Bulletin: IN000006

The following information is an update of recent legislation by the Indiana General Assembly. Please distribute this information to your escrow officers, title examiners, title officers, searchers and anyone else that you feel should know about it. If you have any questions or would like a copy of particular legislation, please contact me with your inquiries.

BARRETT LAW

IC §§ 36-9-36-9.5, 36,46; 36-9-37-8.5, 11, 12, 29; 36-9-38-23.5, 29, 30
(SEA 338)
Effective Date: July 1, 2001

Property owners can elect under certain conditions to pay Barrett Law assessments in 10, 20, or 30 annual or monthly installments that correspond to the number of annual installments. An assessment less than $100.00 cannot be paid in installments. An issuer of Barrett Law bonds can establish the election time for property owners in relation to the structuring of a bond issue and to the number of elected installments. Bonds issued in anticipation of assessment collection shall be issued to mature from 10 to 30 years from the issuance date.

BUSINESS ENTITIES

IC §§ 23-1-18-1; 23-1-23-2; 23-4-1-45, 45.4; 23-16-2-2, 2.5; 23-16-12-5; 23-17-5-3; 23-17-29-1; 23-18-2-9.5
(SEA 489)
Effective Date: July 1, 2001

An electronic signature on an electronic document that is filed with the Secretary of State is sufficient when the document is intended to be filed with an authentic symbol by the signer and is entered with the filing party's name in the designated signature box. A person or a business entity may reserve a business name by registering with the Secretary of State. This registration can result in the exclusive use of the business name upon the effective date of the registration application. The Secretary of State may allow the filing of numerous assumed business names.

CEMETERIES

IC §§ 6-1.1-6.8 et seq., 14-21-1-13.5 & 26.5; 35-43-1-2.1 (HEA 1074)
Effective Date: July 1, 2001

Provides for the classification and assessment of cemetery land. Land may be classified as cemetery land if it is included in the registry of Indiana cemeteries and burial grounds established under IC § 14-21-1-13.5. Land may not be classified as cemetery land if a dwelling or other building is situated on the parcel or the land is grazed by a domestic animal. The owner of the classified cemetery land must allow family members and descendants of persons buried in the cemetery to have at least one day each year to visit the cemetery. The Historic Preservation and Archaeology Division of the DNR records cemetery and burial ground information in each county. Property development near a cemetery or burial ground must follow certain procedures regardless if the burial ground or cemetery is recorded.

COURTS

IC §§ 33-5-25-5, 1
(SEA 138)
Effective Date: Upon Passage

The Hendricks Superior Court Two and Three have jurisdiction over probate, guardianship, and trust matters. The Hendricks Superior Court One has a small claims and misdemeanor division.

COVENANTS

IC §§ 13-14-2-6; 13-11-2-193.5
(SEA 321)
Effective Date: July 1, 2001

The Commissioner of the Department of Environmental Management (IDEM) can enforce in court any restrictive covenants on land approved by the commissioner and created in connection with any remediation, closure, cleanup, or corrective action under state environmental statutes. The statutes' definitions of covenants include covenants in deeds, environmental covenants, environmental notices or restrictions that limit land use or requires maintenance to protect human health and the environment.

DRAINS

IC §§ 36-9-27-69.5
(SEA 152)
Effective Date: July 1, 2001

Prior to developing a subdivision tract outside a municipality, a developer must obtain approval of the county drainage board of the drainage plans and specifications. The statute includes plan standards and the ability of the drainage board to approve an alternate plan that does not comply with the standards for the entrance and exit of surface water.

FRAUD

IC §§35-43-5-1, 35-43-5-3.5, 35-43-5-4. (HEA 1106)
Effective Date: July 1, 2001

IC § 35-43-5-3.5 defines the crime of identity deception as a Class D Felony. Activities of minors trying to gain access to events or to purchase items with a false birth date are excepted from the statute. A person who knowingly or intentionally obtains, possesses, transfers, or uses the identifying information of another person:
(1) without the other person's consent; and
(2) with intent to harm or defraud another person;
commits identity deception. Identifying information includes name, date of birth, Social Security number, electronic identification, and numbers to access accounts to obtain money, goods, services, or anything of value or to initiate a transfer of funds.

