LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6580 NOTE PREPARED: Jan 5, 2022
BILL NUMBER: HB 1260 BILL AMENDED:
SUBJECT: Department of Local Government Finance.
FIRST AUTHOR: Rep. Leonard BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: Property Record Cards: This bill provides that a county assessor shall provide
electronic access to property record cards on the county's official Internet web site.
Property Tax Exemptions: The bill provides that the authority of a property tax assessment board of appeals
(PTABOA) is not limited to review the ongoing eligibility of a property for an exemption.
Assessment Appeals: The bill defines the term "taxpayer" for purposes of the procedures for review and
appeal of assessments and corrections of errors. It provides that in an appeal, an assessment as last
determined by an assessing official or the PTABOA is presumed to equal a property's true tax value until
rebutted by evidence presented by the parties.
Certified AV Amendments: This bill provides that a county auditor shall submit a certified statement to the
Department of Local Government Finance (DLGF) not later than September 1 in a manner prescribed by the
DLGF.
PTABOA Reports: For reports filed by PTABOAs with the DLGF, the bill changes the requirement for the
total number of "notices" to be filed to the total number of "appeals" to be filed. It requires additional
information to be filed in such reports.
Tax Representative: This bill provides that the term "tax representative" does not include an attorney who
is a member in good standing of the Indiana bar or any person who is a member in good standing of any other
state bar and who has been granted temporary admission to the Indiana bar in order to represent a party
before the PTABOA or the DLGF.
HB 1260 1 Assessor Complaints: The bill provides that the DLGF may not review certain written complaints if such a
complaint is related to a matter that is under appeal.
Residential Property Definition: This bill provides that for certain airport development zones and allocation
areas established after June 30, 2024, "residential property" refers to the assessed value of property that is
allocated to the 1% homestead land and improvement categories in the county tax and billing software
system, along with the residential assessed value as defined for purposes of calculating the rate for the local
income tax property tax relief credit designated for residential property.
Referendum Question: The bill provides formulas for school corporations that propose to impose property
taxes under a referendum tax levy.
Cumulative Funds: This bill removes the remaining cumulative funds for the requirement or adjust maximum
tax rates after reassessment or annual adjustment.
Pro Bono Legal Services Fee: The bill removes the sunset provision on the $1 pro bono legal service fee.
Repeal: The bill also repeals various property tax provisions.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Tax Representative: This provision could reduce DLGF workload. The
DLGF will no longer be charged with granting authority to out of state attorneys to represent a client before
the county PTABOAs and the DLGF. Under the bill, an out of state attorney may represent clients as long
as they have been granted temporary admission to the Indiana bar.
Assessor Complaints: Under current law, a taxpayer may submit a written complaint to the DLGF if the
taxpayer has reason to believe the assessing official failed to adhere to Uniform Standards of Professional
Appraisal Practice (USPAP) or does not have the necessary competency to perform the assessment. This bill
provides that the DLGF may not review such a complaint if related to a matter currently under appeal. This
provision could delay the review of some complaints until the related appeal has been adjudicated.
Airport Loans: This provision may reduce DLGF workload. Under current law, the DLGF must review
airport loan contracts and either approve, disapprove, or reduce the amount of the loan. The DLGF will no
longer review these contracts under the bill.
Lease Agreements: This provision may reduce DLGF workload. Under current law, the DLGF must approve
all noncapital leases with a term exceeding 10 years. The DLGF will no longer review these leases under the
bill.
Sale-Leaseback: This provision may reduce DLGF workload. Under current law, the DLGF must approve
all sale-leaseback transactions. The DLGF will no longer review these under the bill.
Explanation of State Revenues: Pro Bono Legal Services Fee: The courts will continue to collect this fee
from persons who pay a civil filing fee, a probate fee, or a small claims filing fee. [Current law provides that
this fee will not be collected beginning in FY 2023.]
Clerks of circuit courts, city and town courts, small claims courts, and township courts collect this fee and
HB 1260 2 forward it to the Auditor of State. The Auditor’s office then transfers the revenue to the Indiana Bar
Foundation, which administers the proceeds to assist or establish approved pro bono legal services programs.
The revenue that has been collected from this fee since FY 2018 is shown in the following table.
Fee Revenues Collected by Fiscal Year
2018 2019 2020 2021
$341,105$368,275$304,839$291,596
Explanation of Local Expenditures: Property Record Cards: This provision will result in an additional
expense for computer services in a small number of counties. Most counties already provide access to
property record cards through their website. There are currently 17 counties that do not do so. The estimated
cost for a county to add online property record cards to their website is about $600 per county.
Certified AV Amendments: This provision has little to no fiscal impact. Under current law, county auditors
must certify assessed values (AV) to the DLGF by August 1 of each year. Auditors are permitted to amend
their certifications before the DLGF certifies tax rates. This provision specifies that amended AV
certifications must be submitted to DLGF by September 1 of each year.
