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 6559 NOTE PREPARED: Mar 1, 2024
BILL NUMBER: HB 1120 BILL AMENDED: Feb 27, 2024
SUBJECT: Property Taxes.
FIRST AUTHOR: Rep. Thompson BILL STATUS: 2
nd
Reading - 2
nd
House
FIRST SPONSOR: Sen. Holdman
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: Veteran’s Deduction: This bill increases the assessed value (AV) limit for the
disabled veteran property tax deduction from $200,000 to $240,000.
Deduction Filing: The bill allows that, for purposes of various property tax deductions, an individual has
until January 15 of a calendar year in which property taxes are first due and payable to complete, date, and
file the required certified statement with the county auditor.
Controlled Projects: This bill extends through 2025 the expiration of the threshold amounts used for
determining whether a political subdivision's project is a controlled project and whether the petition and
remonstrance process or the referendum process applies based on the political subdivision's total debt service
tax rate. It specifies that a political subdivision's total debt service tax rate does not include a tax rate
approved by voters for a referendum debt service tax levy.
MLGQ: The bill extends through 2026 the calculation to be used in determining the maximum levy growth
quotient (MLGQ) as added in the 2023 session in House Bill 1499.
Curricular Materials: This bill provides that distributions for curricular materials may not be considered for
purposes of determining whether a school corporation met the requirement to expend a minimum amount
of state tuition support for teacher compensation. It repeals the requirement that each school maintained by
a school corporation and each charter school establish a curricular materials account. The bill also requires
a public school to deposit distributions for curricular materials in: (1) the education fund of the school
corporation that maintains the school; or (2) the fund in which a charter school receives state tuition support.
HB 1120 1 Redevelopment Commissions: The bill adds a provision to allow a redevelopment commission to expend
revenues from its allocation fund that are allocated for police and fire services on both capital expenditures
and operating expenses as authorized in the 2023 session in House Bill 1454.
Township Firefighting/EMS: This bill provides that, if a township transitions from a single township
firefighting and emergency services fund to two separate funds as authorized under current law, the township
legislative body must approve a transfer of the remaining cash balance from the single fund to the two new
separate funds and determine the amounts attributable to each fund.
Task Force: The bill requires the State and Local Tax Review Task Force established in the 2023 session
in Senate Bill 3 to study the following topics:
(1) Changing the qualification requirements for a civil taxing unit to be eligible for a levy increase
in excess of limitations.
(2) Requiring certain projects of a political subdivision to be subject to:
(A) the petition and remonstrance process if the political subdivision's total debt service tax
rate is more than $0.40 per $100 dollars of AV, but less than $0.80 per $100 of AV; or
(B) the referendum process if the political subdivision's total debt service tax rate is at least
$0.80 per $100 of AV.
(3) Capping the total amount of operating referendum tax that may be levied by a school corporation.
The bill also makes technical corrections and conforming changes.
Effective Date: Upon passage; January 1, 2023 (retroactive); January 1, 2024 (retroactive); July 1, 2024;
January 1, 2025.
Explanation of State Expenditures: Task Force: The State and Local Tax Review Task Force must meet
at least four times in CY 2024. There would be no additional expense if the task force studies the additional
topics during the remaining planned meetings. However, if the task force holds additional meeting(s) to study
the additional topics, then there will be extra expenses for the members who receive per diem, mileage, and
other travel reimbursements.
Explanation of State Revenues:
Explanation of Local Expenditures: Redevelopment Commissions: Under current law, redevelopment
commissions are permitted to expend revenues from a TIF district that are allocated for police and fire
services on both capital expenditures and operating expenses. This provision specifies that the expenditures
may be made from the allocation fund.
Curricular Materials: This provision requires public schools to deposit amounts currently in the curricular
materials account and distributions for curricular materials in the education fund (and in the case of a charter
school that does not have an education fund, the fund in which state tuition support distributions are placed)
rather than the curricular materials account. However, the bill specifies that amounts received from curricular
materials can still only be used to pay for the cost of curricular materials.
(Revised) Controlled Projects: This provision could have an indeterminable impact on local units'
expenditures and related debt service property tax levies. In addition to the projects that would currently
qualify as controlled projects and projects that currently must go through the referendum process, additional
projects could become controlled projects and be subject to referendum.
