Indiana Administrative Code › Title 50 - DEPARTMENT OF LOCAL GOVERNMENT FINANCE › Article 8 - TAX INCREMENT FINANCE › Rule 2 - Determination and Use of Tax Increment › Section 2-10 - Apportionment; real and personal property example

Current through July 10, 2024
Authority: IC 6-1.1-39; IC 36-7-14; IC 36-7-15.1
Affected: IC 6-1.1-39; IC 8-22-3.5; IC 36-7-14; IC
				  36-7-15.1
Sec. 10.
(a) This
				section addresses the apportionment to restore the base assessment that might
				be required as described in section 8 of this rule. (This is required only if
				the percentage of credit on taxes on the current base assessment individual
				components differs from the percentage of credit on taxes on the captured
				assessment individual components.) This section deals with a tax increment
				finance program that includes both real and personal property. (See section
				2(b) of this rule concerning the limited circumstances under which personal
				property may be included in the program.) For purposes of this subsection, it
				is assumed that the redevelopment commission has adopted a resolution to
				include twenty-five percent (25%) of depreciable personal property in the tax
				increment finance program under section 2(b) of this rule and that the base
				assessment date precedes March 1, 1988. The inclusion of personal property
				requires consideration of additional factors in the computation of the
				potential captured assessment. As described in section 9 of this rule, if the
				assessed values of some of the parcels of allocation area real property are
				higher than they were on the base assessment date, then the increases may be
				apportioned, if necessary, to restore the base assessment. Any increases that
				are not used to restore the base assessment become part of the potential
				captured assessment.
(b) With
				respect to each personal property return that includes allocation area personal
				property, the assessed value of the property on the return as of the base
				assessment date must be compared to the assessed value of that property on the
				return as of the assessment date of the current year. If seventy-five percent
				(75%) of the assessed value as of the current assessment date is equal to or
				greater than the assessed value as of the base assessment date, then the full
				remaining twenty-five percent (25%) may be apportioned, if necessary, to
				restore the base assessment. If seventy-five percent (75%) of the assessed
				value as of the current assessment date is less than the assessed value as of
				the base assessment date, then any positive remainder obtained by subtracting
				the assessed value as of the base assessment date from the assessed value as of
				the current assessment date may be apportioned, if necessary, to restore the
				base assessment. In both cases, any amounts available to restore the base
				assessment that are not used for that purpose become part of the potential
				captured assessment.
(c)
				Restoration of the base assessment is required when the following amount is
				less than the base assessment:
(1) the sum of
				the assessed value as of the current year of all original base assessment
				individual real property components; plus
(2) the aggregate of the remaining current
				year assessed value of allocation area personal property after subtracting any
				portion of the assessed value that is available to restore the base assessment
				as described in subsection (b).
Example
(1) Base assessment date is March 1,
				1986.
(2) There are three (3)
				parcels of allocation area real property and three (3) returns that include
				allocation area personal property.
(3) AV = assessed valuation.
Column 1
Column 2
Column 3
Column 4
Parcel A
$10,000
$24,000
(1) $14,000
(1) $10,000
B
20,000
5,000
5,000
C
12,000
18,000
6,000
12,000
Personal Property
Return X
12,000
16,000
(2) 4,000
(2) 12,000
Y
9,000
6,000
(3) -0-
6,000
Z
10,000
12,000
2,000
10,000
$73,000
$81,000
(4) $26,000
(3) $55,000
Column 5
Column 6
Column 7
Parcel A
$14,000 × .6923 =
$9,692
(1) $19,692
(1) $4,308
B
5,000
C
6,000 × .6923 =
4,154
16,154
1,846
Personal Property
Return X
4,000 × .6923 =
2,769
(2) 14,769
1,231
Y
6,000
Z
2,000 × .6923 =
1,385
11,385
615
$18,000
$73,000
(2) $8,000
Column 1
March 1, 1986 AV of all parcels of allocation area real
				  property and returns of allocation area personal property. The total of Column
				  1 is the base assessment.
Column 2
March 1, 1988 AV of all parcels of allocation area real
				  property and returns of allocation area personal property.
Column 3
(1) Increases in the AV of allocation area
				real property from 1986 to 1988 (Parcels A and C).
(2) Twenty-five percent (25%) of Column 2 if
				seventy-five percent (75%) of Column 2 is equal to or greater than Column 1
				(Return X).
(3) If seventy-five
				percent (75%) of Column 2 is less than Column 1, then the remainder of Column 2
				minus Column 1 (not less than zero (0)) is listed in Column 3 (Returns Y and
				Z).
(4) The total of Column 3 is
				the amount available to restore the base assessment.
Column 4
(1) The original base assessment individual
				real property components as of March 1, 1988 (all parcels).
(2) With respect to each personal property
				return, the remainder of the current year AV of allocation area personal
				property (from Column 2) minus the amount of AV that is available to restore
				the base assessment (from Column 3).
(3) The total of Column 4 is the amount of AV
				that is taxable by the taxing units in which the allocation area is located
				unless that total is less than the base assessment (total of Column 1). The
				remainder of the total of Column 1 minus the total of Column 4 ($73,000 -
				$55,000 = $18,000) must be restored from the amount of AV available for that
				purpose under Column 3 (twenty-six thousand dollars ($26,000)).
Column 5
From each amount in Column 3, a percentage is used for
				  restoration of the base assessment. The percentage is the amount to be restored
				  (the total of Column 1 minus the total of Column 4) divided by the amount
				  available for that purpose from Column 3 ($18,000/$26,000 = 69.23% or
				  .6923).
Column 6
(1) With respect to each parcel of real
				property, the sum of:
(A) the original base
				assessment individual real property components as of March 1, 1988, from Column
				4(1); plus
(B) the portion of any
				real property AV increase from Column 3(1) that is computed for restoration of
				the base assessment under Column 5.
(2) With respect to each personal property
				return, the sum of:
(A) the amount of AV
				listed in Column 4(2); plus
(B) the
				portion of the AV from Column 3(2) and 3(3) that is computed for restoration of
				the base assessment under Column 5.
Note: With respect to each parcel and each return, the amount
				  listed in Column 6 is the amount of the 1988 AV that is taxable by the taxing
				  units in which the allocation area is located. (3) The total of Column 6 is the
				  restored base assessment.
Column 7
(1) Potential captured assessment
				individual components (all parcels and returns).
(2) Potential captured
				assessment.