HISTORIC PRESERVATION
ST. JOSEPH COUNTY

IC §§ 36-7-11-8.5 & 22
(SEA 255)
Effective Date: July 1, 2001

A building or structure that is declared a historic building or site by the St. Joseph County Historic Preservation Commission may be placed under interim protection for not more than 30 days. The St. Joseph County Historic Preservation Commission may remove the historic classification of a building or structure owned by a political subdivision without the adoption of an ordinance by the legislative body of the unit.

IDENTIFICATION

IC §§ 9-24-11-5, 9-24-16-3
(HEA 1170)
Effective Date: January 1, 2002

All driver's licenses, learner's permits, and state identification cards must bear a date of birth, and a photograph or a computerized image.

INCOMPETENTS

IC §§ 29-3-3-1, 29-3-3-2
(SEA 190)
Effective Date: July 1, 2001

The maximum dollar amount for a debtor to directly pay to the person who has care and custody (instead of a legal guardian) of a minor creditor or incapacitated creditor has changed from $5,000.00 to $10,000.00.

INSURANCE

BUSINESS PRACTICE

IC § 27-2-20
Effective Date: July 1, 2001
IC § 27-4-1-6
Effective Date: Effective upon Passage
(HEA 1555)

This act includes Indiana's adoption, and implementation of the Gramm Leach Blilely Act of 1999 (15 USC § 6801 et seq.). IC § 27-2-20 prohibits a person from disclosing nonpublic personal financial information. The statute authorizes the insurance commissioner to implement related rules. Under Gramm Leach Bliley, nonpublic personal information includes but is not limited to driver's license numbers, owner's policies including policy numbers and insurance amounts, social security numbers, payoff amounts, loan numbers, bank account numbers, credit card numbers, HUD-1As, sales contracts, and 1099's. (See Stewart Title Guaranty's 5/22/01Bulletin NL00103 Privacy of Personal Information of Consumers and Customers for additional information.) The Act also allows the insurance commissioner to consider a violator's remediation efforts in relation to unfair methods of competition or deceptive acts or practices with insurance business. The amendment of 27-4-1-6 removes the previous aggregate maximum penalties of $100,000.00 and $200,000.00 for violations due to unfair methods of competition or deceptive acts or practices in the business of insurance.

LICENSES

IC §§ 12-17-2-34 & 36; 27-1-15.6,15.7, & 15.8; 27-1-22-2.5; 27-4-1-4; 31-14-12-7; 31-16-12-10; 35-43-9-4 (HEA 1674)
Effective Date: January 1, 2002

The current insurance agent licensure statute is repealed and replaced after December 31, 2001. HEA 1674 adds IC §§ 27-1-15.6, 15.7, and 15.8 as to: (1) insurance producer licensing; (2) insurance producer license renewal; and (3) surplus lines producers. License and temporary license qualifications, procedures, and education of resident and nonresident insurance producers are included. The current 10 credit hours requirement for title insurance licenses is also reflected in the new statutes. The statutes address procedures and activities where the insurance commissioner may suspend, revoke, or refuse to issue or renew a license. The Insurer's termination of a business relationship with a producer is also included. The insurance commissioner now has specific procedures and remedies with insurance licenses with regard to a court order concerning child support obligations of a licensee.

LOAN BROKERS

IC §§ 23-2-5-3; 23-2-5-20
(SEA 526)
Effective Date:
IC §23-2-5-3: January 1, 2002
IC §23-2-5-20: July 1, 2001

For purposes of regulating loan brokers, the definition of a loan broker (IC § 23-2-5-3) does not include a supervised lender or a nonsupervised automatic lender of the United States Dept. of Veterans Affairs. The anti-fraud provisions for loan brokers under IC § 23-2-5-20 applies to any person regardless if the individual is a registered or unregistered loan broker.

MORTGAGES

RELEASES

IC § 32-8-15.5 et seq.
(HEA 1636)
Effective Date: July 1, 2001-July 1, 2003

This new chapter allows a title insurance company to release a mortgage of not more than $1,000,000.00 on behalf of the mortgagor and mortgagee. Please consult your Stewart Title Guaranty Underwriting Bulletin No. IN000005 for a copy of the statutes, procedures for your appointment and execution of releases, sample certificate of release, and sample notice to lender.

