Citations Affected: IC 6-1.1; IC 6-8.1-1-1; IC 6-10; IC 36-1-2-7.
Synopsis: Property tax freeze. Imposes a freeze on the total amount of
ad valorem property taxes that may be imposed in Indiana beginning
in 2008 other than for an obligation that: (1) was entered into before
April 15, 2007; and (2) includes a pledge requiring a taxing unit or
allocation area to repay the obligation only from property taxes.
Authorizes a taxing unit to adopt a levy freeze replacement income tax
to replace the revenue lost as a result of the application of the property
tax levy freeze. Defines the term "fiscal officer" for certain political
subdivisions.
Effective: July 1, 2007.
January 23, 2007, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
limit" refers to the part of a taxing unit's overall freeze limit that
applies to a particular county.
Sec. 5. As used in this chapter, "controlled tax levy" refers to a
levy of any combination of property taxes and other taxes that are
limited by a general tax limit.
Sec. 6. As used in this chapter, "department" refers to the
department of local government finance.
Sec. 7. As used in this chapter, "fiscal officer" has the meaning
set forth in IC 36-1-2-7.
Sec. 8. As used in this chapter, "freeze limit" refers to the
following:
(1) A taxing unit's overall freeze limit.
(2) A taxing unit's apportioned freeze limit.
(3) Any governmental function freeze limit applicable to
property taxes imposed for any of the taxing unit's purposes,
funds, or groups of purposes or funds.
(4) Any apportioned governmental function freeze limit
applicable to property taxes imposed for any of the taxing
unit's purposes, funds, or groups of purposes or funds.
Sec. 9. As used in this chapter, "freeze limit determination"
refers to a determination by the department setting or adjusting a
taxing unit's freeze limit or imposing a property tax in excess of a
freeze limit.
Sec. 10. As used in this chapter, "general tax limit" refers to tax
controls imposed by law that limit the aggregate amount of
property taxes and other taxes that may be imposed for a
particular purpose, fund, or group of purposes or funds.
Sec. 11. As used in this chapter, "governing body of an
allocation area" refers to a governing body (as defined in
IC 6-1.1-21.2-6) of an allocation area (as defined in
IC 6-1.1-21.2-3).
Sec. 12. As used in this chapter, "governmental function freeze
limit" means the maximum permissible property tax levy that a
taxing unit may impose for a particular fund, purpose, or group of
funds or purposes.
Sec. 13. As used in this chapter, "overall freeze limit" means the
maximum total of all property tax levies that a taxing unit may
impose for all of the taxing unit's funds, purposes, and groups of
funds or purposes.
Sec. 14. As used in this chapter, "property tax" refers to a tax
that is assessed and imposed on tangible property on an ad valorem
basis for a particular assessment date, including property taxes
imposed by a special taxing district (as defined in IC 36-1-2-18) and
property taxes subject to IC 6-1.1-7-6.
Sec. 15. As used in this chapter, "requirement" refers to a
requirement:
(1) in a lease, bond, note, warrant, or other obligation that
restricts the source of revenue from which a payment may be
made to property taxes; and
(2) that became legally binding on a:
(A) taxing unit; or
(B) governing body of an allocation area;
before April 15, 2007.
Sec. 16. (a) A taxing unit may not impose a:
(1) property tax; or
(2) property tax rate;
for a calendar year that, when added to all of the taxing unit's
other property taxes and property tax rates imposed for the same
calendar year, exceeds the taxing unit's overall freeze limit for the
year.
(b) A taxing unit may not impose a:
(1) property tax; or
(2) property tax rate;
in a particular county for a calendar year that, when added to all
of the taxing unit's other property taxes and property tax rates
imposed for the county for the same calendar year, exceeds the
taxing unit's apportioned overall freeze limit in the county for the
year.
Sec. 17. (a) This section applies only if a law imposes a:
(1) maximum permissible property tax limit on a property tax
levy; or
(2) maximum permissible general tax limit on the total
controlled tax levy;
that may be or must be imposed for a particular purpose, fund, or
group of purposes or funds.
