Bill Text: IN HB1174 | 2011 | Regular Session | Engrossed
Bill Title: Sale of real property by local government.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Passed) 2011-05-16 - Effective 07/01/2011 [HB1174 Detail]
Download: Indiana-2011-HB1174-Engrossed.html
Citations Affected: IC 36-1.
Effective: July 1, 2011.
(SENATE SPONSORS _ GLICK, WALKER)
January 10, 2011, read first time and referred to Committee on Local Government.
February 10, 2011, amended, reported _ Do Pass.
February 14, 2011, read second time, amended, ordered engrossed.
February 15, 2011, engrossed. Read third time, passed. Yeas 93, nays 0.
February 17, 2011, read first time and referred to Committee on Local Government.
March 31, 2011, amended, reported favorably _ Do Pass.
Digest Continued
appraisals (instead of as determined by a joint appraisal of the property), if the agent publishes notice of the amount of the offer to be accepted. Allows a local government disposing agent to lease real property for a value that is less than 90% of the appraised fair market rental as determined by the average of the two appraisals (instead of as determined by a joint appraisal of the property), if the agent publishes notice of the amount of the bid to be accepted. Provides that if the disposing agent rejects all offers or bids, the agent must make a written determination for the rejection and explain why the bids or offers were rejected. Provides that a sale or transfer of property constituting a public easement or right of way under the statutes governing disposal of property by local government does not deprive a public utility of the use of the public easement or right of way if, at the time of the sale or transfer, the public utility is occupying and using all or part of that public easement or right of way for the location and operation of its facilities.
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A BILL FOR AN ACT to amend the Indiana Code concerning local
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(b) The disposing agent shall first have the property appraised by two (2) appraisers. The appraisers must be:
(1) professionally engaged in making appraisals;
(2) licensed under IC 25-34.1; or
(3) employees of the political subdivision familiar with the value of the property.
(c) After the property is appraised, the disposing agent shall publish a notice in accordance with IC 5-3-1 setting forth the terms and conditions of the sale and, when subsection (e) is employed, may engage an auctioneer licensed under IC 25-6.1 to advertise the sale and
to conduct a public auction. The advertising conducted by the
auctioneer is in addition to any other notice required by law and shall
include a detailed description of the property to be sold stating the key
numbers, if any, of the tracts within that property. If the disposing agent
determines that the best sale of the property can be made by letting the
bidders determine certain conditions of the sale (such as required
zoning or soil or drainage conditions) as a prerequisite to purchasing
the property, the disposing agent may permit the bidders to specify
those conditions. The notice must state the following:
(1) Bids will be received beginning on a specific date.
(2) The sale will continue from day to day for a period determined
by the disposing agent of not more than sixty (60) days.
(3) The property may not be sold to a person who is ineligible
under section 16 of this chapter.
(4) A bid submitted by a trust (as defined in IC 30-4-1-1(a)) must
identify each:
(A) beneficiary of the trust; and
(B) settlor empowered to revoke or modify the trust.
(d) A bid must be open to public inspection. A bidder may raise the
bidder's bid, and subject to subsection (e), that raise takes effect after
the board has given written notice of that raise to the other bidders.
(e) The disposing agent may also engage an auctioneer licensed
under IC 25-6.1 to conduct a sale by public auction. The auction may
be conducted either at the time for beginning the sale in accordance
with the public notice or after the beginning of the sale. The disposing
agent shall give each bidder who has submitted a bid written notice of
the time and place of the auction.
(f) The disposing agent may, before expiration of the time set out in
the notice, sell the property to the highest and best bidder. The highest
and best bidder must have complied with any requirement under
subsection (c)(4). However, the disposing agent may sell the property
for less than ninety percent (90%) of the appraised value average of
the two (2) appraisals of the tracts only after having an additional
notice of the sale published in accordance with subsection (c). stating
the amount of the bid to be accepted is published in accordance
with IC 5-3-1. The disposing agent may reject all bids. If the
disposing agent rejects all bids, the disposing agent must make a
written determination to reject all bids explaining why all bids
were rejected.
(g) If the disposing agent determines that, in the exercise of good
business judgment, the disposing agent should hire a broker or
auctioneer to sell the property, the disposing agent may do so and pay
the broker or auctioneer a reasonable compensation out of the gross
proceeds of the sale. However, the disposing agent must still comply
with the procedural requirements of this section. A disposing agent
may hire a broker to sell real property directly rather than using
the bid process under subsections (c) through (f) if:
(1) the disposing agent publishes a notice of the determination
to hire the broker in accordance with IC 5-3-1; and
(2) the property has been up for bid for at least sixty (60) days
before the broker is hired, and either no bids were received or
the disposing agent has rejected all bids that were received.
The disposing agent may hire one (1) of the appraisers as the broker or
auctioneer.
(h) The following apply if a broker is hired under subsection (g):
(1) The property may not be sold to a person who is ineligible
under section 16 of this chapter.
(2) If the property is sold to a trust (as defined in
IC 30-4-1-1(a)), the following information must be placed in
the public record relating to the sale:
(A) Each beneficiary of the trust.
(B) Each settlor empowered to revoke or modify the trust.
(1) To promote an economic development project.
(2) To facilitate compatible land use planning.
