Introduced Version






HOUSE BILL No. 1141

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 13-26-12; IC 36-9.

Synopsis: Sewer liens on rental property. Requires a municipality that operates a sewage works to require a security deposit. Provides that a lien for unpaid sewage fees does not attach against real property if someone other than the owner occupies the property, and that a lien that attached before July 1, 2004, to property occupied by someone other than the owner is void. Repeals a provision allowing a sewer lien to attach against real property occupied by someone other than the owner.

Effective: July 1, 2004.





Kersey




    January 13, 2004, read first time and referred to Committee on Local Government.







Introduced

Second Regular Session 113th General Assembly (2004)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2003 Regular Session of the General Assembly.

HOUSE BILL No. 1141



    A BILL FOR AN ACT to amend the Indiana Code concerning local government.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 13-26-12-2; (04)IN1141.1.1. -->     SECTION 1. IC 13-26-12-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 2. Except as provided in sections section 5 and 6 of this chapter, a lien attaches at the time of the recording of the list in the county recorder's office as provided in IC 13-26-13. The lien:
        (1) is superior to and takes precedence over all other liens except the lien for taxes; and
        (2) shall be enforced under this article.
SOURCE: IC 13-26-12-6.1; (04)IN1141.1.2. -->     SECTION 2. IC 13-26-12-6.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 6.1. After June 30, 2004, a lien does not attach against real property for rates or charges assessed against the property under this article if a person other than the owner of the property occupies the property.
SOURCE: IC 36-9-23-28; (04)IN1141.1.3. -->     SECTION 3. IC 36-9-23-28, AS AMENDED BY P.L.2-2002, SECTION 123, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 28. (a) The legislative body of a

municipality that operates sewage works under this chapter may, shall, by ordinance, require the owners, lessees, or users of property served by the works to pay a deposit to ensure payment of sewer fees.
    (b) The deposit required may not exceed the estimated average payment due from the property served by the sewage works for a three (3) month period. The deposit must be retained in a separate fund.
    (c) The deposit, less any outstanding penalties and service fees, shall be refunded to the depositor after a notarized statement from the depositor that as of a certain date the property being served:
        (1) has been conveyed or transferred to another person; or
        (2) no longer uses or is connected with any part of the municipal sewage system.
A statement under subdivision (1) must include the name and address of the person to whom the property is conveyed or transferred.
    (d) If a depositor fails to satisfy costs and fees within sixty (60) days after the termination of his the depositor's use or ownership of the property served, he the depositor forfeits his the depositor's deposit and all accrued interest. The forfeited amount shall be applied to the depositor's outstanding fees. Any excess that remains due after application of the forfeiture may be collected in the manner prescribed by section 31 or 32 of this chapter.
    (e) A deposit may be used to satisfy all or part of any judgment awarded the municipality under section 31 of this chapter.
    (f) A deposit made under this section that has remained unclaimed by the depositor for more than seven (7) years after the termination of the services for which the deposit was made becomes the property of the municipality. IC 32-34-1 (unclaimed property) does not apply to a deposit described in this subsection.

SOURCE: IC 36-9-23-32; (04)IN1141.1.4. -->     SECTION 4. IC 36-9-23-32 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 32. (a) Except as provided in subsection (c), fees assessed against real property under this chapter or under any statute repealed by IC 19-2-5-30 (repealed September 1, 1981) constitute a lien against the property assessed. The lien is superior to all other liens except tax liens. Except as provided in subsections (b) and (c), the lien attaches when notice of the lien is filed in the county recorder's office under section 33 of this chapter.
    (b) A fee is not enforceable as a lien against a subsequent owner of property unless the lien for the fee was recorded with the county recorder before the conveyance to the subsequent owner. If the property is conveyed before the lien can be filed, the municipality shall notify the person who owned the property at the time the fee became payable. The notice must inform the person that payment, including penalty fees

for delinquencies, is due not less than fifteen (15) days after the date of the notice. If payment is not received within one hundred eighty (180) days after the date of the notice, the amount due may be expensed as a bad debt loss.
    (c) A lien attaches against real property occupied by someone other than the owner only if the utility notified the owner within twenty (20) days after the time the utility fees became sixty (60) days delinquent. However, the utility is required to give notice to the owner only if the owner has given the general office of the utility written notice of the address to which his notice is to be sent.
    (c) After June 30, 2004, a lien does not attach against real property for fees assessed against the property under this chapter if a person other than the owner of the property occupies the property.

    (d) The municipality shall release:
        (1) liens filed with the county recorder after the recorded date of conveyance of the property; and
        (2) delinquent fees incurred by the seller;
upon receipt of a verified demand in writing from the purchaser. The demand must state that the delinquent fees were not incurred by the purchaser as a user, lessee, or previous owner, and that the purchaser has not been paid by the seller for the delinquent fees.

