Bill Text: IN SB0155 | 2011 | Regular Session | Engrossed
Bill Title: Tax liens.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2011-05-18 - Effective 07/01/2011 [SB0155 Detail]
Download: Indiana-2011-SB0155-Engrossed.html
Citations Affected: IC 6-8.1; IC 32-28.
Synopsis: Tax liens. Requires the department to release a judgment if:
(1) it has been fully satisfied; or (2) the tax assessment or issuance of
the tax warrant was erroneous. Provides that a tax lien on real property
is void if the person owing the tax provides written notice to the
department to file an action to foreclose the lien, and the department
fails to file an action to foreclose the lien not later than 180 days after
receiving the notice. Permits a sheriff to collect the outstanding tax
liability if the taxpayer has taken an action to foreclose the lien.
Specifies that a complaint to foreclose a homeowners association lien
may not be filed earlier than 90 days after recording, unless a person
files a notice to foreclose the lien, or another person files an action to
foreclose the property that is the subject of the lien.
Effective: July 1, 2011.
(HOUSE SPONSORS _ FOLEY, UBELHOR)
January 5, 2011, read first time and referred to Committee on Judiciary.
January 13, 2011, amended, reported favorably _ Do Pass.
January 20, 2011, read second time, amended, ordered engrossed.
January 21, 2011, engrossed.
January 24, 2011, read third time, passed. Yeas 49, nays 1.
March 28, 2011, read first time and referred to Committee on Judiciary.
April 11, 2011, reported _ Do Pass.
April 13, 2011, read second time, ordered engrossed.
April 14, 2011, engrossed.
April 18, 2011, read third time, recommitted to Committee of One, amended; passed. Yeas 61, nays 36.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
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Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
(1) That the person has ten (10) days from the date the department mails the notice to either pay the amount demanded or show reasonable cause for not paying the amount demanded.
(2) The statutory authority of the department for the issuance of a tax warrant.
(3) The earliest date on which a tax warrant may be filed and recorded.
(4) The statutory authority for the department to levy against a
person's property that is held by a financial institution.
(5) The remedies available to the taxpayer to prevent the filing
and recording of the judgment.
If the department files a tax warrant in more than one (1) county, the
department is not required to issue more than one (1) demand notice.
(b) If the person does not pay the amount demanded or show
reasonable cause for not paying the amount demanded within the ten
(10) day period, the department may issue a tax warrant for the amount
of the tax, interest, penalties, collection fee, sheriff's costs, clerk's costs,
and fees established under section 4(b) of this chapter when applicable.
When the department issues a tax warrant, a collection fee of ten
percent (10%) of the unpaid tax is added to the total amount due.
(c) When the department issues a tax warrant, it may not file the
warrant with the circuit court clerk of any county in which the person
owns property until at least twenty (20) days after the date the demand
notice was mailed to the taxpayer. The department may also send the
warrant to the sheriff of any county in which the person owns property
and direct the sheriff to file the warrant with the circuit court clerk:
(1) at least twenty (20) days after the date the demand notice was
mailed to the taxpayer; and
(2) no later than five (5) days after the date the department issues
the warrant.
(d) When the circuit court clerk receives a tax warrant from the
department or the sheriff, the clerk shall record the warrant by making
an entry in the judgment debtor's column of the judgment record,
listing the following:
(1) The name of the person owing the tax.
(2) The amount of the tax, interest, penalties, collection fee,
sheriff's costs, clerk's costs, and fees established under section
4(b) of this chapter when applicable.
(3) The date the warrant was filed with the clerk.
(e) When the entry is made, the total amount of the tax warrant
becomes a judgment against the person owing the tax. The judgment
creates a lien in favor of the state that attaches to all the person's
interest in any:
(1) chose in action in the county; and
(2) real or personal property in the county;
excepting only negotiable instruments not yet due.
(f) A judgment obtained under this section is valid for ten (10) years
from the date the judgment is filed. The department may renew the
judgment for additional ten (10) year periods by filing an alias tax
warrant with the circuit court clerk of the county in which the judgment
previously existed.
(g) A judgment arising from a tax warrant in a county may shall be
released by the department:
(1) after the judgment, including all accrued interest to the date of
payment, has been fully satisfied; or
(2) if the department determines that the tax assessment or the
issuance of the tax warrant was in error.
