Introduced Version
SENATE BILL No. 145
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-4.
Synopsis: Property tax matters. Provides that the true tax value of
commercial real property used for retail purposes that is at least
100,000 square feet and that is occupied by the original owner or by a
tenant for which the improvement was built shall be determined by the
cost approach for the first 10 years of occupancy of the property, less
normal depreciation and normal obsolescence under the rules and
guidelines of the department of local government finance (department).
Requires the department to annually establish a standard construction
cost per square foot for these properties for each county based on the
average market cost in the county (or region) to be used for purposes
of the assessment, unless the taxpayer has provided the taxpayer's
determination of actual construction costs to the appropriate assessing
official not later than 45 days after the date of the assessment notice
that is the subject of the review. Requires the taxpayer, if a taxpayer
has provided the taxpayer's determination of actual construction cost
within 45 days after the assessment notice, to provide to the county
property tax assessment board of appeals (PTBOA) information
necessary to determine the actual construction costs for the real
property. Requires that the taxpayer's actual construction costs must be
used for purposes of the assessment if the PTBOA determines that
actual construction costs for the real property are less than the standard
construction cost established by the department for the county.
Requires the fiscal officer of the county to establish a separate account
for the tax receipts that are attributable to the property tax assessment
that is the subject of review. Provides that a county assessor or
township assessor (if any) may request the department to perform a
state conducted assessment of these properties for a specific
assessment date. Sets out the procedures for a state conducted
assessment.
Effective: January 1, 2023.
Buchanan, Rogers, Boots, Baldwin
January 4, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
2022 IN 145—LS 6755/DI 120 Introduced
Second Regular Session of the 122nd General Assembly (2022)
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,
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
SENATE BILL No. 145
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-1.1-4-28.5, AS AMENDED BY P.L.86-2018,
2 SECTION 33, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2023]: Sec. 28.5. (a) Money assigned to a property
4 reassessment fund under section 27.5 of this chapter may be used only
5 to pay the costs of:
6 (1) the reassessment of one (1) or more groups of parcels under
7 a county's reassessment plan prepared under section 4.2 of this
8 chapter, including the computerization of assessment records;
9 (2) payments to assessing officials and hearing officers for county
10 property tax assessment boards of appeals under IC 6-1.1-35.2;
11 (3) the development or updating of detailed soil survey data by
12 the United States Department of Agriculture or its successor
13 agency;
14 (4) the updating of plat books;
15 (5) payments for the salary of permanent staff or for the
16 contractual services of temporary staff who are necessary to assist
17 assessing officials;
2022 IN 145—LS 6755/DI 120 2
1 (6) making annual adjustments under section 4.5 of this chapter;
2 and
3 (7) the verification under 50 IAC 27-4-7 of sales disclosure forms
4 forwarded to:
5 (A) the county assessor; or
6 (B) township assessors (if any);
7 under IC 6-1.1-5.5-3; and
8 (8) state conducted assessments requested under section 31.8
9 of this chapter.
10 Money in a property reassessment fund may not be transferred or
11 reassigned to any other fund and may not be used for any purposes
12 other than those set forth in this section.
13 (b) All counties shall use modern, detailed soil maps in the
14 reassessment of agricultural land.
15 (c) The county treasurer of each county shall, in accordance with
16 IC 5-13-9, invest any money accumulated in the property reassessment
17 fund. Any interest received from investment of the money shall be paid
18 into the property reassessment fund.
19 (d) An appropriation under this section must be approved by the
20 fiscal body of the county after the review and recommendation of the
21 county assessor. However, in a county with a township assessor in
22 every township, the county assessor does not review an appropriation
23 under this section, and only the fiscal body must approve an
24 appropriation under this section.
25 SECTION 2. IC 6-1.1-4-31.8 IS ADDED TO THE INDIANA
26 CODE AS A NEW SECTION TO READ AS FOLLOWS
27 [EFFECTIVE JANUARY 1, 2023]: Sec. 31.8. (a) As used in this
28 section, "department" refers to the department of local
29 government finance.
30 (b) This section applies only to a real property assessment of a
31 commercial building or structure used for retail purposes to which
32 section 43.5 of this chapter applies.
33 (c) A county assessor or a township assessor (if any) may
34 request the department to perform a state conducted assessment
35 of a particular property in the county for a specified assessment
36 date. The request must be made in the form and in the manner
37 prescribed by the department.
38 (d) If the department receives a request for a state conducted
39 assessment of a particular property in a county, the department
40 shall assume the duties of the county assessor with regard to the
41 assessment of that property for that assessment date.
42 (e) Before assuming the duties of a county assessor, the
2022 IN 145—LS 6755/DI 120 3
1 department shall transmit a notice of the state conducted
2 assessment of the property for the assessment date to the county
3 assessor, the county fiscal body, and the county auditor.
4 (f) A county assessor who requests the department to perform
5 a state conducted assessment under this section shall make
6 available and provide access to all information requested by the
7 department or the department's contractor that is related to the
8 assessment of real property that is subject to the state conducted
9 assessment in the county.
