Introduced Version
SENATE BILL No. 9
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-18.5.
Synopsis: Maximum levy growth quotient. Amends, beginning with
property taxes first due and payable in 2027, the calculation to
determine the maximum levy growth quotient (MLGQ) used in
determining a civil taxing unit's maximum permissible ad valorem
property tax levy and specifies that the MLGQ calculation is
determined for the county and each civil taxing unit within the county.
Provides, beginning with property taxes first due and payable in 2027,
that the term "civil taxing unit" includes a school corporation. (Under
current law, a school corporation: (1) is excluded from the definition
of a "civil taxing unit"; and (2) has a separate MLGQ calculation.)
Beginning with property taxes first due and payable in 2027, requires
the budget agency to: (1) provide the MLGQ for each county to civil
taxing units and the department of local government finance; and (2)
calculate, using each county's MLGQ, the statewide minimum,
statewide maximum, statewide median, and statewide average.
Provides, beginning with property taxes first due and payable in 2027,
for the calculation of the MLGQ for civil taxing units with territory in
more than one county.
Effective: Upon passage.
Baldwin
January 14, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
2025 IN 9—LS 7464/DI 129 Introduced
First Regular Session of the 124th General Assembly (2025)
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SENATE BILL No. 9
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-1.1-18.5-1, AS AMENDED BY P.L.136-2024,
2 SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 UPON PASSAGE]: Sec. 1. As used in The following definitions
4 apply throughout this chapter:
5 (1) "Ad valorem property tax levy for an ensuing calendar year"
6 means the total property taxes imposed by a civil taxing unit for
7 current property taxes collectible in that ensuing calendar year.
8 However, if a township elects to establish both a township
9 firefighting levy and a township emergency services levy under
10 IC 36-8-13-4(c)(2), the township firefighting levy and township
11 emergency services levy shall be combined and considered as a
12 single levy for purposes of this chapter.
13 (2) "Civil taxing unit" means the following:
14 (A) For property taxes first due and payable in a calendar
15 year ending before January 1, 2027, any taxing unit except
16 a school corporation.
17 (B) For property taxes first due and payable in each
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calendar year ending after December 31, 1 2026, any taxing
2 unit including a school corporation.
3 (3) "Maximum permissible ad valorem property tax levy for the
4 preceding calendar year" means, for purposes of determining a
5 maximum permissible ad valorem property tax levy under section
6 3 of this chapter for property taxes imposed for an assessment
7 date after January 15, 2011, the civil taxing unit's maximum
8 permissible ad valorem property tax levy for the calendar year
9 immediately preceding the ensuing calendar year, as that levy was
10 determined under section 3 of this chapter (regardless of whether
11 the taxing unit imposed the entire amount of the maximum
12 permissible ad valorem property tax levy in the immediately
13 preceding year).
14 (4) "Taxable property" means all tangible property that is subject
15 to the tax imposed by this article and is not exempt from the tax
16 under IC 6-1.1-10 or any other law. For purposes of sections 2 and
17 3 of this chapter, the term "taxable property" is further defined in
18 section 6 of this chapter.
19 SECTION 2. IC 6-1.1-18.5-2, AS AMENDED BY P.L.239-2023,
20 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
21 UPON PASSAGE]: Sec. 2. (a) As used in The following definitions
22 apply throughout this section:
23 (1) "County nonfarm personal income" means the estimate of
24 total nonfarm personal income for each county in Indiana in
25 a calendar year, as computed by the federal Bureau of
26 Economic Analysis using any actual data for the calendar
27 year and any estimated data determined appropriate by the
28 federal Bureau of Economic Analysis.
29 (2) "Indiana average annual pay in total for all industries and
30 all establishment sizes" means the estimate of total average
31 annual pay for those industries and establishments in Indiana
32 in a calendar year as computed by the federal Bureau of
33 Labor Statistics using any actual data for the calendar year
34 and any estimated data determined appropriate by the federal
35 Bureau of Labor Statistics.
36 (3) "Indiana nonfarm personal income" means the estimate of
37 total nonfarm personal income for Indiana in a calendar year as
38 computed by the federal Bureau of Economic Analysis using any
39 actual data for the calendar year and any estimated data
40 determined appropriate by the federal Bureau of Economic
41 Analysis.
42 (4) "Indiana personal consumption expenditures" means the
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1 estimate of total personal consumption expenditures for
2 Indiana in a calendar year as computed by the federal Bureau
3 of Economic Analysis using any actual data for the calendar
4 year and any estimated data determined appropriate by the
5 federal Bureau of Economic Analysis.
