March 9, 2022

The Big Issues

BUSINESS PERSONAL PROPERTY TAX

  • HB 1002, as it passed the House, proposed eliminating the 30% floor entirely for new equipment purchases, a negative fiscal impact to local governments. However, in the final version of HB 1002 this language was not included in the bill. Language was included to allow “mini mills” or steel mills not in Lake County to opt into the depreciation pool with no 30% floor if doing so would not impact local TIF bonds. This is the only BPPT language that made it to the end of the process. The fiscal impact will be better known in the coming weeks, but it will be substantially less than a total elimination of the 30% floor.
  • This outcome is a testament to the work of our members reaching out to their legislators since last summer and continuing to work straight on through the last day of session. Without local leaders telling their stories about the fiscal impact to their cities and towns, and Aim’s effective collaboration with lawmakers, specifically Senate leadership, the outcome would have been very different. Read statements from Aim CEO Matt Greller and Aim President Mayor Clint Lamb here.
  • HB 1002, authored by Representative Tim Brown (R-Crawfordsville) and sponsored by Senator Ryan Mishler (R-Bremen), passed the House with a vote of 82-17 and passed the Senate with a vote of 50-0 early Wednesday morning.

INNOVATION DEVELOPMENT DISTRICTS

  • SB 361 contains 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 selected for economic development projects that are financed by incremental state sales, state income, and local property taxes.
  • Aim worked with the bill authors throughout session to ensure these districts do not affect existing TIF districts and include meaningful local input. The final version of the bill requires that executives of affected local units must have entered into an agreement with the IEDC on the terms of the district prior to the district moving forward for all projects under $2B in investment. For projects over $2B, truly transformative projects, local leaders are still brought in for discussion and collaboration on the front end, but do not have the veto power that exists for projects under $2B. This addition represents a significant move by the legislature and the IEDC to recognize the necessity of local collaboration and input.
  • SB 361, authored by Senator Ryan Mishler (R-Bremen) and sponsored by Representative Tim Brown (R-Crawfordsville), passed the House 70-22 and passed the Senate 50-0 on Tuesday night.

DLGF

  • HB 1260 is the annual DLGF agency bill and includes many provisions relating to local government finance. Of note, this year it included two provisions of notable benefit to cities and towns.
  • The first is an Aim legislative initiative and a legislative priority of ILMCT. This provision removes the trending process for local cumulative capital development funds, meaning these funds will no longer need to be reestablished if there is a substantial change in AV that previously caused the rate to be adjusted as well. This represents the easing of a significant administrative burden for both local governments and DLGF.
  • The second provision is an update in procedures for tax appeals brought forward by the Indiana Board of Tax Review (IBTR) related to the court decisions in the South Lake Mall case. The new language allows the IBTR to find a true tax value for a property under appeal that is neither the previous year assessment (as desired by the taxpayer) nor the exact value found by the assessor, but instead may weigh the evidence presented to IBTR from independent appraisals and establish a true tax value between the assessor’s number and the taxpayer’s number. This will improve the appeals process significantly in favor of local assessors.
  • HB 1260, authored by Representative Dan Leonard (R-Hutington) and sponsored by Senator Eric Bassler (R-Washington), passed the House 83-14 and passed the Senate 44-6.

EMINENT DOMAIN

  • HB 1106 would have required the county to approve the use of eminent domain by municipalities (not including municipal utilities) in unincorporated territory and place several other procedural hurdles on the use of eminent domain outside of corporate boundaries.
  • Aim opposed HB 1106 because it would have limited the ability to effectively manage infrastructure outside municipal boundaries. This bill did not move forward due to Aim’s opposition and all of our members who communicated the negative impacts of this bill to their legislators.
  • HB 1106, authored by Representative Chuck Goodrich (R-Noblesville) and sponsored by Senator Jim Buck (R-Kokomo), failed to advance on the Senate floor with a vote of 19-31.

DARK BOX

  • SB 145 allows the cost of construction to be used as the basis for assessment of large, commercial properties for their first 5 years of existence. This is an attempt to limit the dark box appeals that have resulted in large litigation costs for counties and low assessments for large retail stores throughout the state.
  • Aim supports this bill because it grants clarity to the assessment process, will reduce the time and amount of property tax appeals, and works to prevent low assessments on large commercial properties that shift property taxes onto other taxpayers or result in tax cap losses.
  • SB 145, authored by Senator Brian Buchanan (R-Lebanon) and sponsored by Representative Tim Brown (R-Crawfordsville), passed the House 92-0 and passed the Senate 47-0.

AIM LEGISLATIVE MOMENT

“Mission accomplished. The deck was stacked against us at the beginning. Our members did a tremendous job of engaging legislators, regularly and thoughtfully. I can’t tell you how big of a difference that made.”

– Matt Greller, Aim CEO

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