*SB0145.1*
January 26, 2022
SENATE BILL No. 145
_____
DIGEST OF SB 145 (Updated January 25, 2022 10:12 am - DI 129)
Citations Affected: IC 6-1.1.
Synopsis: Property tax matters. Provides that a county assessor or
township assessor (if any) may request the department of local
government finance (department) to perform a state conducted
assessment of these properties for a specific assessment date. Sets out
the procedures for a state conducted assessment. 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. Requires the department to annually
establish a standard construction cost per square foot for these
properties for each region based on the average market cost in the state
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
(Continued next page)
Effective: January 1, 2023.
Buchanan, Rogers, Boots, Baldwin,
Randolph Lonnie M
January 4, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
January 25, 2022, amended, reported favorably — Do Pass.
SB 145—LS 6755/DI 120 Digest Continued
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. 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 if a taxpayer
files a notice of an assessment appeal and a major roadway or traffic
pattern located on the property is changed, that change must be
considered in the determination of the property's assessed valuation in
the appeal.
SB 145—LS 6755/DI 120SB 145—LS 6755/DI 120 January 26, 2022
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,
additions will appear in this style type, and deletions will appear in this style type.
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;
SB 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
SB 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:
20 (1) services as agreed to by the department and the county
21 under specific terms contained in the contract described in
22 subsection (g); and
23 (2) all administrative costs incurred by the department.
24 The county shall pay the bill, without appropriation, from the
25 county reassessment fund.
26 (j) The county shall pay all costs associated with an appeal of a
27 state conducted assessment if a taxpayer files a notice under
28 IC 6-1.1-15.
29 SECTION 3. IC 6-1.1-4-43.5 IS ADDED TO THE INDIANA
30 CODE AS A NEW SECTION TO READ AS FOLLOWS
31 [EFFECTIVE JANUARY 1, 2023]: Sec. 43.5. (a) This section applies
32 to a real property assessment of commercial real property used for
33 retail purposes:
34 (1) for the 2023 assessment date and assessment dates
35 thereafter; and
36 (2) if the commercial real property is:
37 (A) at least one hundred thousand (100,000) square feet;
38 and
39 (B) occupied by the original owner or by a tenant for
40 which the improvement was built.
41 (b) This section does not apply to real property described in
42 subsection (a) if the real property is sold:
SB 145—LS 6755/DI 120 4
1 (1) by the original owner for which the improvement was
2 built; and
3 (2) to a subsequent purchaser in an arms length transaction.
4 (c) This subsection applies to a taxpayer that files a notice under
5 IC 6-1.1-15 after December 31, 2022, requesting a review of the
6 assessment of the taxpayer's real property that is subject to this
7 section. In determining the true tax value of real property under
8 this section, true tax value shall be determined by the cost
9 approach for the first ten (10) years of occupancy of the subject
10 property, less normal depreciation and normal obsolescence under
11 the rules and guidelines of the department of local government
12 finance. For purposes of this subsection, the land value shall be
13 assessed separately. The assessed value of the land underlying the
14 improvements assessed under this section may be assessed or
15 challenged based on the market value of comparable land. For
16 purposes of this section, economic and functional obsolescence of
17 the subject property may be determined by application of
18 aggregate market data, but shall not be determined by comparison
19 to any other individual parcels.