(b) A taxing unit may not impose a:
(1) property tax; or
(2) property tax rate;
for a calendar year for a particular purpose, fund, or group of
purposes or funds that exceeds the taxing unit's governmental
function freeze limit for the purpose, fund, or group of purposes or
funds for the year.
(c) A taxing unit may not impose a:
(1) property tax; or
installments, a permissible deferral of a property tax due date, or
another reason.
Sec. 21. The amount of any shortfall or other corrective
property tax levy permitted under IC 6-1.1-18.5-14,
IC 6-1.1-18.5-16, IC 6-1.1-19-3, IC 20-45-6-7, or another law is
attributable to the year being corrected and not the year in which
the shortfall or other corrective property tax levy becomes first
due and payable.
Sec. 22. (a) This section applies if an amount from a levy excess
fund established under IC 6-1.1-18.5-17 or IC 20-44-3 is used to
reduce a property tax levy imposed in a particular year.
(b) If a taxing unit's property tax levy or property tax rate
would exceed a taxing unit's freeze limit before the application of
money from a levy excess fund to reduce the property tax levy or
rate, the amount from the levy excess fund may be applied only
after reducing the property tax levy or rate to bring the taxing
unit's property tax levies and rates within the taxing unit's freeze
limits.
Sec. 23. (a) A county board of tax adjustment or a county
auditor performing the duties of a county board of tax adjustment
may not approve or recommend property tax levies or property tax
rates that would exceed a taxing unit's freeze limit.
(b) If a taxing unit adopts or advertises a property tax levy or
rate that would result in the taxing unit exceeding its freeze limits,
the county board of tax adjustment or county auditor that reviews
the taxing unit's budget, property tax levy, and property tax rate
shall reduce the taxing unit's property tax levies and property tax
rates to bring the taxing unit's property tax levies and rates within
the taxing unit's freeze limits.
(c) If a county board of tax adjustment approves, or
recommends the approval of, property tax levies or property tax
rates that exceed the taxing unit's freeze limits, the county auditor
shall reduce the taxing unit's property tax levies and property tax
rates to bring the taxing unit's property tax levies and rates within
the taxing unit's freeze limits.
(d) A reduction under this section must be set out in the notice
published by the county auditor under IC 6-1.1-17-12.
(e) An appeal to the department of a reduction under this
section is permitted as provided in IC 6-1.1-17, IC 6-1.1-18.5, and
IC 6-1.1-19, as appropriate.
Sec. 24. The department may review under IC 6-1.1-17 any tax
rate, tax levy, or budget that contributes to the aggregate property
tax levy that is subject to a freeze limit.
Sec. 25. The department may not certify under IC 6-1.1-17-16
a property tax levy, property tax rate, or budget that would result
in property tax levies that exceed a taxing unit's freeze limits. The
part of any greater property tax levy that is permitted under any
other law may be raised only from any combination of the
following:
(1) The imposition of a tax under IC 6-10.
(2) The use of money derived from a source of revenue other
than property taxes.
Sec. 26. The department shall:
(1) apply the maximum permissible property tax levy limits
and property tax rate limits permitted under IC 6-1.1-18-12,
IC 6-1.1-18.5-3, IC 20-45-3, or any other law in a manner that
carries out this chapter; and
(2) prescribe budget procedures and forms that implement
this chapter.
Sec. 27. A county board of tax adjustment, a county auditor, and
the department shall reduce property tax levies and property tax
rates to bring the taxing unit's property tax levies and rates within
the taxing unit's freeze limits in the manner and according to the
standards prescribed by the department.
Sec. 28. A part of the property tax levy actually collected by a
taxing unit, for taxes first due and payable during a particular
calendar year, that exceeds the taxing unit's property tax levy, as
approved by the department under IC 6-1.1-17, for those property
taxes is valid even if the amount actually collected exceeds a freeze
limit. The amount collected may not be contested on the grounds
that it exceeds the taxing unit's freeze limit for the applicable year.
However, the taxing unit shall deposit the amount exceeding the
freeze limits in the taxing unit's levy excess fund. The amount
deposited under this section shall be used as provided for property
tax collections deposited in the taxing unit's levy excess fund under
IC 6-1.1-18.5-17 or IC 20-44-3.
