expenses are necessary or desirable to carry
3out the purposes of this chapter.
4(F) Reimburse public and private entities for expenses
5incurred in training employees of industrial facilities that are
6located:
7(i) in the allocation area; and
8(ii) on a parcel of real property that has been classified as
9industrial property under the rules of the department of local
10government finance.
11However, the total amount of money spent for this purpose in
12any year may not exceed the total amount of money in the
13allocation fund that is attributable to property taxes paid by the
14industrial facilities described in this clause. The
15reimbursements under this clause must be made not more than
16three (3) years after the date on which the investments that are
17the basis for the increment financing are made.
18(G) Expend money and provide financial assistance as
19authorized in section 9(a)(25) of this chapter.
20Except as provided in clause (E), the allocation fund may not be
21used for operating expenses of the reuse authority.
22(4) Except as provided in subsection (g), before July 15 of each
23year the reuse authority shall do the following:
24(A) Determine the amount, if any, by which property taxes
25payable to the allocation fund in the following year will exceed
26the amount of property taxes necessary to make, when due,
27principal and interest payments on bonds described in
28subdivision (3) plus the amount necessary for other purposes
29described in subdivision (3).
30(B) Provide a written notice to the county auditor, the fiscal
31body of the unit that established the reuse authority, and the
32officers who are authorized to fix budgets, tax rates, and tax
33levies under IC 6-1.1-17-5 for each of the other taxing units
34that is wholly or partly located within the allocation area. The
35notice must:
36(i) state the amount, if any, of excess property taxes that the
37reuse authority has determined may be paid to the respective
38taxing units in the manner prescribed in subdivision (1); or
39(ii) state that the reuse authority has determined that there
40are no excess property tax proceeds that may be allocated to
41the respective taxing units in the manner prescribed in
42subdivision (1).
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                                    69
1The county auditor shall allocate to the respective taxing units
2the amount, if any, of excess property tax proceeds determined
3by the reuse authority. The reuse authority may not authorize
4a payment to the respective taxing units under this subdivision
5if to do so would endanger the interest of the holders of bonds
6described in subdivision (3) or lessors under section 19 of this
7chapter.
8     (c) For the purpose of allocating taxes levied by or for any taxing
9 unit or units, the assessed value of taxable property in a territory in the
10 allocation area that is annexed by a taxing unit after the effective date
11 of the allocation provision of the declaratory resolution is the lesser of:
12(1) the assessed value of the property for the assessment date with
13respect to which the allocation and distribution is made; or
14(2) the base assessed value.
15     (d) Property tax proceeds allocable to the military base reuse district
16 under subsection (b)(3) may, subject to subsection (b)(4), be
17 irrevocably pledged by the military base reuse district for payment as
18 set forth in subsection (b)(3).
19     (e) Notwithstanding any other law, each assessor shall, upon
20 petition of the reuse authority, reassess the taxable property situated
21 upon or in or added to the allocation area, effective on the next
22 assessment date after the petition.
23     (f) Notwithstanding any other law, the assessed value of all taxable
24 property in the allocation area, for purposes of tax limitation, property
25 tax replacement, and the making of the budget, tax rate, and tax levy
26 for each political subdivision in which the property is located is the
27 lesser of:
28(1) the assessed value of the property as valued without regard to
29this section; or
30(2) the base assessed value.
31     (g) If any part of the allocation area is located in an enterprise zone
32 created under IC 5-28-15, the unit that designated the allocation area
33 shall create funds as specified in this subsection. A unit that has
34 obligations, bonds, or leases payable from allocated tax proceeds under
35 subsection (b)(3) shall establish an allocation fund for the purposes
36 specified in subsection (b)(3) and a special zone fund. Such a unit
37 shall, until the end of the enterprise zone phase out period, deposit each
38 year in the special zone fund any amount in the allocation fund derived
39 from property tax proceeds in excess of those described in subsection
40 (b)(1) and (b)(2) from property located in the enterprise zone that
41 exceeds the amount sufficient for the purposes specified in subsection
42 (b)(3) for the year. The amount sufficient for purposes specified in
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1 subsection (b)(3) for the year shall be determined based on the pro rata
2 part of such current property tax proceeds from the part of the
3 enterprise zone that is within the allocation area as compared to all
4 such current property tax proceeds derived from the allocation area. A
5 unit that does not have obligations, bonds, or leases payable from
6 allocated tax proceeds under subsection (b)(3) shall establish a special
7 zone fund and deposit all the property tax proceeds in excess of those
8 described in subsection (b)(1) and (b)(2) that are derived from property
9 in the enterprise zone in the fund. The unit that creates the special zone
10 fund shall use the fund (based on the recommendations of the urban
11 enterprise association) for programs in job training, job enrichment,
12 and basic skill development that are designed to benefit residents and
13 employers in the enterprise zone or other purposes specified in
14 subsection (b)(3), except that where reference is made in subsection
15 (b)(3) to allocation area it shall refer for purposes of payments from the
16 special zone fund only to that part of the allocation area that is also
17 located in the enterprise zone. The programs shall reserve at least
18 one-half (1/2) of their enrollment in any session for residents of the
19 enterprise zone.
