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Indiana 2014 Legislative Session Halftime Report

Date: February 05, 2014

My halftime show does not have Bruno Mars or Red Hot Chili Peppers but, let me assure you, we are red hot!  I’m pleased to report that a number of great-for-small business bills are moving through the legislature and a number of bad-for-small-biz bills are dead. 

2014 is a non-budget year, a year that is most often referred to as the “short session.”  In years past, the short session was widely considered to be the year during which  not much happens.  This is hardly the case this year.  Hundreds of bills have been filed and your NFIB state public policy staff is working hard to see that the good stuff moves forward and the bad stuff dies. 

Here’s a rundown of the bills we’re working on and the issues we’re following:

HB 1001-  Tax Exemption for New Personal Property -  This bill provides local governments with the option to exempt new personal property (equipment and furniture) from the Business Personal Property Tax.  Reforming Indiana’s Business Personal Property Tax is the number one state issue for NFIB members.  Indiana State Director Barbara Quandt and four NFIB members testified in support of this bill when it was heard in the House Ways and Means committee.

This issue has been much in the news with local governments raising alarm about lost tax revenue and squeezed budgets.  What they fail to point out is that none of the current proposals before the General Assembly eliminate the tax.  HB1001 merely exempts the tax on NEW equipment.  AND….. this proposal is optional.  No county will be forced to exempt any business personal property.

This bill has passed the House on a vote of 63 to 33 and is now headed for the Senate.

Note:  If you haven’t already done so, tell your legislators that you support reforming the Business Personal Property Tax.

SB 1 – State and Local Taxation -   Among other provisions, this bill provides that if the value of a taxpayer's business personal property is less than $25,000 for a particular assessment date: (1) the taxpayer is not required to file a personal property return for the taxpayer's business personal property in the county; and (2) the taxpayer's business personal property in the county is exempt from taxation for that assessment date. This also requires the taxpayer to file an annual certification with the county assessor.

This is the other Business Personal Property Tax bill that is moving through the legislature.  State Director, Barbara Quandt and several NFIB members testified in support of this thoughtful and creative proposal.  If a business has less than $25,000 in assessed value, they would pay no tax and would not have to file a personal property tax return.  This good-for-small-biz bill also cuts the corporate tax rate and provides for a commission to study how the state can permanently eliminate the Business Personal Property Tax.

This bill has passed the Senate on a vote of 35 to 11 and is now headed to the House.

Note:  If you haven’t already done so, tell your legislators that you support reforming the Business Personal Property Tax.

HB 1020 – Study of Economic Development Incentives – Among other provisions, this bill requires the commission on state tax and financing policy to review, analyze, and evaluate state and local tax incentives that are provided to encourage economic development or to alter, reward, or subsidize a particular action or behavior by a tax incentive recipient. Requires the use of a five year review schedule. Requires the commission to publish a report before November 1 each year on tax incentives reviewed that year.

HB 1020 passed out of the House on a vote of 93 to 0. 

Note:  This bill is one that emerged following the series of Town Hall meetings conducted last summer by the Indiana Legislature’s Small Business Caucus.  Legislators really listened to small business owners’ concerns.

HB 1198 – Business Single Point of Contact with State - Specifies that state agencies, including the department of workforce development and the department of state revenue, shall provide assistance at no cost to the secretary of state in developing and maintaining a one stop Internet web site for businesses to use. Requires the department of state revenue and the department of workforce development to coordinate with the secretary of state to use an Internet web site to share information with other state agencies and to provide a single point of contact with all state agencies for a person to accomplish various requirements to transact business in the state.

This is another proposal emerging from the Small Business Caucus Town Halls last summer.  Small business owners repeatedly expressed their frustration in dealing with state agencies and the difficulty they encounter when attempting to get timely, accurate information. 

HB1198 passed out of the House on a vote of 94 to 0 and moves on to the Senate.

HB 1241- Environmental Coverage-  This bill specifies the manner in which the meaning of "pollutant", as used in certain liability insurance policies, must be construed.  This is a controversial issue that has small business owners concerned that they will be hit by cleanup costs that insurance policies will not cover.  NFIB is working with the bill’s sponsor and others to protect our members.

This legislation passed out of the House on a vote of 57 to 36.

HB 1301 – Fire and Building Safety Issues – Among other provisions, this bill requires the state building commissioner to issue a written interpretation of a building law or fire safety law not later than 10 business days after the date of receiving a request. It provides that a design release may be issued without a plan review if: (1) the application for a design release is complete; and (2) the application for a design release is not selected for a plan review by the division. It establishes deadlines for the division to conduct plan reviews and provide notices. It also provides that, with certain exceptions, if the division fails to provide notice or complete plan review within the time required by statute, a design release must be issued without further review.  

HB 1301 is yet another issue that was brought up at the Small Business Town Halls.  Many complaints were raised about the slow pace of plan reviews and the adverse effect this has on small businesses around the state.

HB 1301 passed out of the House on a vote of 79 to 15.

HB 1332 – Office of Small Business and Entrepreneurship – This bill codifies the law concerning the office of small business and entrepreneurship. It transfers the small business development center, the small business ombudsman, and the young entrepreneurs program from the Indiana economic development corporation to the office of small business and entrepreneurship by removing or repealing the appropriate provisions in the Indiana economic development corporation law and recodifying them in the law concerning the lieutenant governor. It extends the young entrepreneurs program by two years and makes other changes to the Indiana code.

State Director Barbara Quandt testified in favor of this legislation that makes common sense streamline changes and places greater emphasis on the job creators of Indiana.

HB 1332 passed out of the House on a vote of 94 to 0. 

SB 66 – State-Assisted Retirement Plan -  This bill establishes a state-assisted retirement plan (plan) for purposes of encouraging Indiana residents to increase their rate of savings and to build assets for the use of a participant or the participant's beneficiaries or survivors after the participant's retirement. Establishes the Indiana retirement savings board (board) consisting of five members appointed by the governor, the treasurer of state, and the director of the office of management and budget. Provides that the board selects an administrator and oversees the plan. Requires that the plan be qualified under Section 401(a) or another applicable section of the Internal Revenue Code.

At first blush, this bill might seem like a good idea.  Encouraging people to save for retirement is a good thing…  right?  Not in this case.  This concept has a couple of gaping flaws:  #1 It puts the state in competition with private enterprise; those companies involved in providing retirement account services.  And #2  It set us up for a new mandate.  While this bill calls for voluntary participation, Illinois had a proposal that made it mandatory for businesses to participate in the state plan.  So… what would happen if the state decided that not enough small businesses were “voluntarily” complying?  We’d be just one simple legislative step away from a new mandate.

Good news!  While this bill easily passed out of the Senate Pensions and Labor Committee, we were able to stop it at that point.  SB 66 never came up for a vote in the full Senate and is effectively dead.  (May it rest in peace.) A huge thank you goes to NFIB Illinois State Director Kim Maisch for bringing this issue to our attention. 

These are just a few of the issues we’re working on.  I will be updating you in this space on a regular basis.  If you have a bill that is of particular interest to you, please don’t hesitate to contact me by phone at 317-638-4447 or by email at barbara.quandt@nfib.org.

Thank you for being an NFIB member!

Barbara Quandt, NFIB Indiana State Director

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