| 1 | 1 | | |
|---|
| 2 | 2 | | Introduced Version |
|---|
| 3 | 3 | | HOUSE BILL No. 1270 |
|---|
| 4 | 4 | | _____ |
|---|
| 5 | 5 | | DIGEST OF INTRODUCED BILL |
|---|
| 6 | 6 | | Citations Affected: IC 6-1.1-49.5. |
|---|
| 7 | 7 | | Synopsis: Optional circuit breaker tax credit. Authorizes the city of |
|---|
| 8 | 8 | | Gary to adopt an ordinance to provide a credit against property tax |
|---|
| 9 | 9 | | liability for qualified individuals. Defines a "qualified individual" for |
|---|
| 10 | 10 | | purposes of the credit. Provides that the ordinance may designate: (1) |
|---|
| 11 | 11 | | all of the territory of the city; or (2) one or more specific geographic |
|---|
| 12 | 12 | | territories within the city; as a neighborhood enhancement district in |
|---|
| 13 | 13 | | which qualified individuals may apply for the credit. Provides that the |
|---|
| 14 | 14 | | amount of the credit in a particular year is equal to the amount by |
|---|
| 15 | 15 | | which an individual's property tax liability increases by more than the |
|---|
| 16 | 16 | | percentage of increase specified by the city fiscal body from the prior |
|---|
| 17 | 17 | | year. Provides that the credit does not affect the allocation of taxes to |
|---|
| 18 | 18 | | a referendum fund. Requires a qualified individual who desires to |
|---|
| 19 | 19 | | claim the credit to file a certified statement with the county auditor. |
|---|
| 20 | 20 | | Provides that the county auditor shall apply the credit in succeeding |
|---|
| 21 | 21 | | years after the certified statement is filed unless the auditor determines |
|---|
| 22 | 22 | | that the individual is no longer eligible for the credit or the county |
|---|
| 23 | 23 | | fiscal body rescinds the ordinance. Provides that the penalty for |
|---|
| 24 | 24 | | wrongly receiving the credit is the same as the penalty for wrongly |
|---|
| 25 | 25 | | receiving the homestead standard deduction. Provides that an |
|---|
| 26 | 26 | | individual may not receive both the optional circuit breaker tax credit |
|---|
| 27 | 27 | | and an over 65 property tax credit in the same year. Provides that an |
|---|
| 28 | 28 | | ordinance must specify that the credit does not apply for property taxes |
|---|
| 29 | 29 | | first due and payable after December 31, 2027. Sunsets the optional |
|---|
| 30 | 30 | | circuit breaker tax credit on January 1, 2028. |
|---|
| 31 | 31 | | Effective: July 1, 2024. |
|---|
| 32 | 32 | | Hatcher |
|---|
| 33 | 33 | | January 9, 2024, read first time and referred to Committee on Ways and Means. |
|---|
| 34 | 34 | | 2024 IN 1270—LS 6702/DI 134 Introduced |
|---|
| 35 | 35 | | Second Regular Session of the 123rd General Assembly (2024) |
|---|
| 36 | 36 | | PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana |
|---|
| 37 | 37 | | Constitution) is being amended, the text of the existing provision will appear in this style type, |
|---|
| 38 | 38 | | additions will appear in this style type, and deletions will appear in this style type. |
|---|
| 39 | 39 | | Additions: Whenever a new statutory provision is being enacted (or a new constitutional |
|---|
| 40 | 40 | | provision adopted), the text of the new provision will appear in this style type. Also, the |
|---|
| 41 | 41 | | word NEW will appear in that style type in the introductory clause of each SECTION that adds |
|---|
| 42 | 42 | | a new provision to the Indiana Code or the Indiana Constitution. |
|---|
| 43 | 43 | | Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts |
|---|
| 44 | 44 | | between statutes enacted by the 2023 Regular Session of the General Assembly. |