Sec. 29. The department shall determine the following:
(1) The total amount of property taxes imposed in Indiana
that ordinarily would be first due and payable in 2007, after
eliminating the effect of:
(A) shortfall and other excessive tax levies; and
(B) other temporary adjustments;
affecting property tax levies first due and payable in 2007.
(2) The share of the amount determined under subdivision (1)
that was levied by each taxing unit.
(3) The share of the amount determined under subdivision (2)
that was levied by the taxing unit for each purpose, fund, or
group of purposes or funds.
Sec. 30. Subject to this chapter, the total property tax levy
determined for a taxing unit under section 29(2) of this chapter is
the taxing unit's overall freeze limit for each year after 2007.
Sec. 31. (a) This section applies only if a law imposes a:
(1) maximum permissible property tax limit on a property tax
levy; or
(2) maximum permissible general tax limit on the total
controlled general tax levy;
that may be or is required to be imposed for a particular purpose,
fund, or group of purposes or funds.
(b) Subject to this chapter, the taxing unit's governmental
function freeze limit for the purpose, fund, or group of purposes or
funds for each year after 2007 is the amount determined for the
purpose, fund, or group of purposes or funds under section 29(3)
of this chapter.
Sec. 32. If property taxes first due and payable in 2007 for a
taxing unit were affected by the late issuance of a statement under
IC 6-1.1-22-8, by the issuance of a provisional or reconciling
statement under IC 6-1.1-22.5, or by other extraordinary factors,
the department's freeze limit determination for the taxing unit may
be an estimate using the best data available to the department.
However, the department shall adjust the estimate, as determined
appropriate by the department and on the schedule and in the
manner determined by the department, to reflect the receipt of
more accurate and complete data.
Sec. 33. The department may adjust a freeze limit
determination, as determined appropriate by the department and
on the schedule and in the manner determined by the department,
to correct a mathematical error or other error in the calculation of
the amount.
Sec. 34. The department may permit a property tax levy that
exceeds a freeze limit only as allowed under this chapter. The
department's order may increase a property tax in excess of a
freeze limit only for the amount and for the period necessary to
carry out the purposes for which the increase is permitted under
this chapter.
Sec. 35. The department may not adjust a taxing unit's freeze
limits for any of the following reasons:
function freeze limits among the counties in which a taxing unit is
located. The taxing unit may not levy in a county in any year after
2007:
(1) a total amount exceeding the part of the taxing unit's
overall freeze limit that is apportioned to the county; or
(2) an amount for any purpose, fund, or group of purposes or
funds that is subject to a governmental function freeze limit
exceeding the part of the taxing unit's governmental function
levy limit that is apportioned to the county.
Sec. 41. A taxing unit's apportioned freeze limit for an ensuing
year is equal to the taxing unit's freeze limit multiplied by a
fraction. The numerator of the fraction is the assessed value of the
taxable property of the taxing unit in a particular county as
reported on the auditor's abstract delivered to the auditor of state
under IC 6-1.1-22-5 in the year in which budgets are adopted for
the ensuing year. The denominator of the fraction is the assessed
value of the taxable property of the taxing unit in all counties as
reported on the auditor's abstract delivered to the auditor of state
under IC 6-1.1-22-5 in the year in which budgets are adopted for
the ensuing year.
Sec. 42. Before August 2 of each year, the department shall
certify a taxing unit's freeze limits to the following:
(1) The fiscal officer of the affected taxing unit.
(2) The county auditor of each county in which the taxing unit
described in subdivision (1) is located.
(3) The fiscal officer of each county in which the taxing unit
described in subdivision (1) is located, if the fiscal officer is
not the county auditor.
Sec. 43. (a) Any of the following may petition for judicial review
of a final freeze limit determination:
(1) The affected taxing unit.
(2) An affected governing body of an allocation area.
(3) The county auditor for a county in which the affected
taxing unit is located.
(4) The fiscal officer of a county in which the affected taxing
unit is located, if the fiscal officer is not the county auditor.
(5) The board of tax adjustment for a county in which the
affected taxing unit is located.
(b) A petition under this section must be filed in the tax court
not more than forty-five (45) days after the department certifies its
freeze limit determination for the affected taxing unit under section
42 of this chapter.
article.
