2016 Indiana Legislative Update

indiana legislative update

2018 Edition  |  Table of Contents
 

Property Tax
By Chad Miller 

Affected Code Section: Ind. Code Article 6-1.1 (amendments)
Effective Date: Upon Passage
Enacted By: Senate Bill 6 §§ 23-26; 28-49, 51-66
Explanation: Makes technical corrections.

Affected Code Section: Ind. Code § 6-1.1-2-7 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1323 § 1
Explanation: Provides that for an assessment date after December 31, 2018, heavy rental equipment, as defined in Ind. Code § 6-6-15-2, that is rented or held in inventory for rental or sale, the rental of which is or would be subject to the heavy equipment rental excise tax under Ind. Code Chapter 6-6-15, is not subject to assessment and taxation.
Application Note: Beginning with the 2019 personal property tax filing year, companies will need to remove this equipment from the personal property pools.

Affected Code Section: Ind. Code § 6-1.1-4-5 (deletion)
Effective Date: Upon Passage
Enacted By: Senate Bill 6 § 27
Explanation: Repeals the Indiana code section dealing with the petition for reassessment of real property.

Affected Code Section: Ind. Code § 6-1.1-4-14 (amendment)
Effective Date: July 1, 2018
Enacted By: Senate Bill 392 § 4
Explanation: Makes conforming changes.

Affected Code Section: Ind. Code § 6-1.1-18-12 (amendments)
Effective Date: January 1, 2019
Enacted By: Senate Bill 6 § 50
Explanation: Makes technical corrections.

Affected Code Section: Ind. Code § 6-1.1-18.5-10 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 1
Explanation: Makes corrections to reference Ind. Code § 12-29-2-4 instead of Ind. Code § 12-29-2-5.

Affected Code Section: Ind. Code § 6-1.1-19-1 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1167 § 1
Explanation: Provides that “appeal” refers to an appeal taken or petition to the department of local government finance by or in respect of a school corporation under any of the following: (1) Ind. Code Chapter 6-1.1-17; (2) Ind. Code Article 20-43; and (3) Ind. Code Chapter 20-46-8.

Affected Code Section: Ind. Code § 6-1.1-20.3-6 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1167 § 2
Explanation: Makes technical corrections to conform to changes from the 2017 legislative session.

Affected Code Section: Ind. Code § 6-1.1-33.5-9 (deletion)
Effective Date: July 1, 2018
Enacted By: House Bill 1003 § 23
Explanation: Repeals the section which required that the department of local government finance report before July 1 of each year to the legislative council concerning compliance with Ind. Code § 6-1.1-33.5-8.

Affected Code Section: Ind. Code Chapter 6-6-15 (addition)
Effective Date: January 1, 2019
Enacted By: House Bill 1323 § 3
Explanation: Imposes an excise tax on the rental of heavy rental equipment from a retail merchant from a location in Indiana. Provides that the term “heavy rental equipment” means personal property (including attachments used in conjunction with the personal property): (A) that is owned by a person or business that: (i) is classified under 532412 of the North American Industry Classification System Manual in effect on January 1, 2018; and (ii) is a retail merchant in the business of renting heavy equipment, including any attachments; (B) is not intended to be permanently affixed to any real property; and (C) is not subject to registration under Ind. Code Article 9-18.1 for use on a public highway. Specifies that the term does not include heavy rental equipment that is rented for mining purposes or heavy rental equipment that is eligible for a property tax abatement deduction under Ind. Code Chapter 6-1.1-12.1 during the calendar year. Defines “rental” as any transfer of possession or control of heavy rental equipment for consideration: (A) for a period not to exceed three hundred sixty-five (365) days; or (B) for a period that is open ended under the terms of the rental contract with no specified end date. Provides that the heavy equipment rental excise tax is two and twenty-five hundredths percent (2.25%) of the gross retail income received by the retail merchant for the rental. Provides that a transaction is exempt from the excise tax if: (1) the rentee is: (A) the United States government; (B) the state; (C) a political subdivision; (D) an agency or instrumentality of an entity described in clauses (A) through (C). (2) The transaction is a subrent of the heavy rental equipment from a rentee to another person, and the rentee was liable for the excise tax. Provides that a person that rents heavy rental equipment is liable for the heavy equipment rental excise tax on the transaction. Specifies that the person shall pay the tax to the retail merchant as a separate amount added to the consideration for the transaction. Provides that the retail merchant shall collect the tax as an agent for the state. Provides that the retail merchant shall remit the excise tax in the same manner as the state gross retail tax. Provides that the excise tax shall be sourced to the business location of the retail merchant from which the heavy rental equipment is rented. Provides that return to be filed for the payment of the excise tax may be either a separate return or may be combined with the return filed for the payment of the state gross retail tax, as prescribed by the department of state revenue. Provides that all revenues collected from the excise tax must be deposited in a special account of the state general fund called the heavy equipment rental excise tax account. Provides that on or before April 30 and October 30 of each year, all amounts held in the account must be distributed to counties in which the excise tax was initially imposed and collected.

