Citations Affected: IC 1-1-4-7; IC 4-12-1; IC 6-1.1; IC 6-2.5;
IC 6-3.5; IC 14-23-3-3; IC 15-1.5; IC 36-1; IC 36-1.3; IC 36-4-1-1;
IC 36-8.5; IC 36-12.
Synopsis: Property tax replacement. Eliminates the authority of the
state and political subdivisions to impose a property tax after December
31, 2005, except to pay debt service obligations and public safety
services. Imposes a special assessment for public safety services on
residential property and property otherwise exempt from property taxes
(other than certain governmental and religious property) instead of an
ad valorem property tax. Eliminates most property tax deductions and
credits, except for a deduction for the elder, blind, and disabled and a
deduction for inventory. Extends the sales tax to all services other than
medical services and certain other services. Provides for the
distribution of the revenue to political subdivisions. Transfers oversight
of local budgets from the department of local government finance to the
budget agency. Provides an optional method to reorganize political
subdivisions. Makes related changes. Repeals property tax credits,
property tax deductions, remonstrance provisions that are superseded
and replaced by provisions in this act, and certain laws granting
authority to the department of local government finance.
Effective: Upon passage; July 1, 2004; July 1, 2005; December 1,
2005; January 1, 2006; February 1, 2006.
January 13, 2004, read first time and referred to Committee on Finance.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
SECTION 1. IC 1-1-4-7 IS ADDED TO THE INDIANA CODE AS
A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2004]: For purposes of construing all Indiana statutes,
"consolidated city" refers to a first class city that has become a
consolidated city under IC 36-3-1.
SECTION 2. IC 4-12-1-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 2. As used in this chapter
unless a different meaning appears from the context:
(a) The word "committee" means the budget committee.
(b) The word "director" or the term "budget director" means the
person who is director of the budget agency.
(c) The term "appointing authority" means the head of an a state
agency. of the state.
(d) The terms "agency of the state" or "agencies of the state" or
"State agency" or "state agencies" mean and include means every
office, officer, board, commission, department, division, bureau,
committee, fund, agency, and, without limitation by reason of any
enumeration herein, every other instrumentality of the state of Indiana,
now existing or which may be created hereafter; every hospital, every
penal institution and every other institutional enterprise and activity of
the state of Indiana, wherever located; the universities and colleges
supported in whole or in part by state funds; the judicial department of
the state of Indiana; and all non-governmental organizations receiving
financial support or assistance from the state of Indiana; but shall not
mean nor include cities, towns, townships, school cities, school towns,
school townships, school districts, nor other municipal corporations or
political subdivisions of the state.
(e) The terms "budget bill," or "budget bills," shall mean a bill for
an act, or two (2) or more such bills, prepared as authorized in this
chapter, by which substantially all of the appropriations are made that
are necessary and required to:
(1) carry on state government; and
(2) make distributions to political subdivisions;
for the budget period, if and when such bill is, or such bills are, enacted
into law.
(f) The term "budget report" shall mean a written explanation of the
budget bill or bills, and a general statement of the reasons for the
appropriations therein and of the sources and extent of state income to
meet such appropriations, together with such further parts as are
required by law.
(g) The term "budget period" means that period of time for which
appropriations are made in the budget bill or budget bills.
SECTION 3. IC 4-12-1-6 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. When requested so to do by
the governor, or by the budget director, other agencies of the state
agencies and political subdivisions shall assist the budget agency in
the effective discharge of its duties and functions. Any such state
agency or political subdivision shall employ its equipment and
facilities to assist the budget agency to prepare the data and
information for a recommended or final budget report and budget bill.
The budget agency shall create and prepare forms required for the
administration of this chapter, and forms necessary for machine
accounting to permit accumulation of statistical data and information
required by the budget agency and the budget committee. Every state
agency and political subdivision, except the universities and colleges,
shall adopt such forms and reporting procedures as are created and
prepared by the budget agency for administration and execution of
appropriations made by law, when such forms and procedures have
been otherwise approved in the manner required by law.
review and analyze all of the information, data, estimates, requests for
appropriations and for other authorizations to spend state funds as the
several state agencies and political subdivisions have prepared and
filed them. As promptly as possible the budget agency shall complete
its examination, review and analysis and shall prepare
recommendations for a budget report, and from time to time shall
submit these to the budget committee for its consideration at one of its
meetings.
SECTION 5. IC 4-12-1-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8. (a) In preparing the various
estimates for the budget report, the budget agency may require any
state agency or political subdivision to prepare and file with it
additional or more detailed information and the director, or any duly
authorized employee of the budget agency, may enter and investigate
the operation of any state agency or political subdivision, and may
examine its records as authorized by the director. A written report of
the investigation and examination shall be prepared and filed in the
budget agency. The foregoing report shall be made available to the
budget committee for review and to aid in its determination of the
several amounts or estimates for appropriations the budget committee
may recommend for inclusion in the budget report and in the budget
bills prepared pursuant to the authority of this chapter.
(b) Upon its own initiative or at the request of any state agency or
any political subdivision, the budget committee may arrange a hearing
or hearings devoted to any matter pertinent to the preparation of a
budget report and budget bill at which representatives of the interested
state agency, political subdivision, or any citizen, may appear and be
heard. As allowed by the committee's policies and procedures, general
information and relevant and material evidence, and explanation and
argument may then be presented to the budget committee members that
will assist them in the performance of their respective duties under this
chapter.
SECTION 6. IC 4-12-1-9 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9. (a) The budget agency shall
assist the budget committee in the preparation of the budget report and
the budget bill, using the recommendations and estimates prepared by
the budget agency and the information obtained through investigation
and presented at hearings. The budget committee shall consider the
data, information, recommendations and estimates before it and, to the
extent that there is agreement on items, matters and amounts between
the budget agency and a majority of the members of the budget
committee, the committee shall organize and assemble a budget report
and a budget bill or budget bills. In the event the budget agency and a
majority of the members of the budget committee shall differ upon any
item, matter, or amount to be included in such report and bills, the
recommendation of the budget agency shall be included in the budget
bill or bills, and the particular item, matter or amount, and the extent
of and reasons for the differences between the budget agency and the
budget committee shall be stated fully in the budget report. Before the
second Monday of January, in the year immediately after preparation,
the budget report and the budget bill or bills shall be submitted to the
governor by the budget committee. The governor shall deliver to the
house members of the budget committee such bill or bills for
introduction into the house of representatives.
(b) Whenever during the period beginning thirty (30) days prior to
a regular session of the general assembly the budget report and budget
bill or bills have been completed and printed and are available for
distribution, upon the request of a member of the general assembly an
informal distribution of one (1) copy of each such document shall be
made by the budget committee to such members. During business
hours, and as may be otherwise required during sessions of the general
assembly, the budget agency shall make available to the members of
the general assembly so much as they shall require of its accumulated
staff information, analyses and reports concerning the fiscal affairs of
the state and the current budget report and budget bill or bills.
(c) The budget report shall include at least the following five (5)
parts;
(1) A statement of budget policy, including but not limited to
recommendations with reference to the fiscal policy of the state
and its political subdivisions for the coming budget period, and
describing the important features of the budget.
(2) A general budget summary setting forth the aggregate figures
of the budget to show the total proposed expenditures and the
total anticipated income, and the surplus or deficit of the state
and its political subdivisions.
(3) The detailed data on actual receipts and expenditures for the
previous fiscal year or two (2) fiscal years depending upon the
length of the budget period for which the budget bill or bills is
proposed, the estimated receipts and expenditures for the current
year, and for the ensuing budget period, and the anticipated
balances at the end of the current fiscal year and the ensuing
budget period. Such data shall be supplemented with necessary
explanatory schedules and statements, including a statement of
any differences between the recommendations of the budget
agency and of the budget committee.
(4) A description of the capital improvement program for the
state, a summary of the capital improvement programs of the
political subdivisions, and an explanation of its their relation to
the budget.
(5) The budget bills.
(d) The budget report shall cover and include all special and
dedicated revenue funds as well as the general revenue fund and shall
include the estimated amounts of federal aids, for whatever purpose
provided, together with estimated expenditures therefrom.
(e) The amount that is proposed to be appropriated in the
budget period for distribution to political subdivisions shall be
aggregated in the budget bill and listed as an appropriation to the
state agency that will make the distribution to the political
subdivisions. It is not the intent of the general assembly that
appropriations from the property tax replacement fund be made
through a general formula in conformity with the budgets
approved by the budget agency under IC 36-1.3 and not by specific
appropriations to each political subdivision.
(f) The budget agency shall furnish the governor with any further
information required concerning the budget, and upon request shall
attend hearings of committees of the general assembly on the budget
bills.
SECTION 7. IC 4-12-1-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 11. (a) In addition
to cooperating in the preparation of a recommended budget report and
budget bill as herein provided, the chief functions of the budget
committee shall be to serve as liaison between the legislative and
executive, including the administrative branches of government and to
provide information to the general assembly with respect to the
management of state and local fiscal affairs so that it may have a better
insight into the budgetary and appropriation needs of the various state
agencies and political subdivisions. To perform such functions the
budget committee may:
(1) Select a chairman and such other officers as the members
desire, and hold meetings at stated intervals, and on call of the
chairman.
(2) Make such policies and procedures concerning its
organization and operation as are deemed advisable but IC 4-22-2
shall not apply thereto.
(3) Have access to all files, information gathered and reports of
the budget agency.
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2006]: Sec. 44. Notwithstanding any
other law, all exemptions from ad valorem property taxes enacted
by the general assembly before March 16, 2004, are void for
property taxes payable after December 31, 2005, except the
following:
(1) Exemptions provided in this chapter.
(2) Exemptions not provided by this chapter but required
under the Constitution of the United States, federal law, or the
Constitution of the State of Indiana.
SECTION 12. IC 6-1.1-12-43 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2006]: Sec. 43. (a) Notwithstanding any
other law, all deductions from the assessed valuation of property
that:
(1) are used to impose an ad valorem property tax; and
(2) that were enacted by the general assembly before March
16, 2004, are void for property taxes payable after December
31, 2005, except the deductions described in subsection (b).
(b) The following deductions apply for property taxes first due
and payable after December 31, 2005:
(1) Deductions provided in this chapter.
(2) Deductions not provided by this chapter but required
under the Constitution of the United States, federal law, or the
Constitution of the State of Indiana.
(3) Deprecation allowances permitted under the rules of the
department of local government finance to reflect the true tax
value of property.
SECTION 13. IC 6-1.1-18-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 2. (a) Before January
1, 2006, the state may not impose a an ad valorem property tax rate
on tangible property in excess of thirty-three hundredths of one cent
($0.0033) on each one hundred dollars ($100) of assessed valuation.
The state tax rate is not subject to review by county boards of tax
adjustment or county auditors.
(b) The state may not impose an ad valorem property tax rate
on tangible property after December 31, 2005.
(c) This section does not apply to political subdivisions of the state.
SECTION 14. IC 6-1.1-21-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2006]: Sec. 9. (a) On or
before October 15 of each year, each county auditor shall, make a
settlement with the department as to the aggregate amount of property
tax replacement credits extended to taxpayers in the auditor's county
during the first eight (8) months of that same year. On or before
December 31 of each year, each county auditor shall make a settlement
with the department along with the filing of the county auditor's
December settlement as to the aggregate amount of property tax
replacement credits extended to taxpayers in the auditor's county
during the last four (4) months of that same year. If the aggregate
credits allowed during either period exceed the property tax
replacement funds allocated and distributed to the county treasurer, for
that same period, as provided in sections section 4 of this chapter
(repealed), and section 5 of this chapter (repealed), and section 13 of
this chapter, then the department shall certify the amount of the excess
to the auditor of state who shall issue a warrant, payable from the
property tax replacement fund, to the treasurer of the state ordering the
payment of the excess to the county treasurer. If the distribution
exceeds the aggregate credits, the county treasurer shall repay to the
treasurer of the state the amount of the excess, which shall be
redeposited in the property tax replacement fund.
(b) In making the settlement required by subsection (a), the county
auditor shall recognize the fact that any loss of revenue resulting from
the provision of homestead credits in excess of the percentage credit
allowed in IC 6-1.1-20.9-2(d) must be paid from county option income
revenues.
(c) (b) Except as otherwise provided in this chapter, the state board
of accounts with the cooperation of the department shall prescribe the
accounting forms, records, and procedures required to carry out the
provisions of this chapter.
SECTION 15. IC 6-1.1-21-10, AS AMENDED BY
P.L.192-2002(ss), SECTION 43, IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JANUARY 1, 2006]: 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 political subdivisions under
section 13 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.
SECTION 16. IC 6-1.1-21-13 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2006]: Sec. 13. (a) Subject to subsection
(g), the department of state revenue shall distribute the amount
determined under the formula in IC 21 from the property tax
replacement fund to each school corporation.
(b) The department of state revenue shall distribute the amount
determined by the budget agency from the property tax
replacement fund to each political subdivision other than a school
corporation.
(c) The budget agency shall annually determine the amount to
be distributed to each political subdivision other than a school
corporation under this section. The budget agency shall notify the
department of state revenue, the affected political subdivision, and
the county auditor of each county in which the political subdivision
is located of the amount of the distribution not later than March 1
of the year of the distribution.
(d) Subject to subsections (f) and (g), for 2006, the amount of
the distribution to a political subdivision other than a school
corporation is equal to the amount determined under STEP
THREE of the following formula:
STEP ONE: Determine the amount equal to the sum of the
political subdivision's ad valorem property tax levies for 2005,
as the levies were determined by the department of local
government finance in fixing the political subdivision's
budget, levy, and rate for 2005 under IC 6-1.1-17 , adjusted to
eliminate the effects of temporary excessive levy appeals and
any other temporary adjustments made by the department of
local government finance to the working maximum levy for
2005, as determined by the budget agency.
STEP TWO: Multiply the STEP ONE amount by the income
growth index for 2006 determined under IC 36-1.2-2-17.
STEP THREE: Determine the lesser of the following:
(A) The STEP TWO amount.
(B) The amount of the political subdivision's budget not
funded by other sources, as determined by the budget
agency.
(e) Subject to subsections (f) and (g), for 2007 and each year
thereafter, the amount of the distribution to a political subdivision
other than a school corporation is equal to the amount determined
under STEP THREE of the following formula:
STEP ONE: Determine the amount distributed to the political
subdivision under this section in the immediately preceding
year.
STEP TWO: Multiply the STEP ONE amount by the income
growth index for the ensuing budget year determined under
IC 36-1.2-2-17.
STEP THREE: Determine the lesser of the following:
(A) The STEP TWO amount.
(B) The amount of the political subdivision's budget not
funded by other sources, as determined by the budget
agency.
(f) The amount distributed under subsection (d) or (e) is
increased by the amount of any increase in expenditures that is
approved by the budget agency under IC 36-1.3 and not funded by
other sources, as determined by the budget agency.
(g) If the total amount of distributions required under this
section in a year exceeds the amount that will be deposited in the
property tax replacement fund in the year, as determined by the
budget agency, the amount to be distributed to a political
subdivision under this section to each:
(1) school corporation during the last six (6) months of the
year shall be reduced by the same dollar amount per ADM (as
adjusted by IC 21-3-1.6-1.1); and
(2) political subdivision other than a school corporation
during the last six (6) months of the year shall be reduced in
an amount that is in proportion to the part of the political
subdivision's budget funded by distributions under this
section relative to the total of all political subdivision budgets
(excluding school corporations) funded by distributions under
this section;
so that the total reductions equal the amount of the excess.
SECTION 17. IC 6-2.5-1-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 2. (a) "Retail
transaction" means a transaction of a retail merchant that constitutes:
(1) selling at retail as described in IC 6-2.5-4-1; that constitutes
(2) making a wholesale sale as described in IC 6-2.5-4-2; or
(3) that is a transaction described in any other section of
IC 6-2.5-4.
(b) "Retail unitary transaction" means a unitary transaction that is
also a retail transaction.