6 (5) "United States nonfarm business labor productivity
7 (output per hour)" means the estimate of total nonfarm
8 business labor productivity for the United States in a calendar
9 year as computed by the federal Bureau of Labor Statistics
10 using any actual data for the calendar year and any estimated
11 data determined appropriate by the federal Bureau of Labor
12 Statistics.
13 (b) Except as provided in subsections (c) and (e), (g), for purposes
14 of determining a civil taxing unit's maximum permissible ad valorem
15 property tax levy for an ensuing calendar year, ending before January
16 1, 2027, the civil taxing unit shall use the maximum levy growth
17 quotient determined in the last STEP of the following STEPS:
18 STEP ONE: For each of the six (6) calendar years immediately
19 preceding the year in which a budget is adopted under
20 IC 6-1.1-17-5 for the ensuing calendar year, divide the Indiana
21 nonfarm personal income for the calendar year by the Indiana
22 nonfarm personal income for the calendar year immediately
23 preceding that calendar year, rounding to the nearest
24 one-thousandth (0.001).
25 STEP TWO: Determine the sum of the STEP ONE results.
26 STEP THREE: Divide the STEP TWO result by six (6), rounding
27 to the nearest one-thousandth (0.001).
28 STEP FOUR: Determine the lesser of the following:
29 (A) The STEP THREE quotient.
30 (B) One and six-hundredths (1.06).
31 This subsection expires December 31, 2026.
32 (c) Except as provided in subsection (f), (h), a school corporation
33 shall use for its operations fund maximum levy calculation under
34 IC 20-46-8-1 the maximum levy growth quotient determined in the last
35 STEP of the following STEPS:
36 STEP ONE: Determine for each school corporation, the average
37 annual growth in net assessed value using the three (3) calendar
38 years immediately preceding the year in which a budget is
39 adopted under IC 6-1.1-17-5 for the ensuing calendar year.
40 STEP TWO: Determine the greater of:
41 (A) zero (0); or
42 (B) the STEP ONE amount minus the sum of:
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1 (i) the maximum levy growth quotient determined under
2 subsection (b) minus one (1); plus
3 (ii) two-hundredths (0.02).
4 STEP THREE: Determine the lesser of:
5 (A) the STEP TWO amount; or
6 (B) four-hundredths (0.04).
7 STEP FOUR: Determine the sum of:
8 (A) the STEP THREE amount; plus
9 (B) the maximum levy growth quotient determined under
10 subsection (b).
11 STEP FIVE: Determine the greater of:
12 (A) the STEP FOUR amount; or
13 (B) the maximum levy growth quotient determined under
14 subsection (b).
15 This subsection expires December 31, 2026.
16 (d) For purposes of determining a civil taxing unit's maximum
17 permissible ad valorem property tax levy for an ensuing calendar
18 year, for property taxes first due and payable in each calendar
19 year beginning after December 31, 2026, the civil taxing unit shall
20 use the maximum levy growth quotient determined in the last
21 STEP of the following STEPS:
22 STEP ONE: For each of the six (6) calendar years
23 immediately preceding the year in which a budget is adopted
24 under IC 6-1.1-17-5 for the ensuing calendar year, determine
25 separately each of the following components:
26 (A) Divide the Indiana personal consumption expenditures
27 for the calendar year by the Indiana personal consumption
28 expenditures for the calendar year immediately preceding
29 that calendar year, rounding to the nearest one-thousandth
30 (0.001).
31 (B) Divide the Indiana average annual pay in total for all
32 industries and all establishment sizes for the calendar year
33 by the Indiana average annual pay in total for all
34 industries and all establishment sizes for the calendar year
35 immediately preceding that calendar year, rounding to the
36 nearest one-thousandth (0.001).
37 (C) Divide the United States nonfarm business labor
38 productivity (output per hour) for the calendar year by the
39 United States nonfarm business labor productivity (output
40 per hour) for the calendar year immediately preceding that
41 calendar year, rounding to the nearest one-thousandth
42 (0.001).
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1 (D) Divide the county nonfarm personal income for each
2 county for the calendar year by the county nonfarm
3 personal income for each county for the calendar year
4 immediately preceding that calendar year, rounding to the
5 nearest one-thousandth (0.001).
6 STEP TWO: Determine separately each of the following
7 components:
8 (A) The sum of the result of clause (A) of STEP ONE.
9 (B) The sum of the result of clause (B) of STEP ONE.
10 (C) The sum of the result of clause (C) of STEP ONE.
11 (D) The sum of the result of clause (D) of STEP ONE.
12 STEP THREE: Divide each of the following:
13 (A) The result of clause (A) of STEP TWO by six (6),
14 rounding to the nearest one-thousandth (0.001).
