March 26, 2021
The Big Issues
DARK BOX APPEALS
- SB 275 allows counties to enact local property tax amnesty programs to encourage property owners owing large amounts of back taxes, penalties, and fees to pay their outstanding property taxes and lift the liens on their properties.
- Amendments were added to SB 275 this week that would 1) require expert legal witnesses in property tax appeal cases and 2) require appealing property owners to submit the actual construction cost of their property to the county assessor during an appeal. Aim supports these efforts to give local governments more tools to evaluate the true tax value of properties that are difficult to assess and whose owners often appeal their assessments.
- SB 275, authored by Senator Eddie Melton, passed the House Ways and Means Committee 18-4 on Wednesday.
LOCAL GOVERNMENT FINANCE
- HB 1271 is the annual agency bill for the Department of Local Government Finance, but it often becomes an omnibus bill to which many local government finance policy changes are attached.
- Included in HB 1271 is an Aim legislative initiative that raises the cap on how much of a local government’s budget can be transferred to the rainy day fund in any year from 10% to 15% through 2024, allowing local governments to prepare for LIT losses in 2022 and save general fund revenues for future projects while federal stimulus funding is available. Unfortunately, it also includes language that prohibits any future “pancake TIFs,” where a parcel is included in more than one allocation area after a municipality annexes property that is already in a county TIF area and then layers a new municipal TIF area on the same property.
- HB 1271, authored by Representative Dan Leonard (R-Huntington), passed the full House of Representatives for a final vote of 76-14 and will now go to the governor for his signature. The bill contains a litany of other local government provisions, so watch for this bill in the comprehensive Aim Statehouse Report that will be released after session ends.
BUSINESS PERSONAL PROPERTY TAX
- SB 336 would increase the business personal property tax exemption to $60,000 (from $40,000), allowing more businesses to be exempt from the tax, increasing tax rates on other properties and increasing circuit breaker losses to local units.
- The originally introduced version contained far more significant language that eliminated the depreciation floor on new business personal property, but those provisions were removed in the first half of session. The House Ways & Means Committee also amended the mechanics of the bill, which lowers the fiscal impact to local units as compared to the Senate-passed version. Now, this bill would cause about a $5.5M statewide hit to local governments (compared to $12M in the Senate-passed version). Although the impact is lessened, the bill still represents a “chipping away” at the BPPT without an identified state revenue replacement plan. Several key lawmakers continue to indicate an interest in phasing out or eliminating the BPPT in the future.
- SB 336, authored by Senator Aaron Freeman (R-Indianapolis), passed the House Ways and Means Committee on Wednesday with a vote of 14-8. It will now go to the full House floor for consideration. You can see the county-by-county estimated revenue losses here.
- SB 389 would repeal Indiana’s law regulating isolated wetlands, which are wetlands that are not abutting navigable waterways and are not currently regulated by the federal government.
- This is a major policy change that would deregulate the majority of Indiana’s wetlands. Stakeholders are discussing the wide-ranging potential impacts on the cost of development, stormwater controls, and environmental management.
- SB 389, authored by Senator Chris Garten (R-Charlestown), was heard this week in the House Environmental Affairs Committee but was held for further amendment. Stakeholders are actively negotiating amendments, two of which were presented to the committee on Monday. It seems likely that the bill will need to be amended significantly in order to move forward through the committee.
- HB 1169 would require local governments to report cybersecurity incidents to the Indiana Office of Technology (IOT) on a simple form provided by the IOT.
- The IOT would serve as a central repository of this data and use it to provide information and technical assistance to local governments so that they are aware of the threats that are affecting their peers and what steps can be taken to mitigate them.
- HB 1169, authored by Rep. Mike Karickhoff, passed the Senate Homeland Security and Transportation committee 9-0 on Tuesday. It will now be considered by the full Senate.
AN AIM LEGISLATIVE MOMENT
“The next three weeks is going to be extremely busy at the Statehouse, especially with the abbreviated calendar. I encourage everyone to read the tracking the list at bottom of your Legislative Summary so you understand what is still alive and what we’re still tracking. Make sure you’re watching your email for any urgent matters that need to be addressed in these last few weeks.”
– Jennifer Simmons, Aim COO
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