Legislation strengthens internal controls of taxpayer dollars

Posted by: Kelly Sweeney  | Friday, March 22, 2013 8:00 am

STATEHOUSE – Legislation to protect Hoosier taxpayers passed unanimously out of the Senate on Tuesday. Authored by State Representatives Ed Soliday (R-Valparaiso), House Bill (HB) 1077 will now go to the governor’s desk and wait for his signature.

This bill designates that only a county, city, or town executive can authorize the transference of Economic Development Income Tax (EDIT) money to their General Fund. Additionally, HB 1077 provides that transferring of EDIT funds must not interfere with any debts, liabilities, or obligations for which they are pledged – including transfers required by the Northwest Indiana Regional Development Authority Law.

This legislation was drafted in response to a recently discovered loophole by the Porter County Council stemming from language in House Enrolled Act (HEA) 1275. The 2011 bill authorized a county, city or town to transfer money from its EDIT funds or Rainy Day Fund to its General Fund or any appropriated funds of the municipality. The council chose to interpret the omission of the word "County" used instead of "County Executive" or "County Commissioners" as a loophole which could be taken as giving the council unfettered spending authority over funds – disrupting the checks and balances set in place for many years.

“The principle of checks and balances, a necessary aspect of our government, has existed since the establishment of that institution, and I want to ensure that system remains in place in Porter County’s legislative process and that no loophole exists threatening it,” said Rep. Soliday.

“To prevent this abridgment of internal controls and protect county taxpayer money, HB 1077 clearly defines the roles and responsibilities that the local legislative bodies have when transferring CEDIT or Rainy Day Funds – removing any vagueness on this issue not discussed when HEA 1275 was drafted,” said Rep. Soliday. “This also defends both sides of a protracted lawsuit and ensures that those long established internal controls on the spending of taxpayer dollars remain in place.”

Visit www.in.gov/legislative for more information about HB 1077.