Introduced Version
HOUSE BILL No. 1250
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-6.4.
Synopsis: Assessment of prime farmland. Provides a reduced property
tax assessment classification for prime farmland.
Effective: January 1, 2026.
Culp
January 9, 2025, read first time and referred to Committee on Ways and Means.
2025 IN 1250—LS 7530/DI 120 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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between statutes enacted by the 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1250
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 6-1.1-6.4 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2026]:
4 Chapter 6.4. Assessment of Prime Farmland
5 Sec. 1. This chapter applies to assessment dates beginning after
6 December 31, 2025.
7 Sec. 2. As used in this chapter, "prime farmland" refers to land
8 that is assessed as agricultural land and that meets the
9 qualifications under section 3 of this chapter. The term does not
10 include land on which renewable energy projects are located,
11 including projects under lease or contract, or land enrolled in a
12 conservation reserve program under the National Resources
13 Conservation Service.
14 Sec. 3. A parcel of agricultural land shall be categorized as
15 prime farmland if it:
16 (1) is classified as tillable land;
17 (2) is currently devoted to agricultural use;
2025 IN 1250—LS 7530/DI 120 2
1 (3) is used as part of an agricultural operation; and
2 (4) has a soil productivity factor of at least 1.0 within fifty
3 percent (50%) or more of the parcel.
4 Sec. 4. Notwithstanding any other provision of this article, land
5 that is categorized under this chapter as prime farmland shall be
6 assessed as follows:
7 (1) For the January 1, 2026, assessment date, at eighty-five
8 percent (85%) of the amount per acre determined for the
9 January 1, 2025, assessment date for general property
10 taxation purposes.
11 (2) For an assessment date occurring after December 31,
12 2026, at the amount per acre determined in the following
13 STEPS for general property taxation purposes:
14 STEP ONE: Determine the amount per acre under this
15 section for the immediately preceding assessment date.
16 STEP TWO: Multiply the STEP ONE amount by the result
17 of:
18 (A) one (1); plus
19 (B) the annual percentage change in the Consumer Price
20 Index for All Urban Consumers published by the federal
21 Bureau of Labor Statistics for the calendar year
22 preceding the calendar year before the assessment date.
23 Sec. 5. (a) An owner of farmland assessed under this chapter
24 must use the farmland in accordance with section 3 of this chapter
25 for at least ten (10) years. If the owner of farmland assessed under
26 this chapter commences using the land for a purpose other than the
27 purposes described in section 3 of this chapter before the
28 expiration of the ten (10) year period, the owner of the farmland is
29 subject to a penalty determined under subsection (b).
30 (b) The amount of a penalty imposed under this section is equal
31 to the amount determined under STEP FOUR of the following
32 formula:
33 STEP ONE: Determine for each year that the owner paid
34 property taxes based upon the assessment of the farmland
35 under this chapter, the difference between:
36 (A) the amount of property taxes that the owner would
37 have paid if the farmland had not been assessed under this
38 chapter; minus
39 (B) the amount of property taxes that the owner of the
40 farmland actually paid based on the assessment of the
41 farmland under this chapter.
42 STEP TWO: Determine the sum of the STEP ONE results.
2025 IN 1250—LS 7530/DI 120 3
1 STEP THREE: Determine the amount of interest due on the
2 STEP TWO result using an interest rate equal to one hundred
3 fifty percent (150%) of the bank prime loan interest rate
4 reported by the Board of Governors of the Federal Reserve
5 System as of the first day of the month in which the interest is
6 determined.
7 STEP FOUR: Determine the sum of:
8 (A) the STEP TWO result; plus
9 (B) the amount of interest determined under STEP
10 THREE.
11 (c) An owner of farmland charged a penalty under this section
12 shall pay the penalty to the county treasurer of the county in which
13 the farmland was assessed under this chapter. The county
14 treasurer shall deposit the penalty in the county general fund for
15 distribution among the respective funds of the taxing units located
16 in the county in the same manner and at the same time as property
17 taxes are apportioned and distributed.
2025 IN 1250—LS 7530/DI 120