IACED members are again encouraged to contact members of the committee and ask them to appropriate no less than $1 million a year for the state’s individual development account program. Call 800-382-9842 or email NOW!

Members of the Ways and Means Committee are as follows:

• Tim Brown (CHAIR) (Counties: Boone, Montgomery, Tippecanoe)
• Suzanne Crouch (VCHAIR) (Counties: Vanderburgh, Warrick)
• Greg Porter (RMM) (County: Marion)
• Jim Baird (Counties: Clay, Morgan, Owen, Parke, Putnam)
• Steve Braun (Counties: Boone, Hamilton)
• Robert Cherry (Counties: Hancock, Madison)
• Tom Dermody (Counties: LaPorte, Starke)
• Terry A. Goodin (Counties: Clark, Jefferson, Scott)
• Todd Huston (County: Hamilton)
• Mike Karickhoff (Counties: Grant, Howard)
• Clyde Kersey (County: Vigo)
• Sheila Klinker (County: Tippecanoe)
• Daniel Leonard (Counties: Allen, Huntington, Wells)
• Sharon Negele (Counties: Benton, Fountain, Jasper, Montgomery, Newton, Tippecanoe, Warren, White)
• David L. Niezgodski (County: St. Joseph)
• Phyllis J. Pond (County: Allen)
• Cherrish Pryor (County: Marion)
• Mara Candelaria Reardon (County: Lake)
• Hal Slager(County: Lake)
• Steven R. Stemler (County: Clark)
• Jeffrey Thompson (Counties: Boone, Hendricks)
• Randy Truitt(County: Tippecanoe)
• P. Eric Turner (Counties: Delaware, Grant, Hamilton, Howard, Madison, Tipton)
• Matt Ubelhor (Counties: Daviess, Greene, Martin, Monroe)

If your local representative serves on the committee, call your legislator. If your local legislator is not on the Ways and Means Committee, call the committee member nearest your community.

If you do not know your legislator, look up your representative at http://district.iga.in.gov/DistrictLookup/.  You can email your legislator here.

House Republicans said the budget restores the state’s commitment to schools as the economy recovers. Increased is tuition support and funding for full day kindergarten. The state would spend an additional $250 million per year on roads and bridges. The budget adds $40 million per year in new funding for the Department of Child Services. Download Representative Tim Brown’s presentation on the budget amendment here.  The House Republican Budget does not fund Governor Mike Pence’s proposed 10-percent income tax cut.

On February 13, 2013 Representatives Robin Shackleford and Cherrish Pryor introduced an amendment to House Bill 1132 in the Indiana House of Representatives Financial Institutions Committee to accomplish this priority. The critical language reads as follows:

(g) The commission shall, by resolution, establish uses for the housing trust fund. However, the uses must be limited to:

…

(5) funding other programs considered appropriate to meet the affordable housing and community development needs of lower income families (as defined in IC 5-20-4-5) and very low income families (as defined in IC 5-20-4-6), including lower income elderly individuals, individuals with disabilities, and homeless individuals.

The language was passed unanimously by the committee. Thank you to Representative Woody Burton for allowing the amendment to his legislation.

IDAs are matched savings accounts that enable low- to moderate-income individuals to save money and build financial assets for the statutorily authorized purposes of purchasing a home, rehabilitating a home, paying for postsecondary education expenses, or starting a small business. If enacted by this General Assembly, Senate Bill 185 will add the purchase of automobiles, under certain parameters, to the list of eligible uses. The IDA program is codified at IC 4-4-28.

The Indiana Housing and Community Development Authority (IHCDA) administers the IDA program with support from 32 sponsoring nonprofit community development corporations (CDCs). Local CDCs provide outreach, enroll participants and insure program compliance, coordinate financial literacy education, and offer case management. IDA funds are placed in escrow with 42 partnering financial institutions.

In the last several budget cycles, marked by austerity and deferred investment, this General Assembly has invested a minimum of $1 million in the Indiana IDA program to match the savings of current enrollees and provide a limited number of additional accounts each year. This appropriation is used to leverage additional funds from the federal Assets for Independence Program and gives Indiana credit toward its Temporary Assistance for Needy Families (TANF) maintenance of effort requirement. In order to receive an appropriation of federal funds, IDAs must receive non-federal dollars for the match.

