First Regular Session 117th General Assembly (2011)


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    SENATE ENROLLED ACT No. 26


     AN ACT to amend the Indiana Code concerning local government.

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

SOURCE: IC 36-1-7-16; (11)SE0026.1.1. -->
    SECTION 1. IC 36-1-7-16 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 16. (a) This section applies to a political subdivision if:
        (1) the political subdivision enters into an agreement with one (1) or more other political subdivisions under this chapter to transfer, combine, or share powers, duties, functions, or resources;
        (2) the political subdivision realizes through the transfer, combination, or sharing of powers, duties, functions, or resources a:
            (A) savings; or
            (B) reduction in the reasonably foreseeable expenses that would otherwise have been incurred by the political subdivision if the transfer, combination, or sharing of powers, duties, functions, or resources had not taken place; and
        (3) the department of local government finance will otherwise decrease the maximum permissible property tax levies, maximum permissible property tax rates, or budgets of the political subdivision to:
            (A) eliminate double taxation by different political

subdivisions for services; or
            (B) eliminate any excess by which the amount of property taxes imposed by the political subdivision exceeds the amount necessary to pay for services.
    (b) The department of local government finance shall establish criteria for making an adjustment to the maximum permissible property tax levies, maximum permissible property tax rates, and budgets under IC 6-1.1-17 and IC 6-1.1-18.5 of a political subdivision described in subsection (a).
    (c) The adjustment under subsection (b) must permit the political subdivision to continue to:
        (1) include in the political subdivision's budget part of the budgeted amounts that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses; and
        (2) impose part of a property tax levy that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses.
    (d) The additional amount that a political subdivision may continue to levy or include in the political subdivision's budget because of the adjustment under subsection (b) may not exceed the result of:
        (1) the savings or reduction in expenses realized in the first full year of operation after the transfer, combination, or sharing of powers, duties, functions, or resources is implemented, as determined by the department of local government finance; multiplied by
        (2) a percentage determined as follows:
            (A) Fifty percent (50%) in the first year of the adjustment.
            (B) Fifty percent (50%) in the second year of the adjustment.
            (C) Thirty percent (30%) in the third year of the adjustment.
            (D) Ten percent (10%) in the fourth year of the adjustment and thereafter.
The fiscal body of the political subdivision shall determine and certify to the department of local government finance the amount of the adjustment that the political subdivision wishes to accept under this section. The amount of any adjustment accepted by a political subdivision under this section must comply with the agreement under this chapter under which the political subdivision transfers, combines, or shares powers, duties, functions, or

resources.

SOURCE: IC 36-1-8-17; (11)SE0026.1.2. -->     SECTION 2. IC 36-1-8-17 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 17. (a) This section applies to a political subdivision if:
        (1) the political subdivision combines or reorganizes a department, agency, or function of the political subdivision;
        (2) the political subdivision realizes through the combination or reorganization a:
            (A) savings; or
            (B) reduction in the reasonably foreseeable expenses that would otherwise have been incurred by the political subdivision if the combination or reorganization had not taken place; and
        (3) the department of local government finance will otherwise decrease the maximum permissible property tax levies, maximum permissible property tax rates, or budgets of the political subdivision to:
            (A) eliminate double taxation; or
            (B) eliminate any excess by which the amount of property taxes imposed by the political subdivision exceeds the amount necessary to pay for services.
    (b) The department of local government finance shall establish criteria for making an adjustment to the maximum permissible property tax levies, maximum permissible property tax rates, and budgets under IC 6-1.1-17 and IC 6-1.1-18.5 of a political subdivision described in subsection (a).
    (c) The adjustment under subsection (b) must permit the political subdivision to continue to:
        (1) include in the political subdivision's budget part of the budgeted amounts that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses; and
        (2) impose part of a property tax levy that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses.
    (d) The additional amount that a political subdivision may continue to levy or include in the political subdivision's budget because of the adjustment under subsection (b) may not exceed the result of:
        (1) the savings or reduction in expenses realized in the first full year of operation after the combination or reorganization

is implemented, as determined by the department of local government finance; multiplied by
        (2) a percentage determined as follows:
            (A) Fifty percent (50%) in the first year of the adjustment.
            (B) Fifty percent (50%) in the second year of the adjustment.
            (C) Thirty percent (30%) in the third year of the adjustment.
            (D) Ten percent (10%) in the fourth year of the adjustment and thereafter.
The fiscal body of the political subdivision shall determine and certify to the department of local government finance the amount of the adjustment that the political subdivision wishes to accept under this section.

