1. (a) If the department determines that an amount of a listed tax has been distributed to a county, taxing district, or taxing unit in error or determines that all or part of the distribution was refunded subsequent to the distribution, the department shall notify the county treasurer and the county auditor of the excess distribution and request that the excess distribution be repaid to the department or that the department be permitted to offset the excess distribution against listed taxes. The notification under this section shall consist of:

   1. (1) the listed tax for which the excess distribution occurred;
   2. (2) the period to which the excess distribution relates; and
   3. (3) the county, taxing district, or taxing unit that received the excess distribution.

2. (b) If the department is unable to obtain repayment from the county or obtain an agreement to offset against other listed taxes after a request by the department is made under subsection (a), the department may offset distributions of that listed tax or other listed taxes distributable to that county upon notification of:

   1. (1) the listed tax from which the offset will be applied;
   2. (2) in the case of an offset applied against local income tax, the particular share from which the offset will be obtained; and

   3. (3) the amount of the repayment to be obtained.

      The department may recover any excess distribution over a period of multiple distributions.

3. (c) The department shall attempt to apply any offset against the same listed tax as the over distribution or other listed taxes otherwise distributable to the county, taxing district, or taxing unit as closely as possible. If the department determines that such an offset is not practicable, the department shall offset the distribution against the local income tax distributions otherwise required under IC 6-3.6 and the state budget agency shall adjust the distributions of local income tax for the calendar year in which the offset occurs or will occur to reflect such distribution.

As added by P.L.137-2022, SEC.84.