20     (h) After each reassessment of real property in an area under the
21 county's reassessment plan under IC 6-1.1-4-4.2, the department of
22 local government finance shall adjust the base assessed value one (1)
23 time to neutralize any effect of the reassessment of the real property in
24 the area on the property tax proceeds allocated to the military base
25 reuse district under this section. After each annual adjustment under
26 IC 6-1.1-4-4.5, the department of local government finance shall adjust
27 the base assessed value to neutralize any effect of the annual
28 adjustment on the property tax proceeds allocated to the military base
29 reuse district under this section. However, the adjustments under this
30 subsection may not include the effect of property tax abatements under
31 IC 6-1.1-12.1, and these adjustments may not produce less property tax
32 proceeds allocable to the military base reuse district under subsection
33 (b)(3) than would otherwise have been received if the reassessment
34 under the county's reassessment plan or annual adjustment had not
35 occurred. The department of local government finance may prescribe
36 procedures for county and township officials to follow to assist the
37 department in making the adjustments. The department of local
38 government finance may require the reuse authority to submit
39 required documentation to neutralize the base assessed value. Any
40 supporting documentation the reuse authority is required to
41 submit to support the base assessed value neutralization
42 calculation must be completed and submitted to the department of
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                                    71
1 local government finance by July 15 of each year. If the reuse
2 authority does not submit the required documentation under this
3 subsection by the deadline described in this subsection in a given
4 year, then five percent (5%) of the excess assessed value shall be
5 allocated to the respective taxing units in the year the deadline
6 described in this subsection is missed.
7     (i) If the reuse authority adopts a declaratory resolution or an
8 amendment to a declaratory resolution that contains an allocation
9 provision and the reuse authority makes either of the filings required
10 under section 12(c) or 13(f) of this chapter after the first anniversary of
11 the effective date of the allocation provision, the auditor of the county
12 in which the military base reuse district is located shall compute the
13 base assessed value for the allocation area using the assessment date
14 immediately preceding the later of:
15(1) the date on which the documents are filed with the county
16auditor; or
17(2) the date on which the documents are filed with the department
18of local government finance.
19     (j) For an allocation area established after June 30, 2024,
20 "residential property" refers to the assessed value of property that is
21 allocated to the one percent (1%) homestead land and improvement
22 categories in the county tax and billing software system. along with the
23 residential assessed value as defined for purposes of calculating the
24 rate for the local income tax property tax relief credit designated for
25 residential property under IC 6-3.6-5-6(d)(3) (before its expiration).
26     SECTION 21. IC 36-7-30-25.2, AS ADDED BY P.L.123-2024,
27 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JULY 1, 2026]: Sec. 25.2. (a) Notwithstanding any other law, if the
29 Indiana economic development corporation subsequently designates
30 territory that is located in an existing allocation area under this chapter
31 as an innovation development district under IC 36-7-32.5, the
32 allocation area may not be renewed or extended under this chapter until
33 the term of the innovation development district expires.
34     (b) Notwithstanding any other law, for taxing districts that
35 include multiple tax increment financing districts under this
36 chapter, the original tax increment financing district does not
37 expire and stays active only for the purpose of satisfying
38 outstanding bonds issued by the subsequent tax increment
39 financing district, only if the reuse authority completes the
40 following requirements:
41(1) Provides a written appeal to and receives the approval of
42the department of local government finance.
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                                    72
1(2) Provides written notice to the state board of accounts of
2the appeal.
3    SECTION 22. IC 36-7-30-26.5, AS ADDED BY P.L.249-2015,
4 SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5 JULY 1, 2026]: Sec. 26.5. (a) A reuse authority may enter into a
6 written agreement with a taxpayer who owns, or is otherwise obligated
7 to pay property taxes on, tangible property that is or will be located in
8 an allocation area established under this chapter in which the taxpayer
9 waives review of any assessment of the taxpayer's tangible property
10 that is located in the allocation area for an assessment date that occurs
11 during the term of any specified bond or lease obligations that are
12 payable from property taxes in accordance with an allocation provision
13 for the allocation area and any applicable statute, ordinance, or
14 resolution. An agreement described in this section may precede the
15 establishment of the allocation area or the determination to issue bonds
16 or enter into leases payable from the allocated property taxes.