HB 1120 2 Under current law, the project cost and the unit’s gross AV determine whether the project will be controlled
and whether it must go through the referendum process. Also under current law, through December 31, 2024,
a project is considered a controlled project for a taxing unit that has a total debt service tax rate that exceeds
$0.40, and if the total debt service tax rate is at least $0.80 then the unit must hold a referendum. (Under
previous law, the unit must hold a referendum only if [1] the referendum threshold is met, and [2] there are
sufficient signatures on a petition requesting the referendum.)
This provision extends the tax rate thresholds through 2025. Additionally, retroactive to January 1, 2024, the
thresholds are changed to exclude debt service rates imposed as a result of a referendum. Therefore, this
provision will make any project a controlled project for a taxing unit that has a non-referendum debt service
tax rate that exceeds $0.40. Also, if the non-referendum debt service tax rate is at least $0.80, then the unit
must hold a referendum.
Since the uncontrolled project, petition and remonstrance, and referendum processes all have different levels
of public vetting, this bill could affect the likelihood that some projects ultimately get approved. Taxes levied
for projects that go through the petition and remonstrance process are subject to tax caps and could
potentially increase tax cap losses, while the taxes levied for referendum projects do not impact tax cap
losses.
Of the 290 school corporations, 148 corporations had a 2024 non-referendum debt service tax rate that
exceeded $0.40. The non-referendum debt tax rate in 15 of those school corporations was at least $0.80. In
addition, two municipalities had 2024 non-referendum debt service tax rates that exceeded $0.40 but were
less than $0.80. No other taxing unit had a 2024 non-referendum debt service tax rate that exceeded $0.40.
[A list of taxing units with 2024 non-referendum debt service tax rates of at least $0.40 is shown as Appendix
A.]
Explanation of Local Revenues: Veteran’s Deduction: Beginning with taxes payable in CY 2025, this
provision will result in an increase in the number of disabled veterans who may qualify for the deduction.
Based on current claim rates and homestead values, an estimated additional 5,800 veterans could claim about
$81 M in AV deductions worth about $1.7 M in taxes. The new deductions will cause tax rates to rise,
resulting in tax shifts to other taxpayers to the extent that tax bills do not exceed the tax caps. Some of the
tax shift will result in revenue losses to taxing units through higher tax cap credits.
Deduction Filing: Under current law, an application for the following property tax deductions must be
completed and dated in the calendar year prior to the year in which taxes are due and must be filed no later
than January 5 of the tax payable year: homestead standard, age 65 or over, blind or disabled, disabled
veterans, WWI surviving spouse, solar heating or cooling, solar power device, wind power device,
hydroelectric power device, geothermal heating or cooling, fertilizer/pesticide storage, model residence, and
residence in inventory.
Under this provision, a taxpayer may complete, date, and file the deduction application by January 15 of the
year in which the taxes are payable. This provision could result in a minimal increase in deduction filers each
year.
Property tax deductions reduce the net AV of the property, shifting taxes to other properties. Homes with
a standard deduction are subject to the 1% tax cap rather than the 2% residential tax cap. The deductions and
lower tax cap for homesteads can reduce net taxes.
HB 1120 3 MLGQ: This provision caps CY 2026 maximum levy increases at 4%. The change will reduce local revenue
as compared to current law. Taxes in CY 2027 and later are affected because the base for future maximum
levies is reduced by the MLGQ changes in CY 2026.
The estimated effect on net property taxes by taxpayer class is summarized in the following table for CY
2026 and CY 2027.
Estimated Net Tax Change (In $Millions)
Property Type CY 2026 CY 2027
Homesteads -19.4 -20.8
Farmland -3.5 -4.0
Other Residential -4.3 -4.7
Apartments -1.6 -1.9
Ag Business -1.3 -1.4
Other Real -13.6 -14.2
Personal Property -8.5 -8.7
Total -52.2 -55.7
The following table summarizes the estimated net property revenue change by taxing unit type. [Total
estimated local property tax revenue changes by county appear in Appendix B. Estimated local property tax
revenue changes by taxing unit are available at this link.]
Estimated Net Revenue Change (In $Millions)
Unit Type CY 2026CY 2027
Counties -12.7 -13.4
Townships -2.3 -2.4
Cities and Towns -10.0 -10.6
School Corporations -15.2 -16.5
Libraries -2.5 -2.6
Special Units -3.1 -3.4
TIF -6.5 -6.9
Total -52.2 -55.7
Total Without TIF -45.7 -48.8
Additional Information -
MLGQ: Under current law, the maximum levies for most civil taxing units and school corporations grow at
the same statewide rate, called the MLGQ. The MLGQ equals the six-year average growth in Indiana
nonfarm personal income. The MLGQ was capped for all units at 1.04 in CY 2024 and CY 2025. The CY
2026 MLGQ is currently estimated at 1.052. There are exceptions to the statewide MLGQ, including the
following: (1) civil units may appeal for a bigger increase because of large NAV increases, (2) an automatic
increase for school corporations that have a large net AV increase, and (3) an appeal for school corporations
that incur large increases in transportation costs.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: County auditors; Civil taxing units and school corporations; Redevelopment
commissions.
