Indiana 2025 Regular Session

Indiana Senate Bill SB0007 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	SENATE BILL No. 7
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 6-1.1-4-4.5.
7	7	Synopsis: Agricultural land assessment. Amends a capitalization rate
8	8	percentage under the statewide agricultural land base rate
9	9	determination.
10	10	Effective: January 1, 2026.
11	11	Buchanan
12	12	January 14, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
13	13	2025 IN 7—LS 7445/DI 129 Introduced
14	14	First Regular Session of the 124th General Assembly (2025)
15	15	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
16	16	Constitution) is being amended, the text of the existing provision will appear in this style type,
17	17	additions will appear in this style type, and deletions will appear in this style type.
18	18	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
19	19	provision adopted), the text of the new provision will appear in this style type. Also, the
20	20	word NEW will appear in that style type in the introductory clause of each SECTION that adds
21	21	a new provision to the Indiana Code or the Indiana Constitution.
22	22	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
23	23	between statutes enacted by the 2024 Regular Session of the General Assembly.
24	24	SENATE BILL No. 7
25	25	A BILL FOR AN ACT to amend the Indiana Code concerning
26	26	taxation.
27	27	Be it enacted by the General Assembly of the State of Indiana:
28	28	1 SECTION 1. IC 6-1.1-4-4.5, AS AMENDED BY P.L.8-2022,
29	29	2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30	30	3 JANUARY 1, 2026]: Sec. 4.5. (a) The department of local government
31	31	4 finance shall adopt rules establishing a system for annually adjusting
32	32	5 the assessed value of real property to account for changes in value in
33	33	6 those years since a reassessment under section 4.2 of this chapter for
34	34	7 the property last took effect.
35	35	8 (b) Subject to subsection (f), the system must be applied to adjust
36	36	9 assessed values beginning with the 2006 assessment date and each year
37	37	10 thereafter that is not a year in which a reassessment under section 4.2
38	38	11 of this chapter for the property becomes effective.
39	39	12 (c) The rules adopted under subsection (a) must include the
40	40	13 following characteristics in the system:
41	41	14 (1) Promote uniform and equal assessment of real property within
42	42	15 and across classifications.
43	43	16 (2) Require that assessing officials:
44	44	17 (A) reevaluate the factors that affect value;
45	45	2025 IN 7—LS 7445/DI 129 2
46	46	1 (B) express the interactions of those factors mathematically;
47	47	2 (C) use mass appraisal techniques to estimate updated property
48	48	3 values within statistical measures of accuracy; and
49	49	4 (D) provide notice to taxpayers of an assessment increase that
50	50	5 results from the application of annual adjustments.
51	51	6 (3) Prescribe procedures that permit the application of the
52	52	7 adjustment percentages in an efficient manner by assessing
53	53	8 officials.
54	54	9 (d) The department of local government finance must review and
55	55	10 certify each annual adjustment determined under this section.
56	56	11 (e) For an assessment beginning after December 31, 2022,
57	57	12 agricultural improvements such as but not limited to barns, grain bins,
58	58	13 or silos on land assessed as agricultural shall not be adjusted using
59	59	14 factors, such as neighborhood delineation, that are appropriate for use
60	60	15 in adjusting residential, commercial, and industrial real property. Those
61	61	16 portions of agricultural parcels that include land and buildings not used
62	62	17 for an agricultural purpose, such as homes, homesites, and excess
63	63	18 residential land and commercial or industrial land and buildings, shall
64	64	19 be adjusted by the factor or factors developed for other similar property
65	65	20 within the geographic stratification. The residential portion of
66	66	21 agricultural properties shall be adjusted by the factors applied to
67	67	22 similar residential purposes.
68	68	23 (f) In making the annual determination of the base rate to satisfy the
69	69	24 requirement for an annual adjustment for each assessment date, the
70	70	25 department of local government finance shall not later than March 1 of
71	71	26 each year determine the base rate using the methodology reflected in
72	72	27 Table 2-18 of Book 1, Chapter 2 of the department of local government
73	73	28 finance's Real Property Assessment Guidelines (as in effect on January
74	74	29 1, 2005), except that the department shall adjust the methodology as
75	75	30 follows:
76	76	31 (1) Use a six (6) year rolling average adjusted under subdivision
77	77	32 (3) instead of a four (4) year rolling average.
78	78	33 (2) Use the data from the six (6) most recent years preceding the
79	79	34 year in which the assessment date occurs for which data is
80	80	35 available, before one (1) of those six (6) years is eliminated under
81	81	36 subdivision (3) when determining the rolling average.
82	82	37 (3) Eliminate in the calculation of the rolling average the year
83	83	38 among the six (6) years for which the highest market value in use
84	84	39 of agricultural land is determined.
85	85	40 (4) After determining a preliminary base rate that would apply for
86	86	41 the assessment date without applying the adjustment under this
87	87	42 subdivision, the department of local government finance shall
88	88	2025 IN 7—LS 7445/DI 129 3
89	89	1 adjust the preliminary base rate as follows:
90	90	2 (A) If the preliminary base rate for the assessment date would
91	91	3 be at least ten percent (10%) greater than the final base rate
92	92	4 determined for the preceding assessment date, a capitalization
93	93	5 rate of eight percent (8%) nine percent (9%) shall be used to
94	94	6 determine the final base rate.
95	95	7 (B) If the preliminary base rate for the assessment date would
96	96	8 be at least ten percent (10%) less than the final base rate
97	97	9 determined for the preceding assessment date, a capitalization
98	98	10 rate of six percent (6%) shall be used to determine the final
99	99	11 base rate.
100	100	12 (C) If neither clause (A) nor clause (B) applies, a capitalization
101	101	13 rate of seven percent (7%) shall be used to determine the final
102	102	14 base rate.
103	103	15 (D) In the case of a market value in use for a year that is used
104	104	16 in the calculation of the six (6) year rolling average under
105	105	17 subdivision (1) for purposes of determining the base rate for
106	106	18 the assessment date:
107	107	19 (i) that market value in use shall be recalculated by using the
108	108	20 capitalization rate determined under clauses (A) through (C)
109	109	21 for the calculation of the base rate for the assessment date;
110	110	22 and
111	111	23 (ii) the market value in use recalculated under item (i) shall
112	112	24 be used in the calculation of the six (6) year rolling average
113	113	25 under subdivision (1).
114	114	26 (g) For assessment dates after December 31, 2009, an adjustment in
115	115	27 the assessed value of real property under this section shall be based on
116	116	28 the estimated true tax value of the property on the assessment date that
117	117	29 is the basis for taxes payable on that real property.
118	118	30 (h) The department shall release the department's annual
119	119	31 determination of the base rate on or before March 1 of each year.
120	120	32 SECTION 2. [EFFECTIVE JANUARY 1, 2026] (a) IC 6-1.1-4-4.5,
121	121	33 as amended by this act, applies to assessment dates occurring after
122	122	34 December 31, 2025.
123	123	35 (b) This SECTION expires January 1, 2028.
124	124	2025 IN 7—LS 7445/DI 129