Indiana 2022 Regular Session

Indiana Senate Bill SB0145 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	SB0145.2
	2	+	Digest Correction
	3	+	January 26, 2022
	4	+	SENATE BILL No. 145
	5	+	_____
	6	+	DIGEST OF SB 145 (Updated January 26, 2022 11:31 am - DI 129)
	7	+	Citations Affected: IC 6-1.1.
	8	+	Synopsis: Property tax matters. Provides that a county assessor or
	9	+	township assessor (if any) may request the department of local
	10	+	government finance (department) to perform a state conducted
	11	+	assessment of commercial real property used for retail purposes that is
	12	+	at least 100,000 square feet and that is occupied by the original owner
	13	+	or by a tenant for which the improvement was built for a specific
	14	+	assessment date. Sets out the procedures for a state conducted
	15	+	assessment. Provides that the true tax value of commercial real
	16	+	property used for retail purposes that is at least 100,000 square feet and
	17	+	that is occupied by the original owner or by a tenant for which the
	18	+	improvement was built shall be determined by the cost approach for the
	19	+	first 10 years of occupancy of the property, less normal depreciation
	20	+	and normal obsolescence under the rules and guidelines of the
	21	+	department. Requires the department to annually establish a standard
	22	+	construction cost per square foot for these properties for each region
	23	+	based on the average market cost in the state to be used for purposes of
	24	+	(Continued next page)
	25	+	Effective: January 1, 2023.
	26	+	Buchanan, Rogers, Boots, Baldwin,
	27	+	Randolph Lonnie M
	28	+	January 4, 2022, read first time and referred to Committee on Tax and Fiscal Policy.
	29	+	January 25, 2022, amended, reported favorably — Do Pass.
	30	+	SB 145—LS 6755/DI 120 Digest Continued
	31	+	the assessment, unless the taxpayer has provided the taxpayer's
	32	+	determination of actual construction costs to the appropriate assessing
	33	+	official not later than 45 days after the date of the assessment notice
	34	+	that is the subject of the review. Requires the taxpayer, if a taxpayer
	35	+	has provided the taxpayer's determination of actual construction cost
	36	+	within 45 days after the assessment notice, to provide to the county
	37	+	property tax assessment board of appeals (PTBOA) information
	38	+	necessary to determine the actual construction costs for the real
	39	+	property. Requires that the taxpayer's actual construction costs must be
	40	+	used for purposes of the assessment if the PTBOA determines that
	41	+	actual construction costs for the real property are less than the standard
	42	+	construction cost established by the department. Requires the fiscal
	43	+	officer of the county to establish a separate account for the tax receipts
	44	+	that are attributable to the property tax assessment that is the subject of
	45	+	review. Provides that if a taxpayer files a notice of an assessment
	46	+	appeal and a major roadway or traffic pattern located on the property
	47	+	is changed, that change must be considered in the determination of the
	48	+	property's assessed valuation in the appeal.
	49	+	SB 145—LS 6755/DI 120SB 145—LS 6755/DI 120 Digest Correction
	50	+	January 26, 2022
1	51		Second Regular Session of the 122nd General Assembly (2022)
2	52		PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3	53		Constitution) is being amended, the text of the existing provision will appear in this style type,
4	54		additions will appear in this style type, and deletions will appear in this style type.
5	55		Additions: Whenever a new statutory provision is being enacted (or a new constitutional
6	56		provision adopted), the text of the new provision will appear in this style type. Also, the
7	57		word NEW will appear in that style type in the introductory clause of each SECTION that adds
8	58		a new provision to the Indiana Code or the Indiana Constitution.
9	59		Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
10	60		between statutes enacted by the 2021 Regular Session of the General Assembly.
11		-	SENATE ENROLLED ACT No. 145
12		-	AN ACT to amend the Indiana Code concerning taxation.
	61	+	SENATE BILL No. 145
	62	+	A BILL FOR AN ACT to amend the Indiana Code concerning
	63	+	taxation.
13	64		Be it enacted by the General Assembly of the State of Indiana:
14		-	SECTION 1. IC 6-1.1-4-43.5 IS ADDED TO THE INDIANA
15		-	CODE AS A NEW SECTION TO READ AS FOLLOWS
16		-	[EFFECTIVE JANUARY 1, 2023]: Sec. 43.5. (a) This section applies
17		-	to a commercial property with a structure, or a portion thereof,
18		-	that:
19		-	(1) is at least one hundred thousand (100,000) square feet in
20		-	area;
21		-	(2) is used for retail purposes;
22		-	(3) is occupied by a single retailer; and
23		-	(4) is assessed for the first time after December 31, 2022.
