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House Bill 1001


House Bill 1001

ARCHIVE (2008)

Latest Information

 

DIGEST OF HB 1001 (Updated March 14, 2008 3:23 pm - DI 73)


State and local finance. Eliminates: (1) medical assistance to wards fund levies; (2) family and children's fund levies; (3) children's psychiatric residential treatment services fund levies; and (4) children with special health care needs county fund levies. Eliminates the hospital care for the indigent fund levy and a portion of the health and hospital corporation levy. Eliminates the statewide property tax levies imposed for the state forestry fund, the state fair, and department of local government finance (DLGF) data base management. Provides for the assumption by the state of the costs of child welfare services and incarcerating delinquent children in a department of correction facility. Makes related changes to procedures governing the adjudication of children as children in need of services or as a delinquent child. Provides that payment for child services shall be made not later than 60 days after the date the department of child services receives the service provider's invoice together with a properly prepared claim voucher and documentation. Provides for the assumption by the state of the amount previously raised by the hospital care for the indigent fund levy and a portion of the health and hospital corporation levy. Eliminates school corporation tuition support levies. Increases the state tuition distribution by the amount of the terminated tuition support levy. Creates the state tuition reserve fund. Abolishes the tuition support account in the state general fund. Requires a transfer of money from the state general fund to the state tuition reserve fund. Provides an additional supplemental standard deduction for homesteads. Provides additional homestead credits in 2008 of $620,000,000. Provides that in a county that adopted a local option income tax (LOIT) in 2007, the county auditor, with the approval of the county fiscal body may petition the DLGF to permit a portion of the additional 2008 homestead credit to be used instead to increase the additional state funded homestead credit provided for 2009 or in both 2009 and 2010. Provides $140,000,000 in homestead credits in 2009 and $80,000,000 in homestead credits in 2010. Provides that a school corporation may not impose a special education preschool property tax levy after December 31, 2008. Requires the department of education to make distributions equal to the product of $2,750 multiplied by the number of special education preschool children who are students in the school corporation. Increases the maximum amount of the state income tax deduction for renters from $2,500 to $3,000. Provides that an individual who owns a homestead with a gross assessed value of less than $160,000 and who has adjusted gross income of $30,000 (in the case of a single return) or $40,000 (in the case of a joint return) is entitled to a property tax credit to the extent that property taxes on the individual's homestead increase by more than 2% from the prior year. Repeals the expiration date for the state earned income tax credit. Provides that the maximum amount of the standard deduction is the lesser of $45,000 or 60% of assessed value for 2009 and thereafter. Requires the DLGF to adopt rules or guidelines concerning the application for the standard deduction. Increases the sales and use tax rates from 6% to 7%. Adjusts distributions of sales tax and use tax so that new revenue from the rate increase is deposited in the state general fund. Reduces sales tax collection allowances for retail merchants. Beginning in 2009, abolishes property tax replacement credits, state homestead credits (except for the temporary homestead credits in 2009 and 2010), the property tax replacement fund, and the property tax reduction trust fund. Provides that revenues from sales tax, income tax, and certain wagering taxes formerly deposited in those funds are to be deposited in the state general fund. Provides that a county council may adopt an ordinance to allow a taxpayer to make installment payments of taxes due under a reconciling statement. Provides that for property taxes first due and payable in 2009, the circuit breaker credit is equal to the amount by which a person's property tax liability attributable to the person's: (1) homestead exceeds 1.5%; (2) residential property exceeds 2.5%; (3) agricultural land exceeds 2.5%; (4) long term care property exceeds 2.5%; (5) nonresidential real property exceeds 3.5%; or (6) personal property exceeds 3.5%; of the gross assessed value of the property that is the basis for determination of the property taxes. Provides that for property taxes first due and payable in 2010 and thereafter, the circuit breaker credit is equal to the amount by which a person's property tax liability attributable to the person's: (1) homestead exceeds 1%; (2) residential property exceeds 2%; (3) agricultural land exceeds 2%; (4) long term care property exceeds 2%; (5) nonresidential real property exceeds 3%; or (6) personal property exceeds 3%; of the gross assessed value of the property that is the basis for determination of the property taxes. Specifies that property taxes imposed after being approved by the voters in a referendum or local public question shall not be considered for purposes of calculating the circuit breaker credit. Provides that for certain eligible counties, property taxes imposed to pay debt service or make lease payments for bonds or leases issued or entered into before