Week of Jan. 28, 2008

Halfway. But Which Way?
Legislature approaches halfway point with bipartisan cooperation, but what is the endgame?

The Indiana General Assembly approached the halfway point of the legislative session last week as the House and Senate approved significant property tax reform bills. The biggest surprise thus far came when the House approved HB1001, 93-1. Passage of the bill also known as Governor’s tax reform proposal came after a late night of debate that included the approval of 27 of more than 100 proposed amendments.

The legislature’s speed has surprised those accustomed to a slower process. But this is no ordinary year and the legislators have heard the call from voters for change—a call they are taking very seriously in an election year. While the halfway point is fast approaching, the end is still too of for final predictions. Rest assured, your Greater Indianapolis Chamber of Commerce advocates will be there every step of the way.

 

LOCAL GOVERNMENT AND FISCAL POLICY

Issue: Marion County Government Modernization (SB280)
 What it means to you: Increased efficiency, accountability and transparency in local government. Authored by Sen. Jim Merritt (R – Indianapolis), SB280 combines the remaining Marion County township and airport fire departments with Indianapolis Fire Department, creating a single, county-wide fire department while saving an estimated $15 million a year. SB280 also puts control of IMPD under the Mayor, eliminates township assessors in Marion County and permits the Indianapolis/Marion County City-County Council to eliminate township trustees in Marion County by 2011.
What happened last week: The bill was heard on second reading, where it was amended to remove any language related to the elimination of certain “included towns”, such as Meridian Hills, in Marion County.
What’s next? Expect a tough fight from those opposed to creating more efficient government through consolidation. The bill should pass out of the Senate, but will run into partisan issues in the House.

Issue: Marion County Fiscal Management (SB260)
What it means to you: Combines the duties of the Marion County treasurer, auditor and controller and establishes the board of finance and management for Marion County, promoting better coordination and oversight of municipal revenues and expenditures.
What happened last week: Though the bill was heard in the Senate Local Government Committee more than a week ago, no action has been taken.
What’s next? It looks like the end of the line for this bill as is, though there is always a chance the language could re-appear in another form and another bill.

Issue: Property Tax Reform (HB 1001)
 What it means to you: Contains the elements for property tax reform as proposed by Gov. Mitch Daniels, including: plans to limit property taxes to 1 percent of assessed valuation for homesteads, 2 percent for rental properties and 3 percent for commercial/industrial properties; shifting payments for child welfare and school general funds from counties to the state; limiting the growth of municipal budgets to the growth of county income levels, consolidating township assessors into a single appointed county assessor; requiring referenda on debt issued by a county that exceeds 1 percent of the county budget and increases the state sales tax to 7 percent.
What happened last week: After hours of late-night debate, the House voted 93-1 to send the bill to the Senate for consideration. With more than 100 amendments proposed, the House took action to adopt 27 amendments to the bill including: freezing property taxes for senior citizens on fixed incomes, reducing the cap for property taxes on agricultural land to 2 percent from 3 percent, doubling the renter's deduction on state income taxes to $5,000 from $2,500, requiring referenda only for school projects that include recreational facilities such as stadiums and swimming pools and increasing the state’s Earned Income Tax Credit (EITC) from 6 percent to 9 percent.
What’s next? ? The bill moves to the Senate for consideration, where Sen. Luke Kenley (R-Noblesville) will play a significant role in crafting the Senate version. Expect many possible changes including restoring referenda for all significant capital projects. In the end, a compromise will be hashed out in the final days of the legislative session by the leaders of all four caucuses.

Issue: Elimination of Township Assessors (SB16)
What it means to you: Seeks to transfer the duties and responsibilities of township assessors to a county assessor. By eliminating township assessors, SB16 will create more accountable, transparent and uniform assessments statewide.
What happened last week: Though a final vote was expected to come Thursday afternoon, the bill was held up to due a perceived lack of favorable votes in the Senate.
What’s next? As a major component of several tax reform proposals, expect this bill to garner bipartisan support AND opposition as it moves through the legislative process. Many legislators may be wary of voting on elimination of township assessors as a stand-alone bill, but components of SB16 are included in the House version of HB1001.