|---|
| 45 | 45 | | HOUSE BILL No. 1270 |
|---|
| 46 | 46 | | A BILL FOR AN ACT to amend the Indiana Code concerning |
|---|
| 47 | 47 | | taxation. |
|---|
| 48 | 48 | | Be it enacted by the General Assembly of the State of Indiana: |
|---|
| 49 | 49 | | 1 SECTION 1. IC 6-1.1-49.5 IS ADDED TO THE INDIANA CODE |
|---|
| 50 | 50 | | 2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE |
|---|
| 51 | 51 | | 3 JULY 1, 2024]: |
|---|
| 52 | 52 | | 4 Chapter 49.5. Optional Circuit Breaker Tax Credit |
|---|
| 53 | 53 | | 5 Sec. 1. This chapter applies to the city of Gary. |
|---|
| 54 | 54 | | 6 Sec. 2. As used in this chapter, "homestead" refers to a |
|---|
| 55 | 55 | | 7 homestead that has been granted a standard deduction under |
|---|
| 56 | 56 | | 8 IC 6-1.1-12-37. |
|---|
| 57 | 57 | | 9 Sec. 3. As used in this chapter, "neighborhood enhancement |
|---|
| 58 | 58 | | 10 district" refers to a geographic territory designated by the city |
|---|
| 59 | 59 | | 11 fiscal body and established as a designated area in an ordinance |
|---|
| 60 | 60 | | 12 adopting an optional circuit breaker tax credit under section 5 of |
|---|
| 61 | 61 | | 13 this chapter. |
|---|
| 62 | 62 | | 14 Sec. 4. As used in this chapter, "qualified individual" means an |
|---|
| 63 | 63 | | 15 individual who: |
|---|
| 64 | 64 | | 16 (1) has received a standard deduction granted under |
|---|
| 65 | 65 | | 17 IC 6-1.1-12-37 for the individual's homestead property in the |
|---|
| 66 | 66 | | 2024 IN 1270—LS 6702/DI 134 2 |
|---|
| 67 | 67 | | 1 immediately preceding calendar year (or was married at the |
|---|
| 68 | 68 | | 2 time of death to a deceased spouse who qualified for a |
|---|
| 69 | 69 | | 3 standard deduction granted under IC 6-1.1-12-37 for the |
|---|
| 70 | 70 | | 4 individual's homestead property in the immediately preceding |
|---|
| 71 | 71 | | 5 calendar year); |
|---|
| 72 | 72 | | 6 (2) is receiving a standard deduction granted under |
|---|
| 73 | 73 | | 7 IC 6-1.1-12-37 for the same homestead property in the |
|---|
| 74 | 74 | | 8 current calendar year; |
|---|
| 75 | 75 | | 9 (3) has lived in the homestead for at least ten (10) years on or |
|---|
| 76 | 76 | | 10 before December 31 of the calendar year immediately |
|---|
| 77 | 77 | | 11 preceding the current calendar year; |
|---|
| 78 | 78 | | 12 (4) is fifty-five (55) years of age or older on or before |
|---|
| 79 | 79 | | 13 December 31 of the calendar year preceding the year in which |
|---|
| 80 | 80 | | 14 the credit is claimed; and |
|---|
| 81 | 81 | | 15 (5) had: |
|---|
| 82 | 82 | | 16 (A) in the case of an individual who filed a single return, |
|---|
| 83 | 83 | | 17 adjusted gross income (as defined in Section 62 of the |
|---|
| 84 | 84 | | 18 Internal Revenue Code) not exceeding the amount |
|---|
| 85 | 85 | | 19 specified in the ordinance adopted by the city under section |
|---|
| 86 | 86 | | 20 5(c)(2) of this chapter; or |
|---|
| 87 | 87 | | 21 (B) in the case of an individual who filed a joint income tax |
|---|
| 88 | 88 | | 22 return with the individual's spouse, combined adjusted |
|---|
| 89 | 89 | | 23 gross income (as defined in Section 62 of the Internal |
|---|
| 90 | 90 | | 24 Revenue Code) not exceeding the amount specified in the |
|---|
| 91 | 91 | | 25 ordinance adopted by the city under section 5(c)(2) of this |
|---|
| 92 | 92 | | 26 chapter; |
|---|
| 93 | 93 | | 27 for the calendar year preceding by two (2) years the calendar |
|---|
| 94 | 94 | | 28 year in which property taxes are first due and payable. |
|---|
