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If an installment of taxes is not completely paid on or before the due date, a penalty of <br />10% of the amount delinquent is added to the amount due. On May 10 and November 10 <br />of each year thereafter, an additional penalty equal to 10% of any taxes remaining <br />unpaid is added. The penalties are imposed only on the principal amount of the <br />delinquency. Property becomes subject to tax sale procedures after IS months of <br />delinquency. <br />Pursuant to State law, real property is valued for assessment purposes at its "true cash <br />value" as defined in rules and regulations promulgated by the State Board of Tax <br />Commissioners. "True cash value" does not mean fair market value. Current <br />regulations define the true cash value, generally, as the reproduction value of property <br />based on actual material and labor costs prevalent in the State of Indiana in 1975. The <br />local assessor may subtract from the reproduction value, an amount for normal <br />depreciation, as provided in the regulations, as well as amounts for functional or <br />economic obsolescence, as the assessor deems appropriate in accordance with the <br />regulations. <br />The "gross assessed value" is equal to 33-I /3% of the true cash value, as defined above. <br />"Net assessed value" represents the gross assessed value less certain deductions for <br />mortgages, veterans, the aged, the blind, economic revitalization, and tax-exempt <br />property. The net assessed value is the value used for taxing purposes in the <br />determination of tax rates. <br />Indiana Code 6-I.I-21-5 provides that each year taxpayers will receive a credit for <br />property tax replacement, known as the "property tax replacement credit" (PTRC), in <br />the amount of twenty percent (20%) of their tax I iabi I i ty for taxes as defined under I C <br />6-I.I-22-9 which are due and payable in May and November of that year. The credit is <br />applied to each installment of taxes. However, the tax liability of a taxpayer does not <br />include the amount of any property tax owed by the taxpayer attributable to certain <br />specified components of the tax levy. Among the tax levy components not receiving <br />the PTRC are the property taxes that will be used to pay for principal and interest due <br />on debt entered into after December 31, 1983. <br />The Indiana Code 6-I.I-12.1 provides a mechanism by which a governmental unit may <br />authorize a property tax deduction for real property and for new manufacturing <br />equipment within an economic revitalization area. The City of South Bend has chosen <br />to use this tax abatement mechanism to encourage economic development in targeted <br />areas. Most of the recent projects in the Allocation Area have received tax <br />abatements. Ordinance Number 7661-86, amending Chapter 2, Article 6 of the City's <br />Municipal Code dealing with tax abatement procedures, was passed by the Common <br />Council on July 14, 1986, (effective upon passage). The Ordinance sets the standards <br />and procedures by which petitions for tax abatements are considered by the Covncil and <br />establishes eligibility criteria <br />Pursuant to State law, the Council may grant the tax abatement for real property for a <br />period of (i) three, six or ten years, if the petition is filed after January I, 1986, or (ii) <br />ten years if filed of ter December 31, 1978 but before January I, 1986. The. deduction is <br />equal to the increase in assessed value resulting from the rehabilitation or <br />redevelopment, multiplied by the percentages prescribed in the following table. <br />r~ <br />-8 - <br />