17    (b) The original owner of each nonowner-occupied residential
18 property subject to the two percent (2%) tax cap, that is located in
19 the tax increment financing area and is excluded from the base
20 assessed value, shall upon completion of construction enter into a
21 written agreement with the reuse authority indicating the owner
22 shall be obligated to pay the property tax for the portion of
23 outstanding bonds in the tax increment financing district
24 attributable to the property until the term length of the original
25 outstanding bond is retired. The written agreement with the reuse
26 authority shall be considered a lien on the property and shall be
27 included as part of the residential real estate sales disclosure under
28 IC 32-21-5. If the property is subsequently sold as a homestead
29 property and becomes subject to the one percent (1%) tax cap, the
30 new owner shall be responsible for the lien on the property
31 attributable to the written agreement with the reuse authority, and
32 the new homestead property owner shall be obligated to fulfill the
33 terms of the written agreement including the payment of the
34 property tax liability included in the agreement.
35    SECTION 23. IC 36-7-30.5-30, AS AMENDED BY P.L.174-2022,
36 SECTION 75, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
37 JULY 1, 2026]: Sec. 30. (a) The following definitions apply throughout
38 this section:
39(1) "Allocation area" means that part of a military base
40development area to which an allocation provision of a
41declaratory resolution adopted under section 16 of this chapter
42refers for purposes of distribution and allocation of property taxes.
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                                     73
1(2) "Base assessed value" means, subject to subsection (i):
2(A) the net assessed value of all the property as finally
3determined for the assessment date immediately preceding the
4adoption date of the allocation provision of the declaratory
5resolution, as adjusted under subsection (h); plus
6(B) to the extent that it is not included in clause (A) or (C), the
7net assessed value of any and all parcels or classes of parcels
8identified as part of the base assessed value in the declaratory
9resolution or an amendment to the declaratory resolution, as
10finally determined for any subsequent assessment date; plus
11(C) to the extent that it is not included in clause (A) or (B), the
12net assessed value of property that is assessed as residential
13property under the rules of the department of local government
14finance, within the allocation area, as finally determined for
15the current assessment date.
16(3) "Property taxes" means taxes imposed under IC 6-1.1 on real
17property.
18    (b) A declaratory resolution adopted under section 16 of this chapter
19 before the date set forth in IC 36-7-14-39(b) pertaining to declaratory
20 resolutions adopted under IC 36-7-14-15 may include a provision with
21 respect to the allocation and distribution of property taxes for the
22 purposes and in the manner provided in this section. A declaratory
23 resolution previously adopted may include an allocation provision by
24 the amendment of that declaratory resolution in accordance with the
25 procedures set forth in section 18 of this chapter. The allocation
26 provision may apply to all or part of the military base development
27 area. The allocation provision must require that any property taxes
28 subsequently levied by or for the benefit of any public body entitled to
29 a distribution of property taxes on taxable property in the allocation
30 area be allocated and distributed as follows:
31(1) Except as otherwise provided in this section, the proceeds of
32the taxes attributable to the lesser of:
33(A) the assessed value of the property for the assessment date
34with respect to which the allocation and distribution is made;
35or
36(B) the base assessed value;
37shall be allocated to and, when collected, paid into the funds of
38the respective taxing units.
39(2) The excess of the proceeds of the property taxes imposed for
40the assessment date with respect to which the allocation and
41distribution is made that are attributable to taxes imposed after
42being approved by the voters in a referendum or local public
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                                      74
1question conducted after April 30, 2010, not otherwise included
2in subdivision (1) shall be allocated to and, when collected, paid
3into the funds of the taxing unit for which the referendum or local
4public question was conducted.
5(3) Except as otherwise provided in this section, property tax
6proceeds in excess of those described in subdivisions (1) and (2)
7shall be allocated to the development authority and, when
8collected, paid into an allocation fund for that allocation area that
9may be used by the development authority and only to do one (1)
10or more of the following:
11(A) Pay the principal of and interest and redemption premium
12on any obligations incurred by the development authority or
13any other entity for the purpose of financing or refinancing
14military base development or reuse activities in or directly
15serving or benefiting that allocation area.
16(B) Establish, augment, or restore the debt service reserve for
17bonds payable solely or in part from allocated tax proceeds in
18that allocation area or from other revenues of the development
19authority, including lease rental revenues.
20(C) Make payments on leases payable solely or in part from
21allocated tax proceeds in that allocation area.
22(D) Reimburse any other governmental body for expenditures
23made for local public improvements (or structures) in or
24directly serving or benefiting that allocation area.
25(E) For property taxes first due and payable before 2009, pay
26all or a part of a property tax replacement credit to taxpayers
27in an allocation area as determined by the development
28authority. This credit equals the amount determined under the
29following STEPS for each taxpayer in a taxing district (as
30defined in IC 6-1.1-1-20) that contains all or part of the
31allocation area:
32STEP ONE: Determine that part of the sum of the amounts
33under IC 6-1.1-21-2(g)(1)(A), IC 6-1.1-21-2(g)(2),
34IC 6-1.1-21-2(g)(3), IC 6-1.1-21-2(g)(4), and
35IC 6-1.1-21-2(g)(5) (before their repeal) that is attributable to
36the taxing district.