Affected Code Section: Ind. Code § 12-15-16-1 (amendment); Ind. Code § 12-15-18-5.1 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 §§ 2, 3
Explanation: Makes corrections to reference Ind. Code Chapter 12-29-2 after December 31, 2018, instead of Ind. Code § 12-29-2-20(d) after December 31, 2003.

Affected Code Section: Ind. Code § 12-29-2-1 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 4
Explanation: Provides that this chapter applies only to the state and local funding of a program of services for individuals with a mental illness that is designated as a community mental health center by the division of mental health and addiction in the division’s approval of the program.

Affected Code Section: Ind. Code § 12-29-2-2 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 5
Explanation: Provides that a county shall provide funding for the operation of community mental health centers in the amount determined by a county’s maximum appropriation amount for the operation of community mental health centers in the previous calendar year multiplied by whichever is greater of: one (1) or the percentage change in the county’s general fund property tax levy, after subtracting circuit breaker credits (but provides that the maximum funding amount will not be less than the preceding year’s maximum funding amount). Provides that, in the case of Marion County for calendar year 2019, calendar year 2020, and calendar year 2021, the amount of funding change will be phased in using the same calculation but reaching the full amount by calendar year 2021. Requires the department of local government finance to verify the maximum appropriation calculation as part of its certification of the county’s budget. Removes prior funding calculations.

Affected Code Section: Ind. Code § 12-29-2-3 (deletion)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 6
Explanation: Repeals the statute providing for the calculation of the maximum appropriation for a community mental health center if the community or a partial population of the community is served by one (1) center.

Affected Code Section: Ind. Code § 12-29-2-4 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 7
Explanation: Provides that the new maximum appropriation for a county represents the combined maximum appropriation to all centers serving the particular county. Provides that the allotment to each center shall be apportioned according to the proportion of: (1) the county’s population residing in the primary service area of each center that is certified by the division of mental health and addiction to serve the county; to (2) the total population of the county. Removes prior allotment calculations.

Affected Code Section: Ind. Code § 12-29-2-5 (deletion)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 8
Explanation: Repeals the section providing for the appropriations for a county’s proportional share of each community mental health center’s operating budget and its effect on the appropriation of property taxes raised.

Affected Code Section: Ind. Code § 12-29-2-15 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 9
Explanation: Provides that a community health center that: (1) is certified by the division of mental health and addiction; and (2) is not administered by a hospital licensed under Ind. Code Chapter 16-21-2; shall include a member of a county fiscal body or a member of a board of county commissioners (or the designee of the member of the board of county commissioners) on the center’s governing board. Provides that the member shall be selected by the board of county commissioners of the county where the community mental health center maintains its corporate mailing address.