(b) The disposing agent shall first have the property appraised by two (2) appraisers. The appraisers must be:
(1) professionally engaged in making appraisals;
(2) licensed under IC 25-34.1; or
(3) employees of the political subdivision familiar with the value of the property.
(c) Subject to subsection (d), the disposing agent may:
(1) negotiate a sale or transfer; and
(2) dispose of the real property;
at a value that is not less than the
(d) The disposing agent may dispose of the real property for a value that is not less than the average of the two (2) appraisals under subsection (b) only after publishing a notice in accordance
with IC 5-3-1 stating the amount of the offer to be accepted. The
disposing agent may reject all offers. If the disposing agent rejects
all offers, the disposing agent must make a written determination
to reject all offers explaining why all offers were rejected.
(1) touches, borders on, or is contiguous to the property that is the subject of sale; and
(2) does not constitute a:
(A) public easement; or
(B) public right-of-way.
(b) As used in this section, "offering price" means the appraised value of real property plus all costs associated with the sale, including:
(1) appraisal fees;
(2) title insurance;
(3) recording fees; and
(4) advertising costs.
(c) The disposing agent may proceed under this section if either of the following applies:
(1) The assessed value of a tract of real property to be sold is less than fifteen thousand dollars ($15,000), based on the most recent assessment of the tract or of the tract of which it was a part before it was acquired.
(2) If the property has not been assessed and the property was previously part of a public right-of-way.
(d) The disposing agent may determine that:
(1) the highest and best use of the tract is sale to an abutting landowner;
(2) the cost to the public of maintaining the tract equals or exceeds the estimated fair market value of the tract; or
(3) it is economically unjustifiable to sell the tract under section
4 of this chapter.
(e) Within ten (10) days after the disposing agent makes a
determination under subsection (d), the disposing agent shall publish
a notice in accordance with IC 5-3-1 identifying the tracts intended for
sale by legal description and, if possible, by key number and street
address. The notice must also include the offering price and a statement
that:
(1) the property may not be sold to a person who is ineligible
under section 16 of this chapter; and
(2) an offer to purchase the property submitted by a trust (as
defined in IC 30-4-1-1(a)) must identify each:
(A) beneficiary of the trust; and
(B) settlor empowered to revoke or modify the trust.
At the time of publication of notice under this subsection, the disposing
agent shall send notice by certified mail to all abutting landowners.
This notice shall contain the same information as the published notice.
(f) The disposing agent shall also have each tract appraised. The
appraiser must be professionally engaged in making appraisals, a
person licensed under IC 25-34.1, or an employee of the political
subdivision who is familiar with the value of the tract. However, if the
assessed value of a tract is less than six thousand dollars ($6,000),
based on the most recent assessment of the tract or of the tract of which
it was a part before it was acquired, the disposing agent is not required
to have the tract appraised.
(g) If, within ten (10) days after the date of publication of the notice
under subsection (e), the disposing agent receives an eligible offer to
purchase a tract listed in the notice at or in excess of the offering price,
the disposing agent shall conduct the negotiation and sale of the tract
under section 4(c) through 4(g) of this chapter.
(h) Notwithstanding subsection (g), if within ten (10) days after the
date of publication of the notice under subsection (e) the disposing
agent does not receive from any person other than an abutting
landowner an eligible offer to purchase the tract at or in excess of the
offering price, the disposing agent shall conduct the negotiation and
sale of the tract as follows:
(1) If only one (1) abutting landowner makes an eligible offer to
purchase the tract, then subject to section 16 of this chapter and
without further appraisal or notice, the disposing agent shall offer
to negotiate for the sale of the tract with that abutting landowner.
(2) If more than one (1) eligible abutting landowner submits an
offer to purchase the tract, the other eligible abutting landowners
who submit offers shall be informed of the highest offer received
and be given an opportunity to submit one (1) additional offer.
The tract shall be sold to the eligible abutting landowner who
submits the highest offer for the tract and who complies with any
requirement under subsection (e)(2).
(3) If no eligible abutting landowner submits an offer to purchase
the tract, the disposing agent may sell the tract to any person who
submits the highest offer for the tract, except a person who is
ineligible to purchase the tract under section 16 of this chapter.
(b) The disposing agent shall first have the property appraised in the manner prescribed in section 4(b) of this chapter, except that the appraisers shall determine the fair market rental value of the property.
(c) The disposing agent shall receive bids in the manner prescribed in section 4 of this chapter and lease the property to the highest and best bidder.
(d) The disposing agent shall determine the terms and conditions of any lease under this section, which may include options to renew and options to purchase. The property may not be leased to a person who is ineligible under section 16 of this chapter.
(e) The terms of a lease with option to purchase may provide that all or part of the rental payments under the lease apply to the purchase price. The purchase price must be equal to at least the minimum sale price determined under section 4(f) of this chapter.
(f) Property owned by a political subdivision or agency may be leased for a term longer than three (3) years if the lease is approved by the fiscal body of the political subdivision.
(g) The disposing agent may lease the real property under this section for a value that is less than ninety percent (90%) of the appraised fair market rental value as determined by the average
of the two (2) appraisals under section 4(b) of this chapter only
after publishing an additional notice in accordance with IC 5-3-1,
stating the amount of the bid to be accepted. If the disposing agent
rejects all bids, the disposing agent must make a written
determination to reject all bids explaining why all bids were
rejected.
