Citations Affected: IC 6-1.1-12.1.
Synopsis: Property tax abatement. Allows a designating body to grant
a property tax abatement deduction to the owner of a building that is
located in an economic revitalization area and has been vacant for at
least 180 days, if the owner or a tenant of the owner occupies the
building and uses the building for commercial or industrial purposes.
Provides that the deduction may not be allowed for more than five
years.
Effective: Upon passage.
January 5, 2006, read first time and referred to Committee on Commerce, Economic
Development and Small Business.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
provided in this chapter.
(2) "City" means any city in this state, and "town" means any town
incorporated under IC 36-5-1.
(3) "New manufacturing equipment" means any tangible personal
property which:
(A) was installed after February 28, 1983, and on or before the
approval deadline determined under section 9 of this chapter,
in an area that is declared an economic revitalization area after
February 28, 1983, in which a deduction for tangible personal
property is allowed;
(B) is used in the direct production, manufacture, fabrication,
assembly, extraction, mining, processing, refining, or finishing
of other tangible personal property, including but not limited
to use to dispose of solid waste or hazardous waste by
converting the solid waste or hazardous waste into energy or
other useful products; and
(C) was acquired by its owner for use as described in clause
(B) and was never before used by its owner for any purpose in
Indiana.
However, notwithstanding any other law, the term includes
tangible personal property that is used to dispose of solid waste or
hazardous waste by converting the solid waste or hazardous waste
into energy or other useful products and was installed after March
1, 1993, and before March 2, 1996, even if the property was
installed before the area where the property is located was
designated as an economic revitalization area or the statement of
benefits for the property was approved by the designating body.
(4) "Property" means a building or structure, but does not include
land.
(5) "Redevelopment" means the construction of new structures,
in economic revitalization areas, either:
(A) on unimproved real estate; or
(B) on real estate upon which a prior existing structure is
demolished to allow for a new construction.
(6) "Rehabilitation" means the remodeling, repair, or betterment
of property in any manner or any enlargement or extension of
property.
(7) "Designating body" means the following:
(A) For a county that does not contain a consolidated city, the
fiscal body of the county, city, or town.
(B) For a county containing a consolidated city, the
metropolitan development commission.
or research in connection with literacy, history, or similar
projects.
(13) "New logistical distribution equipment" means tangible
personal property that:
(A) is installed after June 30, 2004, and on or before the
approval deadline determined under section 9 of this chapter,
in an economic revitalization area in which a deduction for
tangible personal property is allowed;
(B) consists of:
(i) racking equipment;
(ii) scanning or coding equipment;
(iii) separators;
(iv) conveyors;
(v) fork lifts or lifting equipment (including "walk
behinds");
(vi) transitional moving equipment;
(vii) packaging equipment;
(viii) sorting and picking equipment; or
(ix) software for technology used in logistical distribution;
(C) is used for the storage or distribution of goods, services, or
information; and
(D) before being used as described in clause (C), was never
used by its owner for any purpose in Indiana.
(14) "New information technology equipment" means tangible
personal property that:
(A) is installed after June 30, 2004, and on or before the
approval deadline determined under section 9 of this chapter,
in an economic revitalization area in which a deduction for
tangible personal property is allowed;
(B) consists of equipment, including software, used in the
fields of:
(i) information processing;
(ii) office automation;
(iii) telecommunication facilities and networks;
(iv) informatics;
(v) network administration;
(vi) software development; and
(vii) fiber optics; and
(C) before being installed as described in clause (A), was
never used by its owner for any purpose in Indiana.
(15) "Eligible vacant building" means a building that:
(A) is zoned for commercial or industrial purposes; and
(B) is unoccupied for at least one hundred eighty (180)
days before the owner of the building or a tenant of the
owner occupies the building, as evidenced by a valid
certificate of occupancy, paid utility receipts, executed
lease agreements, or any other evidence of occupation that
the department of local government finance requires.
three (3) four (4) sets of standards may be established:
(1) One (1) relative to the deduction under section 3 of this
chapter for economic revitalization areas that are not residentially
distressed areas.
(2) One (1) relative to the deduction under section 3 of this
chapter for residentially distressed areas.
(3) One (1) relative to the deduction allowed under section 4.5 of
this chapter.
(4) One (1) relative to the deduction allowed under section 4.8
of this chapter.
(h) A designating body may impose a fee for filing a designation
application for a person requesting the designation of a particular area
as an economic revitalization area. The fee may be sufficient to defray
actual processing and administrative costs. However, the fee charged
for filing a designation application for a parcel that contains one (1) or
more owner-occupied, single-family dwellings may not exceed the cost
of publishing the required notice.
