IAA Continues Successful Legislative Action
Throughout the years the industry has had numerous wins at the Statehouse and are a direct result of IAA’s Government Affairs efforts. Below are several highlights of IAA’s legislative accomplishments.
- Successfully advocating that multifamily properties fall under the 2% property tax cap, as opposed to 3%;
- Pushed for a change to the definition of homestead so the 2% property tax cap applies to an entire property as opposed to only the footprint;
- Limited the annual registration fee municipalities can collect to $5 per property;
- Defeated an attempt to institute a fee for police runs;
- Required municipalities with rental inspection programs to recognize an opt-out provision for certain rental unit communities that successfully pass other 3rd party inspections;
- Going forward sewer utilities must charge multifamily properties based on water consumption opposed to a flat per unit fee if the utility assesses fees for another class of property (i.e. commercial) based on consumption which was in response to utilities assessing per unit sewer fees; and
- Amended legislation seeking to put all properties where methamphetamine site is fount on a statewide database for an extended period of time to allow the property the opportunity to have the site adequately cleaned.
PDF of 2018 State Legislative Wrap-Up
Members of the 2017 General Assembly concluded their work in April after spending roughly four months addressing important issues for the state. In total, there were 1,245 bills filed by state legislators and of those just 271 bills successfully navigated the legislative process. Legislation approved by legislators then proceeded to Governor Eric Holcomb’s desk for further consideration. In the end, the Governor only exercised his veto power on one bill, House Bill 1523 which would have allowed government agencies to charge a maximum hourly fee for a records search that exceeded two hours. Below are highlights of legislation of interest for the multifamily industry. IAA’s Government Affairs team was on-hand throughout session, advocating on behalf of membership and educating legislators on the potential impact legislation could have on the industry. Thank you to members who took the time to help with the IAA’s legislative efforts this year.
PDF of 2017 IAA Legislative Wrap-Up
Approved Legislation of Interest
SB 558: Leases and Sales of Real Property (Sen. Travis Holdman R-Markle, Rep. Sean Eberhart R-Shelbyville)
Viewed as a key priority for IAA this session, the language addresses four main issues listed below. IAA appreciates the work and support of the legislature as this bill contained several complicated issues. Language contained in the bill will help push the industry forward and provide a protection for victims who live in multifamily properties. Included in the bill are the following provisions:
- Inclusionary zoning: Prohibits local governments from adopting ordinances which require developers to set aside a percentage of new units for affordable housing which is capped in terms of the amount of rent that can be charged and also prohibits requiring a developer to make an lieu of payment toward an affordable housing fund. (Retroactive effective date of January 1, 2017)
- Occupancy standard: Establishes a reasonable statewide occupancy policy of two persons per bedroom, increasing if there is an infant less than one-year of age or another area that could reasonably be used as a sleeping area such as a den, library, finished basement, or loft that meets state and local codes. The language also says an owner cannot be required to consider a kitchen, dining room, living room, bathroom, hallway, or closet as a sleeping area. The language should help combat fair housing advocates that file complaints urging the use of local codes as occupancy guidance which can lead to serious health and safety concerns. (Effective July 1, 2017)
- Victim exception to police run fees: Establishes a statewide victim exception providing that victims of crime or abuse or those calling on their behalf cannot be penalized for contacting the police. (Effective July 1, 2017)
- Police run fees assessed toward residents: Continues to allow local governments to adopt police fees, fines or penalties for contacting the police but requires the amount charged not to exceed $250 and be assessed against the resident as opposed to the property owner. (Effective July 1, 2017)
Governor Eric Holcomb has signed the legislation into law and members should reference the individual effective dates listed above for each section.
View full legislation
SB 386: Property Taxation (Sen. Rick Niemeyer R-Lowell, Rep. Hal Slager R-Scherrerville)
The legislation contains various provisions regarding property taxes. IAA worked extensively on this legislation to ensure the industry would not be harmed by the language proposed by the Indiana Board of Tax Review (IBTR). Initially the language sought to consolidate the existing eight Correction of Error (COE) categories into four which then moved the existing three-year window to 45-days. IAA was successful in resetting the three-year window for COEs. Additionally there was language which would have explicitly allowed local board the ability to review exemptions which was very troubling given the amount of time and resources that must be expended during such reviews which could happen whenever the board requested such information. IAA was also successful in removing this language from the legislation. COE language is effective July 1, 2017.