July 1, 2008, shall not be considered for purposes of calculating the circuit breaker credit. Changes the membership of the distressed unit appeal board. Makes changes to the relief available from the distressed unit appeal board. Provides that the distressed unit appeal board may provide that some or all of the property taxes that are being imposed to pay debt and that would otherwise be included in the calculation of the circuit breaker credit shall not be included for purposes of calculating the credit. Authorizes a distressed political subdivision to petition the tax court for judicial review of a final determination of the distressed unit appeal board. Provides that political subdivisions are required to fully fund the payment of their debt obligations, regardless of any reduction in property tax collections due to the circuit breaker credit. Provides for a grant in 2009 and 2010 to replace a portion of the revenue lost to a school corporation from the application of the circuit breaker credit. Specifies that a school corporation is entitled to such a grant in a particular year only if it expects to lose more than 2% of its property tax revenue because of application of the circuit-breaker credits. Provides that a school bus replacement plan must apply to at least 12 years (rather than 10 years). Requires the state board of education to adopt administrative rules setting forth guidelines for the selection of school sites and the construction, alteration, and repair of school buildings, athletic facilities, and other categories of facilities related to the operation and administration of school corporations. Requires a school corporation to consider the guidelines and to submit proposed plans and specifications to the department of education. Requires the department of education to provide written recommendations to the school corporation, including findings as to any material differences between the plans and specifications and the guidelines. Requires the school corporation to have a public hearing on the plans and specifications. Requires the department of education to establish a central clearinghouse containing prototype designs for school facilities. Permits a school corporation to appeal to the department of local government finance to impose a shortfall levy to replace a shortfall in a tuition support levy imposed before 2009. Provides that beginning in 2010, the budget year for all school corporations shall be from July 1 of the year through June 30 of the following year. Effective July 1, 2008, transfers to the county assessor property assessment duties of township assessors in all townships in which the number of real property parcels is less than 15,000 and in townships in which there is a trustee-assessor. Requires a referendum to be held at the general election in 2008 in each township in which the number of parcels of real property on January 1, 2008, is at least 15,000. Provides that the referendum shall determine whether to transfer to the county assessor the assessment duties that would otherwise be performed by the elected township assessor of the township. Provides that a person who runs in an election after January 1, 2012, for the office of township assessor must have attained the certification of a level three assessor-appraiser before taking office. Establishes a procedure for removal from office of county assessors and township assessors who fail to adequately perform the duties of office. Amends the procedure to obtain a review by the county property tax assessment board of appeals. Provides that each appraiser that performs assessments on behalf of a county property assessment contractor must have a level two assessor-appraiser certification, and requires the DLGF to consider before approving the contract the contractor's experience, training, and number of employees. Provides that the DLGF must be a party to appraisal and reassessment contracts. Specifies that after June 30, 2009, an employee of a county assessor who performs real property assessing duties must have attained the level of certification that the assessor is required to attain. Repeals the county land valuation commission and obsolete provisions. Provides that in 2009 and each year thereafter, the state pension relief fund shall pay to each unit of local government the total amount of pension, disability, and survivor benefit payments from the old police and firefighter funds by the unit. Provides that for property taxes first due and payable after December 31, 2008, the DLGF shall reduce the maximum permissible property tax levy of any civil taxing unit and special service district by the amount of the payment to be made in 2009 by the state for benefits to members (and survivors and beneficiaries of members) of the 1925 police pension fund, the 1937 firefighters' fund, or the 1953 police pension fund. Makes an appropriation to the pension relief fund. Provides that certain interest earned by the public deposit insurance fund continues to be used to pay local police and firefighter pensions through 2022. (Under current law, the interest would be used for this purpose through 2012.) Provides that for purposes of computing and distributing excise taxes or local option income taxes, the computation and distribution of the excise tax or local option income tax shall be based on the taxing unit's property tax levy as calculated before any reduction due to circuit breaker credits. Provides that the local government tax control board is not abolished. Provides that a capital project is a controlled project if it will cost the political