Citations Affected: IC 36-1; IC 36-4.
Synopsis: Local rainy day funds. Reconciles two different versions of
the statute allowing political subdivisions to establish rainy day funds.
Defines a second class city a city having a population of 35,000 to
499,999 and first class city as a city having a population of 500,000 or
more. (Current law defines a second class city as a city having a
population of 35,000 to 249,999 and a first class city as a city having
a population of 250,000 or more.)
Effective: Upon passage.
January 6, 2004, read first time and referred to Committee on Governmental Affairs and
January 29, 2004, reported favorably _ Do Pass.
February 2, 2004, read second time, ordered engrossed. Engrossed.
February 3, 2004, read third time, passed. Yeas 49, nays 0.
A BILL FOR AN ACT to amend the Indiana Code concerning local
SECTION 1. IC 36-1-8-5.1, AS AMENDED BY P.L.267-2003,
SECTION 15, AND P.L.173-2003, SECTION 19, IS AMENDED AND
CORRECTED TO READ AS FOLLOWS [EFFECTIVE UPON
PASSAGE]: Sec. 5.1. (a) A political subdivision may establish a rainy
to receive transfers of unused and unencumbered funds
under: (1) section 5 of this chapter; (2) IC 6-3.5-1.1-21.1; (3)
IC 6-3.5-6-17.3; and (4) IC 6-3.5-7-17.3. by the adoption of:
(1) an ordinance, in the case of a county, city, or town; or
(2) a resolution, in the case of any other political subdivision.
(b) An ordinance or a resolution adopted under this section must specify the following:
(1) The purposes of the rainy day fund.
(2) The sources of funding for the rainy day fund, which may include the following:
(A) Unused and unencumbered funds under:
(i) section 5 of this chapter;
(ii) IC 6-3.5-1.1-21.1;
(iii) IC 6-3.5-6-17.3; or
(iv) IC 6-3.5-7-17.3.
(B) Any other funding source:
(i) specified in the ordinance or resolution adopted under this section; and
(ii) not otherwise prohibited by law.
(b) (c) The rainy day fund is subject to the same appropriation
process as other funds that receive tax money. Before making an
appropriation from the rainy day fund, the fiscal body shall make a
finding that the proposed use of the rainy day fund is consistent with
the intent of the fund.
(c) (d) In any fiscal year, a political subdivision may transfer under
section 5 of this chapter not more than ten percent (10%) of the
political subdivision's total annual budget for that fiscal year, adopted
under IC 6-1.1-17, to the rainy day fund.
(d) (e) A political subdivision may use only the funding sources
specified in subsection (b)(2)(A) or in the ordinance or resolution
establishing the rainy day fund. unless The political subdivision adopts
may adopt a subsequent ordinance or resolution authorizing the use
of another funding source.
(f) The department of local government finance may not reduce the actual or maximum permissible levy of a political subdivision as a result of a balance in the rainy day fund of the political subdivision.
SECTION 2. IC 36-4-1-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 1. (a) Municipalities are classified according to their status and population as follows:
STATUS AND POPULATION CLASS
250,000 500,000 or more First class cities
Cities of 35,000 to
249,999 499,999 Second class cities
Cities of less than 35,000 Third class cities
Other municipalities of any
(b) Except as provided in subsection (c), a city that attains a population of thirty-five thousand (35,000) remains a second class city even though its population decreases to less than thirty-five thousand (35,000) at the next federal decennial census.
(c) The legislative body of a city to which subsection (b) applies may, by ordinance, adopt third class city status.
SECTION 3. An emergency is declared for this act.