Introduced Version






HOUSE BILL No. 1294

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-1.1-12-44.

Synopsis: Rental dwelling property tax deduction. Establishes a property tax deduction for residential rental property. Specifies the deduction percentage for taxes payable in 2007 and 2008. Provides that the deduction for taxes payable after 2008 is based on deduction percentages set by the department of local government finance based on certain guidelines.

Effective: Upon passage.





Hoffman




    January 10, 2006, read first time and referred to Committee on Ways and Means.







Introduced

Second Regular Session 114th General Assembly (2006)


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 2005 Regular Session of the General Assembly.

HOUSE BILL No. 1294



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

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

SOURCE: IC 6-1.1-12-44; (06)IN1294.1.1. -->     SECTION 1. IC 6-1.1-12-44 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 44. (a) As used in this section:
        (1) "2002 proportion" means for property taxes first due and payable in 2002 the proportion that the recalculated gross tax liability per dollar of gross assessed value attributable to principal rental dwellings bears to the
recalculated gross tax liability per dollar of gross assessed value attributable to all dwellings;
        (2) "2009 proportion" means for property taxes first due and payable in 2009 the proportion that the recalculated gross tax liability per dollar of gross assessed value attributable to principal rental dwellings bears to the
recalculated gross tax liability per dollar of gross assessed value attributable to all dwellings;
        (3) "condominium" has the meaning set forth in IC 32-25-2-7;
        (4) "condominium building" means a building in which one

(1) or more condominium units are located;
        (5) "condominium unit" has the meaning set forth in IC 32-25-2-9;
        (6) "department" refers to the department of local government finance;
        (7) "dwelling" has the meaning set forth in IC 6-1.1-20.9-1(1);
        (8) "gross assessed value" means assessed value without the application of deductions under this chapter;
        (9) "majority interest condominium owner" means a person, an entity, or affiliated or related entities that own one (1) or more condominium units that comprise more than fifty percent (50%) of the area (excluding common areas) of a condominium building;
        (10) "principal rental dwelling" means:
            (A) for the assessment date in 2001, a dwelling:
                (i) for which the credit under IC 6-1.1-20.9 did not apply for property taxes first due and payable in 2002; and
                (ii) that had an assessed value of at least twelve thousand dollars ($12,000); and
            (B) for the assessment date in 2008, a dwelling:
                (i) that an individual with a leasehold interest in the property uses as the individual's principal place of residence, regardless of whether the individual is absent from the property while in a facility described in subsection (b); and
                (ii) that has an assessed value of at least seventy thousand dollars ($70,000);
        (11) "recalculated gross tax liability" means liability for property taxes calculated without the application of:
            (A) deductions under this chapter, except the deduction under section 37 of this chapter; or
            (B) any credit under this article; and
        (12) "standard deduction amount" means the maximum amount of the standard deduction under section 37(b)(2) of this chapter.
    (b) The term "principal rental dwelling" does not include any of the following:
        (1) A hospital licensed under IC 16-21.
        (2) A facility licensed under IC 16-28.
        (3) A Christian Science home or sanatorium.
        (4) A group home licensed under IC 12-17.4.
        (5) An establishment that serves as an emergency shelter for:


            (A) victims of domestic violence;
            (B) homeless persons; or
            (C) other similar purposes.
        (6) A fraternity, sorority, or student cooperative housing organization described in IC 6-2.5-5-21.

