§ 36-7-15.1-26 — Real property tax allocation and distribution

Indiana § 36-7-15.1-26

• Jurisdiction: Indiana
• Title 36: LOCAL GOVERNMENT
• Art. 7: PLANNING AND DEVELOPMENT
• Ch. 15.1: Redevelopment of Areas in Marion County Needing

Text

Note: This version of section effective until 7-1-2027. See also
following version of this section, effective 7-1-2027.
Sec. 26. (a) As used in this section:
"Allocation area" means that part of a redevelopment project area
to which an allocation provision of a resolution adopted under section
8 of this chapter refers for purposes of distribution and allocation of
property taxes.
"Base assessed value" means, subject to subsection (j), the
following:
(1) If an allocation provision is adopted after June 30, 1995, in a
declaratory resolution or an amendment to a declaratory
resolution establishing an economic development area:
(A) the net assessed value of all the property as finally
determined for the assessment date immediately preceding the
effective date of the allocation provision of the declaratory
resolution, as adjusted under subsection (h); plus
(B) to the extent that it is not included in clause (A), the net
assessed value of property that is assessed as residential
property under the rules of the department of local government
finance, within the allocation area, as finally determined for the
current assessment date.
(2) If an allocation provision is adopted after June 30, 1997, in a
declaratory resolution or an amendment to a declaratory
resolution establishing a redevelopment project area:
(A) the net assessed value of all the property as finally
determined for the assessment date immediately preceding the
effective date of the allocation provision of the declaratory
resolution, as adjusted under subsection (h); plus
(B) to the extent that it is not included in clause (A), the net
assessed value of property that is assessed as residential
property under the rules of the department of local government
finance, within the allocation area, as finally determined for the
current assessment date.
(3) If:
(A) an allocation provision adopted before June 30, 1995, in a
declaratory resolution or an amendment to a declaratory
resolution establishing a redevelopment project area expires
after June 30, 1997; and
(B) after June 30, 1997, a new allocation provision is included
in an amendment to the declaratory resolution;
the net assessed value of all the property as finally determined for
the assessment date immediately preceding the effective date of
the allocation provision adopted after June 30, 1997, as adjusted
under subsection (h).
(4) Except as provided in subdivision (5), for all other allocation
areas, the net assessed value of all the property as finally
determined for the assessment date immediately preceding the
effective date of the allocation provision of the declaratory
resolution, as adjusted under subsection (h).
(5) If an allocation area established in an economic development
area before July 1, 1995, is expanded after June 30, 1995, the
definition in subdivision (1) applies to the expanded part of the
area added after June 30, 1995.
(6) If an allocation area established in a redevelopment project
area before July 1, 1997, is expanded after June 30, 1997, the
definition in subdivision (2) applies to the expanded part of the
area added after June 30, 1997.
Except as provided in section 26.2 of this chapter, "property taxes"
means taxes imposed under IC 6-1.1 on real property. However, upon
approval by a resolution of the redevelopment commission adopted
before June 1, 1987, "property taxes" also includes taxes imposed
under IC 6-1.1 on depreciable personal property. If a redevelopment
commission adopted before June 1, 1987, a resolution to include within
the definition of property taxes, taxes imposed under IC 6-1.1 on
depreciable personal property that has a useful life in excess of eight
(8) years, the commission may by resolution determine the percentage
of taxes imposed under IC 6-1.1 on all depreciable personal property
that will be included within the definition of property taxes. However,
the percentage included must not exceed twenty-five percent (25%) of
the taxes imposed under IC 6-1.1 on all depreciable personal property.