SECTION 18. IC 6-2.5-1-5, AS AMENDED BY P.L.257-2003,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 5. (a) Except as provided in subsection (b),
"gross retail income" means the total gross receipts, of any kind or
character, received in a retail transaction, including cash, credit,
property, and services, for which tangible personal property or a
service is sold, leased, or rented, valued in money, whether received in
money or otherwise, without any deduction for:
(1) the seller's cost of the property sold;
(2) the cost of materials used, labor or service cost, interest,
losses, all costs of transportation to the seller, all taxes imposed
on the seller, and any other expense of the seller;
(3) charges by the seller for any services necessary to complete
the sale, other than delivery and installation charges;
(4) delivery charges;
(5) installation charges; or
(6) the value of exempt personal property or services given to the
purchaser where taxable and exempt personal property or
services have been bundled together and sold by the seller as a
single product or piece of merchandise.
(b) "Gross retail income" does not include that part of the gross
receipts attributable to:
(1) the value of any tangible personal property received in a like
kind exchange in the retail transaction, if the value of the property
given in exchange is separately stated on the invoice, bill of sale,
or similar document given to the purchaser;
(2) the receipts received in a retail transaction which constitute
interest, finance charges, or insurance premiums on either a
promissory note or an installment sales contract;
(3) discounts, including cash, terms, or coupons that are not
reimbursed by a third party that are allowed by a seller and taken
by a purchaser on a sale;
(4) interest, financing, and carrying charges from credit extended
on the sale of personal property or services if the amount is
separately stated on the invoice, bill of sale, or similar document
given to the purchaser; or
(5) any taxes legally imposed directly on the consumer that are
separately stated on the invoice, bill of sale, or similar document
given to the purchaser.
(c) A public utility's or a power subsidiary's gross retail income
includes all gross retail income received by the public utility or power
subsidiary, including any minimum charge, flat charge, membership
fee, or any other form of charge or billing.
SECTION 19. IC 6-2.5-1-25.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE DECEMBER 1, 2005]: Sec. 25.7. As used in this
article, "service" does not include:
(1) a lease or rental; or
(2) labor furnished to a person by the person's employee.
SECTION 20. IC 6-2.5-3-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 1. For purposes
of this chapter:
(a) "Use" means the exercise of any right or power of ownership
over tangible personal property or to employ services for their
intended purpose.
(b) "Storage" means the keeping or retention of tangible personal
property in Indiana for any purpose except the subsequent use of that
property solely outside Indiana.
(c) "A retail merchant engaged in business in Indiana" includes any
retail merchant who makes retail transactions in which a person
acquires personal property or services for use, storage, or consumption
in Indiana and who maintains:
(1) an office, place of distribution, sales location, sample location,
warehouse, storage place, or other place of business which is
located in Indiana and which the retail merchant maintains,
occupies, or uses, either permanently or temporarily, either
directly or indirectly, and either by himself the retail merchant
or through an agent or subsidiary; or
(2) a representative, agent, salesman, canvasser, or solicitor who,
while operating in Indiana under the authority of and on behalf of
the retail merchant or a subsidiary of the retail merchant, sells,
delivers, or takes orders for sales of tangible personal property or
services to be used, stored, or consumed in Indiana.
(d) Notwithstanding any other provision of this section, tangible or
intangible property that is:
(1) owned or leased by a person that has contracted with a
commercial printer for printing; and
(2) located at the premises of the commercial printer;
shall not be considered to be, or to create, an office, a place of
distribution, a sales location, a sample location, a warehouse, a storage
place, or other place of business maintained, occupied, or used in any
way by the person. A commercial printer with which a person has
contracted for printing shall not be considered to be in any way a
representative, an agent, a salesman, a canvasser, or a solicitor for the
person.
SECTION 21. IC 6-2.5-3-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 2. (a) An excise
tax, known as the use tax, is imposed on the storage, use, or
consumption of tangible personal property or services in Indiana if the
property or services was acquired in a retail transaction, regardless of
the location of that transaction or of the retail merchant making that
transaction.
(b) The use tax is also imposed on the storage, use, or consumption
of a vehicle, an aircraft, or a watercraft, if the vehicle, aircraft, or
watercraft:
(1) is acquired in a transaction that is an isolated or occasional
sale; and
(2) is required to be titled, licensed, or registered by this state for
use in Indiana.
(c) The use tax is imposed on the addition of tangible personal
property to a structure or facility and services provided for an
addition of tangible personal property to a structure or facility, if,
after its addition, the property becomes part of the real estate on which
the structure or facility is located. However, the use tax does not apply
to additions of tangible personal property described in this subsection,
if:
(1) the state gross retail or use tax has been previously imposed
on the sale or use of that property or service; or
licensed by Indiana.
SECTION 24. IC 6-2.5-3-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 6. (a) For
purposes of this section, "person" includes an individual who is
personally liable for use tax under IC 6-2.5-9-3.
(b) The person who uses, stores, or consumes the tangible personal
property or services acquired in a retail transaction is personally liable
for the use tax.
(c) The person liable for the use tax shall pay the tax to the retail
merchant from whom the person acquired the property or services, and
the retail merchant shall collect the tax as an agent for the state, if the
retail merchant is engaged in business in Indiana or if the retail
merchant has departmental permission to collect the tax. In all other
cases, the person shall pay the use tax to the department.
(d) Notwithstanding subsection (c), a person liable for the use tax
imposed in respect to a vehicle, watercraft, or aircraft under section
2(b) of this chapter shall pay the tax:
(1) to the titling agency when the person applies for a title for the
vehicle or the watercraft; or
(2) to the registering agency when the person registers the
aircraft;
unless the person presents proof to the agency that the use tax or state
gross retail tax has already been paid with respect to the purchase of
the vehicle, watercraft, or aircraft or proof that the taxes are
inapplicable because of an exemption under this article.
(e) At the time a person pays the use tax for the purchase of a
vehicle to a titling agency pursuant to subsection (d), the titling agency
shall compute the tax due based on the presumption that the sale price
was the average selling price for that vehicle, as determined under a
used vehicle buying guide to be chosen by the titling agency. However,
the titling agency shall compute the tax due based on the actual sale
price of the vehicle if the buyer, at the time the buyer pays the tax to the
titling agency, presents documentation to the titling agency sufficient
to rebut the presumption set forth in this subsection and to establish the
actual selling price of the vehicle.
SECTION 25. IC 6-2.5-3-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 7. (a) A person
who acquires tangible personal property or services from a retail
merchant for delivery in Indiana is presumed to have acquired the
property or services for storage, use, or consumption in Indiana, unless
the person or the retail merchant can produce evidence to rebut that
presumption.
taxable under this article to the extent that the income represents:
(1) the price of the property transferred without the rendition of
any or service delivered; and
(2) except as provided in subsection (g), any bona fide charges
which are made for preparation, fabrication, alteration,
modification, finishing, completion, delivery, or other service
performed in respect to the property transferred or service
delivered before its transfer and which are separately stated on
the transferor's records.
For purposes of subdivision (2), charges for delivery are charges by the
seller for preparation and delivery of the property to a location
designated by the purchaser of property, including but not limited to
transportation, shipping, postage, handling, crating, and packing.
(f) Notwithstanding subsection (e):
(1) in the case of retail sales of gasoline (as defined in
IC 6-6-1.1-103) and special fuel (as defined in IC 6-6-2.5-22), the
gross retail income received from selling at retail is the total sales
price of the gasoline or special fuel minus the part of that price
attributable to tax imposed under IC 6-6-1.1, IC 6-6-2.5, or
Section 4041(a) or Section 4081 of the Internal Revenue Code;
and
(2) in the case of retail sales of cigarettes (as defined in
IC 6-7-1-2), the gross retail income received from selling at retail
is the total sales price of the cigarettes including the tax imposed
under IC 6-7-1.
(g) Gross retail income does not include income that represents
charges for serving or delivering food and food ingredients furnished,
prepared, or served for consumption at a location, or on equipment,
provided by the retail merchant. However, the exclusion under this
subsection only applies if the charges for the serving or delivery are
stated separately from the price of the food and food ingredients when
the purchaser pays the charges.
SECTION 28. IC 6-2.5-4-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 2. (a) A person
is a retail merchant making a retail transaction when he the person is
making wholesale sales.
(b) For purposes of this section, a person is making wholesale sales
when he: the person:
(1) sells tangible personal property or service, other than capital
assets or depreciable property, to a person who purchases the
property or service for the purpose of reselling it without
changing its form;
purposes other than transmission.
(b) A person is a retail merchant making a retail transaction when
the person:
(1) furnishes or sells an intrastate a telecommunication service;
and
(2) receives gross retail income from billings or statements
rendered to customers.
(c) Notwithstanding subsection (b), a person is not a retail merchant
making a retail transaction when:
(1) the person provides, installs, constructs, services, or removes
tangible personal property which is used in connection with the
furnishing of the telecommunication services described in
subsection (a);
(2) (1) the person furnishes or sells the telecommunication
services described in subsection (a) to another person described
in this section or in section 5 of this chapter;
(3) (2) the person furnishes telecommunications services
described in subsection (a) to another person who is using a
prepaid telephone calling card or prepaid telephone authorization
number described in section 13 of this chapter; or
(4) (3) the person furnishes intrastate mobile telecommunications
service (as defined in IC 6-8.1-15-7) to a customer with a place of
primary use that is not located in Indiana (as determined under
IC 6-8.1-15).
SECTION 32. IC 6-2.5-4-9 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 9. (a) A person
is a retail merchant making a retail transaction when the person sells
tangible personal property which: or services that:
(1) is are to be added to a structure or facility or used to add
tangible personal property to a structure or facility by the
purchaser; and
(2) after its the addition to the structure or facility, the tangible
personal property would become a part of the real estate on
which the structure or facility is located.
(b) Notwithstanding subsection (a), a transaction described in
subsection (a) is not a retail transaction, if the ultimate purchaser or
recipient of the property to be added to the structure or facility would
be exempt from the state gross retail and use taxes if that purchaser or
recipient had directly purchased the property from the supplier for
addition to the structure or facility.
SECTION 33. IC 6-2.5-4-10, AS AMENDED BY P.L.257-2003,
SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 10. (a) A person, other than a public
utility, is a retail merchant making a retail transaction when he the
person rents or leases tangible personal property to another person
other than for subrent or sublease.
(b) A person is a retail merchant making a retail transaction when
the person sells any tangible personal property which has been rented
or leased in the regular course of the person's rental or leasing business.
(c) Notwithstanding subsection (a), a person is not a retail merchant
making a retail transaction when the person rents or leases motion
picture film, audio tape, or video tape to another person. However, this
exclusion only applies if:
(1) the person who pays to rent or lease the film charges
admission to those who view the film; or
(2) the person who pays to rent or lease the film or tape
broadcasts the film or tape for home viewing or listening.
SECTION 34. IC 6-2.5-4-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 11. (a) A person
is a retail merchant making a retail transaction when he the person
furnishes local cable or satellite television, service or intrastate cable
television radio, or Internet access or content service.
(b) Notwithstanding subsection (a), a person is not a retail merchant
making a retail transaction when the person provides, installs,
constructs, services, or removes tangible personal property which is
used in connection with the furnishing of local cable television service
or intrastate cable television service.
SECTION 35. IC 6-2.5-5-1, AS AMENDED BY P.L.257-2003,
SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 1. Transactions involving animals, feed,
seed, plants, fertilizer, insecticides, fungicides, and other tangible
personal property and services are exempt from the state gross retail
tax if:
(1) the person acquiring the property or service acquires it for his
the person's direct use in the direct production of food and food
ingredients or commodities for sale or for further use in the
production of food and food ingredients or commodities for sale;
and
(2) the person acquiring the property or service is occupationally
engaged in the production of food and food ingredients or
commodities which he the person sells for human or animal
consumption or uses for further food and food ingredient or
commodity production.
SECTION 36. IC 6-2.5-5-2, AS AMENDED BY P.L.257-2003,
SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 2. (a) Transactions involving agricultural
machinery, tools, and equipment, and services are exempt from the
state gross retail tax if the person acquiring that property or service
acquires it for his the person's direct use in the direct production,
extraction, harvesting, or processing of agricultural commodities.
(b) Transactions involving agricultural machinery, or equipment, or
services are exempt from the state gross retail tax if:
(1) the person acquiring the property or service acquires it for use
in conjunction with the production of food and food ingredients
or commodities for sale;
(2) the person acquiring the property or service is occupationally
engaged in the production of food or commodities which he the
person sells for human or animal consumption or uses for further
food and food ingredients or commodity production; and
(3) the machinery, or equipment, or service is designed for use in
gathering, moving, or spreading animal waste.
SECTION 37. IC 6-2.5-5-3, AS AMENDED BY P.L.192-2002(ss),
SECTION 50, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 3. (a) For purposes of this section:
(1) the retreading of tires shall be treated as the processing of
tangible personal property; and
(2) commercial printing shall be treated as the production and
manufacture of tangible personal property.
(b) Transactions involving manufacturing machinery, tools, and
equipment, and services are exempt from the state gross retail tax if
the person acquiring that property or service acquires it for direct use
in the direct production, manufacture, fabrication, assembly, extraction,
mining, processing, refining, or finishing of other tangible personal
property.
SECTION 38. IC 6-2.5-5-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 4. Transactions
involving tangible personal property or service are exempt from the
state gross retail tax if the person acquiring the property or service
acquires it for his the person's direct use in the direct production of the
machinery, tools, or equipment described in section 2 or 3 of this
chapter.
SECTION 39. IC 6-2.5-5-5.1, AS AMENDED BY
P.L.192-2002(ss), SECTION 51, IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 5.1. (a) As used
in this section, "tangible personal property" includes electrical energy,
natural or artificial gas, water, steam, and steam heat.
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 10.
Transactions involving tangible personal property or services are
exempt from the state gross retail tax, if:
(1) the property or service is classified as production plant or
power production expenses, according to the uniform system of
accounts which was adopted and prescribed for the utility by the
Indiana utility regulatory commission; and
(2) the person acquiring the property or service is:
(A) a public utility that furnishes or sells electrical energy,
steam, or steam heat in a retail transaction described in
IC 6-2.5-4-5; or
(B) a power subsidiary (as defined in IC 6-2.5-4-5(a)) that
furnishes or sells electrical energy, steam, or steam heat to a
public utility described in clause (A).
SECTION 43. IC 6-2.5-5-11 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 11.
Transactions involving tangible personal property or services are
exempt from the state gross retail tax, if:
(1) the property or service is classified as production plant,
storage plant, production expenses, or underground storage
expenses according to the uniform system of accounts, which was
adopted and prescribed for the utility by the Indiana utility
regulatory commission; and
(2) the person acquiring the property or service is a public utility
that furnishes or sells natural or artificial gas in a retail
transaction described in IC 6-2.5-4-5.
SECTION 44. IC 6-2.5-5-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 12. (a)
Transactions involving tangible personal property or service are
exempt from the state gross retail tax, if:
(1) the property or service is classified as source of supply plant
and expenses, the pumping plant and expenses, or water treatment
plant and expenses according to the uniform system of accounts
which was adopted and prescribed for the utility by the Indiana
utility regulatory commission; and
(2) the person acquiring the property or service is a public utility
that furnishes or sells water in a retail transaction described in
IC 6-2.5-4-5.
(b) Transactions involving tangible personal property or service are
exempt from the state gross retail tax if:
(1) the property or service is classified as collection plant and
expenses, treatment and disposal plant and expenses, or system
pumping plant and expenses; and
(2) the person acquiring the property or service is a public utility
that collects, treats, or processes wastewater.
SECTION 45. IC 6-2.5-5-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 13.
Transactions involving tangible personal property are exempt from the
state gross retail tax, if:
(1) the property is:
(A) classified as central office equipment, station equipment
or apparatus, station connection, wiring, or large private
branch exchanges according to the uniform system of accounts
which was adopted and prescribed for the utility by the Indiana
utility regulatory commission; or
(B) mobile telecommunications switching office equipment,
radio or microwave transmitting or receiving equipment,
including, without limitation, towers, antennae, and property
that perform a function similar to the function performed by
any of the property described in clause (A); and
(2) the person acquiring the property furnishes or sells intrastate
telecommunication service in a retail transaction described in
IC 6-2.5-4-6.
