Introduced Version




SENATE BILL No. 599

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-1.1.

Synopsis: Property tax credit based on income. Provides a property tax credit equal to the amount by which property tax on a homestead exceeds 10% of the owner's three year average gross income. Requires a credit application that includes income information to be filed with the county auditor. Applies current confidentiality requirements to income information and other financial information received by the county auditor.

Effective: July 1, 2005.



Kruse


    January 20, 2005, read first time and referred to Committee on Tax and Fiscal Policy.




Introduced

First Regular Session 114th General Assembly (2005)


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SENATE BILL No. 599


    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 6-1.1-17-1; (05)IN0599.1.1. -->     SECTION 1. IC 6-1.1-17-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 1. (a) On or before August 1 of each year, the county auditor shall send a certified statement, under the seal of the board of county commissioners, to the fiscal officer of each political subdivision of the county and the department of local government finance. The statement shall contain:
        (1) information concerning the assessed valuation in the political subdivision for the next calendar year;
        (2) an estimate of the taxes to be distributed to the political subdivision during the last six (6) months of the current calendar year;
        (3) the current assessed valuation as shown on the abstract of charges;
        (4) the average growth in assessed valuation in the political subdivision over the preceding three (3) budget years, excluding years in which a general reassessment occurs, determined according to procedures established by the department of local

government finance; and
         (5) information concerning credits applicable under IC 6-1.1-21-5.6 to taxes first due and payable in the next calendar year; and
        (5) (6) any other information at the disposal of the county auditor that might affect the assessed value used in the budget adoption process.
    (b) The estimate of taxes to be distributed shall be based on:
        (1) the abstract of taxes levied and collectible for the current calendar year, less any taxes previously distributed for the calendar year; and
        (2) any other information at the disposal of the county auditor which might affect the estimate.
    (c) The fiscal officer of each political subdivision shall present the county auditor's statement to the proper officers of the political subdivision.
     (d) The:
        (1) officers of a political subdivision; and
        (2) department of local government finance;
shall adjust the assessed value used in setting rates for the taxes first due and payable in a calendar year in which credits apply under IC 6-1.1-21-5.6 to eliminate or minimize levy reductions that would otherwise result from the application of those credits.

SOURCE: IC 6-1.1-21-5.6; (05)IN0599.1.2. -->     SECTION 2. IC 6-1.1-21-5.6 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 5.6. (a) The following definitions apply throughout this section:
        (1) "Gross income" has the meaning set forth in IC 6-3-1-8.
        (2) "Homestead" has the meaning set forth in IC 6-1.1-20.9-1(2).
        (3) "Household income" means the combined gross income of the qualifying individual and the qualifying individual's spouse.
        (4) "Net property tax bill" means the amount of property taxes currently due and payable in a particular calendar year after the application of all deductions and credits, except for the credit provided by this section, as evidenced by the tax statement referred to in IC 6-1.1-22-8.
        (5) "Qualifying individual" means an individual who is liable for the payment of property taxes on a homestead.
        (6) "Taxable year" has the meaning set forth in IC 6-3-1-16.
    (b) Except as provided in subsection (c), for property taxes first

due and payable after December 31, 2006, a qualifying individual may receive a credit each year against the net property tax bill on the qualifying individual's homestead. The amount of the credit to which a qualifying individual is entitled equals the greater of zero (0) or the remainder of:
        (1) the amount of the net property tax bill without the application of the credit provided by this section; minus
        (2) ten percent (10%) of the qualifying individual's average gross income for:
            (A) the qualifying individual's most recent taxable year that ends before the date on which the claim is filed under subsection (d); and
            (B) the two (2) taxable years that immediately precede the taxable year referred to in clause (A).
    (c) If the qualifying individual resides in the homestead with the qualifying individual's spouse, those individuals are together entitled to one (1) credit under this section for the homestead. The amount of the credit is determined under subsection (b), except that the household income is substituted for the qualifying individual's gross income.
    (d) A qualifying individual who desires or a qualifying individual and the qualifying individual's spouse who desire to claim the credit provided by this section must file a certified statement in duplicate, on forms prescribed by the department of local government finance, with the auditor of the county in which the homestead is located. With respect to real property, the statement must be filed during the twelve (12) months preceding May 11 of the year before the year for which the qualifying individual or the qualifying individual and the qualifying individual's spouse wish to obtain the credit under this section. For a mobile home that is not assessed as real property or a manufactured home that is not assessed as real property, the statement must be filed during the twelve (12) months preceding March 2 of the year for which the qualifying individual or the qualifying individual and the qualifying individual's spouse wish to obtain the credit under this section. The statement must include the following information:
        (1) The full name or names and complete address of the qualifying individual or the qualifying individual and the qualifying individual's spouse.
        (2) A description of the homestead.
        (3) Copies of federal income tax returns for the taxable years