37STEP TWO: Divide:
38(i) that part of each county's eligible property tax
39replacement amount (as defined in IC 6-1.1-21-2 (before its
40repeal)) for that year as determined under IC 6-1.1-21-4
41(before its repeal) that is attributable to the taxing district;
42by
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                                      75
1(ii) the STEP ONE sum.
2STEP THREE: Multiply:
3(i) the STEP TWO quotient; by
4(ii) the total amount of the taxpayer's taxes (as defined in
5IC 6-1.1-21-2 (before its repeal)) levied in the taxing district
6that have been allocated during that year to an allocation
7fund under this section.
8If not all the taxpayers in an allocation area receive the credit
9in full, each taxpayer in the allocation area is entitled to
10receive the same proportion of the credit. A taxpayer may not
11receive a credit under this section and a credit under section
1232 of this chapter (before its repeal) in the same year.
13(F) Pay expenses incurred by the development authority for
14local public improvements or structures that were in the
15allocation area or directly serving or benefiting the allocation
16area.
17(G) Reimburse public and private entities for expenses
18incurred in training employees of industrial facilities that are
19located:
20(i) in the allocation area; and
21(ii) on a parcel of real property that has been classified as
22industrial property under the rules of the department of local
23government finance.
24However, the total amount of money spent for this purpose in
25any year may not exceed the total amount of money in the
26allocation fund that is attributable to property taxes paid by the
27industrial facilities described in this clause. The
28reimbursements under this clause must be made not more than
29three (3) years after the date on which the investments that are
30the basis for the increment financing are made.
31(H) Expend money and provide financial assistance as
32authorized in section 15(26) of this chapter.
33The allocation fund may not be used for operating expenses of the
34development authority.
35(4) Except as provided in subsection (g), before July 15 of each
36year the development authority shall do the following:
37(A) Determine the amount, if any, by which property taxes
38payable to the allocation fund in the following year will exceed
39the amount of property taxes necessary to make, when due,
40principal and interest payments on bonds described in
41subdivision (3) plus the amount necessary for other purposes
42described in subdivisions (2) and (3).
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1(B) Provide a written notice to the appropriate county auditors
2and the fiscal bodies and other officers who are authorized to
3fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for
4each of the other taxing units that is wholly or partly located
5within the allocation area. The notice must:
6(i) state the amount, if any, of the excess property taxes that
7the development authority has determined may be paid to
8the respective taxing units in the manner prescribed in
9subdivision (1); or
10(ii) state that the development authority has determined that
11there is no excess assessed value that may be allocated to the
12respective taxing units in the manner prescribed in
13subdivision (1).
14The county auditors shall allocate to the respective taxing units
15the amount, if any, of excess assessed value determined by the
16development authority. The development authority may not
17authorize a payment to the respective taxing units under this
18subdivision if to do so would endanger the interest of the
19holders of bonds described in subdivision (3) or lessors under
20section 24 of this chapter. Property taxes received by a taxing
21unit under this subdivision before 2009 are eligible for the
22property tax replacement credit provided under IC 6-1.1-21
23(before its repeal).
24     (c) For the purpose of allocating taxes levied by or for any taxing
25 unit or units, the assessed value of taxable property in a territory in the
26 allocation area that is annexed by a taxing unit after the effective date
27 of the allocation provision of the declaratory resolution is the lesser of:
28(1) the assessed value of the property for the assessment date with
29respect to which the allocation and distribution is made; or
30(2) the base assessed value.
31     (d) Property tax proceeds allocable to the military base development
32 district under subsection (b)(3) may, subject to subsection (b)(4), be
33 irrevocably pledged by the military base development district for
34 payment as set forth in subsection (b)(3).
35     (e) Notwithstanding any other law, each assessor shall, upon
36 petition of the development authority, reassess the taxable property
37 situated upon or in or added to the allocation area, effective on the next
38 assessment date after the petition.
39     (f) Notwithstanding any other law, the assessed value of all taxable
40 property in the allocation area, for purposes of tax limitation, property
41 tax replacement, and the making of the budget, tax rate, and tax levy
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1 for each political subdivision in which the property is located is the
2 lesser of:
3(1) the assessed value of the property as valued without regard to
4this section; or
5(2) the base assessed value.