(h) If the department determines that the filing of a tax warrant was
in error, the department shall mail a release of the judgment to the
taxpayer and the circuit court clerk of each county where the warrant
was filed. The department shall mail the release as soon as possible but
no later than seven (7) days after:
(1) the determination by the department that the filing of the
warrant was in error; and
(2) the receipt of information by the department that the judgment
has been recorded under subsection (d).
(i) If the department determines that a judgment described in
subsection (h) is obstructing a lawful transaction, the department shall
mail a release of the judgment to the taxpayer and the circuit court
clerk of each county where the judgment was filed immediately upon
making the determination.
(j) A release issued under subsection (h) or (i) must state that the
filing of the tax warrant was in error. Upon the request of the taxpayer,
the department shall mail a copy of a release issued under subsection
(h) or (i) to each major credit reporting company located in each county
where the judgment was filed.
(k) The commissioner shall notify each state agency or officer
supplied with a tax warrant list of the issuance of a release under
subsection (h) or (i).
(l) If the sheriff collects the full amount of a tax warrant, the sheriff
shall disburse the money collected in the manner provided in section
3(c) of this chapter. If a judgment has been partially or fully satisfied
by a person's surety, the surety becomes subrogated to the department's
rights under the judgment. If a sheriff releases a judgment:
(1) before the judgment is fully satisfied;
(2) before the sheriff has properly disbursed the amount collected;
or
(3) after the sheriff has returned the tax warrant to the department;
the sheriff commits a Class B misdemeanor and is personally liable for
the part of the judgment not remitted to the department.
(m) A lien on real property described in subsection (e)(2) is void
if both of the following occur:
(1) The person owing the tax provides written notice to the
department to file an action to foreclose the lien.
(2) The department fails to file an action to foreclose the lien
not later than one hundred eighty (180) days after receiving
the notice.
(n) A person who gives notice under subsection (m) by
registered or certified mail to the department may file an affidavit
of service of the notice to file an action to foreclose the lien with the
circuit court clerk in the county in which the property is located.
The affidavit must state the following:
(1) The facts of the notice.
(2) That more than one hundred eighty (180) days have passed
since the notice was received by the department.
(3) That no action for foreclosure of the lien is pending.
(4) That no unsatisfied judgment has been rendered on the
lien.
(o) Upon receipt of the affidavit described in subsection (n), the
circuit court clerk shall make an entry showing the release of the
judgment lien in the judgment records for tax warrants.
warrants.
(b) A sheriff shall sell property to satisfy a tax warrant in a manner
that is reasonably likely to bring the highest net proceeds from the sale
after deducting the expenses of the offer to sell and sale. A sheriff may
engage an auctioneer to advertise a sale and to conduct a public
auction, unless the person being levied files an objection with the clerk
of the circuit or superior court having the tax warrant within five (5)
days of the day that the sheriff informs the person of the person's right
to object. 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. When an auctioneer is engaged
under this subsection and the auctioneer files a verified claim with the
clerk of the circuit or superior court with whom the tax warrant is filed,
the sheriff may pay the reasonable fee and reasonable expenses of the
auctioneer from the gross proceeds of the sale before other expenses
and the judgment arising from the tax warrant are paid. As used in this
section, "auctioneer" means an auctioneer licensed under IC 25-6.1.
(c) The sheriff shall deposit all amounts that the sheriff collects
under this section, including partial payments, into a special trust
account for judgments collected that arose from tax warrants. On or
before the fifth day of each month, the sheriff shall disburse the money
in the tax warrant judgment lien trust account in the following order:
(1) The sheriff shall pay the department the part of the collections
that represents taxes, interest, and penalties.
(2) The sheriff shall pay the county treasurer and the clerk of the
circuit or superior court the part of the collections that represents
their assessed costs.
(3) Except as provided in subdivisions (4) and (5), the sheriff
shall keep the part of the collections that represents the ten
percent (10%) collection fee added under section 2(b) of this
chapter.
(4) If the sheriff has entered a salary contract under
IC 36-2-13-2.5, the sheriff shall deposit in the county general fund
the part of the collections that represents the ten percent (10%)
collection fee added under section 2(b) of this chapter.
(5) If the sheriff has not entered into a salary contract under
IC 36-2-13-2.5, the sheriff shall deposit in the county general fund
the part of the collections that:
(A) represents the ten percent (10%) collection fee added
under section 2(b) of this chapter; and
(B) would, if kept by the sheriff, result in the total amount of
the sheriff's annual compensation exceeding the maximum
amount allowed under IC 36-2-13-17.