The IHCDA is authorized to establish 800 new IDA accounts each fiscal year. Savers are matched $3 for each $1 of earned income deposited, with up to $400 matched annually, each year for four consecutive years. However, state statute allows accounts to be matched up to 6:1, if additional funds are available. The best practice in IDA program management is that IHCDA commit all 4 years of match upon the opening of the account. The federal funding agency strongly recommends this practice. Presently, IHCDA has 945 accounts open and within the 4-year eligibility window for savings and match. Fully investing in the program would necessitate an appropriation increase.

The quality of the state of Indiana’s IDA program is reviewed by the Corporation for Enterprise Development (CFED) every two years through its Assets and Opportunities Scorecard, which compiles policy information to rate the strength of state policies that build assets for low and moderate income individuals. Based on direct work with IDA providers, government officials, and savers, CFED believes a strong state IDA policy has the following characteristics:

• Sufficient funding
• State agency stewardship
• State funding for all types of program costs
• Stable state funding

Indiana has a strong IDA policy compared to other states, satisfying 3 out of the 4 characteristics. The area where Indiana falls far short is in sufficient funding. Indiana commits only $0.57 for each low-income resident. CFED recommends $200 per low-income resident to IDA programs.

Increasing investment in IDAs generates both individual asset building and returns to the economy. CFED estimates each dollar invested in IDAs yield a return of approximately five dollars to the national economy in the form of new businesses, additional earnings, new and rehabilitated homes, reduced welfare expenditures, and human capital associated with greater educational attainment.

Research summarized by the Center for Social Development (CSD) demonstrates many beneficial aspects of holding financial assets. These benefits include:
• promoting household economic stability and educational attainment
• decreasing the risk of intergenerational poverty transmission
• increasing health and satisfaction among adults, and
• increasing local civic involvement.

IACED members believe in asset-building strategies such as IDAs to build long-term wealth and lift Hoosiers out of poverty. Please provide a minimum of $1 million a year for the state IDA program and consider an investment of $2,000,000 to provide additional savings for Hoosiers.

Thank You, Andy Fraizer

February 13, 2013
Indiana General Assembly
House of Representatives
Ways and Means Committee

If your local representative serves on the committee, call your legislator. If your local legislator is not on the Ways and Means Committee, call the committee member nearest your community.

As IACED reported in this blog post from January, Governor Pence’s proposed budget reduces funding to $500,000 year for the IDA program. It is important Ways and Means Committee members hear about the importance of the IDA program to building wealth through homeownership, education, and small business development.

Members of the Ways and Means Committee are as follows:

• Tim Brown (CHAIR) (Counties: Boone, Montgomery, Tippecanoe)
• Suzanne Crouch (VCHAIR) (Counties: Vanderburgh, Warrick)
• Greg Porter (RMM) (County: Marion)
• Jim Baird (Counties: Clay, Morgan, Owen, Parke, Putnam)
• Steve Braun (Counties: Boone, Hamilton)
• Robert Cherry (Counties: Hancock, Madison)
• Tom Dermody (Counties: LaPorte, Starke)
• Terry A. Goodin (Counties: Clark, Jefferson, Scott)
• Todd Huston (County: Hamilton)
• Mike Karickhoff (Counties: Grant, Howard)
• Clyde Kersey (County: Vigo)
• Sheila Klinker (County: Tippecanoe)
• Daniel Leonard (Counties: Allen, Huntington, Wells)
• Sharon Negele (Counties: Benton, Fountain, Jasper, Montgomery, Newton, Tippecanoe, Warren, White)
• David L. Niezgodski (County: St. Joseph)
• Phyllis J. Pond (County: Allen)
• Cherrish Pryor (County: Marion)
• Mara Candelaria Reardon (County: Lake)
• Hal Slager(County: Lake)
• Steven R. Stemler (County: Clark)
• Jeffrey Thompson (Counties: Boone, Hendricks)
• Randy Truitt(County: Tippecanoe)
• P. Eric Turner (Counties: Delaware, Grant, Hamilton, Howard, Madison, Tipton)
• Matt Ubelhor (Counties: Daviess, Greene, Martin, Monroe)

While you are reaching out to Ways and Means Committee members, please mention two other issues.