subdivision more than the lesser of $2,000,000 or an amount equal to 1% of the total gross assessed value of property within the political subdivision on the last assessment date (if that amount is at least $1,000,000). Provides that a project that is in response to a natural disaster, emergency, or accident that makes a building or facility unavailable for its intended use and that is approved by the county council is not a controlled project for purposes of the referendum process. Provides that a controlled project for a school building for kindergarten through grade 8 is subject to a referendum if the cost is more than $10,000,000. Provides that a controlled project for a school building for grade 9 through grade 12 is subject to a referendum if the cost is more than $20,000,000. Provides that other controlled project with a cost that exceeds the lesser of $12,000,000 or 1% of assessed value (but at least $1,000,000) are also subject to a referendum. Specifies that it takes 100 persons who are either owners of real property within the political subdivision or registered voters residing within the political subdivision or 5% of the registered voters residing within the political subdivision to initiate such a referendum. Provides that controlled projects that are not subject to a referendum are subject to the petition and remonstrance process. Repeals provisions concerning: (1) the procedures for amending a resolution previously adopted by a redevelopment commission; and (2) locally funded property tax replacement credits in tax increment financing (TIF) allocation areas. Provides that certain property tax levy appeals are eliminated beginning in 2009. Provides that the levy appeal for increased costs to a civil taxing unit resulting from annexation, consolidation, or other extensions of governmental services is not eliminated. Allows such an appeal in the first year increased costs are incurred and the immediately succeeding four years, and makes the excessive levy for a year a permanent part of the unit's maximum permissible levy for succeeding years. Eliminates certain exceptions to the property tax levy limits. Provides that the exemptions from the property tax levy limits for certain taxes to fund a community mental health center or community mental retardation and other developmental disabilities center do not apply to a civil taxing unit that did not fund a community mental health center or community mental retardation and other developmental disabilities center in 2008. Specifies the method for determining the assessed value of certain agricultural land that has been strip mined. Makes other changes related to property tax assessment. Repeals the county boards of tax and capital projects review. Provides that review and approval by the DLGF are not required before a civil taxing unit may issue or enter into bonds, a lease, or any other obligation if the civil taxing unit's determination to issue or enter into the bonds, lease, or other obligation is made after June 30, 2008. Provides that after June 30, 2008, review and approval by the DLGF are not required before a civil taxing unit may construct, alter, or repair a capital project. Provides that in counties without a county board of tax adjustment, each civil taxing unit that imposes property taxes shall file with the fiscal body of the county in which the civil taxing is located: (1) a statement of the proposed or estimated tax rate and tax levy for the civil taxing unit for the ensuing budget year; and (2) a copy of the civil taxing unit's proposed budget for the ensuing budget year. Provides that a county fiscal body shall issue a nonbinding recommendation to a civil taxing unit regarding the civil taxing unit's tax rate or levy or proposed budget. Provides that in the case of a taxing unit's governing body that does not consist of a majority of officials who are elected, the governing body may not issue bonds or enter into a lease payable in whole or in part from property taxes unless it obtains the approval of the city or town fiscal body or the county fiscal body (as applicable). Provides that review by the DLGF and approval by the DLGF are not required before a school corporation may issue or enter into bonds, a lease, or any other obligation if the school corporation's determination to issue or enter into the bonds, lease, or other obligation is made after June 30, 2008. Provides that after June 30, 2008, review by the DLGF and approval by the DLGF are not required before a school corporation may construct, alter, or repair a capital project. Prohibits, with respect to bonds payable from property taxes, special benefit taxes, or tax increment revenues, a local issuing body from: (1) issuing refunding bonds that have a repayment date that is beyond the maximum term of the bonds being refunded; or (2) using savings resulting from refunding bonds or surplus proceeds for any purpose other than to maintain a debt service reserve fund, repay bonds, or reduce levies. Requires the local issuing body to pay interest and principal on bonds on a schedule that provides for substantially equal installment amounts and regular payment intervals, with certain exceptions. Provides that (with certain exceptions) the maximum terms for property tax based obligations are: (1) the maximum applicable period under federal law for obligations issued to evidence loans under a federal program; (2) 25 years for TIF obligations; and (3) 20 years for other property tax based obligations. Specifies that the need for level principal payments over the term of the obligations, in order to