10 (g) The department may enter into a contract with a
11 professional appraising firm to conduct a requested assessment of
12 the property under this section.
13 (h) After receiving the report of the assessed value of the
14 property from the appraisal firm acting under a contract described
15 in subsection (g), the department shall give notice to the taxpayer
16 and the county assessor, by mail, of the amount of the assessment
17 of the property.
18 (i) The department shall forward to the auditor of the county in
19 which the state conducted assessment occurs a bill for services as
20 agreed to by the department and the county under specific terms
21 contained in the contract described in subsection (g). The county
22 shall pay the bill, without appropriation, from the county
23 reassessment fund.
24 SECTION 3. IC 6-1.1-4-43.5 IS ADDED TO THE INDIANA
25 CODE AS A NEW SECTION TO READ AS FOLLOWS
26 [EFFECTIVE JANUARY 1, 2023]: Sec. 43.5. (a) This section applies
27 to a real property assessment of commercial real property used for
28 retail purposes:
29 (1) for the 2023 assessment date and assessment dates
30 thereafter; and
31 (2) if the commercial real property is:
32 (A) at least one hundred thousand (100,000) square feet;
33 and
34 (B) occupied by the original owner or by a tenant for
35 which the improvement was built.
36 (b) This section does not apply to real property described in
37 subsection (a) if the real property is sold:
38 (1) by the original owner for which the improvement was
39 built; and
40 (2) to a subsequent purchaser in an arms length transaction.
41 (c) This subsection applies to a taxpayer that files a notice under
42 IC 6-1.1-15 after December 31, 2022, requesting a review of the
2022 IN 145—LS 6755/DI 120 4
1 assessment of the taxpayer's real property that is subject to this
2 section. In determining the true tax value of real property under
3 this section, true tax value shall be determined by the cost
4 approach for the first ten (10) years of occupancy of the subject
5 property, less normal depreciation and normal obsolescence under
6 the rules and guidelines of the department of local government
7 finance. For purposes of this subsection, the land value shall be
8 assessed separately. The assessed value of the land underlying the
9 improvements assessed under this section may be assessed or
10 challenged based on the market value of comparable land. For
11 purposes of this section, economic and functional obsolescence of
12 the subject property may be determined by application of
13 aggregate market data, but shall not be determined by comparison
14 to any other individual parcels.
15 (d) Beginning after December 31, 2022, the department of local
16 government finance shall annually establish for each county a
17 standard construction cost per square foot for real property that
18 is subject to this section. The department's construction cost in a
19 county must be based on average market costs in the region, if
20 there is insufficient data to determine a standard construction cost
21 for the county based on average market costs in that county.
22 (e) This subsection applies to a taxpayer that files a notice under
23 IC 6-1.1-15 after December 31, 2022, requesting a review of the
24 assessment of the taxpayer's real property that is subject to this
25 section. For purposes of applying the cost approach, the
26 construction costs for the real property shall be determined by
27 applying the standard construction cost per square foot established
28 by the department of local government finance for the county in
29 which the real property is located, unless the taxpayer has
30 provided to the appropriate county or township assessing official,
31 not later than forty-five (45) days after the date of the assessment
32 notice that is the subject of the review, the taxpayer's
33 determination of actual construction costs for the real property
34 and all the information relied on by the taxpayer in making the
35 taxpayer's determination. If the taxpayer has provided the
36 taxpayer's determination of actual construction costs to the
37 appropriate county or township assessing official not later than
38 forty-five (45) days after the date of the assessment notice, not later
39 than ten (10) days prior to the scheduled hearing by the county
40 property tax assessment board of appeals the taxpayer shall
41 provide to the county property tax assessment board of appeals all
42 information necessary to determine the actual construction costs
2022 IN 145—LS 6755/DI 120 5
1 for the real property. If the information provided by the taxpayer
2 establishes that the actual construction costs for the real property
3 are less than the standard construction cost established by the
4 department for the county, the normal depreciation and normal
5 obsolescence factor as described in subsection (c) shall be deducted
6 from the actual construction costs rather than the standard
7 construction cost established by the department.
8 (f) If a taxpayer files a notice under IC 6-1.1-15 after December
9 31, 2022, requesting a review of the assessment of the taxpayer's
10 real property that is subject to this section, the fiscal officer of the
11 county shall establish a separate account for purposes of the
12 review. The fiscal officer shall deposit in the account the tax
13 receipts that are attributable to the property tax assessment that
14 is the subject of the review. Money transferred to an account is not
15 considered miscellaneous revenue. Both the taxing units and the
16 department of local government finance shall disregard any
17 balance in the account in the determination of the taxing units'
18 property tax levy, property tax rate, and budget until the calendar
19 year in which the money is released from the account. The fiscal
20 officer of the county, following a final determination of the review,
21 or final judgement on an appeal if the review is appealed, shall
22 disburse the money deposited in the account in accordance with the
23 final determination or final judgment.
2022 IN 145—LS 6755/DI 120