February 15, 2011





HOUSE BILL No. 1096

_____


DIGEST OF HB 1096 (Updated February 15, 2011 2:46 pm - DI 116)



Citations Affected: IC 6-1.1; IC 36-8; noncode.

Synopsis: Fire protection territories. Provides that for property taxes first due and payable after 2011, the total amount that may be levied in a civil taxing unit in the ensuing calendar year to support a fire protection territory may not exceed: (1) the amount levied in the civil taxing unit to support the fire protection territory in the current calendar year; multiplied by (2) the assessed value growth quotient. Provides that for property taxes first due and payable after 2011, in the first year in which a civil taxing unit levies a property tax to support a fire protection territory, the total amount that may be levied in that year in the civil taxing unit to support the fire protection territory may not exceed the lesser of: (1) the amount specified by the legislative body of the civil taxing unit in the hearing held before adoption of the ordinance or resolution to establish the fire protection territory; or (2) the amount levied for fire protection services in the year immediately preceding the year in which the unit first imposes property taxes to support the fire protection territory, multiplied by the assessed value growth quotient. Specifies that a member of the legislative body of a unit may not vote on a proposed ordinance or resolution authorizing the unit to join or establish a fire protection territory if that member is also an employee of another unit that: (1) is a participating unit in the fire protection territory; or (2) is proposing to become a participating unit in the fire protection territory. Provides that the provider unit, with the approval of each of the other participating units, shall annually budget the necessary money to meet the expenses of operation and
(Continued next page)

Effective: Upon passage; July 1, 2011; January 1, 2012.





Cherry , Dodge




    January 5, 2011, read first time and referred to Committee on Veterans Affairs and Public Safety.
    February 15, 2011, amended, reported _ Do Pass.





Digest Continued

maintenance of the fire protection services with the territory, plus a reasonable operating expense. (Current law provides that the provider unit, with the assistance of each of the other participating units, shall annually budget the necessary money to meet the expenses of operation and maintenance of the fire protection services with the territory, plus a reasonable operating expense, not to exceed 20% of the budgeted expenses.) Removes language that, in the case the amount levied in a particular year is insufficient to cover costs, the levy in the following year shall be increased by the amount needed and the provider unit is entitled to transfer the amount transferred from the fund as reimbursement to the provider unit. Requires the department of local government finance to review the tax rates in existing fire protection territories and reconsider whether different rates should apply for the participating units.



February 15, 2011

First Regular Session 117th General Assembly (2011)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2010 Regular Session of the General Assembly.

HOUSE BILL No. 1096



    A BILL FOR AN ACT to amend the Indiana Code concerning local government.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-1.1-18.5-10.5; (11)HB1096.1.1. -->     SECTION 1. IC 6-1.1-18.5-10.5, AS AMENDED BY P.L.113-2010, SECTION 32, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 10.5. (a) The ad valorem property tax levy limits imposed by section 3 of this chapter do not apply to ad valorem property taxes imposed by a civil taxing unit for fire protection services within a fire protection territory under IC 36-8-19, if the civil taxing unit is a participating unit in a fire protection territory established before August 1, 2001. For purposes of computing the ad valorem property tax levy limits imposed on a civil taxing unit by section 3 of this chapter on a civil taxing unit that is a participating unit in a fire protection territory, established before August 1, 2001, the civil taxing unit's ad valorem property tax levy for a particular calendar year does not include that part of the levy imposed under IC 36-8-19. Any property taxes imposed by a civil taxing unit that are exempted by this subsection from the ad valorem property tax levy limits imposed by

section 3 of this chapter and first due and payable after December 31, 2008, may not increase annually by a percentage greater than the result of:
        (1) the assessed value growth quotient determined under section 2 of this chapter; minus
        (2) one (1).
    (b) The department of local government finance may, under this subsection, increase the maximum permissible ad valorem property tax levy that would otherwise apply to a civil taxing unit under section 3 of this chapter to meet the civil taxing unit's obligations to a fire protection territory established under IC 36-8-19. To obtain an increase in the civil taxing unit's maximum permissible ad valorem property tax levy, a civil taxing unit shall submit a petition to the department of local government finance in the year immediately preceding the first year in which the civil taxing unit levies a tax to support the fire protection territory. The petition must be filed before the date specified in section 12(a)(1) of this chapter of that year. The department of local government finance shall make a final determination of the civil taxing unit's budget, ad valorem property tax levy, and property tax rate for the fire protection territory for the ensuing calendar year. In making its determination under this subsection, the department of local government finance shall consider the amount that the civil taxing unit is obligated to provide to meet the expenses of operation and maintenance of the fire protection services within the territory, including the participating unit's reasonable share of an operating balance for the fire protection territory. The department of local government finance shall determine the entire amount of the allowable adjustment in the final determination. The department shall order the adjustment implemented in the amounts and over the number of years, not exceeding three (3), requested by the petitioning civil taxing unit. However, the department of local government finance may not approve under this subsection a property tax levy greater than zero (0) if the civil taxing unit did not exist as of the March 1 assessment date for which the tax levy will be imposed. For purposes of applying this subsection to the civil taxing unit's maximum permissible ad valorem property tax levy in subsequent calendar years, the department of local government finance may determine not to consider part or all of the part of the property tax levy imposed to establish the operating balance of the fire protection territory.
    (b) Except as provided in subsection (c), for property taxes first due and payable after 2011, the total amount that may be levied in a civil taxing unit in the ensuing calendar year to support a fire