Affected Code Section: Ind. Code § 12-29-2-16 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1141 § 10
Explanation: Requires the annual report by a community mental health center to be made to the division of mental health and addiction and to the fiscal body and the board of county commissioners of each county located in the community mental health center’s primary service area. Specifies certain information that must be included in the annual reports provided by community mental health centers. Requires the division of mental health and addiction to specify the format of the annual reports that must be provided by community mental health centers. Requires the division of mental health and addiction to provide an annual report containing specified information to the county fiscal body and board of county commissioners of each county.

Affected Code Section: Ind. Code § 12-29-2-20 (amendment)
Effective Date: January 1, 2019
Enacted By: House Bill 1141 § 11
Explanation: Provides that unless otherwise agreed to by the county and the community mental health center, the county payment to the community mental health center shall be paid by the county treasurer to the treasurer of the community mental health center’s board of directors at least as frequently as semiannually (in July and in December). Deletes requirement that the appropriation payment be made by the county treasurer to the division of mental health and addiction. Deletes the requirement that the county auditor certify the amount of money that will be provided to the community mental health center to the extent that money is appropriated for other allowed purposes. Deletes the provision that payments by the county fiscal body are in place of grants from agencies supported within the county solely by county tax money.

Affected Code Section: Ind. Code § 25-21.5-1-6.5 (addition)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 1
Explanation: Defines “original survey” as a survey that is executed for purposes of locating and describing real property that has not been previously described in one (1) or more documents conveying an interest in the real property.

Affected Code Section: Ind. Code § 25-21.5-1-8.7 (addition)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 2
Explanation: Defines “retracement survey” as a survey of real property that has been previously described in one (1) or more documents conveying an interest in the real property.

Affected Code Section: Ind. Code § 25-21.5-9-9 (addition)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 3
Explanation: Provides that any new or modified real property description prepared by a professional surveyor as a product of an original survey or a retracement survey must include a caption that identifies: (1) the name and professional surveyor registration number of the professional surveyor who prepared the description; and (2) the plat of survey produced as a part of the original survey or retracement survey, including the following information: (A) the date of the surveyor’s certification; (B) the date of the last revision, if any, to the survey; (C) any associated project or job number; and (D) the name of the survey company, if any. Specifies that this section does not apply to descriptions of lots in new subdivisions.

Affected Code Section: Ind. Code § 25-34.1-11-13.3 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1277 § 1
Explanation: Provides that before an appraisal management company may engage a real estate appraiser to perform an appraisal under Ind. Code Chapter 25-34.1-11, the appraisal management company shall provide the real estate appraiser with a proposed contract to perform the appraisal. Provides that the contract must include the following: (1) The order for appraisal. (2) Information delineating the work to be completed. (3) The date when the real estate appraiser must complete the appraisal. (4) The terms and conditions for the payment of the real estate appraiser for the appraisal. Provides that a real estate appraiser may accept the proposed contract by returning a signed copy or accepting the contract electronically. Provides that a real estate appraiser may accept a proposed contract that is offered and signed, manually or electronically, by the appraisal management company by: (1) signing a written contract and delivering the signed contract to the appraisal management company; or (2) accepting the contract electronically through an electronic mail, facsimile transmission, or digital image to the appraisal management company.

Affected Code Section: Ind. Code § 25-34.1-11-13.5 (addition)
Effective Date: July 1, 2018
Enacted By: Senate Bill 351 § 2
Explanation: Provides that an appraisal management company that engages a real estate appraiser as an independent contractor as described in the statute concerning appraisal management companies to perform an appraisal shall pay the real estate appraiser for the appraisal not later than: (1) the deadline indicated by the payment terms set forth in: (A) the contract or agreement between the appraisal management company and the real estate appraiser; or (B) the real estate appraiser’s invoice, if a contract or agreement: (i) does not exist; or (ii) exists but does not specify any payment terms or clearly indicate a payment deadline; or (2) forty-five (45) days after the delivery of the appraisal report to the appraisal management company if a contract, an agreement, or an invoice: (A) does not exist with respect to the appraisal; or (B) exists but does not specify any payment terms. Specifies exceptions to an appraisal management company’s obligation to pay at the required times, in the case of the following: (1) A breach by the real estate appraiser of its contract with the appraisal management company. (2) The inclusion in the appraisal report of one (1) or more significant and material documented errors. (3) The failure of the real estate appraiser’s scope of work to meet or exceed: (A) the expectations of parties in similar assignments; and (B) what the actions of the real estate appraiser’s peers would be in similar assignments. Provides that an appraisal management company may not prohibit a real estate appraiser from including in an appraisal report the real estate appraiser’s fee amount for preparing the appraisal. Defines “peers” and “scope of work” as used in this section.

