January 25, 2000






HOUSE BILL No. 1319

_____


DIGEST OF HB 1319 (Updated January 20, 2000 5:12 PM - DI 94)



Citations Affected: IC 36-7.

Synopsis: Special service areas. Permits cities, towns, and counties to establish special service areas for the purpose of imposing assessments against real property to provide funding for infrastructure and local public improvements, such as streets, sidewalks, sewers, capital improvement board projects, park and recreation facilities, and municipal utilities. Provides that establishment of a special service area may be initiated by a preliminary ordinance of the legislative body or by a petition of landowners in the affected area. Establishes procedures for hearings on the establishment of a special service area and for computation of assessments against real property. Provides that money raised by the assessments may be used to pay debt service on bonds or lease rentals under leases.

Effective: Upon passage.





Liggett , Cherry




    January 11, 2000, read first time and referred to Committee on Local Government.
    January 24, 2000, reported _ Do Pass.







January 25, 2000

Second Regular Session 111th General Assembly (2000)


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 1999 General Assembly.

HOUSE BILL No. 1319



    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:

SOURCE: IC 36-7-32; (00)HB1319.1.1. -->     SECTION 1. IC 36-7-32 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 32. Special Service Areas
    Sec. 1. This chapter applies to all units except townships.
    Sec. 2. The definitions in IC 36-1-2 apply throughout this chapter.
    Sec. 3. As used in this chapter, "infrastructure" includes:
        (1) improvements (as defined in IC 36-9-1-2 );
        (2) parking facilities (as defined in IC 36-9-1-3 );
        (3) public ways (as defined in IC 36-9-1-7 );
        (4) sewage works (as defined in IC 36-9-1-8 );
        (5) thoroughfares (as defined in IC 36-9-1-8.5 );
        (6) watercourses (as defined in IC 36-9-1-10 );
        (7) capital improvements (as defined in IC 36-10-1-4 );
        (8) park and recreational facilities described in IC 36-10-1-2 ;
        (9) municipally owned utilities (as defined in IC 8-1-2-1) ;
        (10) municipal waterworks facilities established under IC 8-1.5-4 ; and
        (11) storm water collection and disposal facilities established under IC 8-1.5-5.
    Sec. 4. As used in this chapter, "local public improvement" has the meaning set forth in IC 36-7-14.5-6.
    Sec. 5. (a) The legislative body of a unit may establish a special service area for the purpose of providing infrastructure and local public improvements in order to:
        (1) benefit the public health, safety, morals, and welfare;
        (2) increase the economic well-being of the unit and the state; and
        (3) protect and increase property and income values in the unit and the state.
    (b) The establishment of a special service area under this chapter may be initiated by:
        (1) the adoption of a preliminary determination ordinance under section 7 of this chapter; or
        (2) the receipt of a petition under section 8 of this chapter.
    (c) Providing infrastructure and local public improvements is a public use and purpose for which public money may be spent and private property may be acquired.
    Sec. 6. (a) All of the taxable real property within a special service area constitutes a special taxing district for the purpose of the special assessments to be apportioned, levied, and collected as provided in this chapter. All of the taxable property within the special service area is considered to be benefited by the infrastructure projects and local public improvements to be carried out under this chapter to the extent of the special assessments apportioned, levied, and collected under this chapter.
    (b) The benefits accruing to a parcel of real property within a special service area must bear a reasonable relationship to the benefits accruing to that parcel as a result of the establishment of the special service area. The benefits may be apportioned among those parcels in any manner reasonably representative of the benefits accruing to a parcel from the infrastructure projects and local public improvements, including the following:
        (1) Assessed value of the parcel.
        (2) Fair market value of the parcel.
        (3) Assessed value of any improvement on the parcel.
        (4) Fair market value of any improvement on the parcel.
        (5) Age of any improvement on the parcel.
        (6) Square footage of each parcel.
        (7) Other similar factors.
    (c) In order to encourage the retention or development of various land uses within the special service area, assessments may be adjusted according to the zoning classification of the property.
    (d) The unit may retain or employ qualified personnel or other consultants to assist it in developing the formula for determining the percentage of the total benefit to be received by each parcel of real property within the proposed special service area and the method for apportioning the assessments to be levied on the real property in the proposed special service area.
    Sec. 7. The legislative body of the unit may adopt an ordinance preliminarily determining to establish a special service area under this chapter. The ordinance preliminarily determining to establish a special service area must include the following information:
        (1) The boundaries of the proposed special service area.
        (2) The address of each parcel and the name and address of each owner of land within the proposed special service area.
        (3) A detailed description of the infrastructure projects and local public improvements to be carried out within the proposed special service area, the estimated cost of these projects, and the estimated benefits to accrue to the property owners within the special service area.
        (4) The plan for the application of assessment revenue to the cost of the infrastructure projects and local public improvements within the proposed special service area.
        (5) The proposed formula for determining the percentage of the total benefit to be received by each parcel of real property within the proposed special service area and the method for apportioning the assessments to be levied on the real property in the proposed special service area.
        (6) The estimated number of years during which assessments will be levied.
    Sec. 8. (a) A verified petition for the establishment of a special service area may be filed with the legislative body of the unit by:
        (1) fifty-one percent (51%) of the owners of land in the proposed special service area; or
        (2) the owners of fifty-one percent (51%) of the total assessed value of the land for property tax purposes in the proposed special service area.
    (b) A petition requesting the establishment of a special service area must include the following information:
        (1) The boundaries of the proposed special service area.
        (2) The address of each parcel and the name and address of