20 (d) Beginning after December 31, 2022, the department of local
21 government finance shall annually establish for each region a
22 standard construction cost per square foot for real property that
23 is subject to this section. The department's construction cost in a
24 region must be based on average market costs in the state, if there
25 is insufficient data to determine a standard construction cost for
26 the region based on average market costs in that region. For
27 purposes of this subsection, region has the meanings set forth in
28 IC 6-1.1-8-2(20) through IC 6-1.1-8-2(22).
29 (e) This subsection applies to a taxpayer that files a notice under
30 IC 6-1.1-15 after December 31, 2022, requesting a review of the
31 assessment of the taxpayer's real property that is subject to this
32 section. For purposes of applying the cost approach, the
33 construction costs for the real property shall be determined by
34 applying the standard construction cost per square foot established
35 by the department of local government finance for the county in
36 which the real property is located, unless the taxpayer has
37 provided to the appropriate county or township assessing official,
38 not later than forty-five (45) days after the date of the assessment
39 notice that is the subject of the review, the taxpayer's
40 determination of actual construction costs for the real property
41 and all the information relied on by the taxpayer in making the
42 taxpayer's determination. If the taxpayer has provided the
SB 145—LS 6755/DI 120 5
1 taxpayer's determination of actual construction costs to the
2 appropriate county or township assessing official not later than
3 forty-five (45) days after the date of the assessment notice, not later
4 than ten (10) days prior to the scheduled hearing by the county
5 property tax assessment board of appeals the taxpayer shall
6 provide to the county property tax assessment board of appeals all
7 information necessary to determine the actual construction costs
8 for the real property. If the information provided by the taxpayer
9 establishes that the actual construction costs for the real property
10 are less than the standard construction cost established by the
11 department for the county, the normal depreciation and normal
12 obsolescence factor as described in subsection (c) shall be deducted
13 from the actual construction costs rather than the standard
14 construction cost established by the department.
15 (f) If a taxpayer files a notice under IC 6-1.1-15 after December
16 31, 2022, requesting a review of the assessment of the taxpayer's
17 real property that is subject to this section, the fiscal officer of the
18 county shall establish a separate account for purposes of the
19 review. The fiscal officer shall deposit in the account the greater of
20 the tax receipts that are attributable to:
21 (1) the property tax assessment that is the subject of the
22 review minus the tax receipts attributable to the property tax
23 assessment in the immediately prior year; or
24 (2) twenty five percent (25%) of the tax receipts attributable
25 to the property tax assessment that is the subject of the
26 review.
27 Money transferred to an account is not considered miscellaneous
28 revenue. Both the taxing units and the department of local
29 government finance shall disregard any balance in the account in
30 the determination of the taxing units' property tax levy, property
31 tax rate, and budget until the calendar year in which the money is
32 released from the account. The fiscal officer of the county,
33 following a final determination of the review, or final judgement on
34 an appeal if the review is appealed, shall disburse the money
35 deposited in the account in accordance with the final determination
36 or final judgment.
37 (g) If a taxpayer files a notice under IC 6-1.1-15 and a major
38 roadway or traffic pattern located on the property is changed, that
39 change must be considered in the determination of the property's
40 assessed valuation in the appeal process under IC 6-1.1-15.
SB 145—LS 6755/DI 120 6
COMMITTEE REPORT
Madam President: The Senate Committee on Tax and Fiscal Policy,
to which was referred Senate Bill No. 145, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
Page 3, line 19, delete "for services as" and insert "for:
(1) services as agreed to by the department and the county
under specific terms contained in the contract described in
subsection (g); and
(2) all administrative costs incurred by the department.
The county shall pay the bill, without appropriation, from the
county reassessment fund.".
Page 3, delete lines 20 through 23, begin a new paragraph and
insert:
"(j) The county shall pay all costs associated with an appeal of
a state conducted assessment if a taxpayer files a notice under
IC 6-1.1-15.".
Page 4, line 16, delete "county" and insert "region".
Page 4, line 19, delete "county" and insert "region".
Page 4, line 19, delete "the region," and insert "the state,".
Page 4, line 21, delete "the county" and insert "the region".
Page 4, line 21, delete "that county." and insert "that region. For
purposes of this subsection, region has the meanings set forth in
IC 6-1.1-8-2(20) through IC 6-1.1-8-2(22).".
Page 5, line 12, after "account" insert "the greater of".
Page 5, line 13, delete "attributable to" and insert "attributable to:
(1) the property tax assessment that is the subject of the
review minus the tax receipts attributable to the property tax
assessment in the immediately prior year; or
(2) twenty five percent (25%) of the tax receipts attributable
to the property tax assessment that is the subject of the
review.".
Page 5, line 13, delete "the property tax assessment that".
Page 5, line 14, delete "is the subject of the review.".
Page 5, after line 23, begin a new paragraph and insert:
"(g) If a taxpayer files a notice under IC 6-1.1-15 and a major
roadway or traffic pattern located on the property is changed, that
change must be considered in the determination of the property's
assessed valuation in the appeal process under IC 6-1.1-15.".
and when so amended that said bill do pass.
SB 145—LS 6755/DI 120 7
(Reference is to SB 145 as introduced.)
HOLDMAN, Chairperson
Committee Vote: Yeas 12, Nays 0.
SB 145—LS 6755/DI 120