MADAM PRESIDENT:
The Senate Committee on Rules and Legislative Procedure, to which was referred Senate Bill No. 269,
has had the same under consideration and begs leave to report the same back to the Senate with the
recommendation that said bill be AMENDED as follows:
Delete the title and insert the following:
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration and to make an appropriation.
Delete everything after the enacting clause and insert the following:
SECTION 1. IC 4-10-21-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 0.5. (a) As used in this chapter, "operating
expenses" refers to operating expenses, as determined under the
standards prescribed by the state board of accounts, of state
agencies that are to be paid from any fund or source.
(b) The term includes, but is not limited to, payments for the
following:
(1) Personal services, including payments for salaries and
wages to officers and employees of the state (either regular
or temporary), payments for compensation awards, and the
employer's share of Social Security, health insurance, life
insurance, disability insurance, and retirement fund
contributions.
(2) Supplies, materials, and parts.
(3) Grants, subsidies, refunds, and awards.
(4) Travel.
(5) Machinery, implements, tools, furniture, furnishings,
vehicles, and other articles that have a calculable period of
service that exceeds twelve (12) calendar months.
(6) Other administrative expenses.
(7) Services other than personal services
(c) The term does not include the following:
(1) Capital expenses, as determined under generally
accepted accounting principles.
(2) Expenditures for any of the following:
(A) Transfers of money among the state general fund,
the property tax replacement fund, and the
counter-cyclical revenue and economic stabilization
fund.
(B) Reserve fund deposits.
(C) Refunds of intergovernmental transfers.
(D) Payment of judgments against the state and
settlement payments made to avoid a judgment against
the state, other than a judgment or settlement payment
for failure to pay a contractual obligation or a personnel
expenditure.
(E) Distributions or allocations of state tax revenues to
a unit of local government under IC 36-7-13,
IC 36-7-26, IC 36-7-27, IC 36-7-31, or IC 36-7-31.3.
(F) Motor vehicle excise tax replacement payments.
(G) Distributions of state tax revenues collected under
IC 7.1 that are payable to cities and towns.
(3) Expenditures from federal funds or gifts designated for
a particular purpose.
SOURCE: IC 4-10-21-9; (04)PD3997.2. -->
SECTION 2. IC 4-10-21-9 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2004]: Sec. 9. (a) The budget agency shall determine the
inflation multiplier under this section.
(b) Not later than March 1 in each year, the budget agency
shall determine the extent to which the general level of prices in
the United States has increased in the previous year above the
general level of prices that existed in the year preceding the
previous year. The computation must be based on:
(1) the Consumer Price Index for Urban Wage Earners and
Clerical Workers: U.S. City Average, All Items, updated
monthly by the Bureau of Labor Statistics of the United
States Department of Labor; or
(2) a successor index issued by the government of the
United States to indicate increases in the general level of
prices in the United States;
used on a consistent basis from year to year.
(c) The budget agency shall determine the inflation multiplier
for an ensuing state fiscal year under the following STEPS:
STEP ONE: Express the percentage increase in the general
level of prices determined under subsection (b) as a decimal
number rounded to the nearest one thousandth (0.001). If
the budget agency determines that the general level of
prices in the United States has decreased, the percentage
increase shall be treated as zero (0).
STEP TWO: Determine the sum of the STEP ONE amount
and one (1).
(d) The budget agency shall publish the inflation multiplier
applicable to the ensuing state fiscal year in the Indiana Register
not later than June 1 of the year in which it is determined.
SOURCE: IC 4-10-21-10; (04)PD3997.3. -->
SECTION 3. IC 4-10-21-10 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 10. (a) As used in this section, "encumbrance"
means an accounting notation made for budget control purposes
to record a commitment to use any part of an appropriation to pay
an unpaid obligation.
(b) As used in this section, "inflation multiplier" refers to the
inflation multiplier determined for a state fiscal year under
section 9 of this chapter.
(c) As used in this section, "state agencies" mean:
(1) all offices, officers, boards, commissions, departments,
divisions, bureaus, committees, agencies, authorities,
councils, or other instrumentalities of the state;
(2) all hospitals, penal institutions, and other institutional
enterprises of the state;
(3) the judicial department of the state; and
(4) the legislative department of the state.
