*924 The estate of a restricted Creek Indian dying January 10, 1935, is subject to Federal estate tax.
*958 This is a proceeding for the redetermination of a deficiency in estate tax in the amount of $15,053.48. The principal question in issue is whether the estate of a restricted full-blood Creek Indian is liable to estate tax. A subsidiary question is whether the respondent erred in disallowing a credit for state, estate, or inheritance taxes. *959 The parties have stipulated that the estate is entitled to additional deductions from the gross estate determined by the respondent as follows:
| Funeral expenses | $500.00 |
| Miscellaneous administration expenses (court costs) | 73.33 |
| Support of dependents | 1,816.67 |
| Total | 2,390.00 |
The evidence of record consists of the pleadings, a signed stipulation of facts together with exhibits (incorporated herein by reference), and the testimony of one witness. Upon the basis of such evidence the Board makes the following findings of fact.
*925 FINDINGS OF FACT.
1. The petitioner is the Superintendent of the Five Civilized Tribes and has under his supervision and jurisdiction the affairs of the estate of the decedent herein, Jeanetta Burgess, nee Tiger. As such superintendent he is the representative of the Secretary of the Interior, who is the fiduciary of the estate of the decedent and required to return and pay such taxes as may be due from the estate of the decedent.
2. The decedent, Jeanetta Burgess, nee Tiger, died on January 10, 1935. She was a full-blood Creek Indian enrolled opposite Roll No. 5069. At the time of her death she was under full restrictions as to all her real estate and personal property.
3. At the time of her death the decedent was the owner of 160 acres of land in Creek County, Oklahoma, which had been allotted to her under an agreement between the United States and the Creek Tribe of Indians, dated March 8, 1900, ratified by Act of Congress March 1, 1901 (31 Stat. 861), and by the Creek Nation on May 25, 1901, which lands are described as:
The East 1/2 of the Northwest 1/4 and the Southwest 1/4 of the Northwest 1/2 of Sec. 16, Twp. 17, North, Range 7 East, containing 120 acres, *926 the same being decedent's surplus lands, and
The Northwest 1/4 of the Northwest 1/4 of Sec. 16, Twp. 17, North, and Range 7 East, containing 40 acres, the same being decedent's homestead.
All of the said tract of 160 acres of land was at the time of decedent's death and still is fully restricted and can not be sold, leased or otherwise encumbered without the approval of the Secretary of the Interior, under the Act of Congress of April 26, 1906 (34 Stat.L. 137), ratified and approved by the Creek Tribe August 2 and 3, 1907, and by the President of the United States on September 17, 1907, and the Act of May 27, 1908 (35 Stat.L. 312), and was certified as exempt from taxation under the provisions of the Act of Congress of May 10, 1928 (45 Stat.L. 495).
*960 4. During the year 1912 an oil and gas lease was entered into between decedent and C. J. Wrightsman, of Tulsa, Oklahoma, under date of March 13, 1912, and was approved by the Secretary of the Interior on June 29, 1912, for a period of 10 years or as long thereafter as oil and gas is produced in paying quantities, covering all of said 160 acres of land. Production was had in 1914, and in 1915 the Superintendent of the*927 Five Civilized Tribes received under the provisions of the lease the first royalty income for the decedent on account thereof. The said lease is still producing in paying quantities and the royalties therefrom are still paid to the Superintendent of the Five Civilized Tribes.
5. During the years of 1917, 1918, and 1919 the Secretary of the Interior purchased for the decedent, out of funds accruing to her account from oil and gas royalties and from interest, Liberty Loan and Victory bonds of a face value of $264,800. At the time of decedent's death there were credited to her account Liberty Loan bonds and Treasury bonds of a total face value of $214,800. The fair market value of these bonds, with accrued interest thereon, at the date of decedent's death was $227,243.41. The bonds were purchased by the Secretary of the Interior under the authority granted him by Congress over the affairs of the restricted Five Tribes Indians.
6. At the time of decedent's death the decedent had a cash credit of $4,754.89 with the Superintendent of Five Civilized Tribes.
7. The income flowing from decedent's restricted allotment, as well as the bond and open account interest, was credited*928 to her account with the Superintendent of the Five Civilized Tribes and disbursed under supervision of the Secretary of the Interior. The greater portion of decedent's funds was deposited by the Superintendent of the Five Civilized Tribes with the Treasurer of the United States and the balance of her funds was deposited with banks. Decedent had the use of such funds from her account with the Superintendent of the Five Civilized Tribes under departmental supervision in the purchase of personal property for her. Title to personal property purchased, other than clothing, etc., was taken on a restricted bill of sale in the name of the United States for the use and benefit of the decedent. All investment problems concerning the decedent's restricted funds were handled by the Superintendent of the Five Civilized Tribes under departmental supervision.
8. From the date of original production under said oil and gas lease under decedent's allotment to the date of decedent's death there were paid into the Five Tribes agency for decedent's account as oil and gas royalties the sum of $513,491.30. During this period there were also credited to decedent's account as interest on the Government*929 *961 bonds the sum of $123,562.74 and the sum of $27,312.71 representing interest on decedent's cash balance with the Five Tribes Agency.
9. On August 26, 1931, the decedent executed in writing an instrument purporting to be her last will and testament, by which she bequeathed to each of her eight then living children $25 and no more, and to stepson $25. All the rest, residue and remainder of her estate was devised and bequeathed to her husband, a full-blood restricted Indian, John Burgess by name. This will was declared invalid and denied probate by a decree of the United States District Court for the Eastern District of Oklahoma, entered March 5, 1938, on the ground of incompetency of attesting witnesses. This decree was affirmed by the United States Circuit Court of Appeals for the Tenth Circuit on April 11, 1939 (). On June 30, 1939, the County Court of Seminole County, Oklahoma, entered a decree determining the heirs of decedent to be decedent's husband, seven living children, three grandchildren, and the wife of a deceased son. The husband was given a one-tenth interest in the estate, each of the seven living children a like interest, *930 each of the three grandchildren a one-twentieth interest, and the wife of a deceased son a one-twentieth interest. All of the heirs are full-blood Indians and were at the time of decedent's death and still are fully restricted. Except for decedent's husband, all of the heirs were born subsequent to March 4, 1906. At the time of decedent's death none of the heirs, except decedent's husband, had any land designated as tax-exempt under the Act of Congress of May 10, 1928. Decedent's husband had 160 acres of land which were designated tax-exempt under that act.
10. All of the funds, including the Government bonds mentioned above belonging to the decedent at the time of her death, except such amounts thereof as were disbursed under departmental supervision for the support and maintenance of the decedent's heirs, were then, and have been at all times since then, retained by the Superintendent of the Five Civilized Tribes under the supervision of the Secretary of the Interior in trust for the heirs of the decedent, and inasmuch as such heirs are fully restricted under the Acts of Congress no actual distribution has been made of the property and estate of the decedent. The shares*931 which each heir of the decedent is entitled to will be credited to the account of such heir on the books of the Interior Department in the office of the Superintendent of the Five Civilized Tribes in accordance with the decree of the County Court of Seminole County, Oklahoma.
11. From 1914 to the date of the decedent's death, January 10, 1935, the decedent received, monthly, cash payments from her account with *962 the Superintendent of the Five Civilized Tribes ranging from $400 to $1,200, with an average monthly payment of $960. The total amount paid to her or for her account, including medical, hospital, and funeral expenses was $444,811.90.
12. The respondent determined that the gross estate of the decedent consisted of the following:
| Homestead allotment | $3,000.00 |
| Liberty Loan bonds - U.S. Treasury bonds (with accrued interest) | 227,243.41 |
| Cash | 4,754.89 |
| 234,998.30 | |
| Deductions | 6,219.26 |
| Net estate (exclusive of statutory exemptions) | 228,779.04 |
| Additional deductions stipulated | 2,390.00 |
| Net estate (exclusive of statutory exemptions) | 226,389.04 |
OPINION.