IC § 32-8-15.5-13. Indicates a "creditor or mortgage servicer may not withhold the release of a mortgage if the written mortgage payoff statement misstates the amount of the payoff and the written payoff is relied upon in good faith by an independent closing agent without knowledge of the misstatement." However, a misstatement does not include a written payoff statement's inaccuracy due to a change in circumstances occurring after the issuance of the payoff statement. The release of a mortgage does not affect the creditor's or mortgage servicer's ability to collect the full amount.

RECORDING

IC § 36-2-11-12 & 16
(HEA 2117)
Effective Date: July 1, 2001

This Act prohibits the recording of a mortgage that discloses the Social Security number of any individual.

POWER OF ATTORNEY

IC §§ 29-1-3-4, 30-5-6-4, 30-5-9-9
(SEA 190)
Effective Date: July 1, 2001

An attorney in fact for a surviving spouse may elect for the spouse if a valid power of attorney has general authority with respect to estates as provided in IC § 30-5-5-15(a)(4). A court can order an attorney in fact to provide an accounting of its transactions. A written statement must be provided to an attorney in fact by one who reasonably believes the power of attorney is 1.) invalid under Indiana law or 2.) does not confer authority to perform a transaction. This statement is also part of the elements in IC § 30-5-9-9 to remove the liability from a person refusing to accept a power of attorney. If an action is brought in court to force the acceptance of a power of attorney or for damages due to the refusal to accept a power of attorney, the liability is: 1.) three times the amount of the actual damages; 2.) attorney's fees.; and 3.) prejudgment interest on the actual damages.

PROBATE

CREDITORS

IC §§ 29-1-7-7,7.5; 29-1-14-1,2,8,10; 29-1-14-16, 21
(SEA 190)
Effective Date: July 1, 2001

The time limit for serving notices on the decedent's creditor(s) has changed from three (3) months to one (1) month after the first publication of the notice. The time bar for all claims was changed from one (1) year to nine (9) months after the date of decedent's death. If a notice to creditors is made, the creditor or any person claiming an interest must file a claim with the court clerk within three (3) months (previously five (5) months) from the date of the first publication of the notice. No proceedings to enforce a judgment lien or to foreclose can be instituted three (3) months from the decedent's date of death.

PERSONAL REPRESENTATIVE

IC §§ 29-1-7-17; 29-1-14-10,18,19; 29-1-16-6
(SEA 190)
Effective Date: July 1, 2001

Since the creditor claim filing period was changed from five (5) month to three (3) months, a personal representative of an unsupervised estate may close an estate with the filing of a verified statement after (3) months from the first published notice to creditors required by IC § 29-1-7-7(b). Requirements as to the information in the verified statement are still found at IC § 29-1-7.5-4. The personal representative can allow or disallow claims on or before three (3) months and fifteen (15) after the first publication of the notice to creditors. The personal representative may compromise unfiled claims within three (3) months after the first publication of the creditor notice. Filed or unfiled claims may be paid by the personal representative of a solvent estate prior to the expiration of the three (3) month filing claim period. The personal representative no longer publishes a notice as to the final distribution, and the fourteen day objection time period from the distribution hearing date was eliminated if distributees waive the notice by mail and consent to distribution without a hearing.

SPOUSES

IC § 29-1-4-1
(SEA 190)
Effective Date: July 1, 2001

The allowance to a surviving spouse was increased from $15,000.00 to $25,000.00. The allowance is paid from the personal property and residence in the decedent's estate with a subsequent lien on any other real property for the remaining balance of the allowance.

WILLS

IC § 29-1-7-17
(SEA 190)
Effective Date July 1, 2001

The time period for contesting a will admitted to probate has changed from five (5) months to three (3) months after a court order admitted the will to probate.

PUBLIC RECORDS

COPIES, FEES & USES

IC §§ 36-2-11-8,16
(HEA 1484)
Effective Date: July 1, 2001

County recorder must establish and post a written procedure for the public to obtain access to the original of a recorded instrument. A recorder may record a document presented for recording or a copy produced by a photographic process of the document presented for recording if: (1) the document complies with other statutory recording requirements; and (2) the document or copy will produce a clear and unobstructed copy.