referred to in subsection (b)(2) for:
            (A) the qualifying individual; or
            (B) if subsection (c) applies, the qualifying individual and the qualifying individual's spouse.
        (4) The name of any other county and township in which the qualifying individual or the qualifying individual's spouse owns or is buying on contract:
            (A) real property; or
            (B) a:
                (i) mobile home; or
                (ii) manufactured home;
            that is not assessed as real property.
        (5) The record number and page where the contract or memorandum of the contract is recorded if the homestead is under contract purchase.
        (6) Any other information required by the department of local government finance.
     (e) The auditor of a county with whom a statement is filed under subsection (d) shall immediately prepare and transmit a copy of the statement to the auditor of any other county if the qualifying individual who claims the credit or the qualifying individual's spouse owns or is buying property located in the other county as described in subsection (d)(4). The auditor of the other county described in subsection (d)(4) shall note on the copy of the statement whether a credit has been claimed under this section for a homestead located in the auditor's county. The auditor shall then return the copy to the auditor of the first county.
    (f) If a proper certified credit statement is filed under subsection (d), the county auditor shall allow the credit and shall apply the credit equally against each installment of property taxes. The county auditor shall include the amount of the credit applied against each installment of property taxes on the tax statement required under IC 6-1.1-22-8.
    (g) If an individual knowingly or intentionally files a false statement under this section, the individual must pay the amount of any credit the individual received because of the false statement, plus interest at the rate of ten percent (10%) per year, to the county auditor for distribution to the taxing units of the county in the same proportion that property taxes are distributed.

SOURCE: IC 6-1.1-21-7; (05)IN0599.1.3. -->     SECTION 3. IC 6-1.1-21-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 7. (a) Notwithstanding IC 6-1.1-26, any taxpayer who is entitled to a credit under this chapter

or who has properly filed for and is entitled to a credit under IC 6-1.1-20.9, and who, without taking the credit, pays in full the taxes to which the credit applies, is entitled to a refund, without interest, of an amount equal to the amount of the credit. However, if the taxpayer, at the time a refund is claimed, owes any other taxes, interest, or penalties payable to the county treasurer to whom the taxes subject to the credit were paid, then the credit shall be first applied in full or partial payment of the other taxes, interest, and penalties and the balance, if any, remaining after that application is available as a refund to the taxpayer.
    (b) Any taxpayer entitled to a refund under this section other than a refund based on the credit under section 5.6 of this chapter shall be paid that refund from proceeds of the property tax replacement fund. However, with respect to any refund attributable to a homestead credit, the refund shall be paid from that fund only to the extent that the percentage homestead credit the taxpayer was entitled to receive for a year does not exceed the percentage credit allowed in IC 6-1.1-20.9-2(d) for that same year. Any refund in excess of that amount shall be paid from the county's revenue distributions received under IC 6-3.5-6.
    (c) The state board of accounts shall establish an appropriate procedure to simplify and expedite the method for claiming these refunds and for the payments thereof, as provided for in this section, which procedure is the exclusive procedure for the processing of the refunds. The procedure shall, however, require the filing of claims for the refunds by not later than June 1 of the year following the payment of the taxes to which the credit applied.