SMITH: The petition filed in this proceeding alleges that the "Respondent erred*932 in determining that under the law the estate of decedent is subject to any Federal estate tax."
The Revenue Act of 1926 provides in part:
SEC. 301. (a) In lieu of the tax imposed by Title III of the Revenue Act of 1924, a tax equal to the sum of the following percentages of the value of the net estate (determined as provided in section 303) is hereby imposed upon the transfer of the net estate of every decedent dying after the enactment of this Act, whether a resident or nonresident of the United States.
* * *
SEC. 302. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated -
(a) To the extent of the interest therein of the decedent at the time of his death. [Emphasis supplied.]
The estate tax imposed by the Revenue Act of 1926 and the amendments thereto is upon the net estate of "every decedent dying after the enactment of this Act, whether a resident or nonresident of the United States." The decedent died subsequent to the Revenue Act of 1926. She was a resident of the United States. All of her property was located in the United*933 States.
The petitioner contends, however, that the decedent had no "net estate" within the meaning of the taxing statute; that "the interest of the decedent [in her property] was deleted by statutory restriction and governmental practice and regulations thereunder so that decedent [at the time of her death] had nothing to transfer but a *00019/1.1/17/15 *01016-1.1-17-15 *03Sec. 15. A political subdivision may appeal to the state board of tax commissioners for an increase in its tax rate or tax levy as fixed by the county board of review or the county auditor. To initiate the appeal, the political subdivision must file a statement with the board within ten (10) days after publication of the notice required by section 12 of this chapter. The legislative body of the political subdivision must authorize the filing of the statement by adopting a resolution. The resolution must be attached to the statement of objections, and the statement must be signed by the following officers: *03(1) in the case of counties, by the board of county commissioners and by the president of the county council; or *03(2) in the case of all other political subdivisions, by the highest executive officer*934 and by the presiding officer of the legislative body. *04: *00016/1.1/17/16 *01016-1.1-17-16 *03Sec. 16. (a) Subject to the limitations and requirements prescribed in this section, the state board of tax commissioners may revise, reduce, or increase a political subdivisions's budget, tax rate, or tax levy which the board reviews under section 8 or section 10 of this chapter. *03(b) Subject to the limitations and requirements prescribed in this section, the state board of tax commissioners may review, revise, reduce, or increase the budget, tax rate, or tax levy of any of the political subdivisions whose tax rates compose the aggregate tax rate within a political subdivision whose budget, tax rate, or tax levy is the subject of an appeal initiated under this chapter. *03(c) Before the state board of tax commissioners reviews, revises, reduces, or increases a political subdivision's budget, tax rate, or tax levy under this section, the board must hold a public hearing on the budget, tax rate, and tax levy. The board shall hold the hearing in the county in which the political subdivision is located. The board may consider the budgets, tax rates, and tax levies of several political*935 subdivisions at the same public hearing. At least five (5) days before the date fixed for a public hearing, the board shall give notice of the time and place of the hearing and of the budgets, levies, and tax rates to be in two (2) newspapers of general circulation published in in two (2) newspapers of general circulation published in the county. However, if only one (1) newspaper of general circulation is published in the county, the board shall publish the notice in that newspaper. *03(d) Except as provided in IC 1971, 6-1.1-19 or IC 1971, 6-3.5-1, the state board of tax commissioners may not increase a political subdivision's tax rate or tax levy to an amount which exceeds the amount originally fixed by the political subdivision. The state board of tax commissioners may make a revision, reduction, or increase in a political subdivision's budget only in the total amounts budgeted for each office or department within each of the major budget classifications prscribed by the state board of accounts. *03(e) The action of the state board of tax commissioners on a budget, tax rate, or tax levy is final. The board shall certify its action to: *03(1) the county auditor; and *03(2) *936 the political subdivision if the state board acts pursuant to an appeal initiated by the political subdivision. *03(f) The state board of tax commissioners is expressly directed to complete the duties assigned to it under this section not later than January 15th of each year for taxes to be collected during that year. *04: *00019/1.1/17/17 *01016-1.1-17-17 *03Sec. 17. Subject to the limitations contained in IC 1971, 6-1.1-19 and IC 1971, 6-3.5-1, the state board of tax commissioners may at any time increase the tax rate and tax levy of a political subdivision for the following reasons: *03(1) to pay the principal or interest upon a funding, refunding, or judgment funding obligation of a political subdivision; *03(2) to pay the interest or principal upon an outstanding obligation of the political subdivision: *03(3) to pay a judgment rendered against the political subdivision; or *03(4) to pay lease rentals that have become an obligation of the political subdivision under IC 1971, 21-5-11 or IC 1971, 21-5-12. *04: *00019/1.1/17/ 8 *01016-1.1-17-18 *03Sec. 18. This chapter does not affect IC 1971, 12-1-11-4. *04: *00019/1.1/17/19 *01019-1.1-17-19 *03Sec. 19. If there is a conflict*937 between the provisions of this chapter and the provisions of IC 1971, 6-1.1-19 or IC 1971, 6-3.5-1, the provisions of the latter two (2) chapters control with respect to the adoption of, review of, and limitations on budgets, tax rates, and tax levies. *04: *00026/1.1/18 *09Chapter 18. Limitations on Property Tax Rates and Appropriations. *00016/1.1/18/1 *01016-1.1-18-1 *03Sec. 1. When fixing a budget, tax rate, and tax levy% under IC 1971, 6-1.1-17-5, the officers of a political subdivision may not fix a budget, tax rate, or tax levy which exceeds the amount published by the political subdivision. The portion of a budget, tax rate, or tax levy which exceeds the published amount is void. *04: *00016/1.1/18/2 *01016-1.1-18-2 *03Sec. 2. The state may not impose a tax rate on tangible property in excess of one cent ($.01) on each one hundred dollars ( $100) of assessed valuation. The state tax rate is not subject to review by county boards of tax adjustment or county auditors. This section does not apply to political subdivisions of the state. *04: *00016/1.1/18/3 *01016-1.1-18-3 *03Sec. 3. (a) Except as provided in subsection (b) of this section, the sum of all tax rates for*938 all political subdivisions imposed on tangible property within a political subdivision may not exceed: *03(1) one dollar and twenty-five cents ($1.25) on each one hundred dollars ( $100) of assessed valuation in territory outside the corporate limits of a city or town; or *03(2) two dollars ($2.00) on each hundred dollars ( $100) of assessed valuation in territory inside the corporate limits of a city or town. *03(b) The proper officers of a political subdivision shall fix tax rates which are sufficient to provide funds for the purposes itemized in this subsection. The portion of a tax rate fixed by a political subdivision shall not be considered in computing the tax rate limits prescribed in subsection (a) of this section if that portion is to be used for one of the following purposes: *03(1) to pay the principal or interest on a funding, refunding, or judgment funding obligation of the political subdivision; *03(2) to pay the principal or interest on an outstanding obligation issued by the political subdivision if notice of the sale of the obligation was published before March 9, 1937; *03(3) to pay the principal or interest upon an obligation issued by the political subdivision*939 to meet an emergency which results from a flood, fire, pestilence, war, or any other major disaster; *03(4) to pay the principal or interest upon an obligation issued in the manner provided in IC 1971, 6-1.1-20-3; *03(5) to pay a judgment rendered against the political subdivision; or *03(6) to meet the requirements of the county welfare fund for public welfare services. *03(c) Except as otherwise provided in IC 1971, 6-1.1-19 or IC 1971, 6-3.5-1, a county board of tax adjustment, a county auditor, or the state board of tax commissioners may review the portion of a tax rate described in subsection (b) of this section only to determine if it exceeds the portion actually needed to provide for one of the purposes itemized in that subsection. *04: *00016/1.1/18/4 *01016-1.1-18-4 *03Sec. 4. Except as otherwise provided in this chapter, the proper officers of a political subdivision shall appropriate funds in such a manner that the expenditures for a year do not exceed its budget for that year as finally determined under this article. *04: *00016/1.1/18/5 *01016-1.1-18-5 *03Sec. 5. (a) If the proper officers of a political subdivision desire to appropriate more money for a particular*940 year than the amount prescribed in the budget for that year as finally determined under this article, they shall give notice