each owner of land within the proposed special service area.
        (3) A detailed description of the infrastructure projects and local public improvements to be carried out within the proposed special service area, the estimated cost of these projects, and the estimated benefits to accrue to the property owners within the special service area.
        (4) The plan for the application of assessment revenue to the cost of the infrastructure projects and local public improvements within the proposed special service area.
        (5) The proposed formula for determining the percentage of the total benefit to be received by each parcel of real property within the proposed special service area and the method for apportioning the assessments to be levied on the real property in the proposed special service area.
        (6) The estimated number of years during which assessments will be levied.
    Sec. 9. (a) After adoption of a preliminary determination ordinance under section 7 of this chapter or receipt of a petition under section 8 of this chapter, the legislative body shall:
        (1) publish notice of a hearing on the proposed special service area, one (1) time, in accordance with IC 5-3-1 ; and
        (2) mail a copy of the notice to each owner of real property within the proposed special service area;
at least ten (10) days before the hearing.
    (b) The notice described in subsection (a) must include:
        (1) a description of the boundaries of the proposed special service area;
        (2) a description, including cost estimates, of the proposed infrastructure projects and local public improvements proposed to be undertaken in the special service area;
        (3) a summary of the plan for the application of assessment revenue to the cost of the infrastructure projects and local public improvements within the proposed special service area;
        (4) the proposed formula for determining the percentage of the total benefit to be received by each parcel of property;
        (5) the date, time, and location of the hearing; and
        (6) a statement that at the time fixed for the public hearing, the legislative body will receive and hear remonstrances and objections from persons interested in or affected by the proceedings pertaining to the establishment of the proposed special service area and will determine the public utility and benefit of the establishment of the special service area.
    (c) All persons affected in any manner by the hearing, including

all taxpayers and owners of real property within the proposed special service area, shall be considered notified of the pendency of the hearing and of subsequent acts, hearings, adjournments, and proceedings of the legislative body by the notice given under this section.
    (d) At the public hearing, which may be adjourned periodically, the legislative body shall hear all persons interested in the proceedings and shall consider all written remonstrances and objections that have been filed on the questions of:
        (1) the sufficiency of the notice;
        (2) whether the proposed infrastructure projects and local public improvements will be of public utility and benefit;
        (3) whether the proposed assessment formula is appropriate; and
        (4) whether the proposed special service area contains all, or more or less than all, of the property specially benefited by the proposed infrastructure projects and local public improvements.
    Sec. 10. (a) After conducting the public hearing, and upon consideration of the evidence, the legislative body may adopt an ordinance establishing the special service area if it determines that:
        (1) the infrastructure projects and local public improvements to be undertaken will provide special benefits to the owners of real property in the special service area and will be of public utility and benefit; and
        (2) the apportionment of the assessment of benefits is appropriate and bears a rational relationship to the special benefits to be provided.
    (b) An ordinance adopted under this section must include:
        (1) the boundaries of the special service area; and
        (2) the formula for determining the percentage of the total benefit to be received by each parcel of real property within the proposed special service area and for apportioning the assessments to be levied and collected.
    (c) A copy of an ordinance adopted under this section, certified by the unit's clerk, shall be recorded in the office of the recorder of each county in which all or a part of the unit is located.
    Sec. 11. (a) The legislative body must conduct a public hearing before amending or repealing an ordinance establishing a special service area. The legislative body shall give notice of the hearing in accordance with IC 5-3-1. The notice must:
        (1) set forth the substance of the proposed amendment;
        (2) state the time and place where written remonstrances

against the proposed amendment may be filed;
        (3) set forth the time and place of the hearing; and
        (4) state that the legislative body will hear any person who has filed a written remonstrance during the filing period set forth under subdivision (2).
    (b) At the hearing on the amendments or repeal, the legislative body shall consider written remonstrances that are filed.
    Sec. 12. (a) Using the formula for determining the percentage of the total benefit to be received by each parcel of real property within the proposed special service area and for apportioning the assessments to be levied and collected as set forth in the ordinance establishing the special service area, the fiscal officer shall annually determine the proposed assessment for each parcel of real property in the special service area and prepare a schedule of the assessments.
    (b) The fiscal officer shall:
        (1) certify the schedule of assessments prepared under subsection (a) to the auditor of each county in which all or a part of the special service area is located; and
        (2) file a copy of the schedule of assessments prepared under subsection (a) in the office of the recorder of each county in which all or a part of the special service area is located.
    (c) Promptly after certifying the schedule of assessments to the county auditor, the unit's fiscal officer shall send notice, by certified mail, to each owner of real property to be assessed. The notice to each owner of real property must be addressed as the name and address appears on the tax duplicates and the records of the auditor of the county in which the real property is located. The notice must:
        (1) set forth the amount of the proposed assessment; and
        (2) state that a copy of the schedule containing the proposed assessment on each parcel of real property in the special service area is available for inspection in the office of the unit's fiscal officer.
    Sec. 13. (a) Within thirty (30) days after the county auditor receives the certification of the schedule of assessments for the special service area, the auditor shall deliver a copy of the certificate to the county treasurer. Each year, the treasurer shall add the full annual assessment due in that year to the tax statements of the person owning the property affected by the assessment, designating it in a manner distinct from general taxes.
    (b) Assessments for special benefits under this chapter are a lien upon each parcel of real property against which the special benefits

