January 22, 2021

The Big Issues

BUSINESS PERSONAL PROPERTY TAX

  • SB 336 would allow the business personal property tax exemption to be calculated using the assessed value of the property (instead of its acquisition value), resulting in an estimated 52,000 more businesses qualifying for the exemption at a $12M cost to local governments statewide. It would also eliminate the 30% depreciation floor on business personal property acquired after the effective date, resulting in an estimated loss of around $175M to local units once fully implemented.
  • Aim opposes this legislation not because we love the taxation of business personal property, but because eliminating this tax without a state revenue replacement plan will create significant fiscal challenges for local governments, especially in communities heavily reliant on the manufacturing base for tax revenue.
  • SB 336, authored by Sen. Aaron Freeman (R-Indianapolis), will be heard in the Senate Tax and Fiscal Policy Committee next Tuesday. While we expect the most damaging language in this bill to be removed in committee, the $12M fiscal hit of expanding the exemption is a continued chipping away of the BPPT without an identified revenue replacement.

TAX INCREMENT FINANCING

  • TIF-related legislation is regularly introduced in the Indiana General Assembly, and this session is no exception.
  • HB 1249, authored by Rep. Ed Clere (R-New Albany), would: 1) require school corporations to “opt in” to participate in any new TIF area; 2) require new findings to spend TIF money outside of an allocation area; and 3) establish new requirements for workforce training/scholarship programs using TIF. HB 1187, authored by Rep. Bob Cherry (R-Greenfield), would require the municipal executive to appoint a school board-nominated person as a voting member of the RDC, and would require mandatory TIF revenue sharing with underlying taxing units.
  • Aim is in active conversations with legislators about these troubling efforts to limit the ability of local governments to use their most versatile local economic development tool, tax increment financing. Though neither have been scheduled for a committee hearing, we expect conversations on this topic to be ongoing.

PIPING MATERIALS

  • HB 1116 defines PVC piping as an acceptable material for public works projects and would prohibit requests for bids from specifying the type of piping material necessary for the completion of a public works project. Rather, it would require any acceptable piping material as defined by this bill (i.e. PVC) to be considered.
  • This language undermines the professional discretion of city engineers and the language in the bill, if passed, would create bidding confusion and likely lead to increased costs and projects delays.
  • HB 1116 has not yet been scheduled for a committee hearing but it is expected to be heard in the House Government and Regulatory Affairs Committee in the coming weeks, where the bill’s author, Rep. Doug Miller (R-Elkhart), also serves as the committee chairman.

BROADBAND EXPANSION

  • Improving access throughout the state to broadband services is a priority this legislative session. With more work being forced to become virtual due to the pandemic, the holes in Indiana’s broadband infrastructure have become more visible and the need to fill them has become more exigent.
  • Many bills have been filed focusing on increasing funding for broadband development, increasing financing options for rural broadband projects, and attempting to remove burdensome regulations that prevent broadband deployment.
  • Aim will be supportive of these efforts to increase connectivity in our communities while working to ensure that local communities maintain control over their fee structures and local rights of way.

OUTDOOR REFRESHMENT AREAS

  • SB 238 would allow municipalities to designate outdoor refreshment areas where permitted vendors could sell alcohol to the attendees of an event, who would be allowed to carry and drink from open containers inside the refreshment area as long as they are identified as attendees with a wristband.
  • Aim supports this bill because it will give communities an option to authorize alcohol sales at public events such as festivals or concert series in a manageable, responsible way.
  • SB 238, authored by Senator Liz Brown (R-Fort Wayne), will be heard in the Senate Public Policy Committee next Wednesday.

AN AIM LEGISLATIVE MOMENT

“The Legislature was closed for business this week. It gave our team a time to dig really deep into some of the bills that have been pushed out. We were expecting a relatively slow session in terms of bills impacting cities and towns – that has not been the case so far. “

– Matt Greller, Aim CEO

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