2018 Indiana Code
TITLE 6. Taxation
ARTICLE 1.1. PROPERTY TAXES
CHAPTER 20.3. Distressed Political Subdivisions
6-1.1-20.3-6.5. Designation of distressed political subdivisions; annual review; notice
Sec. 6.5. (a) After the board receives a petition concerning a political subdivision under section 6(a), 6(b)(2), or 6(c) of this chapter, the board may designate the political subdivision as a distressed political subdivision if at least one (1) of the following conditions applies to the political subdivision:
(1) The political subdivision has defaulted in payment of principal or interest on any of its bonds or notes.
(2) The political subdivision has failed to make required payments to payroll employees for thirty (30) days or two (2) consecutive payrolls.
(3) The political subdivision has failed to make required payments to judgment creditors for sixty (60) days beyond the date of the recording of the judgment.
(4) The political subdivision, for at least thirty (30) days beyond the due date, has failed to do any of the following:
(A) Forward taxes withheld on the incomes of employees.
(B) Transfer employer or employee contributions due under the Federal Insurance Contributions Act (FICA).
(C) Deposit the political subdivision's minimum obligation payment to a pension fund.
(5) The political subdivision has accumulated a deficit equal to eight percent (8%) or more of the political subdivision's revenues. For purposes of this subdivision, "deficit" means a negative fund balance calculated as a percentage of revenues at the end of a budget year for any governmental or proprietary fund. The calculation must be presented on an accrual basis according to generally accepted accounting principles.
(6) The political subdivision has sought to negotiate a resolution or an adjustment of claims that in the aggregate:
(A) exceed thirty percent (30%) of the political subdivision's anticipated annual revenues; and
(B) are ninety (90) days or more past due.
(7) The political subdivision has carried over interfund loans for the benefit of the same fund at the end of two (2) successive years.
(8) The political subdivision has been severely affected, as determined by the board, as a result of granting the property tax credits under IC 6-1.1-20.6.
(9) In addition to the conditions listed in subdivisions (1) through (8), and in the case of a school corporation, the board may also designate a school corporation as a distressed political subdivision if at least one (1) of the following conditions applies:
(A) The school corporation has:
(i) issued refunding bonds under IC 5-1-5-2.5; or
(ii) adopted a resolution under IC 5-1-5-2.5 making the determinations and including the information specified in IC 5-1-5-2.5(g).
(B) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's 2011 ADM ranks in the highest ten (10) among all school corporations.
(C) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's total assessed valuation for calendar year 2011 ranks in the highest ten (10) among all school corporations.
(D) The amount of homestead assessed valuation in the school corporation for calendar year 2011 was at least sixty percent (60%) of the total amount of assessed valuation in the school corporation for calendar year 2011.
The board may consider whether a political subdivision has fully exercised all the local options available to the political subdivision, such as a local option income tax or a local option income tax rate increase or, in the case of a school corporation, an operating referendum.
(b) If the board designates a political subdivision as distressed under subsection (a), the board shall review the designation annually to determine if the distressed political subdivision meets at least one (1) of the conditions listed in subsection (a).
(c) If the board designates a political subdivision as a distressed political subdivision under subsection (a), the board shall immediately notify:
(1) the treasurer of state;
(2) the county auditor and county treasurer of each county in which the distressed political subdivision is wholly or partially located; and
(3) in the case of a school corporation, the Indiana education employment relations board established by IC 20-29-3-1;
that the board has designated the political subdivision as a distressed political subdivision.
As added by P.L.145-2012, SEC.6. Amended by P.L.257-2013, SEC.21; P.L.241-2017, SEC.7.