| 95 | 95 | | 29 Sec. 5. (a) Subject to subsection (h), the city fiscal body may |
|---|
| 96 | 96 | | 30 adopt an ordinance to provide a credit against a qualified |
|---|
| 97 | 97 | | 31 individual's property tax liability as set forth in this chapter. |
|---|
| 98 | 98 | | 32 (b) An ordinance adopted under this section may designate a |
|---|
| 99 | 99 | | 33 neighborhood enhancement district. A neighborhood enhancement |
|---|
| 100 | 100 | | 34 district may include: |
|---|
| 101 | 101 | | 35 (1) all of the territory of the city; or |
|---|
| 102 | 102 | | 36 (2) one (1) or more specific geographic territories within the |
|---|
| 103 | 103 | | 37 city; |
|---|
| 104 | 104 | | 38 as an area in which qualified individuals may apply for the credit. |
|---|
| 105 | 105 | | 39 (c) Subject to subsection (h), an ordinance adopted under this |
|---|
| 106 | 106 | | 40 section must: |
|---|
| 107 | 107 | | 41 (1) include a boundary description of the neighborhood |
|---|
| 108 | 108 | | 42 enhancement district or districts to which the ordinance |
|---|
| 109 | 109 | | 2024 IN 1270—LS 6702/DI 134 3 |
|---|
| 110 | 110 | | 1 applies; |
|---|
| 111 | 111 | | 2 (2) specify the income thresholds for a qualified individual |
|---|
| 112 | 112 | | 3 under section 4(5)(A) and 4(5)(B) of this chapter, if any; and |
|---|
| 113 | 113 | | 4 (3) specify the percentage of increase on a qualified |
|---|
| 114 | 114 | | 5 individual's property tax liability in a particular year |
|---|
| 115 | 115 | | 6 compared to the prior year that is to be used in determining |
|---|
| 116 | 116 | | 7 the amount of the optional circuit breaker tax credit |
|---|
| 117 | 117 | | 8 calculated under section 8(2)(B) of this chapter. The |
|---|
| 118 | 118 | | 9 percentage must be at least two percent (2%) but not more |
|---|
| 119 | 119 | | 10 than five percent (5%). |
|---|
| 120 | 120 | | 11 The boundary description required under subdivision (1) must be |
|---|
| 121 | 121 | | 12 sufficient to identify the parcel or parcels to which the credit may |
|---|
| 122 | 122 | | 13 be applied, including identification by taxing district, a parcel list, |
|---|
| 123 | 123 | | 14 or a legal description. |
|---|
| 124 | 124 | | 15 (d) If a proposal is presented to the city fiscal body to adopt an |
|---|
| 125 | 125 | | 16 ordinance under this section, the city fiscal body shall hear the |
|---|
| 126 | 126 | | 17 proposal at a public meeting of the city fiscal body and may then |
|---|
| 127 | 127 | | 18 vote to adopt the ordinance at the next meeting of the city fiscal |
|---|
| 128 | 128 | | 19 body. |
|---|
| 129 | 129 | | 20 (e) The city fiscal body may rescind an ordinance adopted under |
|---|
| 130 | 130 | | 21 this section. |
|---|
| 131 | 131 | | 22 (f) An ordinance adopted under this section is effective January |
|---|
| 132 | 132 | | 23 1 of the year following the year in which the ordinance is adopted. |
|---|
| 133 | 133 | | 24 (g) An ordinance adopted under this section must specify that |
|---|
| 134 | 134 | | 25 the credit does not apply for property taxes first due and payable |
|---|
| 135 | 135 | | 26 after December 31, 2027. |
|---|
| 136 | 136 | | 27 (h) A city fiscal body shall prescribe the same income |
|---|
| 137 | 137 | | 28 thresholds, credit amounts, and any other requirements related to |
|---|
| 138 | 138 | | 29 eligibility for each neighborhood enhancement district designated |
|---|
| 139 | 139 | | 30 in the city. |
|---|
| 140 | 140 | | 31 Sec. 6. If a city fiscal body adopts an ordinance to either provide |
|---|
