January 14, 2022
The Big Issues
BUSINESS PERSONAL PROPERTY TAX
- Several bills were heard this week that would reduce the business personal property tax. HB 1002 would phase out the 30% depreciation floor on new property while providing businesses with a tax credit for the cost of the depreciation floor on existing property. SB 378 would increase the BPPT exemption from $80,000 to $250,000, phase down the depreciation floor to 25%, and provide a BPPT holiday in 2023 where property purchased in that year would never be subject to personal property taxation.
- It is an Aim legislative priority to work with the legislature to ensure that any changes to the business personal property tax do not have an adverse effect on local government budgets and that any revenue capacity that is limited is replaced through state action.
- HB 1002, authored by Representative Tim Brown (R-Crawfordsville) passed the House Ways and Means committee on Wednesday with a vote of 15-7 and SB 378, authored by Senator Brian Buchanan (R-Lebanon) was heard in the Senate Tax and Fiscal Policy committee on Tuesday but was held to possibly return at a future meeting.
- 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 is monitoring this bill closely to ensure that the Innovation Development Districts do not restrict the ability of local governments to control their own economic development districts and ensure existing TIFs maintain their autonomy and ability to meet their bond obligations.
- SB 361, authored by Senator Ryan Mishler (R-Bremen), will be heard in the Senate Appropriations committee next week.
- HB 1260 is the annual DLGF agency bill. This bill contains an Aim legislative initiative that removes the annual adjustment for the remaining cumulative funds that still require it. This will ensure cities and towns do not have to recertify cumulative funds every year there is a significant assessed value adjustment.
- Aim will continue to monitor this bill as it moves throughout session to ensure the helpful language stays in and harmful language stays out. This bill is a common home for language that affects local government finance so it will likely change throughout the session.
- HB 1260, authored by Representative Dan Leonard (R-Huntington), was heard in the House Ways and Means committee but was held for amendment and vote at a future meeting.
- SB 272 is the result of the wastewater taskforce over the summer and contains several helpful provisions for local government, including the creation of a new LTAP program through Purdue University for water, stormwater, and wastewater utilities and asset management requirements for water programs through the Indiana Finance Authority.
- Aim is continuing to work with the bill author to improve language that allows the IURC to put wastewater utilities under their jurisdiction if they receive two enforcement actions from IDEM within two years. There was an amendment adopted in committee to clarify that these enforcement actions must be tied to environmental and human health violations and not failure to submit paperwork. However, this process may be too drastic too quickly and may need to be adjusted so utilities can realistically comply with it.
- SB 272, authored by Senator Eric Koch (R-Bedford), passed the Senate Utilities committee 10-0 on Thursday and will now move on for a vote before the full Senate.
- SB 29 was amended in committee this week to remove the increased attorneys fee language and now only requires that 120% of the fair market value of properties be paid during eminent domain proceedings that completely take the property, so the owner has to vacate and the title changes. HB 1106 would require the county to approve the use of eminent domain by municipalities in unincorporated territory.
- SB 29 was significantly improved but Aim will continue to monitor the bill for any changes. However, Aim opposes HB 1106 because it limits the ability to effectively manage existing utility infrastructure outside of municipal boundaries.
- SB 29, authored by Senator Jim Buck (R-Kokomo), passed the Senate Local Government Committee on Thursday with a vote of 9-0. HB 1106, Authored by Representative Chuck Goodrich (R-Noblesville), will be heard next week in the House Local Government committee.
AIM LEGISLATIVE MOMENT
“The House is moving very quickly on business personal property tax, and the Senate is taking a slower approach. We’ll continue to work at the General Assembly, and this week we will be asking all of you to push the adoption of resolutions by your councils on the issue.”
– Matt Greller, Aim CEO
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