SECTION 46. IC 6-2.5-5-14 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 14. (a)
Transactions involving tangible personal property or service are
exempt from the state gross retail tax if the person acquiring the
property or service is:
(1) a municipally owned utility;
(2) a utility owned or operated by a special district; or
(3) a public utility owned or operated by a not-for-profit
corporation incorporated under:
(A) the Indiana General Not for Profit Corporation Act (Acts
1935, Chapter 157, as amended), notwithstanding its repeal;
(B) the Indiana Not-for-Profit Corporation Act of 1971
(IC 23-7-1.1), notwithstanding its repeal; or
(C) IC 23-17.
(b) The term "public utility owned or operated by a not-for-profit
corporation" does not include those public utilities incorporated under
Acts 1935, chapter 157, as amended, and which are owned or operated
by local district rural electric membership corporations.
SECTION 47. IC 6-2.5-5-19.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE DECEMBER 1, 2005]: Sec. 19.7. Sales of any of the
following health or mental health services are exempt from the
state gross retail tax:
(1) Preventive care.
(2) Inpatient and outpatient hospital and physician care.
(3) Diagnostic laboratory care.
(4) Diagnostic and therapeutic radiological services.
(5) Emergency care.
(6) Mental health services.
(7) Services for alcohol and drug abuse.
(8) Dental services.
(9) Vision services.
(10) Long term rehabilitation treatment.
(11) Home health services.
SECTION 48. IC 6-2.5-5-21, AS AMENDED BY P.L.257-2003,
SECTION 26, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 21. (a) For purposes of this section,
"private benefit or gain" does not include reasonable compensation
paid to an employee for work or services actually performed.
(b) Sales of food and food ingredients and food and food
ingredient services are exempt from the state gross retail tax if:
(1) the seller meets the filing requirements under subsection (d)
and is any of the following:
(A) A fraternity, a sorority, or a student cooperative housing
organization that is connected with and under the supervision
of a college, a university, or any other educational institution
if no part of its income is used for the private benefit or gain
of any member, trustee, shareholder, employee, or associate.
(B) Any:
(i) institution;
(ii) trust;
(iii) group;
(iv) united fund;
(v) affiliated agency of a united fund;
(vi) nonprofit corporation;
(vii) cemetery association; or
(viii) organization;
that is organized and operated exclusively for religious,
charitable, scientific, literary, educational, or civic purposes if
no part of its income is used for the private benefit or gain of
any member, trustee, shareholder, employee, or associate.
(C) A group, an organization, or a nonprofit corporation that
is organized and operated for fraternal or social purposes, or
as a business league or association, and not for the private
benefit or gain of any member, trustee, shareholder, employee,
or associate.
(D) A:
(i) hospital licensed by the state department of health;
(ii) shared hospital services organization exempt from
federal income taxation by Section 501(c)(3) or 501(e) of
the Internal Revenue Code;
(iii) labor union;
(iv) church;
(v) monastery;
(vi) convent;
(vii) school that is a part of the Indiana public school
system;
(viii) parochial school regularly maintained by a recognized
religious denomination; or
(ix) trust created for the purpose of paying pensions to
members of a particular profession or business who created
the trust for the purpose of paying pensions to each other;
if the taxpayer is not organized or operated for private profit or
gain;
(2) the purchaser is a person confined to his the purchaser's
home because of age, sickness, or infirmity;
(3) the seller delivers the food and food ingredients or food and
food ingredient services to the purchaser; and
(4) the delivery is prescribed as medically necessary by a
physician licensed to practice medicine in Indiana.
(c) Sales of food and food ingredients and food and food
ingredient services are exempt from the state gross retail tax if the
seller is an organization described in subsection (b)(1), and the
purchaser is a patient in a hospital operated by the seller.
(d) To obtain the exemption provided by this section, a taxpayer
must file an application for exemption with the department:
(1) before January 1, 2003, under IC 6-2.1-3-19 (repealed); or
(2) not later than one hundred twenty (120) days after the
taxpayer's formation.
In addition, the taxpayer must file an annual report with the department
on or before the fifteenth day of the fifth month following the close of
each taxable year. If a taxpayer fails to file the report, the department
shall notify the taxpayer of the failure. If within sixty (60) days after
receiving such notice the taxpayer does not provide the report, the
taxpayer's exemption shall be canceled. However, the department may
reinstate the taxpayer's exemption if the taxpayer shows by petition that
the failure was due to excusable neglect.
SECTION 49. IC 6-2.5-5-21.5, AS AMENDED BY P.L.257-2003,
SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 21.5. Sales of food and food ingredients
and food and food ingredient services prescribed as medically
necessary by a physician licensed to practice medicine in Indiana are
exempt from the state gross retail tax if:
(1) a registered pharmacist makes the sale upon the prescription
of a practitioner who is licensed to practice medicine in Indiana;
or
(2) the licensed practitioner makes the sale of the food and food
ingredients or food and food ingredient services described in
this section.
SECTION 50. IC 6-2.5-5-22, AS AMENDED BY P.L.257-2003,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 22. (a) Sales of school meals are exempt
from the state gross retail tax if:
(1) the seller is a school containing students in any grade, one (1)
through twelve (12);
(2) the purchaser is one (1) of those students or a school
employee; and
(3) the school furnishes the food and food ingredients on its
premises.
(b) Sales of food and food ingredients and food and food
ingredient services by not-for-profit colleges or universities are
exempt from the state gross retail tax, if the purchaser is a student at
the college or university.
(c) Sales of meals after December 31, 1976, by a fraternity, sorority,
or student cooperative housing organization described in section
21(b)(1)(A) of this chapter are exempt from the state gross retail tax,
if the purchaser:
(1) is a member of the fraternity, sorority, or student cooperative
housing organization; and
(2) is enrolled in the college, university, or educational institution
with which the fraternity, sorority, or student cooperative housing
organization is connected and by which it is supervised.
SECTION 51. IC 6-2.5-5-23 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 23.
Transactions involving tangible personal property or services are
exempt from the state gross retail tax, if the person:
(1) acquiring the property acquires it for incorporation into a
school building which is being constructed by a lessor corporation
in accordance with a lease executed under IC 21-5-11 or
IC 21-5-12; or
(2) acquiring the service acquires it for direct use in the
incorporation of tangible personal property into a school
building which is being constructed by a lessor corporation in
accordance with a lease executed under IC 21-5-11 or
IC 21-5-12.
SECTION 52. IC 6-2.5-5-26, AS AMENDED BY P.L.192-2002(ss),
SECTION 57, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 26. (a) Sales of tangible personal property
or services are exempt from the state gross retail tax, if:
(1) the seller is an organization that is described in section
21(b)(1) of this chapter;
(2) the organization makes the sale to make money to carry on a
not-for-profit purpose; and
(3) the organization does not make those sales during more than
thirty (30) days in a calendar year.
(b) Sales of tangible personal property or services are exempt from
the state gross retail tax, if:
(1) the seller is an organization described in section 21(b)(1) of
this chapter;
(2) the seller is not operated predominantly for social purposes;
(3) the property or service sold is designed and intended
primarily either for the organization's educational, cultural, or
religious purposes, or for improvement of the work skills or
professional qualifications of the organization's members; and
(4) the property or service sold is not designed or intended
primarily for use in carrying on a private or proprietary business.
(c) The exemption provided by this section does not apply to an
accredited college or university's sales of books, stationery,
haberdashery, supplies, or other property or noneducational services.
SECTION 53. IC 6-2.5-5-30 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 30. (a) Sales of
tangible personal property or services are exempt from the state gross
retail tax if:
(1) the:
(A) property constitutes, is incorporated into, or is consumed
in the operation of, a device, facility, or structure
predominantly used and acquired for the purpose of complying
with any state, local, or federal environmental quality statutes,
regulations, or standards; or
(B) service is directly consumed in the incorporation into
or consumption in the operation of a device, facility, or
structure predominantly used and acquired for the
purpose of complying with state, local, or federal
environmental quality laws, regulations, or standards; and
(2) the person acquiring the property or service is engaged in the
business of manufacturing, processing, refining, mining, or
agriculture.
(b) The portion of the sales price of tangible personal property or
service which is exempt from state gross retail and use taxes under this
section equals the product of:
(A) (1) the total sales price; multiplied by
(B) (2) one hundred percent (100%).
SECTION 54. IC 6-2.5-5-33 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 33. Sales of
tangible personal property or services purchased with food stamps are
exempt from the state gross retail tax.
SECTION 55. IC 6-2.5-5-35, AS AMENDED BY P.L.257-2003,
SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
DECEMBER 1, 2005]: Sec. 35. Transactions involving tangible
personal property or services are exempt from the state gross retail tax
if:
(1) the:
(A) person acquires the property or services to facilitate the
service or consumption of food and food ingredients that is not
exempted from the state gross retail tax under section 20 of
this chapter; and
(B) property or service is:
(i) used, consumed, or removed in the service or
consumption of the food and food ingredients; and
(ii) made unusable for further service or consumption of
food and food ingredients after the property's first use for
service or consumption of food and food ingredients; or
(2) the:
(A) person acquiring the property or service is engaged in the
business of renting or furnishing rooms, lodgings, or
accommodations in a commercial hotel, motel, inn, tourist
camp, or tourist cabin; and
(B) the property or service acquired is:
(i) used up, removed, or otherwise consumed during the
occupation of the rooms, lodgings, or accommodations by a
guest; or
claimant who is not required to file federal income tax returns
may deduct an uncollectible receivable on a return filed for the
period in which the receivable is written off as uncollectible in the
claimant's books and records and would be eligible for a bad debt
deduction for federal income tax purposes if the claimant were
required to file a federal income tax return.
(4) If the amount of uncollectible receivables claimed as a
deduction by a retail merchant for a particular reporting period
exceeds the amount of the retail merchant's taxable sales for that
reporting period, the retail merchant may file a refund claim
under IC 6-8.1-9. However, the deadline for refund claim shall be
measured from the due date of the return for the reporting period
on which the deduction for the uncollectible receivables could
first be claimed.
(5) If a retail merchant's filing responsibilities have been assumed
by a certified service provider (as defined in IC 6-2.5-11-2), the
certified service provider may claim, on behalf of the retail
merchant, any deduction or refund for uncollectible receivables
provided by this section. The certified service provider must
credit or refund the full amount of any deduction or refund
received to the retail merchant.
(6) For purposes of reporting a payment received on a previously
claimed uncollectible receivable, any payments made on a debt or
account shall be applied first proportionally to the taxable price
of the property or service and the state gross retail tax or use tax
thereon, and secondly to interest, service charges, and any other
charges.
(7) A retail merchant claiming a deduction for an uncollectible
receivable may allocate that receivable among the states that are
members of the streamlined sales and use tax agreement if the
books and records of the retail merchant support that allocation.
SECTION 57. IC 6-2.5-8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE DECEMBER 1, 2005]: Sec. 3. (a) A
manufacturer or wholesaler may register with the department as a
purchaser of property or services in exempt transactions. A
manufacturer or wholesaler wishing to register must apply in the same
manner and pay the same fee as a retail merchant under section 1 of
this chapter.
(b) Upon receiving the application and fee, the department may
issue a manufacturer's or wholesaler's certificate for each place of
business listed on the application. Each certificate shall contain a serial
number and the location of the place of business for which it is issued.
local government (as defined in IC 5-10.3-11-3) in the same
proportion as funds may be distributed to the unit under IC 5-10.3
and used only for a purpose for which money distributed from the
pension relief fund may be used under IC 5-10.3-11-3.
SECTION 65. IC 14-23-3-3, AS AMENDED BY P.L.272-2003,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 3. Annually (a) Before January 1, 2006, there
shall annually be levied and collected as other state ad valorem
property taxes are levied and collected the amount of sixteen
hundredths of one cent ($0.0016) upon each one hundred dollars
($100) worth of taxable property in Indiana. An ad valorem property
tax may not be levied under this section for property taxes first due
and payable after December 31, 2005.
(b) The ad valorem property tax imposed under this section
shall be collected as other ad valorem property taxes are collected.
The county in which the property tax is levied shall transfer the
amounts collected from the levy to the treasurer of state for deposit
in the fund.
(c) The money collected resulting from one hundred fifty-seven
thousandths of one cent ($0.00157) of the rate shall be paid into the
fund. The money collected resulting from three thousandths of one cent
($0.00003) is appropriated to the budget agency for purposes of
department of local government finance data base management.
(d) This section expires June 30, 2006.
SECTION 66. IC 15-1.5-7-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 3. (a) The fund consists
of the following:
(1) Revenue from the property tax imposed under IC 15-1.5-8
before January 1, 2006.
(2) Appropriations made by the general assembly.
(3) Interest accruing from investment of money in the fund.
(4) Certain proceeds from the operation of the fair.
(b) The fund is divided into the following accounts:
(1) Agricultural fair revolving contingency account.
(2) Other accounts established by the commission.
(c) The money credited to the agricultural fair revolving
contingency account may only be used to pay start-up expenses for the
fair each year. Money used to pay the start-up expenses from the
account shall be replaced using proceeds from the operation of the fair
before the proceeds may be used for any other purpose.
SECTION 67. IC 15-1.5-8-1, AS AMENDED BY P.L.272-2003,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 1. A tax is imposed upon all the taxable property
in the state at a rate of eight hundredths of a cent ($0.0008) for each
one hundred dollars ($100) of assessed valuation for property taxes
first due and payable before January 1, 2006. The state may not
impose an ad valorem property tax under this section for property
taxes first due and payable after December 31, 2005.
SECTION 68. IC 15-1.5-8-5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2004]: Sec. 5. This chapter expires December 31, 2005.
SECTION 69. IC 36-1.3 IS ADDED TO THE INDIANA CODE AS
A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2004]:
ARTICLE 1.3. BUDGETS
Chapter 1. Application
Sec. 1. This article applies to budgets for all political
subdivisions for all budget years beginning after December 31,
2004.
Sec. 2. IC 36-1.3-6 applies to bonds (as defined in IC 36-1.3-6-2)
and leases (as defined in IC 36-1.3-6-6) after December 31, 2005.
Chapter 2. Expenditure Limitation
Sec. 1. This chapter does not apply to the part of an
appropriation that is funded from any of the following sources of
revenue:
(1) Distributions from the motor vehicle highway account
established by IC 8-14-1.
(2) Distributions from the highway, road and street fund
established by IC 8-14-2-2.1.
(3) Distributions from the pension relief fund established by
IC 5-10.3-11.
(4) Revenues received from the government of the United
States.
(5) Revenues contributed by a governmental entity described
in IC 36-1-7-1 to the political subdivision to administer an
interlocal agreement under IC 36-1-7 or another statute
providing for a joint enterprise, if the revenues were either
counted toward the expenditure limit of the political
subdivision contributing the revenues or qualified as
exempted source revenues for the political subdivision
contributing the revenues.
(6) The proceeds of:
(A) contracts with; and
(B) grants, gifts, donations, and bequests made to;
the political subdivision for a purpose specified by the
contractor or donor.
(7) User charges derived by the political subdivision from the
sale of a product or service:
(A) pledged or legally available to repay any security; or
(B) for which the quantity of the product or level of service
provided to a user is at the discretion of the user.
(8) Revenues derived from the issuance of any security.
However, this subdivision does not exempt the money pledged
to repay the principal of and interest on the security or to
establish a reserve for repayment.
(9) Revenues received from the sale of fixed assets or gains on
fixed asset transfers.
(10) Revenues raised to meet a fiscal emergency.
(11) Unexpended appropriated balances remaining in a
cumulative fund after the year in which the money was
appropriated.
(12) Special assessments, other than a special assessment
under IC 36-8.5, authorized by state law.
(13) A license fee that is not greater than the amount
reasonably related to the administrative cost of exercising a
regulatory power.
(14) A service charge or user fee that is not greater than the
amount reasonably related to reasonable and just rates and
charges for services.
(15) Property taxes authorized under IC 6-1.1-2 that are
imposed to make payments for debt service, including bond
and lease payments.
Sec. 2. As used in this chapter, "adjustment factor" refers to the
adjustment factor determined under section 18 of this chapter.
Sec. 3. As used in this chapter, "appropriations" refers to the
total capital or operating appropriations of a political subdivision.