6    (g) If any part of the allocation area is located in an enterprise zone
7 created under IC 5-28-15, the development authority shall create funds
8 as specified in this subsection. A development authority that has
9 obligations, bonds, or leases payable from allocated tax proceeds under
10 subsection (b)(3) shall establish an allocation fund for the purposes
11 specified in subsection (b)(3) and a special zone fund. The
12 development authority shall, until the end of the enterprise zone phase
13 out period, deposit each year in the special zone fund any amount in the
14 allocation fund derived from property tax proceeds in excess of those
15 described in subsection (b)(1) and (b)(2) from property located in the
16 enterprise zone that exceeds the amount sufficient for the purposes
17 specified in subsection (b)(3) for the year. The amount sufficient for
18 purposes specified in subsection (b)(3) for the year shall be determined
19 based on the pro rata part of such current property tax proceeds from
20 the part of the enterprise zone that is within the allocation area as
21 compared to all such current property tax proceeds derived from the
22 allocation area. A development authority that does not have
23 obligations, bonds, or leases payable from allocated tax proceeds under
24 subsection (b)(3) shall establish a special zone fund and deposit all the
25 property tax proceeds in excess of those described in subsection (b)(1)
26 and (b)(2) that are derived from property in the enterprise zone in the
27 fund. The development authority that creates the special zone fund
28 shall use the fund (based on the recommendations of the urban
29 enterprise association) for programs in job training, job enrichment,
30 and basic skill development that are designed to benefit residents and
31 employers in the enterprise zone or for other purposes specified in
32 subsection (b)(3), except that where reference is made in subsection
33 (b)(3) to an allocation area it shall refer for purposes of payments from
34 the special zone fund only to that part of the allocation area that is also
35 located in the enterprise zone. The programs shall reserve at least
36 one-half (1/2) of their enrollment in any session for residents of the
37 enterprise zone.
38    (h) After each reassessment of real property in an area under a
39 reassessment plan prepared under IC 6-1.1-4-4.2, the department of
40 local government finance shall adjust the base assessed value one (1)
41 time to neutralize any effect of the reassessment of the real property in
42 the area on the property tax proceeds allocated to the military base
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1 development district under this section. After each annual adjustment
2 under IC 6-1.1-4-4.5, the department of local government finance shall
3 adjust the base assessed value to neutralize any effect of the annual
4 adjustment on the property tax proceeds allocated to the military base
5 development district under this section. However, the adjustments
6 under this subsection may not include the effect of property tax
7 abatements under IC 6-1.1-12.1, and these adjustments may not
8 produce less property tax proceeds allocable to the military base
9 development district under subsection (b)(3) than would otherwise
10 have been received if the reassessment under the county's reassessment
11 plan or annual adjustment had not occurred. The department of local
12 government finance may prescribe procedures for county and township
13 officials to follow to assist the department in making the adjustments.
14 The department of local government finance may require the
15 development authority to submit required documentation to
16 neutralize the base assessed value. Any supporting documentation
17 the development authority is required to submit to support the
18 base assessed value neutralization calculation must be completed
19 and submitted to the department of local government finance by
20 July 15 of each year. If the development authority does not submit
21 the required documentation under this subsection by the deadline
22 described in this subsection in a given year, then five percent (5%)
23 of the excess assessed value shall be allocated to the respective
24 taxing units in the year the deadline described in this subsection is
25 missed.
26     (i) If the development authority adopts a declaratory resolution or
27 an amendment to a declaratory resolution that contains an allocation
28 provision and the development authority makes either of the filings
29 required under section 17(e) or 18(f) of this chapter after the first
30 anniversary of the effective date of the allocation provision, the auditor
31 of the county in which the military base development district is located
32 shall compute the base assessed value for the allocation area using the
33 assessment date immediately preceding the later of:
34(1) the date on which the documents are filed with the county
35auditor; or
36(2) the date on which the documents are filed with the department
37of local government finance.
38     (j) For an allocation area established after June 30, 2024,
39 "residential property" refers to the assessed value of property that is
40 allocated to the one percent (1%) homestead land and improvement
41 categories in the county tax and billing software system. along with the
42 residential assessed value as defined for purposes of calculating the
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1 rate for the local income tax property tax relief credit designated for
2 residential property under IC 6-3.6-5-6(d)(3).
3    SECTION 24. IC 36-7-30.5-30, AS AMENDED BY P.L.68-2025,
4 SECTION 238, IS AMENDED TO READ AS FOLLOWS
5 [EFFECTIVE JULY 1, 2027]: Sec. 30. (a) The following definitions
6 apply throughout this section:
7(1) "Allocation area" means that part of a military base
8development area to which an allocation provision of a
9declaratory resolution adopted under section 16 of this chapter
10refers for purposes of distribution and allocation of property taxes.
11(2) "Base assessed value" means, subject to subsection (i):
12(A) the net assessed value of all the property as finally
13determined for the assessment date immediately preceding the
14adoption date of the allocation provision of the declaratory
15resolution, as adjusted under subsection (h); plus
16(B) to the extent that it is not included in clause (A) or (C), the
17net assessed value of any and all parcels or classes of parcels
18identified as part of the base assessed value in the declaratory
19resolution or an amendment to the declaratory resolution, as
20finally determined for any subsequent assessment date; plus
21(C) to the extent that it is not included in clause (A) or (B), the
22net assessed value of property that is assessed as residential
23property under the rules of the department of local government
24finance, within the allocation area, as finally determined for
25the current assessment date.