SOURCE: IC 6-1.1-35-9; (05)IN0599.1.4. -->     SECTION 4. IC 6-1.1-35-9 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 9. (a) All information that is related to earnings, income, profits, losses, or expenditures and that is:
        (1) given by a person to:
            (A) an assessing official;
            (B) a member of a county property tax assessment board of appeals;
            (C) a county assessor;
             (D) a county auditor;
            (D) (E) an employee of a person referred to in clauses (A) through (C); (D); or
            (E) (F) an officer or employee of an entity that contracts with a board of county commissioners, a county assessor, or an elected township assessor under IC 6-1.1-36-12; or
        (2) acquired by:
            (A) an assessing official;
            (B) a member of a county property tax assessment board of appeals;
            (C) a county assessor;
             (D) a county auditor;
            (D) (E) an employee of a person referred to in clauses (A) through (C); (D); or
            (E) (F) an officer or employee of an entity that contracts with a board of county commissioners, a county assessor, or an elected township assessor under IC 6-1.1-36-12;
        in the performance of the person's duties;
is confidential. The assessed valuation of tangible property is a matter of public record and is thus not confidential. Confidential information may be disclosed only in a manner that is authorized under subsection (b), (c), or (d).
    (b) Confidential information may be disclosed to:
        (1) an official or employee of:
            (A) this state or another state;
            (B) the United States; or
            (C) an agency or subdivision of this state, another state, or the United States;
        if the information is required in the performance of the official duties of the official or employee; or
        (2) an officer or employee of an entity that contracts with a board of county commissioners, a county assessor, or an elected township assessor under IC 6-1.1-36-12 if the information is required in the performance of the official duties of the officer or employee.
    (c) The following state agencies, or their authorized representatives, shall have access to the confidential farm property records and schedules that are on file in the office of a county or township assessor:
        (1) the Indiana state board of animal health, in order to perform its duties concerning the discovery and eradication of farm animal diseases;
        (2) the department of agricultural statistics of Purdue University, in order to perform its duties concerning the compilation and dissemination of agricultural statistics; and
        (3) any other state agency that needs the information in order to perform its duties.
    (d) Confidential information may be disclosed during the course of a judicial proceeding in which the regularity of an assessment is

questioned.
    (e) Confidential information that is disclosed to a person under subsection (b) or (c) retains its confidential status. Thus, that person may disclose the information only in a manner that is authorized under subsection (b), (c), or (d).
    (f) Notwithstanding any other provision of law:
        (1) a person who:
            (A) is an officer or employee of an entity that contracts with a board of county commissioners, a county assessor, or an elected township assessor under IC 6-1.1-36-12; and
            (B) obtains confidential information under this section;
        may not disclose that confidential information to any other person; and
        (2) a person referred to in subdivision (1) must return all confidential information to the taxpayer not later than fourteen (14) days after the earlier of:
            (A) the completion of the examination of the taxpayer's personal property return under IC 6-1.1-36-12; or
            (B) the termination of the contract.

SOURCE: IC 6-1.1-35-11; (05)IN0599.1.5. -->     SECTION 5. IC 6-1.1-35-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 11. (a) An assessing official, member of a county property tax assessment board of appeals, a state board member, a county auditor, or an employee of any assessing official, county assessor, county auditor, or board shall immediately be dismissed from that position if the person discloses in an unauthorized manner any information that is classified as confidential under section 9 of this chapter.
    (b) If an officer or employee of an entity that contracts with a board of county commissioners, a county assessor, or an elected township assessor under IC 6-1.1-36-12 discloses in an unauthorized manner any information that is classified as confidential under section 9 of this chapter:
        (1) the contract between the entity and the board is void as of the date of the disclosure;
        (2) the entity forfeits all right to payments owed under the contract after the date of disclosure;
        (3) the entity and its affiliates are barred for three (3) years after the date of disclosure from entering into a contract with a board, a county assessor, or an elected township assessor under IC 6-1.1-36-12; and
        (4) the taxpayer whose information was disclosed has a right of action for triple damages against the entity.
SOURCE: ; (05)IN0599.1.6. -->     SECTION 6. [EFFECTIVE JULY 1, 2005] IC 6-1.1-21-5.6, as added by this act, applies only to property taxes first due and payable after December 31, 2006.