(b) A resolution adopted under section 8 of this chapter on or before
the allocation deadline determined under subsection (i) may include a
provision with respect to the allocation and distribution of property
taxes for the purposes and in the manner provided in this section. A
resolution previously adopted may include an allocation provision by
the amendment of that resolution on or before the allocation deadline
determined under subsection (i) in accordance with the procedures
required for its original adoption. A declaratory resolution or
amendment that establishes an allocation provision must include a
specific finding of fact, supported by evidence, that the adoption of the
allocation provision will result in new property taxes in the area that
would not have been generated but for the adoption of the allocation
provision. For an allocation area established before July 1, 1995, the
expiration date of any allocation provisions for the allocation area is
June 30, 2025, or the last date of any obligations that are outstanding
on July 1, 2015, whichever is later. However, for an allocation area
identified as the Consolidated Allocation Area in the report submitted
in 2013 to the fiscal body under section 36.3 of this chapter, the
expiration date of any allocation provisions for the allocation area is
January 1, 2051. A declaratory resolution or an amendment that
establishes an allocation provision after June 30, 1995, must specify an
expiration date for the allocation provision. For an allocation area
established before July 1, 2008, the expiration date may not be more
than thirty (30) years after the date on which the allocation provision
is established. For an allocation area established after June 30, 2008,
the expiration date may not be more than twenty-five (25) years after
the date on which the first obligation was incurred to pay principal and
interest on bonds or lease rentals on leases payable from tax increment
revenues. However, with respect to bonds or other obligations that were
issued before July 1, 2008, if any of the bonds or other obligations that
were scheduled when issued to mature before the specified expiration
date and that are payable only from allocated tax proceeds with respect
to the allocation area remain outstanding as of the expiration date, the
allocation provision does not expire until all of the bonds or other
obligations are no longer outstanding. The allocation provision may
apply to all or part of the redevelopment project area. The allocation
provision must require that any property taxes subsequently levied by
or for the benefit of any public body entitled to a distribution of
property taxes on taxable property in the allocation area be allocated
and distributed as follows:
(1) Except as otherwise provided in this section, the proceeds of
the taxes attributable to the lesser of:
(A) the assessed value of the property for the assessment date
with respect to which the allocation and distribution is made; or
(B) the base assessed value;
shall be allocated to and, when collected, paid into the funds of
the respective taxing units.
(2) The excess of the proceeds of the property taxes imposed for
the assessment date with respect to which the allocation and
distribution is made that are attributable to taxes imposed after
being approved by the voters in a referendum or local public
question conducted after April 30, 2010, not otherwise included
in subdivision (1) shall be allocated to and, when collected, paid
into the funds of the taxing unit for which the referendum or local
public question was conducted.
(3) Except as otherwise provided in this section, property tax
proceeds in excess of those described in subdivisions (1) and (2)
shall be allocated to the redevelopment district and, when
collected, paid into a special fund for that allocation area that may
be used by the redevelopment district only to do one (1) or more
of the following:
(A) Pay the principal of and interest on any obligations payable
solely from allocated tax proceeds that are incurred by the
redevelopment district for the purpose of financing or
refinancing the redevelopment of that allocation area.
(B) Establish, augment, or restore the debt service reserve for
bonds payable solely or in part from allocated tax proceeds in
that allocation area.
(C) Pay the principal of and interest on bonds payable from
allocated tax proceeds in that allocation area and from the
special tax levied under section 19 of this chapter.
(D) Pay the principal of and interest on bonds issued by the
consolidated city to pay for local public improvements that are
physically located in or physically connected to that allocation
area.
(E) Pay premiums on the redemption before maturity of bonds
payable solely or in part from allocated tax proceeds in that
allocation area.
(F) Make payments on leases payable from allocated tax
proceeds in that allocation area under section 17.1 of this
chapter.
(G) Reimburse the consolidated city for expenditures for local
public improvements (which include buildings, parking
facilities, and other items set forth in section 17 of this chapter)
that are physically located in or physically connected to that
allocation area.
(H) Reimburse the unit for rentals paid by it for a building or
parking facility that is physically located in or physically
connected to that allocation area under any lease entered into
under IC 36-1-10.
(I) Reimburse public and private entities for expenses incurred
in training employees of industrial facilities that are located:
(i) in the allocation area; and
(ii) on a parcel of real property that has been classified as
industrial property under the rules of the department of local
government finance.
However, the total amount of money spent for this purpose in
any year may not exceed the total amount of money in the
allocation fund that is attributable to property taxes paid by the
industrial facilities described in this clause. The
reimbursements under this clause must be made within three
(3) years after the date on which the investments that are the
basis for the increment financing are made.
(J) Pay the costs of carrying out an eligible efficiency project
(as defined in IC 36-9-41-1.5) within the unit that established
the redevelopment commission. However, property tax
proceeds may be used under this clause to pay the costs of
carrying out an eligible efficiency project only if those property
tax proceeds exceed the amount necessary to do the following:
(i) Make, when due, any payments required under clauses (A)
through (I), including any payments of principal and interest
on bonds and other obligations payable under this
subdivision, any payments of premiums under this
subdivision on the redemption before maturity of bonds, and
any payments on leases payable under this subdivision.
(ii) Make any reimbursements required under this
subdivision.
