CHAPTER 18. LIMITATIONS ON PROPERTY TAX RATES AND APPROPRIATIONS
IC 6-1.1-18
Chapter 18. Limitations on Property Tax Rates andAppropriations
IC 6-1.1-18-1
Budget, tax rate, and tax levy; exceeding amount published
Sec. 1. When fixing a budget, tax rate, and tax levy underIC 6-1.1-17-5, the officers of a political subdivision may not fix abudget or tax levy which exceeds the amount published by thepolitical subdivision. The portion of a budget or tax levy whichexceeds the published amount is void.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.33-1994,SEC.2.
IC 6-1.1-18-2
Maximum state tax rate
Sec. 2. (a) Before January 1, 2009, the state may not impose acombined ad valorem property tax rate on tangible property thatexceeds the sum of the ad valorem property tax rates permitted underIC 4-9.1-1-8, IC 15-1.5-7-3 (before July 1, 2008), and IC 15-13-8-3(after June 30, 2008, and before January 1, 2009). The state tax rateis not subject to review by county boards of tax adjustment or countyauditors.
(b) Except as permitted under IC 4-9.1-1-8 to repay notes issuedto meet casual deficits in state revenue, the state may not impose anad valorem property tax rate on tangible property after December 31,2008.
(c) This section does not apply to political subdivisions of thestate.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.6-1997,SEC.81; P.L.224-2007, SEC.17; P.L.146-2008, SEC.165;P.L.1-2010, SEC.26.
IC 6-1.1-18-3
Maximum political subdivision tax rate
Sec. 3. (a) Except as provided in subsection (b), the sum of all taxrates for all political subdivisions imposed on tangible propertywithin a political subdivision may not exceed:
(1) forty-one and sixty-seven hundredths cents ($0.4167) oneach one hundred dollars ($100) of assessed valuation interritory outside the corporate limits of a city or town; or
(2) sixty-six and sixty-seven hundredths cents ($0.6667) oneach one hundred dollars ($100) of assessed valuation interritory inside the corporate limits of a city or town.
(b) The proper officers of a political subdivision shall fix tax rateswhich are sufficient to provide funds for the purposes itemized inthis subsection. The portion of a tax rate fixed by a politicalsubdivision shall not be considered in computing the tax rate limitsprescribed in subsection (a) if that portion is to be used for one (1)of the following purposes: (1) To pay the principal or interest on a funding, refunding, orjudgment funding obligation of the political subdivision.
(2) To pay the principal or interest on an outstanding obligationissued by the political subdivision if notice of the sale of theobligation was published before March 9, 1937.
(3) To pay the principal or interest upon:
(A) an obligation issued by the political subdivision to meetan emergency which results from a flood, fire, pestilence,war, or any other major disaster; or
(B) a note issued under IC 36-2-6-18, IC 36-3-4-22,IC 36-4-6-20, or IC 36-5-2-11 to enable a city, town, orcounty to acquire necessary equipment or facilities formunicipal or county government.
(4) To pay the principal or interest upon an obligation issued inthe manner provided in:
(A) IC 6-1.1-20-3 (before its repeal);
(B) IC 6-1.1-20-3.1 through IC 6-1.1-20-3.2; or
(C) IC 6-1.1-20-3.5 through IC 6-1.1-20-3.6.
(5) To pay a judgment rendered against the politicalsubdivision.
(c) Except as otherwise provided in IC 6-1.1-19 (before January1, 2009), IC 6-1.1-18.5, IC 20-45 (before January 1, 2009), orIC 20-46, a county board of tax adjustment, a county auditor, or thedepartment of local government finance may review the portion ofa tax rate described in subsection (b) only to determine if it exceedsthe portion actually needed to provide for one (1) of the purposesitemized in that subsection.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.73-1983,SEC.10; P.L.16-1986, SEC.3; P.L.37-1988, SEC.7; P.L.36-1994,SEC.2; P.L.25-1995, SEC.27; P.L.273-1999, SEC.53; P.L.273-1999,SEC.54; P.L.90-2002, SEC.160; P.L.224-2003, SEC.84; P.L.2-2006,SEC.41; P.L.224-2007, SEC.18; P.L.146-2008, SEC.166;P.L.1-2010, SEC.27.