of their proposed additional appropriation. The notice shall state the time and place at which a public hearing will be held on the proposal. The notice shall be given in the manner prescribed in IC 1971, 6-1.1-17-4 at least ten (10) days before the date fixed for the hearing. *03(b) After the public hearing, the proper officers of the political subdivision may file a certified copy of their final proposal with the county auditor. The county auditor shall forward a certified copy of the final proposal and any other relevant information to the state board of tax commissioners. *03(c) When the state board of tax commissioners receives a certified copy of a proposal for an additional appropriation, the board shall set a time and place for a hearing on the proposal. The hearing shall be held in the political subdivision, or in the county where the political subdivision is located, not less than five (5) nor more than fifteen (15) days after the board receives the proposal. The state board of tax commissioners shall mail a notice of the time and place of the*941 hearing to the executive officer of the political subdivision at least five (5) days before the date fixed for the hearing. *03(d) The state board of tax commissioners may affirm or decrease the amount of the additional appropriation proposed by the political subdivision. However, the board shall limit the amount of the additional appropriation to revenues available, or to be made available, which are in addition to and in excess of those revenues anticipated in the political subdivision's original budget. *04: *00016/1.1/18/6 *01016-1.1-18-6 *03Sec. 6. (a) The proper officers of a political subdivision may transfer money from one major budget classification to another within a department or office if: *03(1) they determine that the transfer is necessary; *03(2) the transfer does not require the expenditure of more money than the total amount set out in the budget as finally determined under this article; *03(3) the transfer is made at a regular public meeting and by proper ordinance; and *03(4) the transfer is certified to the county auditor. *03(b) A transfer may be made under this section without notice and without the approval of the state board of tax commissioners. However, *942 the county auditor shall report the transfer to the state board. *04: *00016/1.1/18/7 *01016-1.1-18-7 *03Sec. 7. Notwithstanding the other provisions of this chapter, the appropriating body of a political subdivision may appropriate funds received from an insurance company if: *03(1) the funds are received as a result of damage to property of the political subdivision; and *03(2) the funds are appropriated for the purpose of repairing or replacing the damaged property. *03However, this section applies only if the funds are in fact expended to repair or replace the property within the twelve (12) month period after they are received. *04: *00016/1.1/18/8 *01016-1.1-18-8 *03Sec. 8. (a) Except as provided in subsections (b) and (c) of this section, a political subdivision may not expend any funds which it has received from the state and which it is required to include in its budget estimate under IC 1971, 6-1.1-17-2 unless: *03(1) the funds have been included in a budget estimate by the political subdivision; and *03(2) the funds have been appropriated by the proper officers of the political subdivision in the amounts and for the specific purposes for which they may be used. *03(b) *943 The county council shall appropriate funds for the operation of the county highway department for the entire ensuing budget year for which annual appropriations are being made. The appropriation shall be for an amount which is not less than the greater of: *03(1) seventy-five percent (75%) of the total estimated to be in the highway fund in the ensuing budget year; or *03(2) ninety-nine percent (99%) of the total estimated to be in the highway fund in the ensuing budget year if the county commissioners file with the county council a four (4) year plan for the construction and improvement of county highways and a one (1) year plan for the maintenance and repair of the county highways. *03(c) In the event of a casualty, accident, or extraordinary emergency, the proper officers of a political subdivision may use state funds to make an additional appropriation under section 5 of this chapter. *04: *00019/1.1/18/9 *01016-1.1-18-9 *03Sec. 9. Notwithstanding the other provisions of this chapter, the proper officer or officers of a political subdivision may: *03(1) make an appropriation with respect to a contract for the discovery of omitted property if the contract provides the payment*944 for the services performed is to be made from taxes or penalties collected on the discovered property; *03(2) reappropriate money recovered from erroneous or excessive disbursements if the error and recovery are made within the current budget year; or *03(3) refund, without appropriation, money erroneously received. *04: *00016/1.1/18/10 *01016-1.1-18-10 *03Sec. 10. (a) If the proper officers of a political subdivision make an appropriation for an item which exceeds the amount which they are permitted to appropriate under this chapter, they are guilty of malfeasance in office and are liable to the political subdivision in an amount equal to the sum of one hundred and twenty-five percent (125%) of the excess so appropriated and court cost. *03(b) Upon the relation of a taxpayer who owns property which is subject to taxation by the political subdivision, the appropriate prosecuting attorney shall initiate an action in the name of this state to recover the amount for which the proper officers of the political subdivision are liable under this section. *04: *00016/1.1/18/11 *01016-1.1-18-11 *03Sec. 11. If there is a conflict between the provisions of this chapter and the provisions*945 of IC 1971, 6-1.1-19 or IC 1971, 6-3.5-1, the provisions of the latter two (2) chapters control with respect to the adoption of, review of, and limitations on budgets, tax rates, and tax levies. *04: *00026/1.1/19 *09Chapter 19. Limitations on Public School Corporation Tax Levies. *00016/1.1/19/1 *01016-1.1-19-1 *03Sec. 1. As used in this chapter, the following terms shall have the following meanings, unless the context clearly requires otherwise: *03(a) "School year" means the period of time from July 1 of each year until June 30 of the following year. %03(b) "ADA" means as to any school corporation, the average number of pupils in daily attendance in the school corporation, determined in accordance with the rules and regulations established by the commission on general education of the state board of education. *03(c) "Current ADA" means the most recently determined ADA for the school corporation in question. *03(d) With the exception provided for in section 6(b) of this chapter, "ADA ratio" means, as to any school corporation, the quotient resulting from a division of that school corporation's current ADA by that school corporation's ADA for the school year ending in 1973. *946 However, in any case in which the quotient is less than 1.0, the ADA ratio for the school corporation is 1.0. *03(e) "Budget year" means any one (1) year period for which a school corporation adopts a budget, appropriations, levies, and rates pursuant to the provisions of IC 1971, 6-1.1-17, IC 1971, 6-1.1-18, and IC 1971, 17-3-78-1. *03(f) "General fund" means the fund that the governing body of each school corporation is required to establish by IC 1971, 21-2-11-2. *03(g) With the exceptions provided for in sections 4(e) (1) (bb), 6(b) and 6(c) of this chapter, "base tax levy" means the total dollar amount of the ad valorem tax levy for its general fund that was levied by a school corporation for taxes collectible in 1973, assuming one hundred percent (100%) tax collection. *03(h) "Executive tax levy" means a school corporation's general fund ad valorem tax levy for a budget year which exceeds, in total dollar amount, the product of the school corporation's base tax levy multiplied by the ADA ratio of the school corporation. However, for the purposes of this calculation, the base tax levy figure for any budget year: *03(1) shall be decreased by any amount received by the school*947 corporation for the year 1974 or thereafter under the basic grant provided for in IC 1971, 21-3-1.5-3(d) which is over and above the amount received by the school corporation pursuant to the foundation program act for the calendar year 1973, if such amount is attributable to a decrease in the adjusted assessed valuation of the school corporation; and *03(2) shall be increased in an amount equal to the decrease in cash balances on December 31, 1973, compared with such balances on December 31, 1972, excepting decreases in cash balances attributable to emergency or additional appropriations or to amounts paid in advance for any services or goods; and *03(3) shall be increased to offset any decrease in federal aid to impacted areas in the budget year 1974 and every year thereafter. The allowable increase under this clause (3) for any school corporation so losing such federal aid shall be the lesser of: *03(i) the amount of loss of such federal aid; or *03(ii) an amount equal to the difference between the sum of the school corporation's 1973 general fund revenue plus the amount of supplemental flat grant which the school corporation is entitled to receive for the budget year under IC 1971, *948 21-3-1.5-3(b), less the total anticipated general fund revenue of the school corporation for such budget year, including state aid (as determined prior to the increase