SB 496-4_ Filed 02/16/2005, 10:23 Kenley

SENATE MOTION


MADAM PRESIDENT:

    I move
that Senate Bill 496 be amended to read as follows:

Page 15, between lines 12 and 13, begin a new paragraph and insert:

SOURCE: IC 6-1.1-4-39; (05)MO049606.5. -->     "SECTION 5. IC 6-1.1-4-39 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2006]: Sec. 39. (a) For assessment dates after February 28, 2005, except as provided in subsection subsections (c) and (e), the true tax value of real property regularly used to rent or otherwise furnish residential accommodations for periods of thirty (30) days or more and that has more than four (4) rental units is the lowest valuation determined by applying each of the following appraisal approaches:
        (1) Cost approach that includes an estimated reproduction or replacement cost of buildings and land improvements as of the date of valuation together with estimates of the losses in value that have taken place due to wear and tear, design and plan, or neighborhood influences.
        (2) Sales comparison approach, using data for generally comparable property.
        (3) Income capitalization approach, using an applicable capitalization method and appropriate capitalization rates that are developed and used in computations that lead to an indication of value commensurate with the risks for the subject property use.
    (b) The gross rent multiplier method is the preferred method of valuing:
        (1) real property that has at least one (1) and not more than four (4) rental units; and
        (2) mobile homes assessed under IC 6-1.1-7.
    (c) A township assessor is not required to appraise real property referred to in subsection (a) using the three (3) appraisal approaches listed in subsection (a) if the township assessor and the taxpayer agree before notice of the assessment is given to the taxpayer under section 22 of this chapter to the determination of the true tax value of the property by the assessor using one (1) of those appraisal approaches.
    (d) To carry out this section, the department of local government

finance may adopt rules for assessors to use in gathering and processing information for the application of the income capitalization method and the gross rent multiplier method. A taxpayer must verify under penalties for perjury any information provided to the assessor for use in the application of either method.
     (e) The true tax value of low income rental property (as defined in section 41 of this chapter) is not determined under subsection (a). The assessment method prescribed in section 41 of this chapter is the exclusive method for assessment of that property.

SOURCE: IC 6-1.1-4-41; (05)MO049606.6. -->     SECTION 6. IC 6-1.1-4-41 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2006]: Sec. 41. (a) For purposes of this section:
        (1) "cost of construction" means the cost of:
            (A) original construction; and
            (B) remodeling, repair, or betterment of property in any manner or any enlargement or extension of property;
        (2) "low income rental property" means real property
used to provide low income housing eligible for federal income tax credits awarded under Section 42 of the Internal Revenue Code;
        (3) "real property cost" means the sum of:
            (A) the cost of construction of real property improvements associated with low income rental property; plus
            (B) the cost of the land on which the improvements are located; and
        (4) "rental period" means the period during which low income rental property is eligible for federal income tax credits awarded under Section 42 of the Internal Revenue Code.
    (b) For assessment dates after February 28, 2006, except as provided in subsection (c), the true tax value of low income rental property is the product of:
        (1) the real property cost; multiplied by
        (2) the quotient of:
            (A) the number of the year within the rental period (e.g., year one (1) of ten (10)) that coincides with the year for which the assessment is determined under this section; divided by
            (B) the total number of years in the rental period;
        expressed as a percentage.
    (c) An assessed value determined under this section may be reduced by the property tax assessment board of appeals on appeal under IC 6-1.1-15 if the taxpayer demonstrates on appeal that, because of deterioration of the neighborhood in which the real property is located, the market value of the real property at the end of the rental period is anticipated to be less than one-half (1/2) of the real property cost. If the assessed value is reduced under this

subsection, the assessed value is reduced to the market value demonstrated by the taxpayer under this subsection.
    (d) The department of local government finance may adopt rules under IC 4-22-2 to implement this section.
".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 496 as printed February 11, 2005.)

________________________________________

Senator KENLEY


MO049606/DI 52
2005