(i) In declaring an area an economic revitalization area, the
designating body may:
(1) limit the time period to a certain number of calendar years
during which the economic revitalization area shall be so
designated;
(2) limit the type of deductions that will be allowed within the
economic revitalization area to either the deduction allowed under
section 3 of this chapter, or the deduction allowed under section
4.5 of this chapter, the deduction allowed under section 4.8 of
this chapter, or any combination of these deductions;
(3) limit the dollar amount of the deduction that will be allowed
with respect to new manufacturing equipment, new research and
development equipment, new logistical distribution equipment,
and new information technology equipment if a deduction under
this chapter had not been filed before July 1, 1987, for that
equipment;
(4) limit the dollar amount of the deduction that will be allowed
with respect to redevelopment and rehabilitation occurring in
areas that are designated as economic revitalization areas on or
after September 1, 1988;
(5) limit the dollar amount of the deduction that will be
allowed under section 4.8 of this chapter with respect to the
occupation of an eligible vacant building; or
(5) (6) impose reasonable conditions related to the purpose of this
chapter or to the general standards adopted under subsection (g)
for allowing the deduction for the redevelopment or rehabilitation
of the property or the installation of the new manufacturing
equipment, new research and development equipment, new
logistical distribution equipment, or new information technology
equipment.
To exercise one (1) or more of these powers, a designating body must
include this fact in the resolution passed under section 2.5 of this
chapter.
(j) Notwithstanding any other provision of this chapter, if a
designating body limits the time period during which an area is an
economic revitalization area, that limitation does not:
(1) prevent a taxpayer from obtaining a deduction for new
manufacturing equipment, new research and development
equipment, new logistical distribution equipment, or new
information technology equipment installed on or before the
approval deadline determined under section 9 of this chapter, but
after the expiration of the economic revitalization area if:
(A) the economic revitalization area designation expires after
December 30, 1995; and
(B) the new manufacturing equipment, new research and
development equipment, new logistical distribution
equipment, or new information technology equipment was
described in a statement of benefits submitted to and approved
by the designating body in accordance with section 4.5 of this
chapter before the expiration of the economic revitalization
area designation; or
(2) limit the length of time a taxpayer is entitled to receive a
deduction to a number of years that is less than the number of
years designated under section 4, or 4.5, or 4.8 of this chapter.
(k) Notwithstanding any other provision of this chapter, deductions:
(1) that are authorized under section 3 of this chapter for property
in an area designated as an urban development area before March
1, 1983, and that are based on an increase in assessed valuation
resulting from redevelopment or rehabilitation that occurs before
March 1, 1983; or
(2) that are authorized under section 4.5 of this chapter for new
manufacturing equipment installed in an area designated as an
urban development area before March 1, 1983;
apply according to the provisions of this chapter as they existed at the
time that an application for the deduction was first made. No deduction
that is based on the location of property or new manufacturing
equipment in an urban development area is authorized under this
chapter after February 28, 1983, unless the initial increase in assessed
value resulting from the redevelopment or rehabilitation of the property
or the installation of the new manufacturing equipment occurred before
March 1, 1983.
(l) If property located in an economic revitalization area is also
located in an allocation area (as defined in IC 36-7-14-39 or
IC 36-7-15.1-26), an application for the property tax deduction
provided by this chapter may not be approved unless the commission
that designated the allocation area adopts a resolution approving the
application.
remonstrances and objections from interested persons. The designating
body shall file the information required by subdivision (2) with the
officers of the taxing unit who are authorized to fix budgets, tax rates,
and tax levies under IC 6-1.1-17-5 at least ten (10) days before the date
of the public hearing. After considering the evidence, the designating
body shall take final action determining whether the qualifications for
an economic revitalization area have been met and confirming,
modifying and confirming, or rescinding the resolution. This
determination is final except that an appeal may be taken and heard as
provided under subsections (d) and (e).
(d) A person who filed a written remonstrance with the designating
body under this section and who is aggrieved by the final action taken
may, within ten (10) days after that final action, initiate an appeal of
that action by filing in the office of the clerk of the circuit or superior
court a copy of the order of the designating body and his the person's
remonstrance against that order, together with his the person's bond
conditioned to pay the costs of his the person's appeal if the appeal is
determined against him. the person. The only ground of appeal that the
court may hear is whether the proposed project will meet the
qualifications of the economic revitalization area law. The burden of
proof is on the appellant.
(e) An appeal under this section shall be promptly heard by the
court without a jury. All remonstrances upon which an appeal has been
taken shall be consolidated and heard and determined within thirty (30)
days after the time of the filing of the appeal. The court shall hear
evidence on the appeal, and may confirm the final action of the
designating body or sustain the appeal. The judgment of the court is
final and conclusive, unless an appeal is taken as in other civil actions.
is entitled to a deduction from the assessed value of the building if
the property owner or a tenant of the property owner occupies the
eligible vacant building and uses it for commercial or industrial
purposes. The property owner is entitled to the deduction:
(1) for the first year in which the property owner or a tenant
of the property owner occupies the eligible vacant building
and uses it for commercial or industrial purposes; and
(2) for subsequent years determined under subsection (g).