The term does not include emergency expenditures or expenditures
from an exempted source.
Sec. 4. As used in this chapter, "base year" means:
(1) a political subdivision's first budget year beginning after
December 31, 2004, if the term is used to compute the
expenditure limit for a political subdivision that was initially
established before January 1, 2005; or
(2) the first budget year in which a political subdivision
operated for an entire budget year, if subdivision (1) does not
apply.
Sec. 5. As used in this chapter, "estimated population" means
the total number of individuals who are residents of a political
subdivision, as determined under section 16 of this chapter.
Sec. 6. As used in this chapter, "expenditure limit" means the
maximum amount of appropriations that a political subdivision
may appropriate for a budget year, as determined or adjusted
under sections 14 and 15 of this chapter. The term does not refer
to actual appropriations or actual expenditures.
Sec. 7. As used in this chapter, "exempted source" means a
source of revenue exempted from the application of this chapter
under section 1 of this chapter.
Sec. 8. As used in this chapter, "fiscal emergency" means
circumstances requiring an expenditure exceeding the expenditure
limit, as determined under section 29 of this chapter.
Sec. 9. As used in this chapter, "income growth index" means
the change in Indiana nonfarm personal income determined under
section 17 of this chapter.
Sec. 10. As used in this section, "Indiana nonfarm personal
income" means the estimate of total nonfarm personal income for
Indiana in a calendar year as computed by the Bureau of Economic
Analysis of the United States Department of Commerce using any
actual data for the calendar year and any estimated data
determined appropriate by the Bureau of Economic Analysis of the
United States Department of Commerce.
Sec. 11. As used in this chapter, "per capita appropriations
amount" means the amount determined under section 19 of this
chapter.
Sec. 12. As used in this chapter, "revenues" means money
received by a political subdivision from interest, a tax, a penalty,
a grant, a state distribution, or any other receipt.
Sec. 13. As used in this chapter, "security" means a bond, note,
warrant, or other evidence of indebtedness, whether the bond,
note, warrant, or other evidence of indebtedness constitutes a debt
of the political subdivision or allocation district within the meaning
of Article 13, Section 1 of the Constitution of the State of Indiana.
Sec. 14. A political subdivision may not appropriate, allot, or
expend in a budget year more than an amount equal to the
expenditure limit for the political subdivision or as determined
under the latest computation made by the budget agency under
section 15 of this chapter before the beginning of the budget year.
Sec. 15. (a) Not later than six (6) months before the beginning of
a political subdivision's budget year, the budget agency shall make
a preliminary estimate of each of the computations required under
sections 16 through 20 of this chapter for the political subdivision.
(b) In order to:
(1) correct a clerical or computational error;
(2) incorporate data that becomes available after the
preliminary estimate is computed under subsection (a); or
(3) incorporate the results of a computation under sections 21
through 30 of this chapter;
the budget agency may adjust a computation under sections 16
through 20 of this chapter for a budget year at any time before the
first day of the budget year.
(c) Not later than five (5) business days after the budget agency
computes an estimate under subsection (a) or (b), the budget
agency shall distribute a copy of the estimate for a political
subdivision in a county to the political subdivision and the county
auditor.
(d) If the total appropriations of a political subdivision will
exceed the latest expenditure limit computed under subsection (a)
or (b), the political subdivision or the budget agency shall adjust
the appropriations to comply with section 14 of this chapter.
Sec. 16. (a) The budget agency shall:
(1) determine an estimated population for a political
subdivision's base year; and
(2) annually determine an estimated population for each
political subdivision.
(b) The estimated population shall be estimated for the first day
of the month preceding the base year or budget year by six (6)
months using the latest available actual or estimated population
data from the United States Department of Commerce Bureau of
the Census.
Sec. 17. (a) The budget agency shall annually compute an
income growth index for each political subdivision's ensuing
budget year.
(b) A political subdivision's income growth index for an ensuing
budget year is the result determined under STEP FOUR of the
following formula:
STEP ONE: For each of the six (6) calendar years
immediately preceding the year in which a budget is adopted
under this article for the ensuing calendar year, divide the
Indiana nonfarm personal income for the calendar year by
the Indiana nonfarm personal income for the calendar year
immediately preceding that calendar year, rounding to the
nearest one-thousandth (0.001).
STEP TWO: Determine the sum of the STEP ONE results.
STEP THREE: Divide the STEP TWO result by six (6),
rounding to the nearest one-thousandth (0.001).
STEP FOUR: Determine the lesser of the following:
(A) The STEP THREE quotient.
(B) One and six-hundredths (1.06).
Sec. 18. (a) The budget agency shall annually compute an
adjustment factor for each political subdivision's ensuing budget
year.
(b) The adjustment factor for a budget year is equal to the result
in STEP TWO of the following formula:
STEP ONE: Determine the estimated population for the
ensuing budget year.
STEP TWO: Multiply the STEP ONE amount by the income
growth index for the ensuing budget year.
Sec. 19. (a) The budget agency shall compute the per capita
appropriations amount for each political subdivision beginning
with the base year. The base year per capita appropriations
amount of a political subdivision is equal to the quotient of:
(1) the total amount of appropriations actually expended by
a political subdivision in the political subdivision's base year;
divided by
(2) the estimated population of the political subdivision for the
base year.
(b) The per capita appropriations amount for each year after
the base year is equal to the quotient of:
(1) the expenditure limit amount for the budget year; divided
by
(2) the estimated population for the budget year.
Sec. 20. (a) The budget agency shall compute an expenditure
limit for each political subdivision for each budget year beginning
after the base year.
(b) The expenditure limit for a political subdivision in an
ensuing budget year after the base year is the result determined
under STEP TWO of the following formula:
STEP ONE: Determine the per capita appropriations of the
political subdivision for the immediately preceding base year
or budget year, whichever occurs later.
STEP TWO: Multiply the STEP ONE result by the
adjustment factor for the political subdivision's ensuing
budget year.
the same total amount.
Sec. 28. (a) Not later than October 1 immediately preceding a
budget year, the fiscal body of a political subdivision may petition
the budget agency to increase the political subdivision's
expenditure limit for one (1) or more subsequent budget years. The
petition must be authorized by at least two-thirds (2/3) of the
members elected or appointed to the fiscal body.
(b) Upon:
(1) receiving a petition under subsection (a);
(2) giving at least ten (10) days notice to the political
subdivision and the county auditor for the county containing
the political subdivision; and
(3) publishing at least one (1) notice under IC 5-3-1 in the
county;
the budget agency shall conduct a hearing concerning the petition.
(c) After the hearing under subsection (b), the budget agency
may approve an increase in the expenditure limit of a political
subdivision if the budget agency determines that:
(1) the increase is necessary to provide an essential new
service not previously provided within the area to be served
by any governmental entity or municipal utility; or
(2) the per capita appropriations amount for the political
subdivision is below the median of all similar political
subdivisions, and the increase is necessary to provide essential
services comparable to the essential services provided in
similar political subdivisions.
(d) Funding approved under this section may be included in the
appropriations base for computing the expenditure limit for
appropriations in subsequent years only to the extent authorized
by the budget agency.
Sec. 29. (a) The expenditure limits as provided in this chapter
may be exceeded if the budget agency approves the declaration of
a fiscal emergency.
(b) A political subdivision may petition the budget agency to
approve a declaration of a fiscal emergency for the political
subdivision. The petition must describe the fiscal emergency and
indicate the source of revenues that will be used to meet the fiscal
emergency.
(c) Upon:
(1) receiving a petition under subsection (b) or on the budget
agency's own motion;
(2) giving at least ten (10) days notice to the political
subdivision and the county auditor for the county containing
the political subdivision; and
(3) publishing at least one (1) notice under IC 5-3-1 in the
county;
the budget agency shall conduct a hearing concerning the petition.
(d) After the hearing under subsection (c), the budget agency
shall approve a declaration of a fiscal emergency only if the budget
agency determines that:
(1) an extraordinary occurrence requires immediate
expenditures; or
(2) a shortfall of revenues will result in default on the
repayment of principal or interest on an indebtedness.
(e) Payment of expenses directly related to an elimination of an
ad valorem property tax system, including the costs of refinancing
bonds or leases and settling disputes related to bonds or leases,
shall be treated as a fiscal emergency. The political subdivision
shall reimburse the political subdivision's account in the state
emergency reserve fund for the distribution under the schedule
determined by the budget agency. Reimbursement of the state
emergency reserve fund may be treated as a fiscal emergency.
(f) Payment of debt service obligations under IC 6-1.1-2-9 shall
be treated as a fiscal emergency.
Sec. 30. Funding for fiscal emergencies may not be included in
the appropriations base for computing the expenditure limit for
appropriations in subsequent years. Fiscal emergency
appropriations shall remain separate from appropriations subject
to limits imposed by this chapter and shall be assigned expiration
dates.
Sec. 31. If upon audit or examination of the results of an audit
of a political subdivision, the state board of accounts determines
that:
(1) funds have been improperly accounted or budgeted for in
order to avoid the limitations imposed by this chapter;
(2) funds have been improperly exempted from the limitations
as provided in this chapter;
(3) general governmental functions have been improperly
financed by user or service charges; or
(4) the limitations imposed by this chapter have been
exceeded;
the state board of accounts shall notify the budget agency and the
political subdivision through the appropriate officer or officers of
the necessary corrective action. If after a reasonable time the
political subdivision has not corrected the deficiency, the state
board of accounts shall refer the matter to the attorney general.
Chapter 3. Adoption of Budget
Sec. 1. This chapter applies to budget years after December 31,
2004.
Sec. 2. The definitions in IC 36-1.3-2 apply throughout this
chapter.
Sec. 3. Not later than July 1 of each year, the budget agency
shall send a certified statement to each county auditor:
(1) estimating the expenditure limit for each political
subdivision in the county; and
(2) computing the total amount of money that is available for
distribution under IC 6-1.1-21-13 and IC 6-3.5 to the political
subdivisions in the county for the last six (6) months of the
current year and the next budget year.
Sec. 4. (a) Before August 2 of each year, a county auditor shall
send a certified statement, under the seal of the board of county
commissioners, to the fiscal officer of each political subdivision of
the county and the budget agency. The statement must contain the
expenditure limit for the political subdivision and an estimate of
the revenues to be distributed to the political subdivision during:
(1) the last six (6) months of the current budget year; and
(2) the next budget year.
(b) The fiscal officer of each political subdivision shall present
the county auditor's statement to the proper officers of the political
subdivision.
Sec. 5. When formulating an annual budget estimate, the proper
officers of a political subdivision shall prepare an estimate of the
amount of revenue that the political subdivision will receive from
the state for and during the year for which the budget is being
formulated. These estimated revenues shall be shown in the budget
estimate and shall be taken into consideration in calculating any
tax that will be imposed in the ensuing budget year.
Sec. 6. (a) The proper officers of a political subdivision shall
formulate the political subdivision's estimated budget on the form
prescribed by the state board of accounts.
(b) The political subdivision shall give notice to taxpayers of the
estimated budget. In the notice, the political subdivision shall also
state the time and place at which a public hearing will be held on
these items. The notice shall be published two (2) times in
accordance with IC 5-3-1, with the first publication at least ten (10)
days before the date fixed for the public hearing.
(c) The county auditor of each county shall estimate the amount
necessary to meet the cost of:
(1) township assistance in each township of the county; and
(2) meeting debt service obligations payable under
IC 6-1.1-2-9;
for the ensuing budget year and publish with the county budget the
estimated amount for each political subdivision.
(d) The board of directors of a solid waste management district
established under IC 13-21-3-1 may conduct the public hearing
required under subsection (b):
(1) in any county of the solid waste management district; and
(2) in accordance with the annual notice of meetings published
under IC 13-21-5-2.
(e) Except as provided for the adoption of a supplemental
budget, the officers of a political subdivision may not fix a budget
that exceeds the amount published by the political subdivision. The
part of a budget that exceeds the published amount is void.
Sec. 7. (a) The officers of political subdivisions shall meet each
year to fix the budget, tax rate, and tax levy of their respective
subdivisions for the ensuing budget year as follows:
(1) The fiscal body of a consolidated city and county, not later
than the last meeting of the fiscal body in September.
(2) The fiscal body of a second class city, not later than
September 30.
(3) The board of school trustees of a school corporation that
is located in a city having a population of more than one
hundred five thousand (105,000) but less than one hundred
twenty thousand (120,000), not later than:
(A) the time required in IC 6-1.1-17-5.6(b); or
(B) September 20 if a resolution adopted under
IC 6-1.1-17-5.6(d) is in effect.
(4) The proper officers of all other political subdivisions, not
later than September 20.
Except in a consolidated city and county and in a second class city,
the public hearing required by section 6 of this chapter must be
completed at least ten (10) days before the proper officers of the
political subdivision meet to fix the budget. In a consolidated city
and county and in a second class city, the public hearing by any
committee or by the entire fiscal body may be held at any time
after introduction of the budget.
(b) Each year at least two (2) days before the first meeting of the
county board of tax adjustment, a political subdivision shall file
with the county auditor two (2) copies of the budget adopted by the
political subdivision for the ensuing budget year. Each year the
county auditor shall present these items to the county board of tax
adjustment at the board's first meeting.
(c) In a consolidated city and county and in a second class city,
the clerk of the fiscal body shall, notwithstanding subsection (b),
file the adopted budget and tax ordinances with the county board
of tax adjustment within two (2) days after the ordinances are
signed by the executive, or within two (2) days after action is taken
by the fiscal body to override a veto of the ordinances, whichever
is later.
Sec. 8. (a) A county board of tax adjustment shall review the
budget of each political subdivision. The board shall revise or
reduce, but not increase, any budget in order to limit the budget to
the:
(1) expenditure limit under IC 36-1.3-2 or any other limitation
on expenditures set by statute; and
(2) amount of revenue to be available in the ensuing budget
year.
(b) The county board of tax adjustment shall make a revision or
reduction in a political subdivision's budget only with respect to
the total amount budgeted for each office or department within
each of the major budget classifications prescribed by the state
board of accounts.
(c) When the county board of tax adjustment makes a revision
or reduction in a budget, it shall file with the county auditor a
written order that indicates the action taken. If the county board
of tax adjustment reduces the budget, it shall also indicate the
reason for the reduction in the order. The chairperson of the
county board shall sign the order.
Sec. 9. If the boundaries of a political subdivision cross one (1)
or more county lines, the budget fixed by the political subdivision
shall be filed with the county auditor of each affected county in the
manner prescribed in section 7 of this chapter. However, the
county board of tax adjustment of the county that contains the
largest part of the general money receivable by the political
subdivision has jurisdiction over the budget to the same extent as
if the property taxable by the political subdivision were wholly
within the county. The secretary of the county board of tax
adjustment shall notify the county auditor of each affected county
of the action of the county board. Appeals from actions of the
county board of tax adjustment may be initiated in any affected
county.
Sec. 10. (a) If the county board of tax adjustment determines
that a fiscal emergency exists or another reason for adjusting the
expenditure limit of the political subdivision exists, the county
board shall file written recommendations in duplicate with the
county auditor. The county board shall include with the
recommendations information that the county board considers
relevant to the matter.
(b) The county auditor shall forward one (1) copy of the county
board's recommendations to the budget agency and shall retain the
other copy in the county auditor's office. The budget agency shall,
in the manner prescribed in section 18 of this chapter, review the
budgets of each political subdivision.
Sec. 11. (a) A county board of tax adjustment shall complete the
duties assigned to it under this chapter before October 2 of each
year, except that in a consolidated city and county and in a county
containing a second class city, the duties of the county board need
not be completed until November 1 of each year.
(b) If the county board of tax adjustment fails to complete the
duties assigned to it within the time prescribed in this section, the
county auditor shall carry out the duties of the county board.
(c) If the county auditor acts under subsection (b), the county
auditor shall send a certificate notice of actions taken by the county
auditor to each political subdivision of the county. The county
auditor shall send these notices within five (5) days after
publication of the notice required by section 14 of this chapter.
(d) If the county auditor acts under subsection (b), the action
shall be treated as if it were the action of the county board of tax
adjustment.
