March/April 2006 Issue
Page 4

STATE NEWS CONTINUED....

2006 SESSION: PROPERTY TAX LEGISLATION OVERVIEW

The final package (HB 1001) was a hybrid of the House and Senate approaches with a focus on short-term relief. However, the inclusion of “2% cap” legislation seems intended to force future action on meaningful property tax reform. The major components of HB 1001 are:

• 2006 Changes: For property taxes paid this year only, the state-paid Homestead Credit will be boosted from 20% to 28%. At a cost of about $100 M, this change is estimated to offset the tax burden for homeowners by about 5%.
• 2007 Changes: For property taxes paid next year only, the $35,000 deduction (or exemption) will rise to $45,000. This will shift between $100 M and $150 M of the total tax burden away from homeowners to owners of all other property types.
• Increased Transparency in Tax Billing: Beginning in 2008, Indiana will finally have a uniform tax bill for all 92 counties. Two years later, the state will begin using a Florida-type notification to inform property owners of how proposed spending levels will impact tax bills.
• Trending: The annual adjustment to real estate assessments to reflect market changes was not delayed . The impacts will be reflected in CY 2007 tax bills.
• 2% Cap: The General Assembly also expanded the existing “2% cap” property tax circuit-breaker. Under current law, counties can choose to limit property taxes for residences to no more than 2% of the property's gross assessed value. For example, the 2% cap would limit taxes on a house with an assessment of $200,000 (before deductions) to $4,000 annually. Here is how the 2% cap will be phased in:
  • HB 1001 provides that beginning with taxes paid in CY 2008, the 2% cap applies to all residential properties, including many rental units.
  • No local action is necessary, and the cap applies statewide (however, in Lake County a mandatory version of this cap begins one year earlier).
  • In CY 2010, the cap will apply to all property, including machinery and equipment.
  • The portion of each taxpayer's bill that exceeds the 2% cap must be borne by local government units as cuts in their budgets.

The Association of Cities and Towns and other groups representing local government and schools were strongly opposed to mandatory 2% caps. In a number of areas of the state (mostly urban centers), tax rates are high enough that some homes already are taxed above the 2% rate. Early estimates indicate that by 2010, the 2% cap will cost local governments and schools many millions of dollars in revenue.

However, the main proponents of this statewide 2% cap do not intend it to punish local units. They hope that in the face of dire consequences, disparate groups can come together (perhaps as soon as next session) to allow for additional property tax replacement revenue, such as local option income taxes.

LOCAL NEWS

THE BOARD OFFICE HAS MOVED!!

Finally, after months of anticipation, the Board and MLS offices have moved to 57225 Alpha Drive, Goshen, Indiana 46528. The move took place the week of March 6th and offices were closed, for the most part, that week. The move went smoothly and we owe that to all the hard working people who moved our office, computers, phones, internet etc.

At this time, we are back in business. We have the staff offices basically in place and are still working on the conference area and training room. We still have decorating to do but we are pleased with the progress.

Several members have stopped by to welcome us to the neighborhood and we appreciate all the support, patience and encouragement members have shown. We are so very pleased with our new location and offices. We are looking forward to offering parts of this building to members. We will keep you informed as things progress. We hope to have an official open house after we are settled but until then feel free to stop by and see us.

MLS SOON TO OFFER A FREE FAX NUMBER TO USE FOR UPLOADING ASSOCIATED DOCS TO LISTINGS

At the March Board of Directors meeting, the MLS Board voted to offer a toll free fax number to use as a way to upload associated docs (i.e. seller disclosure, lead base paint disclosure etc) to the listings in Paragon.

Currently, offices can upload documents by any number of methods, however, the fax method will help those offices who don't have an easy method or the time to upload associated documents. This should be available to offices by April 1, 2006.

In order to utilize the program, the listing is first input into the computer. Then while in listing maintenance go to “Select an action” then “select Associated Documents”. A new button labeled “Fax Cover” will be displayed. Select “Fax Cover” and this will open the Fax Cover window which will prompt you to provide the number of pages in the document and any comments you wish to add to the fax. A fax cover sheet will be generated with the following information: Number of pages, Agent ID, Office ID, MLS #, Name of sender, any comments added and a bar code. This will provide the necessary information to attach the documents with the listing.

You will need to print the fax cover sheet and place it in the beginning of the document and fax it to 1-866-338-1700. Once the document(s) have been faxed, Paragon will strip out the cover sheet and convert the documents to a PDF format. It will then be added to the list of associated documents.

Using the fax upload method will provide a uniformity to the associated documents and make it much easier for users to download and read the documents attached. In the future, the MLS plans on making it mandatory to upload the seller disclosure form and any applicable lead base paint forms. Remember, do not use this program until April 1, 2006 even if you see the Fax Cover button in the program.

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