Sec. 5. Laws placing conditions on when a property tax may be
imposed or how a property tax may be used, including:
(1) IC 6-1.1-18.5-8;
(2) IC 6-1.1-20; and
(3) IC 20-46-7-8;
shall be construed for purposes of this article to apply to a tax
imposed under this article.
Sec. 6. Taxes imposed under this article shall be treated as
exempt from any property tax levy limitations imposed by law,
including:
(1) IC 6-1.1-18.5-3; and
(2) IC 20-45-3;
only to the extent that the property taxes that are replaced would
have been exempt from the levy limitations.
Sec. 7. Any law that refers to a property tax levy shall be
interpreted for purposes of this article by converting the property
tax levy amount to an equivalent amount of tax under this article.
Sec. 8. Any law that refers to a property tax rate shall be
interpreted for purposes of this article by converting the property
tax rate to a tax rate under this article that will raise an equivalent
amount of revenue.
Sec. 9. Taxes shall be distributed to an allocation area to the
extent that the property taxes that are replaced would have been
distributed to the allocation area, as determined in the manner
prescribed by the department of local government finance.
Sec. 10. The department of local government finance shall
prescribe procedures and standards for applying this chapter to:
(1) a calculation permitted or required by law that uses a
property tax rate or property tax levy; and
(2) any other law that refers to a property tax levy or
property tax rate.
Chapter 4. Maximum Tax; Computation of Tax Rates
Sec. 1. (a) A taxing unit may impose or appropriate money from
a tax under this article only if:
(1) a law outside this article; or
(2) section 6 or 7 of this chapter;
specifically permits or requires the taxing unit to impose or
appropriate money from a property tax or a tax under this article.
(b) The taxing unit's authority to impose or appropriate taxes
from a tax under this article is limited to the greater of zero (0) or
the remainder of:
under written policies established by the budget agency and
uniformly applied in all taxing units.
(c) The department of local government finance shall notify the
fiscal officer of a taxing unit of the proposed additional tax levy
and estimated tax rate under this section before August 2 of the
year immediately preceding the year in which it is imposed.
(d) An additional tax rate under this section shall be certified
and published in the same manner as other tax rates under this
article.
(e) The amount collected from an additional tax rate imposed
under this section shall be deposited in the taxing unit's account in
the excess fund.
Sec. 7. (a) The department of local government finance, after
review of the recommendation of the budget agency, may impose
an additional tax rate for a taxing unit to cover a shortfall in tax
collections below the amount of tax revenue certified for use in a
taxing unit's budget.
(b) The additional tax rate may be imposed over more than one
(1) year to recover the full amount of the shortfall.
(c) The department of local government finance shall notify the
taxing unit's fiscal officer of a proposed additional tax rate under
this section on the schedule determined by the department of local
government finance.
(d) An additional tax under this section shall be certified and
published in the same manner as other tax rates under this article.
(e) The amount collected from an additional tax rate imposed
under this section shall be deposited in the taxing unit's account in
the excess fund.
Chapter 5. Determination of Tax Area
Sec. 1. A tax levy for a taxing unit shall be imposed in the tax
area determined under this chapter.
Sec. 2. The tax rate imposed by a taxing unit in the taxing unit's
tax area shall be uniformly applied to the adjusted gross income of
all taxpayers in the taxing area.
Sec. 3. (a) This section applies to a school corporation.
(b) The taxing area for a school corporation is the area within
the boundaries of the school corporation.
Sec. 4. (a) This section applies to the following:
(1) A city.
(2) A town.
(3) Another taxing unit if:
(A) the assessed valuation of the taxing unit is entirely
contained within one (1) or more cities or towns; or
(B) the taxing unit was originally established by one (1) or
more cities or towns.
(b) This section does not apply to any of the following:
(1) A school corporation.
(2) A township.
(c) The taxing area for a taxing unit to which this section applies
is the area within the boundaries of the city or town where the
taxing unit is located.
Sec. 5. (a) This section applies to a taxing unit to which section
3 or 4 of this chapter does not apply.
(b) The taxing area for a taxing unit to which this section applies
is each county in which the taxing unit is located.