allowed by this clause (3)). *03(i) "Normal tax levy" means the total dollar amount of any general fund ad valorem tax levy that is made by a school corporation, for a budget year, and is not an excessive tax levy. *03(j) "Tax control board" means the state school property tax control board, established by section 4 of this chapter. *04: *00016/1.1/19/2 *01016-1.1-19-2 *03Sec. 2. (a) Except as provided in this chapter, a school corporation may not adopt or advertise an excessive tax levy for any budget year. In addition, a county board of tax adjustment may not approve or recommend the approval of an excessive tax levy. *03(b) If a school corporation adopts or advertises an excessive tax levy, the county board of tax adjustment which reviews the school corporation's budget, tax levy, and tax rate shall reduce the excessive tax levy to the maximum normal tax levy. *03(c) If a county board of tax adjustment approves, or recommends the approval of, an excessive tax levy for a school corporation, the auditor of the*949 county for which the county board is acting shall reduce the excessive tax levy to the maximum normal tax levy. Such a reduction shall be set out in the notice required to be published by the auditor under IC 1971, 6-1.1-17-12 and an appeal shall be permitted therefrom as provided under IC 1971, 6-1.1-17 as modified by this chapter. *03(d) Appeals from any action of a county board of tax adjustment or county auditor in respect of a school corporation's budget, tax levy, or tax rate may be taken as provided for by IC 1971, 6-1.1-17. Further, a school corporation may, not later than twenty (20) days after the county auditor shall have posted and published the notice of the school corporation's tax rate for the ensuing budget year for which provision is made in IC 1971, 6-1.1-17-12, appeal to the state board of tax commissioners for emergency financial relief for the ensuing budget year. In the appeal petition in which a school corporation seeks emergency financial relief, the appellant school corporation shall allege that, unless it is given the emergency financial relief for which it petitions, it will be unable to carry out, in its ensuing budget year, the public educational duty*950 committed to it by law, and it shall support that allegation by reasonably detailed statements of fact. When an appeal petition in which a school corporation petitions for emergency financial relief is filed with the state board of tax commissioners, the board shall include, in the notice of the hearing in respect of the petition that it is required to give under IC 1971, 6-1.1-17-16, a statement to the effect that the appellant school corporation is seeking emergency financial relief for the ensuing budget year. A subsequent action taken by the state board of tax commissioners in respect of such an appeal petition is not invalid, however, or otherwise affected, if the board fails to include such a statement in the hearing notice. *04: *00016/1.1/19/3 *01016-1.1-19-3 *03Sec. 3. When an appeal is taken to the state board of tax commissioners under IC 1971, 6-1.1-17 or under this chapter by, or in respect of, any school corporation, the board may exercise those powers to revise, change, or increase the budget, tax levy, or tax rate of the appellant school corporation that are defined in IC 1971, 6-1.1-17, subject, however, to the provisions of this chapter. The state board of tax*951 commissioners may not exercise any of those powers until it receives, in respect to the appellant school corporation's budget, tax levy, or tax rate, the recommendation of the tax control board. *04: *00016/1.1/19/4 *01016-1.1-19-4 *03Sec. 4. (a) To assist the state board of tax commissioners in deciding the merits of any appeal which is filed under IC 1971, 6-1.1-17 or under this chapter with the state board of tax commissioners by, or in respect of, any school corporation there is hereby established a board which shall be know as "the school property tax control board". This board shall consist of five (5) voting members and two (2) ex officio nonvoting members. Of the five (5) voting members, one (1) shall be appointed by the state board of accounts; and (1) shall be appointed by the state board of tax commissioners; and three (3) shall be appointed by the governor. The governor may seek the recommendation of the state superintendent of public instruction with regard to one (1) of the governor's appointments. Each of the remaining two (2) governor's appointees must be a citizen of the state of Indiana who neither holds an elective or appointive office in the government of the*952 state of Indiana nor is regularly employed by the state of Indiana. Each of the five (5) voting members shall serve at the will of the appointing board or person. The speaker of the house of representatives shall appoint one (1) members of the house as one (1) of the ex officio nonvoting members of the tax control board, and the president pro tempore of the senate shall appoint one (1) senator as the other ex officio nonvoting member of the tax control board. Each of the ex officio nonvoting members of the tax control board shall serve at the will of the appointing officer. A vacancy in the membership of the tax control board shall be filled by the appointing authority who made the appointment to the seat that is vacated. No member of the tax control board shall receive any compensation for his services as such a member, except for mileage and per diem compensation in an amount to be established by the state budget agency. Each of the members of the tax control board shall, before proceeding to the discharge of his duties as a member of the tax control board, subscribe and swear to a writing declaring the member's intention to support the constitutions of the United States and*953 the state of Indiana and his intention to faithfully, honestly, and impartially discharge his duties as a member of the tax control board. *03(b) The tax control board shall meet, as its business may require, in rooms to be provided by the state board of tax commissioners, and the state board of tax commissioners shall provide the tax control board with such staff and secretarial assistance as the tax control board may reasonably require. At each organization meeting of the tax control board, which shall be held annually on the first business day in January, the tax control board shall elect one (1) of its members its chairman and another of its members its secretary. *03(c) The state board of tax commissioners shall promptly deliver to the tax control board every appeal petition that is filed under IC 1971, 6-1.1-17 or under this chapter with the state board of tax commissioners by, or in respect of, any school corporation. The state board of tax commissioners shall also promptly deliver to the tax control board any other materials related to the appeal petition as the state board of tax commissioners shall then or thereafter possess. Upon receiving an appeal petition, the tax*954 control board shall proceed immediately to examine the petition and to consider the merits of the school corporation's appeal. The tax control board may conduct hearings on any appeal petition that is before it, and the tax control board may require any officer or member of the school corporation whose appeal petition is under consideration by the tax control board to appear before the tax control board or to produce, before the tax control board, any books and records that the tax control board considers pertinent to the appeal, or both. If such an officer or member fails or refuses to appear at a hearing of the tax control board after having been given a written notice from the tax control board requiring his attendance, or fails or refuses to produce for the tax control board's use the books and records that the tax control board shall have, by written notice, required the officer or member to produce, then the tax control board may file an affidavit in the circuit court in which jurisdiction of the person of the officer or member may be had, or with the judge of the circuit or refusal. Upon the filing forth the facts of the failure or refusal. Upon the filing of such an affidavit*955 the circuit court shall promptly issue a summons, and the sheriff of the county within which the circuit court is sitting shall serve the summons. The summons shall command the officer or member to appear before the tax control board, to provide information to the tax control board, or to produce books and records for the tac control board's use, as the case may be. Disobedience of the summons constitutes, and is punishable as, a contempt of the circuit court which issued the summons. All expenses incident to the filing of such an affidavit and the issuance and service of such a summons shall be charged to the officer or member against whom the summons is issued, unless the circuit court finds that the action of the officer or member was taken in good faith and with reasonable cause, in which event and in any case in which an affidavit has been filed without the issuance of a summons in respect thereof, the expenses shall be charged against the county in which the affidavit has been filed and shall be allowed by the proper fiscal officers of that county. *03(d) (1) With respect to every appeal petition which is delivered to it by the state board of tax commissioners under subsection*956 (c) of this section and which does not include a request for emergency financial relief, the tax control board shall, after having made such a study of the appeal petition and related materials as it considers