DEEDS

IC § 14-18-11-2
(SEA 153)
Effective Date: July 1, 2001

Deeds for rights-of-way granted by the department of natural resources to railroads and to telegraph and telephone companies to construct and operate lines across the land of state forests and state nurseries are subject to the approval of the governor, the attorney general, and (instead of the auditor of state) the Indiana department of administration.

SALES DISCLOSURE FORMS

IC §§ 6-1.1-5.5-3, 6-3.5-1.1-2.5
(HEA 1503)
Effective Date: July 1, 2001

The county recorder no longer has to retain real estate sales disclosure form for five years. County assessing officials and the State Board of Tax Commissioners are allowed to use real estate sales disclosure forms for certain purposes

TAX SALES

IC §§ 6-1.1-25-9,9.5
(SEA 0543)
Effective Date: upon passage

A county that acquires land through the tax sale process can recover the maintenance, administration and tax sale offer costs from the proceeds of the subsequent tax sale.

IC § 6-1.1-24-1,2,3,4,5,7,8,9,10; 6-1.1-25-1,2, 2.5, 3,4, 4.1, 4.5, 4.6, 5, 7, 8, 10, 11, 12, 13, 14,15,16; 32-2-8
(HEA 1846)
Effective Date: July 1, 2001

The parcel number, common address, and the name of at least one owner must be included in the tax sale list, tax sale notice, certificate of sale, and tax sale record. The treasurer must send the certified tax sale list of property to each mortgagee who requests the list. Notice of sale eligibility must be sent to at least one of multiple owners, and that a notice is considered sufficient if the notice is mailed to the last address of owner in auditor's records. Any person can redeem real property sold at tax sale. The county does not warrant the accuracy of the street address or common description of the property. The tax sale certificate is registered in the auditor's office. The certificate contains various information including: 1.) name of the single owner or at least one of the owners where the property is owned by multiple owners according to the record at the time of the tax sale; 2.) the mailing address of the owner as indicated by the auditor's record; 3.) the time redemption expires according to IC 6-1.1-25-4 ; 4.) the cause number for the judgment ordering the sale; and 5.) the street address, if any, or common description of the real property.

A written guarantee by the treasurer includes how much money the tax sale purchaser receives if the sale is invalid. With respect to an invalid tax sale, amounts are to be refunded to the purchaser and a political subdivision is required to reimburse the county for interest paid to the tax sale purchaser under certain circumstances. The act also amends the circumstances under which purchase money is refunded to a tax sale purchaser.

The tax debtor, or the owner of record of the real property who is divested of ownership at the time the tax deed is issued may have a right to the tax sale surplus. The property owner who purchased the land from the tax debtor must file a tax sale surplus disclosure in order to recover any surplus.

Anyone may redeem as opposed to the old wording that indicated "any person with a substantial property interest of public record". Redemption within six months after the sales date must include one hundred ten percent (110%) of the amount of the minimum tax sale bid. Redemption six months after the tax sale date must include one hundred fifteen percent (115%) of the amount of the minimum tax sale. Redemption must include the purchase price above the minimum tax sale bid plus ten percent (10%) per annum interest. A redemption must also include an amount equal to the taxes and special assessments paid by the purchaser after the tax sale plus ten percent (10%) per annum interest. If a county acquires land through a tax sale, the county can recover maintenance and administration costs associated with the land as part of a subsequent tax sale.

Within nine (9) months of a tax sale, the tax purchaser's notice of the tax sale results, redemption procedure and time for petition for a tax deed is sent to the property owner and any person with a substantial and recorded property interest. Within six months of the expiration of the redemption time, the purchaser must send out the notice as to the petitioning for a tax deed. If the tax purchaser fails to meet the time requirements for these notices, the tax purchaser's interest terminates. Once the verified petition is filed, the property owner or any interested party has 30 days to object to the petition. The order for a tax deed is uncontestable unless an appeal is made within sixty days of the order for issuance of a tax deed. The tax sale statutes still provide for a quiet title action.

