SENATE BILL No. 305
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-23.
Synopsis: Purchase options for state highway projects. Authorizes the
department of transportation to acquire purchase options for property
needed for state highway projects. Provides that real property to which
the department has acquired only a purchase option remains subject to
Effective: July 1, 2011.
January 10, 2011, read first time and referred to Committee on Homeland Security,
Transportation & Veterans Affairs.
First Regular Session 117th General Assembly (2011)
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SENATE BILL No. 305
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 8-23-2-6; (11)IN0305.1.1. -->
SECTION 1. IC 8-23-2-6, AS AMENDED BY P.L.235-2005,
SECTION 123, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2011]: Sec. 6. (a) The department, through the
commissioner or the commissioner's designee, may do the following:
(1) Acquire by purchase, gift, or condemnation, sell, abandon,
own in fee or a lesser interest, including a purchase option,
or lease property in the name of the state, or otherwise dispose of
or encumber property to carry out its responsibilities.
(2) Contract with persons outside the department to do those
things that in the commissioner's opinion cannot be adequately or
efficiently performed by the department.
(3) Enter into:
(A) a contract with the Indiana finance authority under
IC 8-9.5-8-7; or
(B) a lease with the Indiana finance authority under
for the construction, reconstruction, improvement, maintenance,
repair, or operation of toll road projects under IC 8-15-2 and toll
bridges under IC 8-16-1.
(4) Sue and be sued, including, with the approval of the attorney
general, the compromise of any claims of the department.
(5) Hire attorneys.
(6) Perform all functions pertaining to the acquisition of property
for transportation purposes, including the compromise of any
claims for compensation.
(7) Hold investigations and hearings concerning matters covered
by orders and rules of the department.
(8) Execute all documents and instruments necessary to carry out
(9) Make contracts and expenditures, perform acts, enter into
agreements, and make rules, orders, and findings that are
necessary to comply with all laws, rules, orders, findings,
interpretations, and regulations promulgated by the federal
government in order to:
(A) qualify the department for; and
federal government funding on a full or participating basis.
(10) Adopt rules under IC 4-22-2 to carry out its responsibilities.
(11) Establish regional offices.
(12) Adopt a seal.
(13) Perform all actions necessary to carry out the department's
(14) Order a utility to relocate the utility's facilities and coordinate
the relocation of customer service facilities if:
(A) the facilities are located in a highway, street, or road; and
(B) the department determines that the facilities will interfere
with a planned highway or bridge construction or
improvement project funded by the department.
(15) Reimburse a utility:
(A) in whole or in part for extraordinary costs of relocation of
(B) in whole for unnecessary relocations;
(C) in accordance with IC 8-23-26-12 and IC 8-23-26-13;
(D) in whole for relocations covered by IC 8-1-9; and
(E) to the extent that a relocation is a taking of property
without just compensation.
(16) Provide state matching funds and undertake any surface
transportation project eligible for funding under federal law.
However, money from the state highway fund and the state
highway road construction and improvement fund may not be
used to provide operating subsidies to support a public
transportation system or a commuter transportation system.
(b) In the performance of contracts and leases with the Indiana
finance authority, the department has authority under IC 8-15-2, in the
case of toll road projects, and IC 8-16-1, in the case of toll bridges,
necessary to carry out the terms and conditions of those contracts and
(c) The department shall:
(1) classify as confidential any estimate of cost prepared in
conjunction with analyzing competitive bids for projects until a
bid below the estimate of cost is read at the bid opening;
(2) classify as confidential that part of the parcel files that contain
appraisal and relocation documents prepared by the department's
land acquisition division; and
(3) classify as confidential records that are the product of systems
designed to detect collusion in state procurement and contracting
that, if made public, could impede detection of collusive behavior
in securing state contracts.
This subsection does not apply to parcel files of public agencies or
affect IC 8-23-7-10.
SOURCE: IC 8-23-3-10; (11)IN0305.1.2. -->
SECTION 2. IC 8-23-3-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. (a) Investigations
conducted by the department to determine the reasonably anticipated
future need for federal aid highways and state highways may include
(1) Traffic surveys.
(2) The study of transportation facilities.
(3) Research concerning the development of the regions of
Indiana and contiguous territory, including the effects of growth
and changes in population and economic activity.
(4) The collection and review of data relating to factors that affect
the judicious planning of the construction, improvement, and
maintenance of highways, including the feasibility of
purchasing and exercising options under IC 8-23-28.
(b) An investigation conducted under subsection (a) may interrupt
and stop traffic if necessary.
(c) An investigation conducted under subsection (a) may be
conducted in cooperation with counties, municipalities, metropolitan
planning organizations, the United States, other states, government
agencies, or other persons.