HB 1120 4 Information Sources: LSA Property Tax Database; Local Government Database, Department of Local
Government Finance.
Fiscal Analyst: Bob Sigalow, 317-232-9859; Austin Spears, 317-234-9454.
HB 1120 5 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
Boonville Civil City 0.6228 X
Dyer Civil Town 0.4533 X
0015Adams Central Community School Corp 0.5129 X
0025North Adams Community School Corp 0.4662 X
0035South Adams School Corporation 0.4030 X
0225Northwest Allen County School Corp 0.4752 X
0515Blackford County School Corporation 0.4148 X
0615Western Boone County School Corporation 0.5082 X
0630Zionsville Community School Corporation 0.6944 X
0755Delphi Community School Corporation 0.5497 X
0875Logansport Community School Corporation 0.7408 X
0935Borden-Henryville School Corporation 0.4165 X
0945Silver Creek School Corporation 0.6918 X
1000Clarksville Community School Corporation 0.7711 X
1010Greater Clark County School Corporation 0.6969 X
1150Clinton Central School Corporation 0.4143 X
1170Frankfort Community School Corporation 0.5414 X
1180Rossville Consolidated School Corp 0.4021 X
1560Sunman-Dearborn Community School Corp 0.5624 X
1600South Dearborn Community School Corp 0.6775 X
1820Garrett-Keyser-Butler Comm School Corp 0.5958 X
1875Delaware Community School Corporation 0.4445 X
1885Wes-Del Community School Corp 0.4155 X
1940Daleville Community Schools 0.5607 X
1970Muncie Community School Corporation 0.5005 X
2110Southwest Dubois County School Corp 0.4010 X
2120Greater Jasper Consolidated School Corp 0.5506 X
2155Fairfield Community School Corporation 0.5545 X
2260Baugo Community School Corporation 0.7900 X
2270Concord Community School Corporation 0.7756 X
2275Middlebury Community School Corporation 0.7995 X
2285Wa-Nee Community School Corporation 0.4484 X
2315Goshen Community School Corporation 0.4846 X
2435Attica Consolidated School Corporation 0.5110 X
2455Southeast Fountain School Corporation 0.4960 X
2645Rochester Community School Corporation 0.4064 X
2735North Gibson School Corporation 0.4758 X
2855Mississinewa Community School Corp 0.7031 X
2950Linton-Stockton School Corporation 0.7799 X
2960M.S.D. Shakamak School Corporation 0.4086 X
3005Hamilton Southeastern School Corporation 0.4830 X
3025Hamilton Heights School Corporation 0.6577 X
3030Westfield-Washington School Corporation 0.6402 X
3055Sheridan Community Schools 0.6604 X
3070Noblesville School Corporation 0.4567 X
3115Southern Hancock County Comm School Corp 0.6268 X
3125Greenfield Central Community School Corp 0.5834 X
3135Mt. Vernon Community School Corporation 1.1000 X X
3295Northwest Hendricks School Corporation 0.7778 X
HB 1120 6 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
3305Brownsburg Community School Corporation 1.0113 X X
3315Avon Community School Corporation 0.9780 X X
3325Danville Community School Corporation 0.8700 X X
3330Plainfield Community School Corporation 0.5190 X
3335Mill Creek Community School Corporation 0.5671 X
3405Blue River Valley School Corporation 0.9374 X X
3415South Henry School Corporation 0.4980 X
3445New Castle Community School Corporation 0.4011 X
3455Charles A. Beard Memorial School Corp 0.7876 X
3460Taylor Community School Corporation 0.7138 X
3470Northwestern School Corporation 0.4262 X
3480Eastern Howard Community School Corp 1.0000 X X
3490Western School Corporation 0.4792 X
3500Kokomo School Corporation 0.4763 X
3640Medora Community School Corporation 0.9176 X X
3675Seymour Community School Corporation 0.4846 X
3695Brownstown Central Community School Corp 0.4086 X