necessary, recommend to the state board of tax commissioners, in respect of the particular appeal petition: *03(aa) that the order of the county board of tax adjustment or the county auditor in respect of the appellant school corporation's budget, tax levy, or tax rate for the ensuing budget year be approved; or *03(bb) that the order of the county board of tax adjustment or the county auditor in respect of the appellant school corporation's budget, tax levy, or tax rate be disapproved and that the appellant school corporation's budget, tax levy, or tax rate be reduced as specified in the tax control board's recommendation; or *03(cc) that the order of the county board of tax adjustment or the county auditor in respect of the appellant school corporation's budget, tax levy, or tax rate be disapproved and that the appellant school corporation's budget, tax levy, or tax rate be increased as specified in the tax control board's recommendation. *03(2) With respect to an appeal petition*957 described in this subsection (d) of this section, the tax control board may not make any recommendation that, if followed by the state board of tax commissioners, would authorize the appellant school corporation, for its ensuing budget year: *03(aa) to collect a general fund tax levy in excess of the general fund tax levy initially adopted and advertised by the appellant school corporation; *03(bb) to impose a general fund tax rate in excess of the general fund tax rate initially adopted and advertised by the appellant school corporation; or *03(cc) to collect an excessive tax levy. *03(e) (1) With respect to every appeal petition which is delivered to it by the state board of tax commissioners under subsection (c) of this section and which includes a request for emergency financial relief, the tax control board shall, after having made such a study of the appeal petition and related materials as it considers necessary, make an appropriate recommendation to the state board of tax commissioners. In respect of such an appeal petition, the tax control board may make to the state board of tax commissioners any of the recommendations that are defined in subsection (d) (1) of this section, *958 subject to the limitations that are defined in subsection (d) (2) of this section. In addition, if the tax control board concludes that the appellant school corporation cannot, in its ensuing budget year, carry out the public educational duty committed to it by law if, for its ensuing budget year, the appellant school corporation does not receive emergency financial relief, then the tax control board shall have the power to recommend to the state board of tax commissioners: *03(aa) that the order of the county board of tax adjustment or the county auditor in respect of the budget, tax levy, or tax rate of the appellant school corporation be approved, or disapproved and modified, as specified in the tax control board's recommendation and that the appellant school corporation receive emergency financial relief from the state, on terms to be specified by the tax control board in its recommendation, in the form of: *03(i) a grant or grants from any funds of the state that are available for such a purpose; *03(ii) a loan or loans from any funds of the state that are available for such a purpose; *03(iii) permission to the appellant school corporation to borrow funds from a source other*959 than the state, or assistance in obtaining such a loan; *03(iv) an advance or advances of funds that will become payable to the appellant school corporation under any law providing for the payment of state funds to school corporations; *03(v) permission to the appellant school corporation to cancel any unpaid obligation of its general fund to its cumulative building fund or to use, for general fund purposes, any unobligated balance in its cumulative building fund and the proceeds of any levy made or to be made by the appellant school corporation for its cumultive building fund; *03(vi) permission to use, for general fund purposes, any unobligated balance in any construction fund, including any unobligated proceeds of a sale of the school corporation's general obligation bonds; or *03(vii) a combination of the above described forms of emergency financial relief. *03(bb) In addition to, or in lieu of, any recommendation that the tax control board may make pursuant to any of the foregoing provisions of this subsection (e) (1), the tax control board may recommend that the appellant school corporation be permitted to make an excessive tax levy for its ensuing budget year, but such a recommendation*960 may not be put into effect until a majority of the individuals voting in a referendum to be conducted in accordance with the provisions of this subsection (e) (1) (bb) approve the appellant school corporation's making an excessive tax levy for its ensuing budget year. *03(i) Whenever the tax control board recommends to the state board of tax commissioners that the appellant school corporation be permitted to make an excessive tax levy for its ending budget year if a majority of the individuals voting in a referendum held in the appellant school corporation approve the appellant school corporation's making an excessive tax levy, and after the state board of tax commissioners gives its written approval of the recommendation, then, and in those events, and upon the appellant school corporation's requesting that the tax control board take the steps necessary to cause such a referendum to be conducted, the tax control board shall proceed in accordance with the provisions of this subsection (e) (1) (bb). *03(ii) The question to be submitted to the voters in such a referendum is, in general, whether or not, for its budget year beginning next after the holding of the referendum, the appellant*961 school corporation shall collect an excessive tax levy in a specified amount. The form and substance of the question shall be prescribed by the tax control board. *03(iii) The tax control board shall certify the question to be voted on at such a referendum to the clerk of the circuit court of each county in which any part of the appellant school corporation lies. Each county clerk shall, upon receiving the question so certified to him by the tax control board, call a meeting of the election board of his county to make arrangements for the referendum. The referendum shall be held in the next primary or general election in which the residents of the appellant school corporation are entitled to vote if the next primary or general election is to be held not more than sixty (60) days after the question is so certified to the county clerk or clerks by the tax control board. If such a paimary or general election is not to be held within that sixty (60) day period, then the referendum shall be held at a special election to be conducted not less than sixty (60) days after the question is so certified to the county clerk or clerks by the tax control board. The appellant school corporation*962 shall advise each affected county corporation board of the date on which the appellant school corporation desires that the referendum be held, and, if practicable, the referendum shall be held on the day so specified by the appellant school corporation. The referendum shall be held under the direction of the county election board, which shall take all steps necessary to carry-out the referendum. Not less than ten (10) days prior to the date on whcih the referendum is to be held, the county election board shall cause notice of the question that is to be voted upon at the referendum to be published in accordance with IC 1971, 5-3-1 and IC 1971, 20-5-12. The appellant school corporation in which the referendum is to be held shall pay all of the costs of holding the referendum. *03(iv) The county election board shall cause the question so certified to the county clerk by the tax control board to be appropriately placed on every paper ballot and every voting machine that is to be used in the referendum, followed by the words "yes" and "no" so arranbged as to permit every individual voting in the referendum to cast his vote for either an affirmative or a negative answer to the question. *963 The county election board shall also cause an adequate supply of paper ballots so prepared, or a voting machine so prepared, to be delivered to the precinct election board of each precinct in which the referendum is to be held. *03(v) The individuals entitled to vote in the referendum are all of the registered voters resident in the appellant school corporation. *03(vi) Each precinct election board shall count the affirmative votes and the negative votes cast in the referendum and shall certify those two (2) totals to the county election as seems proper to the state board of tax commissioners. Whenever the state board of tax commissioners exercises the power given it in this subsection (e)(1)(cc), it shall, in its order to the affected school corporation, specify the amount of the authorized excessive tax levy and shall take appropriate steps to insure that so much of the proceeds of the excessive tax levy as should be used for loan repayment purposes is not used for any other purpose. The state board of tax commissioners may not exercise the power defined in this subsection (e)(1)(cc) to authorize any school corporation to collect an excessive tax levy for more than one (1) budget*964 year in any period of four (4) consecutive budget years. *03(2) (aa) Every school corporation with respect to which the tax control board recommends, and the state board of tax commissioners authorizes, any of the forms of