First, ask the representative to support House Bill (HB) 1011, the public mass transportation legislation. Your message to legislators is “I live in your district and I want you to support HB1011. Please let citizens vote on the funding of transit in Central Indiana.”

Second, please express support of House Bill 1318. Ask committee members to encourage Chairman Tim Brown to hold a hearing on this legislation authored by Representative Ed Clere. Read this IACED blog post for additional information on this legislation.

If you do not know your legislator, look up your representative at http://district.iga.in.gov/DistrictLookup/

You can email your legislator here.

The challenge of property abandonment is common in most Indiana communities. Abandoned property represents a real estate market failure which blights communities and devalues property and the lives Indiana citizens work day-in and day-out to build. While the scope of the problem varies by jurisdiction a similar set of strategies can be applied to address the challenge. HB 1317 represents a comprehensive set of solutions.

The bill is authored by Representative Ed Clere.

HB 1317 has been scheduled for a committee hearing at 10:30 a.m. on  February 12, 2013 in room 156-A of the Indiana State House. Call 800-382-9842 or  email  NOW!

Please encourage these representatives to vote the bill out of committee and keep it moving for the 2013 Indiana General Assembly session.

• Kevin Mahan (CHAIR) (Counties: Blackford, Delaware, Grant, and Wells)
• Tim Wesco (VCHAIR) (Counties: Elkhart and St. Joseph)
• Mara Candelaria Reardon (RMM) (County: Lake)
• John Bartlett (County: Marion)
• Christina Hale (County: Marion)
• Tim Harman (Counties: Fulton and Marshall)
• Kathy Heuer (Counties: Allen and Whitley)
• Karlee Macer (County: Marion)
• Wendy McNamara (Counties: Posey and Vanderburgh)
• Rick Niemeyer (Counties: Lake and Porter)
• David Ober (Counties: Allen, Elkhart, LaGrange, Noble, and Whitley)
• Randy Truitt (County: Tippecanoe)
• David Wolkins (Counties: Grant, Kosciusko, Miami, and Wabash)

If you do not know your legislator, look up your representative at http://district.iga.in.gov/DistrictLookup/

You can email your legislator here.

HB1317 authorizes a county, consolidated city, or second class city to which the unsafe building law applies to establish a municipal corporation or nonprofit known as a land bank. The bill provides that the purpose of a land bank is to manage and improve the marketability of distressed real property in the territory of the county or city that established the land bank.

The bill provides that the calculation of the amount required to redeem real property sold at a tax sale includes:

1. 1.5% per month on the purchaser’s investment in the property, if the property is not certified to be vacant or abandoned; or
2. 5% per month on the purchaser’s investment in the property, if the property is certified to be vacant or abandoned.

This bill provides that when a tax deed is issued to a land bank after a county executive has assigned the county executive’s certificate of sale to the land bank, the taxes, special assessments, and costs on the real property are removed from the tax duplicate in the same manner that taxes are removed by certificate of error.

The bill provides that real property to which a county executive has acquired title through the tax sale process may be transferred at no cost to a land bank.

This bill authorizes a land bank to maintain an action to quiet title to more than one parcel of real property for which the land bank has a claim in a single complaint.

This bill permits an enforcement authority for the unsafe building law to file a praecipe for a sheriff’s sale following a foreclosure action if:

1. the creditor does not file a praecipe within 90 days; and
2. the enforcement authority has issued an abatement order with respect to the property.

The bill allows an enforcement authority to petition a court to determine that a property is abandoned before a creditor has filed a foreclosure action. It requires the enforcement authority to serve a copy of its petition on the debtor, creditor, and any other appropriate party. The bill provides that, if a court finds that the property is abandoned, the creditor shall file a foreclosure action within 90 days.

