MEMORANDUM
TO: All Political Subdivisions
FROM:
Micah G. Vincent, Commissioner
RE: Transfers, Combinations, and
Consolidations of Powers, Duties, Functions, or Resources
DATE: June
6, 2013
On May 11, 2013, Governor Mike Pence signed into law Senate
Enrolled Act 459 (“SEA 459”), which introduced changes affecting IC 36-1-7-16
and IC 36-1-8-17, which govern certain inter-local and intra-unit combinations
and reorganizations of functions, respectively. This memorandum addresses these
changes, which take effect July 1, 2013. For information related to inter-local
agreements for Public Safety Access Point (“PSAP”) funding, please see the
memorandum entitled “UPDATE to March 25, 2013 Memorandum Entitled, ‘Emergency
911 & Public Safety Access Point (“PSAP”) Funding.’” Please note that this
memorandum is intended to be an informative bulletin; it is not a substitute for
reading the law.
Section 2 of SEA 459 amends IC 36-1-7-16 so that
if:
(1) a political subdivision enters into an agreement with one or more
other political subdivisions under IC 36-1-7 to transfer, combine, or share
powers, duties, functions, or resources; and
(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;
the political
subdivision must specify in the agreement described above the amount (if any) of
the decrease that the Department must make 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 the political subdivision to:
(1) eliminate
double taxation by different political subdivisions for services; or
(2)
eliminate any excess by which the amount of property taxes imposed by the
political subdivision exceeds the amount necessary to pay for
services.
The fiscal body of the political subdivision must determine and
certify to the Department the amount of the adjustment (if any) to be made. The
amount of the adjustment (if any) to be made must comply with the agreement
under which the political subdivision transfers, combines, or shares powers,
duties, functions, or resources.
In sum, this statute, as amended, now
requires that a political subdivision that enters into an inter-local agreement
with one or more other political subdivisions to transfer, combine, or share
powers, duties, functions, or resources and that experiences a savings or
reduction in expenses as a result must specify in that agreement the amount of
the decrease the Department is to make in that political subdivision’s budget,
rates, and levies to eliminate double or excess taxation. The statute, as
amended, no longer provides for a staggered reduction in the political
subdivision’s maximum levy.
Section 3 similarly amends IC 36-1-8-17.
Here, when a political subdivision that:
(1) combines or reorganizes a
department, agency, or function of the political subdivision; and
(2)
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;
the fiscal body of the political
subdivision must specify by resolution the amount (if any) of the decrease that
the Department must make to its 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
to:
(1) eliminate double taxation by different political subdivisions for
services; or
(2) eliminate any excess by which the amount of property
taxes imposed by the political subdivision exceeds the amount necessary to
pay for services.
The fiscal body of the political subdivision must determine
and certify to the Department the amount of the adjustment (if any) to be
made.
Any political subdivision that must, pursuant to IC 36-1-7-16 or IC
36-1-8-17, certify a maximum levy decrease amount to the Department must do so
on or before September 1 of the year preceding the year in which the adjustment
is to take effect. The political subdivision must provide the Department’s
Budget Division with all appropriate ordinances, agreements, and supporting
documentation.
Contact Information
Questions may be directed to
Staff Attorney Mike Duffy at 317-233-9219 or mduffy@dlgf.in.gov.