Sec. 12. A county auditor shall certify the budget of a political
subdivision in the county to the budget agency, if the budget, as
approved or modified by the county board of tax adjustment,
exceeds the:
(1) expenditure limit under IC 36-1.3-2 or any other limitation
on expenditures set by statute; or
(2) amount of revenue to be available in the ensuing budget
year.
Sec. 13. The budget of a political subdivision, as approved or
modified by the county board of tax adjustment, is final unless:
(1) action is taken by the county auditor in the manner
provided under section 11 of this chapter;
(2) the action of the county board is subject to review by the
budget agency under section 10 or 12 of this chapter; or
(3) an appeal to the budget agency is initiated with respect to
the budget.
Sec. 14. When the budgets are approved or modified by a county
board of tax adjustment, the county auditor shall within fifteen
(15) days prepare a notice of the proposed changes in tax rates to
be charged in the ensuing budget year in each taxing district. The
notice shall also inform the taxpayers of the manner in which the
taxpayers may initiate an appeal of the county board's action. The
county auditor shall post the notice at the county courthouse and
publish the notice in two (2) newspapers that represent different
political parties and that have a general circulation in the county.
Sec. 15. Ten (10) or more taxpayers may initiate an appeal of a
county board of tax adjustment's action on a political subdivision's
budget by filing a statement of their objections with the county
auditor. The statement must be filed within ten (10) days after the
publication of the notice required by section 14 of this chapter. The
statement shall specifically identify the provisions of the budget to
which the taxpayers object. The county auditor shall forward the
statement, with the budget, to the budget agency.
Sec. 16. A county auditor shall initiate an appeal to the budget
agency if a county board of tax adjustment reduces a township
assistance tax rate below the rate necessary to meet the estimated
cost of township assistance.
Sec. 17. A political subdivision may appeal to the budget agency
for an increase in the political subdivision's budget as fixed by the
county board of tax adjustment or the county auditor. To initiate
the appeal, the political subdivision must file a statement with the
board within ten (10) days after publication of the notice required
by section 14 of this chapter. The legislative body of the political
subdivision must authorize the filing of the statement by adopting
a resolution. The resolution must be attached to the statement of
objections, and the statement must be signed by the following
officers:
(1) In the case of counties, by the board of county
commissioners and by the president of the county council.
(2) In the case of all other political subdivisions, by the highest
executive officer and by the presiding officer of the legislative
body.
Sec. 18. (a) Subject to the limitations and requirements
prescribed in this section, the budget agency may revise, reduce, or
increase a political subdivision's budget that the county tax
adjustment board reviews under section 10 or 12 of this chapter.
(b) Subject to the limitations and requirements prescribed in
this section, the budget agency may review, revise, reduce, or
increase the budget of a political subdivision whose budget is the
subject of an appeal initiated under this chapter.
(c) Before the budget agency reviews, revises, reduces, or
increases a political subdivision's budget under this section, the
county board must hold a public hearing on the budget. The county
board shall hold the hearing in the county in which the political
subdivision is located. The county board may consider the budgets
of several political subdivisions at the same public hearing. At least
five (5) days before the date fixed for a public hearing, the county
board shall give notice of the time and place of the hearing and of
the budgets to be considered at the hearing. The board shall
publish the notice in two (2) newspapers of general circulation
published in the county. However, if only one (1) newspaper of
general circulation is published in the county, the board shall
publish the notice in that newspaper.
(d) The budget agency may not increase a political subdivision's
budget to an amount that exceeds the amount originally fixed by
the political subdivision. The budget agency shall give the political
subdivision written notification specifying any revision, reduction,
or increase that the budget agency proposes. The political
subdivision has one (1) week after the date the political subdivision
receives the notice to provide a written response to the budget
agency's Indianapolis office specifying how to make the required
reductions in the amount budgeted for each office or department.
The budget agency shall make reductions as specified in the
political subdivision's response if the response is provided as
required by this subsection and sufficiently specifies all necessary
reductions. The budget agency may make a revision, a reduction,
or an increase in a political subdivision's budget only in the total
amounts budgeted for each office or department within each of the
major budget classifications prescribed by the state board of
accounts.
(e) The budget agency may not approve an appropriation for
lease payments by a city, town, county, or library if the lease
payments are payable to a building corporation for use by the
building corporation for debt service on bonds and if:
(1) no bonds of the building corporation are outstanding; or
(2) the building corporation has enough legally available
funds on hand to redeem all outstanding bonds payable from
the particular lease rental levy requested.
(f) The action of the budget agency on a budget is final. The
budget agency shall certify its action to:
(1) the county auditor; and
(2) the political subdivision.
(g) The budget agency shall complete the duties assigned to it
under this section not later than February 15 of each year.
Sec. 19. (a) A political subdivision that in any year adopts a
proposal to establish a cumulative fund or sinking fund under any
of the following provisions must submit the proposal to the budget
agency before August 2 of that year:
IC 3-11-6
IC 8-10-5
IC 8-16-3
IC 8-16-3.1
IC 8-22-3
IC 14-27-6
IC 14-33-21
IC 16-22-4
IC 16-22-8
IC 36-8-14
IC 36-9-4
IC 36-9-14
IC 36-9-14.5
IC 36-9-15
IC 36-9-15.5
IC 36-9-16
IC 36-9-17
IC 36-9-17.5
IC 36-9-26
IC 36-9-27
IC 36-10-3
IC 36-10-4
IC 36-10-7.5.
(b) If a proposal described in subsection (a) is not submitted to
the budget agency before August 2 of a year, the political
subdivision may not expend money from the cumulative fund or
sinking fund in the ensuing year.
Sec. 20. The budget agency may at any time increase the budget
of a political subdivision for the following reasons:
(1) To pay the principal or interest on a funding, refunding, or
judgment funding obligation of a political subdivision.
(2) To pay the interest or principal on an outstanding
obligation of the political subdivision.
(3) To pay a judgment rendered against the political
subdivision.
Sec. 21. (a) This section applies to a political subdivision that is
not a school corporation, county, city, town, or township.
(b) If:
(1) the boundaries of the political subdivision are entirely
contained within a city or town; or
(2) the boundaries of the political subdivision are not entirely
contained within a city or town but the political subdivision
was originally established by the city or town;
the governing body shall submit its proposed budget to the city or
town fiscal body. The proposed budget and levy shall be submitted
at least fourteen (14) days before the city or town fiscal body is
required to hold budget approval hearings under this chapter.
(c) If subsection (b) does not apply, the governing body of the
political subdivision shall submit its proposed budget to the county
fiscal body in the county in which the political subdivision has the
largest share of its total area. The proposed budget shall be
submitted at least fourteen (14) days before the county fiscal body
is required to hold budget approval hearings under this chapter.
(d) The fiscal body of the city, town, or county (whichever
applies) shall review each budget and adopt a final budget for the
political subdivision. The fiscal body may reduce or modify but not
increase the proposed budget. However, the fiscal body may not
reduce the proposed budget to an amount that is less than the
amount necessary to meet reasonable operating costs of the
political subdivisions and to pay the expenditures described in
section 20 of this chapter.
Sec. 22. (a) Except as provided in subsections (b) and (c), a
political subdivision may not expend funds that the political
subdivision receives from the state and that the political
subdivision is required to include in its budget estimate unless the
funds are:
(1) included in a budget estimate by the political subdivision;
and
(2) appropriated by the proper officers of the political
subdivision in the amounts and for the specific purposes for
which they may be used.
(b) The county council shall appropriate funds for the operation
of the county highway department for the entire ensuing budget
year for which annual appropriations are being made. The
appropriation shall be for an amount that is not less than the
greater of:
(1) seventy-five percent (75%) of the total estimated money to
be in the highway fund in the ensuing budget year; or
(2) ninety-nine percent (99%) of the total estimated money to
be in the highway fund in the ensuing budget year if the board
of county commissioners files with the county council a four
(4) year plan for the construction and improvement of county
highways and a one (1) year plan for the maintenance and
repair of county highways.
(c) In the event of a casualty, an accident, or an extraordinary
emergency, the proper officers of a political subdivision may use
state funds to make an additional appropriation under
IC 36-1.3-4-1.
Chapter 4. Supplemental Budget; Miscellaneous Provisions
Sec. 1. If the proper officers of a political subdivision desire to
appropriate more money for a particular year than the amount
prescribed in the budget for that year as finally determined under
this article, the officers shall give notice of the proposed additional
appropriation. The notice must state the date, time, and place at
which a public hearing will be held on the proposal. The notice
shall be given once in accordance with IC 5-3-1-2(b).
Sec. 2. The political subdivision must report the additional
appropriation to the county auditor.
Sec. 3. A political subdivision other than a city, town, county,
township, or school corporation must report the additional
appropriation to the political subdivision to which the original
budget must be reported under IC 36-3.1-3-21. The supplemental
appropriation is subject to approval in the same manner as
required under IC 36-3.1-3-21.
Sec. 4. After a public hearing, the proper officers of a political
subdivision shall file a certified copy of the final proposal for an
additional appropriation and other relevant information to the
budget agency.
Sec. 5. (a) When the budget agency receives a certified copy of
a final proposal for an additional appropriation under section 4 of
this chapter, the budget agency shall determine whether:
(1) sufficient funds are available or will be available for the
proposal; and
(2) the appropriation will not require the political subdivision
to exceed its expenditure limitation or the fiscal emergency
amount approved under IC 36-1.3-2.
The determination shall be made in writing and sent to the political
subdivision within fifteen (15) days after the budget agency
receives the proposal.
(b) In making the determination under subsection (a), the board
shall limit the amount of the additional appropriation to revenues
available or to be made available that have not been previously
appropriated.
(c) If the budget agency disapproves an additional
appropriation under subsection (a), the budget agency shall specify
the reason for its disapproval on the determination sent to the
political subdivision.
(d) A political subdivision may request a reconsideration of a
determination of the budget agency under this section by filing a
written request for reconsideration. A request for reconsideration
must:
(1) be filed with the budget agency within fifteen (15) days of
the receipt of the determination by the political subdivision;
and
(2) state with reasonable specificity the reason for the request.
The budget agency must act on a request for reconsideration
within fifteen (15) days of receiving the request.
Sec. 6. (a) The proper officers of a political subdivision may
transfer money from one (1) major budget classification to another
within a department or office if:
(1) the proper officers determine that the transfer is
necessary;
(2) the transfer does not require the expenditure of more
money than the total amount set out in the budget as finally
determined under this article;
(3) the transfer is made at a regular public meeting and by
proper ordinance or resolution; and
(4) the transfer is certified to the county auditor.
(b) A transfer may be made under this section without notice
and without the approval of the budget agency.
Sec. 7. The appropriating body of a political subdivision may
appropriate funds received from an insurance company if:
(1) the funds are received as a result of damage to property of
the political subdivision; and
(2) the funds are appropriated for the purpose of repairing or
replacing the damaged property of the political subdivision.
However, this section applies only if the funds are expended to
repair or replace the property of the political subdivision within
the twelve (12) month period after the funds are received.
Sec. 8. Notwithstanding other provisions of this chapter, the
proper officer or officers of a political subdivision may:
(1) reappropriate money recovered from erroneous or
excessive disbursements if the error and recovery are made
within the current budget year; or
(2) refund, without appropriation, money erroneously
received.
Sec. 9. (a) If the proper officers of a political subdivision make
an appropriation for an item that exceeds the amount the officers
are permitted to appropriate under IC 36-1.3-2 or this chapter, the
officers commit malfeasance in office and are liable to the political
subdivision in an amount equal to the sum of one hundred
twenty-five percent (125%) of the excess appropriated and court
costs.
(b) Upon the relation of a taxpayer who owns property that is
located in the political subdivision, the appropriate prosecuting
attorney shall initiate an action in the name of the state to recover
the amount for which the proper officers of the political
subdivision are liable under this section.
Sec. 10. Except as provided in this chapter, the proper officers
of a political subdivision shall expend funds in a manner so that the
expenditures for a year do not exceed the budget for that year as
finally determined under this article.
Chapter 5. Bonding Limit
Sec. 1. As used in this chapter, "average total revenue" means
the result determined under sections 2 through 5 of this chapter.
Sec. 2. Except as provided in sections 4 and 5 of this chapter, the
average total revenue of a political subdivision is equal to the result
determined under STEP THREE of the following formula:
STEP ONE: Determine, for each of the three (3) budget years
immediately preceding the budget year in which the political
subdivision will incur a debt, the total receipts:
(A) received by a political subdivision, including
distributions from the state but excluding the proceeds
from loans, the sale of property, the sale of bonds, or the
issuance of other debt; and
(B) available to pay the expenditures of the political
subdivision, including repayment of principal and interest
on debt.
STEP TWO: Determine the sum of the amounts determined
under STEP ONE.
STEP THREE: Divide the amount determined under STEP
TWO by three (3).
Sec. 3. Funds dedicated to a particular purpose may be included
in the computation of average total revenue only to the extent that
the funds are or may be pledged to repay any part of the debt of a
political subdivision.
Sec. 4. The budget agency shall compute an average total
revenue for a political or municipal subdivision that may issue debt
less than three (3) budget years after the political subdivision is
established based on an estimate of the receipts that the political
subdivision will receive in the first full budget years after the debt
is incurred.
Sec. 5. A political subdivision may include in the computation of
average total revenue an amount that is:
(1) equal to an estimate of the amount the political subdivision
will receive from a tax or fee that was not collected in any of
the three (3) budget years preceding the budget year in which
the political subdivision incurs a debt but is pledged to repay
a debt; and
(2) approved by the budget agency.
Sec. 6. A political subdivision may not become indebted after
December 31, 2005, in any manner or for any purpose to an
amount that, in total, would result in payments of principal and
interest in any year over the term of all debt that exceeds twenty
percent (20%) of the average total revenues of the political
subdivision previous to the incurring of such indebtedness.
Sec. 7. Subject to sections 8 and 9 of this chapter, all bonds or
obligations of a political subdivision, that exceed the amount
determined under section 6 of this chapter, are void.
Sec. 8. In time of war, foreign invasion, or other great public
calamity, on petition of a majority of the property owners in
number and value within the limits of such corporation, the public
authorities may incur obligations necessary for the public
protection and defense to the amount as may be requested in a
petition.
Sec. 9. This chapter does not release or extinguish the debt of a
political subdivision that has debt on January 1, 2006, exceeding
the maximum debt limit allowed under section 6 of this chapter.
However, the political subdivision may not incur an additional debt
that will increase the total debt of the political subdivision until the
political subdivision is in compliance with section 6 of this chapter.
it is payable solely from funds other than property taxes.
Sec. 6. As used in this chapter, "lease" means a lease by a
political subdivision of any controlled project with lease rentals
payable from property taxes that are exempt from the expenditure
limitations under IC 36-3.1-2.
Sec. 7. As used in this chapter, "lease rentals" means the
payments required under a lease.
Sec. 8. As used in this chapter, "project" means any project or
purpose for which a political subdivision may issue bonds or enter
into leases, including a sale-lease back of an existing building.
Sec. 9. A political subdivision may, subject to the limitations
provided by law, issue any bonds, notes, or warrants, or enter into
any leases or obligations that the political subdivision considers
necessary.
Sec. 10. (a) When the governing body of a political subdivision
decides to issue bonds in a total amount that exceeds five thousand
dollars ($5,000), the governing body shall give notice of the decision
by:
(1) posting; and
(2) publishing once each week for two (2) weeks.
The notice required by this section shall be posted in three (3)
public places in the political subdivision and published in
accordance with IC 5-3-1-4. The decision to issue bonds may be a
preliminary decision.
(b) Ten (10) or more taxpayers who will be affected by the
proposed issuance of the bonds and who wish to object to the
issuance on the grounds that it is unnecessary or excessive may file
a petition in the office of the auditor of the county in which the
political subdivision is located. The petition must be filed within
fifteen (15) days after the notice required by subsection (a) is given,
and the petition must contain the objections of the taxpayers and
facts that show that the proposed issue is unnecessary or excessive.
When taxpayers file a petition in the manner prescribed in this
subsection, the county auditor shall immediately forward a
certified copy of the petition and any other relevant information to
the budget agency.