Chapter 6. Imposition of Tax
Sec. 1. The fiscal body of a taxing unit may impose a levy freeze
replacement income tax on the adjusted gross income of taxpayers
in the taxing unit's tax area.
Sec. 2. The tax is imposed on the adjusted gross income of:
(1) each individual who is a resident of the tax area on the
residency determination day for the individual's taxable year;
and
(2) each individual:
(A) who is not a resident of any tax area in Indiana on the
residency determination day for the individual's taxable
year; and
(B) whose principal place of business or employment is
located in the tax area on the residency determination day
for the individual's taxable year.
Sec. 3. The tax on a nonresident may be imposed only on the
part of the nonresident's adjusted gross income that is derived
from the individual's principal place of business or employment in
the tax area.
Sec. 4. In the case of a resident of Perry County, the tax may not
be imposed on the part of the individual's adjusted gross income
that is:
(1) earned in a county that is:
(A) located in another state; and
(B) adjacent to the county in which the taxpayer resides;
and
(2) subject to an income tax imposed by a county, city, town,
or other local governmental entity in the other state.
Sec. 5. For purposes of this chapter, an individual shall be
treated as a resident of:
(1) the tax area in which the individual maintains a home, if
the individual maintains only one (1) home in Indiana;
(2) if subdivision (1) does not apply, the tax area in which the
individual is registered to vote;
(3) if neither subdivision (1) nor (2) applies, the tax area in
which the individual registers the individual's personal
automobile; or
(4) if neither subdivision (1), nor (2), nor (3) applies, the tax
area in which the individual spends the majority of the
individual's time in Indiana during the taxable year in
question.
Sec. 6. The residence or principal place of business or
employment of an individual is to be determined on January 1 of
the year in which the individual's taxable year begins. If an
individual changes the location of the individual's residence or
principal place of employment or business to another tax area in
Indiana during a year, the individual's liability for the tax is not
affected.
Sec. 7. A taxing unit's fiscal body may pass an ordinance (if the
taxing unit is a county, city, or town) or a resolution (if the taxing
unit is not a county, city, or town) to enter into reciprocity
agreements with the taxing authority of a city, town, municipality,
county, or other similar local governmental entity of any other
state. A reciprocity agreement must provide that the income of
Indiana residents is exempt from income taxation by the other
local governmental entity to the extent that the income of
nonresidents who reside in the other local governmental entity is
exempt from the tax in the Indiana taxing unit entering into the
agreement.
Sec. 8. A reciprocity agreement adopted under this chapter may
not become effective until it is also made effective in the other local
governmental entity that is a party to the agreement.
Sec. 9. The form and effective date of any reciprocity agreement
described in this chapter must be approved by the department of
state revenue. The taxing unit shall certify the reciprocity
agreement and any change in the reciprocity agreement to the
department of state revenue.
Sec. 10. If for any taxable year a taxpayer is subject to different
tax rates for the tax imposed in a tax area, the taxpayer's tax rate
for the tax area and that taxable year is the rate determined in
STEP FOUR of the following STEPS:
the taxpayer's spouse are, entitled to a credit against the tax
liability under this article for that same taxable year. The amount
of the credit equals the lesser of:
(1) the product of:
(A) the credit for the elderly or totally disabled for that
same taxable year; multiplied by
(B) a fraction, the:
(i) numerator of which is the tax rate imposed under this
article against the taxpayer or the taxpayer and the
taxpayer's spouse; and
(ii) denominator of which is fifteen-hundredths (0.15); or
(2) the amount of tax imposed on the taxpayer or the taxpayer
and the taxpayer's spouse.
(b) If a taxpayer and the taxpayer's spouse file a joint return
and are subject to different taxing unit tax rates for the same
taxable year, the taxpayer and the taxpayer's spouse shall compute
the credit under this section by using the formula provided under
subsection (a), except that they shall use the average of the two (2)
tax rates imposed against them as the numerator referred to in
subsection (a)(1)(B)(i).