24		-	(b) This section does not apply to a property described in
25		-	subsection (a) that:
26		-	(1) was vacated by the original occupant for which the
27		-	property was constructed;
28		-	(2) was constructed more than five (5) years prior to the
29		-	assessment date; or
30		-	(3) was substantially and adversely impacted by a change in
31		-	a roadway or traffic pattern.
32		-	(c) If a single retailer leases or subleases small undivided
33		-	portions of a structure, the structure shall still be considered
34		-	occupied by a single retailer.
35		-	(d) For assessment dates beginning after December 31, 2022, the
36		-	true tax value of a commercial property subject to this section shall
37		-	SEA 145 — Concur 2
38		-	be determined by application of the cost approach. In applying the
39		-	cost approach, estimates of depreciation and obsolescence shall not
40		-	be based on data derived from the sales comparison or income
41		-	capitalization approaches. The department of local government
42		-	finance shall establish a standard construction cost per square foot
43		-	for the purpose of applying the cost approach to commercial
44		-	property subject to this section. The department shall update the
45		-	standard construction cost per square foot annually. When
46		-	requesting a review of an assessment under this section, a taxpayer
47		-	may present an appraisal based on the cost approach as evidence
48		-	that the taxpayer's actual construction cost was lower than the
49		-	department's determined standard construction cost per square
50		-	foot that was used to assess the property. Notwithstanding this
51		-	section, the value of the land component may be determined based
52		-	on the sales comparison approach.
53		-	(e) If the entire commercial property is occupied by a single
54		-	retailer as a single economic unit, the entire commercial property
55		-	shall be valued under this section. If only a portion of the
56		-	commercial property forms a single economic unit occupied by a
57		-	single retailer, then only that portion of the commercial property
58		-	shall be valued under this section.
59		-	(f) Notwithstanding subsections (c), (d), and (e), the parties to
60		-	any appeal filed under IC 6-1.1-15 may enter into a written
61		-	agreement to stipulate to the true tax value of the property under
62		-	appeal.
63		-	(g) If a taxpayer files a notice under IC 6-1.1-15 requesting a
64		-	review of the assessment of the taxpayer's commercial property
65		-	that is subject to this section, the fiscal officer of the county may
66		-	establish a separate account for purposes of the review. The fiscal
67		-	officer shall deposit in the account the greater of the tax receipts
68		-	that are attributable to:
	65	+	1 SECTION 1. IC 6-1.1-4-28.5, AS AMENDED BY P.L.86-2018,
	66	+	2 SECTION 33, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	67	+	3 JANUARY 1, 2023]: Sec. 28.5. (a) Money assigned to a property
	68	+	4 reassessment fund under section 27.5 of this chapter may be used only
	69	+	5 to pay the costs of:
	70	+	6 (1) the reassessment of one (1) or more groups of parcels under
	71	+	7 a county's reassessment plan prepared under section 4.2 of this
	72	+	8 chapter, including the computerization of assessment records;
	73	+	9 (2) payments to assessing officials and hearing officers for county
	74	+	10 property tax assessment boards of appeals under IC 6-1.1-35.2;
	75	+	11 (3) the development or updating of detailed soil survey data by
	76	+	12 the United States Department of Agriculture or its successor
	77	+	13 agency;
	78	+	14 (4) the updating of plat books;
	79	+	15 (5) payments for the salary of permanent staff or for the
	80	+	16 contractual services of temporary staff who are necessary to assist
	81	+	17 assessing officials;
	82	+	SB 145—LS 6755/DI 120 2
	83	+	1 (6) making annual adjustments under section 4.5 of this chapter;
	84	+	2 and
	85	+	3 (7) the verification under 50 IAC 27-4-7 of sales disclosure forms
	86	+	4 forwarded to:
	87	+	5 (A) the county assessor; or
	88	+	6 (B) township assessors (if any);
	89	+	7 under IC 6-1.1-5.5-3; and
	90	+	8 (8) state conducted assessments requested under section 31.8
	91	+	9 of this chapter.
	92	+	10 Money in a property reassessment fund may not be transferred or
	93	+	11 reassigned to any other fund and may not be used for any purposes
	94	+	12 other than those set forth in this section.
