1. (a) As used in this section, "authority" refers to the Indiana housing and community development authority created by IC 5-20-1-3 .
2. (b) As used in this section, "capacity related fee" has the meaning set forth in section 101.6 of this chapter.

3. (c) As used in this section, "eligible customer" means a not-for-profit organization that is subject to IC 23-17 and is recognized as tax exempt under Section 501(c) of the Internal Revenue Code of 1986 and that:

   1. (1) has entered into an agreement:

      1. (A) with the authority; and
      2. (B) under which the person will construct workforce housing in Indiana; and
   2. (2) seeks to connect the workforce housing described in subdivision (1) to the water or wastewater system of a utility under the terms of a special contract with the utility under subsection (g) or (h).
4. (d) As used in this section, "tap fee" has the meaning set forth in section 101.6 of this chapter.

5. (e) As used in this section, "utility" means a:

   1. (1) public utility (as defined in section 1(a) of this chapter);
   2. (2) municipally owned utility (as defined in section 1(h) of this chapter), including a sewer utility operated under IC 36-9-23 or IC 36-9-25 ;
   3. (3) not-for-profit utility (as defined in section 125(a) of this chapter), including a utility company owned, operated, or held in trust by a consolidated city;
   4. (4) cooperatively owned corporation;
   5. (5) conservancy district established under IC 14-33 ; or

   6. (6) regional district established under IC 13-26 ;

      that provides water service or wastewater service, or both, to the public, regardless of whether the entity described in subdivisions (1) through (6) is under the jurisdiction of the commission for the approval of rates and charges with respect to the water service or wastewater service that is provided.

6. (f) As used in this section, "workforce housing" means a single family dwelling or duplex that is:

   1. (1) constructed for a household with an income, adjusted by family size, that is less than the area median income, as published by the United States Department of Housing and Urban Development;
   2. (2) offered for sale or lease to a household described in subdivision (1) for a monthly amount that represents not more than thirty percent (30%) of the household's monthly income; and

   3. (3) located in reasonable proximity to employment.

      The term does not include an apartment building, a multi-family development other than a duplex, or any other building that is not described in subdivision (1) or (2).

7. (g) Subject to subsection (i) and notwithstanding any law or rule governing the extension of service or the imposition of capacity related fees or tap fees, a utility may not charge or collect a capacity related fee or a tap fee to an eligible customer for connecting workforce housing to the utility's water or wastewater system:

   1. (1) to the extent that the extension of service to the workforce housing to be connected will result in a positive contribution to the utility's overall cost of service over a twenty (20) year period; and
   2. (2) if the terms and conditions of the connection are set forth in a special contract executed by the eligible customer and the utility.

8. (h) Subject to subsection (i) and notwithstanding any law or rule governing the extension of service or the imposition of capacity related fees or tap fees, if a utility determines that the extension of service to workforce housing at the request of an eligible entity will not result in a positive contribution to the utility's overall cost of service over a twenty (20) year period, the utility may charge and collect from the eligible customer, under terms and conditions agreed to under a special contract between the utility and the eligible customer, a capacity related fee or a tap fee that does not exceed the difference between:

   1. (1) the capacity related fee or tap fee that would otherwise apply in connecting the workforce housing to the utility's water or wastewater system; minus
   2. (2) the contribution to the utility's overall cost of service over a twenty (20) year period that will result from the extension of service to the workforce housing.
9. (i) A utility may apply discretion with respect to the number of special contracts that it enters into with eligible customers under subsection (g) or (h) at any given time, so as to ensure that any costs associated with such special contracts are not unreasonably subsidized by other customers of the utility.

10. (j) The:

    1. (1) exemption from a capacity related fee or a tap fee under subsection (g); or

    2. (2) reduction in a capacity related fee or a tap fee under subsection (h);

       is not discriminatory for purposes of this chapter or any other law regulating rates and charges for service.

As added by P.L.127-2026, SEC.2.