| 141 | 141 | | 32 the credit under this chapter or rescind an ordinance previously |
|---|
| 142 | 142 | | 33 adopted, the city fiscal body shall, not later than fifteen (15) days |
|---|
| 143 | 143 | | 34 after the adoption of the ordinance, give notice of the adoption of |
|---|
| 144 | 144 | | 35 the ordinance to: |
|---|
| 145 | 145 | | 36 (1) the department of local government finance on the form |
|---|
| 146 | 146 | | 37 and in the manner prescribed by the department of local |
|---|
| 147 | 147 | | 38 government finance; |
|---|
| 148 | 148 | | 39 (2) the county auditor; and |
|---|
| 149 | 149 | | 40 (3) the fiscal officer of each taxing unit within the |
|---|
| 150 | 150 | | 41 neighborhood enhancement district or districts to which the |
|---|
| 151 | 151 | | 42 ordinance applies; |
|---|
| 152 | 152 | | 2024 IN 1270—LS 6702/DI 134 4 |
|---|
| 153 | 153 | | 1 including a certified copy of the adopted ordinance. |
|---|
| 154 | 154 | | 2 Sec. 7. (a) A qualified individual who desires to claim the credit |
|---|
| 155 | 155 | | 3 under this chapter must apply for the credit by filing a certified |
|---|
| 156 | 156 | | 4 statement on forms prescribed by the department of local |
|---|
| 157 | 157 | | 5 government finance with the county auditor. However, a qualified |
|---|
| 158 | 158 | | 6 individual who remains eligible for the credit in the following year |
|---|
| 159 | 159 | | 7 is not required to file a statement to apply for the credit in the |
|---|
| 160 | 160 | | 8 following year. |
|---|
| 161 | 161 | | 9 (b) An individual who has a credit provided under this chapter |
|---|
| 162 | 162 | | 10 applied to the individual's property tax liability in a particular |
|---|
| 163 | 163 | | 11 calendar year may not also have a credit under IC 6-1.1-20.6-8.5 |
|---|
| 164 | 164 | | 12 applied to the individual's property tax liability in the same |
|---|
| 165 | 165 | | 13 calendar year. |
|---|
| 166 | 166 | | 14 (c) Not more than one (1) credit may be claimed under this |
|---|
| 167 | 167 | | 15 chapter with respect to a particular homestead by any qualified |
|---|
| 168 | 168 | | 16 individual. |
|---|
| 169 | 169 | | 17 Sec. 8. The amount of the credit under this chapter is equal to |
|---|
| 170 | 170 | | 18 the greater of zero (0) or the result of: |
|---|
| 171 | 171 | | 19 (1) the property tax liability first due and payable on the |
|---|
| 172 | 172 | | 20 qualified individual's homestead property for the calendar |
|---|
| 173 | 173 | | 21 year (excluding any property tax liability imposed in a voter |
|---|
| 174 | 174 | | 22 approved referendum levy); minus |
|---|
| 175 | 175 | | 23 (2) the result of: |
|---|
| 176 | 176 | | 24 (A) the property tax liability first due and payable on the |
|---|
| 177 | 177 | | 25 qualified individual's homestead property for the |
|---|
| 178 | 178 | | 26 immediately preceding year after the application of the |
|---|
| 179 | 179 | | 27 credit granted under this section for that year (excluding |
|---|
| 180 | 180 | | 28 any property tax liability imposed in a voter approved |
|---|
| 181 | 181 | | 29 referendum levy); multiplied by |
|---|
| 182 | 182 | | 30 (B) the sum of: |
|---|
| 183 | 183 | | 31 (i) the percentage adopted in an ordinance under section |
|---|
| 184 | 184 | | 32 5(c)(3) of this chapter, expressed as a decimal; plus |
|---|
| 185 | 185 | | 33 (ii) one (1). |
|---|
| 186 | 186 | | 34 However, the credit provided by this chapter shall not apply to any |
|---|
| 187 | 187 | | 35 portion of property tax liability imposed on a qualified individual's |
|---|