	95	+	13 (b) All counties shall use modern, detailed soil maps in the
	96	+	14 reassessment of agricultural land.
	97	+	15 (c) The county treasurer of each county shall, in accordance with
	98	+	16 IC 5-13-9, invest any money accumulated in the property reassessment
	99	+	17 fund. Any interest received from investment of the money shall be paid
	100	+	18 into the property reassessment fund.
	101	+	19 (d) An appropriation under this section must be approved by the
	102	+	20 fiscal body of the county after the review and recommendation of the
	103	+	21 county assessor. However, in a county with a township assessor in
	104	+	22 every township, the county assessor does not review an appropriation
	105	+	23 under this section, and only the fiscal body must approve an
	106	+	24 appropriation under this section.
	107	+	25 SECTION 2. IC 6-1.1-4-31.8 IS ADDED TO THE INDIANA
	108	+	26 CODE AS A NEW SECTION TO READ AS FOLLOWS
	109	+	27 [EFFECTIVE JANUARY 1, 2023]: Sec. 31.8. (a) As used in this
	110	+	28 section, "department" refers to the department of local
	111	+	29 government finance.
	112	+	30 (b) This section applies only to a real property assessment of a
	113	+	31 commercial building or structure used for retail purposes to which
	114	+	32 section 43.5 of this chapter applies.
	115	+	33 (c) A county assessor or a township assessor (if any) may
	116	+	34 request the department to perform a state conducted assessment
	117	+	35 of a particular property in the county for a specified assessment
	118	+	36 date. The request must be made in the form and in the manner
	119	+	37 prescribed by the department.
	120	+	38 (d) If the department receives a request for a state conducted
	121	+	39 assessment of a particular property in a county, the department
	122	+	40 shall assume the duties of the county assessor with regard to the
	123	+	41 assessment of that property for that assessment date.
	124	+	42 (e) Before assuming the duties of a county assessor, the
	125	+	SB 145—LS 6755/DI 120 3
	126	+	1 department shall transmit a notice of the state conducted
	127	+	2 assessment of the property for the assessment date to the county
	128	+	3 assessor, the county fiscal body, and the county auditor.
	129	+	4 (f) A county assessor who requests the department to perform
	130	+	5 a state conducted assessment under this section shall make
	131	+	6 available and provide access to all information requested by the
	132	+	7 department or the department's contractor that is related to the
	133	+	8 assessment of real property that is subject to the state conducted
	134	+	9 assessment in the county.
	135	+	10 (g) The department may enter into a contract with a
	136	+	11 professional appraising firm to conduct a requested assessment of
	137	+	12 the property under this section.
	138	+	13 (h) After receiving the report of the assessed value of the
	139	+	14 property from the appraisal firm acting under a contract described
	140	+	15 in subsection (g), the department shall give notice to the taxpayer
	141	+	16 and the county assessor, by mail, of the amount of the assessment
	142	+	17 of the property.
	143	+	18 (i) The department shall forward to the auditor of the county in
	144	+	19 which the state conducted assessment occurs a bill for:
	145	+	20 (1) services as agreed to by the department and the county
	146	+	21 under specific terms contained in the contract described in
	147	+	22 subsection (g); and
	148	+	23 (2) all administrative costs incurred by the department.
	149	+	24 The county shall pay the bill, without appropriation, from the
	150	+	25 county reassessment fund.
	151	+	26 (j) The county shall pay all costs associated with an appeal of a
	152	+	27 state conducted assessment if a taxpayer files a notice under
	153	+	28 IC 6-1.1-15.
	154	+	29 SECTION 3. IC 6-1.1-4-43.5 IS ADDED TO THE INDIANA
	155	+	30 CODE AS A NEW SECTION TO READ AS FOLLOWS
	156	+	31 [EFFECTIVE JANUARY 1, 2023]: Sec. 43.5. (a) This section applies
	157	+	32 to a real property assessment of commercial real property used for
	158	+	33 retail purposes:
	159	+	34 (1) for the 2023 assessment date and assessment dates
	160	+	35 thereafter; and
	161	+	36 (2) if the commercial real property is:
	162	+	37 (A) at least one hundred thousand (100,000) square feet;
	163	+	38 and
	164	+	39 (B) occupied by the original owner or by a tenant for
	165	+	40 which the improvement was built.
	166	+	41 (b) This section does not apply to real property described in
	167	+	42 subsection (a) if the real property is sold:
	168	+	SB 145—LS 6755/DI 120 4
	169	+	1 (1) by the original owner for which the improvement was
	170	+	2 built; and
	171	+	3 (2) to a subsequent purchaser in an arms length transaction.