3710Crothersville Community School Corp 0.6599 X
3945Jay County School Corporation 0.4532 X
4145Clark-Pleasant Community School Corp 0.9648 X X
4205Center Grove Community School Corp 0.7184 X
4215Edinburgh Community School Corporation 0.6454 X
4225Franklin Community School Corporation 0.7999 X
4255Nineveh-Hensley-Jackson United Sch Corp 0.5368 X
4335Vincennes Community School Corporation 0.4228 X
4415Warsaw Community School Corporation 0.4276 X
4445Tippecanoe Valley School Corporation 0.4230 X
4455Whitko Community School Corporation 0.4423 X
4580Hanover Community School Corporation 0.5463 X
4590River Forest Community School Corp 0.6303 X
4600Merrillville School Corporation 0.5077 X
4645Tri Creek School Corporation 0.7495 X
4650Lake Ridge School Corporation 1.3729 X X
4660Crown Point Community School Corporation 0.7887 X
4680Lake Station School Corporation 0.7916 X
4690Gary Community School Corporation 0.7081 X
4700Griffith Public School Corporation 0.7395 X
4710Hammond City School Corporation 0.5141 X
4720Highland Town School Corporation 0.5839 X
4730School City Of Hobart School Corporation 1.0258 X X
4860New Durham Township School Corporation 0.5074 X
4925Michigan City Area School Corporation 0.4328 X
4940South Central Community School Corp 0.5146 X
4945Laporte Community School Corporation 0.4415 X
5085Mitchell Community School Corporation 0.6514 X
5245Frankton-Lapel Community School Corp 0.8181 X X
5255South Madison Community School Corp 0.6444 X
5275Anderson Community School Corporation 0.6492 X
5280Elwood Community School Corporation 0.8579 X X
HB 1120 7 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
5300M.S.D. Decatur Township School Corp 0.6942 X
5310Franklin Township Community School Corp 0.6653 X
5360M.S.D. Warren Township School Corp 0.5200 X
5375M.S.D. Wayne Township School Corporation 1.0000 X X
5380Beech Grove City School Corporation 1.1184 X X
5470Argos Community School Corporation 0.5239 X
5485Plymouth Community School Corp 0.4762 X
5625Oak Hill United School Corporation 0.7282 X
5635Peru Community School Corporation 0.6680 X
5705Richland-Bean Blossom Comm School Corp 0.6462 X
5845South Montgomery Community School Corp 0.4426 X
5855Crawfordsville Community School Corp 0.7375 X
5900Monroe-Gregg School Corporation 0.6853 X
5930Mooresville Consolidated School Corp 0.4078 X
6080Rising Sun-Ohio County Comm School Corp 0.5437 X
6260Southwest Parke Community School Corp 0.4463 X
6325Perry Central Community School Corp 0.4615 X
6340Cannelton City School Corporation 1.3211 X X
6350Tell City-Troy Township School Corp 0.6898 X
6460Boone Township School Corporation 0.7890 X
6510East Porter County School Corporation 0.5386 X
6520Porter Township School Corporation 0.5771 X
6530Union Township School Corporation 0.4242 X
6705South Putnam Community School Corp 0.6400 X
6715North Putnam Community School Corp 0.6942 X
6755Greencastle Community School Corporation 0.6199 X
6835Randolph Eastern School Corporation 0.5303 X
6865South Ripley Community School Corp 0.4628 X
6910Milan Community School Corporation 0.5179 X
7150John Glenn School Corporation 0.4488 X
7175Penn-Harris-Madison-School Corporation 0.4265 X
7200Mishawaka City School Corporation 0.6870 X
7215Union-North United School Corporation 0.5672 X
7230Scott County District No. 1 School Corp 0.4065 X
7255Scott County District No. 2 School Corp 0.4456 X
7285Shelby Eastern School Corporation 0.5477 X
7350Northwestern Consolidated School Corp 0.4180 X
7365Shelbyville Central School Corporation 0.5621 X
7525Knox Community School Corporation 0.4007 X
7865Tippecanoe School Corporation 0.4778 X