IC 6-1.1-18-4
Appropriations not to exceed budget
Sec. 4. Except as otherwise provided in this chapter, the properofficers of a political subdivision shall appropriate funds in such amanner that the expenditures for a year do not exceed its budget forthat year as finally determined under this article.
(Formerly: Acts 1975, P.L.47, SEC.1.)
IC 6-1.1-18-5
Proposed additional appropriations; public hearing
Sec. 5. (a) If the proper officers of a political subdivision desireto appropriate more money for a particular year than the amountprescribed in the budget for that year as finally determined under thisarticle, they shall give notice of their proposed additionalappropriation. The notice shall state the time and place at which apublic hearing will be held on the proposal. The notice shall be given
once in accordance with IC 5-3-1-2(b).
(b) If the additional appropriation by the political subdivision ismade from a fund that receives:
(1) distributions from the motor vehicle highway accountestablished under IC 8-14-1-1 or the local road and streetaccount established under IC 8-14-2-4; or
(2) revenue from property taxes levied under IC 6-1.1;
the political subdivision must report the additional appropriation tothe department of local government finance. If the additionalappropriation is made from a fund described under this subsection,subsections (f), (g), (h), and (i) apply to the political subdivision.
(c) However, if the additional appropriation is not made from afund described under subsection (b), subsections (f), (g), (h), and (i)do not apply to the political subdivision. Subsections (f), (g), (h), and(i) do not apply to an additional appropriation made from thecumulative bridge fund if the appropriation meets the requirementsunder IC 8-16-3-3(c).
(d) A political subdivision may make an additional appropriationwithout approval of the department of local government finance ifthe additional appropriation is made from a fund that is not describedunder subsection (b). However, the fiscal officer of the politicalsubdivision shall report the additional appropriation to thedepartment of local government finance.
(e) After the public hearing, the proper officers of the politicalsubdivision shall file a certified copy of their final proposal and anyother relevant information to the department of local governmentfinance.
(f) When the department of local government finance receives acertified copy of a proposal for an additional appropriation undersubsection (e), the department shall determine whether sufficientfunds are available or will be available for the proposal. Thedetermination shall be made in writing and sent to the politicalsubdivision not more than fifteen (15) days after the department oflocal government finance receives the proposal.
(g) In making the determination under subsection (f), thedepartment of local government finance shall limit the amount of theadditional appropriation to revenues available, or to be madeavailable, which have not been previously appropriated.
(h) If the department of local government finance disapproves anadditional appropriation under subsection (f), the department shallspecify the reason for its disapproval on the determination sent to thepolitical subdivision.
(i) A political subdivision may request a reconsideration of adetermination of the department of local government finance underthis section by filing a written request for reconsideration. A requestfor reconsideration must:
(1) be filed with the department of local government financewithin fifteen (15) days of the receipt of the determination bythe political subdivision; and
(2) state with reasonable specificity the reason for the request.The department of local government finance must act on a requestfor reconsideration within fifteen (15) days of receiving the request.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by Acts 1981,P.L.46, SEC.2; P.L.69-1983, SEC.5; P.L.57-1991, SEC.1;P.L.17-1995, SEC.4; P.L.90-2002, SEC.161.
IC 6-1.1-18-6
Transfer of money from one budget classification to another
Sec. 6. (a) The proper officers of a political subdivision maytransfer money from one major budget classification to anotherwithin a department or office if:
(1) they determine that the transfer is necessary;
(2) the transfer does not require the expenditure of more moneythan the total amount set out in the budget as finally determinedunder this article; and
(3) the transfer is made at a regular public meeting and byproper ordinance or resolution.
