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Indiana Legislature tweaks laws on property taxes and sets the stage for renewable energy.

Tom J Bechman 1, Editor, Indiana Prairie Farmer

April 5, 2022

3 Min Read
wind turbines
OPTION FOR ‘WIND-ENERGY READY:’ If your community chooses to promote wind or solar energy, it can adopt what a new law calls default standards so potential developers know what to expect. Tom J. Bechman

The subtle changes that Indiana legislators made to property tax and renewable energy standards in the recent legislative session may not affect your farming operation today. But they could make a difference down the road, depending on how your community addresses these issues in the future.

“The tweaks on property taxes were things we supported, in some cases for a long time,” explains Jeff Cummins, associate director of engagement for Indiana Farm Bureau. “They should be positive for agriculture in the long run.

“In terms of alternative energy, what the Legislature did is not earth-shaking. New language could make it easier for a community that wants to embrace solar or wind energy to move forward.”

Here’s a closer look:

Senate Enrolled Act 119. Language here relates to how personal property, such as farm equipment and farm improvements, are assessed. Changes will take effect for 2022 assessments.

The first thing this legislation does is prohibit use of residential factors used to adjust residential properties to the valuation process for farm improvements. These include things like farm buildings, grain bins and silos, Cummins explains. It separates out a farm home and treats it like other residential properties for assessment purposes.

Second, the law creates a new option that communities and municipalities could embrace to encourage agricultural development.

“Almost everyone is familiar with offering property tax abatement for a specified time for businesses to help entice them to come to a community, or to expand and grow,” Cummins says. “This applies the same concept to agriculture. If an entity chooses, it can offer tax abatement for ag equipment or ag real estate improvements like buildings used in harvesting and processing commodities.”

Necessary guidelines and rules for implementing this new tax law will be circulated to assessors by the Department of Local Government Finance. Cummins cautions that this is not relief from paying normal property taxes on farm equipment. While that issue came up early in the session, it didn’t advance.

Senate Enrolled Act 145. This new law doesn’t affect agriculture assessments directly, but it will help maintain the local tax base by affecting how local assessors value new big-box retail stores. This limits the impact of appeals filed by tax representatives claiming new big-box buildings should be valued like vacant, older, similar buildings. It helps farmers and other taxpayers if more money comes in from non-ag sources.

The language in this new law addresses the “dark box” loophole, which relates to how commercial property no longer in use is assessed.

Senate Enrolled Act 411. Some wondered if the Legislature would set statewide, mandatory zoning standards for solar and wind energy installations. Instead, it passed this language, creating a designation for communities that adopt either default standards, spelled out in statutes, or standards less restrictive than default standards, Cummins explains.

Standards refer to things like setback distances, allowable heights, reflectance and decommissioning procedures. There was speculation related to what the state might do since some counties have not yet enacted a set of standards for solar, wind or both.

“If a community adopts standards that meet qualifications, it’s designated as a ‘wind energy-ready community’ or a ‘solar energy-ready community,’” Cummins says. “This is all strictly voluntary. And at this point, there are no grants or monetary incentives for earning these designations.”

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About the Author(s)

Tom J Bechman 1

Editor, Indiana Prairie Farmer

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