reduce total interest costs, is an exception to the requirement that an agreement for the issuance of obligations must provide for the payment of principal and interest on the obligations in nearly equal payment amounts and at regular designated intervals over the maximum term of the obligations. Provides that certain decisions with respect to TIF allocation areas are to be made by the legislative or fiscal body of the city, town, or county instead of the redevelopment commission or are subject to the approval of the legislative or fiscal body. Provides that if TIF revenues of an allocation area have been decreased by a law enacted by the general assembly or by an action of the DLGF below the amount needed to make all payments on obligations payable from tax increment revenues, the governing body of the TIF district may: (1) impose a special assessment on the owners of property in an allocation area; (2) impose a tax on all taxable property in the TIF district; or (3) reduce the base assessed value of property in the allocation area to an amount that is sufficient to increase the tax increment revenues. Requires review of these actions by the legislative body of the unit that established the TIF district. Makes other changes related to TIF. Provides three additional options for the distribution of local option income tax for property tax replacement in Lake County. Provides that an individual may claim a deduction for state income tax purposes for property taxes that: (1) were imposed on the individual's principal place of residence for the March 1, 2006, assessment date or the January 15, 2007, assessment date; (2) are due after December 31, 2007; and (3) are paid in 2008 on or before the due date for the property taxes. Converts the 100% property tax deduction for inventory to an exemption by excluding inventory from the definition of personal property subject to property tax. Repeals property tax credits and exemptions applicable to inventory. Provides that counties receive CAGIT, COIT, and CEDIT distributions that would otherwise be lost as a result of the termination of certain levies. Provides that a check issued by a county for a refund of the additional 2007 homestead credit is void if the check is: (1) outstanding and unpaid for 180 days after it is issued; and (2) for an amount that is not more than $10. Allows the county council or county income tax council to adopt before October 1 of a year an ordinance changing the purposes for which revenue attributable to the LOIT for property tax relief shall be used in the following year. Provides that a county auditor may not grant an individual or a married couple a standard deduction if the individual or married couple, for the same year, claims the deduction on two or more different applications for the deduction and the applications claim the deduction for different property. Provides that a co-op is considered a homestead for purposes of the standard deduction and homestead credit. Provides that a civil taxing unit's levy appeal in a case where the civil taxing unit cannot carry out its governmental functions may be granted only if the civil taxing unit's inability to carry out its governmental functions is due to a natural disaster, an accident, or another unanticipated emergency. Provides that the local property tax replacement credit percentage for a particular year that is funded by a LOIT shall be based on the amount of tax revenue that will be used under the LOIT to provide local property tax replacement credits. Provides that a taxpayer that owns an industrial plant located in Jasper County is ineligible for a local property tax replacement credit against the property taxes due on the industrial plant if the assessed value of the industrial plant as of March 1, 2006, exceeds 20% of the total assessed value of all taxable property in the county on that date. Allows a school corporation to appeal to the DLGF for a new facility adjustment to increase the school corporation's tuition support distribution for the following year to pay increased costs to open: (1) a new school facility; or (2) an existing facility that has not been used for at least three years. Deletes the expiration date in the provision authorizing a school corporation to use money in its capital projects fund for utility services and insurance. Appropriates to the department of education from the state general fund $10,000,000 for the state fiscal year beginning July 1, 2008, and ending June 30, 2009, to make new facility adjustment distributions that are approved by the department of local government finance. Provides that a school corporation does not need the approval of the school property tax control board or the DLGF before holding a referendum concerning a referendum tax levy. Provides that a school corporation may hold a referendum on whether a referendum tax levy should be imposed to replace property tax revenue that the school corporation will not receive because of the application of the circuit breaker credit. Provides that in counties other than Marion County, if the percentage increase in the proposed budget for a civil taxing unit with an unelected governing body for the ensuing calendar year is greater than the growth allowed under the assessed value growth quotient, the governing body of the civil taxing unit must submit its proposed budget and property tax levy for approval by the county fiscal body or municipal fiscal body. Provides that budgets, levies, and bond issues for taxing units in Marion County with an unelected board must be approved by the city-county council. Provides