(d) Notwithstanding any other provision, the total amount of
expenditures, encumbrances, and delayed payments made by all
state agencies for operating expenses in each state fiscal year
beginning after June 30, 2005, may not exceed the amount
determined under the following STEPS:
STEP ONE: Determine the sum of:
(A) the expenditures made in the immediately
preceding state fiscal year for operating expenses; and
(B) the encumbrances made in the immediately
preceding state fiscal year for operating expenses that
are outstanding on July 1 of the current state fiscal
year.
STEP TWO: Multiply the result determined under STEP
ONE by the inflation multiplier determined for the state
fiscal year.
(e) This section may be enforced in a private individual or
class action suit. Successful plaintiffs are allowed costs and
reasonable attorney's fees. The state may recover costs and
reasonable attorney's fees only if a suit against the state is ruled
frivolous.
subdivisions.
(B) Reserve fund deposits.
(C) Refunds of intergovernmental transfers.
(D) Payment of judgments against the political
subdivision and settlement payments made to avoid a
judgment against the political subdivision, other than a
judgment or settlement payment for failure to pay a
contractual obligation or a personnel expenditure.
(E) Debt service.
(3) Expenditures from federal funds or gifts designated for
a particular purpose.
SOURCE: IC 6-1.1-18-11; (04)PD3997.6. -->
SECTION 6. IC 6-1.1-18-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 11. (a) If there is a
conflict between the provisions of this chapter ( other than a conflict
with section 12 or 13 of this chapter) and the provisions of
IC 6-1.1-19 or IC 6-1.1-18.5, the provisions of the latter two (2)
chapters control with respect to the adoption of, review of, and
limitations on budgets, tax rates, and tax levies.
(b) If there is a conflict between section 12 or 13 of this
chapter and any other law, unless the other law, through language
enacted in an act adopted after March 15, 2004, expressly states
otherwise, the provisions of section 12 and 13 of this chapter
control with respect to the adoption of, review of, and limitations
on the budgets, tax rates, and tax levies of a taxing unit.
SOURCE: IC 6-1.1-18-13; (04)PD3997.7. -->
SECTION 7. IC 6-1.1-18-13 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 13. (a) This section applies to all political
subdivisions except school corporations.
(b) The department of local government finance shall
compute a new inflation multiplier under this subsection before
March 1, 2005, and March 1 in each year thereafter. The inflation
multiplier determined under this subsection applies to the year in
which it is computed. The inflation multiplier to be used in the
year is the amount determined under STEP THREE of the
following formula:
STEP ONE: Determine the extent to which the general level
of prices in the United States has increased in the previous
year above the general level of prices that existed in the
year immediately preceding the previous year. The
computation must be based on:
(A) the Consumer Price Index for Urban Wage Earners
and Clerical Workers: U.S. City Average, All Items,
updated monthly by the Bureau of Labor Statistics of
the United States Department of Labor; or
(B) a successor index issued by the government of the
United States to indicate increases in the general level
of prices in the United States.
Express the increase as a decimal number rounded to the
nearest one thousandth (0.001). If the department of local
government finance determines that the general level of
prices in the United States has decreased, the percentage
increase shall be treated as zero (0).
STEP TWO: Determine the sum of the STEP ONE amount
and one (1).
STEP THREE: Add the STEP TWO amount and:
(A) One hundredth (0.01), if result under item (iii) is
greater than one and two hundredths (1.02).
(i) Divide the total assessed value of all the taxable
property in the political subdivision in the year
immediately preceding the ensuing year by the
total assessed value of all the taxable property in
the political subdivision in the year preceding the
ensuing year by two (2).
(ii) Divide the sum of the assessed value of all
taxable property in all political subdivisions in the
year immediately preceding the ensuing year by
the sum of the assessed value of all taxable
property in all political subdivisions in the year
preceding the ensuing year by two (2).
(iii) Divide the result determined under item (i) by
the result determined under item (ii); or
(B) zero (0) if the result under clause (A)(iii) is not
greater than one and two hundredths (1.02).
The department of local government finance shall certify the
inflation multiplier for a political subdivision to the fiscal body of
the political subdivision and the county clerk for each county in
which the political subdivision is located.
(c) In addition to complying with any other budget, property
tax levy, and property tax rate limits imposed by law, a political
subdivision must comply with the expenditure limit imposed by
this section.