15 (B) The result of clause (B) of STEP TWO by six (6),
16 rounding to the nearest one-thousandth (0.001).
17 (C) The result of clause (C) of STEP TWO by six (6),
18 rounding to the nearest one-thousandth (0.001).
19 (D) The result of clause (D) of STEP TWO by six (6),
20 rounding to the nearest one-thousandth (0.001).
21 STEP FOUR: Determine the product of each of the following:
22 (A) Multiply the result determined under clause (A) of
23 STEP THREE by two tenths (0.2).
24 (B) Multiply the result determined under clause (B) of
25 STEP THREE by three tenths (0.3).
26 (C) Multiply the result determined under clause (C) of
27 STEP THREE by three tenths (0.3).
28 (D) Multiply the result determined under clause (D) of
29 STEP THREE by two tenths (0.2).
30 STEP FIVE: Determine the sum of the STEP FOUR results,
31 rounding to nearest one-thousandth (0.001).
32 The maximum levy growth quotient determined under this
33 subsection is the maximum levy growth quotient for the county and
34 each civil taxing unit within the county.
35 (d) (e) For property taxes first due and payable in a calendar
36 year ending before January 1, 2027, the budget agency shall provide
37 the maximum levy growth quotient for the ensuing year to civil taxing
38 units, school corporations, and the department of local government
39 finance before July 1 of each year.
40 (f) For property taxes first due and payable in each calendar
year ending after December 31, 41 2026, the budget agency shall
42 provide:
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1 (1) the maximum levy growth quotient for each county for the
2 ensuing year to civil taxing units and the department of local
3 government finance; and
4 (2) in the case of a civil taxing unit that contains territory in
5 more than one (1) county, the maximum levy growth quotient,
6 using the average of the maximum levy growth quotient for
7 each county in which the civil taxing unit has territory, for the
8 ensuing year to a civil taxing unit and the department of local
9 government finance;
10 before July 1, 2026, and each July 1 thereafter. Additionally,
11 before July 1, 2026, and each July 1 thereafter, the budget agency
12 shall, using each county's maximum levy growth quotient, calculate
13 and provide to the department of local government finance the
14 statewide minimum, statewide maximum, statewide median, and
15 statewide average.
16 (e) (g) This subsection applies only for purposes of determining the
17 maximum levy growth quotient to be used in determining a civil taxing
18 unit's maximum permissible ad valorem property tax levy in calendar
19 years 2024 and 2025. For purposes of determining the maximum levy
20 growth quotient in calendar years 2024 and 2025, instead of the result
21 determined in the last STEP in subsection (b), the maximum levy
22 growth quotient is determined in the last STEP of the following
23 STEPS:
24 STEP ONE: Determine the result of STEP FOUR of subsection
25 (b), calculated as if this subsection was not in effect.
26 STEP TWO: Subtract one (1) from the STEP ONE result.
27 STEP THREE: Multiply the STEP TWO result by eight-tenths
28 (0.8).
29 STEP FOUR: Add one (1) to the STEP THREE result.
30 STEP FIVE: Determine the lesser of:
31 (A) the STEP FOUR result; or
32 (B) one and four-hundredths (1.04).
33 (f) (h) This subsection applies only for purposes of determining the
34 maximum levy growth quotient to be used in determining a school
35 corporation's operations fund maximum levy in calendar years 2024
36 and 2025. For purposes of determining the maximum levy growth
37 quotient in calendar years 2024 and 2025, instead of the result
38 determined in the last STEP in subsection (c), the maximum levy
39 growth quotient is determined in the last STEP of the following
40 STEPS:
41 STEP ONE: Determine the result of STEP FIVE of subsection (c),
42 calculated as if this subsection was not in effect.
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1 STEP TWO: Subtract one (1) from the STEP ONE result.
2 STEP THREE: Multiply the STEP TWO result by eight-tenths
3 (0.8).
4 STEP FOUR: Add one (1) to the STEP THREE result.
5 STEP FIVE: Determine the lesser of:
6 (A) the STEP FOUR result; or
7 (B) one and four-hundredths (1.04).
8 SECTION 3. IC 6-1.1-18.5-3, AS AMENDED BY P.L.247-2017,
9 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10 UPON PASSAGE]: Sec. 3. (a) A civil taxing unit may not impose an
11 ad valorem property tax levy for an ensuing calendar year that exceeds
12 the amount determined in the last STEP of the following STEPS:
13 STEP ONE: Determine the civil taxing unit's maximum
14 permissible ad valorem property tax levy for the preceding
15 calendar year.