Additionally, current law requires that the county auditor must hold a public hearing before making the
amended certification unless the amendment (1) corrects a mathematical error, (2) adds the AV of omitted
property, or (3) will not result in a tax rate increase. This provision deletes the exceptions and requires a
public hearing in all cases.
PTABOA Reports: This provision may increase workload for county PTABOAs. Under current law,
PTABOAs must prepare and submit an annual report regarding assessment appeals to the DLGF and the
Legislative Services Agency. This provision adds additional detail to the reports.
Referendum Question: This provision may increase some county auditors’ workloads. Under current law,
the county auditor must calculate the estimated average property tax increase percentage that a homestead
and a business would pay to the civil taxing unit or school corporation seeking a controlled project, school
operating, or school safety referendum levy. Those increase percentages are included in the public question.
This provision applies the same requirements to a referendum to extend a levy and changes the computation
of the business increase percentage to start with the average business AV rather than the average homestead
AV.
Redevelopment Commission Property Disposal: This provision may reduce the number of public hearings
that as redevelopment commission must hold. Under current law, a redevelopment commission must hold
a public hearing before it may dispose of any real property. This provision limits the need for a public
hearing to:
(1) Property that was acquired by the commission to carry out a project; and which the commission
has, at a public hearing, decided that the property is not needed to complete the activity in the project
area;
(2) Real property acquired that is not in a project area;
(3) Parcels secured from the county that were acquired by the county in the tax sale process; and
(4) Real property donated or transferred to the commission.
HB 1260 3 Explanation of Local Revenues: Property Tax Exemptions: This provision has little to no fiscal impact. The
bill clarifies that the county PTABOA is not prohibited from reviewing the ongoing eligibility of a property
for an exemption.
Maximum Levy Appeals: This provision will allow more taxing units to qualify for a higher maximum levy
because of high unit AV growth. Current law allows taxing units to appeal for a higher maximum levy if their
3 year average AV growth percentage exceeds the statewide growth percentage by at least 2%. The formula
includes transitional calculations that adjust for the implementation of the statewide inventory deduction
(2007) and the supplemental standard deduction (2008). Now, after the transition, these calculations skew
the actual AV growth percentage. The DLGF reports that 168 taxing units were eligible for a three-year
growth appeal for taxes payable in 2020 and that an additional 50 units would have been eligible without the
transitional adjustments. If more taxing units become eligible and receive higher maximum levies, their tax
rates will increase, potentially causing increased tax cap losses for those units and intersecting units.
Assessment Appeals: This provision makes several changes to the property tax appeals process. It is uncertain
as to what overall effect this provision will have on assessments and appeals.
The bill removes the assessor’s burden of proof in cases where an assessment rises by more than 5% and in
cases where the assessor changes the underlying parcel characteristics of a parcel. However, under the bill,
an assessment that has increased by more than 5% is not presumed to be the parcel’s true tax value. The bill
requires the Indiana Board of Tax Review (IBTR) to determine the value of a property under appeal based
on the totality of the evidence. (Currently, the IBTR must choose either the assessor’s valuation or the
taxpayer’s valuation).
Residential Property Definition: This provision clarifies the definition of residential property as it relates to
the base AV in a TIF area. Most TIF areas exclude residential AV from the TIF increment. To do this, all
residential AV is added to the base AV for the allocation area. For new TIFs established after June 30, 2024,
the bill defines residential property as all homesteads plus the residential value that would qualify for the
nonhomestead residential local income tax (LIT) credit. This clarification does not apply to any existing TIF
areas.
Cumulative Funds: This provision could increase tax rates for taxing units that would not otherwise re-adopt
their cumulative fund after rate adjustment. Under current law, the maximum tax rates for the fire territory
equipment replacement fund, cumulative township vehicle fund, and township park and recreation
cumulative fund must be adjusted each year to neutralize the increases in assessed value from annual
adjustments and general reassessments. After the tax rate is reduced, a taxing unit may re-adopt their
cumulative fund at the maximum statutory rate. Under this bill, the maximum rates will no longer be
adjusted, eliminating the need for the taxing units to re-adopt their cumulative funds.
Mortgage Deductions: This provision has little to no fiscal impact. The mortgage deduction equals up to
$3,000 in AV, limited to (1) the amount of mortgage indebtedness, and (2) one half of the AV of the
property. This provision clarifies which year’s AV is to be considered for the limit.
State Agencies Affected: Department of Local Government Finance; Indiana Board of Tax Review.
Local Agencies Affected: County auditors; Local assessors; County property tax boards of appeal; Local
civil taxing unit sand school corporations; Clerks of circuit, city and town, small claims, and township small
claims courts.
HB 1260 4 Information Sources: Emily Crisler, General Counsel, DLGF, 317-232-3777; Auditor of State.
Fiscal Analyst: Bob Sigalow, 317-232-9859; Corrin Harvey, 317-234-9438.
HB 1260 5