	172	+	4 (c) This subsection applies to a taxpayer that files a notice under
	173	+	5 IC 6-1.1-15 after December 31, 2022, requesting a review of the
	174	+	6 assessment of the taxpayer's real property that is subject to this
	175	+	7 section. In determining the true tax value of real property under
	176	+	8 this section, true tax value shall be determined by the cost
	177	+	9 approach for the first ten (10) years of occupancy of the subject
	178	+	10 property, less normal depreciation and normal obsolescence under
	179	+	11 the rules and guidelines of the department of local government
	180	+	12 finance. For purposes of this subsection, the land value shall be
	181	+	13 assessed separately. The assessed value of the land underlying the
	182	+	14 improvements assessed under this section may be assessed or
	183	+	15 challenged based on the market value of comparable land. For
	184	+	16 purposes of this section, economic and functional obsolescence of
	185	+	17 the subject property may be determined by application of
	186	+	18 aggregate market data, but shall not be determined by comparison
	187	+	19 to any other individual parcels.
	188	+	20 (d) Beginning after December 31, 2022, the department of local
	189	+	21 government finance shall annually establish for each region a
	190	+	22 standard construction cost per square foot for real property that
	191	+	23 is subject to this section. The department's construction cost in a
	192	+	24 region must be based on average market costs in the state, if there
	193	+	25 is insufficient data to determine a standard construction cost for
	194	+	26 the region based on average market costs in that region. For
	195	+	27 purposes of this subsection, region has the meanings set forth in
	196	+	28 IC 6-1.1-8-2(20) through IC 6-1.1-8-2(22).
	197	+	29 (e) This subsection applies to a taxpayer that files a notice under
	198	+	30 IC 6-1.1-15 after December 31, 2022, requesting a review of the
	199	+	31 assessment of the taxpayer's real property that is subject to this
	200	+	32 section. For purposes of applying the cost approach, the
	201	+	33 construction costs for the real property shall be determined by
	202	+	34 applying the standard construction cost per square foot established
	203	+	35 by the department of local government finance for the county in
	204	+	36 which the real property is located, unless the taxpayer has
	205	+	37 provided to the appropriate county or township assessing official,
	206	+	38 not later than forty-five (45) days after the date of the assessment
	207	+	39 notice that is the subject of the review, the taxpayer's
	208	+	40 determination of actual construction costs for the real property
	209	+	41 and all the information relied on by the taxpayer in making the
	210	+	42 taxpayer's determination. If the taxpayer has provided the
	211	+	SB 145—LS 6755/DI 120 5
	212	+	1 taxpayer's determination of actual construction costs to the
	213	+	2 appropriate county or township assessing official not later than
	214	+	3 forty-five (45) days after the date of the assessment notice, not later
	215	+	4 than ten (10) days prior to the scheduled hearing by the county
	216	+	5 property tax assessment board of appeals the taxpayer shall
	217	+	6 provide to the county property tax assessment board of appeals all
	218	+	7 information necessary to determine the actual construction costs
	219	+	8 for the real property. If the information provided by the taxpayer
	220	+	9 establishes that the actual construction costs for the real property
	221	+	10 are less than the standard construction cost established by the
	222	+	11 department for the county, the normal depreciation and normal
	223	+	12 obsolescence factor as described in subsection (c) shall be deducted
	224	+	13 from the actual construction costs rather than the standard
	225	+	14 construction cost established by the department.
	226	+	15 (f) If a taxpayer files a notice under IC 6-1.1-15 after December
	227	+	16 31, 2022, requesting a review of the assessment of the taxpayer's
	228	+	17 real property that is subject to this section, the fiscal officer of the
	229	+	18 county shall establish a separate account for purposes of the
	230	+	19 review. The fiscal officer shall deposit in the account the greater of
	231	+	20 the tax receipts that are attributable to:
	232	+	21 (1) the property tax assessment that is the subject of the
	233	+	22 review minus the tax receipts attributable to the property tax
	234	+	23 assessment in the immediately prior year; or
	235	+	24 (2) twenty five percent (25%) of the tax receipts attributable
	236	+	25 to the property tax assessment that is the subject of the
	237	+	26 review.