(g) The designating body shall determine the number of years
for which a property owner is entitled to a deduction under this
section. However, the deduction may not be allowed for more than
five (5) years. This determination shall be made:
(1) as part of the resolution adopted under section 2.5 of this
chapter; or
(2) by a resolution adopted not more than sixty (60) days after
the designating body receives a copy of the property owner's
deduction application from the county auditor.
A certified copy of a resolution under subdivision (2) shall be sent
to the county auditor, who shall make the deduction as provided in
section 5.3 of this chapter. A determination concerning the number
of years the deduction is allowed that is made under subdivision (1)
is final and may not be changed by using the procedure under
subdivision (2).
(h) Except as provided in section 2(i)(5) of this chapter, the
amount of the deduction the property owner is entitled to receive
under this section for a particular year equals the product of:
(1) the assessed value of the building or part of the building
that is occupied by the property owner or a tenant of the
property owner; multiplied by
(2) the percentage set forth in the table in subsection (i).
(i) The percentage to be used in calculating the deduction under
subsection (h) is as follows:
(1) For deductions allowed over a one (1) year period:
YEAR OF DEDUCTION
PERCENTAGE
1st 100%
(2) For deductions allowed over a two (2) year period:
YEAR OF DEDUCTION
PERCENTAGE
1st 100%
2nd 50%
(3) For deductions allowed over a three (3) year period:
YEAR OF DEDUCTION
PERCENTAGE
1st 100%
year, the deduction application required by this section may be
filed not later than thirty (30) days after the date the notice is
mailed to the property owner at the address shown on the records
of the township assessor.
(c) The deduction application required by this section must
contain the following information:
(1) The name of the property owner and, if applicable, the
property owner's tenant.
(2) A description of the property for which a deduction is
claimed.
(3) The amount of the deduction claimed for the first year of
the deduction.
(4) Any other information required by the department of local
government finance or the designating body.
(d) A deduction application filed under this section applies to the
year in which the property owner or a tenant of the property
owner occupies the eligible vacant building and in the following
years in which the deduction is allowed, without an additional
deduction application being filed.
(e) A property owner that desires to obtain the deduction
provided by section 4.8 of this chapter but that did not file a
deduction application within the dates prescribed in subsection (a)
or (b) may file a deduction application between March 1 and May
10 of a subsequent year. A deduction application filed under this
subsection applies to the year in which the deduction application
is filed and the following years in which the deduction is allowed,
without an additional deduction application being filed. The
amount of the deduction under this subsection is the amount that
would have been applicable to the year under section 4.8 of this
chapter if the deduction application had been filed in accordance
with subsection (a) or (b).
(f) Subject to subsection (i), the county auditor shall do the
following:
(1) If a determination concerning the number of years the
deduction is allowed has been made in the resolution adopted
under section 2.5 of this chapter, the county auditor shall
make the appropriate deduction.
(2) If a determination concerning the number of years the
deduction is allowed has not been made in the resolution
adopted under section 2.5 of this chapter, the county auditor
shall send a copy of the deduction application to the
designating body. Upon receipt of the resolution stating the
number of years the deduction will be allowed, the county
auditor shall make the appropriate deduction.
(g) The amount and period of the deduction provided by section
4.8 of this chapter are not affected by a change in the ownership of
the eligible vacant building or a change in the property owner's
tenant, if the new property owner or the new tenant:
(1) continues to occupy the eligible vacant building in
compliance with any standards established under section 2(g)
of this chapter; and
(2) files an application in the manner provided by subsection
(e).
(h) Before the county auditor acts under subsection (f), the
county auditor may request that the township assessor of the
township in which the eligible vacant building is located review the
deduction application.
(i) A property owner may appeal a determination of the county
auditor under subsection (f) by requesting in writing a preliminary
conference with the county auditor not more than forty-five (45)
days after the county auditor gives the property owner notice of
the determination. An appeal under this subsection shall be
processed and determined in the same manner that an appeal is
processed and determined under IC 6-1.1-15.
(j) In addition to the requirements of subsection (c), a property
owner that files a deduction application under this section must
provide the county auditor and the designating body with
information showing the extent to which there has been compliance
with the statement of benefits approved under section 4.8 of this
chapter. This information must be included in the deduction
application and must also be updated each year in which the
deduction is applicable:
(1) at the same time that the property owner or the property
owner's tenant files a personal property tax return for
property located at the eligible vacant building for which the
deduction was granted; or
(2) if subdivision (1) does not apply, before May 15 of each
year.
