CROWN POINT | Gov. Mitch Daniels on Friday ordered the Lake County auditor to restore $9.7 million in property tax rebates to about 30,000 homeowners who were improperly denied the relief.

Daniels ordered the immediate cutting of supplementary refund checks to those taxpayers -- many of whom received $0 rebate notices last week.

At a news conference Friday, Daniels said the rebates were withheld from the Lake County homeowners -- who primarily live in Gary, Hammond, East Chicago and Whiting -- "through innocent confusion."

"There are 29,000 property owners -- homeowners in some of the poorest neighborhoods who deserve more money," Daniels said.

County Auditor Peggy Holinga Katona said Friday her office had begun generating the checks, which will go out by the end of the month.

"I'm happy this is finally resolved, and the rest will be getting their rebates," she said.

The governor's intervention culminates a series of complaints from taxpayers who had been waiting months for rebates authorized by the Indiana General Assembly only to receive murky letters stating their rebates had been reduced because they already had received other tax breaks.

State Rep. Charlie Brown, D-Gary, who heard many of the same complaints and also received a $0 rebate check, said the county wasn't following the law. He asked Indiana House Speaker Pat Bauer, D-South Bend, for help.

"Gratitude goes to the speaker's office for speaking to the (Democratic and Republican legislative) caucuses," Brown said Friday. "Everybody was in agreement with me. What the auditor's office did wasn't the intent of the law."

Brown and Daniels absolved the auditor's office of any blame.

Daniels said Friday, "I don't think it's anyone's fault."

They said the rebate law didn't take Lake County's unique circuit-breaker system into account. The circuit breaker caps property taxes at 2 percent of a home's assessed value.

Acting on the OK from the state auditor's office, Katona withheld rebates from taxpayers who already received Lake County's circuit-breaker tax relief. The new round of rebates also will restore money to those who received only partial rebates, she said.

Indiana House Rep. Mara Candelaria Reardon, D-Munster, said Friday, "It's good the governor has seen the intention of the law" to provide property tax relief without being impacted by the circuit breaker.