The department shall establish the procedure for the disbursement of
partial payments so that the intent of this section is carried out.
(d) After the period described in subsection (a) has passed, the
sheriff shall return the tax warrant to the department. However, if the
department determines that:
(1) at the end of this period the sheriff is in the process of
collecting the judgment arising from a tax warrant in periodic
payments of sufficient size that the judgment will be fully paid
within one (1) year after the date the judgment was filed; and
(2) the sheriff's electronic data base regarding tax warrants is
compatible with the department's data base;
the sheriff may keep the tax warrant and continue collections.
(e) Notwithstanding any other provision of this chapter, the
department may order a sheriff to return a tax warrant at any time, if the
department feels that action is necessary to protect the interests of the
state.
(f) This subsection applies only to the sheriff of a county having a
consolidated city or a second class city. In such a county, the ten
percent (10%) collection fee added under section 2(b) of this chapter
shall be divided as follows:
(1) Subject to subsection (g), the sheriff may retain forty thousand
dollars ($40,000), plus one-fifth (1/5) of any fees exceeding that
forty thousand dollar ($40,000) amount.
(2) Two-fifths (2/5) of any fees exceeding that forty thousand
dollar ($40,000) amount shall be deposited in the sheriff's
department's pension trust fund.
(3) Two-fifths (2/5) of any fees exceeding that forty thousand
dollar ($40,000) amount shall be deposited in the county general
fund.
(g) If an amount of the collection fee added under section 2(b) of
this chapter would, if retained by the sheriff under subsection (f)(1),
cause the total amount of the sheriff's annual compensation to exceed
the maximum amount allowed under IC 36-2-13-17, the sheriff shall
instead deposit the amount in the county general fund.
(h) Money deposited into a county general fund under subsections
(c)(5) and (g) must be used as follows:
(1) To reduce any unfunded liability of a sheriff's pension trust
plan established for the county's sheriff's department.
(2) Any amounts remaining after complying with subdivision (1)
must be applied to the costs incurred to operate the county's
sheriff's department.
(1) The department may levy upon the property of the taxpayer that is held by a financial institution by sending a claim to the financial institution. Upon receipt of a claim under this subdivision, the financial institution shall surrender to the department the taxpayer's property. If the taxpayer's property exceeds the amount owed to the state by the taxpayer, the financial institution shall surrender the taxpayer's property in an amount equal to the amount owed. After receiving the department's notice of levy, the financial institution is required to place a sixty (60) day hold on or restriction on the withdrawal of funds the taxpayer has on deposit or subsequently deposits, in an amount not to exceed the amount owed.
(2) The department may garnish the accrued earnings and wages of a taxpayer by sending a notice to the taxpayer's employer. Upon receipt of a notice under this subdivision, an employer shall garnish the accrued earnings and wages of the taxpayer in an amount equal to the full amount that is subject to garnishment under IC 24-4.5-5. The amount garnished shall be remitted to the department. The employer is entitled to a fee in an amount equal to the fee allowed under IC 24-4.5-5-105(5). However, the fee shall be borne entirely by the taxpayer.
(3) The department may levy upon and sell property and may:
(A) take immediate possession of the property and store it in a secure place; or
(B) leave the property in the custody of the taxpayer;
until the day of the sale. The department shall provide notice of the sale in one (1) newspaper, as provided in IC 5-3-1-2. If the property is left in the custody of the taxpayer, the department may require the taxpayer to provide a joint and several delivery bond, in an amount and with a surety acceptable to the department. At any time before the sale, any owner or part owner of the property may redeem the property from the judgment by paying the department the amount of the judgment. The proceeds of the sale
shall be applied first to the collection expenses and second to the
payment of the delinquent taxes and penalties. Any balance
remaining shall be paid to the taxpayer.
(1) may not be filed earlier than
(A) another person files a foreclosure action on the property that is the subject of the lien; or
(B) a person files written notice to file an action to foreclose the lien under section 9(a)(1) of this chapter; and
(2) must be filed not later than five (5) years;
after the date the statement and notice of intention to hold a lien was recorded under section 6 of this chapter.
(b) If a lien is not enforced within the time set forth in subsection (a), the lien is void.
