Sec. 17. (a) As used in this section, “levy excess” means the part of the ad valorem property tax levy actually collected by a civil taxing unit, for taxes first due and payable during a particular calendar year, that exceeds the civil taxing unit’s ad valorem property tax levy, as approved by the department of local government finance under IC 6-1.1-17. The term does not include delinquent ad valorem property taxes collected during a particular year that were assessed for an assessment date that precedes the assessment date for the current year in which the ad valorem property taxes are collected.

     (b) A civil taxing unit’s levy excess is valid and may not be contested on the grounds that it exceeds the civil taxing unit’s levy limit for the applicable calendar year. However, the civil taxing unit shall deposit, except as provided in subsections (h) and (i), its levy excess in a special fund to be known as the civil taxing unit’s levy excess fund.

     (c) The chief fiscal officer of a civil taxing unit may invest money in the civil taxing unit’s levy excess fund in the same manner in which money in the civil taxing unit’s general fund may be invested. However, any income derived from investment of the money shall be deposited in and becomes a part of the levy excess fund.

     (d) The department of local government finance shall require a civil taxing unit to include the amount in its levy excess fund in the civil taxing unit’s budget fixed under IC 6-1.1-17.

     (e) Except as provided by subsection (f), a civil taxing unit may not spend any money in its levy excess fund until the expenditure of the money has been included in a budget that has been approved by the department of local government finance under IC 6-1.1-17. For purposes of fixing its budget and for purposes of the ad valorem property tax levy limits imposed under this chapter, a civil taxing unit shall treat the money in its levy excess fund that the department of local government finance permits it to spend during a particular calendar year as part of its ad valorem property tax levy for that same calendar year.

     (f) A civil taxing unit may transfer money from its levy excess fund to its other funds to reimburse those funds for amounts withheld from the civil taxing unit as a result of refunds paid under IC 6-1.1-26.

     (g) Subject to the limitations imposed by this section, a civil taxing unit may use money in its levy excess fund for any lawful purpose for which money in any of its other funds may be used.

     (h) If the amount that would, notwithstanding this subsection, be deposited in the levy excess fund of a civil taxing unit for a particular calendar year is less than one hundred dollars ($100), no money shall be deposited in the levy excess fund of the unit for that year.

     (i) This subsection applies only to a civil taxing unit that:

(1) has a levy excess for a particular calendar year;

(2) in the preceding calendar year experienced a shortfall in property tax collections below the civil taxing unit’s property tax levy approved by the department of local government finance under IC 6-1.1-17; and

(3) did not receive permission from the department to impose, because of the shortfall in property tax collections in the preceding calendar year, a property tax levy that exceeds the limits imposed by section 3 of this chapter.

The amount that a civil taxing unit subject to this subsection must transfer to the civil taxing unit’s levy excess fund in the calendar year in which the excess is collected shall be reduced by the amount of the civil taxing unit’s shortfall in property tax collections in the preceding calendar year (but the reduction may not exceed the amount of the civil taxing unit’s levy excess).

As added by P.L.73-1983, SEC.1. Amended by P.L.64-1985, SEC.1; P.L.90-2002, SEC.172; P.L.23-2004, SEC.26 and P.L.1-2004, SEC.24; P.L.154-2006, SEC.48; P.L.219-2007, SEC.57; P.L.182-2009(ss), SEC.137.