Sec. 14. Except as otherwise provided in this chapter, all
provisions of the adjusted gross income tax law (IC 6-3)
concerning:
(1) definitions;
(2) declarations of estimated tax;
(3) filing of returns;
(4) deductions or exemptions from adjusted gross income;
(5) remittances;
(6) incorporation of the provisions of the Internal Revenue
Code;
(7) penalties and interest; and
(8) exclusion of military pay credits for withholding;
apply to the imposition, collection, and administration of the tax
imposed by this article.
Sec. 15. IC 6-3-1-3.5(a)(6), IC 6-3-3-3, IC 6-3-3-5,
IC 6-3-4-4.1(h), IC 6-3-4-8.1(f), and IC 6-3-5-1 do not apply to the
tax imposed by this article.
Sec. 16. Each employer, including an employer making
payments by electronic funds transfer, shall report to the
department of state revenue for each reporting period the amount
of tax withholdings attributable to each taxing area. The report
must be made before the later of:
taxing unit is located.
(3) Any person or entity that is the subject of an order.
(4) If the order was issued as the result of an appeal, any of
the parties to the appeal.
(b) The petition must be filed in the tax court not more than
thirty (30) days after the department of local government finance
enters its order under this article.
Chapter 9. Adoption of Budgets, Tax Rate, and Tax Levies
Sec. 1. Before July 2 in each year, the county fiscal officer shall
send a certified statement to the fiscal officer of each taxing unit in
the county containing the following information:
(1) An estimate of the taxes to be distributed to the taxing unit
during the last six (6) months of the current year.
(2) The average growth in adjusted gross income in the county
over the preceding three (3) years, as determined according
to procedures established by the department of local
government finance.
(3) The amount available in the excess fund to replace revenue
shortfalls from a year before the ensuing year and to reduce
tax rates in the ensuing year.
(4) Any other information at the disposal of the county fiscal
officer that might affect the budget adoption process.
Sec. 2. In formulating budget estimates, a taxing unit's fiscal
officer and fiscal body shall identify the tax levies that are needed
for each fund for the budget year.
Sec. 3. In the notice required under IC 6-1.1-17-3, a taxing unit
shall include the following information:
(1) The amount of the budget for each fund that the taxing
unit proposes to fund from taxes, as determined before the
inclusion of the amounts described in subdivision (2) and the
estimated tax rate necessary to raise the amount.
(2) The amount of each excessive levy appeal or other appeal
under IC 6-1.1-18.5, IC 6-1.1-19, or another law that the
taxing unit proposes to fund from taxes and the estimated tax
rate necessary to raise the amount.
(3) The amount of budget that will be funded from a
distribution of the taxing unit's reserve in the excess fund.
(4) The amount of tax levy and tax rate required under
IC 6-10-4-5 and IC 6-10-4-6.
Sec. 4. Not later than the date on which the notice described in
section 3 of this chapter is published, a taxing unit shall submit a
copy of the notice to the county fiscal officer.
rates, and tax levies.
Sec. 11. When a county board of tax adjustment or county fiscal
officer (if the county fiscal officer is permitted by law to act for or
instead of the county board of tax adjustment) reviews budgets, tax
levies, and tax rates under IC 6-1.1-17-6, the county board of tax
adjustment or county fiscal officer may revise or reduce, but not
increase, taxes, tax rates, and the part of the budget funded from
taxes to enforce the taxing unit's tax limits imposed by law. A
county board of tax adjustment or county fiscal officer shall notify
the fiscal officer of each taxing unit of the action taken under this
section.
Sec. 12. When a county board of tax adjustment or county fiscal
officer (if the county fiscal officer is permitted by law to act for or
instead of the county board of tax adjustment) reviews budgets, tax
levies, and tax rates under IC 6-1.1-17-6, the county board of tax
adjustment or county fiscal officer may recommend that a taxing
unit's tax limits are inadequate to carry out the governmental
functions of the taxing unit. The recommendation shall be filed
with the county fiscal officer and the department of local
government finance with findings of fact to support the
recommendation.
Sec. 13. A county board of tax adjustment or the county fiscal
officer (if the county fiscal officer is permitted by law to act for or
instead of the county board of tax adjustment) shall complete its
duties under sections 11 and 12 of this chapter before the date
specified in IC 6-1.1-17-9. The county board of tax adjustment or
county fiscal officer shall issue its determination in the form of a
written order. The written order shall be certified to the following:
(1) The affected taxing unit.