(iii) Pay any expenses required under this subdivision.
(iv) Establish, augment, or restore any debt service reserve
under this subdivision.
(K) Expend money and provide financial assistance as
authorized in section 7(a)(21) of this chapter.
The special fund may not be used for operating expenses of the
commission.
(4) Before June 15 of each year, the commission shall do the
following:
(A) Determine the amount, if any, by which the assessed value
of the taxable property in the allocation area for the most recent
assessment date minus the base assessed value, when
multiplied by the estimated tax rate of the allocation area will
exceed the amount of assessed value needed to provide the
property taxes necessary to make, when due, principal and
interest payments on bonds described in subdivision (3) plus
the amount necessary for other purposes described in
subdivision (3) and subsection (g).
(B) Provide a written notice to the county auditor, the
legislative body of the consolidated city, the officers who are
authorized to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for each of the other taxing units that is wholly or
partly located within the allocation area, and (in an electronic
format) the department of local government finance. The notice
must:
(i) state the amount, if any, of excess assessed value that the
commission has determined may be allocated to the
respective taxing units in the manner prescribed in
subdivision (1); or
(ii) state that the commission has determined that there is no
excess assessed value that may be allocated to the respective
taxing units in the manner prescribed in subdivision (1).
The county auditor shall allocate to the respective taxing units
the amount, if any, of excess assessed value determined by the
commission. The commission may not authorize an allocation
to the respective taxing units under this subdivision if to do so
would endanger the interests of the holders of bonds described
in subdivision (3).
(C) If:
(i) the amount of excess assessed value determined by the
commission is expected to generate more than two hundred
percent (200%) of the amount of allocated tax proceeds
necessary to make, when due, principal and interest payments
on bonds described in subdivision (3); plus
(ii) the amount necessary for other purposes described in
subdivision (3) and subsection (g);
the commission shall submit to the legislative body of the unit
the commission's determination of the excess assessed value
that the commission proposes to allocate to the respective
taxing units in the manner prescribed in subdivision (1). The
legislative body of the unit may approve the commission's
determination or modify the amount of the excess assessed
value that will be allocated to the respective taxing units in the
manner prescribed in subdivision (1).
(c) For the purpose of allocating taxes levied by or for any taxing
unit or units, the assessed value of taxable property in a territory in the
allocation area that is annexed by any taxing unit after the effective
date of the allocation provision of the resolution is the lesser of:
(1) the assessed value of the property for the assessment date with
respect to which the allocation and distribution is made; or
(2) the base assessed value.
(d) Property tax proceeds allocable to the redevelopment district
under subsection (b)(3) may, subject to subsection (b)(4), be
irrevocably pledged by the redevelopment district for payment as set
forth in subsection (b)(3).
(e) Notwithstanding any other law, each assessor shall, upon
petition of the commission, reassess the taxable property situated upon
or in, or added to, the allocation area, effective on the next assessment
date after the petition.
(f) Notwithstanding any other law, the assessed value of all taxable
property in the allocation area, for purposes of tax limitation, property
tax replacement, and formulation of the budget, tax rate, and tax levy
for each political subdivision in which the property is located is the
lesser of:
(1) the assessed value of the property as valued without regard to
this section; or
(2) the base assessed value.
(g) If any part of the allocation area is located in an enterprise zone
created under IC 5-28-15, the unit that designated the allocation area
shall create funds as specified in this subsection. A unit that has
obligations, bonds, or leases payable from allocated tax proceeds under
subsection (b)(3) shall establish an allocation fund for the purposes
specified in subsection (b)(3) and a special zone fund. Such a unit
shall, until the end of the enterprise zone phase out period, deposit each
year in the special zone fund the amount in the allocation fund derived
from property tax proceeds in excess of those described in subsection
(b)(1) and (b)(2) from property located in the enterprise zone that
exceeds the amount sufficient for the purposes specified in subsection
(b)(3) for the year. A unit that has no obligations, bonds, or leases
payable from allocated tax proceeds under subsection (b)(3) shall
establish a special zone fund and deposit all the property tax proceeds
in excess of those described in subsection (b)(1) and (b)(2) in the fund
derived from property tax proceeds in excess of those described in
subsection (b)(1) and (b)(2) from property located in the enterprise
zone. The unit that creates the special zone fund shall use the fund,
based on the recommendations of the urban enterprise association, for
one (1) or more of the following purposes:
(1) To pay for programs in job training, job enrichment, and basic
skill development designed to benefit residents and employers in
the enterprise zone. The programs must reserve at least one-half
(1/2) of the enrollment in any session for residents of the
enterprise zone.
