January 21, 2022
The Big Issues
BUSINESS PERSONAL PROPERTY TAX
- Both HB 1002 and SB 378 eliminate a portion of local government revenue by phasing out portions of Business Personal Property Tax. Neither bill offers a full replacement for the lost revenue and both will result in a tax shift to other tax payers, including homeowners.
- 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 of representatives on Thursday with a vote of 68-25; SB 378, authored by Senator Brian Buchanan (R-Lebanon) will be heard next week in the Senate Tax and Fiscal Policy Committee for amendment and vote.
- 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 working with the bill author 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), was heard in the Senate Appropriations committee on Thursday but was held for further work an amendment at a later meeting.
- 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. It also includes language to help the property tax appeals boards ensure that properties are assessed at their true value even when appealed.
- 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), passed the House Ways and Means committee on Thursday with a vote of 19-0.
- HB 1106 would require the county to approve the use of eminent domain by municipalities in unincorporated territory and place several other procedural hurdles on the use of eminent domain outside of corporate boundaries.
- Aim opposes HB 1106 because it limits the ability to effectively manage existing utility infrastructure outside of municipal boundaries. We are looking for assistance from our membership to contact their legislators with strong concerns about HB 1106.
- HB 1106, authored by Representative Chuck Goodrich (R-Noblesville), passed the House Local Government committee on Wednesday with a vote of 8-3.
- HB 1193 updates the language from last year’s budget on the distribution of the opioid settlement agreement to increase the amount of revenue going to local governments for opioid treatment and prevention and increasing the window of time during which litigating communities can opt into the statewide settlement.
- Aim is continuing to work with bill author to ensure that local governments get the best possible deal from this settlement, both those that chose to enter their own litigation and those that did not.
- HB 1193, authored by Representative Mike Karickhoff (R-Kokomo), passed the House Ways and Means Committee on Wednesday with a vote of 20-0.
AIM LEGISLATIVE MOMENT
“The Replace Don’t Erase coalition is extremely active right now. I urge you to visit our website at aimindiana.org/bppt to get caught up on the coalition. We strongly encourage our municipal members to look at the template resolutions and consider having your council adopt a resolution, making sure lawmakers know where you stand on any revenue from the personal property tax being taken away from local budgets without a proper, full replacement.”
– Jennifer Simmons, Aim COO
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