Friday, February 8, 2013

Farm Bureau Reports on Progress of Tax Related Bills

From the Farm Bureau Public Policy Dispatch:

PRODUCTIVITY FACTOR BILL TO BE “FAST TRACKED” IN HOUSE  House Speaker Brian Bosma (R-Indianapolis) announced this week that SB 319 (Sen. Jean Leising, R-Oldenburg), the bill that will delay the application of new soil productivity factors for another year, will be expedited in the House. The Department of Local Government Finance has advised county assessors to begin the March 1 assessment using the new soil productivity factors because the General Assembly has not finished the legislative process to delay their application. The House reportedly hopes to get a bill to the governor before March 1 to avoid both the discomfort and cost of a remedial assessment. Toward that end, SB 319, which is sponsored in the House by Reps. Don Lehe (R-Brookston), Bob Cherry (R-Greenfield) and Terry Goodin (D-Austin), will be heard in the House Ways & Means Committee on Monday morning.

PERSONAL PROPERTY TAXES CONSIDERED IN HOUSE WAYS & MEANS  HB 1530, authored by Rep. Bob Morris (R-Ft Wayne), was heard on Thursday. HB 1530 provides that, beginning with the March 1, 2014, assessment date, a taxpayer is entitled to an exemption for the taxpayer’s new personal property located in a county, unless the county council adopts an ordinance specifying that the exemption does not apply to that particular county. As presented, the bill limits the exemption to the first $100,000 of a taxpayer’s new personal property located in the county. Katrina Hall supported the bill but opposed the $100,000 limit, stating that equipment acquisitions of farmers far exceed that number. The bill was opposed by lobbyists representing cities, towns and counties who are worried about erosion of their property tax base. The bill was held for further consideration.

HB 1349, authored by Rep. Bob Cherry (R-Greenfield), was heard along with HB 1530. It provides an assessed value deduction to offset the effects of the 30 percent minimum personal property tax depreciation floor for depreciable personal property or utility personal property that is acquired or installed after the 2013 assessment date. IFB supports this bill as well. The attention paid by both houses of the General Assembly to personal property tax is an encouraging sign that something might happen this session.

WILL THERE BE A TAX CUT THIS SESSION?  HB 1541, authored by Rep. Eric Turner (R-Cicero), includes a mix of state tax provisions. The bill repeals the automatic taxpayer refund and reduces the individual income tax rate from 3.4% to 3.06%, which is basically the income tax cut proposed by Gov. Pence. HB 1541 phases the tax cut down over three years rather than immediately. Katrina Hall testified in favor of the provisions that would phase-out inheritance over 5 years rather than the 9-year phase-out passed last session. She also expressed concern that tax cuts would inhibit the state’s ability to fund priorities important to IFB members, those being funding K-12 education, making higher education affordable, and investing in infrastructure – especially local roads. The bill was held for a later vote.

REDEVELOPMENT COMMISSION CHECKS AND BALANCES  SB 325, authored by Sen. Luke Kenley (R-Noblesville), provides that a redevelopment commission may not enter into any obligation payable from public funds without first obtaining the approval of the legislative or fiscal body of the unit that established the commission. It also includes a requirement that if a redevelopment commission acquires or sells real property, the redevelopment commission will include in its annual report a description of the real property and the terms under which the real property was acquired or sold. It limits when an executive session may be conducted for a discussion of strategy with respect to the acquisition, lease, or sale of real property by the redevelopment commission. Indiana Farm Bureau supported the bill because it provides much needed checks and balances and much more transparency. The bill was amended and left the committee by a vote of 8-1.

AGRICULTURAL CLASSIFICATION CLARIFIED  SB 531, authored by Sen. Doug Eckerty (R-Muncie), provides that land is to be assessed as agricultural if the land could be devoted to agricultural use or if a building or other real property improvement that is devoted to agricultural purposes is located on the land. As amended by the committee, it provides that land that is zoned for (instead of purchased for) residential, commercial, or industrial use is not to be assessed as agricultural land unless the land is devoted to agricultural use. The bill requires assessors to subtract from the value of a parcel land that is being used for various right-of-way purposes without any action having to be taken by the property owner. Finally, it prohibits the DLGF from adopting rules concerning tax representatives that restrict a residential property owner who is an individual from appointing someone else to act on the owner's behalf in a property tax appeal to the property tax assessment board of appeals so long as the person does so without being paid. Katrina Hall supported the bill and it passed to the full Senate by a vote of 13-0.