emergency financial relief described or referred to in subsection (e) (1) of this section (including, but not limited to, relief in the form of an authorization to make an excessive tax levy) is, if the school corporation accepts the relief so authorized, prohibited, throughout any budget year in which or for which the school corporation receives the emergency financial relief, from taking any of the prohibited actions described in this subsection (e) (2) (aa) until the school corporation's being authorized to take such action is recommended by the tax control board to the state board of tax commissioners and the school corporation's taking such action is authorized by the state board of tax commissioners. The prohibited actions are: *03(i) the acquisition of real estate for school building purposes, the construction of new school buildings, or the remodeling or renovation of existing school buildings; *03(ii) the making of any lease of real or personal property*965 for an annual rental, or the incurring of any other contractual obligation (except an employment contract for a new employee, which contract is to supersede the contract of a terminating employee) calling for an annual outlay by the school corporation in excess of ten thousand dollars ($10,000); *03(iii) the purchase of any personal property for a consideration in excess of ten thousand dollars ($10,000); or *03(iv) the adoption or advertising of a budget, tax levy, or tax rate for any budget year. *03(bb) If any school corporation that is subjeft to the controls defined in subsection (e) (2) (aa) of this section takes any of the actions defined in subsection (e) (2) (aa) of this section without having first obtained the recommendation of the tax control board in respect thereof and the state board of tax commissioners' authorization for taking the action, then the state board of tax commissioners may take appropriate steps to reduce or terminate any emergency financial relief that the school corporation may then be receiving pursuant to the provisions of subsection (e) (1) of this section. *03(f) The tax control board may recommend to the state board of tax commissioners a correction*966 of any mathematical error or errors in data which affect the determination of: *03(i) a school corporation's 1973 ad valorem property tax levy; *03(ii) a school corporation's base tax levy; *03(iii) a school corporation's excessive tax levy; and *03(iv) a school corporation's normal tax levy. *03The state board of tax commissioners may correct any mathematical error or errors in date for any school corporation. *04: *00016/1.1/19/5 *01016-1.1-19-5 *03Sec. 5. (a) The tax control board shall have, in addition to the other duties imposed upon it by this chapter, the duty of examining the schoolhouse occupancy program of every school corporation not less frequently than once in every period of five (5) years. Each such examination shall by conducted by the tax control board with a view toward determining whether the tax levy being collected, or the tax rate being imposed, at the time of the examination, for any cumulative building fund that may have been established pursuant to IC 1971, 21-2-6 by the school corporation under examination should be reduced or terminated. In any case in which, as a result of its examination, the tax control board determines that the cumulative building*967 fund tax levy or cumulative building fund tax rate should be reduced or terminated, the tax control board shall recommend such reduction or termination in a writing filed with the state board of tax commissioners, one (1) copy of which written recommendation shall be filed with the auditor of the county in which the school corporation is situated. Upon receiving such a written recommendation from the tax control board, the state board of tax commissioners shall conduct a hearing in respect of the recommendation, which hearing shall be held in general accordance with the provisions of, and pursuant to the notice requirements specified in, IC 1971, 21-2-6. At the conclusion of such a hearing, the state board of tax commissioners may reduce or terminate the cumulative building fund tax levy or cumulative building fund tax rate that is the subject of the tax control board's recommendation, and the action of the state board of tax commissioners in respect of that recommendation is final and conclusive. *03(b) The state board of tax commissioners shall take no action in respect of the establishment or increase of a cumulative building fund tax rate for a school corporation without having*968 first received the recommendation of the tax control board in respect of the particular request for the establishment or increase of such a tax rate. The tax control board, in making such a recommendation, and the state board of tax commissioners, in acting upon such a recommendation, shall take appropriate steps to insure that no school corporation shall collect a cumulative building fund tax rate that exceeds the rate prescribed in IC 1971, 21-2-6. *04: *00016/1.1/19/6 *01016-1.1-19-6 *03Sec. 6. (a) A school corporation that comes into existence after April 4, 1973 may not collect its first general fund tax levy until that first general fund tax levy (and the related budget, appropriations, and general fund tax rate), after being adopted and advertised and considered by the proper county board of tax adjustment, as provided by law, is reviewed by the tax control board, which shall make its recommendations in respect thereof to the state board of tax commissioners, and is approved by the state board of tax commissioners. *03(b) For all purposes relevant to this chapter: *03(i) the base tax levy for a school corporation that comes into existence after April 4, 1973 is the total*969 dollar amount of the ad valorem tax levy for its general fund that, after being approved in the manner provided for in subsection (a) of this section, is made by the school corporation for taxes collectible in the first full calendar year of its existence; and *03(ii) the ADA ratio for a school corporation that shall come into existence after April 4, 1973 is the quotient resulting from a division of the school corporation's current ADA by the ADA first determined for the school corporation in accordance with the rules and regulations established by the commission on general education of the state board of education. *03(c) Where territory is transferred from one (1) school corporation to another after April 4, 1973 under IC 1971, 20-4-4 or IC 1971, 20-3-14, ADA, current ADA, ADA ratio, base tax levy, normal tax levy, and all other terms used in this chapter shall be interpreted, insofar as possible, as though the pupils in the territory had been transferred in the school year ending in 1973 and the assessed valuation of the territory had been transferred prior to March 1, 1972, in accordance with rules and a final determination by the state board of tax commissioners. *04: *00016/1.1/19/7 *01016-1.1-19-7 *03Sec. *970 7. Any recommendation that is to be made by the tax control board to the state board of tax commissioners pursuant to any provision of this chapter shall be made at such a time as is prescribed in this chapter and, if no time for the making of such a recommendation is prescribed in this chapter, then the recommendation shall be made at such a time as will permit the state board of tax commissioners to complete those duties of the board that are defined in IC 1971, 6-1.1-17 within the time allowed by law for the completion of those duties, or such additional time as is reasonably necessary for the state board of tax commissioners and the tax control board to complete the duties provided by this chapter. No tax levy shall be invalid because of the failure of either board to complete its duties within the time or time limits provided by this chapter or any other law. Subject to the provisions of this chapter, the state board of tax commissioners may accept, reject, or accept in part and reject in part any recommendation of the tax control board that is made to it under this chapter and may make any order that is cionsistent with the provisions of IC 1971, 6-1.1-17. The state board*971 of tax commissioners may not approve or authorize an excessive tax levy except in accordance with the provisions of this chapter. *04: *00016/1.1/19/8 *01016-1.1-19-8 *03Sec. 8. (a) A school corporation may not levy ad valorem property taxes to pay or fund bond or lease rental indebtedness created or incurred after June 30, 1974, unless the school corporation has first obtained the state board of tax commissioners' approval of the lease rental agreement or the bond issue. This restriction does not apply to ad valorem property taxes which a school corporation levies to pay or fund bond or lease rental indebtedness created or incurred before July 1, 1974. *03(b) The state board of tax commissioners may either approve or disapprove a school corporation's proposed lease rental agreement or bond issue. Before it approves or disapproves a proposed lease rental agreement or bond issue, the state board of tax commissioners may seek the recommendation *04: *0026/1.1/20 *09Chapter 20. Procedures for Issuance of Bonds and Other Evidences of Indebtedness by Political Subdivisions. *00016/1.1/20/1 *01016-1.1-20-1 *03Sec. 1. For purposes of this chapter, the term "bonds" means any bonds or*972 other evidences of indebtedness, but does not include notes or warrants representing temporary loans which are payable out of taxes levied and in the course of collection. *04: *00016/1.1/20/2 *01016-1.1-20-2 *03Sec. 2. A political