CHAPTER 18. LIMITATIONS ON PROPERTY TAX RATES AND APPROPRIATIONS
IC 6-1.1-18
Chapter 18. Limitations on Property Tax Rates and
Appropriations
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 under
IC 6-1.1-17-5, the officers of a political subdivision may not fix a
budget or tax levy which exceeds the amount published by the
political subdivision. The portion of a budget or tax levy which
exceeds 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 a
combined ad valorem property tax rate on tangible property that
exceeds the sum of the ad valorem property tax rates permitted under
IC 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 rate
is not subject to review by county boards of tax adjustment or county
auditors.
(b) Except as permitted under IC 4-9.1-1-8 to repay notes issued
to meet casual deficits in state revenue, the state may not impose an
ad valorem property tax rate on tangible property after December 31,
2008.
(c) This section does not apply to political subdivisions of the
state.
(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 tax
rates for all political subdivisions imposed on tangible property
within a political subdivision may not exceed:
(1) forty-one and sixty-seven hundredths cents ($0.4167) on
each one hundred dollars ($100) of assessed valuation in
territory outside the corporate limits of a city or town; or
(2) sixty-six and sixty-seven hundredths cents ($0.6667) on
each one hundred dollars ($100) of assessed valuation in
territory inside the corporate limits of a city or town.
(b) The proper officers of a political subdivision shall fix tax rates
which are sufficient to provide funds for the purposes itemized in
this subsection. The portion of a tax rate fixed by a political
subdivision shall not be considered in computing the tax rate limits
prescribed 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, or
judgment funding obligation of the political subdivision.
(2) To pay the principal or interest on an outstanding obligation
issued by the political subdivision if notice of the sale of the
obligation was published before March 9, 1937.
(3) To pay the principal or interest upon:
(A) an obligation issued by the political subdivision to meet
an 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, or
county to acquire necessary equipment or facilities for
municipal or county government.
(4) To pay the principal or interest upon an obligation issued in
the 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 political
subdivision.
(c) Except as otherwise provided in IC 6-1.1-19 (before January
1, 2009), IC 6-1.1-18.5, IC 20-45 (before January 1, 2009), or
IC 20-46, a county board of tax adjustment, a county auditor, or the
department of local government finance may review the portion of
a tax rate described in subsection (b) only to determine if it exceeds
the portion actually needed to provide for one (1) of the purposes
itemized 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 proper
officers of a political subdivision shall appropriate funds in such a
manner that the expenditures for a year do not exceed its budget for
that 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 desire
to appropriate more money for a particular year than the amount
prescribed in the budget for that year as finally determined under this
article, they shall give notice of their proposed additional
appropriation. The notice shall state the time and place at which a
public 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 is
made from a fund that receives:
(1) distributions from the motor vehicle highway account
established under IC 8-14-1-1 or the local road and street
account 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 to
the department of local government finance. If the additional
appropriation 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 a
fund 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 the
cumulative bridge fund if the appropriation meets the requirements
under IC 8-16-3-3(c).
(d) A political subdivision may make an additional appropriation
without approval of the department of local government finance if
the additional appropriation is made from a fund that is not described
under subsection (b). However, the fiscal officer of the political
subdivision shall report the additional appropriation to the
department of local government finance.
(e) After the public hearing, the proper officers of the political
subdivision shall file a certified copy of their final proposal and any
other relevant information to the department of local government
finance.
(f) When the department of local government finance receives a
certified copy of a proposal for an additional appropriation under
subsection (e), the department shall determine whether sufficient
funds are available or will be available for the proposal. The
determination shall be made in writing and sent to the political
subdivision not more than fifteen (15) days after the department of
local government finance receives the proposal.
(g) In making the determination under subsection (f), the
department of local government finance shall limit the amount of the
additional appropriation to revenues available, or to be made
available, which have not been previously appropriated.
(h) If the department of local government finance disapproves an
additional appropriation under subsection (f), the department shall
specify the reason for its disapproval on the determination sent to the
political subdivision.
(i) A political subdivision may request a reconsideration of a
determination of the department of local government finance under
this section by filing a written request for reconsideration. A request
for reconsideration must:
(1) be filed with the department of local government finance
within fifteen (15) days of the receipt of the determination by
the political subdivision; and
(2) state with reasonable specificity the reason for the request.
The department of local government finance must act on a request
for 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 may
transfer money from one major budget classification to another
within a department or office if:
(1) they determine that the transfer is necessary;
(2) the transfer does not require the expenditure of more money
than the total amount set out in the budget as finally determined
under this article; and
(3) the transfer is made at a regular public meeting and by
proper ordinance or resolution.
(b) A transfer may be made under this section without notice and
without 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 and
P.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 subdivision
and budgeted for volunteer firefighting contracts and purposes, if
appropriated and spent by that political subdivision, shall be
appropriated 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, the
fiscal officer of a political subdivision may appropriate funds
received from an insurance company if:
(1) the funds are received as a result of damage to property of
the political subdivision; and
(2) the funds are appropriated for the purpose of repairing or
replacing the damaged property.
