TIMING OF DISTRIBUTION OF COUNTY TAXES (H.E.A. 1432)
SUMMARY OF NEW PROVISION: County auditors will now be required to distribute county income tax revenues (e.g., COIT, CEDIT and CAGIT) to the local units entitled to receive them within ten (10) business days after the County Treasurer receives the funds from the State. CONTEXT OF NEW PROVISION: In some counties, the distributions have not been timely in recent years, and the county unit stood to benefit from earning interest by investing the funds prior to distributing them.
PUBLICATIONS OF LEGAL NOTICES (H.E.A. 1230)
POSTING OF LEGAL NOTICES ON WEB SITE: If a newspaper in which a legal notice is published maintains a Web site, the notice must also be posted on the Web site. Local governmental units would be well served to remind the newspaper of this new requirement at the time they submit the legal notice for publication. Local governmental units should also request a proof of posting on the Web site (or a certification that the newspaper does not have a Web site) as well as a proof of publication.
PUBLICATION OF ANNUAL REPORT OF RECEIPTS AND EXPENDITURES: Within sixty (60) days after the end of each calendar year, political subdivisions (if they have taxing power and annual budgets of at least $300,000) are required to publish an annual report of their receipts and expenditures during the preceding calendar year.
ELIMINATION OF POSTING REQUIREMENT: The additional requirement that cities, towns and school corporations post legal notices in designated locations in cases where no newspaper is published in the city, town or school corporation has been eliminated. (Note that the city, town or school corporation still must publish the notice in a county newspaper that circulates within the city, town or school corporation.)
ELIMINATION OF REQUIREMENT FOR COUNTIES TO PUBLISH CLAIMS: County auditors are no longer required to publish notice of claims before they can be paid (but publication of notice of court allowances continues to be required). (Note: This requirement had applied to counties, but not cities and towns.)
PUBLICATION OF NOTICE OF INCREASE OR DECREASE OF NUMBER OF MEMBERS OF CITY’S BOARD OF PUBLIC WORKS AND SAFETY: If the Mayor of a city changes the number of the members of a board of public works and safety (or, in second class cities, a board of public works or board of safety) from three to five or five to three, the city must publish legal notice of the change.
ELIMINATION OF REQUIREMENT FOR CITIES TO PUBLISH SALARY ORDINANCES: Cities are no longer required to publish the ordinance fixing the annual compensation of elected city officers.
MISCELLANEOUS LOCAL GOVERNMENT PROVISIONS (H.E.A. 1514)
PUBLIC WORKS PROJECTS ESTIMATED TO COST LESS THAN $150,000: Political subdivisions can use the less restrictive public works contract provisions of Indiana Code 5-22, rather than the more cumbersome provisions of Indiana Code 36-1-12, for projects for the routine operation, repair or maintenance of existing buildings, structures or real property where the estimated cost is less than $150,000.
INCREASE IN AMOUNT OF REQUIRED SURETY BONDS: Fiscal bodies of governmental units are required to make specified increases in the amount of the surety bond for specified officials. The required amount may be increased by the State Board of Accounts for a particular official in cases where the State Examiner issues a finding of nonfeasance or malfeasance.
COMPUTERIZED ACCOUNTING AND REPORTING: The State Board of Accounts is now authorized to require cities and towns to use an electronic or computerized system of accounting and reporting.
ELECTRONIC FILING OF ANNUAL FINANCIAL REPORTS: Local governments must now use electronic means to file their annual financial reports with the State Examiner, but the deadline is changed from thirty (30) days to sixty (60) days after the end of the fiscal year.
INCREASED SCRUTINY RELATING TO HANDLING OF PUBLIC FUNDS: A new requirement is imposed on examiners to make a report to the State Examiner if they find that there has been a misappropriation of public funds, or if public funds are unaccounted for, and the examiner believes that a law or compliance guideline has been violated. The State Examiner is then required to file a copy of the report with the Indiana Attorney General, who can then sue the local official (or employee) or file against the local official’s (or employee’s) surety bond.
PROVISIONS APPLICABLE TO PARTICULAR LOCAL GOVERNMENTS
ALLEN COUNTY: Makes various changes relating to the Fort Wayne - Allen County Convention and Tourism Authority (now to be known as the “Allen County – Fort Wayne Capital Improvement Board of Managers”). Also makes changes to legislation relating to the Allen County professional sports development area and the Allen County food and beverage tax.
