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 6702 NOTE PREPARED: Dec 28, 2023
BILL NUMBER: HB 1270 BILL AMENDED:
SUBJECT: Optional Circuit Breaker Tax Credit.
FIRST AUTHOR: Rep. Hatcher BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill authorizes the city of Gary to adopt an ordinance to provide a credit
against property tax liability for qualified individuals. It defines a "qualified individual" for purposes of the
credit. The bill provides that the ordinance may designate: (1) all of the territory of the city; or (2) one or
more specific geographic territories within the city; as a neighborhood enhancement district in which
qualified individuals may apply for the credit.
This bill provides that the amount of the credit in a particular year is equal to the amount by which an
individual's property tax liability increases by more than the percentage of increase specified by the city fiscal
body from the prior year. It provides that the credit does not affect the allocation of taxes to a referendum
fund.
The bill requires a qualified individual who desires to claim the credit to file a certified statement with the
county auditor. It provides that the county auditor shall apply the credit in succeeding years after the certified
statement is filed unless the auditor determines that the individual is no longer eligible for the credit or the
city fiscal body rescinds the ordinance.
This bill provides that the penalty for wrongly receiving the credit is the same as the penalty for wrongly
receiving the homestead standard deduction. It provides that an individual may not receive both the optional
circuit breaker tax credit and an over 65 property tax credit in the same year. The bill also provides that an
ordinance must specify that the credit does not apply for property taxes first due and payable after December
31, 2027. It sunsets the optional circuit breaker tax credit on January 1, 2028.
Effective Date: July 1, 2024.
HB 1270 1 Explanation of State Expenditures:
Explanation of State Revenues: The DLGF will receive 1% of any civil penalty imposed by the county
for receiving a credit while not meeting qualifications. The money is to be used by the DLGF in establishing
and maintaining the homestead property database. Any money remaining may be used for other purposes of
the DLGF.
Explanation of Local Expenditures: This bill will result in an increase in the administrative workload for
the Lake County auditor if the City of Gary adopts a credit. The auditor’s office would need to work with
their property tax and billing software vendor to establish a scenario (in the software system) where this
credit is implemented within the specified area per the ordinance. This would also include reviewing and
verifying that those who file for the optional credit are not currently receiving the over 65 property tax credit.
Explanation of Local Revenues: If the Gary City Council establishes the credit, taxing units that serve the
parcels receiving the credit will lose revenue. The earliest that the credit could be available is for taxes
payable in CY 2025. The credit will not be available after CY 2027.
The amount of revenue lost by affected units in Lake County is dependent on the following:
1) Whether the city adopts the credit.
2) The income limit adopted by the city.
3) The neighborhood enhancement district as adopted by the city.
4) The number of homeowners who have owned their home for at least ten years.
5) The amount of the credit percentage, which must be at least 2% but not more than 5%.
6) The number of homeowners who are at least 55 years in age.
Ultimately, the fiscal impact depends on the actions of the Gary City Council.
Additional Information - For taxes payable in CY 2023, there were 14,412 homesteads in Gary with taxes
totaling $9.9 M. It is estimated that 13,600 of those will have CY 2025 tax bills that exceed CY 2024 tax bills
by $1.3 M. This estimate includes all homesteads and is not limited by age of householder.
An estimated 13,400 homesteads will have CY 2025 increases that exceed CY 2024 bills by more than 2%.
The amount over 2% is estimated at $1.0 M. This estimate includes all homesteads and is not limited by age
of householder.
An estimated 12,800 homesteads will have CY 2025 increases that exceed CY 2024 bills by more than 5%.
The amount over 5% is estimated at $700,000. This estimate includes all homesteads and is not limited by
age of householder.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Gary City Council; Lake County Auditor; Taxing units that intersect with Gary.
Information Sources: LSA Property Tax Database.
Fiscal Analyst: Bob Sigalow, 317-232-9859.
HB 1270 2