However, this section applies only if the funds are in fact expended
to repair or replace the property within the twelve (12) month period
after 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 body
of a political subdivision may appropriate any funds received as a
grant from the state or the federal government without using the
additional appropriation procedures under section 5 of this chapter,
if the funds are provided or designated by the state or the federal
government as a reimbursement of an expenditure made by the
political 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 this
section, a political subdivision may not expend any funds which it
has received from the state and which it is required to include in its
budget estimate under IC 1971, 6-1.1-17-2 unless:
(1) the funds have been included in a budget estimate by the
political subdivision; and
(2) the funds have been appropriated by the proper officers of the
political subdivision in the amounts and for the specific purposes for
which they may be used.
(b) The county council shall appropriate funds for the operation
of the county highway department for the entire ensuing budget year
for which annual appropriations are being made. The appropriation
shall be for an amount which is not less than the greater of:
(1) seventy-five percent (75%) of the total estimated to be in the
highway fund in the ensuing budget year; or
(2) ninety-nine percent (99%) of the total estimated to be in the
highway fund in the ensuing budget year if the county commissioners
file with the county council a four (4) year plan for the construction
and improvement of county highways and a one (1) year plan for the
maintenance and repair of the county highways.
(c) In the event of a casualty, accident, or extraordinary
emergency, the proper officers of a political subdivision may use
state funds to make an additional appropriation under section 5 of
this 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, the
proper officer or officers of a political subdivision may:
(1) reappropriate money recovered from erroneous or excessive
disbursements if the error and recovery are made within the
current 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 they
are permitted to appropriate under this chapter, they are guilty of
malfeasance in office and are liable to the political subdivision in an
amount 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 is
subject to taxation by the political subdivision, the appropriate
prosecuting attorney shall initiate an action in the name of this state
to recover the amount for which the proper officers of the political
subdivision 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 this
chapter and the provisions of IC 6-1.1-18.5 or IC 20-46, the
provisions of IC 6-1.1-18.5 and IC 20-46 control with respect to the
adoption of, review of, and limitations on budgets, tax rates, and tax
levies.
(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 annual
adjustment
Sec. 12. (a) For purposes of this section, "maximum rate" refers
to 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 2003
is the maximum rate that would have been determined under
subsection (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 for
the change in assessed value of real property that results from:
(1) an annual adjustment of the assessed value of real property
under 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 adjustment
under this section.
(e) The new maximum rate under a statute listed in subsection (d)
is the tax rate determined under STEP SEVEN of the following
STEPS:
STEP ONE: Determine the maximum rate for the political
subdivision levying a property tax or special benefits tax under
the statute for the year preceding the year in which the annual
adjustment or general reassessment takes effect.
STEP TWO: Determine the actual percentage increase (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 year preceding the year the annual
adjustment or general reassessment takes effect to the year that
the annual adjustment or general reassessment takes effect.
STEP THREE: Determine the three (3) calendar years that
immediately precede the ensuing calendar year and in which a
statewide general reassessment of real property does not first
take effect.
STEP FOUR: Compute separately, for each of the calendar
years determined in STEP THREE, the actual percentage
increase (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 preceding
year.
STEP FIVE: Divide the sum of the three (3) quotients computed
in 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 the
STEP FIVE percentage.
STEP SEVEN: Determine the quotient of the STEP ONE tax
rate divided by the sum of one (1) plus the STEP SIX
percentage increase.
(f) The department of local government finance shall compute the
maximum rate allowed under subsection (e) and provide the rate to
each political subdivision with authority to levy a tax under a statute
listed in subsection (d).
As added by P.L.1-2004, SEC.20 and P.L.23-2004, SEC.21. Amended
by 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 reassessment
or annual adjustment
Sec. 13. (a) The maximum property tax rate levied under
IC 20-46-6 by each school corporation for the school corporation's
capital projects fund must be adjusted each year to account for the
change in assessed value of real property that results from:
(1) an annual adjustment of the assessed value of real property
under 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 rate
determined under STEP SEVEN of the following formula:
STEP ONE: Determine the maximum rate for the school
corporation for the year preceding the year in which the annual
adjustment or general reassessment takes effect.
STEP TWO: Determine the actual percentage increase (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 year preceding the year the annual
adjustment or general reassessment takes effect to the year that
the annual adjustment or general reassessment is effective.
STEP THREE: Determine the three (3) calendar years that
immediately precede the ensuing calendar year and in which a
statewide general reassessment of real property does not first
become effective.
STEP FOUR: Compute separately, for each of the calendar
years determined in STEP THREE, the actual percentage
increase (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 preceding
year.
STEP FIVE: Divide the sum of the three (3) quotients computed
in 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 the
STEP FIVE percentage.
STEP SEVEN: Determine the quotient of the STEP ONE tax
rate divided by the sum of one (1) plus the STEP SIX
percentage increase.
(c) The department of local government finance shall compute the
maximum rate allowed under subsection (b) and provide the rate to
each school corporation.
As added by P.L.2-2006, SEC.44. Amended by P.L.219-2007,
SEC.53.