(2) The county fiscal officer for each county in which the
taxing unit is located.
Sec. 14. An action concerning a taxing unit's taxes taken by a
county board of tax adjustment or the county fiscal officer (if the
county fiscal officer is permitted by law to act for or instead of the
county board of tax adjustment) under section 13 of this chapter is
final unless:
(1) a recommendation is made under section 12 of this
chapter; or
(2) section 19 of this chapter applies (but only to the extent
necessary to carry out section 19 of this chapter).
Sec. 15. In the notice required under IC 6-1.1-17-12, the county
fiscal officer shall include the following information:
government finance in the county from which the appeal was filed.
Sec. 21. The department of local government finance may, at
any time, increase the taxes imposed for a taxing unit for the
following reasons:
(1) To pay the principal or interest upon a funding, refunding,
or judgment funding obligation of a taxing unit.
(2) To pay the interest or principal upon an outstanding
obligation of the taxing unit.
(3) To pay a judgment rendered against the taxing unit.
(4) To pay lease rentals that have become an obligation of the
taxing unit under IC 20-47-2 or IC 20-47-3.
(5) To raise sufficient money to pay the cost of child services
(as defined in IC 12-19-7-1) of the county payable from the
family and children's fund.
(6) To raise sufficient money to pay the cost of children's
psychiatric residential treatment services (as defined in
IC 12-19-7.5-1) of the county payable from the children's
psychiatric residential treatment services fund.
(7) To raise sufficient money to meet the estimated cost of
township assistance.
Sec. 22. The department of local government finance may
increase a taxing unit's taxes to raise sufficient money to pay for
the amount of an excessive levy appeal or other appeal under
IC 6-1.1-19 that exceeds the taxing unit's tax limits.
Sec. 23. The department of local government finance may
increase, decrease, or otherwise revise a tax to correct an error in
data, computations, or advertisements.
Sec. 24. The department of local government finance may
decrease or otherwise revise a tax to enforce the taxing unit's tax
limits.
Sec. 25. The department of local government finance may
increase or otherwise revise a tax to eliminate the effects of
imposing or increasing a tax after January 1 of a year.
Sec. 26. If the department of local government finance increases,
decreases, or otherwise revises a taxing unit's taxes, the
department of local government finance must revise the taxing
unit's budget in the manner provided in IC 6-1.1-17-16.
Sec. 27. The department of local government finance shall
certify a taxing unit's tax levies and tax rates for a year to:
(1) the affected taxing unit;
(2) the county fiscal officer for the county where taxes must be
raised;
department of local finance certifies for use to fund the taxing
unit's budget for the year.
Sec. 2. The auditor of state shall distribute as required by law
any tax revenue that is:
(1) distributed to an allocation area; or
(2) used as incremental tax revenue.
Sec. 3. Distributions under this chapter must be made from the
state general fund.
Sec. 4. Subject to this chapter, the auditor of state shall make
the distribution in eleven (11) equal monthly installments
beginning in February of the year for which the certification is
made. However, if the department of local government finance
adjusts the amount to be distributed after February of a particular
year, the auditor of state shall increase or decrease the distribution
amount equally in each remaining month in the year to reflect the
adjustment.
Sec. 5. (a) This section applies if:
(1) a taxing unit's legislative body adopts an ordinance (if the
taxing unit is a county, city, or town) or a resolution (if the
taxing unit is not a county, city, or town) authorizing the
distribution of part of the taxing unit's taxes to an assignee of
the taxing unit; and
(2) the assignment is permitted by law.
(b) The auditor of state shall reduce the amount of a distribution
made to a taxing unit by the amount that the taxing unit directs the
auditor of state to distribute to an assignee of the taxing unit.
(c) A distribution under this section must be made to the
assignee designated in the ordinance or resolution at the assignee's
last known address, as submitted to the auditor of state by the
executive of the taxing unit before the cutoff date specified by the
auditor of state or as otherwise determined by law.
(d) A distribution under this section may be made not more than
one (1) time each month. The distribution may be made only in the
months specified in the ordinance or resolution. The distribution
for a month may not exceed the amount that the taxing unit would
otherwise be entitled to receive as a distribution in the month, after
deducting all other distribution assignments.