     (c) For property taxes first due and payable in 2007 and 2008, subject to subsections (j), (k), and (l), the owner of a building that contains one (1) or more dwellings that one (1) or more individuals with a leasehold interest in the property use as the individuals' principal place of residence (regardless of whether the individuals are absent from the property while in a facility described in subsection (b)) is entitled to a deduction from the assessed value of the building and the land on which the building is located in the amount determined under subsection (d).
    (d) Subject to subsection (e), if the number of dwellings described in subsection (c) in the building is:
        (1) less than five (5), the amount of the deduction under subsection (c) is the product of:
            (A) sixty-six percent (66%); and
            (B) the standard deduction amount; or
        (2) greater than four (4), the amount of the deduction under subsection (c) is the product of:
            (A) the number of dwellings in the building;
            (B) the amount determined under subdivision (1); and
            (C) the percentage from the following table that corresponds to the number of dwellings in the building:
            NUMBER OF UNITS    PERCENTAGE
                5 to 8        25%
                9 to 20        15%
                more than 20        10%
    (e) The deduction amount under this section may not exceed fifty percent (50%) of the combined assessed value of the building and the land.
    (f) For property taxes first due and payable in 2009 and later years, deductions that are calculated in the same manner provided in subsection (d) apply, except that the deduction percentage determined by the department under subsection (g) is substituted for the percentage indicated in subsection (d)(1)(A).
    (g) Before January 1, 2008, the department shall, based on the department's best estimates:
        (1) for property taxes first due and payable in 2009, determine a deduction percentage calculated to result, when the

deduction percentage is substituted under subsection (f), in a 2009 proportion that equals the 2002 proportion; and
        (2) report the deduction percentage determined under subdivision (1) to:
            (A) the legislative council in an electronic format under IC 5-14-6; and
            (B) county auditors.
    (h) A certificate of occupancy that complies with this subsection is prima facie evidence that a building and the land on which the building is located contain the number of dwellings specified in the certificate. To comply with this subsection, the certificate of occupancy must:
        (1) be prepared on a form prescribed by the department;
        (2) be signed under penalties of perjury by:
            (A) the owner of the building containing one (1) or more dwellings; or
            (B) the principal officer of the entity owning the building; and
        (3) indicate that:
            (A) with respect to a building that contains only one (1) dwelling, the unit was used as a principal place of residence; and
            (B) with respect to a building that contains more than one (1) dwelling, substantially all the dwellings in the building were used as principal places of residence;
        on the assessment date for which the deduction under this section applies.
    (i) To obtain the deduction under this section, the:
        (1) owner of the building containing a dwelling; or
        (2) principal officer for the cooperative, common interest community, owner's association, or other entity owning the building;
must file a certified application in duplicate, on forms prescribed by the department, with the auditor of the county in which the property is subject to assessment. The certified application must be filed before May 11 of the year containing the assessment date to which the application applies.
    (j) If the owner of a building containing a dwelling is eligible to receive:
        (1) a homestead credit for the building under IC 6-1.1-20.9; or
        (2) the standard deduction for the building under section 37 of this chapter;


the owner may not claim the deduction provided under this section.
    (k) If a parcel of land contains more than one (1) building for which a deduction is claimed under this section, the township assessor shall allocate the assessed value of the land among the buildings on the parcel in proportion to the assessed value of each building. The county auditor shall use the allocated assessed value of land under this section in determining the amount of the deduction that is to be granted under this section.

     (l) The owner of a condominium unit that uses the condominium unit as a dwelling is eligible for a deduction under this section. Each condominium unit that is owned by a co-owner (as defined in IC 32-25-2-11) that is not a majority interest condominium owner is treated as a separate building for the purpose of applying this section. The amount of the deduction under this section for one (1) or more condominium units owned by a majority interest condominium owner is:
        (1) determined as if:
            (A) the majority interest condominium owner were the owner of the condominium building; and
            (B) each condominium unit owned by the majority interest condominium owner in the condominium building and used as a dwelling were a separate dwelling contained in the building; and
        (2) apportioned equally among the condominium units in the condominium building.

SOURCE: ; (06)IN1294.1.2. -->     SECTION 2. [EFFECTIVE UPON PASSAGE] (a) Notwithstanding IC 6-1.1-12-44(i), as added by this act, a certified application must be filed before July 1, 2006, under that subsection to claim a deduction under IC 6-1.1-12-44, as added by this act, for property taxes first due and payable in 2007.
    (b) This SECTION expires January 1, 2008.

SOURCE: ; (06)IN1294.1.3. -->     SECTION 3. An emergency is declared for this act.