26(3) "Property taxes" means taxes imposed under IC 6-1.1 on real
27property.
28    (b) A declaratory resolution adopted under section 16 of this chapter
29 before the date set forth in IC 36-7-14-39(b) pertaining to declaratory
30 resolutions adopted under IC 36-7-14-15 may include a provision with
31 respect to the allocation and distribution of property taxes for the
32 purposes and in the manner provided in this section. A declaratory
33 resolution previously adopted may include an allocation provision by
34 the amendment of that declaratory resolution in accordance with the
35 procedures set forth in section 18 of this chapter. The allocation
36 provision may apply to all or part of the military base development
37 area. The allocation provision must require that any property taxes
38 subsequently levied by or for the benefit of any public body entitled to
39 a distribution of property taxes on taxable property in the allocation
40 area be allocated and distributed as follows:
41(1) Except as otherwise provided in this section, the proceeds of
42the taxes attributable to the lesser of:
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1(A) the assessed value of the property for the assessment date
2with respect to which the allocation and distribution is made;
3or
4(B) the base assessed value;
5shall be allocated to and, when collected, paid into the funds of
6the respective taxing units.
7(2) The excess of the proceeds of the property taxes imposed for
8the assessment date with respect to which the allocation and
9distribution is made that are attributable to taxes imposed after
10being approved by the voters in a referendum or local public
11question conducted after April 30, 2010, not otherwise included
12in subdivision (1) shall be allocated to and, when collected, paid
13into the funds of the taxing unit for which the referendum or local
14public question was conducted.
15(3) Except as otherwise provided in this section, property tax
16proceeds in excess of those described in subdivisions (1) and (2)
17shall be allocated to the development authority and, when
18collected, paid into an allocation fund for that allocation area that
19may be used by the development authority and only to do one (1)
20or more of the following:
21(A) Pay the principal of and interest and redemption premium
22on any obligations incurred by the development authority or
23any other entity for the purpose of financing or refinancing
24military base development or reuse activities in or directly
25serving or benefiting that allocation area.
26(B) Establish, augment, or restore the debt service reserve for
27bonds payable solely or in part from allocated tax proceeds in
28that allocation area or from other revenues of the development
29authority, including lease rental revenues.
30(C) Make payments on leases payable solely or in part from
31allocated tax proceeds in that allocation area.
32(D) Reimburse any other governmental body for expenditures
33made for local public improvements (or structures) in or
34directly serving or benefiting that allocation area.
35(E) For property taxes first due and payable before 2009, pay
36all or a part of a property tax replacement credit to taxpayers
37in an allocation area as determined by the development
38authority. This credit equals the amount determined under the
39following STEPS for each taxpayer in a taxing district (as
40defined in IC 6-1.1-1-20) that contains all or part of the
41allocation area:
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1STEP ONE: Determine that part of the sum of the amounts
2under IC 6-1.1-21-2(g)(1)(A), IC 6-1.1-21-2(g)(2),
3IC 6-1.1-21-2(g)(3), IC 6-1.1-21-2(g)(4), and
4IC 6-1.1-21-2(g)(5) (before their repeal) that is attributable to
5the taxing district.
6STEP TWO: Divide:
7(i) that part of each county's eligible property tax
8replacement amount (as defined in IC 6-1.1-21-2 (before its
9repeal)) for that year as determined under IC 6-1.1-21-4
10(before its repeal) that is attributable to the taxing district;
11by
12(ii) the STEP ONE sum.
13STEP THREE: Multiply:
14(i) the STEP TWO quotient; by
15(ii) the total amount of the taxpayer's taxes (as defined in
16IC 6-1.1-21-2 (before its repeal)) levied in the taxing district
17that have been allocated during that year to an allocation
18fund under this section.
19If not all the taxpayers in an allocation area receive the credit
20in full, each taxpayer in the allocation area is entitled to
21receive the same proportion of the credit. A taxpayer may not
22receive a credit under this section and a credit under section
2332 of this chapter (before its repeal) in the same year.
24(F) Pay expenses incurred by the development authority for
25local public improvements or structures that were in the
26allocation area or directly serving or benefiting the allocation
27area.
28(G) Reimburse public and private entities for expenses
29incurred in training employees of industrial facilities that are
30located:
31(i) in the allocation area; and
32(ii) on a parcel of real property that has been classified as
33industrial property under the rules of the department of local
34government finance.
35However, the total amount of money spent for this purpose in
36any year may not exceed the total amount of money in the
37allocation fund that is attributable to property taxes paid by the
38industrial facilities described in this clause. The
39reimbursements under this clause must be made not more than
40three (3) years after the date on which the investments that are
41the basis for the increment financing are made.