protection territory may not exceed:
        (1) the amount levied in the civil taxing unit to support the fire protection territory in the current calendar year; multiplied by
        (2) the assessed value growth quotient determined under section 2 of this chapter.
    (c) For property taxes first due and payable after 2011, in the first year in which a civil taxing unit levies a property tax to support a fire protection territory, the total amount that may be levied in that year in the civil taxing unit to support the fire protection territory may not exceed the lesser of the following:
        (1) An amount equal to:
            (A) the amount levied for fire protection services in the participating civil taxing unit in the year immediately preceding the year in which the unit first imposes property taxes to support the fire protection territory; multiplied by
            (B) the assessed value growth quotient determined under section 2 of this chapter.
        (2) The property tax levy specified by the legislative body of the civil taxing unit under IC 36-8-19-6(f)(1) as the property tax levy to be imposed in the first year of the territory.

SOURCE: IC 36-8-19-6; (11)HB1096.1.2. -->     SECTION 2. IC 36-8-19-6, AS AMENDED BY P.L.47-2007, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 6. (a) To establish a fire protection territory, the legislative bodies of each unit desiring to become a part of the proposed territory must adopt an ordinance (if the unit is a county or municipality) or a resolution (if the unit is a township) that meets the following requirements:
        (1) The ordinance or resolution is identical to the ordinances and resolutions adopted by the other units desiring to become a part of the proposed territory.
        (2) The ordinance or resolution is adopted after January 1 but before April 1.
        (3) The ordinance or resolution authorizes the unit to become a party to an agreement for the establishment of a fire protection territory.
        (4) The ordinance or resolution is adopted after the legislative body does the following:
            (A) Holds a public hearing at least thirty (30) days before adopting the ordinance or resolution at which the legislative body makes available to the public the information required by subsection (e) concerning the

fiscal impact of the proposed fire protection territory.
            (B)
Holds at least one (1) additional public hearing to receive public comment on the proposed ordinance or resolution. The legislative body must give notice of the hearing under IC 5-3-1.
    (b) The notice required under this section shall include all of the following:
        (1) A list of the provider unit and all participating units in the proposed territory.
        (2) The date, time, and location of the hearing.
        (3) The location where the public can inspect the proposed ordinance or resolution.
        (4) A statement as to whether the proposed ordinance or resolution requires uniform tax rates or different tax rates within the territory and the proposed levies and tax rates for each participating unit.
        (5) The name and telephone number of a representative of the unit who may be contacted for further information.
    (c) The ordinance or resolution adopted under this section shall include at least the following:
        (1) The boundaries of the proposed territory.
        (2) The identity of the provider unit and all other participating units desiring to be included within the territory.
        (3) An agreement to impose the following:
            (A) For property taxes first due and payable before January 1, 2012:
                (i)
a uniform tax rate upon all of the taxable property within the territory for fire protection services; or
                (B) (ii) different tax rates for fire protection services for the participating units desiring to be included within the territory, so long as a tax rate applies uniformly to all of a unit's taxable property within the territory. unit.
             (B) For property taxes first due and payable after December 31, 2011, a property tax levy for fire protection services within each participating unit. The maximum property tax levy for fire protection services for a particular unit may not exceed the amount determined for the unit under IC 6-1.1-18.5-10.5.
        (4) The contents of the agreement to establish the territory.
    (d) Except as provided in subsection (e), an ordinance or a resolution adopted under this section takes effect July 1 of the year the ordinance or resolution is adopted.