Sec. 11. (a) Upon receipt of a certified petition filed in the
manner prescribed in section 10 of this chapter, the budget agency
shall fix a date, time, and place for a hearing on the matter. The
budget agency shall hold the hearing at least five (5) and not more
than thirty (30) days after the department receives the petition, and
the department shall hold the hearing in the political subdivision
or in the county in which the political subdivision is located. At
least five (5) days before the date fixed for the hearing, the budget
agency shall give notice of the hearing, by mail, to the executive
officer of the political subdivision and to the first ten (10) taxpayers
who signed the petition. The mailings shall be addressed to the
executive officer and to the taxpayers at their usual place of
residence.
(b) After the hearing required by this section, the budget agency
may approve, disapprove, or reduce the amount of the proposed
issue. The budget agency must render a decision not later than
three (3) months after the hearing, and if no decision is rendered
within that time, the issue is considered approved unless the
department takes the extension provided for in this section. A three
(3) month extension of the period during which the decision must
be rendered may be taken by the budget agency if the department
gives notice by mail of the extension to the executive officer of the
political subdivision and to the first ten (10) taxpayers who signed
the petition at least ten (10) days before the end of the original
three (3) month period. If no decision is rendered within the
extension period, the issue is considered approved.
(c) A:
(1) taxpayer who signed a petition referred to in subsection
(a); or
(2) political subdivision against which a petition referred to in
subsection (a) is filed;
may petition for judicial review of the final determination of the
budget agency under subsection (b). The petition must be filed in
the tax court not more than forty-five (45) days after the budget
agency renders its decision under subsection (b).
Sec. 12. A political subdivision may not pay debt service or lease
rentals for a controlled project without completing the following
procedures:
(1) The governing body of a political subdivision shall:
(A) publish notice in accordance with IC 5-3-1; and
(B) send notice by first class mail to any organization that
delivers to the officers, before January 1 of that year, an
annual written request for such notices;
of any meeting to consider the adoption of a resolution or an
ordinance making a preliminary determination to issue bonds
or enter into a lease and shall conduct a public hearing on a
preliminary determination before the adoption of the
resolution or ordinance.
property within the political subdivision the number of
petition forms requested by the owner or owners. Each form
must be accompanied by instructions detailing the
requirements that:
(A) the carrier and signers must be owners of real
property;
(B) the carrier must be a signatory on at least one (1)
petition;
(C) after the signatures have been collected, the carrier
must swear or affirm before a notary public that the
carrier witnessed each signature; and
(D) govern the closing date for the petition period.
Persons requesting forms may not be required to identify
themselves and may be allowed to pick up additional copies to
distribute to other property owners.
(6) Each petition must be verified under oath by at least one
(1) qualified petitioner in a manner prescribed by the state
board of accounts before the petition is filed with the county
auditor under subdivision (7).
(7) Each petition must be filed with the county auditor not
more than thirty (30) days after publication under subdivision
(2) of the notice of the preliminary determination.
(8) The county auditor must file a certificate and each petition
with:
(A) the township trustee, if the political subdivision is a
township, who shall present the petition or petitions to the
township board; or
(B) the body that has the authority to authorize the
issuance of the bonds or the execution of a lease, if the
political subdivision is not a township;
within fifteen (15) business days after the filing of the petition
requesting a petition and remonstrance process. The
certificate must state the number of petitioners that are
owners of real property within the political subdivision.
If a sufficient petition requesting a petition and remonstrance
process is not filed by qualified petitioners under this section, the
political subdivision may issue bonds or enter into a lease by
following the provisions of law relating to the bonds to be issued or
lease to be entered into.
Sec. 13. If a sufficient petition requesting a petition and
remonstrance process has been filed as set forth in section 12 of
this chapter for a controlled project, a political subdivision may
not pay debt service or lease rentals without completing the
following procedures:
(1) The governing body of the political subdivision shall give
notice of the applicability of the petition and remonstrance
process by:
(A) publication in accordance with IC 5-3-1; and
(B) first class mail to the organizations described in section
12(1)(B) of this chapter.
A notice under this subdivision must include a statement that
any registered voters or owners of real property within the
political subdivision who want to petition in favor of or
remonstrate against the proposed debt service or lease
payments must file petitions and remonstrances in compliance
with subdivisions (2) through (4) not earlier than thirty (30)
days and not later than sixty (60) days after publication in
accordance with IC 5-3-1.
(2) Not earlier than thirty (30) days and not later than sixty
(60) days after the notice under subdivision (1) is given:
(A) petitions (as described in subdivision (3)) in favor of
the bonds or lease; and
(B) remonstrances (as described in subdivision (3)) against
the bonds or lease;
may be filed by a registered voter or an owner or owners of
real property within the political subdivision. Each signature
on a petition must be dated, and the date of signature may not
be before the date on which the petition and remonstrance
forms may be issued under subdivision (3). A petition under
clause (A) or a remonstrance under clause (B) must be
verified in compliance with subdivision (4) before the petition
or remonstrance is filed with the county auditor under
subdivision (4).
(3) The state board of accounts shall design and, on request by
the county auditor, deliver to the county auditor, or the
county auditor's designated printer, the petition and
remonstrance forms to be used solely in the petition and
remonstrance process described in this section. The county
auditor shall issue to a registered voter or an owner or owners
of real property within the political subdivision the number of
petition or remonstrance forms requested by the registered
voter or owner or owners. Each form must be accompanied
by instructions detailing the requirements that:
(A) the carrier and signers must be registered voters or
owners of real property in the school district;
(B) the carrier must be a signatory on at least one (1)
petition;
(C) after the signatures have been collected, the carrier
must swear or affirm before a notary public that the
carrier witnessed each signature;
(D) govern the closing date for the petition and
remonstrance period; and
(E) apply to the carrier under section 12 of this chapter.
Persons requesting forms may not be required to identify
themselves and may be allowed to pick up additional copies to
distribute to other property owners. The county auditor may
not issue a petition or remonstrance form earlier than
twenty-nine (29) days after the notice is given under
subdivision (1). The county auditor shall certify the date of
issuance on each petition or remonstrance form that is
distributed under this subdivision.
(4) The petitions and remonstrances must be verified in the
manner prescribed by the state board of accounts and filed
with the county auditor within the sixty (60) day period
described in subdivision (2) in the manner set forth in section
12 of this chapter relating to requests for a petition and
remonstrance process.
(5) The county auditor must file a certificate and the petition
or remonstrance with the body of the political subdivision
charged with issuing bonds or entering into leases within
fifteen (15) business days of the filing of a petition or
remonstrance under subdivision (4), whichever applies,
containing ten thousand (10,000) signatures or less. The
county auditor may take an additional five (5) days to review
and certify the petition or remonstrance for each additional
five thousand (5,000) signatures up to a maximum of sixty (60)
days. The certificate must state the number of petitioners and
remonstrators that are registered voters or owners of real
property within the political subdivision.
(6) If a greater number of registered voters or owners of real
property within the political subdivision sign a remonstrance
than the number that signed a petition, the bonds petitioned
for may not be issued or the lease petitioned for may not be
entered into. The governing body of the political subdivision
may not make a preliminary determination to issue bonds or
enter into a lease for the controlled project defeated by the
petition and remonstrance process under this section or any
other controlled project that is not substantially different
within one (1) year after the date of the county auditor's
certificate under subdivision (5). Withdrawal of a petition
carries the same consequences as a defeat of the petition.
(7) After a political subdivision has gone through the petition
and remonstrance process set forth in this section, the
political subdivision is not required to follow any other
remonstrance or objection procedures under any other law
(including section 10 of this chapter and IC 6-1.1-20-5).
Sec. 14. When the governing body of a political subdivision
decides to issue bonds to finance a public improvement that is a
controlled project, the governing body shall adopt an ordinance or
a resolution that sets forth the determination to issue the bonds.
The political subdivision may not advertise for or receive bids for
the construction of the improvement until the expiration of the
later of:
(1) the period within which taxpayers may file a petition for
review of or a remonstrance against the proposed issue; or
(2) the period during which a petition for review of the
proposed issue is pending before the budget agency.
Sec. 15. (a) If a petition and remonstrance process is commenced
under section 13 of this chapter for a controlled project, during the
sixty (60) day period commencing with the notice under section
12(1) of this chapter, the political subdivision seeking to issue
bonds or enter into a lease for the proposed controlled project may
not promote a position on the petition or remonstrance by doing
any of the following:
(1) Allowing facilities or equipment, including mail and
messaging systems, owned by the political subdivision to be
used for public relations purposes to promote a position on
the petition or remonstrance, unless equal access to the
facilities or equipment is given to persons with a position
opposite to that of the political subdivision.
(2) Making an expenditure of money from a fund controlled
by the political subdivision to promote a position on the
petition or remonstrance (except as necessary to explain the
project to the public) or to pay for the gathering of signatures
on a petition or remonstrance. This subdivision does not
prohibit a political subdivision from making an expenditure
of money to an attorney, an architect, a construction
manager, or a financial adviser for professional services
provided with respect to a controlled project.
(3) Using an employee to promote a position on the petition or
remonstrance during the employee's normal working hours
or paid overtime.
(4) In the case of a school corporation, promoting a position
on a petition or remonstrance by:
(A) using students to transport written materials to the
students' residences; or
(B) including a statement within another communication
sent to the students' residences.
However, this section does not prohibit an employee of the school
corporation from carrying out duties with respect to a petition or
remonstrance that are part of the normal and regular conduct of
the employee's office or agency.
(b) A person may not solicit or collect signatures for a petition
or remonstrance on property owned or controlled by the political
subdivision.
SECTION 70. IC 36-1-2-4.2 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2004]: Sec. 4.2. "Consolidated city" refers to a first class city that
has become a consolidated city under IC 36-3-1.
SECTION 71. IC 36-1-3-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 5. (a) Except as
provided in subsection subsections (b) and (c), a unit may exercise any
power it has to the extent that the power:
(1) is not expressly denied by the Constitution of the State of
Indiana Constitution or by statute; and
(2) is not expressly granted to another entity.
(b) A township may not exercise power the township has if another
unit in which all or part of the township is located exercises that same
power.
(c) A unit may exercise the power of another entity if:
(1) the exercise is in accordance with a reorganization plan
under IC 36-12 that reorganizes both the unit and the other
entity; and
(2) the reorganized unit is not expressly prohibited from
exercising the power by statute, rule, or other law.
sewers, drains, and public grounds inside its corporate boundaries,
unless a statute provides otherwise.
(b) The area inside the corporate boundaries of a municipality
comprises its territorial jurisdiction, except to the extent that a statute
expressly authorizes the municipality to exercise a power in areas
outside its corporate boundaries.
(c) Whenever a statute authorizes a municipality to exercise a power
in areas outside its corporate boundaries, the power may be exercised:
(1) inside the corporate boundaries of another municipality, only
if:
(A) both municipalities, by ordinance, enter into an agreement
under IC 36-1-7; or
(B) the power is exercised in accordance with a
reorganization plan under IC 36-12 that reorganizes both
municipalities; or
(2) in a county other than the county in which the municipal hall
is located, but not inside the corporate boundaries of another
municipality, only if both the municipality and the other county,
by ordinance, enter into an agreement under IC 36-1-7.
(d) If the two (2) units involved under subsection (c) cannot reach
an agreement, either unit may petition the circuit or superior court of
the county to hear and determine the matters at issue. The clerk of the
court shall issue notice to the other unit as in other civil actions, and the
court shall hold the hearing without a jury. There may be a change of
venue from the judge but not from the county. The petitioning unit
shall pay the costs of the action.
SECTION 73. IC 36-1-8-5, AS AMENDED BY P.L.173-2003,
SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 5. (a) This section applies to all funds raised by a
general or special tax levy on all the taxable property of available to
a political subdivision.
(b) Whenever the purposes of a tax levy money in a fund have been
fulfilled and an unused and unencumbered balance remains in the fund,
the fiscal body of the political subdivision shall order the balance of
that fund to be transferred as follows, unless a statute provides that it
be transferred otherwise:
(1) Funds of a county, to the general fund or rainy day fund of the
county, as provided in section 5.1 of this chapter.
(2) Funds of a municipality, to the general fund or rainy day fund
of the municipality, as provided in section 5.1 of this chapter.
(3) Funds of a township for redemption of poor relief obligations,
to the poor relief fund of the township or rainy day fund of the
township, as provided in section 5.1 of this chapter.
(4) Funds of any other political subdivision, to the general fund or
rainy day fund of the political subdivision, as provided in section
5.1 of this chapter. However, if the political subdivision is
dissolved or does not have a general fund or rainy day fund, then
to the general fund of each of the units located in the political
subdivision in the same proportion that the assessed valuation of
the unit bears to the total assessed valuation of the political
subdivision.
(c) Whenever an unused and unencumbered balance remains in the
civil township fund of a township and a current tax levy for the fund
balance is not needed, the township fiscal body may order any part of
the balance of that fund transferred to the debt service fund of the
school corporation located in or partly in the township. but However,
if more than one (1) school corporation is located in or partly in the
township, then any sum transferred shall be transferred to the debt
service fund of each of those school corporations in the same
proportion that the part of the assessed valuation of the school
corporation in the township bears to the total assessed valuation of the
township.
(d) Transfers to a political subdivision's rainy day fund under this
section must be made after the last day of the political subdivision's
fiscal year and before March 1 of the subsequent calendar year.
SECTION 74. 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 UPON PASSAGE]: 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 an to receive funds under:
(2) (1) IC 6-3.5-1.1-21.1;
(3) (2) IC 6-3.5-6-17.3; and
(4) (3) IC 6-3.5-7-17.3;
(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. It is the intent
of the general assembly that money in a rainy day fund be used
only to:
(1) pay extraordinary expenses of a political subdivision that
could not have been foreseen when tax rates were advertised
and set for the year in which the obligations became due; and
(2) replace revenues from other sources in years in which tax
receipts and other revenues are reduced because of economic
conditions, war, foreign invasion, or other great public
calamity.
A political subdivision may not guarantee the repayment of a debt
or pledge to repay debt from money in a rainy day 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.
SECTION 75. IC 36-4-1-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 1. (a) Municipalities
are classified according to their status and population as follows:
STATUS AND POPULATION CLASS
Cities of 250,000 600,000 or more First class cities
Cities of 35,000 to 249,999 599,999 Second class cities
Cities of less than 35,000 Third class cities
Other municipalities of any
population Towns
(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.
IC 36-7-14-39(a), IC 36-7-15.1-26(a), and IC 36-7-30-25(a)(3);
or
(2) for allocation areas created under IC 8-22-3.5, the taxes
assessed on taxable tangible property in the allocation area.
Sec. 6. As used in this chapter, "tax increment revenues" means
the property taxes attributable to the assessed value of property
that exceeds the base assessed value.
Sec. 7. (a) This chapter applies to an allocation area in which:
(1) the holders of obligations received a pledge of tax increment
revenues to repay a part of the obligations due after December
31, 2005; and
(2) the elimination of property tax levies under IC 6-1.1-2-8
adversely affects the ability of the governing body to repay the
obligations described in subdivision (1).
(b) A governing body may use one (1) or more of the procedures
described in sections 8 and 9 of this chapter to provide sufficient
funds to repay the obligations described in subsection (a).
Sec. 8. (a) A governing body may, after a public hearing, impose
a special assessment on the owners of property that is located in an
allocation area to repay a bond or an obligation described in
section 7 of this chapter that comes due after December 31, 2005.
(b) Before a public hearing under subsection (a) may be held, the
governing body must publish notice of the hearing under IC 5-3-1.
The notice must state that the governing body will meet to consider
whether a special assessment should be imposed under this chapter
and whether the special assessment will help the governing body
realize the redevelopment or economic development objectives for
the allocation area or honor its obligations related to the allocation
area. The notice must also name a date when the governing body
will receive and hear remonstrances and objections from persons
affected by the special assessment. All persons affected by the
hearing, including all taxpayers within the allocation area, shall be
considered notified of the pendency of the hearing and of
subsequent acts, hearings, and orders of the governing body by the
notice. At the hearing, which may be adjourned from time to time,
the governing body shall hear all persons affected by the
proceedings and shall consider all written remonstrances and
objections that have been filed. The only grounds for remonstrance
or objection are that the special assessment will not help the
governing body realize the redevelopment or economic
development objectives for the allocation area or honor its
obligations related to the allocation area. After considering the
evidence presented, the governing body shall take final action
concerning the proposed special assessment. The final action taken
by the governing body shall be recorded and is final and
conclusive, except that an appeal may be taken in the manner
prescribed by subsection (c).