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1(H) Expend money and provide financial assistance as
2authorized in section 15(26) of this chapter.
3The allocation fund may not be used for operating expenses of the
4development authority.
5(4) Except as provided in subsection (g), before July 15 of each
6year the development authority shall do the following:
7(A) Determine the amount, if any, by which property taxes
8payable to the allocation fund in the following year will exceed
9the amount of property taxes necessary to make, when due,
10principal and interest payments on bonds described in
11subdivision (3) plus the amount necessary for other purposes
12described in subdivisions (2) and (3).
13(B) Provide a written notice to the appropriate county auditors
14and the fiscal bodies and other officers who are authorized to
15fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for
16each of the other taxing units that is wholly or partly located
17within the allocation area. The notice must:
18(i) state the amount, if any, of the excess property taxes that
19the development authority has determined may be paid to
20the respective taxing units in the manner prescribed in
21subdivision (1); or
22(ii) state that the development authority has determined that
23there is no excess assessed value that may be allocated to the
24respective taxing units in the manner prescribed in
25subdivision (1).
26The county auditors shall allocate to the respective taxing units
27the amount, if any, of excess assessed value determined by the
28development authority. The development authority may not
29authorize a payment to the respective taxing units under this
30subdivision if to do so would endanger the interest of the
31holders of bonds described in subdivision (3) or lessors under
32section 24 of this chapter. Property taxes received by a taxing
33unit under this subdivision before 2009 are eligible for the
34property tax replacement credit provided under IC 6-1.1-21
35(before its repeal).
36     (c) For the purpose of allocating taxes levied by or for any taxing
37 unit or units, the assessed value of taxable property in a territory in the
38 allocation area that is annexed by a taxing unit after the effective date
39 of the allocation provision of the declaratory resolution is the lesser of:
40(1) the assessed value of the property for the assessment date with
41respect to which the allocation and distribution is made; or
42(2) the base assessed value.
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1     (d) Property tax proceeds allocable to the military base development
2 district under subsection (b)(3) may, subject to subsection (b)(4), be
3 irrevocably pledged by the military base development district for
4 payment as set forth in subsection (b)(3).
5     (e) Notwithstanding any other law, each assessor shall, upon
6 petition of the development authority, reassess the taxable property
7 situated upon or in or added to the allocation area, effective on the next
8 assessment date after the petition.
9     (f) Notwithstanding any other law, the assessed value of all taxable
10 property in the allocation area, for purposes of tax limitation, property
11 tax replacement, and the making of the budget, tax rate, and tax levy
12 for each political subdivision in which the property is located is the
13 lesser of:
14(1) the assessed value of the property as valued without regard to
15this section; or
16(2) the base assessed value.
17     (g) If any part of the allocation area is located in an enterprise zone
18 created under IC 5-28-15, the development authority shall create funds
19 as specified in this subsection. A development authority that has
20 obligations, bonds, or leases payable from allocated tax proceeds under
21 subsection (b)(3) shall establish an allocation fund for the purposes
22 specified in subsection (b)(3) and a special zone fund. The
23 development authority shall, until the end of the enterprise zone phase
24 out period, deposit each year in the special zone fund any amount in the
25 allocation fund derived from property tax proceeds in excess of those
26 described in subsection (b)(1) and (b)(2) from property located in the
27 enterprise zone that exceeds the amount sufficient for the purposes
28 specified in subsection (b)(3) for the year. The amount sufficient for
29 purposes specified in subsection (b)(3) for the year shall be determined
30 based on the pro rata part of such current property tax proceeds from
31 the part of the enterprise zone that is within the allocation area as
32 compared to all such current property tax proceeds derived from the
33 allocation area. A development authority that does not have
34 obligations, bonds, or leases payable from allocated tax proceeds under
35 subsection (b)(3) shall establish a special zone fund and deposit all the
36 property tax proceeds in excess of those described in subsection (b)(1)
37 and (b)(2) that are derived from property in the enterprise zone in the
38 fund. The development authority that creates the special zone fund
39 shall use the fund (based on the recommendations of the urban
40 enterprise association) for programs in job training, job enrichment,
41 and basic skill development that are designed to benefit residents and
42 employers in the enterprise zone or for other purposes specified in
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1 subsection (b)(3), except that where reference is made in subsection
2 (b)(3) to an allocation area it shall refer for purposes of payments from
3 the special zone fund only to that part of the allocation area that is also
4 located in the enterprise zone. The programs shall reserve at least
5 one-half (1/2) of their enrollment in any session for residents of the
6 enterprise zone.