7875West Lafayette Community School Corp 0.4909 X
7945Tipton Community School Corporation 0.4177 X
8045Manchester Community School Corporation 0.4531 X
8050M.S.D. Wabash County School Corporation 0.5882 X
8060Wabash City School Corporation 0.6424 X
8115M.S.D. Warren County School Corp 0.5187 X
8205Salem Community School Corporation 0.5008 X
8215East Washington School Corporation 0.4338 X
8355Western Wayne School Corporation 0.4785 X
HB 1120 8 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
8360Centerville-Abington Comm School Corp 0.4786 X
8375Northeastern Wayne School Corporation 0.4501 X
8445M.S.D. Bluffton-Harrison School Corp 0.4879 X
Count 150 15
HB 1120 9 Appendix B
Estimated Change in Revenue
From MLGQ Cap
CntyCounty CY 2026 CY 2027
01 Adams -224,000 -241,000
02 Allen -3,546,000 -3,762,000
03 Bartholomew -709,000 -731,000
04 Benton -139,000 -150,000
05 Blackford -67,000 -72,000
06 Boone -1,141,000 -1,219,000
07 Brown -130,000 -137,000
08 Carroll -96,000 -101,000
09 Cass -234,000 -258,000
10 Clark -1,092,000 -1,255,000
11 Clay -168,000 -177,000
12 Clinton -232,000 -243,000
13 Crawford -45,000 -47,000
14 Daviess -252,000 -266,000
15 Dearborn -318,000 -337,000
16 Decatur -264,000 -275,000
17 DeKalb -560,000 -588,000
18 Delaware -379,000 -399,000
19 Dubois -368,000 -403,000
20 Elkhart -2,007,000 -2,157,000
21 Fayette -127,000 -135,000
22 Floyd -578,000 -599,000
23 Fountain -150,000 -166,000
24 Franklin -172,000 -181,000
25 Fulton -169,000 -180,000
26 Gibson -426,000 -442,000
27 Grant -329,000 -343,000
28 Greene -151,000 -160,000
29 Hamilton -4,826,000 -5,287,000
30 Hancock -768,000 -822,000
31 Harrison -305,000 -321,000
32 Hendricks -1,706,000 -1,884,000
33 Henry -222,000 -229,000
34 Howard -334,000 -352,000
35 Huntington -204,000 -214,000
36 Jackson -401,000 -416,000
37 Jasper -349,000 -366,000
38 Jay -175,000 -201,000
39 Jefferson -128,000 -132,000
40 Jennings -246,000 -258,000
41 Johnson -1,267,000 -1,388,000
42 Knox -466,000 -498,000
43 Kosciusko -814,000 -851,000
44 LaGrange -334,000 -352,000
45 Lake -3,203,000 -3,314,000
46 LaPorte -601,000 -639,000
47 Lawrence -370,000 -386,000
48 Madison -449,000 -474,000
49 Marion -5,569,000 -6,108,000
50 Marshall -383,000 -405,000
51 Martin -85,000 -89,000
52 Miami -190,000 -207,000
53 Monroe -1,540,000 -1,634,000
54 Montgomery -351,000 -366,000
55 Morgan -624,000 -655,000
HB 1120 10 Appendix B
Estimated Change in Revenue
From MLGQ Cap
CntyCounty CY 2026 CY 2027
56 Newton -199,000 -210,000
57 Noble -500,000 -530,000
58 Ohio -44,000 -47,000
59 Orange -179,000 -188,000
60 Owen -155,000 -163,000
61 Parke -134,000 -141,000
62 Perry -117,000 -123,000
63 Pike -75,000 -75,000
64 Porter -1,585,000 -1,679,000
65 Posey -387,000 -406,000
66 Pulaski -145,000 -153,000
67 Putnam -220,000 -231,000
68 Randolph -191,000 -202,000
69 Ripley -233,000 -244,000
70 Rush -145,000 -154,000
71 St. Joseph -1,206,000 -1,271,000
72 Scott -165,000 -172,000
73 Shelby -412,000 -429,000
74 Spencer -286,000 -300,000
75 Starke -199,000 -209,000
76 Steuben -444,000 -467,000
77 Sullivan -144,000 -149,000
78 Switzerland -89,000 -94,000
79 Tippecanoe -1,521,000 -1,648,000
80 Tipton -142,000 -150,000
81 Union -63,000 -66,000
82 Vanderburgh -667,000 -580,000
83 Vermillion -131,000 -136,000
84 Vigo -333,000 -352,000
85 Wabash -217,000 -226,000
86 Warren -108,000 -114,000
87 Warrick -704,000 -741,000
88 Washington -165,000 -175,000
89 Wayne -137,000 -135,000
90 Wells -249,000 -261,000
91 White -284,000 -297,000
92 Whitley -286,000 -301,000
Total -52,246,000-55,686,000
HB 1120 11