March 4, 2022
The Big Issues
BUSINESS PERSONAL PROPERTY TAX
- As we have reported in recent weeks, HB 1002 is the obvious vehicle for language that will 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.
- The final negotiations on HB 1002 have ramped up in recent days and although the BPPT reduction language is not in the current form of the bill, it is very much a part of the discussion, and we expect to learn more about these talks over the weekend and early Monday morning. Aim encourages our members to continue reaching out to your members of the House and the Senate over the weekend to communicate the negative fiscal impact of this change and encourage them not to include BPPT reductions in the final version of the bill without a dollar-for-dollar replacement mechanism.
- HB 1002, authored by Representative Tim Brown (R-Crawfordsville) and sponsored by Senator Ryan Mishler (R-Bremen), will be heard in conference committee on Monday.
INNOVATION DEVELOPMENT DISTRICTS
- SB 361 includes several 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 created for economic development projects that are financed by incremental sales, state 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. Aim has had several meetings with Senate and House leadership and the IEDC to ask that there is language included in the final version of that bill that includes local approval in the process, creates a public and transparent local process, and ensures that local infrastructure costs are included in the negotiation phase of the projects.
- SB 361, authored by Senator Ryan Mishler (R-Bremen) and sponsored by Representative Tim Brown (R-Crawfordsville), was heard in conference committee on Thursday.
- HB 1106 would require county commissioners to approve the use of eminent domain by municipalities (not including municipal utilities) in unincorporated areas and would allow the county commissioners findings on these critical municipal projects to be challenged in court. The bill also includes language requiring that property owners be compensated for 120% fair market value, but that language was removed in a Conference Committee Report on Thursday.
- Aim opposes HB 1106 because it limits the ability of a municipality to effectively manage infrastructure outside municipal boundaries and could delay critical projects, including road projects. The bill narrowly passed the Senate by a vote of 26-24 earlier this week but Aim encourages members to reach out to your State Senator again to ask them to Vote No on the final Conference Committee Report.
- HB 1106, authored by Representative Chuck Goodrich (R-Noblesville) and sponsored by Senator Jim Buck (R-Kokomo), was heard in conference committee on Thursday.
VARIOUS TAX MATTERS
- SB 382 is the annual Department of Revenue agency bill and includes many tax provisions that affect the state and local tax code. Of particular interest to Aim, this bill includes funding support for the state GIS officer to help local governments complete a GIS map of the entire state for integration with Department of Revenue systems for the purposes of better tracking local income tax. It also expands eligibility to use the housing TIF to all communities.
- Aim supports this bill as it takes an important step toward a tax system in Indiana that could support local income taxes levied at the municipal level. It also allows more communities to access the housing TIF tool to expand affordable housing options that are sorely needed.
- SB 382, authored by Senator Travis Holdman (R-Markle) and sponsored by Representative Tim Brown (R-Crawfordsville) was heard in conference committee Thursday.
CONTRIBUTIONS IN AID OF CONSTRUCTION
- HB 1245 would prohibit municipal utilities from including contributions in aid of construction in capacity-related 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 opposes the bill but has worked with the bill authors to improve this bill throughout session and add additional clarity related to the capacity-related fees provisions of this bill. 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, authored by Representative Jim Pressel (R-Rolling Prairie) and sponsored by Senator Eric Koch (R-Bedford), was heard in conference committee on Thursday.
AIM LEGISLATIVE MOMENT
“The House and Senate will have to get together to negotiate the differences [in HB 1002]. My hunch is that this will be one of, if not the last item decided on this Session. It’s not too late. Still talk to your legislators and let them know that no reduction can come without full replacement at the state level.”
– Matt Greller, Aim CEO
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