This bill transfers the administration of the Historic Rehabilitation Tax Credit (HRTC) from the Division of Historic Preservation and Archeology of the Department of Natural Resources (DHPA) to the Office of Community and Rural Affairs (OCRA). With the state’s bicentennial fast approaching in 2016, HB 1318 is an important redevelopment tool for communities as the state celebrates its history but also look forward to a future where all communities around the state can once again thrive. According to a 2007 study done by Policy Analytics, there is a nearly 3 to 1 return on the state’s investment in the historic tax credit program.

The bill provides that the credit applies to the preservation or rehabilitation of historic properties that have been vacant for at least one year. It establishes four new methodologies for determining the amount of the tax credit. The bill changes numerous spending floors and caps relating to the tax credit. It phases in increases to the annual statewide cap on the tax credit over 4 years from $450,000 until the cap is $10 million. The bill voids a rule providing that the maximum amount of tax credits for a particular project is $100,000. It also prohibits the OCRA from reallocating available tax credits from year to year.

Rep. Clere and representatives of Indiana Landmarks, an IACED member, have met with Chairman Brown regarding this bill. Chairman Brown represents Boone, Montgomery and Tippecanoe Counties. Contacts from his constituents in these counties is very important in expressing support for HB 1318. Rep. Brown can be contacted via email at h41@in.gov. Please reference the bill number in the subject line of the email.

Legislation similar to this bill passed the House of Representatives last year 96-0.

We believe the changes made this year and those outlined below make this legislation an even stronger economic development tool for communities around the state. Chairman Brown represents Boone, Montgomery and Tippecanoe counties. Contacts from IACED members and who are a constituent are especially important. Rep. Brown can be contacted via email at h41@in.gov. Please reference the bill number in the subject line of the email.

This blog post summarizes where IACED public policy priorities are in the legislative process and legislation the policy team is watching and commenting. Read the policy priorities in detail here. From earlier posts, members know they include:

• new tools to deal with abandoned property and property tax foreclosure reform;
• defense of key programs – Neighborhood Assistance Program (NAP), Low Income Housing Tax Credit, Individual Development Accounts (IDA), and preserving a $50 foreclosure filing fee for housing counseling;
• additional flexibility in the Indianapolis Housing Trust Fund; and
• support for local decision making around public transit.

Representative Ed Clere has introduced House Bill 1317 which is the most comprehensive vehicle for the reforms sought by IACED to deal with abandoned property. The legislation is assigned to the Local Government Committee and awaits a hearing. Rep. Clere is working on an omnibus amendment based on feedback he has received from various interests.

To date, no legislation impacts the NAP tax credit or Section 42 Low Income Housing Tax Credit. House Bill 1308, authored by Representative Woody Burton, reinstates the $50 mortgage foreclosure filing fee which lapsed as of December 31, 2012. This legislation is assigned to the House Judiciary Committee and is expected to be on the committee agenda for February 4, 2013.

As IACED summarized in this blog post, Governor Pence’s proposed budget cuts the funding for the Individual Development Account program from $1 million for each year of the biennial budget to $500,000. Be on the lookout for a call to action on this issue if funding is not restored via discussions in the Indiana House of Representatives Ways and Means Committee. On the topic of Individual Development Accounts, IACED testified in support of Senator Dennis Kruse’s legislation, Senate Bill 185, to make purchase of an automobile an eligible use of the IDA funds. The legislation has passed the Indiana Senate by a vote of 48-0 and awaits consideration in the Indiana House of Representatives. Representative Randy Truitt is the House sponsor of the legislation.

The IACED public policy team is working with several lawmakers to find a legislative vehicle for amendment which would allow the Indianapolis Housing Trust Fund to make investments in community development programs in the same way that the Indiana Housing and Community Development Trust fund allows.

IACED testified in favor of House Bill 1011 allowing local decision making in the Central Indiana region on the question of public transportation. IACED’s testimony is available here. The legislation passed the Roads and Transportation Committee and has been recommitted to the House of Representatives Ways and Means Committee. Watch for an action alert on this legislation.

IACED has also voted in support of legislation, House Bill 1414 which would create an Indiana New Markets Job Growth Tax Credit. Read IACED’s testimony here. This legislation passed unanimously out of the Indiana House of Representatives Small Business and Economic Development committee.