| 188 | 188 | | 36 homestead property that is used for trade or business purposes in |
|---|
| 189 | 189 | | 37 connection with the production of income. In addition, the credit |
|---|
| 190 | 190 | | 38 does not affect the allocation of taxes to a referendum fund. |
|---|
| 191 | 191 | | 39 Sec. 9. If the ownership of a homestead for which a qualified |
|---|
| 192 | 192 | | 40 individual received a credit under this chapter changes, and the |
|---|
| 193 | 193 | | 41 qualified individual no longer owns or principally resides in the |
|---|
| 194 | 194 | | 42 homestead, the county auditor shall remove the designation of the |
|---|
| 195 | 195 | | 2024 IN 1270—LS 6702/DI 134 5 |
|---|
| 196 | 196 | | 1 individual as a qualified individual with respect to that homestead. |
|---|
| 197 | 197 | | 2 Sec. 10. The county auditor shall, in a particular year, apply a |
|---|
| 198 | 198 | | 3 credit provided under this chapter to each qualified individual who |
|---|
| 199 | 199 | | 4 received the credit in the preceding year unless the county auditor |
|---|
| 200 | 200 | | 5 determines that the individual is no longer eligible for the credit or |
|---|
| 201 | 201 | | 6 the city fiscal body rescinds the ordinance that provided the credit. |
|---|
| 202 | 202 | | 7 Sec. 11. (a) If an individual who is receiving the credit provided |
|---|
| 203 | 203 | | 8 by this chapter: |
|---|
| 204 | 204 | | 9 (1) knows or should have known that the individual does not |
|---|
| 205 | 205 | | 10 qualify for the credit under this chapter; or |
|---|
| 206 | 206 | | 11 (2) changes the use of the individual's property so that part or |
|---|
| 207 | 207 | | 12 all of the property no longer qualifies for the credit under this |
|---|
| 208 | 208 | | 13 chapter; |
|---|
| 209 | 209 | | 14 the individual must file a certified statement with the county |
|---|
| 210 | 210 | | 15 auditor, notifying the county auditor that subdivision (1) or (2) |
|---|
| 211 | 211 | | 16 applies, not more than sixty (60) days after the date subdivision (1) |
|---|
| 212 | 212 | | 17 or (2) first applies. |
|---|
| 213 | 213 | | 18 (b) An individual who fails to file the statement required by this |
|---|
| 214 | 214 | | 19 section is liable for any additional taxes that would have been due |
|---|
| 215 | 215 | | 20 on the property if the individual had filed the statement as |
|---|
| 216 | 216 | | 21 required by this section, plus a civil penalty equal to ten percent |
|---|
| 217 | 217 | | 22 (10%) of the additional taxes due. The additional taxes owed plus |
|---|
| 218 | 218 | | 23 the civil penalty become part of the property tax liability for |
|---|
| 219 | 219 | | 24 purposes of this article. |
|---|
| 220 | 220 | | 25 (c) The civil penalty imposed under this section is in addition to |
|---|
| 221 | 221 | | 26 any interest and penalties for a delinquent payment that might |
|---|
| 222 | 222 | | 27 otherwise be due. One percent (1%) of the total civil penalty |
|---|
| 223 | 223 | | 28 collected under this section shall be transferred by the county to |
|---|
| 224 | 224 | | 29 the department of local government finance for use by the |
|---|
| 225 | 225 | | 30 department of local government finance in establishing and |
|---|
| 226 | 226 | | 31 maintaining the homestead property data base under |
|---|
| 227 | 227 | | 32 IC 6-1.1-12-37(i) and, to the extent there is money remaining, for |
|---|
| 228 | 228 | | 33 any other purposes of the department of local government finance. |
|---|
| 229 | 229 | | 34 Sec. 12. This chapter expires January 1, 2028. |
|---|
| 230 | 230 | | 2024 IN 1270—LS 6702/DI 134 |
|---|