Section 50 IAC 8-2-10 - Apportionment; real and personal property exampleAuthority: 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.Department of Local Government Finance; 50 IAC 8-2-10; filed Jan 30, 1989, 3:30 p.m.: 12 IR 1362