(d) Except as authorized by section 14 of this chapter, a
political subdivision may not in a year:
(1) pay operating expenses (except from an amount
encumbered in a previous year); or
(2) encumber money to pay year after the end of the year
operating expenses incurred in the year;
in an amount that, in the aggregate, exceeds the total operating
expenditure limit for the year, as determined under subsection
(e).
(e) The total operating expenditure limit applicable to a
political subdivision in a year is equal to the amount determined
under STEP TWO of the following formula:
STEP ONE: Determine the lesser of the following:
(A) The total amount:
(i) paid for operating expenses in the immediately
preceding year (excluding amounts paid from an
encumbrance made in the year preceding the
current year by two (2)); and
(ii) encumbered in the immediately preceding year
to pay after the end of the immediately preceding
year operating expenses incurred in the
immediately preceding year.
(B) For years after December 31, 2005, the total
operating expenditure limit determined under this
subsection for the year.
However, if the political subdivision was not in existence for
the immediately preceding year, the department of local
government finance shall establish the initial amount to be
used under this STEP.
STEP TWO: Multiply the STEP ONE amount by the inflation
multiplier for the year.
(f) Any part of a payment or an encumbrance for a payment
that, when added to all other payments and encumbrances for
operating expenses made in a budget year, exceeds the total
operating expenditure limit for the political subdivision, is void.
(g) The amount of revenue not dedicated to a particular
purpose that is received in a year by a political subdivision and
that exceeds the total operating expenditure limit for the year
must be:
(1) used, after appropriation, to pay capital expenditures; or
(2) deposited in the political subdivision's rainy day fund
established under IC 36-1-8-5.1.
(h) This section may be enforced, subject to the public lawsuit
provisions in IC 34, in a private individual or class action suit.
Successful plaintiffs are allowed costs and reasonable attorney's
fees. The political subdivision may recover costs and reasonable
attorney's fees only if a suit against the political subdivision is
ruled frivolous.
SOURCE: IC 6-1.1-18-14; (04)PD3997.8. -->
SECTION 8. IC 6-1.1-18-14 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 14. (a) A political subdivision, other than a
school corporation, may appeal to the department of local
government finance in the manner provided by IC 6-1.1-18.5 to
increase its total operating expenditure limit by more than the
maximum amount allowed under section 13 of this chapter.
(b) If in an appeal commenced under subsection (a) the
department of local government finance determines that any of
the following conditions apply, the department of local
government finance may increase the political subdivision's total
operating expenditure limit by more than the maximum amount
allowed under section 13 of this chapter, but by not more than the
minimum amount necessary to meet the conditions that form the
basis of order:
(1) A political subdivision needs an additional increase to
extend services to an area that has been annexed by the
political subdivision.
(2) The political subdivision needs an additional increase as
the result of additional responsibilities arising from an repel
invasion, an insurrection, hostilities, or another emergency
declared by the governor.
(3) The political subdivision needs an additional increase to
provide a new service that is substantially different from
services provided in preceding years.
(4) The political subdivision needs the additional increase
and one (1) or more other political subdivisions agree to
decrease their total operating expenditure limits in an
amount that offsets the increase.
(5)The political subdivision needs the additional increase to
provide goods or services that the political subdivision is
required to provide under a court order.
(6) The political subdivision needs the additional increase to
meet another emergency that presents a high risk of injury
or death to one (1) or more individuals.
(7) The political subdivision has additional revenues as a
result of an increase in an income tax rate under IC 6-3.5.
(c) The maximum increase allowed under section 13 of this
chapter does not limit an increase in the total operating
expenditure limit authorized under subsection (b). For purposes
of computing the maximum allowable increase under section 13 of
this chapter, a political subdivision's total operating expenditure
limit for a particular calendar year does not include that part of an
increase authorized under subsection (b) unless the department
of local government finance determines that the additional
increase must be permanent to meet the conditions that form the
basis of the order.
(d) The department of local government finance shall, upon
its own motion, or upon appeal filed under IC 6-1.1-17-13,
decrease a political subdivision's total operating expenditure limit
for a year if the department finds, after a hearing, any of the
following conditions:
(1) A decrease is needed because the political subdivision
has significantly reduced or eliminated one (1) or more
services that it previously provided.
(2) A decrease is appropriate because the total operating
expenditure limit substantially exceeds the amount
reasonably necessary for the political subdivision to provide
essential governmental services.
