February 25, 2022
The Big Issues
BUSINESS PERSONAL PROPERTY TAX
- As we have reported in recent weeks, HB 1002 was the only bill remaining attempting to partially reduce the business personal property tax. HB 1002, as it passed the House, proposed a tax credit on various state taxes to offset what business pay on equipment hitting the 30% depreciation floor. However, by coupling this move with a provision that eliminates the 30% floor entirely for new equipment purchases, the negative financial hit to local units of government is inevitable.
- During the Senate Tax and Fiscal policy committee, the business personal property tax changes in this bill were removed by the committee and replaced with the Food and Beverage tax sunset dates contained in SB 390. Though these BPPT changes were eliminated for now they could be added back in during the final negotiations on HB 1002 in conference committee, so it remains important to communicate our concerns to your Senators and Representatives.
- HB 1002, sponsored by Senator Ryan Mishler (R-Bremen), passed the Senate Tax and Fiscal Policy committee earlier this month and cleared the second reading hurdle this week. While no language exists at this time, this issue is very much alive. We encourage you to reach out to your legislators immediately to inform them that any dollar eliminated from local budgets due to changes in business personal property tax policy must be replaced. For more information, watch the Legislative Summary video below or look in your inbox for the Action Alert sent earlier this week.
INNOVATION DEVELOPMENT DISTRICTS
- SB 361 contains a large number of economic development proposals that give the IEDC tools to attract investment to Indiana. Among them is language that would allow the IEDC to designate Innovation Development Districts, regional districts that are selected for economic development projects that are financed by incremental sales, income, and property taxes.
- Aim has worked with the bill authors throughout session to ensure these districts do not affect existing TIF districts and include meaningful local input. Changes this week in the House require these districts to be governed by local boards consisting of 3 members appointed by the IEDC and 3 members appointed by local fiscal bodies. While these changes have improved this bill by protecting existing TIFs and requiring some local buy-in, we will continue to work with the bill authors to ensure that local governments have a firm opt-in or opt-out option for these districts, all local project costs associated with the district can be negotiated while the district is being established, and a robust public process with taxpayer involvement is followed when the district is established at the local level.
- SB 361, Sponsored by Representative Tim Brown (R-Crawfordsville), passed the House Ways and Means committee on Tuesday with a vote of 14-8 and was further amended on the House floor on Thursday. It will go before the House for a full vote on Monday.
CONTRIBUTIONS IN AID OF CONSTRUCTION
- HB 1245 would prohibit municipal utilities from including capacity-related fees in connection fees, most commonly associated with new development. Capacity-related fees usually refer to costs associated with system-wide improvements fees such as system development charges, interceptor fees, or availability fees. It also creates a process by which these fees can be challenged and reviewed by the IURC after the property owner has an informal mediation with the utility. Another provision in the bill limits the discretion of local health departments to review and approve new septic systems.
- Aim has worked with the bill authors to improve this bill throughout session and many of the changes made to the capacity-related fees provisions of this bill improved in the Senate version. We will continue to work to alleviate additional issues with that language as this bill moves through the end of the legislative process.
- HB 1245, sponsored by Senator Eric Koch (R-Bedford), passed the Senate Utilities committee on Thursday with a vote of 11-0 and will now move before the full Senate for further amendment and vote next week.
- HB 1106 would require the county to approve the use of eminent domain by municipalities (not including municipal utilities) in unincorporated territory and place several other procedural hurdles on the use of eminent domain outside of corporate boundaries. It also requires that condemnations that result in the property title changing hands must be compensated at 120% of fair market value.
- Aim opposes HB 1106 because it limits the ability to effectively manage infrastructure outside municipal boundaries, raises the cost of eminent domain, and could delay critical projects.
- HB 1106, sponsored by Senator Jim Buck (R-Kokomo), passed the Senate Local Government Committee on Thursday with a vote of 6-4 and will be heard for further amendment on the Senate Floor next Monday. We are looking for assistance from our members to contact their Senators to ask them to vote no on HB 1106 prior to it being heard before the full Senate on Monday and Tuesday next week.
OPIOID LITIGATION SETTLEMENT
- HB 1193 amends the statewide framework for distributing the proceeds of settlement dollars from the lawsuits against large opioid manufacturers nationwide. It increases the proportion of the proceeds that flow to local cities, towns, and counties and provides the distribution will be weighted based on how much the community has been affected by the opioid epidemic. It also increases the window in which communities that were separately litigating could opt into the statewide settlement while providing those communities with options to negotiate the use of their settlement proceeds to pay for the costs they have already incurred with their attorneys during their litigation.
- Aim supports this bill as it is a reasonable compromise that attempts to get more local units into the statewide settlement (increasing the overall value of the settlement) while providing consideration for the litigating communities.
- HB 1193, sponsored by Senator Ryan Mishler (R-Bremen), passed the Senate on Thursday with a vote of 48-0.
AIM LEGISLATIVE MOMENT
“We are going to need the help of all our members this week on three issues and bills where your involvement could make a real difference in the outcome.”
– Jennifer Simmons, Aim COO
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