Affected Code Section: Ind. Code § 25-34.1-11-15.5 (addition)
Effective Date: Upon Passage
Enacted By: Senate Bill 351 § 3
Explanation: Specifies that this section applies to an appraisal management company that qualifies under 12 U.S.C. § 3350(11). Requires such an appraisal management company to pay to the real estate appraiser licensure and certification board the annual appraisal management company registry fee, as established by the Appraisal Subcommittee of the Federal Financial Institutions Examination Council. Sets forth the formula for determining the amount of the fee. Provides that the appraisal management company registry fee is in addition to the other registration fees required by this chapter. Requires the real estate appraiser licensure and certification board to transmit the appraisal management company registry fees collected to the Appraisal Subcommittee on an annual basis. Authorizes the real estate commission to adopt and amend rules to implement these provisions and to conform the appraisal management company registry fee imposed by the real estate appraiser licensure and certification board with the appraisal management company registry fee established by the Appraisal Subcommittee upon the recommendation of the real estate appraiser licensure and certification board. Defines the terms “Appraisal Subcommittee,” “covered transaction,” and “performed an appraisal” as used in this section.

Affected Code Section: Ind. Code § 32-19-2-2 (amendment)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 4
Explanation: Amends the statute concerning the Indiana coordinate system for describing real property to provide that coordinates based on specified coordinate systems (adding “any other coordinate system published by an agency of the federal government or the state, including the Indiana Geospacial Coordinate System” to the list) and used to define the position of a point on a land boundary may not be presented to be recorded unless the recording document also contains: (1) the method used to relate the coordinates to the National Spatial Reference System; and (2) the name and zone of the coordinate system, including the: (A) datum; (B) datum realization; and (C) units; used. Eliminates other reporting and certification requirements with respect to such recordings.

Affected Code Section: Ind. Code § 32-19-3-1 (amendment)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 5
Explanation: Makes corrections to remove reference to coordinates based on the Indiana coordinate system.

Affected Code Section: Ind. Code § 32-19-3-2 (deletion)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 6
Explanation: Repeals the statute stating that a purchaser or mortgagee of real estate is not required to rely on a description which depends exclusively upon the Indiana coordinate system.

Affected Code Section: Ind. Code § 32-25.5-3-4 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1155 § 1
Explanation: Establishes that the section limiting the kind of contracts a board of directors of a homeowners association may enter into does not apply to a contract under Ind. Code Chapter 36-9-27.8 (Subdivision Drain Repair Pilot Program).

Affected Code Section: Ind. Code § 36-1-14-5 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1256 § 1
Explanation: Provides that a county that sells a county hospital before January 1, 2017, may establish a charitable nonprofit foundation to hold some or all of the proceeds of the sale of the county hospital in trust for the benefit of the county, by the council and the county executive adopting substantially similar ordinances to establish the charitable nonprofit foundation after June 30, 2018. Provides that the ordinances do not supersede or replace any previously adopted ordinance or agreement effectuating: (1) monetary disbursements; and (2) distributions from the previously executed asset purchase agreement to an Indiana nonprofit corporation. Provides the details for the operation of the charitable nonprofit foundation and use of the trust funds. Provides that another unit in the same county may enter into an interlocal agreement with the county council, the county executive, and the board to invest funds obtained by the unit from the sale of a capital asset into the charitable nonprofit foundation. Establishes requirements for the contents of the interlocal agreement. Provides that the department of local government finance may not reduce the actual or maximum permissible property tax levy of a unit that enters into an interlocal agreement on account of money transferred into or expended from the charitable nonprofit foundation. Permits the county to: (1) use money from the principal amount of the donation as a pledge of money to bonds, leases, or other obligations; and (2) pay bonds issued by the county.