     (e) A legislative body of a participating unit that desires to adopt an ordinance or a resolution under this section must make the following information available to the public at the meeting required by subsection (a)(4)(A):
        (1) The property tax levy, property tax rate, and budget to be imposed or adopted during the first year of the territory for each of the units that would participate in the proposed fire protection territory.
        (2) The estimated effect of the proposed reorganization in following years on taxpayers in each of the units that would participate in the proposed fire protection territory, including the expected property tax rates, property tax levies, expenditure levels, and service levels, and annual debt service payments.
        (3) A description of the planned services and staffing levels to be provided in the proposed fire protection territory.
        (4) A description of any capital improvements to be provided in the proposed fire protection territory.

SOURCE: IC 36-8-19-6.3; (11)HB1096.1.3. -->     SECTION 3. IC 36-8-19-6.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 6.3. A member of the legislative body of a unit may not vote on a proposed ordinance or resolution authorizing the unit to become a party to an agreement to join or establish a fire protection territory if that member is also an employee of:
        (1) another unit that is a participating unit in the fire protection territory; or
        (2) another unit that is proposing to become a participating unit in the fire protection territory.

SOURCE: IC 36-8-19-7; (11)HB1096.1.4. -->     SECTION 4. IC 36-8-19-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012]: Sec. 7. (a) A tax levied under this chapter must be levied at: as follows:
        (1) For property taxes first due and payable before January 1, 2012:
             (A) a uniform rate upon all taxable property within the territory; or
            (2) (B) different rates for the participating units included within the territory, so long as a tax rate applies uniformly to all of a unit's taxable property within the territory. unit.
         (2) For property taxes first due and payable after December 31, 2011, a property tax levy for fire protection services for a particular unit may not exceed the amount determined for the unit under IC 6-1.1-18.5-10.5.
SOURCE: IC 36-8-19-8; (11)HB1096.1.5. -->     SECTION 5. IC 36-8-19-8, AS AMENDED BY P.L.182-2009(ss), SECTION 443, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 8. (a) Upon the adoption of identical ordinances or resolutions, or both, by the participating units under section 6 of this chapter the designated provider unit must establish a fire protection territory fund from which all expenses of operating and maintaining the fire protection services within the territory, including repairs, fees, salaries, depreciation on all depreciable assets, rents, supplies, contingencies, and all other expenses lawfully incurred within the territory shall be paid. The purposes described in this subsection are the sole purposes of the fund, and money in the fund may not be used for any other expenses. Except as allowed in subsections (d) and (e) and section 8.5 of this chapter, the provider unit is not authorized to transfer money out of the fund at any time.
    (b) The fund consists of the following:
        (1) All receipts from the tax imposed under this section.
        (2) Any money transferred to the fund by the provider unit as authorized under subsection (d).
        (3) Any receipts from a false alarm fee or service charge imposed by the participating units under IC 36-8-13-4.
        (4) Any money transferred to the fund by a participating unit under section 8.6 of this chapter.
    (c) The provider unit, with the assistance approval of each of the other participating units, shall annually budget the necessary money to meet the expenses of operation and maintenance of the fire protection services within the territory, plus a reasonable operating balance. not to exceed twenty percent (20%) of the budgeted expenses. Except as provided in Subject to IC 6-1.1-18.5-10.5, after estimating expenses and receipts of money, the provider unit shall establish adopt the tax levy required to fund the estimated budget. The amount budgeted under this subsection shall be considered a part of each of the participating unit's budget.
    (d) If the amount levied in a particular year is insufficient to cover the costs incurred in providing fire protection services within the territory, the provider unit may transfer from available sources to the fire protection territory fund the money needed to cover those costs. In this case:
        (1) the levy in the following year shall be increased by the amount required to be transferred; and
        (2) the provider unit is entitled to transfer the amount described in subdivision (1) from the fund as reimbursement to the provider

unit.
    (e) If the amount levied in a particular year exceeds the amount necessary to cover the costs incurred in providing fire protection services within the territory, the levy in the following year shall be reduced by the amount of surplus money that is not transferred to the equipment replacement fund established under section 8.5 of this chapter. The amount that may be transferred to the equipment replacement fund may not exceed five percent (5%) of the levy for that fund for that year. Each participating unit must agree to the amount to be transferred by adopting an ordinance (if the unit is a county or municipality) or a resolution (if the unit is a township) that specifies an identical amount to be transferred.
    (f) The tax under this section is subject to the tax levy limitations imposed under IC 6-1.1-18.5-10.5.

SOURCE: ; (11)HB1096.1.6. -->     SECTION 6. [EFFECTIVE UPON PASSAGE] (a) The department of local government finance shall review the tax rates levies for fire protection territories established before July 1, 2011, that have a uniform tax rate throughout the territory and shall reconsider whether different tax rates for fire protection services should be applied for the participating units included within the territory consistent with this act.
     (b) This SECTION expires January 1, 2015.