1. (a) For townships and municipalities that elect to have the township provide fire protection and emergency services under section 3(b) of this chapter, the department of local government finance shall adjust each township's and each municipality's maximum permissible levy in the year following the year in which the change is elected, as determined under IC 6-1.1-18.5-3 , to reflect the change from providing fire protection or emergency services under a contract between the municipality and the township to allowing the township to impose a property tax levy on the taxable property located within the corporate boundaries of each municipality. Each municipality's maximum permissible property tax levy shall be reduced by the amount of the municipality's property tax levy that was imposed by the municipality to meet the obligations to the township under the fire protection or emergency services contract. The township's maximum permissible property tax levy shall be increased by the product of:

   1. (1) one and five-hundredths (1.05); multiplied by

   2. (2) the amount the township received:

      1. (A) in the year in which the change is elected; and
      2. (B) as fire protection or emergency services contract payments from all municipalities whose levy is decreased under this section.
2. (b) For purposes of determining a township's or municipality's maximum permissible ad valorem property tax levy under IC 6-1.1-18.5-3 for years following the first year after the year in which the change is elected, a township's or municipality's maximum permissible ad valorem property tax levy is the levy after the adjustment made under subsection (a).

As added by P.L.269-1993, SEC.4. Amended by P.L.2-1995, SEC.137; P.L.90-2002, SEC.495; P.L.236-2023, SEC.205.