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| Indiana legislature OKs a land assessment plan |
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INDIANAPOLIS, Ind. — On March 25, Gov. Mitch Daniels signed into law a plan that is intended to protect Indiana farmers and agriculture companies by improving the state’s assessment of farmland.
State Sen. Richard D. Young (D-Milltown), a co-author of Senate Bill (SB) 396, said the change was needed to more accurately assess increases in farmland value for property taxes. SB 396 was approved by a 50-0 vote in the Senate, and 97-1 in the House of Representatives.
“This legislation will reduce dramatic increases in property tax assessments for farmland,” said Sen. Young. “And it will improve the property assessment system to more accurately reflect the true values of farmland and property used in the agricultural industries in Indiana.”
Today, the Indiana Department of Local Government and Finance determines farmland value based on a six-year rolling average. The value is based on a formula that factors information on land rents, crop yields and prices, and interest rates. Farmland values are recalculated each year as part of the trending process.
Rep. Bill Friend (R-Macy), who voted for the bill, said it retains the six-year rolling average of crop values and farm income, but it subtracts the highest-value year. “This formula would reduce the effects of spikes in farm income,” Friend reported. “This action would be helpful to agriculture by reducing the base rate used for the calculations. I was a conferee on this bill and am pleased it passed the House.”
Beginning with taxes payable in 2011, SB 396 would change the calculation by which farmland assessments are determined. Under the proposal, the base rate formula for farmland assessments would be done on an adjusted six-year average with the highest value eliminated.
Indiana Farm Bureau (IFB) said Hoosier farmers will pay about $75 million less in property taxes during the next three years due to this bill.
“This is a tremendous victory for Indiana farmers. It took a lot of work by our lobbyists and a number of supportive legislators,” said IFB President Don Villwock. “But it is only because of the vocal and visible presence of Farm Bureau members at the Statehouse demanding property tax relief for farmers that we were even in a position to accomplish this significant modification of the assessment formula.”
The new law reduces both the assessed value of the state’s farmland and the taxes on that land from what they otherwise would have been. It does this, explained IFB tax specialist Katrina Hall, by amending the formula used by the Indiana Department of Local Government Finance to set the base value for an acre of Indiana farmland.
The base value per acre of farmland is $1,250 for taxes payable in 2010. This rate is estimated to increase to $1,400 for 2011, $1,700 for 2012, and $1,810 for 2013. Under this proposal, the base rate would be $1,290 for 2011, $1,500 for 2012, and $1,620 for 2013. |
| 3/31/2010 |
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