Issue: Limits on Redevelopment Commission and TIFs (SB17)
 What it means to you: SB17 limits the amount of time placed on repayments of debt with respect to Tax Increment Finance projects (TIFs) to 25 years. The bill also creates greater oversight by local fiscal bodies on debt issued for economic and redevelopment projects and restricts the expansion of TIF districts.
What happened last week: The bill unanimously passed out of the Senate 47-0 and was sent to the House for consideration, where Ways and Means Chairman Bill Crawford (D-Indianapolis) will carry the bill.
What’s next? As a major component of several tax reform proposals, expect this bill to garner bipartisan support AND opposition as it moves through the legislative process. The final version will not to be known until the last days of session.

Issue: Limitations on Government Debt (SB18)
 What it means to you: Limits the amount of debt issued by local taxing units, while restricting the amount of time placed on repayments of debt to 25 years for Tax Increment Finance projects (TIFs) and 20 years for all other debt. SB18 also limits the authority of the taxing unit to utilize revenue in excess of anticipated amounts or as a result of re-issuance of bonds. The bill also requires referenda for debt issued for major capital projects, with some exceptions for school districts that have an annual growth rate of over 4 percent. The bill could have serious consequences for economic development projects around the state as well as negatively impacting school districts that may not be growing at 4 percent but nonetheless require improvements or additions to their facilities.
What happened last week: After being amended to require referenda on capital projects in excess of $7 million, the bill passed out of the Senate on a split 31-16 vote.
What’s next? The bill heads to the House for consideration, where Ways and Means Chairman Bill Crawford (D-Indianapolis), will carry the bill. The final version will not to be known until the last days of session.

Issue: Child Welfare Levies (SB1)
 What it means to you: Shifts the burden of funding for Child Welfare, a state administered program, from counties to the state. As the fastest-growing portion of the Marion County budget, removing this levy will provide immediate property tax relief to Marion County and counties across the state.
What happened last week: The bill unanimously passed the Senate 48-0 and was sent to the House for consideration.
What’s next? As a major component of several property tax reform plans, expect this issue to garner bipartisan support as it makes it way through the legislative process.

 

ECONOMIC GROWTH

Issue: Sunset of Economic Development Incentives (HB1242)
 What it means to you: Sunsets all state and local economic development incentives at the end of 2009. Legislative Council will have the ability to review all incentives and make determinations to keep certain incentives deemed effective. While the Greater Indianapolis Chamber of Commerce supports a comprehensive review of these incentives, sunsetting the incentives from the start sends a dangerous signal to the world that Indiana is no longer open for business.
What happened last week: Though scheduled for a vote in the House Commerce Committee, the bill was not heard or voted upon.
What’s next? It may be the end of the line for this bill, but expect the debate over economic development incentives to continue as the session moves along.

Issue: Statewide Smoking Ban (HB1057)
 What it means to you: Prohibits smoking in: (1) public places; (2) enclosed areas of a place of employment; and (3) certain state vehicles with some exemptions.
What happened last week: Presented in the House Public Policy Committee by State Rep. Charlie Brown, (D-Gary), the bill did not receive a vote.
What's next? As introduced, this legislation does not move on. Representative Brown has promised to reintroduce the language in the 2009 session.

Issue: Hands free mobile phone requirement (HB1167)
 What it means to you: Introduced by State Rep. Vanessa Summers (D-Indianapolis), this bill makes it a Class D misdemeanor to operate a vehicle while using a mobile phone with exemptions for emergency situations and emergency vehicles. Members who conduct business via mobile devices will be required to purchase and utilize hands free devices and technology.
What happened last week: The bill was withdrawn by Representative Summers after the House Public Policy Committee did not show support.
What’s next? This bill will not advance.