subdivision may, subject to the limitations provided by law, issue any bonds, notes, or warrants, that it considers necessary. *04: *00016/1.1/20/3 *01016-1.1-20-3 *038sec. 3. A political subdivision mayu not impose a property tax rate or levy to pay the principal or interest on bonds issued after March 9, 1937 unless the bonds have been issued for a purpose described in clause (1), (2), or (3) of IC 1971, 6-1.1-18-3(b) or unless before the issuance of the bonds a petition or petitions for their issuance have been filed in the following manner: *03(1) the petition or petitions must be signed by at least the lesser of: of the tax control board. by the political subdivision; or *03(ii) a majority of the owners of real property subject to taxation by the political subdivision; *03(2) each petition must be verified under oath by at least one (1) qualified petitioner; *03(3) a certificate from the county auditor which states the number of petitioners who*973 are owners of real property subject to taxation by the political subdivision must be attached to each petition; and *03(4) the petition or petitions must be filed with: *03(i) the township trustee, if the political subdivision is a township, who shall present the petition or petitions to the township advisory board; or *03(ii) the body that has the authority to authorize the issuance of the bonds if the political subdivision is not a township. *04: *00016/1.1/20/4 *01016-1.1-20-4 *03Sec. 4. (a) If the appropriate body of a political subdivision decides to issue bonds which have been petitioned for in the manner prescribed in section 3 of this chapter, the political subdivision shall give notice of the petition by: *03(1) posting; and *03(2) publication one (1) time; *03in the manner prescribed in subsection (c) of this section. Within thirty (30) days after the notice is given, the owners of real property subject to taxation by the political subdivision may file a remonstrance or remonstrances with the same officer or body with whom petitions are to be filed under section 3 of this chapter. Each remonstrance must be verified and have a certificate attached to it in the same manner*974 that a petition must be verified and have a certificate attached to it under section 3 of this chapter. *03(b) If a greater number of owners of real property subject to taxation by the political subdivision sign a remonstrance or remonstrances than the number who signed a petition or petitions, the bonds so petitioned for may not be issued. If a proposal to issue bonds is defeated in the manner provided in this section, the owners of real property subject to taxation by the political subdivision may not file a subsequent petition for the issuance of the bonds within the one (1) year period after the filing of the remonstrance or remonstrances. *03(c) The notice required by thissection shall be posted in three (3) public places in the political subdivision and published in: *03(1) two (2) newspapers which represent different political parties and which are published in the political subdivision; or *03(2) one (1) newspaper if it is the only newspaper published in the political subdivision; or *03(3) two (2) newspapers which represent the two (2) leading political parties and which are published in the county and have a general circulation in the political subdivision, if no newspaper*975 is published in the political subdivision. However, if only one (1) newspaper having a general circulation in the political subdivision is published in the county, the notice shall be published in that newspaper. *04: *00016/1.1/20/5 *01016-1.1-20-5 *03Sec. 5. (a) When the proper officers of a political subdivision decide to issue bonds in a total amount which exceeds five thousand dollars ($5,000), they shall give notice of the decision by: *03(1) posting; and *03(2) publication once each week for two (2) weeks; in the manner prescribed in section 4(c) of this chapter. *03(b) Ten (10) or more taxpayers who will be affected by the proposed issuance of the bonds and who wish to object to the issuance on the grounds that it is unnecessary or excessive may file a petition in the office of the auditor of the county in which the political subdivision is located. The petition must be filed within fifteen (15) days after the notice required by subsection (a) of this section is given, and it must contain the objections of the taxpayers or excessive. When taxpayers file a petition in the manner prescribed in this subsection, the county auditor shall immediately forward a certified copy*976 of the petition and any other relevant information to the state board of tax commissioners. *04: *00016/1.1/20/6 *01016-1.1-20-6 *03Sec. 6. (a) Upon recept of a certified petition filed in the manner prescribed in section 5(b) of this chapter, the state board of tax commissioners shall fix a time and place for a hearing on the matter. The state board shall hold the hearing not less than five (5) or more than thirty (30) days after the board receives the petition, and the state board shall hold the hearing in the political subdivision or in the county where the political subdivision is located. At least five (5) days before the date fixed for the hearing, the state board of tax commissioners shall give notice of the hearing, by mail, to the executive officer of the political subdivision and to the first ten (10) taxpayers who signed the petition. The mailings shall be addressed to the officer and the taxpayers at their usual place of residence. *03(b) After the hearing required by this section, the state board of tax commissioners may approve, disapprove, or reduce the amount of the proposed issue. The action taken by the state board of tax commissioners on the proposed issue*977 is final. *04: *00016/1.1/20/7 *01016-1.1-20-7 *03Sec. 7. When the proper officers of a political subdivision decide to issue any bonds, notes, or warrants which will be payable from property taxes and which will bear interest in excess of five percent (5%) per annum, the political subdivision shall submit the matter to the state board of tax commissioners for review. The board may either approve or disapprove the rate of interest. *04: *00016/1.1/2/8 *01016-1.1-20-8 *03Sec. 8. Any bonds, notes, or warrants, whether payable from property taxes, revenues, or any other source, are not subject to the maximum interest rate limitations contained in any law enacted before March 15, 1969 if they are issued by or in the name of: *03(1) a state agency; *03(2) a political subdivision; *03(3) a special assessment district; *03(4) any other political, municipal, public, or quasi-public corporation; *03(5) any commission, authority, or authorized body of an entitty described in clause (2), (3), or (4) of this section; or *03(6) a lessor school building corporation if the item is issued in connection with a lease of a school building to a school corporation under IC 1971, 21-5-11. *03This*978 section does not limit an interest rate review conducted by the state board of tax commissioners under section 7 of this chapter. *04: *00016/1.1/20/8/5 *01016-1.1-20-8.5 *03Sec. 8.5. Any bonds, notes, or warrants, whether payable from property taxes, revenues, or any other source, issued by an entity described in clause 1 through 6, inclusive, of section 8 of this chapter may provide that the bonds, notes, or warrants may be payable before maturity from available funds and with such premiums as are set forth in the bonds, notes or warrants. In addition, the bonds, notes, or warrants may provide that they may be registered as to principal or interest, or both, at the option of the holder, and upon such terms and conditions as are set forth in the bonds, notes, or warrants. *04(History: Added by Acts 1975, P.L. 54, SEC. 1). *00016/1.1/20/9 *01016-1.1-20-9 *03Sec. 9 (a) When the proper officers of a political subdivision decide to issue bonds payable from property taxes to finance a public improvement, they shall adopt an ordinance or resolution which sets forth their determination to issue the bonds. Except as provided in subsection (be) of this section, the political subdivision*979 may not advertise for or receive bids for the construction of the improvement until the expiration of the latter of: *03(1) the time period within which taxpayers may file a petition for review of or a remonstrance against the proposed issued; or *03(2) the time period during which a petition for review of the proposed issue is pending before the state board of tax commissioners. *03(b) When a petition for review of a proposed issue is pending before the state board of tax commissioners, the board may order the political subdivision to advertise for and receive bids for the construction of the public improvement. When the board issues such an order, the political subdivision shall file a bid report with the state board of tax commissioners within five (5) days after the bids are received, and the board shall render a final decision on the proposed issue within fifteen (15) days after it receives the bid report. Notwithstanding the provisions of this subsection, a political subdivision may not enter into a contract for the construction of a public improvement while a petition for review of the bond issue which is to finance the improvement is pending before the state board of tax*980 commissioners. *04:(History: Added by Acts 1975, P.L. 47, SEC. 1). *00026/1.1/21 *09Chapter 21. Property Tax Replacement Fund. *00016/1.1/21/1 *01016-1.1-21-1 *03Sec. 1. There is hereby established a special fund to be known as the "property tax replacement fund". *03All taxes or other