7     (h) After each reassessment of real property in an area under a
8 reassessment plan prepared under IC 6-1.1-4-4.2, the department of
9 local government finance shall adjust the base assessed value one (1)
10 time to neutralize any effect of the reassessment of the real property in
11 the area on the property tax proceeds allocated to the military base
12 development district under this section. After each annual adjustment
13 under IC 6-1.1-4-4.5, the department of local government finance shall
14 adjust the base assessed value to neutralize any effect of the annual
15 adjustment on the property tax proceeds allocated to the military base
16 development district under this section. However, the adjustments
17 under this subsection may not include the effect of property tax
18 abatements under IC 6-1.1-12.1, and these adjustments may not
19 produce less property tax proceeds allocable to the military base
20 development district under subsection (b)(3) than would otherwise
21 have been received if the reassessment under the county's reassessment
22 plan or annual adjustment had not occurred. The department of local
23 government finance may prescribe procedures for county and township
24 officials to follow to assist the department in making the adjustments.
25 The department of local government finance may require the
26 development authority to submit required documentation to
27 neutralize the base assessed value. Any supporting documentation
28 the development authority is required to submit to support the
29 base assessed value neutralization calculation must be completed
30 and submitted to the department of local government finance by
31 July 15 of each year. If the development authority does not submit
32 the required documentation under this subsection by the deadline
33 described in this subsection in a given year, then five percent (5%)
34 of the excess assessed value shall be allocated to the respective
35 taxing units in the year the deadline described in this subsection is
36 missed.
37     (i) If the development authority adopts a declaratory resolution or
38 an amendment to a declaratory resolution that contains an allocation
39 provision and the development authority makes either of the filings
40 required under section 17(e) or 18(f) of this chapter after the first
41 anniversary of the effective date of the allocation provision, the auditor
42 of the county in which the military base development district is located
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1 shall compute the base assessed value for the allocation area using the
2 assessment date immediately preceding the later of:
3(1) the date on which the documents are filed with the county
4auditor; or
5(2) the date on which the documents are filed with the department
6of local government finance.
7     (j) For an allocation area established after June 30, 2024,
8 "residential property" refers to the assessed value of property that is
9 allocated to the one percent (1%) homestead land and improvement
10 categories in the county tax and billing software system. along with the
11 residential assessed value as defined for purposes of calculating the
12 rate for the local income tax property tax relief credit designated for
13 residential property under IC 6-3.6-5-6(d)(3) (before its expiration).
14     SECTION 25. IC 36-7-30.5-30.3, AS ADDED BY P.L.123-2024,
15 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16 JULY 1, 2026]: Sec. 30.3. (a) Notwithstanding any other law, if the
17 Indiana economic development corporation subsequently designates
18 territory that is located in an existing allocation area under this chapter
19 as an innovation development district under IC 36-7-32.5, the
20 allocation area may not be renewed or extended under this chapter until
21 the term of the innovation development district expires.
22     (b) Notwithstanding any other law, for taxing districts that
23 include multiple tax increment financing districts under this
24 chapter, the original tax increment financing district does not
25 expire and stays active only for the purpose of satisfying
26 outstanding bonds issued by the subsequent tax increment
27 financing district, only if the development authority completes the
28 following requirements:
29(1) Provides a written appeal to and receives the approval of
30the department of local government finance.
31(2) Provides written notice to the state board of accounts of
32the appeal.
33     SECTION 26. IC 36-7-30.5-31.5, AS ADDED BY P.L.249-2015,
34 SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
35 JULY 1, 2026]: Sec. 31.5. (a) The development authority may enter
36 into a written agreement with a taxpayer who owns, or is otherwise
37 obligated to pay property taxes on, tangible property that is or will be
38 located in an allocation area established under this chapter in which the
39 taxpayer waives review of any assessment of the taxpayer's tangible
40 property that is located in the allocation area for an assessment date
41 that occurs during the term of any specified bond or lease obligations
42 that are payable from property taxes in accordance with an allocation
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1 provision for the allocation area and any applicable statute, ordinance,
2 or resolution. An agreement described in this section may precede the
3 establishment of the allocation area or the determination to issue bonds
4 or enter into leases payable from the allocated property taxes.
5     (b) The original owner of each nonowner-occupied residential
6 property subject to the two percent (2%) tax cap, that is located in
7 the tax increment financing area and is excluded from the base
8 assessed value, shall upon completion of construction enter into a
9 written agreement with the development authority indicating the
10 owner shall be obligated to pay the property tax for the portion of
11 outstanding bonds in the tax increment financing district
12 attributable to the property until the term length of the original
13 outstanding bond is retired. The written agreement with the
14 development authority shall be considered a lien on the property
15 and shall be included as part of the residential real estate sales
16 disclosure under IC 32-21-5. If the property is subsequently sold as
17 a homestead property and becomes subject to the one percent (1%)
18 tax cap, the new owner shall be responsible for the lien on the
19 property attributable to the written agreement with the
20 development authority, and the new homestead property owner
21 shall be obligated to fulfill the terms of the written agreement
22 including the payment of the property tax liability included in the
23 agreement.
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