March 6, 2020
The Big Issues
BUSINESS PERSONAL PROPERTY TAX EXEMPTION
- Under current law, if a business owns property with an acquisition value of $40,000 or less, they are exempt from the business personal property tax. A provision added to HB 1065 would change this so the assessed value (including depreciation) is used to calculate the exemption.
- Aim opposes this provision in HB 1065 because more businesses will qualify for the exemption and local governments will lose more revenue from a continued chipping away at the business personal property tax. We hope to have it removed from the bill in conference committee.
- HB 1065, authored by Representative Jeff Thompson, passed the Senate with a vote of 31-19 on Wednesday and is currently pending in conference committee.
MUNICIPALLY OWNED UTILITIES
- HB 1165 would prohibit municipal utilities from ever holding property owners liable for the unpaid water, gas or electric utility bills of their tenants unless the property owner chooses to keep the utility bill in his/her name.
- Aim opposes this bill because it hamstrings the ability of municipal utilities to recover unpaid bills and undermines existing practice in many of the utilities around the state.
- The HB 1165 concurrence motion was defeated on the House floor 33-59 on Wednesday, but procedurally, it can come back for another vote in the House. We expect another vote to occur on Monday, so please continue to stay in contact with your state representative on this bill.
- SB 148, which originally dealt with manufactured housing issues, is now a home for language that would pre-empt local ordinances that govern landlord-tenant relations, including the newly adopted Indianapolis ordinance.
- Aim opposes the landlord-tenant language that limits locals’ ability to adopt and enforce ordinances that provide greater protections to tenants facing eviction or other forms of retaliation by their landlords.
- SB 148, authored by Senator Blake Doriot, is currently pending in conference committee. If an agreement with the conferees is reached, the conference committee report will be voted on for final passage in both the House and Senate.
LOCAL GOVERNMENT FINANCE
- HB 1113 includes many local government finance provisions. Notably, it allows local governments to pay back large property tax appeals over 5-10 years, depending on the size of the appeal.
- It also includes an Aim legislative initiative, requiring the adopting body for local income taxes to request the other effected units in the county to examine the effect the proposed change in the local income tax would have on their bond obligations and communicate that information back before the tax change is adopted.
- Aim has worked with the bill authors to ensure that harmful parts of the bill come out and helpful parts of the bill stay in or are improved. As this bill continues through the process, we will continue to advocate for municipalities in any fiscal policy changes. HB 1113, authored by Representative Dan Leonard, passed the Senate with a vote of 45-5 on Tuesday and is currently pending in conference committee for final negotiations.
EXTENSION OF WATER AND SEWER MAINS
- HB 1131 requires municipally-owned utilities to follow the IURC rules for water and sewer extensions, including requiring municipalities to pay for “upsizing” mains, where the utility would have to pay the developer the difference in cost when the utility is requesting a bigger main beyond what is necessary to serve that development.
- Aim is opposing this bill, and we continue to ask for language that mitigates the detrimental effects this would have on municipally-owned utilities because of the added regulations on water and sewer main extensions and its potential cost shifts for new mains onto municipal utilities.
- HB 1131 is currently pending in conference committee, and is likely close to final agreement. Unfortunately, we do not expect that the bill will be improved for municipally-owned utilities.
AN AIM LEGISLATIVE MOMENT
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