View full legislation
SB 312: Use of Criminal Information in Hiring (Sen. Phil Boots R-Crawfordsville, Rep. Dan Leonard R-Huntington)
The bill prohibits local units of government from adopting what is commonly referred to as “ban the box” ordinances seeking to prohibit employers from obtaining or using criminal history information during the hiring process. IAA supported the legislation to prevent a potential patchwork of rules and recognize the importance of having continued flexibility in hiring practices as many on-site employees have access into people’s homes as well as sensitive information. (Effective July 1, 2017)
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HB 1441: Pest and Vector Control (Rep. Greg Porter D-Indianapolis, Sen. Vaneta Becker R-Evansville)
The bill initially sought to provide the Marion County Health and Hospital Corporation and the Indiana State Department of Health the ability to regulate pest and vector which would dramatically increase their regulatory powers. Targeting bed bugs, IAA was very concerned about this legislation and was successful in its effort to strip the bill and request the issue be sent to an interim study committee. IAA will continue to be part of future conversations surrounding bed bugs and any future attempts to create regulations. (Effective upon passage)
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SB 293: Animals (Sen. Jean Leising R-Ogden, Sen. Don Lehe R-Brookston)
The legislation urges the Legislative Council to assign the issue of service and emotional support animals to an interim study committee. Initially the bill only addressed service animals but upon IAA’s request the bill was amended to also include emotional support animals. IAA regularly hears concerns from members who believe there is widespread abuse of emotional support animals within the rental housing industry. IAA worked to educate a variety of legislators on the issue and plans to try to navigate federal regulations to find a way to address this during a future legislative session. (Effective upon passage)
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HB 1489: Clark County Taxes (Rep. Tim Brown R-Crawfordsville, Sen. Jim Smith R-Charlestown)
Originally focusing on allowing Clark County to increase the county’s property tax levy in 2018, the bill was amended during the final days of session to include language urging the Legislative Council to assign two issues of interest to be studied during the interim. The topics include:
- Uniform property tax assessment of nonprofit entities. This is a result of legislation which sought to provide a uniform property tax exemption for certain affordable housing properties. IAA will be watching this study carefully and participating as necessary.
- Tax Increment Financing (TIF) and the process necessary to establish a district, the process by which a redevelopment commission may retain or release incremental assessed revenue in a district and termination of a district once it has been established. IAA recognizes many members have utilized TIF in multifamily projects and will be carefully monitoring these hearings.
The study language is effective upon passage.
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SB 1450: Property Tax Matters (Rep. Dan Leonard R-Huntington, Sen. Ryan Mishler R-Bremen)
The bill contains various provisions related to property tax matters but of particular interest is language impacting Section 42 properties. The language clarifies a local assessor’s inaccurate method of assessment for a multifamily property offering Medicaid assisted living services to clearly state their assessment is equal to the total true tax value that results in a gross annual tax liability equal to 5% of the total gross rent received. The language also extends the timeframe that a Section 42 property is considered a low-income rental property by including the time period during which the property is subject to an extended low-income housing commitment under Section 41(h)(6)(B) of the Internal Revenue Code. (Sections of interest are effective July 1, 2017)
