Introduced Version




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 property taxes.

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)

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.
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    A BILL FOR AN ACT to amend the Indiana Code concerning transportation.

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, hold, 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 IC 8-9.5-8-8;
        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 its responsibilities.
        (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
            (B) receive;
        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 responsibilities.
        (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 facilities;
            (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 leases.
    (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 the following:
        (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 subsection (a).

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 improvement project.
        (2) To widen or straighten a highway.
        (3) To clear and remove obstructions to vision at crossings and curves.
        (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 right-of-way.
    (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 taxation.
     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 highway project.
    (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 purchased.
    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 IC 6-1.1.
    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.