(b) A transfer may be made under this section without notice andwithout the approval of the department of local government finance.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.57-1991,SEC.2; P.L.90-2002, SEC.162; P.L.173-2003, SEC.7 andP.L.256-2003, SEC.16.
IC 6-1.1-18-6.5
Volunteer firefighting purposes; expenditures
Sec. 6.5. Monies raised by taxes levied by a political subdivisionand budgeted for volunteer firefighting contracts and purposes, ifappropriated and spent by that political subdivision, shall beappropriated and spent for those purposes only.
As added by Acts 1979, P.L.58, SEC.1.
IC 6-1.1-18-7
Insurance funds; appropriations
Sec. 7. Notwithstanding the other provisions of this chapter, thefiscal officer of a political subdivision may appropriate fundsreceived from an insurance company if:
(1) the funds are received as a result of damage to property ofthe political subdivision; and
(2) the funds are appropriated for the purpose of repairing orreplacing the damaged property.
However, this section applies only if the funds are in fact expendedto repair or replace the property within the twelve (12) month periodafter they are received.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.173-2003,SEC.8.
IC 6-1.1-18-7.5
Appropriation of state and federal grant funds
Sec. 7.5. Notwithstanding any other law, the appropriating bodyof a political subdivision may appropriate any funds received as a
grant from the state or the federal government without using theadditional appropriation procedures under section 5 of this chapter,if the funds are provided or designated by the state or the federalgovernment as a reimbursement of an expenditure made by thepolitical subdivision.
As added by P.L.15-2005, SEC.1.
IC 6-1.1-18-8
Expenditure of state funds by political subdivisions; conditions
Sec. 8. (a) Except as provided in subsections (b) and (c) of thissection, a political subdivision may not expend any funds which ithas received from the state and which it is required to include in itsbudget estimate under IC 1971, 6-1.1-17-2 unless:
(1) the funds have been included in a budget estimate by thepolitical subdivision; and
(2) the funds have been appropriated by the proper officers of thepolitical subdivision in the amounts and for the specific purposes forwhich they may be used.
(b) The county council shall appropriate funds for the operationof the county highway department for the entire ensuing budget yearfor which annual appropriations are being made. The appropriationshall be for an amount which is not less than the greater of:
(1) seventy-five percent (75%) of the total estimated to be in thehighway fund in the ensuing budget year; or
(2) ninety-nine percent (99%) of the total estimated to be in thehighway fund in the ensuing budget year if the county commissionersfile with the county council a four (4) year plan for the constructionand improvement of county highways and a one (1) year plan for themaintenance and repair of the county highways.
(c) In the event of a casualty, accident, or extraordinaryemergency, the proper officers of a political subdivision may usestate funds to make an additional appropriation under section 5 ofthis chapter.
(Formerly: Acts 1975, P.L.47, SEC.1.)
IC 6-1.1-18-9
Reappropriations from erroneous or excessive disbursements;refunds without appropriation
Sec. 9. Notwithstanding the other provisions of this chapter, theproper officer or officers of a political subdivision may:
(1) reappropriate money recovered from erroneous or excessivedisbursements if the error and recovery are made within thecurrent budget year; or
(2) refund, without appropriation, money erroneously received.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.178-2002,SEC.26.
IC 6-1.1-18-10
Excessive appropriations; liability of officers; action for recovery
Sec. 10. (a) If the proper officers of a political subdivision make
an appropriation for an item which exceeds the amount which theyare permitted to appropriate under this chapter, they are guilty ofmalfeasance in office and are liable to the political subdivision in anamount equal to the sum of one hundred and twenty-five percent(125%) of the excess so appropriated and court cost.
(b) Upon the relation of a taxpayer who owns property which issubject to taxation by the political subdivision, the appropriateprosecuting attorney shall initiate an action in the name of this stateto recover the amount for which the proper officers of the politicalsubdivision are liable under this section.
(Formerly: Acts 1975, P.L.47, SEC.1.)