that if a township assessor determines that the township assessor has made an error concerning: (1) the assessed valuation of property; (2) the name of a taxpayer; or (3) the description of property; in an assessment, the township assessor shall on the township assessor's own initiative correct the error. Provides that if such a correction results in a reduction in an assessment, the taxpayer is entitled to a credit on the taxpayer's next tax installment. Requires a township board to consider certain factors when determining whether a fire and emergency services need exists requiring the expenditure of money not included in the township's budget estimates and levy. Requires the DLGF to report to the commission on state tax and financing policy (CSTFP) regarding: (1) the possibility of eliminating the existing method of assessing and valuing property for the purpose of property taxation; and (2) the use of alternative methods of valuing property for the purpose of property taxation. Requires the CSTFP to study those issues and report to the legislative council. Requires the CSTFP to study the following issues and report to the legislative council: (1) Whether it is reasonable and appropriate to require all counties to use the state-designed software system. (2) Alternative methods for distribution of local option income taxes. (3) The possible elimination of property taxation of homestead property. Provides that a taxpayer that receives a tax statement or a provisional tax statement for the first installment of property taxes based on the assessment date in 2007 and first due and payable in 2008 may appeal the assessment by filing a notice in writing with the proper assessing official not later than the later of 45 days after the tax statement (or reconciling statement) is given to the taxpayer or July 1, 2008. Provides that the county auditor's annual statement to political subdivisions and the DLGF for counties with taxing units that cross into or intersect with other counties must include the assessed valuation as shown on the most current abstract of property. Adjusts the maximum property tax rates for county cumulative capital development funds and for municipal cumulative capital development funds to reflect the change from 33.33% to 100% of true tax value. Provides that a county council or county income tax council may in 2008 adopt or increase a LOIT for property tax relief or public safety at any time before January 1, 2009. Provides that a county council or county income tax council may not adopt an ordinance determining that LOIT revenue shall be used to provide local property tax replacement credits at a uniform rate to all taxpayers in the county unless the county council or county income tax council has: (a) made available the county council's best estimate of the amount of property tax replacement credits to be provided to various classes of property; and (b) adopted a resolution or other statement acknowledging that some taxpayers in the county that do not pay the LOIT will receive a property tax replacement credit that is funded with LOIT revenue. Requires a county council or county income tax council to hold at least one public meeting each year at which the county council or county income tax council discusses whether the LOIT for levy replacement should be imposed or increased. Provides that a copy of a completed case plan concerning a child in need of services or a child adjudicated as a delinquent shall be sent to an agency having the legal responsibility or authorization to care for, treat, or supervise the child. Indicates that the certain assessment system software and hardware standards apply to all assessment system software and hardware rules and standards adopted by the DLGF. Provides for the distribution to the legislative services agency of policy documents provided to local taxing officials. Requires written standards for the operation and management of a property tax data base system. Authorizes the DLGF to adopt temporary rules to revise its rules establishing standards for computer systems used by Indiana counties for the administration of the property tax assessment, billing, and settlement processes. Requires employers to report to the department of state revenue the amount of withholdings attributable to local income taxes each time the employer remits to the department the tax that is withheld. Requires an individual filing an estimated tax return to designate the portion of the estimated tax payment that represents state income tax liability and the portion of the estimated tax payment that represents local income tax liability. Provides that if an individual requests the payor of a distribution to withhold taxes from the distribution, the individual must designate the portion of the withheld amount that represents state income tax liability and the portion of the withheld amount that represents local income tax liability. Requires the department of state revenue and the office of management and budget to develop certain reports related to local option income taxes. Requires the department of revenue to develop a system of crosschecks between annual withholding tax reports and individual taxpayer W-2 forms. Requires the office of management and budget to submit an informative summary of certain calculations related to the certified distribution of local income taxes to the county council and requires certain information to be included in the informative summary. Makes other changes. Makes appropriations.
Current Status:
 Law Enacted
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