are assessed. The lien attaches at the time the schedule of assessments is filed with the county recorder. The lien is superior to all other liens except tax liens, and the real property is subject to sale as is provided by statute for the sale of real property on which there are delinquent taxes. Upon the sale, the proceeds shall be prorated among the assessment and any delinquent taxes.
    (c) Assessments collected under this chapter shall be paid to the unit's fiscal officer at the same time and in the same manner as the county treasurer distributes property taxes under IC 6-1.1-27.
    Sec. 14. (a) The fiscal officer shall establish a special services area fund and shall deposit in this fund all revenues received from assessments levied and collected under this chapter.
    (b) All income from investment of money in the fund shall remain a part of the fund.
    (c) Money in the fund shall be used by the unit for the financing, construction, operation, or maintenance of infrastructure projects and local public improvements.
    (d) The unit may issue bonds, enter into leases, or incur other obligations to:
        (1) pay any costs associated with the infrastructure projects or local public improvements described in subsection (c);
        (2) reimburse the unit for any money advanced to pay those costs; or
        (3) refund bonds issued or other obligations incurred under this chapter.
    (e) Bonds or other obligations issued under this section:
        (1) are payable solely from money provided under this chapter or other money legally available for that purpose; and
        (2) may, in the discretion of the unit, be sold at a negotiated sale at a price to be determined by the unit or in accordance with IC 5-1-11.
    (f) Leases entered into under this section:
        (1) may be for a term not to exceed fifty (50) years;
        (2) may provide for payments from revenues under this chapter, any other revenues available to the unit, or any combination of these sources;
        (3) may provide that payments by the unit to the lessor are required only to the extent and only for the time that the lessor is able to provide the leased facilities in accordance with the lease;
        (4) must be based upon the value of the facilities leased; and
        (5) may not create a debt of the unit for purposes of the

Constitution of the State of Indiana.
    (g) A lease may be entered into by the legislative body of the unit only after a public hearing at which all interested parties are provided the opportunity to be heard. After the public hearing, the legislative body may approve the execution of the lease on behalf of the unit only if the legislative body finds that the service to be provided throughout the life of the lease will serve the public purpose of the unit and is in the best interests of its residents.
    (h) Upon execution of a lease under this section, the legislative body shall publish notice of the execution of the lease and the approval of the lease in accordance with IC 5-3-1.
    (i) The legislative body of the unit may pledge money in the fund to pay bonds issued, loans obtained, and lease payments or other obligations incurred by or on behalf of the unit or a special taxing district in the unit to provide the facilities described in subsection (c).
    (j) A pledge under subsection (i) is enforceable under IC 5-1-14-4.
    Sec. 15. (a) With respect to any bonds, leases, loans, or obligations for which a pledge has been made under section 14(i) of this chapter, the general assembly covenants with the holders of the obligations that this chapter will not be repealed or amended in a manner that will adversely affect the imposition or collection of the assessments imposed under this chapter if the payment of any of the obligations is outstanding.
    (b) With respect to any bonds, leases, loans, or obligations for which a pledge has been has been made under section 14(i) of this chapter, the legislative body of a unit may not amend or repeal an ordinance adopted under this chapter in a manner that will adversely affect the imposition or collection of the assessments imposed under this chapter if the payment of any of the obligations is outstanding.
    Sec. 16. (a) Any owner of real property in a special service area may file an action contesting the validity of:
        (1) an ordinance adopted under section 10 of this chapter; or
        (2) the assessment schedule established under section 12 of this chapter.
    (b) An action under subsection (a) must be filed:
        (1) in the circuit or superior court of the county in which a majority of the special service area is located; and
        (2) within thirty (30) days after:
            (A) adoption of the ordinance, if the action is to contest the validity of the ordinance; or


            (B) establishment of the assessment schedule, if the action is to contest the validity of the assessment schedule.
    (c) An action to contest the validity of bonds issued or leases entered into under this chapter must be brought within thirty (30) days after the adoption of a bond ordinance or notice of the execution and approval of the lease, as the case may be.

SOURCE: ; (00)HB1319.1.2. -->     SECTION 2. An emergency is declared for this act.