Sec. 6. The amount necessary to make the distributions required
by this chapter is annually appropriated from the state general
fund.
Chapter 11. Levy Freeze Replacement Excess Fund
Sec. 1. The levy freeze replacement excess fund is established.
The excess fund shall be administered by the auditor of state.
Sec. 2. The treasurer of state shall invest the money in the excess
fund not currently needed to meet the obligations of the excess
fund in the same manner as other public money may be invested.
Interest that accrues from these investments shall be deposited in
the excess fund.
Sec. 3. Money in the excess fund at the end of a state fiscal year
does not revert to the state general fund.
Sec. 4. An account is established in the excess fund for each
taxing unit.
Sec. 5. The auditor of state shall deposit revenues collected from
a tax in the account established under section 4 of this chapter for
the taxing unit imposing the tax. The auditor of state shall
apportion interest earned on money in the excess fund among the
accounts in the excess fund.
Sec. 6. Money in the excess fund may be used for any of the
following purposes:
(1) To reimburse the state general fund for distributions to
taxing units and assignees of taxing units under this article, on
the schedule determined by the budget agency.
(2) To reimburse the state general fund for refunds made to
taxpayers for tax overpayments, on the schedule determined
by the budget agency.
(3) For a purpose described in section 7 of this chapter.
Sec. 7. (a) The budget agency shall annually determine whether
there is excess tax revenue in a taxing unit's account in the excess
fund.
(b) The budget agency may not consider as excess revenue any
balance accumulated from tax revenue described in IC 6-10-4-3.
(c) If the budget agency determines in any year that a taxing
unit's account has excess tax revenue, the budget agency shall
certify the excess amount to the department of local government
finance and the auditor of state. The department of local
government finance shall order that the excess money be applied
as follows:
(1) To fund any shortfall in tax revenue for the taxing unit
from a preceding year, as determined by the department of
local government finance.
(2) If a material amount of excess tax revenue remains after
applying the excess tax revenue under subdivision (1), the
department of local government finance shall order that tax
rates in one (1) or more subsequent years in the taxing unit be
reduced and the balance of the excess tax revenue be used to
replace the revenue lost as a result of the reduction in taxes.
(d) Excess revenue distributed to a taxing unit under this section
may be used for any lawful purpose of the taxing unit. The excess
revenue shall be treated as miscellaneous revenue and may not be
considered in computing the maximum taxes that may be levied by
the taxing unit.
Sec. 8. A distribution to a taxing unit under this article may not
be withheld on the grounds that an inadequate amount exists in the
excess fund or in a taxing unit's account in the excess fund. If
insufficient money exists in the excess fund or in an account in the
excess fund to reimburse the state general fund for all distributions
made in a year, the state general fund shall be reimbursed in
subsequent years as money becomes available.
Sec. 9. A transfer of money to the state general fund under
section 6 of this chapter may be made even if an inadequate
amount exists in a particular taxing unit's account in the excess
fund. If insufficient money exists in an account in the excess fund
to reimburse the state general fund for all distributions made in a
year:
(1) an advance to the general fund may be made from any
other account in the excess fund; or
(2) the general fund may be reimbursed as money becomes
available.
The amount of any advance made from an account shall be
replaced as money becomes available.
Sec. 10. The amount necessary to make the transfers and
distributions from the excess fund permitted by this chapter is
annually appropriated from the excess fund.
Chapter 12. Bonds
Sec. 1. Notwithstanding any other law, if a taxing unit desires to
issue obligations or enter into leases, payable wholly or in part
from taxes, the obligations of the taxing unit or any lessor may be
sold at public sale in accordance with IC 5-1-11 or at negotiated
sale.
Sec. 2. A pledge of tax revenues under this article is enforceable
in accordance with IC 5-1-14.
Sec. 3. With respect to obligations for which a pledge has been
made under this article, the general assembly covenants with the
taxing unit and the purchasers or owners of those obligations that
this article will not be repealed or amended in any manner that will
adversely affect the tax collected under this article as long as the
principal of or interest on those obligations is unpaid.