TAXES AND ASSESSMENTS

INHERITANCE TAXES

IC §§ 6-4.1-4-0.5,1,2,7; 6-4.1-9-1,2
(SEA 190)
Effective Date July 1, 2001

The inheritance tax imposed as a result of a decedent's death is due twelve (12) months instead of 18 months after the person's date of death. If the tax is paid nine (9) months instead of one (1) year after the decedent's death, a five percent (5%) reduction in the inheritance tax is given. The Indiana Department of State Revenue (DSR) shall prescribe an affidavit form that may be used to state that no inheritance tax is due after application under IC 6-4.1-3 for exemptions. If the affidavit addresses real property, the affidavit may include a legal description and be recorded in the office of the county recorder. The DSR or county assessor may rely upon an affidavit prescribed by the DSR to determine that a transfer will not jeopardize the collection of inheritance taxes for IC 6-4.1-8-4(e). A presumption exists that no inheritance tax is due and that no inheritance tax return is required if an affidavit was properly executed and recorded in the decedent's county of residence or submitted under IC §6-4.1-8-4. A lien attached to the real property owned by a decedent terminates when an affidavit is properly executed and recorded. However, a lien is reattached to the property under IC § 6-4.1-8-1 if DSR obtains an order that an inheritance tax is owed. If an inheritance tax return is to be filed, the personal representative, the trustee, or transferee of property transferred by the decedent shall file an inheritance tax return with the appropriate probate court or with the DSR (for a nonresident decedent estate) within nine (9) instead of twelve (12) months after the date of the decedent's death.

TAX DEFERRED EXCHANGES

IC §§ 6-2.1-3-16, 16.5
(HEA 1948)
Effective Date: January 1, 2001

Proceeds from the sale, lease, or other transfer by or to an electric utility or a general district REMC of an interest in an electric generating facility can qualify, at least in part, to certain "safe harbor" sale-leaseback provisions under the Internal Revenue Code. The qualification exempts gross income tax to the extent of any mortgage, security interest, or similar encumbrance on the interest in the facility. A gross income tax exemption exists for amounts received under a "qualified investment" where a lessee pays the basic rent and exercises a purchase option under the lease for an electric generating facility that, at least in part, is subject to "safe harbor" sale-leaseback provisions of the Internal Revenue Code.

TRANSFER TAX

IC § 6-4.1-11.5-9
(SEA 190)
Effective Date: July 1, 2001

The transfer tax created by the decedent's death resulting in a generation-skipping transfer is due twelve (12) months instead of eighteen (18) months after the date of decedent's death.

TRUSTS

IC § 30-4-1-8 to 12
(SEA 190)
Effective Date: July 1, 2001

A trust shall not operate as to the exercise of a power of appointment, which the settlor may have with respect to any real or personal property, unless by its terms the trust specifically indicates that the settlor intended to exercise the power. The laws of intestate succession apply where a distribution in favor of "descendants,", "issue," or "heirs of the body" does not specify how the property is to be distributed among these individuals. A settlor can designate the laws of a certain state to determine the distribution under a trust unless that state's laws are contrary to Indiana's public policy. The statutes addressing the inheritance of illegitimate children also apply to trust distributions where distributees are determined by their relationship to the settlor or another person.

UNIFORM COMMERCIAL CODE

ELECTRONIC TRANSFERS

I.C. § 26-2-8-103
(SEA 46)
Effective Date: July 1, 2001

The Uniform Electronic Transaction Act for electronic records and signatures applies to the Uniform Commercial Code sections on sales and leases.

FINANCING STATEMENTS

IC §§ 26-1-9.1-109, 304,305,306,307,317,319,322,335,408,501,502,506,509,523,525,526,625,626,705; 32-7-1-18; 32-8-33-1
(SEA 357 )
Effective Date: July 1, 2001

A security interest, instead of an unperfected security interest, is subordinate to the rights of certain other persons with priority and to certain lien creditors. A debtor is no longer required to authenticate financing statements and amendments to financing statements. A secured party must furnish a copy of the financing statement to the debtor no later than 30 days after the filing of the financing statement. The secured party has the burden of establishing compliance with the requirement to furnish a copy of the financing statement. The enrolled act includes remedies for the failure of a secured party to furnish a copy of the financing statement to a debtor. A debtor can recover an additional $500 from a secured party that does not furnish a copy of the financing statement to a debtor. Before July 1, 2002, IC §26-1-9.1-501 provides that in order for a financing statement to perfect a security interest in farm equipment, a farm product, or an account or general intangible arising from or relating to the sale of a farm product shall be filed in a specified county recorder's office.