moneys deposited in the property tax replacement fund, as provided by law, shall be held and distributed in accordance with the provisions of this chapter and all funds in the property tax replacement fund, remaining after any distribution provided for in this chapter, shall not revert to the general fund of the state but shall constitute a revolving fund for subsequent distribution for the purposes provided for in this chapter. Any amount earned on moneys deposited in the property tax replacement fund shall remain in and become part of the property tax replacement fund. *04: *00016/1.1/21/2 *01016-1.1-21-2 *03Sec. 2. Whenever used in this chapter: *03(a) The term "taxpayer" means a person who is liable for taxes on property assessed under this article. *03(b) He term "taxes" means taxes payable in respect to property assessed under this article. The term "taxes" does not include special assessments, *981 penalties, or interest, but does include any special charges which a county treasurer combines with all other taxes in the preparation and delivery of the tax statements required under IC 1971, 6-1.1-22-8(a). *03(c) The term "department" means the department of revenue of the state of Indiana. *03(d) The term "auditor's abstract" means the annual report prepared by each county auditor which, under IC 1971, 6-1.1-22-5, is to be filed on or before December 31 of each year with the auditor of the state. *03(e) The term "mobile home assessments" means the assessments of mobile homes made under IC 1971, 6-1.1-7. *03(f) The term "post-abstract adjustments" means adjustments in taxes made subsequent to the filing of an "auditor's abstract" which change assessments therein or add assessments of omitted property affecting taxes for such assessment year. *03(g) The term "total county tax levy" means the sum of: *03(1) the aggregate levy of all taxes for all taxing units in a county which are to be paid in the county for a stated assessment year as reflected by the auditor's abstract for the assessment year, adjusted, however, for any post-abstract adjustments which change the amount of*982 the aggregate levy; plus *03(2) all taxes to be paid in the county in respect to mobile home assessments currently assessed for the year in which the taxes stated in the abstract are to be paid; plus *03(3) the amounts, if any, of county adjusted gross income taxes which were applied by the taxing units in the county as property tax replacement credits to reduce the individual levies of the taxing units for the assessment year, as provided in IC 1971, 6-3.5-1; plus *03(4) the amounts of: *03(i) federal revenue sharing funds distributed pursuant to the State and Local Assistance Act of 1972; and *03(ii) county adjuted gross income taxes received as all or part of a certified share of adjusted gross income tax as provided in IC 1971, 6-3.5-1-7; *03to the extent those amounts are applied by the taxing units in the county as property tax relief to reduce the individual levies of the taxing units for the assessment year below the maximum levy permissible for each taxing
*963 The decedent was recognized as the owner of the land, although she could not sell, lease, or otherwise encumber it without the approval of the Secretary of the Interior. She was also recognized as the beneficial*983 owner of all of the income from the land and of property purchased out of such income, as well as of such property. The legal title to all such property was held by the United States in a fiduciary capacity for the benefit of the decedent. She was the sole beneficiary. The United States had paid over to her during her lifetime more than $400,000 of the income. The balance was held by the United States at the date of death for the benefit of the decedent. She had the right under section 23 of the Act of April 26, 1906 (34 Stat. 137) to will that property to whomever she chose. She made an ineffective will in 1931, devising and bequeathing nearly all of the property to her husband. Where a person has the entire beneficial interest in property held in trust the value of such property is includable in the gross estate. The petitioner does not question the correctness of the value of the property determined by the respondent as includable in the decedent's gross estate. We reach the conclusion that the decedent had a net estate in the amount claimed by the respondent within the meaning of the Revenue Act of 1926.
The petitioner further contends that, under the treaties between*984 the United States and the Five Civilized Tribes, lands in Oklahoma (then the Indian territory) were set apart for the Indians in exchange for other lands given up by them and that Congress has provided that the lands allotted to full-blood Indians shall be "non-taxable and inalienable and free from any incumbrance whatever for twenty-one yearsc (sec. 7 of the Act of March 1, 1901, 31 Stat. 861, 863, and sec. 16 of the Act of June 30, 1902, 32 Stat. 500, 503); that the understanding of the Indian was that the provision that the land should be nontaxable embraced every form of tax, including an estate tax; and that the understanding of the Indian must be given effect.
Apparently all of these arguments were pressed upon the United States Supreme Court in the case of . The Supreme Court rejected the contentions in holding that the income of a trust fund held for a restricted Indian was subject to income tax. The Supreme Court said:
Nor can we conclude that taxation of income from trust funds of an Indian ward is so inconsistent with that relationship that exemption is a necessary implication. *985 Nontaxability and restriction upon alienation are distinct things. . The taxpayer here is a citizen of the United States, and wardship with limited power over his property does not, without more, render him immune from the common burden.
*964 The petitioner contends that the above cited case is not in point in this proceeding for the reason that the Court was there dealing only with income derived from the investment of surplus funds of a restricted Indian and not with income derived from royalties on oil produced from the Indian's land. It is apparent, however, from the rationale of the opinion and from the cases cited, that the court intended to make no distinction between a restricted Indian's income derived from the investment of surplus funds and his other taxable income. The point was made that "The language of sections 210 and 211(a) [Revenue Act of 1918] subjects the income of 'every individual' to tax." Therefore the income of the restricted Indian is subject to tax the same as the income of an unrestricted Indian or any other citizen or resident. By a parity of reasoning the estate of a restricted Indian must*986 be held subject to estate tax; for the estate tax is imposed upon the net estate of "every" decedent dying after the enactment of the imposing statute.
It is furthermore to be noted that the Federal estate tax is not a tax upon property; it is an excise tax imposed upon the transfer or shifting "of the economic benefits and burdens" of property at death. . The distinction between a direct tax on property and an excise on the transfer of property is neither illusory nor inconsequential. It is so fundamental that it has been made the basis for sustaining a tax of the latter character, even though the subject of the transfer itself was tax-exempt. Thus a state may impose a legacy tax on a bequest which consists wholly of tax-exempt United States bonds. ; . Likewise the Federal Government may impose the estate tax upon the transfer of net estates consisting in part of municipal bonds. *987 .
Likewise it was held in , that the proceeds of a War Risk Insurance policy payable to a deceased veteran's widow was subject to Federal estate tax. In that case the executor of the estate contended that the proceeds of such policy should not be included in the estate because of the provisions of the World War Veterans Act, 43 Stat. 607, which provided that "insurance * * * shall be exempt from all taxation."
The Federal estate tax does not specifically exempt from the tax the estate of a restricted Indian. If such an estate is exempt from estate tax the exemption must rest upon implication. But, as was said in , "Exemptions from taxation do not rest upon implication. * * * Similarly, the statutory immunity of War Risk Insurance from taxation does not *965 include an immunity from excises upon the occasion of shifts of economic interests brought about by the death of an insured." See also *988 ; ; ; .
We conclude that the respondent did not err in his holding that the estate of the decedent was subject to Federal estate tax.
In the petition filed in this proceeding it is alleged that "Respondent erred in disallowing a credit for State estate or inheritance taxes." It does not appear from the record in this proceeding that any state, estate, or inheritance tax has been paid or will be paid upon the estate of the decedent. It is alleged, however:
That the State of Oklahoma is now proceeding against the estate of the decedent to collect an estate or inheritance tax and if successful the estate will be entitled to a credit on account thereof to the extent of 80% of the Federal estate tax imposed by the Revenue Act of 1926, and no allowance has been made for said credit and, therefore, the estate of decedent has been deprived of its rights.
Upon proof of the payment of a state, estate, or inheritance tax, credit therefor will be allowed*989 upon the settlement under Rule 50 of the Board's Rules of Practice.
Reviewed by the Board.
Decision will be entered under Rule 50.