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HB 1519: Infrastructure Development Zone Utility Service (Rep. Heath VanNatter R-Kokomo, Sen. Ed Charbonneau R-Valparaiso)
This bill could potentially impact future development projects if the public utility petitions the Indiana Utility Regulatory Commission to extend utility service to an infrastructure development zone. If the petition is approved it would allow the utility to include a surcharge payable by customers in the area of the extension. It is not uncommon for municipalities to require a developer to pay for the extension of services for a project and this could help ease this cost burden if a public utility is willing to agree to the provisions in this bill. Instead of a developer having to provide the upfront costs, the legislation allows for ratepayers to be assessed a surcharge on future bills to recapture the utility’s expense for extending services. The legislation was requested by Indiana Michigan Water who has noted they could be willing to participate in such an option. (Effective July 1, 2017)
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HB 1001: Biennial Budget (Rep. Tim Brown R-Crawfordsville, Sen. Luke Kenley R-Noblesville)
There are several items of interest for the industry within this document and include:
- Grants for Veterans’ Services: Included enabling language for the Indiana Department of Veterans’ Affairs the program to administer grants that focus on entities providing services to veterans, which could include up to 9-months of rental assistance. (Effective July 1, 2017)
- Annexation: Seemingly prohibits the Bloomington involuntary annexation proposal until July 1, 2022. (Retroactive effective date of April 30, 2017)
- Nursing Home Moratorium: Current moratorium was extended by one year and will expire on June 30, 2019. (Effective July 1, 2017)
- Business Promotion & Innovation: Appropriated a total of $30M ($15M per year) to the Indiana Economic Development Corporation which can be used to promote business investment and encourage entrepreneurship. (Effective July 1, 2016)
View full language
SB 505: Recording Documents (Sen. Rod Bray R-Martinsville, Rep. Dennis Zent R-Angola)
While the legislation mainly focuses on increasing various fees charged at the local level, language was amended into the bill which allows Marion County to adopt an ordinance authorizing the county recorder to charge a fee of $10 for each document the recorder records to be deposited in the housing trust fund. After June 30, 2017 at least 40% of the money deposited in the housing trust fund shall be used for the following purposes: to assist existing owner occupants with repair, rehab, or reconstruction of their homes; to finance the acquisition, rehab, or new construction of homes for homebuyers; and to acquire, rehab, or construction of rental housing. (Effective July 1, 2017)
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Other Approved Legislation of Interest
SB 242: Indiana Housing First Program(Sen. Jim Merritt R-Indianapolis, Rep. Dave Frizzell R-Indianapolis)
SB 353: Real Property Improvement Contracts (Sen. Randy Head R-Logansport, Rep. Martin Carbaugh R-Ft. Wayne)
HB 1539:Financial Institutions and Consumer Credit (Rep. Woody Burton R-Whiteland, Sen. Travis Holdman R-Markle)
Tax and Funding Matters
HB 1002: Transportation Infrastructure Funding (Rep. Ed Soliday R-Valparaiso, Sen. Mike Crider R-Greenfield)
HB 1144: South Shore Rail Transit (Rep. Hal Slager R-Scherrerville, Sen. Rick Niemeyer R-Lowell)
HB 1129: Local Income and State Sales Tax Matters (Rep. Jeff Thompson R-Lizton, Sen. Brandt Hershman R-Buck Creek)
HB 1154: Unemployment Insurance (Rep. Dan Leonard R-Huntington, Sen. Phil Boots R-Crawfordsville)
Workforce and Economic Development
HB 1601: Certified Technology Parks (Rep. Todd Huston R-Fishers, Sen. Brandt Hershman R-Buck Creek)
SB 198: Career and Technical Education (Sen. Doug Eckerty R-Yorktown, Rep. Todd Young R-Fishers)
SB 253: Study of Voluntary Paid Family and Medical Leave (Sen. Karen Tallian R-Ogden Dunes, Rep. Dave Ober R-Albion)
SB 515: Entrepreneur and Enterprise Districts (Sen. Brandt Hershman R-Buck Creek, Rep. Sally Siegrist R-Lafayette)
