13-3407.

Property tax request authority; unused property tax request authority; requirements; political subdivision; failure to comply; withhold or forfeit state aid.

(1) The auditor shall prepare forms to be used by political subdivisions for the purpose of calculating property tax request authority and unused property tax request authority. Each political subdivision shall calculate such amounts and submit the forms to the auditor on or before September 30, 2025, and on or before September 30 of each year thereafter. If a political subdivision fails to submit such forms to the auditor or if the auditor determines from such forms that a political subdivision is not complying with the limits provided in the Property Tax Growth Limitation Act, the auditor shall notify the political subdivision and the State Treasurer of the noncompliance.

(2)(a) Upon receiving notice from the auditor, the State Treasurer shall then suspend distribution of state aid allocated to the political subdivision until the political subdivision complies. The funds shall be held for six months. If the political subdivision complies within the six-month period, it shall receive the suspended funds. If the political subdivision fails to comply within the six-month period, the suspended funds shall be forfeited and shall be (i) redistributed to other recipients of the state aid in the county where such noncompliant political subdivision is located or returned to the Highway Allocation Fund if there is no eligible recipient or (ii) in the case of a homestead exemption reimbursement, returned to the General Fund.

(b) The political subdivision shall continue to forfeit state aid until the political subdivision reaches compliance and the State Treasurer has received notification of such compliance from the auditor. All state aid that was forfeited shall remain forfeited and redistributed according to subdivision (a)(i) of this subsection.

(3) If any political subdivision fails to reach compliance within twelve months after the time of the order and notice of delinquency given by the auditor to the State Treasurer, such political subdivision shall be ineligible for future distributions of state aid. Upon reaching compliance, the political subdivision shall be eligible for future distributions of state aid.