(d) The department may enter into an agreement with an entity
described in subsection (c) to conduct an investigation under
SOURCE: IC 8-23-7-2; (11)IN0305.1.3. -->
SECTION 3. IC 8-23-7-2, AS AMENDED BY P.L.35-2005,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2011]: Sec. 2. The department may acquire real property,
including by acquiring a purchase option under IC 8-23-28, for any
purpose necessary to carry out this article, including the following:
(1) To locate, relocate, construct, reconstruct, repair, or maintain
a state highway, including area for:
(A) the placement of a utility facility within the right-of-way
of the state highway system; or
(B) the relocation of a utility facility within the right-of-way of
the state highway system due to interference with a highway
(2) To widen or straighten a highway.
(3) To clear and remove obstructions to vision at crossings and
(4) To construct weigh stations and rest areas.
(5) To provide scenic easements and other areas necessary to
cooperate with the federal government or carry out a federal law.
(6) To facilitate long-range transportation planning.
SOURCE: IC 8-23-7-31; (11)IN0305.1.4. -->
SECTION 4. IC 8-23-7-31 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 31. (a) Whenever the
department acquires real property, rights, or easements for the
construction, repair, and maintenance of a state highway, a legal
description of all rights-of-way and easements, including the area of the
land acquired, shall be filed by the department in the office of the
recorder in the county in which the real property is located. The
description shall be recorded in the deed records of the county. No fee
may be charged for filing and recording the description. The
department shall also file the description with the county auditor.
(b) Real property and interests in real property, other than a
purchase option under IC 8-23-28,
acquired for permanent highway
purposes are exempt from taxation from the date of acquisition,
provided that all taxes, interest, and penalties recorded on the property
tax duplicates have been paid. Where real property or interests in real
property are acquired after the assessment date of any year but before
December 31, the taxes on the property in the ensuing year are not a
lien on the property and shall be removed from the tax duplicates by
the county auditor. A property owner who on or after March 1, 1965,
conveyed real property or rights in real property to the department and
who after July 8, 1965, is assessed taxes upon the property or rights
conveyed and who pays the taxes by reason of the failure of the
department to properly record the interest in the real property conveyed
with the county auditor and recorder for tax purposes may recover the
amount of the taxes from the department.
SOURCE: IC 8-23-8-3; (11)IN0305.1.5. -->
SECTION 5. IC 8-23-8-3 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2011]: Sec. 3. (a) The department or a highway
authority may acquire private or public property and property rights for
limited access facilities and service roads, including purchase options
and rights of access, air, view, and light, by gift, devise, purchase, or
condemnation for the laying out, widening, or improvement of
highways and streets within their respective jurisdictions.
(b) In the acquisition of property or property rights for a limited
access facility or a service road connected with a facility, the state,
county, or municipality may acquire an entire lot, block, or tract of
land, if the interests of the public will be best served, even though the
entire lot, block, or tract is not immediately needed for the
(c) Court proceedings necessary to acquire property or property
rights under this section take precedence over all other causes not
involving the public interest in all courts.
SOURCE: IC 8-23-18-1; (11)IN0305.1.6. -->
SECTION 6. IC 8-23-18-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. The authority given
to the department to acquire the fee simple title to public or private real
property, rights, including purchase options, or easements needed or
reasonably necessary for a state highway includes the right to acquire
real property or a right in, to, or over real property owned, held, or
claimed by a city, town, township, county, school corporation or other
municipal corporation, or political subdivision of the state, public
corporation, instrumentality, or agency supported in whole or in part by
SOURCE: IC 8-23-28; (11)IN0305.1.7. -->
SECTION 7. IC 8-23-28 IS ADDED TO THE INDIANA CODE AS
CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 28. Purchase Options
Sec. 1. As used in this chapter, "purchase option" means a
transaction in which the department pays a landowner a specified
amount of money for the right to purchase the landowner's real
property for a state highway project within a set time for a
specified price but is not obligated to purchase the property.
Sec. 2. As used in this chapter, "state highway project" means
the construction or reconstruction of a state highway (as defined
in IC 8-14-10-4). The term does not include maintenance of or
repairs to a state highway.
Sec. 3. (a) The department may acquire purchase options for
property needed, or proposed to be needed, for all or part of a state
(b) The department may use any money appropriated to the
department for highway construction or reconstruction to acquire
a purchase option under this section.
Sec. 4. A purchase option may include an option for the
department to renew the purchase option at a specified time. The
renewal option must specify the manner in which the price of the
renewal option is calculated.
Sec. 5. The purchase of an option under this chapter does not
relieve the department of any responsibility to comply with federal
laws, regulations, or guidelines concerning the evaluation of
alternatives to the state highway project for which the option is
Sec. 6. The department shall structure the acquisition of a
purchase option under this chapter to maximize the part of the
purchase price that may qualify as state matching funds under
federal law if the department exercises the purchase option on a
state highway project that is otherwise eligible for matching
federal aid highway funds.
Sec. 7. A purchase option acquired by the department under this
chapter does not affect the status of the real property that is the
subject of the purchase option for purposes of taxation under
Sec. 8. The department shall establish guidelines to ensure that
the department or an agent or employee of the department does
not engage in land speculation when acquiring purchase options.