Pam Faeber has passed along some notes from the meeting Monday afternoon regarding reclassification of “agricultural” land to “excess residential”. Thank you Pam!
According to Pam, the following representatives were on hand at the meeting:
- Senator Mike Delph
- Senator Phillip Boots
- Senator Jim Buck
- Representative Bob Cherry
- Katriana Hall, Director In State Government Relations for Indiana Farm Bureau
This is an issue facing property owners state-wide. In Boone County this reclassification has resulted in the following:
- none of the parcels reclassified have had a change in use of the land
- all have always been “agriculture”
- some land reclassified consists of: flood plains, wooded ravines, heavy wooded areas, horse pasture and open fields of scrub
The local assessor states that she is following state law (Indiana Code section 6-1.1-4-13(a)):
In assessing or reassessing land, the land shall be assessed as agricultural land only when it is devoted to agricultural use.
Once land is classified “excess residential” on an ANNUAL basis, the residential land sold in a given area is averaged to determine the value per acre. This means in a high-growth area like Zionsville land may sell at $50,000-$100,000 per acre since a large portion of land is being developed.
Pam Faeber gave examples of the Faeber land which was reclassified last year from “agricultural” to “excess residential”. This year the assessed value increased by another $100,000 on 38 acres over the previous year.
A second example was 17 acres changed this year from “agricultural” to “excess residential” with the value going from $17,000 to $195,000. Mike Shoemaker related that at his first “appeal” he was told if the land is not tilled up and producing crops it is not agricultural land, even though it is all flood plain or under high-tension wire.
Senator Phil Boots stated that land classified as “agricultural” must produce revenue. Pam Faerber read the law again and, as per above, it does NOT state that agricultural land must produce revenue.
Representative Cherry related a bill he has already introduced which states that land can not be reclassified unless the use of the land has changed. As soon as a copy of the proposed legislation is obtained we will publish the exact wording.
Additionally, Representative Cherry stated it was not fair that Indiana protects the financial interests of developers by allowing them to hold land classified as “agricultural” as such UNTIL it is developed:
Circumstances under which undeveloped land may be reassessed
Sec. 12. (a) As used in this section, “land developer” means a person that holds land for sale in the ordinary course of the person’s trade or business. The term includes a financial institution (as defined in IC 28-1-1-3(1)) if the financial institution’s land in inventory is purchased, acquired, or held for one (1) or more of the purposes established under IC 28-1-11-5(a)(2), IC 28-1-11-5(a)(3), and IC 28-1-11-5(a)(4).
(b) As used in this section, “land in inventory” means:
(1) a lot; or
(2) a tract that has not been subdivided into lots;
to which a land developer holds title in the ordinary course of the land developer’s trade or business.
(c) As used in this section, “title” refers to legal or equitable title, including the interest of a contract purchaser.
(d) For purposes of this section, land purchased, acquired, or held by a financial institution for one (1) or more of the purposes established under IC 28-1-11-5(a)(2), IC 28-1-11-5(a)(3), and IC 28-1-11-5(a)(4) is considered held for sale in the ordinary course of the financial institution’s trade or business.
(e) Except as provided in subsections (i) and (j), if:
(1) land assessed on an acreage basis is subdivided into lots; or
(2) land is rezoned for, or put to, a different use;
the land shall be reassessed on the basis of its new classification.
(f) If improvements are added to real property, the improvements shall be assessed.
(g) An assessment or reassessment made under this section is effective on the next assessment date.
(h) No petition to the department of local government finance is necessary with respect to an assessment or reassessment made under this section.
(i) Subject to subsection (j), land in inventory may not be reassessed until the next assessment date following the earliest of:
(1) the date on which title to the land is transferred by:
(A) the land developer; or
(B) a successor land developer that acquires title to the land;
to a person that is not a land developer;
(2) the date on which construction of a structure begins on the land; or
(3) the date on which a building permit is issued for construction of a building or structure on the land.
(j) Subsection (i) applies regardless of whether the land in inventory is rezoned while a land developer holds title to the land.
Indiana should afford the same protection to individual land owners as as it does to developers.
Senators Delph and Buck both voiced support for this measure and encouraged anyone with an interest to attend the committee reading of this proposed legislation. A large contingent of citizens would go a long way to encouraging passage of legislation such as that proposed by Representative Cherry.
Pam Faerber read the following from the Indiana assessors manual:
Assessors are further directed that all acres enrolled in programs of the United States Department of Agriculture (USDA), Farm Services Agency, and Natural Resources Conservation Service and have received a “farm number” are eligible for classification as “agricultural.” Those acres have been determined by those administering federal programs to be a part of an “agricultural operation.”
Finally, Pam pointed out that the US Agricultural Department and Indiana Board of Animal Health both recognize horses as “livestock”.
Action(s) To Take
- attend the opening legislature date (presumably November 18, but we will confirm the actual date as soon as we know it)
- if a bill is introduced to rectify this situation we will want as large a contingent of affected citizens as possible to attend
- if you are interested in joining a class-action lawsuit concerning this, let us know. Several land owners are interested and this may be the fastest way to bring about a new law (assuming we win)
- take a 10 second video of yourself in a location on your property that should NOT be considered “excess residential” saying something like: “Does this look like residential land to you?”. Examples would be land in a flood plain, woods, horse pasture, etc. Use the Contact page once your video is finished and we’ll arrange for you to upload it to us.