Affected Code Section: Ind. Code § 36-2-12-10 (amendment)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 7
Explanation: Amends the section governing the establishment of property lines by means of a legal survey to: (1) eliminate the exception to the required notice when all adjoining landowners consent in writing; and (2) specify that the right to appeal commences when the plat of the legal survey is entered (rather than recorded) in the legal survey record book.

Affected Code Section: Ind. Code § 36-2-12-14 (amendment)
Effective Date: July 1, 2018
Enacted By: Senate Bill 197 § 8
Explanation: Removes the requirement that a property owner be served with notice of the survey, whether personally or by publication, for the time limit to appeal the survey by the property owner to commence.

Affected Code Section: Ind. Code § 36-7-14-19 (amendment); Ind. Code § 36-7-14-19.5 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1256 §§ 2, 3
Explanation: Makes a technical correction for consistency.

Affected Code Section: Ind. Code § 36-9-22-2 (amendment)
Effective Date: July 1, 2018
Enacted By: House Bill 1023 § 1
Explanation: Amends the statute governing the municipal works board’s ability to fix the terms of a contract for installation of sewage works that have not been finally approved or accepted for full maintenance and operation by the municipality on July 1, 1979. Provides that the works board of a municipality may waive the requirement that the parties to a contract and the successors to a contract waive the right to remonstrate against pending or future annexations by the municipality of the area served by the sewage works if the works board considers such a wavier to be in the best interests of the municipality. Makes conforming changes.

Affected Code Section: Ind. Code Chapter 36-9-27.8 (addition)
Effective Date: July 1, 2018
Enacted By: House Bill 1155 § 2
Explanation: Establishes the Subdivision Drain Repair Pilot Program. Defines “executive” as (1) the board of county commissioners, in the case of Johnson County, or (2) the mayor, in the case of a consolidated city. Defines “unit” as Johnson County or the consolidated city in Marion County. Defines “subdivision drain” to mean a system that (1) consists of: (A) underground pipes; and (B) one (1) or more inlets; (2) may also include one (1) or more streams, swales, ditches, natural drains, catch basins, and other components; (3) is designed to drain excess water from impervious surfaces like paved streets and parking areas; (4) is located in a subdivision; and (5) has not been dedicated to public use and accepted by the county or any other political subdivision in which the system is located. Also defines “fiscal officer,” “governing documents,” “homeowners association,” and “subdivision.” Provides that the pilot program applies to a subdivision located in an unincorporated area of Johnson County and a subdivision located within a consolidated city. Provides that this chapter does not apply to a subdivision located within the boundaries of an excluded city (as defined in Ind. Code § 36-3-1-7). Provides that the executive may enter into a contract under this chapter with the homeowners association of a subdivision if the contract provisions provide for the following: (1) authorize the unit to repair subdivision drains located in the subdivision either through the work of employees of the unit or by contracting for the repair work to be performed by a third party; (2) authorize the unit to impose assessments on owners of property in the subdivision to: (A) recover the costs of repairing subdivision drains in the subdivision; and (B) accumulate funds to defray the cost of future projects to repair subdivision drains in the subdivision; (3) authorize employees of the unit or a contractor of the unit and the county surveyor or the county surveyor’s employees to enter upon property located in the subdivision for the purpose of repairing subdivision drains located on the property; and (4) authorize the unit to determine the order in which subdivision drains will be repaired by the unit. Provides that before a person authorized to enter property to perform repair work under this section, the owner of the property shall be notified in writing by registered or certified mail not later than twenty (20) days before the date of entry, and the person who enters shall present written identification or authorization to the occupant of the property before entering. Provides that not later than ten (10) business days after the date a contract is executed under this chapter, the executive shall record the contract with the county recorder. Provides for the creation of a subdivision drain repair fund with a separate account for each participating subdivision into which the assessments paid by the owners of property in the subdivision are deposited. Requires the assessments imposed on a subdivision’s homeowners to be set by the executive at an amount not greater than reasonably necessary to meet the cost of repairing the subdivision’s drains and that the charge for a homeowner’s assessment may appear on the homeowner’s semiannual property tax statement. Provides that all assessments imposed on an owner of property in a subdivision under this chapter but which remain unpaid constitute a subdivision drain repair lien on the property. In the case of a voluntary conveyance of property in a subdivision, the grantee of the property is jointly and severally liable with the grantor for all unpaid subdivision drain repair assessments that were imposed on the grantor under this chapter before the grant or conveyance, without prejudice to the grantee’s right to recover from the grantor the amounts of the subdivision drain repair assessments paid by the grantee. Provides that if the mortgagee of a first mortgage of record or another purchaser obtains title to a property in a subdivision as a result of foreclosure of the first mortgage, the acquirer of title or the acquirer’s successors and assigns are not liable for the share of the subdivision drain repair assessments that are chargeable to the property and that became due before the acquirer acquired title to the property, and any subdivision drain repair lien on the property relating to the share of the subdivision drain repair assessment that became due before the mortgagee or other purchaser acquired title to the property shall be released. Provides that assessments imposed under this chapter may be enforced and collected as special assessments. Provides that an executive may not enter into a contract under this chapter after June 30, 2021.