(c) A person who filed a written remonstrance with a governing
body under subsection (b) and is aggrieved by the final action
taken may, within ten (10) days after that final action, file in the
office of the clerk of the circuit or superior court a copy of the
order of the governing body and the person's remonstrance or
objection against that final action, together with a bond
conditioned to pay the costs of appeal if the appeal is determined
against the person. The only ground of remonstrance or objection
that the court may hear is whether the proposed assessment will
help achieve the redevelopment of economic development
objectives for the allocation area or honor its obligations related to
the allocation area. An appeal under this subsection shall be
promptly heard by the court without a jury. All remonstrances or
objections on which an appeal has been taken must be
consolidated, heard, and determined within thirty (30) days after
the time of the filing of the appeal. The court shall hear evidence on
the remonstrances or objections, and may confirm the final action
of the governing body or sustain the remonstrances or objections.
The judgment of the court is final and conclusive, unless an appeal
is taken as in other civil actions.
(d) A special assessment shall be imposed and collected in the
same manner as ad valorem property taxes are imposed and
collected.
Sec. 9. If a governing body does not impose a special assessment
under section 8 of this chapter, the governing body may, in order
to provide sufficient funds to repay the obligations described in
section 7(a) of this chapter, use any tax increment revenues that
exceed:
(1) the amount pledged to pay the principal and interest of
obligations; and
(2) any amounts used to provide debt service reserve for
obligations payable solely or in part from tax increment
revenues or from other revenues.
SECTION 77. IC 36-8.5 IS ADDED TO THE INDIANA CODE AS
A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2006]:
ARTICLE 8.5. PUBLIC SAFETY SPECIAL ASSESSMENTS
Chapter 1. Definitions
Sec. 1. Except as provided in section 4 of this chapter, the
definitions in IC 6-1.1-1 apply throughout this article.
Sec. 2. "Public safety cost" means a cost to a taxing unit that may
be funded by the taxing unit by the imposition of property taxes
and is incurred to establish, maintain, operate, or provide facilities
or equipment for, contract for, finance, or repay a judgment or
other obligation related to any of the following:
(1) A police and law enforcement system to preserve public
peace and order.
(2) A firefighting and fire prevention system.
(3) Emergency ambulance services (as defined in
IC 16-18-2-107), except as part of a levy for a county hospital
under IC 16-22 or a municipal hospital under IC 16-23.
(4) Emergency medical services (as defined in IC 16-18-2-110),
except as part of a levy for a county hospital under IC 16-22 or
a municipal hospital under IC 16-23.
(5) Emergency action (as defined in IC 13-11-2-65).
(6) A court.
(7) A probation department of a court.
(8) Confinement, supervision, services under a community
correction program (as defined in IC 35-38-2.6-2), or other
correctional services for a person who has been:
(A) diverted before a final hearing or trial under an
agreement that:
(i) is between the county prosecutor and the person or the
person's custodian, guardian, or parent; and
(ii) provides for confinement, supervision, community
correction services, or other correctional services instead
of a final action described in clause (B) or (C);
(B) convicted of a crime; or
(C) adjudicated as a delinquent child or a child in need of
services in a facility.
(9) A juvenile detention facility under IC 31-31-8.
(10) A juvenile detention center under IC 31-31-9.
(11) A county jail.
(12) A communications system (as defined in IC 36-8-15-3) or
an enhanced emergency telephone system (as defined in
IC 36-8-16-2).
(13) Pension payments for any of the following:
(A) A member of the fire department (as defined in
IC 36-8-1-8) or any other employee of a fire department.
(B) A member of the police department (as defined in
IC 36-8-1-9), a police chief hired under a waiver under
IC 36-8-4-6.5, or any other employee hired by a police
department.
(C) A county sheriff or any other member of the office of the
county sheriff.
(D) Other personnel employed to provide a service described
in this section.
Sec. 3. "Special assessments" means public safety special
assessments imposed under IC 36-8.5-2.
Sec. 4. "Taxing unit" means:
(1) a unit; or
(2) a fire protection district.
Chapter 2. Imposition of Special Assessments
Sec. 1. Except as provided in sections 2 and 3 of this chapter,
public safety special assessments are payable each calendar year
with respect to:
(1) a one (1) or two (2) family dwelling, including the curtilage
related to the dwelling, that is used as a residence, regardless
of whether it is used as a residence by the owner or rented for
residential purposes; and
(2) other tangible property exempt from property taxes under
IC 6-1.1-10.
Sec. 2. Special assessments are not payable with respect to:
(1) a building or structure that is exempt from property taxes:
(A) under:
(i) IC 6-1.1-10-1;
(ii) IC 6-1.1-10-2;
(iii) IC 6-1.1-10-3;
(iv) IC 6-1.1-10-4;
(v) IC 6-1.1-10-5;
(vi) IC 6-1.1-10-5.5;
(vii) IC 6-1.1-10-6;
(viii) IC 6-1.1-10-7;
(ix) IC 6-1.1-10-8;
(x) IC 6-1.1-10-15;
(xi) IC 6-1.1-10-16.7;
(xii) IC 6-1.1-10-17;
(xiii) IC 6-1.1-10-19;
(xiv) IC 6-1.1-10-21; or
(xv) IC 6-1.1-10-38; or
(B) under IC 6-1.1-10-16 and used:
(i) for religious worship; or
(ii) as a parsonage;
(2) personal property that is exempt from property taxes:
(A) under a section listed in subdivision (1)(A); or
(B) under IC 6-1.1-10-16 and used for religious worship; and
(3) land:
(A) that is exempt from property taxes under a section listed
in subdivision (1)(A); or
(B) on which a building or structure referred to in
subdivision (1) is located.
Sec. 3. Special assessments are not payable with respect to
property in a calendar year to the extent that payments in lieu of
taxes are:
(1) paid with respect to the property in the calendar year; and
(2) used by a taxing unit to pay public safety costs.
Sec. 4. (a) Special assessments are payable in each calendar year
after December 31, 2005, based on:
(1) the assessed value of:
(A) the real property associated with each parcel; and
(B) the personal property reportable on each personal
property return;
for the assessment date in the calendar year that immediately
precedes the calendar year in which the special assessments are
payable; and
(2) subject to subsection (b), the following schedule:
ASSESSED VALUE ANNUAL
SPECIAL
ASSESSMENT
Less than $25,000 $0
At least $25,000 but less than $50,000 $100
At least $50,000 but less than $100,000 $200
At least $100,000 but less than $150,000 $400
At least $150,000 but less than $200,000 $600
At least $200,000 but less than $250,000 $800
At least $250,000 but less than $300,000 $1,000
At least $300,000 but less than $500,000 $1,500
At least $500,000 but less than $750,000 $2,000
At least $750,000 but less than $1,000,000 $3,000
At least $1,000,000 $5,000
(b) For each year after 2006, the budget agency shall annually
adjust the annual amount in subsection (a)(2) to reflect changes in
inflation, using the average of the percentage increase in the
Consumer Price Index for all Urban Consumers, as published by
the United States Bureau of Labor Statistics, for the twelve (12)
month period ending in September immediately preceding the
beginning of the year in which the adjustment is to be applied. The
budget agency shall distribute the adjusted schedule to each county
auditor and each political subdivision that provides public safety
services. The amount of the special assessment for a year is equal
to the greater of the amount determined under subsection (a)(2) or
the adjusted amount determined under this subsection.
Sec. 5. The county treasurer shall distribute collections from
special assessments each year to each taxing unit in the county in
the amount that bears the same proportion to the total special
assessment collections in the county for the year as the amount
appropriated by the taxing unit for the year to pay public safety
costs, as determined by the budget agency under IC 36-1.3, bears
to the total appropriations by all taxing units in the county for the
year to pay public safety costs.
Sec. 6. The budget agency shall reduce the levy that the budget
agency certifies under IC 36-1.3 for each year for a taxing unit
under IC 6-1.1-2-10 by the amount of revenue from special
assessments the department estimates the taxing unit will receive
in the calendar year for which the levy is certified.
Sec. 7. The township assessors shall assess the tangible property
subject to special assessments in the same manner that assessments
are determined under IC 6-1.1.
Sec. 8. Special assessments under this chapter:
(1) are collected in the same manner that other special
assessments are collected;
(2) may be used by a taxing unit only to pay public safety costs;
and
(3) are otherwise treated in the same manner as other special
assessments for purposes of all procedural and substantive
provisions of law.
SECTION 78. IC 36-12 IS ADDED TO THE INDIANA CODE AS
A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2004]:
ARTICLE 12. REORGANIZATION OF MUNICIPAL
CORPORATIONS
Chapter 1. Applicability and Definitions
Sec. 1. This article applies to all counties except a county
containing a first class city.
Sec. 2. The definitions in this chapter apply throughout this
article.
Sec. 3. "Appointing authority" refers to a person who appoints
a member of a government reorganization commission.
Sec. 4. "Commission" refers to a government reorganization
commission established under this chapter.
Sec. 5. "Excluded municipality" means:
(1) a third class city; or
(2) a town;
that acts under IC 36-12-4 to be excluded from government
reorganization.
Sec. 6. "Included municipality" means:
(1) a city; or
(2) a town;
that does not act under IC 36-12-4 to be excluded from government
reorganization.
Sec. 7. "Initial appointment of all members" means the
appointment of members under IC 36-12-3-3. The term does not
include the filling of vacancies on the commission or an
appointment under IC 36-12-4-3.
Sec. 8. "Municipal corporation" means a county, city, town,
township, library district, local housing authority, fire protection
district, public transportation corporation, local building
authority, local hospital authority or corporation, local airport
authority, special service district, or any other separate local
governmental entity that may sue and be sued. The term does not
include a special taxing district or a school corporation.
Sec. 9. "Municipality" means a city or a town.
Sec. 10. "Person" means an individual, a corporation, a limited
liability company, a partnership, a governmental agency, a
political subdivision, or other legal entity.
Sec. 11. "Plan" refers to a government reorganization plan
developed under this article.
Sec. 12. "Special service district" refers to a separate taxing
district within which a municipal corporation levies and collects
taxes in accordance with the kind, type, level, and character of
services provided in the district.
Chapter 2. General Reorganization Powers
Sec. 1. A municipal corporation may reorganize as set forth in
this article by changing any of the following:
(1) Governmental structure, including:
(A) consolidating or merging municipal corporations;
(B) consolidating or merging agencies, departments,
commissions, or services of municipal corporations; or
(C) eliminating or creating a municipal corporation.
(2) Governmental finance.
(3) Governmental services.
(4) Governmental efficiency.
Sec. 2. A charter school may not be established under this article.
Sec. 3. A reorganized municipal corporation is subject to audit
by the state board of accounts under IC 5-11-1-9.
Sec. 4. A reorganized municipal corporation is subject to the
home rule provisions set forth in IC 36-1-3.
Sec. 5. A reorganized municipal corporation is subject to the
following:
(1) Any general law of the state that does not conflict with the
powers granted to a reorganized municipal corporation under
this article.
(2) Statutes, laws, or rules that specifically govern a
reorganized municipal corporation.
(3) The charter of the reorganized municipal corporation.
(4) Ordinances, resolutions, or bylaws of the reorganized
municipal corporation.
Sec. 6. A reorganized municipality may not diminish the rights
or privileges of any former municipal employee or present
municipal employee in the employee's pension or retirement
system.
Chapter 3. Government Reorganization Commission
Sec. 1. Before a municipal corporation may reorganize under this
article, a commission must be established.
Sec. 2. A commission is established when:
(1) the county fiscal body and the fiscal body of each second
class city within the county (or if the county does not have any
second class cities, the fiscal body of at least one (1) third class
city or town) adopt a resolution to establish a commission; or
(2) a resident of the county files with the county election board
a petition that:
(A) is signed by the number of registered voters equal to at
least five percent (5%) of the votes cast within the county in
the most recent general election for the office of secretary of
state;
(B) asks that a commission be established under this chapter;
and
(C) requests a local public question on the question of
government reorganization.
fifteen thousand (15,000), the town fiscal bodies shall jointly
make one (1) appointment.
(8) The trustees of each township in the county shall jointly
appoint two (2) members.
(b) The commission may adopt a resolution to have additional
advisory members appointed by political subdivisions other than
a city, town, or county.
Sec. 5. For the purpose of determining the exact number of
appointments under section 4 of this chapter, a quotient must be
rounded to the nearest whole number as follows:
(1) Rounding the quotient to a higher number if the quotient is
a whole number with a fraction that is at least five-tenths (0.5).
(2) Rounding the quotient to a lower number if the quotient is
a whole number with a fraction that is less than five-tenths
(0.5).
Sec. 6. An appointing authority may not appoint more than one
(1) commission member who is an elected official.
Sec. 7. A member of the commission must be a resident of the
county that is the subject of the commission.
Sec. 8. A commission member may not receive:
(1) a salary; or
(2) a per diem;
for performance of the commission member's duties. The member
may receive reimbursement for expenses necessarily incurred in
the performance of the commission member's duties.
Sec. 9. Except as provided in IC 36-12-4, if a vacancy occurs on
a commission, the appointing authority for that position shall
appoint a person to fill the vacancy.
Sec. 10. If a member fails to attend three (3) consecutive meetings
of a commission, the member is removed from the commission.
Sec. 11. (a) This section applies to a commission established
under section 2(1) of this chapter.
(b) The expenses of the commission may be paid from:
(1) any public funds that are not prohibited from being
expended for this purpose by state, federal, or local law; and
(2) private funds.
(c) Any expenses of the commission that are not paid from the
funds described under subsection (b), shall be paid by the county
and each included city and town in proportion to its population.
For purposes of determining a county's share of the expenses, only
the population of the county in the unincorporated areas and in the
excluded cities and towns shall be used to compute the population
of the county.
Sec. 12. (a) This section applies to a commission established
under section 2(2) of this chapter.
(b) The expenses of the commission may be paid from any
combination of the following:
(1) The county general fund.
(2) The general fund of an included city or town.
(3) Any public funds that are not prohibited from being
expended for this purpose by state, federal, or local law.
(4) Private funds.
Sec. 13. Private funds donated to a commission may be used:
(1) to promote approval of a public question on government
reorganization; and
(2) for any other commission purpose.
Sec. 14. A commission may do the following and pay the
associated costs:
(1) Employ staff.
(2) Obtain secretarial, clerical, professional, or consultant
services.
(3) Engage in public information or education activities.
(4) Administer and perform the responsibilities of the
commission under this chapter.
Sec. 15. Subject to IC 36-12-4-4, an affirmative vote of a majority
of the members appointed to the commission is required for the
commission to take any action, including adopting a report.
Chapter 4. Excluded Municipalities
Sec. 1. (a) Except as provided in subsection (b), if the fiscal body
of a town or third class city adopts a resolution to exclude the
municipality from government reorganization, the municipality is
excluded as of the date the fiscal body adopts the resolution.
(b) A municipality may not adopt a resolution excluding the
municipality from government reorganization more than twelve
(12) months after the initial appointment of all commission
members.
Sec. 2. If a municipality that adopts a resolution under section 1
of this chapter is a third class city that appoints a member to the
commission under IC 36-12-3-4(5), the municipality ceases to be
represented on the commission as of the date of the resolution.
Sec. 3. (a) This section applies if a:
(1) third class city that jointly appointed a member to the
commission under IC 36-12-3-4(6); or
(2) town that jointly appointed a member to the commission
under IC 36-12-3-4(7);
becomes an excluded municipality.
(b) The number of appointments under IC 36-12-3-4(6) or
IC 36-12-3-4(7) must be recalculated by excluding the population
of any excluded third class cities and towns. The remaining
included third class cities and towns shall reduce the number of
members appointed to the commission in accordance with the
recalculation.