16 STEP TWO: Multiply the amount determined in STEP ONE by
17 the amount determined in the last STEP of section 2(b) of this
18 chapter (for property taxes first due and payable in a calendar
19 year ending before January 1, 2027) or section 2(d) of this
20 chapter (for property taxes first due and payable in a
21 calendar year ending after December 31, 2026).
22 STEP THREE: Determine the lesser of one and fifteen hundredths
23 (1.15) or the quotient (rounded to the nearest ten-thousandth
24 (0.0001)), of the assessed value of all taxable property subject to
25 the civil taxing unit's ad valorem property tax levy for the ensuing
26 calendar year, divided by the assessed value of all taxable
27 property that is subject to the civil taxing unit's ad valorem
28 property tax levy for the ensuing calendar year and that is
29 contained within the geographic area that was subject to the civil
30 taxing unit's ad valorem property tax levy in the preceding
31 calendar year.
32 STEP FOUR: Determine the greater of the amount determined in
33 STEP THREE or one (1).
34 STEP FIVE: Multiply the amount determined in STEP TWO by
35 the amount determined in STEP FOUR.
36 STEP SIX: Add the amount determined under STEP TWO to the
37 amount of an excessive levy appeal granted under section 13 of
38 this chapter for the ensuing calendar year.
39 STEP SEVEN: Determine the greater of STEP FIVE or STEP
40 SIX.
41 (b) This subsection applies only to a civil taxing unit that is located
42 in a county that is covered by IC 6-3.6-11-1. For purposes of subsection
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1 (a), revenue under IC 6-3.6-6 that is applied for purposes of a levy
2 freeze shall not be included in the amount determined under STEP
3 ONE of subsection (a) for the civil taxing unit. Notwithstanding any
4 provision in this section, any other section of this chapter, or
5 IC 12-20-21-3.2, and except as provided in subsection (c), if the
6 adopting body has adopted a resolution specifying that any increase in
7 the maximum levy is to be funded using local income tax revenue, the
8 maximum permissible ad valorem property tax levy calculated under
9 this section for the ensuing calendar year for the civil taxing unit is
10 equal to the civil taxing unit's maximum permissible ad valorem
11 property tax levy for the current calendar year. If the adopting body has
12 adopted a resolution specifying that any increase in the maximum levy
13 is not to be funded using local income tax revenue, the maximum
14 permissible ad valorem property tax levy for the civil taxing unit is
15 equal to the civil taxing unit's maximum permissible ad valorem
16 property tax levy calculated under this section for the ensuing calendar
17 year.
18 (c) In the case of a civil taxing unit that:
19 (1) is partially located in a county that is covered by
20 IC 6-3.6-11-1; and
21 (2) is partially located in a county that is not described in
22 subdivision (1);
23 the department of local government finance shall, notwithstanding
24 subsection (b), adjust the portion of the civil taxing unit's maximum
25 permissible ad valorem property tax levy that is attributable (as
26 determined by the department of local government finance) to the
27 county or counties described in subdivision (2). The department of
28 local government finance shall adjust this portion of the civil taxing
29 unit's maximum permissible ad valorem property tax levy so that,
30 notwithstanding subsection (b), this portion is allowed to increase as
31 otherwise provided in this section. If the department of local
32 government finance increases the civil taxing unit's maximum
33 permissible ad valorem property tax levy under this subsection, any
34 additional property taxes imposed by the civil taxing unit under the
35 adjustment shall be paid only by the taxpayers in the county or counties
36 described in subdivision (2).
37 SECTION 4. IC 6-1.1-18.5-21, AS AMENDED BY P.L.236-2023,
38 SECTION 31, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 UPON PASSAGE]: Sec. 21. (a) A civil taxing unit may determine that
40 the ad valorem property tax levy limits imposed by section 3 of this
41 chapter do not apply to all or part of the ad valorem property taxes
42 imposed to repay a loan under either or both of the following:
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1 (1) IC 6-1.1-21.3.
2 (2) IC 6-1.1-21.9.
3 (b) This subsection applies to a civil taxing unit or (before January
4 1, 2027) school corporation located in Lake County that has received
5 or is receiving a loan under IC 6-1.1-22.1. The ad valorem property tax
6 levy limits imposed in section 3 of this chapter do not apply to all or
7 part of the ad valorem property taxes imposed to repay a loan under
8 IC 6-1.1-22.1 for the ensuing calendar year if:
9 (1) the civil taxing unit or (before January 1, 2027) school
10 corporation provides to the department the information the
11 department considers necessary to determine the amount of ad
12 valorem property taxes imposed to repay the loan in the ensuing
13 calendar year; and
14 (2) the information described in subdivision (1) is provided to the
15 department not later than December 1 of the year preceding the
16 ensuing calendar year.
17 SECTION 5. An emergency is declared for this act.
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