MEMORANDUM
TO:
County
Auditors
FROM:
Dan Jones, Assistant Director, Budget Division
SUBJECT:
TIF and Redevelopment Commission Responsibilities
DATE:
July 3, 2012
This memorandum
provides guidance to county auditors regarding the statutory responsibility of
redevelopment commissions in determining and reporting the amount of excess or
shortfall of assessed values within Tax Increment Finance (“TIF”) districts
before July 15 of each year. (IC 36-7-14-39(b)(3)).
The Department of
Local Government Finance (“DLGF”) recommends that each county auditor contact
his or her county’s redevelopment commissions to notify them of this
responsibility. The DLGF recommends that each redevelopment commission submit
the written notice to its county auditor prior to certification of the 2012 pay
2013 assessed valuations to the DLGF. Statutorily, county auditors are to
certify 2012 pay 2013 assessed values by August 1, 2012. (IC
6-1.1-17-1).
County auditors
should forward a copy of each redevelopment commission’s written notice to the
DLGF’s Budget Division at the same time that the Certificate of Net Assessed
Valuations is filed.
Reporting the
excess assessed value is especially important when a referendum has been
approved by a unit or school within the TIF allocation area or the unit
anticipates adopting a Tax Increment Replacement rate (“TIR”) in the 2013 budget
when the unit has a shortfall in the required assessed value.
The redevelopment
commission must submit a written notice including:
1)
The amount, if any, of excess
assessed value that the commission has determined may be allocated to the
respective taxing units; or
2)
A statement that the
commission has determined that there is no excess assessed value that may be
allocated to the respective taxing units.
The manner for
determining the excess assessed value is prescribed in IC 36-7-14-39(b)(3) as
follows:
(A) Determine the amount, if any, by which the assessed
value of the taxable property in the allocation area for the most recent
assessment date minus the base assessed value, when multiplied by the estimated
tax rate of the allocation area, will exceed the amount of assessed value needed
to produce the property taxes necessary to make, when due, principal and
interest payments on bonds described in subdivision (3) plus the amount
necessary for other purposes described in subdivision (3).
(B) Provide a written
notice to the county auditor, the fiscal body of the county or municipality that
established the department of redevelopment, and the officers who are authorized
to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for each of the
other taxing units that is wholly or partly located within the allocation area.
The notice must:
(i) state the amount,
if any, of excess assessed value that the commission has determined may be
allocated to the respective taxing units in the manner prescribed in subdivision
(1); or
(ii) state that the
commission has determined that there is no excess assessed value that may be
allocated to the respective taxing units in the manner prescribed in subdivision
(1).
The county
auditor shall allocate to the respective taxing units the amount, if any, of
excess assessed value determined by the commission. The commission may not
authorize an allocation of assessed value to the respective taxing units under
this subdivision if to do so would endanger the interests of the holders of
bonds described in subdivision (3) or lessors under section 25.3 of this
chapter.”
The requirements and
procedures for adopting a TIR are prescribed in IC 6-1.1-21.2-12.