SOURCE: IC 36-9-25-11; (04)IN1141.1.5. -->     SECTION 5. IC 36-9-25-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 11. (a) In connection with its duties, the board may fix fees for the treatment and disposal of sewage and other waste discharged into the sewerage system, collect the fees, and establish and enforce rules governing the furnishing of and payment for sewage treatment and disposal service. The fees must be just and equitable and shall be paid by any user of the sewage works and the owner of every lot, parcel of real property, or building that is connected with and uses the sewage works of the district by or through any part of the sewerage system. This section applies to owners of property that is partially or wholly exempt from taxation, as well as owners of property subject to full taxation.
    (b) The board may change fees from time to time. The fees, together with the taxes levied under this chapter, must at all times be sufficient to produce revenues sufficient to pay operation, maintenance, and administrative expenses, to pay the principal and interest on bonds as they become due and payable, and to provide money for the revolving fund authorized by this chapter.
    (c) Fees may not be established until a public hearing has been held at which all the users of the sewage works and owners of property

served or to be served by the works, including interested parties, have had an opportunity to be heard concerning the proposed fees. After introduction of the resolution fixing fees, and before they are finally adopted, notice of the hearing setting forth the proposed schedule of fees shall be given by publication in accordance with IC 5-3-1. After the hearing the resolution establishing fees, either as originally introduced or as amended, shall be passed and put into effect. However, fees related to property that is subject to full taxation do not take effect until they have been approved by ordinance of the municipal legislative body.
    (d) A copy of the schedule of the fees shall be kept on file in the office of the board and must be open to inspection by all interested parties. The fees established for any class of users or property served shall be extended to cover any additional premises thereafter served that fall within the same class, without the necessity of hearing or notice.
    (e) A change of fees may be made in the same manner as fees were originally established. However, if a change is made substantially pro rata for all classes of service, hearing or notice is not required, but approval of the change by ordinance of the municipal legislative body is required.
    (f) If a fee established is not paid within thirty (30) days after it is due, the amount, together with a penalty of ten percent (10%) and a reasonable attorney's fee, may be recovered by the board from the delinquent user or owner of the property served in a civil action in the name of the municipality.
    (g) Fees assessed against real property under this section also constitute a lien against the property assessed. Except as provided in subsection (k), the lien attaches at the time of the filing of the notice of lien in the county recorder's office. The lien is superior to all other liens except tax liens, and shall be enforced and foreclosed in the same manner as is provided for liens under IC 36-9-23-33 and IC 36-9-23-34.
    (h) This subsection applies to fees due after July 1, 1988. Except as provided in subsection (k), a fee assessed against real property under this section constitutes a lien against the property assessed only when the fee is delinquent for no more than three (3) years from the day after the fee is due.
    (i) In addition to the penalties under subsections (f) and (g) and section 11.5 of this chapter, a delinquent user may not discharge water into the public sewers and may have the property disconnected from the public sewers.


    (j) The authority to establish a user fee under this section includes fees to recover the cost of construction of sewage works from industrial users as defined and required under federal statute or rule. Any industrial users' cost recovery fees may become a lien upon the real property and shall be collected in the manner provided by law. In addition, the imposition of the fees, the use of the amounts collected, and the criteria for the fees must be consistent with the regulations of the federal Environmental Protection Agency.
     (k) After June 30, 2004, a lien does not attach against real property for fees assessed against the property under this section if a person other than the owner of the property occupies the property.
SOURCE: IC 13-26-12-6; (04)IN1141.1.6. -->     SECTION 6. IC 13-26-12-6 IS REPEALED [EFFECTIVE JULY 1, 2004].
SOURCE: ; (04)IN1141.1.7. -->     SECTION 7. [EFFECTIVE JULY 1, 2004] Notwithstanding the repeal of IC 13-26-12-6 by this act, a lien that:
        (1) attached before July 1, 2004, against real property occupied by someone other than the owner under IC 13-26-12-6 before its repeal by this act; and
        (2) is not released from the property on July 1, 2004;
is void and unenforceable.

SOURCE: ; (04)IN1141.1.8. -->     SECTION 8. [EFFECTIVE JULY 1, 2004] Notwithstanding IC 36-9-23-28 as amended by this act, a lien that:
        (1) attached before July 1, 2004, against real property occupied by someone other than the owner under IC 36-9-23-28(c) before its amendment by this act; and
        (2) is not released from the property on July 1, 2004;
is void and unenforceable.

SOURCE: ; (04)IN1141.1.9. -->     SECTION 9. [EFFECTIVE JULY 1, 2004] Notwithstanding IC 36-9-25-11 as amended by this act, a lien that:
        (1) attached before July 1, 2004, against real property occupied by someone other than the owner under IC 36-9-25-11 before its amendment by this act; and
        (2) is not released from the property on July 1, 2004;
is void and unenforceable.