SOURCE: IC 36-1.5-3-5; (11)SE0026.1.3. -->     SECTION 3. IC 36-1.5-3-5, AS ADDED BY P.L.186-2006, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. (a) The department of local government finance shall establish a formula criteria for adjusting making an adjustment to the maximum permissible property tax levies, maximum permissible property tax rates, and budgets under this chapter that permits IC 6-1.1-17 and IC 6-1.1-18.5 if a political subdivision (or a successor political subdivision) that realizes through a reorganization under this article, including a reorganization through a cooperative agreement under IC 36-1.5-5, a:
        (1) savings; to its taxpayers; or
        (2) reduction in the reasonably foreseeable expenses that would otherwise be have been incurred by its taxpayers; the political subdivision if the reorganization had not taken place.
through a reorganization under this article.
     (b) Except as provided in subsection (d), the adjustment under this section must permit the political subdivision to continue to:
        (1) include in the political subdivision's budget part of the budgeted amounts that would otherwise be reduced by the department of local government finance under section 4 of this chapter on account of the realized savings or reduction in expenses that occurs because of the reorganization; and
        (2) impose part of the property tax levy part of that would otherwise be reduced by the department of local government finance under section 4 of this chapter on account of the realized savings or reduction in expenses that occurs because of the reorganization.
     (c) The additional amount that a political subdivision may

continue to levy or include in the political subdivision's budget because of the adjustment under this section may not exceed fifty percent (50%) the result of :
        (1) the savings or reduction realized in the first full year of operation after the reorganization is implemented, as determined by the department of local government finance; multiplied by
        (2) a percentage determined as follows:
            (A) Fifty percent (50%) in the first year of the adjustment.
            (B) Fifty percent (50%) in the second year of the adjustment.
            (C) Thirty percent (30%) in the third year of the adjustment.
            (D) Ten percent (10%) in the fourth year of the adjustment and thereafter.
The fiscal body of the political subdivision shall determine and certify to the department of local government finance the amount of the adjustment that the political subdivision wishes to accept under this section.
     (d) The amount of any adjustment accepted by a political subdivision under this section must comply with the reorganization agreement under which the political subdivision is reorganized under this article.

SOURCE: IC 36-6-1.5-12; (11)SE0026.1.4. -->     SECTION 4. IC 36-6-1.5-12, AS ADDED BY P.L.240-2005, SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 12. (a) Subject to subsection (b), the officers of the new township government shall:
        (1) obtain from the department of local government finance approval under IC 6-1.1-18.5-7 of:
            (A) a budget;
            (B) an ad valorem property tax levy; and
            (C) a property tax rate;
        (2) fix the annual budget under IC 6-1.1-17;
        (3) impose a property tax levy; and
        (4) take any action necessary to ensure the collection of fees and other revenue;
for the new township government for the budget year following the year the officers take office.
     (b) The department of local government finance shall establish criteria for making an adjustment to the maximum permissible property tax levies, maximum permissible property tax rates, and budgets under IC 6-1.1-17 and IC 6-1.1-18.5 if the new township realizes through a merger under this chapter a:
        (1) savings; or
        (2) reduction in the reasonably foreseeable expenses that would otherwise have been incurred by the political subdivision if the merger had not taken place.
    (c) The adjustment under subsection (b) must permit the new township to continue to:
        (1) include in the township's budget part of the budgeted amounts that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses that occurs because of the merger; and
        (2) impose part of a property tax levy that would otherwise be reduced by the department of local government finance on account of the realized savings or reduction in expenses that occurs because of the merger.
    (d) The additional amount that a political subdivision may continue to levy or include in the political subdivision's budget because of the adjustment under subsection (b) may not exceed the result of:
        (1) the savings or reduction in expenses realized in the first full year of operation after the merger is implemented, as determined by the department of local government finance; multiplied by
        (2) a percentage determined as follows:
            (A) Fifty percent (50%) in the first year of the adjustment.
            (B) Fifty percent (50%) in the second year of the adjustment.
            (C) Thirty percent (30%) in the third year of the adjustment.
            (D) Ten percent (10%) in the fourth year of the adjustment and thereafter.
The fiscal body of the new township shall determine and certify to the department of local government finance the amount of the adjustment that the new township wishes to accept under this section.

SEA 26
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