Issue: Transportation Tax Area (HB1220)
 What it means to you: Further develops and expands the mass transportation opportunities in Northwest Indiana and provides Central Indiana with additional evidence of the economic benefits related to mass transportation. Money raised through a Sales Tax Increment Financing arrangement will be leveraged to match $500 million of federal funding secured by US Rep. Pete Visclosky (D-IN).
What happened last week: Presented again in the House Ways and Means Committee, this bill passed with a 17-3 vote.
What’s next? Expect this bill to move through the legislative process and gain bipartisan support. Communities throughout the state will view this legislation as a funding model for mass transportation in their areas.

Issue: Transit Districts (HB1245)
 What it means to you: Introduced by State Rep. Terri Austin (D-Anderson), this gives flexibility to local communities throughout the state to fund mass transportation projects through the creation of transit districts. The transit district is able to capture part of the: 1) sales tax in the district; and 2) adjusted gross income tax withheld from the wages of employees within the district.
What happened last week: Heard in the House Ways and Means Committee, there were significant concerns with the sales tax implications to fund the districts. Members agreed to pass the legislation out of committee but asked Rep. Austin to address the funding source concerns.
What’s next? The bill will receive consideration from the full House but there is much skepticism about its success and advancement because of the impact of diverting state sales tax revenue to local units of government that might otherwise be used for property tax relief.

Issue: Green Building/Sustainable Design (HB1280)
 What it means to you: Requires all new public buildings and structures, (excluding those contracted by a public school corporation, buildings listed on the National Register of Historic Places and structures designed solely to store commodities or other property) and public building repairs in valued in excess $1 million, to meet LEED (Leadership in Energy and Environmental Design) Silver or an equivalent rating system. Currently, building to these standards cost on average no more than 1.5 – 2 percent than conventional buildings; however building to LEED Silver standards produces considerable cost savings. It is estimated that the additional investment required to build to LEED standards can be recovered in 12-24 months.
What happened last week: The bill was heard in the House Environmental Affairs Committee where it passed 8-3.
What’s next? The bill will move on to its second reading in the House this week. Concerns over mandates versus incentives may prompt second reading amendments to be offered.

 

EDUCATION AND WORKFORCE DEVELOPMENT

Issue: Moving School Board Elections From The Primary To The General Election (SB2)
 What it means to you: Greater transparency and accountability with school boards and therefore potentially greater voter turnout. The bill requires elected school board members stand for election at general elections.
What happened last week: Authored by Sen. Teresa Lubbers (R-Indianapolis), Sen. Jim Merritt (R-Indianapolis) and Sen. Vaneta Becker (R-Evansville) the bill was ordered engrossed on second reading with no amendments.
What’s next? The bill has moved to third reading. Sen. Lubbers did not call the bill on Jan. 24 because she is waiting to appoint a Democratic House Sponsor. We anticipate a third reading vote early next week, before the Jan. 30 third reading deadline in the Senate.

Issue: Graduation Rate (SB111)
 What it means to you: Amends the current graduation rate formula to ensure that a student is counted in only one cohort in the graduation rate. This primarily affects students who graduate in less than four years. The bill specifies that students graduating as members of a cohort include students from the cohort who graduate during the expected graduation year or during a previous reporting year. The bill also provides that students may count as graduating members of only one cohort and corrects an incorrect cross-reference.
What happened last week: Authored by Sen. David Long (R-Fort Wayne), the bill was referred to the Senate Rules and Legislative Procedure Committee. The committee report passed as amended and the bill was reassigned to Education and Career Development, where Sen. Long was removed as first author and Sen. Teresa Lubbers was added as first author. The committee report was adopted.
What’s next? The bill must be heard on second reading before the Jan. 29 deadline.

Issue: Ex-offender Reentry Into The Workforce (SB120)
 What it means to you: Provides employer immunity for hiring offenders. The bill provides immunity from criminal or civil liability for a person who employs an offender in a minimum-security release program for an act or omission of the offender.
What happened last week: Authored by Sen. Mike Young (R-Indianapolis) the bill was referred to the Senate Corrections, Criminal and Civil Matters Committee. The bill did not receive a committee hearing before the deadline on Jan. 24.
What’s next? We anticipate the author will introduce the bill again in 2009. However, language from the bill could be inserted into another bill that is considered germane.

