MEMORANDUM
TO: All Political Subdivisions
FROM: Micah G.
Vincent, Commissioner
RE: UPDATE to March 25, 2013 Memorandum
Entitled, “Emergency 911 & Public Safety Access Point (“PSAP”)
Funding”
DATE: June 6, 2013
On March 25, 2013, the
Department of Local Government Finance (“Department”) issued a memorandum
entitled “Emergency 911 & Public Safety Access Point (‘PSAP’) Funding,”
which addressed IC 36-1-7-16 and the process by which political subdivisions
enter 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
that results in a savings or reduction in expenses. 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. This memorandum addresses these changes, which
take effect July 1, 2013. This memorandum supersedes and replaces the March 25,
2013 memorandum cited above. For more general information about amendments to
the statutes governing inter-local and intra-unit combinations and
reorganizations of functions, please see the memorandum entitled “Transfers,
Combinations, and Consolidations of Powers, Duties, Functions, or Resources.”
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.
A political subdivision responsible for providing the service that has
been transferred to it by other political subdivisions may submit to the
Department an Extension of Services excess levy appeal pursuant to IC
6-1.1-18.5-13(a)(1) (Version b) in order to increase its maximum levy to fund
the service for which it is now responsible. In reviewing such an appeal, the
Department will give special attention to how the political subdivisions’
agreement “eliminate[s] double taxation by different political subdivisions for
services.” An appeal may be denied if the agreement fails to eliminate double
taxation or for any other reasons the Department determines warrants denial. For
example, if an agreement calls for Town A to pay for 50% of the service while
County B (which is providing the service) pays the other 50%, residents in Town
A will be doubly taxed for the same service—once by the Town and once by the
County. If the County were to submit an Extension of Services appeal, it would
likely be denied because of the double taxation problem.
Any political
subdivision that must, pursuant to IC 36-1-7-16, 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. An Extension of Services
excess levy appeal must be submitted to the Department on or before October 21,
2013 to have effect for 2014.
Contact Information
Questions may be
directed to Staff Attorney Mike Duffy at 317-233-9219 or mduffy@dlgf.in.gov.