(k) The following information is a public record if filed under
this section:
(1) The name and address of the property owner.
(2) The location and description of the eligible vacant building
for which the deduction was granted.
(3) Any information concerning the number of employees at
the eligible vacant building for which the deduction was
granted, including estimated totals that were provided as part
of the statement of benefits.
(4) Any information concerning the total of the salaries paid
to the employees described in subdivision (3), including
estimated totals that are provided as part of the statement of
benefits.
(5) Any information concerning the assessed value of the
eligible vacant building, including estimates that are provided
as part of the statement of benefits.
(l) Information concerning the specific salaries paid to
individual employees by the property owner or tenant is
confidential.
property owner and other interested parties, the designating body shall
again determine whether the property owner has made reasonable
efforts to substantially comply with the statement of benefits and
whether any failure to substantially comply was caused by factors
beyond the control of the property owner. If the designating body
determines that the property owner has not made reasonable efforts to
comply with the statement of benefits, the designating body shall adopt
a resolution terminating the property owner's deduction under section
3, or 4.5, or 4.8 of this chapter. If the designating body adopts such a
resolution, the deduction does not apply to the next installment of
property taxes owed by the property owner or to any subsequent
installment of property taxes.
(d) If the designating body adopts a resolution terminating a
deduction under subsection (c), the designating body shall immediately
mail a certified copy of the resolution to:
(1) the property owner;
(2) the county auditor; and
(3) if the deduction applied under section 4.5 of this chapter, the
township assessor.
The county auditor shall remove the deduction from the tax duplicate
and shall notify the county treasurer of the termination of the
deduction. If the designating body's resolution is adopted after the
county treasurer has mailed the statement required by IC 6-1.1-22-8,
the county treasurer shall immediately mail the property owner a
revised statement that reflects the termination of the deduction.
(e) A property owner whose deduction is terminated by the
designating body under this section may appeal the designating body's
decision by filing a complaint in the office of the clerk of the circuit or
superior court together with a bond conditioned to pay the costs of the
appeal if the appeal is determined against the property owner. An
appeal under this subsection shall be promptly heard by the court
without a jury and determined within thirty (30) days after the time of
the filing of the appeal. The court shall hear evidence on the appeal and
may confirm the action of the designating body or sustain the appeal.
The judgment of the court is final and conclusive unless an appeal is
taken as in other civil actions.
(f) If an appeal under subsection (e) is pending, the taxes resulting
from the termination of the deduction are not due until after the appeal
is finally adjudicated and the termination of the deduction is finally
determined.
UPON PASSAGE]: Sec. 8. (a) Not later than December 31 of each
year, the county auditor shall publish the following in a newspaper of
general interest and readership and not one of limited subject matter:
(1) A list of the deduction applications that were filed under this
chapter during that year that resulted in deductions being applied
under this chapter for that year. The list must contain the
following:
(A) The name and address of each person approved for or
receiving a deduction that was filed for during the year.
(B) The amount of each deduction that was filed for during the
year.
(C) The number of years for which each deduction that was
filed for during the year will be available.
(D) The total amount for all deductions that were filed for and
applied during the year.
(2) The total amount of all deductions for real property that were
in effect under section 3 of this chapter during the year.
(3) The total amount of all deductions for new manufacturing
equipment, new research and development equipment, new
logistical distribution equipment, or new information technology
equipment that were in effect under section 4.5 of this chapter
during the year.
(4) The total amount of all deductions for eligible vacant
buildings that were in effect under section 4.8 of this chapter
during the year.
(b) The county auditor shall file the information described in
subsection (a)(2), and (a)(3), and (a)(4) with the department of local
government finance not later than December 31 of each year.
a law that:
(A) terminates the automatic extension of approval deadlines
under subdivision (2); and
(B) specifically designates a particular date as the final
approval deadline.
have been paid by the property owner if the deduction had not
been in effect.
STEP TWO: Determine the sum of the STEP ONE amounts.
STEP THREE: Multiply the sum determined under STEP TWO
by one and one-tenth (1.1).
(f) The county treasurer shall distribute money paid under this
section on a pro rata basis to the general fund of each taxing unit that
contains the property that was subject to the deduction. The amount to
be distributed to the general fund of each taxing unit shall be
determined by the county auditor according to the following formula:
STEP ONE: For each year that the deduction was in effect,
determine the additional amount of property taxes that would
have been paid by the property owner to the taxing unit if the
deduction had not been in effect.
STEP TWO: Determine the sum of the STEP ONE amounts.
STEP THREE: Divide the STEP TWO sum by the sum
determined under STEP TWO of subsection (e).
STEP FOUR: Multiply the amount paid by the property owner
under subsection (e) by the STEP THREE quotient.