Issue: Ex-offender Reentry Into The Workforce (SB125)
 What it means to you: Addresses reentry courts and community transition. The bill gives a certified reentry court the authority to establish alternate commencement dates for community transition programs and permits the court to discharge or release on probation or parole persons who have successfully completed a community transition program. The introduced version of this bill was prepared by the sentencing policy study committee.
What happened last week: Authored by Sen. Brent Waltz (R-Greenwood), the bill was referred to the Senate Judiciary Committee. The bill did not receive a committee hearing before the Jan. 24 deadline.
What’s next? We anticipate the author will introduce the bill again in 2009. However, language from the bill could be inserted into another bill that is considered germane.

Issue: Scholarship Granting Organization Tax Credit (SB248)
 What it means to you: Promotes school choice and provides an incentive for individuals and businesses to donate to approved, non-profit scholarship granting organizations that serve Hoosier students. These programs would provide scholarships to qualifying low-income families. Donors would receive a partial credit against their state tax liabilities based on their donations.
What happened last week: Authored by Sen. Jeff Drozda (R-Sheridan) the bill passed as amended out of the Senate Education and Career Development Committee along party lines, 6-4, with the Senate majority in favor of the bill. Sen. Luke Kenley (R-Noblesville) proposed the amendment, which removed funding language from the bill. Without passage, the bill would have to be reassigned to the Senate Appropriations Committee and would have died in a non-budget year. The bill will need to be revisited in 2009 during the budget session in order to reinsert an appropriation.
What’s next? The committee report was adopted. The bill will move to the Senate floor for second reading.

Issue: Elected School Boards (HB1021)
 What it means to you: Greater efficiency and consistency for school boards. The bill requires members of the governing body of a school corporation be elected and repeals statutes providing for the appointment of members.
What happened last week: Authored by State Rep. Tim Neese (R-Elkhart), the bill did not receive a committee hearing.
What’s next? Language from the bill could be inserted into another bill that is considered germane. We anticipate school board language will be most successful in SB2.

Issue: Ex-offender re-entry into the workforce (HB1229)
 What it means to you: The Fresh Start Income Tax Credit Bill establishes a state income tax credit for a taxpayer that employs an individual who, within the preceding four years, was either: (1) convicted of a felony; or (2) released from incarceration for conviction of a felony. The bill provides that the amount of the credit each taxable year is $500 per qualifying employee.
What happened last week: Originally authored by State Rep. Jon Elrod (R-Indianapolis), now authored by State Rep. John Day (D-Indianapolis) and co-authored by Elrod, the bill was assigned to the House Ways and Means Committee. The bill did not receive a committee hearing before the Jan. 24 deadline.
What’s next? We anticipate State Rep. Day will introduce this bill again in 2009. However, language from the bill could be inserted into another bill that is considered germane.

Issue: Appointment of State Superintendent of Public Instruction (HB1372)
 What it means to you: Addresses the selection of superintendent of public instruction. The bill provides for the state superintendent of public instruction to be appointed by the governor. The bill repeals a statute relating to the residency of candidates for state superintendent of public instruction and deletes a provision describing the term of office of the state superintendent of public instruction.
What happened last week: Authored by State Rep. Bob Behning (R-Indianapolis), the bill was referred to the House Elections and Apportionment Committee. The bill did not receive a committee hearing before the Jan. 24 deadline.
What’s next? We anticipate the author will introduce this bill again in 2009. However, language from the bill could be inserted into another bill that is considered germane.

Issue: Moving School Board Elections from the Primary to the General Election (HB1373)
 What it means to you: Greater public accountability with school boards. The bill requires that school board members selected by election must be elected.
What happened last week: Authored by State Rep. Bob Behning (R-Indianapolis) the bill was introduced on first reading and assigned to the House Elections and Apportionment Committee. However, the bill did not receive a committee hearing before the Jan. 24 committee report deadline.
What’s next? School board language will have a greater opportunity to receive a hearing before the House Elections and Apportionment Committee when the Senate version of the bill (SB2) comes over to the House.