LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6854 NOTE PREPARED: Jan 2, 2024
BILL NUMBER: HB 1134 BILL AMENDED:
SUBJECT: Local Income Tax.
FIRST AUTHOR: Rep. Clere BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: LIT Allocations for Taxing Unit Merger or Consolidation: This bill provides that,
for the purpose of distributing the local income tax (LIT), if two or more school corporations or civil taxing
units merge or consolidate to form a single school corporation or civil taxing unit, the school corporation or
civil taxing unit is entitled to the combined pro rata distribution of the LIT revenue allocated to each
applicable school corporation or civil taxing unit in existence on January 1 of the immediately preceding
calendar year prior to the merger or consolidation.
FIT Allocations for Taxing Unit Merger or Consolidation: This bill provides, for purposes of calculating
distributions of the financial institutions tax to local taxing units, how to calculate distributions for a taxing
unit that did not receive distributions in 2012 because the unit was subsequently established from the merger
or consolidation of two or more taxing units that received distributions from the financial institutions tax
fund in 2012.
CVET Allocations for Taxing Unit Merger or Consolidation: This bill provides, for purposes of calculating
qualified distributions of the commercial motor vehicle excise tax to local taxing units, how to calculate base
revenue distributions for a taxing unit that did not receive a base revenue distribution in 2001 because the
taxing unit was subsequently established from the merger or consolidation of two or more taxing units that
received base revenue distributions in 2001. It provides that, for purposes of determining the apportionment
or distribution of the motor vehicle excise tax, that the county auditor may make adjustments to reflect the
merger or consolidation of two or more taxing units.
Highland Fire Protection District: This bill provides that the Department of Local Government Finance
(DLGF) shall make certain adjustments pertaining to the distribution of LIT for Floyd County in 2025, which
HB 1134 1 provide that the Highlander Fire Protection District (district) shall receive an amount equal to the combined
distribution that would have been distributed to the Greenville Fire Protection District (FPD) and the
Lafayette Fire Protection District (FPD) in 2024, but for their elimination resulting from the merger to
establish the district. The bill requires corresponding adjustments in 2025 to reduce the distribution for each
applicable civil taxing unit and school corporation in Floyd County, excluding the district, by an amount that
equals the proportionate share of the amount of LIT received in 2024 of the combined distribution that would
have been distributed to the Greenville FPD and the Lafayette FPD in 2024, but for their elimination.
This bill makes technical corrections.
Effective Date: July 1, 2024; January 1, 2025.
Explanation of State Expenditures: Department of Local Government Finance (DLGF): The administrative
workload for the DLGF may increase as a result of computing and reporting the revised/updated revenue
allocations of local income tax and commercial vehicle excise tax revenue, should two or more civil taxing
units or school corporations consolidate or merge into one unit. Additionally, the DLGF will experience a
minor temporary increase in administrative workload to make the applicable adjustments to the CY 2025 LIT
distribution allocations to account for the newly created Highland Fire Protection District in Floyd County.
It is assumed that the DLGF will be able to make these calculations using existing resources and not require
additional appropriations to implement this bill’s provisions.
State Comptroller: The State Comptroller may experience a minor increase in administrative workload as
a result of computing and transferring to the county auditor the revised/updated revenue allocations of
financial institutions tax, should two or more civil taxing units or school corporations consolidate or merge
into one unit. It is assumed that the State Comptroller’s office will be able to implement these provisions
using existing resources and not require additional appropriations.
Explanation of State Revenues:
Explanation of Local Expenditures: County Auditors: The administrative workload for county auditors
may increase as a result of making any necessary adjustments to the current taxing unit apportionment and
distributions of motor vehicle excise tax revenue in the county, should two or more civil taxing units or
school corporations consolidate or merge into one unit.
Explanation of Local Revenues: LIT, FIT, and CVET Allocations for Taxing Unit Merger or
Consolidation: These provisions should have a neutral impact on total overall LIT, financial institutions tax,
and commercial and motor vehicle excise tax revenues in a county where two or more civil taxing units or
school corporations have merged or consolidated. The allocations of these revenues to certain taxing units
will be revised so that the pro rata distribution to the applicable taxing units (pre-merger or pre-
consolidation) is combined and distributed to the newly merged or consolidated taxing unit. This bill’s
provisions would eliminate the potential of any re-distribution of these revenues to the other taxing units in
the county that may occur in the first year immediately following the creation of the newly merged or
consolidated taxing unit.
Highland Fire Protection District: This bill’s provisions set the local income tax distributions effective CY
2025 - inclusive of any future supplemental distributions - for the newly created Highland Fire Protection
District that would have originally been allocated to the Greenville Township Fire Protection District and
Lafayette Township Fire Protection District in Floyd County prior to the merger.
HB 1134 2 Additional Information: The Highland Fire Protection District was established via an ordinance approved
by the Floyd County Commissioners on December 30, 2022. The newly created district was the result of a
merger between the Greenville Township Fire Protection District and the Lafayette Township Fire District
and is to become fully operational on January 1, 2024. The Highland Fire Protection District did adopt a total
property tax levy of approximately $3M for CY 2024. However, the newly created Highland Fire Protection
District did not receive a levy in CY 2023 and therefore, did not have a base for which to calculate CY 2024
LIT distributions. The CY 2024 LIT distributions that would have been allocated to the Greenville Township
Fire Protection District in the amount of $462,687 and to the Lafayette Township Fire Protection District in
the amount of $489,435 were instead allocated to the other taxing units in Floyd County. These CY 2024
distributions will be added as an adjustment for the Highland Fire Protection District when the DLGF
calculates the LIT distribution allocations for CY 2025.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Civil taxing units and school corporations.
Information Sources: CY 2024 Certified Local Income Tax Distributions - Unit Allocations as November
29, 2023; Gateway for Local Government Units - Budget Application: Highland Fire District CY 2024
Budget Form 4.
Fiscal Analyst: James Johnson, 317-232-9869; Bob Sigalow, 317-232-9859.
HB 1134 3