(3) A decrease is needed because total operating expenditure
limit exceeds available revenues.
SOURCE: IC 6-1.1-21-10; (04)PD3997.9. -->
SECTION 9. IC 6-1.1-21-10, AS AMENDED BY
P.L.192-2002(SS), SECTION 43, IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 10. (a) There is
established a property tax replacement fund board to consist of the
commissioner of the department, the commissioner of the department
of local government finance, the director of the budget agency, and two
(2) ex officio nonvoting representatives of the general assembly of the
state of Indiana. The speaker of the house of representatives shall
appoint one (1) member of the house as one (1) of the ex officio
nonvoting representatives, and the president pro tempore of the senate
shall appoint one (1) senator as the other ex officio nonvoting
representative, each to serve at the will of the appointing officer. The
commissioner of the department shall be the chairman of the board, and
the director of the budget agency shall be the secretary of the board.
(b) Except as provided in section 10.5 of this chapter, the schedule
to be used in making distributions to county treasurers during the
periods set forth in section 4(b) of this chapter is as follows:
January 0
.00%
February 0
.00%
March 16
.70%
April 16
.70%
May 0
.00%
June 0
.00%
July 16
.60%
August 0
.00%
September 16
.70%
October 16
.70%
November 16
.60%
December 0
.00%
The board may authorize the department to distribute the estimated
distributions to counties earlier than what is required under section 4(b)
of this chapter.
(c) The board is also authorized to transfer funds from the property
tax replacement fund for the purpose of providing financial aid to
school corporations as provided in IC 21-3. However, if an amount
is transferred under IC 4-10-18-8 from the counter-cyclical
revenue and economic stabilization fund to the property tax
replacement fund, that amount that exceeds ten percent (10%) of
the total state general fund revenues for that state fiscal year
shall be distributed under this chapter as an additional eligible
property tax replacement amount and shall be used to replace
revenues lost from an additional taxpayer's property tax
replacement credit amount granted under subsection (d). There is
annually appropriated the amount necessary to make the
distribution under this subsection.
(d) Each taxpayer of each county shall receive a credit for
property tax replacement in the amount of each taxpayer's
additional property tax replacement credit amount against the
taxpayer's tax liability as determined under section 5 of this
chapter. The additional property tax replacement credits under
this subsection shall be applied to the tax liability of a taxpayer in
conformity with the procedures prescribed by the department of
local government finance.
SOURCE: IC 36-1-8-5.1; (04)PD3997.10. -->
SECTION 10. IC 36-1-8-5.1, AS AMENDED BY P.L.173-2003,
SECTION19 AND P.L.267-2003, SECTION 15, IS AMENDED TO
READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 5.1. (a) A
political subdivision may establish a rainy day fund 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.
(c) 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;
(4) IC 6-3.5-7-17.3; and
(5) IC 6-1.1-18-13.
(b) Money in a rainy day fund may be used for any
governmental purpose of the political subdivision. 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.
(d) (c) This subsection applies only to amounts transferred to
a rainy day fund under section 5 of this chapter. 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 adopted under IC 6-1.1-17, for that fiscal year to the rainy day
fund.
(e) A political subdivision may use only the funding sources
specified in the ordinance or resolution establishing the rainy day fund
unless the political subdivision adopts a subsequent ordinance or
resolution authorizing the use of another funding source.
(d) 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. However,
if the balance of the rainy day fund exceeds ten per cent (10%) of
the political subdivision's budget for a year, the excess money
shall be used to temporarily reduce the levies of the political
subdivision in one (1) or more subsequent years, as determined by
the department of local government finance. Use of money from
a rainy day fund to replace property taxes lost as a result of a levy
reduction under this subsection shall be treated for all purposes
as ad valorem property taxes.
SOURCE: ; (04)PD3997.11. -->
SECTION 11. [EFFECTIVE JULY 1, 2004] (a) As used in this
SECTION, "political subdivision" has the meaning set forth in
IC 6-1.1-1-12.
(b) IC 4-10-21-10, as added by this act, applies only to
expenditures made after June 30, 2005.
(c) IC 6-1.1-18-13, as added by this act, applies only to
expenditures made after December 31, 2004.
(Reference is to SB 269 as introduced.)
and when so amended that said bill be reassigned to the Senate Committee on Finance.