IACED has been involved in numerous discussions with the Indiana Financial Services Association and members of the Indiana House Financial Institutions Committee regarding proposed increases in fees for consumer credit sales other than revolving charge accounts, both supervised and unsupervised loans contained in House Bill 1083 and Senate Bill 238. IACED researched these consumer installment loans and originating companies which cause concerns. The proposal makes larger loans more expensive due to increases to the permissible annual percentage rate (APR) and other charges. The proposal increases the origination fees that can be charged in addition to the finance charges, and which seemingly can be charged repeatedly with each refinancing. Research shows the consumer finance industry has extremely high rates of refinancing, indicating this category of loans are difficult for consumers to repay. Each refinancing increases costs and diminishes consumers’ ability to stay on a path of economic opportunity.

IACED is watching more than 100 bills in addition to the issues identified thus far. Below are the most relevant bills to the diversity of IACED members. You can check the status of any of this legislation on the Indiana General Assembly web site – http://www.in.gov/legislative. Continue monitoring the IACED blog for updates on priorities and the following issues as they become relevant.

House Bills

HB 1002 – Indiana career council
HB 1016 – problem solving courts
HB 1023 – partial unemployment benefit
HB 1036 – guarantee energy savings contracts
HB 1060 – work share unemployment benefit
HB 1079 – Mortgages and vendor’s liens on real property
HB 1081 – Financial institutions and consumer credit
HB 1083 – Charges for consumer loans and credit sales
HB 1123 – Commission on improving the status of children
HB 1155 – Mortgage recording fee
HB 1183 – Abandoned structure liens
HB 1274 – Service of warrants for unsafe buildings
HB 1313 – Regulation of residential leases
HB 1318 – Historic preservation tax credits
HB 1319 – Health benefit exchange provisions
HB 1338 – Charter school administration
HB 1359 – Age-restricted housing

Senate Bills

SB 052 – Evaluation of agencies and programs
SB 152 – Property tax assessments
SB 162 – Economic development incentives and reports
SB 167 – Recording of documents
SB 197 – Reentry court sentence modification
SB 201 – Homestead assessed value growth cap
SB 236 – Mortgages and liens on real property
SB 237 – Rental purchase agreements
SB 238 – Charges for consumer loans and credit sales
SB 239 – Tax credit for quality child care
SB 316 – Economic development incentive accountability
SB 318 – Home rule powers of certain units
SB 325 – Redevelopment commissions and authorities
SB 326 – Taxation of homesteads
SB 328 – Nonprofit debt management companies
SB 346 – Redevelopment commissions
SB 399 – LOIT for early childhood education
SB 405 – Public transportation corporation funding
SB 411 – Health standards for farmers’ markets
SB 418 – Financial literacy instruction
SB 423 – Charter school approval process
SB 433 – Abandoned property
SB 444 – Countywide public transit
SB 521 – Indiana New Markets Tax Credit
SB 556 – SNAP and TANF

IACED’s policy work at the Indiana General Assembly is done in partnership with other organizations. The policy team is aided by the work of the Indiana Institute for Working Families, Indiana Association of United Ways, Indiana Coalition for Human Services, Habitat for Humanity of Indiana, Indiana Community Action Association, Indiana Area Agencies on Aging, and the many members who regularly visit with their members of the Indiana General Assembly and report insights to Executive Director Andy Fraizer. If you have questions about any of these issues or communicate with your legislators, please inform Andy at his email afraizer@iaced.org

I rise with concerns about several provisions of this legislation. IACED’s members are concerned about the creation of a new fee for payment on rental purchase agreements via a telephone. This legislation allows a phone pay fee not to exceed $5 per transaction. IACED is opposed to the inclusion of this fee as an unnecessary addition to service the accounts of customers who are likely utilizing the rent-to-own structure because of financial hardship and poor credit. The costs of offering payments by telephone are the same as allowing payment at the place of business. IACED believes accepting payment on a rental purchase agreement is a cost of doing business included in the unregulated cash price and total cost of ownership for the merchandise. The convenience of customer paying via telephone, as opposed to a store front walk-in, is a benefit to the rent to own business not an additional hindrance.

