Indiana Administrative Code
Title 50 - DEPARTMENT OF LOCAL GOVERNMENT FINANCE
Article 8 - TAX INCREMENT FINANCE
Rule 2 - Determination and Use of Tax Increment
Section 2-13 - Tax increment; use

Universal Citation: 50 IN Admin Code 2-13

Current through September 18, 2024

Authority: IC 6-1.1-39; IC 36-7-14; IC 36-7-15.1

Affected: IC 6-1.1-39-2; IC 8-22-3.5; IC 36-1-10; IC 36-7-14; IC 36-7-15.1

Sec. 13.

(a) Tax increment in an allocation area established under IC 36-7-14 or IC 36-7-15.1, or in an economic development area, is paid into an allocation fund that may be used only to do one (1) or more of the following:

(1) Pay the principal of and interest on any obligations payable solely from allocated tax proceeds which are incurred by the redevelopment district for the purpose of financing or refinancing the redevelopment of that allocation area.

(2) Establish, augment, or restore the debt service reserve for bonds payable solely or in part from allocated tax proceeds in that allocation area.

(3) Pay the principal of and interest on bonds payable from allocated tax proceeds in that allocation area and from the special tax levied under IC 36-7-14-27 or IC 36-7-15.1-19.

(4) Pay the principal of and interest on bonds issued by the unit to pay for local public improvements in that allocation area or serving the allocation area in counties other than Marion County.

(5) Pay premiums on the redemption before maturity of bonds payable solely or in part from the tax increment in that allocation area.

(6) Make payments on leases payable from tax increment in that allocation area under IC 36-7-14-25.2 or IC 36-7-15.1-17.1.

(7) Reimburse the unit for expenditures made by it for local public improvements (which include buildings, parking facilities, and other items described in IC 36-7-14-25.1(a) or IC 36-7-15.1-17(a)) in that allocation area or serving the allocation area in counties other than Marion County.

(8) Reimburse the unit for rentals paid by it for a building or parking facility in that allocation area or serving the allocation area in counties other than Marion County under any lease entered into under IC 36-1-10.

(9) In counties other than Marion County, pay all or a portion of a property tax replacement credit to taxpayers in an allocation area as determined by the redevelopment commission. The amount of the credit is determined under IC 36-7-14-39(b)(2)(I). (This is a credit that is paid to taxpayers from collected tax increment, unlike the additional credit and the housing program credit which reduce the tax increment collected.)

(b) Tax increment in an allocation area established under IC 36-7-15.1-32 with respect to a program for housing is paid into a special fund that may be used only for purposes related to the accomplishment of the program, including the following:

(1) The construction, rehabilitation, or repair of residential units within the allocation area.

(2) The construction, reconstruction, or repair of infrastructure (such as streets, sidewalks, and sewers) within or serving the allocation area.

(3) The acquisition of real property and interests in real property within the allocation area.

(4) The demolition of real property within the allocation area.

(5) To provide financial assistance to enable individuals and families to purchase or lease residential units within the allocation area. However, financial assistance may be provided only to those individuals and families whose income is at or below the county's median income for individuals and families, respectively.

(6) To provide financial assistance to neighborhood development corporations to permit them to provide financial assistance for the purposes described in subdivision (5).

(7) To provide each taxpayer in the allocation area a credit for property tax replacement as determined under IC 36-7-15.1-35

(c) through IC 36-7-15.1-35(d). However, this credit may be provided by the commission only if the city-county legislative body establishes the credit by ordinance adopted in the year before the year in which the credit is provided. (This is a credit that is paid to taxpayers from collected tax increment, unlike the additional credit and the housing program credit which reduce the tax increment collected.)

(c) Tax increment in an economic development district declared under IC 6-1.1-39-2 is paid into a special fund that may be used only to pay the principal of and interest on obligations owed by the unit under IC 4-4-8[IC 4-4-8 was repealed by P.L. 4-2005, SECTION 148, effective February 9, 2005.] for the financing of industrial development programs in, or serving, that economic development district.

(d) The allocation fund or special fund may not be used for the operating expenses of the redevelopment commission.

(e) A unit may be reimbursed under subsection (a)(7) or (a)(8) only for expenditures that qualify under that subsection and that were made after the adoption of the resolution in which the allocation area was declared. Supervisory expenses related to redevelopment projects in the allocation area that are paid to individuals retained to supervise such projects qualify as expenditures for which reimbursement can be made.

(f) Except as provided in subsection (g), the redevelopment commission shall direct the county auditor to pay to the taxing units in which the allocation area is located any part of the tax increment in excess of the amount that will be used in the following year to meet the obligations of the redevelopment commission (including the funding of all accounts and reserves that might be required under a contract with bondholders).

(g) For these allocation areas governed by IC 36-7-14, if any part of the allocation area is located in an enterprise zone created under IC 4-4-6.1[IC 4-4-6.1 was repealed by P.L. 4-2005, SECTION 148, effective February 9, 2005.], then the taxing unit that designated the allocation area shall create a special zone fund and the redevelopment commission may not direct the county auditor to pay excess amounts to the taxing units. The county auditor shall deposit in the special zone fund incremental tax proceeds that exceed the amount needed for payments described in subsection (a). The special zone fund is used for certain programs related to the enterprise zone.

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