(c) If a member appointed to the commission is a resident of an
excluded town or excluded city, the remaining included towns or
cities may remove the member and appoint a new member to the
commission. The new member must be appointed not more than
thirty (30) days after the town or city notifies the commission of its
exclusion from the reorganization.
Sec. 4. An affirmative vote of the majority of the total number of
members who are appointed to the commission after the
membership is adjusted as set forth in this chapter is required for
the commission to take any action, including adopting a report.
Sec. 5. (a) Except as provided in subsection (b), an excluded
municipality may not adopt an ordinance annexing territory:
(1) that is subject to a government reorganization under this
article; and
(2) after approval of a local public question on the government
reorganization by the majority of voters under IC 36-12-6.
(b) If the legislative body of an excluded municipality adopts an
ordinance annexing territory that is subject to a government
reorganization under this article before a local public question is
approved under IC 36-12-6:
(1) the municipality may continue the annexation proceeding
after the local public question is approved; and
(2) the annexation has the effect of expanding the excluded
territory.
Chapter 5. Commission Responsibilities
Sec. 1. A commission shall study government reorganization and
develop a government reorganization plan.
Sec. 2. If the plan proposes the government reorganization of a
municipal corporation, service, or department, the plan must
include the following charter provisions for the reorganized entity:
(1) A name.
(2) A form and structure.
(3) Functions and powers.
(4) Officers and their powers and duties.
after the certification of the election results under IC 3-12-4-9.
(3) If the commission makes a determination not to proceed
with a government reorganization under section 9 of this
chapter, the commission expires thirty (30) days after the final
report is distributed to each appointing authority under section
9 of this chapter.
Chapter 6. Local Public Question
Sec. 1. The county election board shall place the public question
on the ballot provided to all voters in the county at the earlier of
the following:
(1) The first general election held after the certification of a
public question on the approval of the plan.
(2) A special election if the county fiscal body and the fiscal
body of each included city and town in the county adopt an
ordinance to order a special election on the public question.
Sec. 2. (a) A local public question shall be placed on the ballot as
set forth in IC 3-10-9-4. The commission shall write the public
question and the explanatory text for the public question.
(b) In addition to the requirements of subsection (a), the ballot on
the local public question must contain a brief description and
summary of the plan as written by the commission.
Sec. 3. At least one (1) month before the election on the local
public question, the commission shall:
(1) Distribute copies of the full text of the plan to each public
library in the county.
(2) Publish a notice in a newspaper of general circulation
throughout the county in which the commission is located
notifying the public of the places in which a copy of the full text
of the plan may be inspected or obtained.
(3) Post the full text of the plan on the Internet web site
established under IC 36-12-5-3.
Sec. 4. If the local public question is approved by a majority of
the voters voting on the local public question, the county election
board shall file a copy of the certification prepared under
IC 3-12-4-9 concerning the local public question on the government
reorganization plan with the following:
(1) The circuit court clerk of the county.
(2) The county auditor.
Sec. 5. A statute outside this article that provides a procedure for
consolidation, merger, dissolution, or incorporation does not apply
to a government reorganization under this article.
Chapter 7. Effect of Reorganization
Sec. 1. Subject to sections 2 and 3 of this chapter, if a local public
question is approved by a majority of the voters voting on the local
public question, the following must occur in accordance with the
transition provisions of the plan:
(1) Reorganized municipal corporations shall be established.
(2) Officials of reorganized municipal corporations shall be
elected and sworn into their respective offices.
(3) Reorganized departments or services, if any, shall be
established.
Sec. 2. (a) Except as provided in section 3 of this chapter, if a
government reorganization requires an election of officers, the
government reorganization takes effect when the officers of the
new municipality are elected and qualified.
(b) If a government reorganization does not require an election
of officers, the government reorganization takes effect in
accordance with the transition provisions of the plan.
Sec. 3. (a) A government reorganization may not take effect
during the year preceding a year in which a federal decennial
census is conducted.
(b) If a government reorganization requires the election of
officers of a reorganized municipal corporation, a government
reorganization that would otherwise take effect during the year
preceding a year in which a federal decennial census is conducted
takes effect January 2 of the year in which a federal decennial
census is conducted.
(c) If a government reorganization does not require the election
of officers of a reorganized municipal corporation, a government
reorganization that would otherwise take effect during the year
preceding a year in which a federal decennial census is conducted
takes effect on a date:
(1) specified in the transition provisions of the reorganization
plan; and
(2) after January 1 of the year in which a federal decennial
census is conducted.
Sec. 4. Upon the corporate dissolution of a municipal corporation
under this article, the following apply for purposes of all state and
federal licensing and regulatory laws, statutory entitlements, gifts,
grants-in-aid, governmental loans, or other governmental
assistance under state or federal statutes, rules, or regulations:
(1) The entire geographic area and population of a reorganized
municipal corporation that is established under this chapter
shall be used when calculating and determining the
distribution basis for the following:
(A) State or federal government statutory entitlements.
(B) Gifts.
(C) Grants-in-aid.
(D) Loans.
(E) Any form of governmental assistance that is not listed in
this subdivision.
(2) Following a public hearing for which notice is published in
a newspaper of general circulation throughout the county at
least thirty (30) days before the public hearing takes place, the
executive of a reorganized municipal corporation that is
established under this chapter shall determine and designate
to the appropriate state or federal agency those:
repeal or amendment of the statutes on which the rights, powers,
privileges, or immunities are based, unless those statutes are
expressly repealed or amended for reorganized municipal
corporations.
Sec. 6. When a reorganized municipal corporation is established
under this article, the following occur:
(1) Unless specified otherwise in the government
reorganization plan, the ordinances, rules, resolutions, bylaws,
and regulations of each of the included municipal
corporations:
(A) remain in force within the territory to which they applied
before the reorganization; and
(B) continue in force until amended or repealed by the
legislative body or an administrative body of the reorganized
municipal corporation.
(2) Pending actions that involve any municipal corporation
that is reorganized shall be prosecuted to final judgment and
execution, and judgments rendered in those actions may be
executed and enforced against the reorganized municipal
corporation without any change of the name of the plaintiff or
defendant.
Sec. 7. Dissolution of a township government under this article
does not affect the geographical boundaries of the township.
Sec. 8. (a) On the date the formation of a new municipal
corporation takes effect, all money in the funds of each of the
included municipal corporations is transferred to the reorganized
municipal corporation. The reorganized municipal corporation:
(1) shall deposit the money in its funds that most closely
correspond to the funds of the included municipal
corporations; and
(2) may use the money to pay its operational and capital costs
for the balance of the calendar year.
(b) After the date on which the formation of a new municipal
corporation takes effect, the reorganized municipal corporation is
entitled to receive all distributions of taxes and other revenue that
would have been made to the included municipal corporations if
the reorganization had not occurred. The reorganized municipal
corporation shall deposit the money in its funds that correspond
most closely to the funds of the included municipal corporations
into which the taxes or other revenue would have been deposited
if the reorganization had not occurred.
Sec. 9. (a) This section applies if a government reorganization
requires the election of officers of the reorganized municipal
corporation.
(b) If the officers of a reorganized municipal corporation are
elected and qualified before July 1 of a year, the officers shall:
(1) obtain from the budget agency approval under IC 36-1.3 of:
(A) a budget;
(B) an ad valorem property tax levy for debt service
obligations payable under IC 6-1.1-2-9;
(C) an ad valorem property tax levy for public safety costs
under IC 6-1.1-2-10, if appropriate; and
(D) a property tax rate;
subject to subsection (d);
(2) fix the annual budget under IC 36-3.1-3;
(3) impose a property tax levy for debt service under
IC 6-1.1-2-9;
(4) impose a property tax levy for public safety costs under
IC 6-1.1-2-10, if appropriate; and
(5) take any action necessary to ensure the collection of special
assessments and other revenue;
for the reorganized municipal corporation for the ensuing budget
year.
(c) If the officers of a reorganized municipal corporation are
elected and qualified after June 30 of a year:
(1) the tax levies and other revenue of the included municipal
corporations:
(A) are collected for the ensuing budget year in the same
manner the collections would have been made if the
reorganization had not occurred; and
(B) are considered for all purposes the tax levy and other
revenue of the reorganized municipal corporation; and
(2) the officers of the reorganized municipal corporation shall:
(A) fund the corporation for the ensuing budget year using
the combined tax levies and other revenue of the included
municipal corporations; and
(B) take the actions described in subsection (b)(1) through
(b)(4) for the reorganized municipal corporation for the
budget year that next follows the ensuing budget year.
(d) The budget agency may not set an ad valorem property tax
levy, budgets, or expenditure limits for a reorganized municipal
corporation under subsection (b) in an amount less than the
combined ad valorem property tax levies, budget, or expenditure
limits of the entities that were reorganized to form the reorganized
municipal corporation.
Sec. 10. (a) This section applies if, as a result of a government
reorganization, municipal corporations consolidate or merge.
(b) On the date on which a reorganized municipal corporation
takes effect:
(1) the included municipal corporations are abolished as
separate entities;
(2) the territory of the reorganized municipal corporation
includes all the territory that comprised the included municipal
corporations before the reorganization;
(3) the agencies of the included municipal corporations are
abolished;
(4) the functions of the abolished agencies are assigned to
agencies of the reorganized municipal corporation;
(5) the:
(A) property;
(B) records;
(C) personnel;
(D) rights; and
(E) liabilities;
related to the functions of the abolished agencies are assigned
to agencies of the reorganized municipal corporation; and
(6) any bonds and other indebtedness of, or assumed by, the
included municipal corporations are transferred to the
reorganized municipal corporation.
SECTION 79. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2005]: IC 6-1.1-17; IC 6-1.1-18.
SECTION 80. THE FOLLOWING ARE REPEALED [EFFECTIVE
JANUARY 1, 2006]: IC 6-1.1-10-9; IC 6-1.1-10-10; IC 6-1.1-10-11;
IC 6-1.1-10-12; IC 6-1.1-10-13; IC 6-1.1-10-14; IC 6-1.1-10-15.5;
IC 6-1.1-10-16; IC 6-1.1-10-16.5; IC 6-1.1-10-18; IC 6-1.1-10-18.5;
IC 6-1.1-10-20; IC 6-1.1-10-23; IC 6-1.1-10-24; IC 6-1.1-10-25;
IC 6-1.1-10-26; IC 6-1.1-10-27; IC 6-1.1-10-28; IC 6-1.1-10-29;
IC 6-1.1-10-29.3; IC 6-1.1-10-29.5; IC 6-1.1-10-30; IC 6-1.1-10-30.5;
IC 6-1.1-10-31; IC 6-1.1-10-31.1; IC 6-1.1-10-31.4; IC 6-1.1-10-31.5;
IC 6-1.1-10-31.6; IC 6-1.1-10-31.7; IC 6-1.1-10-32; IC 6-1.1-10-33;
IC 6-1.1-10-34; IC 6-1.1-10-35; IC 6-1.1-10-36; IC 6-1.1-10-36.3;
IC 6-1.1-10-36.5; IC 6-1.1-10-37; IC 6-1.1-10-39; IC 6-1.1-10-40;
IC 6-1.1-10-41; IC 6-1.1-10-42; IC 6-1.1-10-43; IC 6-1.1-10.1;
IC 6-1.1-12-1; IC 6-1.1-12-2; IC 6-1.1-12-3; IC 6-1.1-12-4;
IC 6-1.1-12-5; IC 6-1.1-12-6; IC 6-1.1-12-7; IC 6-1.1-12-8;
IC 6-1.1-12-13; IC 6-1.1-12-14; IC 6-1.1-12-15; IC 6-1.1-12-17;
IC 6-1.1-12-17.4; IC 6-1.1-12-17.5; IC 6-1.1-12-18; IC 6-1.1-12-19;
IC 6-1.1-12-20; IC 6-1.1-12-21; IC 6-1.1-12-22; IC 6-1.1-12-23;
IC 6-1.1-12-24; IC 6-1.1-12-25; IC 6-1.1-12-25.5; IC 6-1.1-12-26;
IC 6-1.1-12-27.1; IC 6-1.1-12-28; IC 6-1.1-12-28.5; IC 6-1.1-12-29;
IC 6-1.1-12-30; IC 6-1.1-12-31; IC 6-1.1-12-33; IC 6-1.1-12-34;
IC 6-1.1-12-35.5; IC 6-1.1-12-36; IC 6-1.1-12-37; IC 6-1.1-12-38;
IC 6-1.1-12-40; IC 6-1.1-12.1; IC 6-1.1-12.2; IC 6-1.1-12.3;
IC 6-1.1-18.5; IC 6-1.1-19; IC 6-1.1-20; IC 6-1.1-20.8; IC 6-1.1-20.9;
IC 6-1.1-21-3; IC 6-1.1-21-4; IC 6-1.1-21-5; IC 6-1.1-21-5.5;
IC 6-1.1-21-7; IC 6-1.1-21-8; IC 6-1.1-21-10.5; IC 6-1.1-21-11;
IC 6-1.1-21.2; IC 6-1.1-42; IC 6-3.5-6-13; IC 6-3.5-7-25;
IC 6-3.5-7-26; IC 12-19-1.5.
SECTION 81. [EFFECTIVE JULY 1, 2004] (a) After June 30,
2005, a reference to IC 6-1.1-17 or IC 6-1.1-18 (both repealed by
this act) shall be treated as a reference to IC 36-3.1. After June 30,
20005, any reference to the department of local government
finance that is related to these functions shall be treated as a
reference to the budget agency.
(b) After December 31, 2005, a reference to IC 6-1.1-18.5,
IC 6-1.1-18.6, IC 6-1.1-19, or IC 6-1.1-20.9 (all as repealed by this
act) shall be treated as a reference to the corresponding provision
of IC 36-3.1, as added by this act. After December 31, 2005, any
reference to the department of local government finance that is
related to these functions shall be treated as a reference to the
budget agency. However, any proceeding related to bonds or leases
that is pending under IC 6-1.1-18.5-8 or IC 6-1.1-19-8 and
IC 6-1.1-20.9 on December 31, 2005, shall be completed under
IC 6-1.1-18.5-8 or IC 6-1.1-19-8 and IC 6-1.1-20.9 as if these
provisions had not been repealed. However, the budget agency
shall take any action required by law to be taken by the
department of local government finance. A bond, lease, or
controlled project that is approved under IC 6-1.1-18.5-8 or
IC 6-1.1-19-8 and IC 6-1.1-20.9 shall be treated after December 31,
2005, as if it had been approved under IC 36-1.3.
(c) Except as provided in IC 6-1.1-2, after December 31, 2005,
any reference in any law or rule to property taxes, property tax
levies, or property tax rates shall be treated as a reference to
money available to a political subdivision and budgeted under
IC 36-1.3, as added by this act.
(d) After June 30, 2005, any reference to the department of local
government finance in a law that requires the collection of any
data or the conduct of any studies related to the matters described
in subsections (a) through (c) shall be treated as a reference to the
budget.
(e) The legislative council shall provide for the introduction of
legislation in the 2005 session of the general assembly to resolve
any conflicts between this act and any other law and to make any
other technical corrections necessary to conform the laws to this
act.
SECTION 82. [EFFECTIVE DECEMBER 1, 2005] (a) For
purposes of IC 6-2.5, as amended by this act, all transactions,
except the furnishing of public utility, telephone, or cable television
services and commodities by retail merchants described in
IC 6-2.5-4-5, IC 6-2.5-4-6, and IC 6-2.5-4-11, shall be considered as
having occurred after November 30, 2005, to the extent that
delivery of the property or services constituting selling at retail is
made after that date to the purchaser or to the place of delivery
designated by the purchaser. However, a transaction shall be
considered as having occurred before December 1, 2005, to the
extent that the agreement of the parties to the transaction is
entered into before December 1, 2005, and payment for the
property or services furnished in the transaction is made before
December 1, 2005, notwithstanding the delivery of the property or
services after November 30, 2005.
(b) With respect to a transaction constituting the furnishing of
public utility, telephone, or cable television services and
commodities, only transactions for which the charges are collected
on original statements and billings dated after December 31, 2005,
shall be considered as having occurred after November 30, 2005.
(c) This SECTION expires July 1, 2006.
SECTION 83. An emergency is declared for this act.