If the Committee sees fit to move forward with a fee on consumers for conveniencing rent to own operators, I urge you to lower the maximum amount of the fee to $1.00 or as an alternative by allowing the Indiana Department of Financial Institutions to set the fee based on their findings of reasonable costs. In addition, I urge you to include a provision similar to the Indiana Uniform Consumer Credit Code that places pricing limitations on the telephone fee. With the ability to charge this fee should come a requirement for a posted disclosure in the place of business that there is a fee associated with telephone payment and outline the no-fee payment alternatives. Lastly, I hope the Committee will consider a prohibition against a customer being assessed a late fee under IC 24-7-5-5 when paying by telephone.

Section 6 of the legislation allows the sale of additional services in connection with a rental purchase agreement. I fear this provision allows rent to own operators to engage in the selling of club memberships and other bundled products which offer little value to consumers. IACED is aware of deceptive practice claims by States Attorneys General, including California, from the provision of these types of services. IACED urges the Committee to proceed with caution in allowing the sale of these kinds of products while entering into a rent to own agreement. IACED believes these types of transactions are not permitted under current law and urges the committee to maintain the status quo.

Thank you for your consideration of IACED’s concerns with SB 237.

Prosperity in the 21st Century will be based on creating and maintaining a sustainable standard of living and a high quality of life for all Hoosiers. To meet this challenge, comprehensive strategies are required. These strategies recognize the investment potential of the three sectors – private, public, and social sector. Comprehensiveness also recognizes the interdependencies of family success, community prosperity, and economic competitiveness. Collaborative work across sectors creates conditions for economic growth and employment generation. Embracing economic, social, and environmental responsibility, this comprehensive approach focuses on the most critical building blocks for success—the community and the region. It emphasizes community-wide and regional collaboration for building prosperous and livable places.

Research has demonstrated that public transportation has a number of positive economic impacts in communities and regions. First, it improves mobility and access to personal, neighborhood, and community level goods and services. It reduces travel time by eliminating the congestion caused by individual travel. The decrease in travel time leads to increased business productivity, because a business is only as productive as its personnel. People can be more efficient and earn more when given access to transportation that saves time. With an increase in business and personal income there is more revenue for government, which is produced by sales, property and income tax

The time has come for Indiana to think differently about the role of economic development in creating vibrant communities where Hoosiers want to live, work, play, and eventually retire. This public transportation legislation invests in existing Hoosier assets and people. It has the potential for revitalizing neighborhood nodes and downtowns while supporting healthier people. It creates accessible transit options for overall community mobility, leading to safer environments and supporting access to local businesses, health care, education options, and individual economic opportunity.

IACED is excited to partner with the Indiana Citizens Alliance for Transit (ICAT) and other voices to advance public transportation in Indiana. IACED supports this legislation authorizing voter referenda to enact local funding for public transportation in Central Indiana.

Thank you, Andy Fraizer

The analysis identified twenty-three that used substantially all of their funds towards housing uses identified in the settlement filing. The Enterprise report finds that many of the states with the largest share of direct settlement dollars, a function of the density of foreclosure victims, have directed either their settlement share to state general funds or left the final use undetermined. Among the states that did allocate their share of funds to housing related uses, most set aside funds for homeowner legal assistance and housing counseling programs.

Indiana is listed as using “Some” (25% – 50%) of the Mortgage Settlement Funds on strategies identified in the documents. IACED members will recall in the final days of the 2012 Indiana General Assembly session, IACED’s policy team was involved with HB 1141, the vehicle by which the settlement funds were allocated. The Indiana Attorney General made available $28.8 million of the settlement money to the General Assembly to fund programs. The General Assembly chose to assist low-income Hoosiers in financial difficulty to pay their utility bills so they are not disconnected from heat or electric service. Eligible homeowners would be those who already qualify for the federal Low Income Home Energy Assistance Program, or LIHEAP. Under HB 1141, a new trust fund created out of the multistate settlement dollars will be used to pay for a state-level home energy assistance program. The amount of energy assistance the State will make available for low-income homeowners transferred out of the settlement fund will be equal to the amount of tax revenue generated from sales tax that LIHEAP recipients pay on their energy bills.