(2) To make loans and grants for the purpose of stimulating
business activity in the enterprise zone or providing employment
for enterprise zone residents in the enterprise zone. These loans
and grants may be made to the following:
(A) Businesses operating in the enterprise zone.
(B) Businesses that will move their operations to the enterprise
zone if such a loan or grant is made.
(3) To provide funds to carry out other purposes specified in
subsection (b)(3). However, where reference is made in
subsection (b)(3) to the allocation area, the reference refers for
purposes of payments from the special zone fund only to that part
of the allocation area that is also located in the enterprise zone.
(h) The state board of accounts and department of local government
finance shall make the rules and prescribe the forms and procedures
that they consider expedient for the implementation of this chapter.
After each reassessment under a reassessment plan prepared under IC 6-1.1-4-4.2, the department of local government finance shall adjust the
base assessed value one (1) time to neutralize any effect of the
reassessment of the real property in the area on the property tax
proceeds allocated to the redevelopment district under this section.
After each annual adjustment under IC 6-1.1-4-4.5, the department of
local government finance shall adjust the base assessed value to
neutralize any effect of the annual adjustment on the property tax
proceeds allocated to the redevelopment district under this section.
However, the adjustments under this subsection may not include the
effect of property tax abatements under IC 6-1.1-12.1, and these
adjustments may not produce less property tax proceeds allocable to
the redevelopment district under subsection (b)(3) than would
otherwise have been received if the reassessment under the
reassessment plan or annual adjustment had not occurred. The
department of local government finance may prescribe procedures for
county and township officials to follow to assist the department in
making the adjustments.
(i) The allocation deadline referred to in subsection (b) is
determined in the following manner:
(1) The initial allocation deadline is December 31, 2011.
(2) Subject to subdivision (3), the initial allocation deadline and
subsequent allocation deadlines are automatically extended in
increments of five (5) years, so that allocation deadlines
subsequent to the initial allocation deadline fall on December 31,
2016, and December 31 of each fifth year thereafter.
(3) At least one (1) year before the date of an allocation deadline
determined under subdivision (2), the general assembly may enact
a law that:
(A) terminates the automatic extension of allocation deadlines
under subdivision (2); and
(B) specifically designates a particular date as the final
allocation deadline.
(j) If the commission adopts a declaratory resolution or an
amendment to a declaratory resolution that contains an allocation
provision and the commission makes either of the filings required
under section 10(e) of this chapter after the first anniversary of the
effective date of the allocation provision, the auditor of the county in
which the unit is located shall compute the base assessed value for the
allocation area using the assessment date immediately preceding the
later of:
(1) the date on which the documents are filed with the county
auditor; or
(2) the date on which the documents are filed with the department
of local government finance.
(k) For an allocation area established after June 30, 2024,
"residential property" refers to the assessed value of property that is
allocated to the one percent (1%) homestead land and improvement
categories in the county tax and billing software system, along with the
residential assessed value as defined for purposes of calculating the
rate for the local income tax property tax relief credit designated for
residential property under IC 6-3.6-5-6(d)(3).
As added by Acts 1982, P.L.77, SEC.8. Amended by
P.L.72-1983, SEC.8; P.L.393-1987(ss), SEC.7; P.L.37-1988, SEC.26;
P.L.14-1991, SEC.23; P.L.41-1992, SEC.7; P.L.18-1992, SEC.27;
P.L.2-1995, SEC.134; P.L.25-1995, SEC.89; P.L.85-1995, SEC.41;
P.L.255-1997(ss), SEC.17; P.L.90-2002, SEC.479; P.L.4-2005,
SEC.138; P.L.185-2005, SEC.38; P.L.216-2005, SEC.7; P.L.154-2006,
SEC.77; P.L.146-2008, SEC.755; P.L.88-2009, SEC.14;
P.L.182-2009(ss), SEC.406; P.L.203-2011, SEC.14; P.L.112-2012,
SEC.56; P.L.149-2014, SEC.36; P.L.95-2014, SEC.5; P.L.87-2015,
SEC.8; P.L.184-2016, SEC.32; P.L.180-2016, SEC.23; P.L.86-2018,
SEC.345; P.L.214-2019, SEC.39; P.L.257-2019, SEC.126;
P.L.156-2020, SEC.140; P.L.174-2022, SEC.72.