2011 General Assembly Update…Feburary 8, 2011
Until interrupted by a harsh winter storm blowing through Indiana last week, the 2011 General Assembly was making progress in considering a number of important issues on IACED’s legislative agenda. There are 125 bills on IACED’s watch list this session, ranging from homelessness to small business development. Specifically, IACED is focusing on the following legislative priorities, as adopted by the board of directors at the September 2010 meeting.
- Microenterprise - IACED will champion legislation to relocate the Microenterprise Partnership Program and Fund from the Indiana Economic Development Corporation to a state agency focused on microenterprise as an asset-building strategy for Hoosier families, the Indiana Housing and Community Development Authority.
Andy Fraizer, Executive Director, recently testified in favor of House Bill (HB) 1192 before the Committee on Commerce, Small Business and Economic Development. Introduced and led by Rep. Bob Heaton and authored by Representatives Wood Burton, Clyde Kersey, and Peggy Welch, the legislation moves the statutory authorization for the Microenterprise Partnership Program and corresponding fund from the Indiana Economic Development Corporation (IEDC) to the Indiana Housing and Community Development Authority (IHCDA). The legislation passed the House of Representatives 89-0 on January 24, 2011. It now moves to the Senate for consideration.
- Affordable Housing Property Tax Status – IACED will champion legislation to clarify the charitable status of affordable housing development and cement property tax exemption for non-profit owned affordable housing.
Representative Milo Smith has introduced HB 1285 which clarifies existing state law providing that property is eligible for the property tax exemption if it is owned by an organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code and occupied and used for its Section 501(c)(3) purpose. The legislation is assigned to the Ways and Means Committee. IACED is working with Rep. Smith to get the bill scheduled for hearing.
- State Budget and Fiscal Matters – IACED will defend a state appropriation for Individual Development Accounts (IDA) and preserve the existence of the Neighborhood Assistance Program (NAP) and IDA tax credits.
The House Ways and Means Committee has been hearing from state agencies on their proposed budgets. You can link to information about the 2011-2013 proposed budget here. IDA funding is included in the proposed budget at $1 million for each year of the biennium; however, the source of funds recommended are dedicated funds as opposed to the historic $1 million general fund appropriation.
Representative Scott Reske and Senator Brandt Hershman have introduced legislation which sunsets the NAP tax credit. Rep. Reske introduced HB 1466 and Senator Hershman authored Senate bill (SB) 589. Rep. Reske and Sen. Hershman co-chaired an interim study committee, which reviewed the NAP program, and recommended its continuation (Read the interim study committee report here). SB 589 is scheduled for a hearing on Tuesday, February 8, 2011. IACED staff and members will be on hand to testify in support of the NAP program and encourage amendment of this legislation.
- Vacant and Abandoned Property – IACED will monitor and react to any proposed legislation dealing with tax sale procedures, vacant and abandoned properties, or redevelopment of the same types of property.
IACED is currently monitoring and providing input on several pieces of legislation dealing with vacant and abandoned property. Representative John Day and Representative Phil Hinkle authored HB 1066. The legislation requires a person who purchases property at a foreclosure sale to record the deed within 60 days.Outlined in the bill is a provision stating a mortgagee is personally liable for ensuring that the property complies with local ordinances or nuisance, unsafe building, and vacant and abandoned structures statutes, and provides that the mortgagee may be liable for additional civil penalties.
HB 1244 applies statewide the authority allowing the county auditor to remove real property from a tax sale if the county treasurer and the taxpayer agree to a mutually satisfactory arrangement for the payment of the delinquent taxes. This authority is currently only available in Lake County. The bill if enacted would keep property on the tax rolls and provide another means for Hoosiers to remain in their homes.
SB 517, reduces the tax sale redemption period for vacant and abandoned residential property to six months, and reduces the redemption period for vacant and abandoned nonresidential property to one month. The legislation provides immunity from civil liability to a person: (1) secures; (2) removes trash or debris from; or (3) mows, landscapes, or maintains; vacant or abandoned property.