IC 6-1.1-18-11
Conflicting provisions
Sec. 11. If there is a conflict between the provisions of thischapter and the provisions of IC 6-1.1-18.5 or IC 20-46, theprovisions of IC 6-1.1-18.5 and IC 20-46 control with respect to theadoption of, review of, and limitations on budgets, tax rates, and taxlevies.
(Formerly: Acts 1975, P.L.47, SEC.1.) As amended by P.L.73-1983,SEC.11; P.L.2-2006, SEC.42; P.L.146-2008, SEC.167.
IC 6-1.1-18-12
Adjustment of maximum tax rates after reassessment or annualadjustment
Sec. 12. (a) For purposes of this section, "maximum rate" refersto the maximum:
(1) property tax rate or rates; or
(2) special benefits tax rate or rates;
referred to in the statutes listed in subsection (d).
(b) The maximum rate for taxes first due and payable after 2003is the maximum rate that would have been determined undersubsection (e) for taxes first due and payable in 2003 if subsection(e) had applied for taxes first due and payable in 2003.
(c) The maximum rate must be adjusted each year to account forthe change in assessed value of real property that results from:
(1) an annual adjustment of the assessed value of real propertyunder IC 6-1.1-4-4.5; or
(2) a general reassessment of real property under IC 6-1.1-4-4.
(d) The statutes to which subsection (a) refers are:
(1) IC 8-10-5-17;
(2) IC 8-22-3-11;
(3) IC 8-22-3-25;
(4) IC 12-29-1-1;
(5) IC 12-29-1-2;
(6) IC 12-29-1-3;
(7) IC 12-29-3-6;
(8) IC 13-21-3-12;
(9) IC 13-21-3-15;
(10) IC 14-27-6-30; (11) IC 14-33-7-3;
(12) IC 14-33-21-5;
(13) IC 15-14-7-4;
(14) IC 15-14-9-1;
(15) IC 15-14-9-2;
(16) IC 16-20-2-18;
(17) IC 16-20-4-27;
(18) IC 16-20-7-2;
(19) IC 16-22-14;
(20) IC 16-23-1-29;
(21) IC 16-23-3-6;
(22) IC 16-23-4-2;
(23) IC 16-23-5-6;
(24) IC 16-23-7-2;
(25) IC 16-23-8-2;
(26) IC 16-23-9-2;
(27) IC 16-41-15-5;
(28) IC 16-41-33-4;
(29) IC 20-46-2-3 (before its repeal on January 1, 2009);
(30) IC 20-46-6-5;
(31) IC 20-49-2-10;
(32) IC 36-1-19-1;
(33) IC 23-14-66-2;
(34) IC 23-14-67-3;
(35) IC 36-7-13-4;
(36) IC 36-7-14-28;
(37) IC 36-7-15.1-16;
(38) IC 36-8-19-8.5;
(39) IC 36-9-6.1-2;
(40) IC 36-9-17.5-4;
(41) IC 36-9-27-73;
(42) IC 36-9-29-31;
(43) IC 36-9-29.1-15;
(44) IC 36-10-6-2;
(45) IC 36-10-7-7;
(46) IC 36-10-7-8;
(47) IC 36-10-7.5-19;
(48) IC 36-10-13-5;
(49) IC 36-10-13-7;
(50) IC 36-10-14-4;
(51) IC 36-12-7-7;
(52) IC 36-12-7-8;
(53) IC 36-12-12-10; and
(54) any statute enacted after December 31, 2003, that:
(A) establishes a maximum rate for any part of the:
(i) property taxes; or
(ii) special benefits taxes;
imposed by a political subdivision; and
(B) does not exempt the maximum rate from the adjustmentunder this section. (e) The new maximum rate under a statute listed in subsection (d)is the tax rate determined under STEP SEVEN of the followingSTEPS:
STEP ONE: Determine the maximum rate for the politicalsubdivision levying a property tax or special benefits tax underthe statute for the year preceding the year in which the annualadjustment or general reassessment takes effect.