MARTINSVILLE: Changes are made to the law relating to Martinsville’s food and beverage tax legislation.
MONROE COUNTY: Monroe County is granted authority to impose a county food and beverage tax.
VANDERBURGH COUNTY: Changes are made to Vanderburgh County’s innkeeper’s tax legislation. Changes are also made to the county’s food and beverage tax legislation to facilitate the financing of a proposed arena in Evansville.
PROPERTY TAX ASSESSMENTS (H.E.A. 1094)
Various changes are made to Indiana law relating to property tax assessments, including the following:
- Real property assessed values are to be based on the estimated true tax value of the property on the assessment date. (In some cases, prior law specified a different date.)
- Notices of the amount of an assessment or reassessment, as well as property tax bills, must provide specified information relating to the procedures for an appeal.
- Delays to March 1 (from December 1) the timing of the hearing by the county property tax assessment board of appeals, in years in which a general reassessment becomes effective.
- Eliminates the requirement, that was scheduled to take effect in 2010, that would have required county auditors to provide an annual notice (containing highly detailed information) to property tax payers.
DELAY IN BEGINNING DATE FOR NEXT GENERAL REASSESSMENT (H.E.A. 1001) The next general reassessment, previously scheduled to begin in 2009, has been delayed so as to begin in 2010 instead.
RULES RELATING TO CONDEMNATION OF WATER OR SEWER UTILITIES (H.E.A. 1278)
Although a Board of Public Works of a city or town will no longer have the authority to condemn water or sewer utilities, the city or town itself may undertake the condemnation, and may now acquire public utility property by purchase or condemnation without submitting the question to a public referendum. The municipality is not permitted to impose a special rate on utility customers to pay for acquisition costs of utility property to be acquired through condemnation, but may impose rates to pay for the acquisition of utility property other than by condemnation. The public utility no longer has the right to seek judicial review of the public necessity and convenience of the municipality’s acquisition of the property.
PROVISIONS RELATING TO REDEVELOPMENT COMMISSIONS (H.E.A. 1001)
NEW ELIGIBLE USE OF TIF: Redevelopment Commissions are now permitted to spend up to 15 percent of their annual TIF for educational or worker retraining programs. (See IC 36-7-25-7, as amended by H.E.A. 1001)
MAXIMUM TERM OF NEW TIF DISTRICTS: Effective Jan. 1, 2010, the 25-year limit (imposed in 2008) on the life of a new TIF district established after June 30, 2008, has been modified to provide that the 25-year clock does not begin to tick until debt that is secured by TIF is incurred. (See IC 36-7-14-39, as amended by H.E.A. 1001)
TAX INCREMENT REPLACEMENT LEVIES OR ASSESSMENTS WILL NOT COUNT AGAINST MAXIMUM LEVY: For Redevelopment Commissions eligible to impose a tax increment replacement levy or an assessment because changes in law have reduced their TIF collections in a way that endangers debt repayment or coverage ratio covenant compliance, Indiana law has been amended so that these remedies will not count against the unit’s maximum levy. (See 6-1.1-21.2-15, as amended by H.E.A. 1001)
GUARANTEED ENERGY SAVINGS CONTRACTS; UTILITY EFFICIENCY PROGRAMS; DESIGN-BUILD (H.E.A. 1033)
- The maximum permissible term of a guaranteed energy savings contract is increased from ten (10) years to twenty (20) years.
- The maximum permissible term of a utility efficiency program is increased from fifteen (15) years to twenty (20) years.
- The definition of a “conservation measure” is expanded to include insulation installed in a local public facility. (Prior law included insulation within that definition only for school corporations.)
- Expressly provides that guaranteed energy savings contracts, utility efficiency programs and design-build contracts are not subject to I.C. 36-1-12 (the general public works project bidding statute).
PERMISSIBLE DEBT SERVICE SCHEDULES FOR PROPERTY TAX-BACKED BONDS AND TIF BONDS (H.E.A. 1001, AMENDING I.C. 5-1-14-16)
The list of exceptions to the rule requiring nearly equal debt service on property tax-backed bonds and tax increment revenue bonds is expanded to permit a repayment schedule that results in the payment of the same amount or a lesser amount of interest compared to the amount of interest payable under a schedule having nearly equal debt service payments.