HB 1293 is authored by Representative Phil Hinkle and permits the waiver of the filing deadline for a property tax exemption application of a nonprofit corporation if the failure to file on time resulted from a personnel change. The legislation allows a nonprofit corporation to amend an exemption application to include personal property or to correct a clerical error. HB 1293 states that exempt property does not lose its exemption during renovation.
Similar to HB 1066 the legislation requires that the mortgagee is responsible for ensuring that the property does not violate local ordinances or nuisance, unsafe building, and vacant and abandoned structures statutes. The legislation permits a homeowners association that has performed maintenance work on real estate in the association to file a homeowners association maintenance lien for the amount of work done, and specifies that a homeowners association maintenance lien has priority over any other lien. HB 1066 requires a sheriff to file a deed with the recorder not later than 30 days after the sheriff’s sale, and requires the recorder to record the deed not later than 30 days after the sheriff files. Beginning July 1, 2012, a county legislative body would have the ability to impose a $5,000 civil penalty on a mortgagee that fails to record a deed within six months of acquiring the deed.
- Indiana Foreclosure Prevention Network (IFPN) and Settlement Conferences – IACED will monitor and react to legislation introduced by others which provides resources for the IFPN or improvements to the settlement conferences including stronger relationships between Indiana courts and housing counselors.
Senator Karen Tallian has authored SB 582. This bill amends the definition of “mortgage” in the statute concerning foreclosure prevention agreements. Representative Woody Burton has introduced a similar bill related to this redefinition in HB 1181.
Senator Tallian’s SB 582 provides that in a residential foreclosure action, any: (1) court costs associated with a settlement conference; or (2) attorney’s fees incurred by a creditor in connection with a settlement conference; may not be charged to or collected from the debtor. It provides that in a residential foreclosure action filed after June 30, 2011: (1) a settlement conference between the debtor and creditor must be scheduled by the court upon the creditor’s filing of the complaint; and (2) the action may not proceed until the settlement conference has taken place, subject to the debtor’s right to opt out of the settlement conference.
SB 582 makes provisions for the debtor to continue to occupy the mortgaged dwelling and the court may issue an order requiring the debtor to continue to make monthly payments. In a residential foreclosure action, it provides that a court may impose sanctions, including a civil penalty, on any party for a violation of: (1) the statute concerning foreclosure prevention agreements for residential mortgages; or (2) a court order or rule relating to an action subject to the statute. It provides that any civil penalties collected shall be deposited in the Home Ownership Education Account with the Indiana Housing and Community Development Authority to support programs to facilitate settlement conferences in residential foreclosure actions.
- Public Transit – IACED will educate legislators and participate in collaborations to raise the profile of mass transit issues. Mass transit is an essential component of building local communities and economies throughout Indiana as it opens up employment opportunities to low income Hoosiers and serve to revitalize commercial corridors. With mass transit being traditionally seen as an ‘urban’ issue, IACED and its partners are seeking to educate on the value of public transportation in rural communities as well as urban.
IACED and partners at the Indiana Citizens Alliance for Transit, met with legislative fiscal leaders prior to the start of the 2011 General Assembly to discuss the importance of transit. IACED continues to monitor issues dealing with public transit. One of these bills is Representative Nancy Dembowski’s HB 1354. This legislation requires the Indiana Department of Transportation to implement complete street design guidelines. Complete Streets is the idea that streets are designed for all modes of transportation and all abilities.
A last piece of legislation on IACED’s watch list is Senator Hershman’s is SB 501 dealing with low-profit limited liability companies (L3C). The L3C is a hybrid legal structure combining the financial advantages of the limited liability company, an LLC, with the social advantages of a non-profit entity. An L3C runs like a regular business and is profitable. However, unlike a for-profit business, the primary focus of the L3C is not to make money, but to achieve socially beneficial aims, with profit making as a secondary goal. The L3C occupies a niche between the private and charitable sectors. For those who attended the 2010 Statewide Conference on Housing and Community Economic Development, you will recall Amy Pearl with Springboard Innovation spoke to the value of this incorporation model.
If you have any questions about this legislation or other issues before the Indiana General Assembly, do not hesitate to contact Andy Fraizer at 317-920-2300 ext. 11 or afraizer@iaced.org.
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