STEP TWO: Determine the actual percentage increase (roundedto the nearest one-hundredth percent (0.01%)) in the assessedvalue (before the adjustment, if any, under IC 6-1.1-4-4.5) ofthe taxable property from the year preceding the year the annualadjustment or general reassessment takes effect to the year thatthe annual adjustment or general reassessment takes effect.
STEP THREE: Determine the three (3) calendar years thatimmediately precede the ensuing calendar year and in which astatewide general reassessment of real property does not firsttake effect.
STEP FOUR: Compute separately, for each of the calendaryears determined in STEP THREE, the actual percentageincrease (rounded to the nearest one-hundredth percent(0.01%)) in the assessed value (before the adjustment, if any,under IC 6-1.1-4-4.5) of the taxable property from the precedingyear.
STEP FIVE: Divide the sum of the three (3) quotients computedin STEP FOUR by three (3).
STEP SIX: Determine the greater of the following:
(A) Zero (0).
(B) The result of the STEP TWO percentage minus theSTEP FIVE percentage.
STEP SEVEN: Determine the quotient of the STEP ONE taxrate divided by the sum of one (1) plus the STEP SIXpercentage increase.
(f) The department of local government finance shall compute themaximum rate allowed under subsection (e) and provide the rate toeach political subdivision with authority to levy a tax under a statutelisted in subsection (d).
As added by P.L.1-2004, SEC.20 and P.L.23-2004, SEC.21. Amendedby P.L.78-2004, SEC.1; P.L.1-2005, SEC.87; P.L.2-2006, SEC.43;P.L.154-2006, SEC.45; P.L.2-2007, SEC.115; P.L.219-2007,SEC.52; P.L.2-2008, SEC.23; P.L.146-2008, SEC.168.
IC 6-1.1-18-13
School capital projects fund; adjustment for effects of reassessmentor annual adjustment
Sec. 13. (a) The maximum property tax rate levied underIC 20-46-6 by each school corporation for the school corporation'scapital projects fund must be adjusted each year to account for thechange in assessed value of real property that results from:
(1) an annual adjustment of the assessed value of real propertyunder IC 6-1.1-4-4.5; or (2) a general reassessment of real property under IC 6-1.1-4-4.
(b) The new maximum rate under this section is the tax ratedetermined under STEP SEVEN of the following formula:
STEP ONE: Determine the maximum rate for the schoolcorporation for the year preceding the year in which the annualadjustment or general reassessment takes effect.
STEP TWO: Determine the actual percentage increase (roundedto the nearest one-hundredth percent (0.01%)) in the assessedvalue (before the adjustment, if any, under IC 6-1.1-4-4.5) ofthe taxable property from the year preceding the year the annualadjustment or general reassessment takes effect to the year thatthe annual adjustment or general reassessment is effective.
STEP THREE: Determine the three (3) calendar years thatimmediately precede the ensuing calendar year and in which astatewide general reassessment of real property does not firstbecome effective.
STEP FOUR: Compute separately, for each of the calendaryears determined in STEP THREE, the actual percentageincrease (rounded to the nearest one-hundredth percent(0.01%)) in the assessed value (before the adjustment, if any,under IC 6-1.1-4-4.5) of the taxable property from the precedingyear.
STEP FIVE: Divide the sum of the three (3) quotients computedin STEP FOUR by three (3).
STEP SIX: Determine the greater of the following:
(A) Zero (0).
(B) The result of the STEP TWO percentage minus theSTEP FIVE percentage.
STEP SEVEN: Determine the quotient of the STEP ONE taxrate divided by the sum of one (1) plus the STEP SIXpercentage increase.
(c) The department of local government finance shall compute themaximum rate allowed under subsection (b) and provide the rate toeach school corporation.
As added by P.L.2-2006, SEC.44. Amended by P.L.219-2007,SEC.53.