	238	+	27 Money transferred to an account is not considered miscellaneous
	239	+	28 revenue. Both the taxing units and the department of local
	240	+	29 government finance shall disregard any balance in the account in
	241	+	30 the determination of the taxing units' property tax levy, property
	242	+	31 tax rate, and budget until the calendar year in which the money is
	243	+	32 released from the account. The fiscal officer of the county,
	244	+	33 following a final determination of the review, or final judgement on
	245	+	34 an appeal if the review is appealed, shall disburse the money
	246	+	35 deposited in the account in accordance with the final determination
	247	+	36 or final judgment.
	248	+	37 (g) If a taxpayer files a notice under IC 6-1.1-15 and a major
	249	+	38 roadway or traffic pattern located on the property is changed, that
	250	+	39 change must be considered in the determination of the property's
	251	+	40 assessed valuation in the appeal process under IC 6-1.1-15.
	252	+	SB 145—LS 6755/DI 120 6
	253	+	COMMITTEE REPORT
	254	+	Madam President: The Senate Committee on Tax and Fiscal Policy,
	255	+	to which was referred Senate Bill No. 145, has had the same under
	256	+	consideration and begs leave to report the same back to the Senate with
	257	+	the recommendation that said bill be AMENDED as follows:
	258	+	Page 3, line 19, delete "for services as" and insert "for:
	259	+	(1) services as agreed to by the department and the county
	260	+	under specific terms contained in the contract described in
	261	+	subsection (g); and
	262	+	(2) all administrative costs incurred by the department.
	263	+	The county shall pay the bill, without appropriation, from the
	264	+	county reassessment fund.".
	265	+	Page 3, delete lines 20 through 23, begin a new paragraph and
	266	+	insert:
	267	+	"(j) The county shall pay all costs associated with an appeal of
	268	+	a state conducted assessment if a taxpayer files a notice under
	269	+	IC 6-1.1-15.".
	270	+	Page 4, line 16, delete "county" and insert "region".
	271	+	Page 4, line 19, delete "county" and insert "region".
	272	+	Page 4, line 19, delete "the region," and insert "the state,".
	273	+	Page 4, line 21, delete "the county" and insert "the region".
	274	+	Page 4, line 21, delete "that county." and insert "that region. For
	275	+	purposes of this subsection, region has the meanings set forth in
	276	+	IC 6-1.1-8-2(20) through IC 6-1.1-8-2(22).".
	277	+	Page 5, line 12, after "account" insert "the greater of".
	278	+	Page 5, line 13, delete "attributable to" and insert "attributable to:
69	279		(1) the property tax assessment that is the subject of the
70	280		review minus the tax receipts attributable to the property tax
71	281		assessment in the immediately prior year; or
72		-	(2) twenty-five percent (25%) of the tax receipts attributable
	282	+	(2) twenty five percent (25%) of the tax receipts attributable
73	283		to the property tax assessment that is the subject of the
74		-	review.
75		-	Money transferred to an account is not considered miscellaneous
76		-	revenue. Both the taxing units and the department of local
77		-	government finance shall disregard any balance in the account in
78		-	the determination of the taxing units' property tax levy, property
79		-	tax rate, and budget until the calendar year in which the money is
80		-	SEA 145 — Concur 3
81		-	released from the account. The fiscal officer of the county,
82		-	following a final determination of the review, or final judgment on
83		-	an appeal if the review is appealed, shall disburse the money
84		-	deposited in the account in accordance with the final determination
85		-	or final judgment.
86		-	SEA 145 — Concur President of the Senate
87		-	President Pro Tempore
88		-	Speaker of the House of Representatives
89		-	Governor of the State of Indiana
90		-	Date: Time:
91		-	SEA 145 — Concur
	284	+	review.".
	285	+	Page 5, line 13, delete "the property tax assessment that".
	286	+	Page 5, line 14, delete "is the subject of the review.".
	287	+	Page 5, after line 23, begin a new paragraph and insert:
	288	+	"(g) If a taxpayer files a notice under IC 6-1.1-15 and a major
	289	+	roadway or traffic pattern located on the property is changed, that
	290	+	change must be considered in the determination of the property's
	291	+	assessed valuation in the appeal process under IC 6-1.1-15.".
	292	+	and when so amended that said bill do pass.
	293	+	SB 145—LS 6755/DI 120 7
	294	+	(Reference is to SB 145 as introduced.)
	295	+	HOLDMAN, Chairperson
	296	+	Committee Vote: Yeas 12, Nays 0.
	297	+	SB 145—LS 6755/DI 120