MODIFICATIONS TO DEBT REFERENDUM LAWS (H.E.A. 1001)
- For project financings subject to the debt referendum process, a local governmental entity is now required to make available at the public hearing on the preliminary determination to issue bonds (or enter into a lease) a comprehensive list of information relating to the proposed terms of the debt, including estimated tax rate impact, estimated levy impact, and similar financial data. In addition, the information required to be included in the notice of a preliminary determination to issue bonds (or enter into a lease) has been expanded. (H.E.A. 1001, amending I.C. 6-1.1-20-3.5)
- The ballot question must include an estimate of the cost of the project and an estimate of the additional property tax rate that will result from the proposed debt. (H.E.A. 1001, amending I.C. 6-1.1-20-3.6)
- The county election board, rather than the county auditor, has the final say on the wording of the ballot question. (H.E.A. 1001, amending I.C. 6-1.1-20-3.6)
- A political subdivision may withdraw a controlled project from consideration as a public question on the ballot if proper procedures are followed. In that case, a public question relating to the same or substantially similar project may not be placed on the ballot sooner than one year after the political subdivision adopts its resolution to withdraw the public question. (H.E.A. 1001, amending I.C. 6-1.1-20-3.6)
- At least thirty (30) days prior to the election at which the public question is to be considered, the political subdivision must submit certain specified financial and other information to the Department of Local Government Finance (DLGF) for posting on the DLGF’s website. (H.E.A. 1001, amending I.C. 6-1.1-20-3.6)
- Modifications are made to the timing requirements for various procedures relating to ballot questions for the incurrence of debt. (H.E.A. 1001, amending I.C. 6-1.1-20-3.5 and I.C. 6-1.1-20-3.6)
- The political subdivision requesting a special election must pay the costs of the election, even in non-election years. (H.E.A. 1001, amending I.C. 6-1.1-20-3.6)
- For controlled projects subject to the referendum requirements but where a sufficient petition demanding a referendum is not filed, the political subdivision may, by following specified procedures, elect to have the project submitted to a referendum (which, if successful, has the effect of exempting debt service for the debt from the circuit breaker caps). (H.E.A. 1001, adding a new I.C. 6-1.1-20-3.7)
ADVOCACY BY PUBLIC OFFICIAL DURING PETITION/REMONSTRANCE PROCESS FOR DEBT (H.E.A. 1001, AMENDING I.C. 6-1.1-20-10)
A provision is added to the law to expressly provide that elected or appointed public officials of a political subdivision may personally advocate a position on a project that is subject to the petition/remonstrance process as long as he or she does not use public funds for that purpose.
MAXIMUM TERM OF FINANCINGS OF PUBLIC WORKS PROJECTS COSTING $2 MILLION OR LESS (H.E.A. 1001, AMENDING I.C. 36-9-41-4)
The maximum term is increased from six (6) years to ten (10) years for financings of public works projects costing $2 million or less.
PERSONAL PROPERTY TAX EXEMPTION FOR IT EQUIPMENT (H.E.A. 448)
SUMMARY OF BILL: Permits counties, cities and towns (other than Marion County) to grant a property tax exemption for information technology equipment purchased after June 30, 2009, for facilities such as data centers that invest at least $10 million in property in Indiana after June 30, 2009 and pay at least 125 percent of average wages in the county.
PROCEDURE FOR GRANTING PROPERTY TAX EXEMPTION: The county council (for facilities located in the unincorporated part of a county), city common council or town council, as appropriate, completes the following steps:
- Pass a declaratory resolution (preliminarily approving the property tax exemption).
- File the declaratory resolution with the county assessor.
- Publish notice of the adoption and substance of the declaratory resolution, including notice of a public hearing.
- File the notice and the declaratory resolution with each taxing unit in the county.
- Hold hearing and adopt a final resolution, including approval of an agreement with the eligible business.
(a) Agreement must set forth duration of the property tax exemption for the particular eligible business.
(b) Final resolution must be adopted before Jan. 1, 2013 (but exemption can continue beyond that date).
PRACTICAL IMPACT OF BILL: The bill will help make Indiana a more attractive location for facilities such as data centers (i.e., buildings that house a large number of servers that process or store data used or transmitted by computers, including internet-related data). Data centers generally have high demand for electricity as well as requiring access to sufficient fiber optic lines.