Affected Code Section: Non-Code Section
Effective Date: Upon Passage; July 1, 2018
Enacted By: Senate Bill 265 § 1; House Bill 1358 § 1
Explanation: Urges the legislative council to assign to the appropriate interim study committee the task of studying the following topics: (1) Safety at intersections that are not controlled by a traffic signal when one (1) or more of the following conditions exist at an intersection: (1) A parcel of land at the intersection is used as agricultural land and the following conditions exist: (A) The land is located within a clear sight triangle of the intersection of two (2) or more roads, as determined using the clear sight triangle calculation method and Intersection Sight Distance table included in the Federal Highway Administration’s report “Intersection Safety: A Manual for Local Rural Road Owners” (report date January 1, 2011). (B) The land may contain: (i) crops that typically exceed a height of three (3) feet; or (ii) any other vegetation, structures, signs, fences, walls, or obstructions owned or controlled by the property owner or a lessee of the property owner that exceed a height of three (3) feet. (2) Parking is permitted by a vehicle at a place where the vehicle obstructs the view of signage at the intersection by an individual operating a vehicle approaching the intersection; and (3) Planting crops too close to rural roads and inadequate drainage of land along these roads causing high water to cover the road.

Affected Code Section: Non-Code Section
Effective Date: Upon Passage
Enacted By: House Bill 1402 § 2
Explanation: Urges the legislative council to assign to an appropriate interim study committee the task of studying whether Indiana should implement a program to provide a property tax deduction for rental property owners as a way to encourage rental property owners to partner with nonprofit organizations to reduce veteran homelessness. Provides that the interim study committee shall consider the following topics: (1) The criteria to be met for a property owner to qualify for a tax deduction under the program. (2) The criteria to be met for a nonprofit organization to participate in the program, and the process for the Indiana department of veterans’ affairs to approve nonprofit organizations for participation in the program. (3) Determining the source of funding for the program.

Connect with Chad 
Chad Miller is the property tax practice leader in KSM’s State and Local Tax Group. Chad has 13 years of Indiana property tax experience, having previously worked in the Hamilton County, Indiana Assessor’s office as a real property appraisal manager.