SB 507: Economic Development (Sen. Randy Head R-Logansport, Rep. Jerry Torr R-Carmel)
HB 1211: Transborder Water Resources Authority (Rep. Steve Stemler D-Jeffersonville, Sen. Ed Charbonneau R-Vaparaiso)
HB 1344: Lead & Arsenic Soil Contamination in E. Chicago (Rep. Earl Harris D-East Chicago, Sen. Ed Charbonneau R-Valparaiso)
SB 309: Distributed Generation (Sen. Brandt Hershman R-Buck Creek, Rep. Dave Ober R-Albion)
SB 416: Infrastructure Assistance Fund (Sen. Ed Charbonneau R-Valparaiso, Rep. Dave Ober R-Albion)
SB 472: Requests to Locate Underground Utility Facilities (Sen. Mike Crider R-Greenfield, Rep. Dale DeVon R-Granger)
HB 1286: Regional Development Authorities (Rep. Steve Stemler R-Jeffersonville, Sen. Ron Grooms R-New Albany)
HB 1622: Record of county and municipality votes (Rep. Mike Speedy R-Indianapolis, Sen. Jack Sandlin R-Indianapolis)
SB 413: Opportunity to Correct Violation (Sen. Eric Koch R-Bedford, Rep. Matt Lehman R-Berne)
Legislation of Interest NOT Approved
HB 1052: Use of Eminent Domain by Regional Development Authority (Rep. Chris Judy R-Fort Wayne)
HB 1082: Redevelopment Commission Membership (Rep. Tony Cook R-Cicero)
HB 1099: Industrial Recovery Tax Credit (Rep. Jerry Torr R-Carmel)
HB 1124: Engineered Lumber (Rep. Tim Wesco R-Goshen)
HB 1125: Snow Removal Services Contracts (Wesco R-Goshen)
HB 1127: Nullification of EPA Regulations in Indiana (Rep. Chris Judy R-Fort Wayne)
HB 1133: Preemption of Local Bans on Short Term Rentals (Rep. Matt Lehman R-Berne, Sen. Randy Head R-Logansport)
HB 1183: Employee Paid Sick Leave (Rep. Linda Lawson R-Hammond)
HB 1226: Piping Materials in Public Works Projects (Rep. Heath VanNatter R-Kokomo)
HB 1247: Property Tax Replacement Fee (Rep. Mike Karickhoff R-Kokomo)
HB 1276: Product Liability Actions (Rep. Jerry Torr R-Carmel)
HB 1294: Tenant Eviction Upon Foreclosure (Rep. Cherrish Pryor D-Indianapolis)
HB 1307: Preemption of Certain Local Ordinances (Rep. Doug Gutwein R-Francesville)
HB 1348: Local Service Fees on Tax Exempt Property (Rep. Tom Saunders R-Lewisville)
HB 1371: Property Tax Assessment (Rep. Milo Smith R-Columbus)
HB 1375: Planning, Zoning, and Permitting Approval (Rep. Justin Moed D-Indianapolis)
HB 1408: Nonresidential On-Site Sewage System Permit (Rep. Tim Wesco R-Goshen)
HB 1458: Unemployment Insurance (Rep. Bob Morris R-Fort Wayne)
HB 1546: Use of Tax Increment Financing Revenues (Rep. Steve Davisson R-Salem)
HB 1557: Municipal Water Utility Liens (Rep. Phil GiaQuinta D-Fort Wayne)
HB 1623: Real Estate Investment Trusts (Rep. Mike Speedy R-Indianapolis)
HB 1633: Sewer and Storm Water Fees Incurred by Tenants (Rep. Vernon Smith D-Gary)
HB 1647: Civil Rights Commission (Rep. Vanessa Summers D-Indianapolis)
SB 33: Adoption of National Electric Code (Sen. Dennis Kruse R-Auburn)
SB 76: Appraisal Management Practices (Sen. Jon Ford R-Terre Haute)
SB 135: Improper Worker Classification (Sen. Frank Mrvan D-Hammond)
SB 225: Regulation of Signage at Polling Locations (Sen. Jean Leising R-Oldenburg)
SB 236: Asbestos Litigation (Sen. Sue Glick R-LaGrange)
SB 343: Carbon Monoxide Alarms in New Homes (Sen. Mike Bohacek R-LaPorte)
SB 395: Rental Lease Application Deception (Sen. Mike Delph R-Carmel)
SB 490: Lead-Based Paint Renovation Hazards Program (Sen. Jean Breaux D-Indianapolis)
SB 491: Testing of Children’s Blood for Lead Poisoning (Sen. Jean Breaux D-Indianapolis)
SB 512: Tax Increment Financing Districts (Sen. Eric Bassler R-Washington)
SB 540: Housing for Veterans (Sen. Jim Merritt R-Indianapolis)
SB 546: Tax Court Reorganization (Sen. Brandt Hershman R-Buck Creek)
SB 559: Property Tax Exemption for Affordable Housing (Sen. Doug Eckerty R-Yorktown)
Local Issues of Note
The Kokomo Common Council recently passed a “Chronic Nuisance Property” ordinance which creates the designation for multifamily properties which require more than 5 police runs for prohibited conduct in a 30-day period. Prohibited conduct includes dealing drugs, gambling, battery, contributing to the delinquency of a minor, resisting law enforcement, disorderly conduct, criminal recklessness, prostitution, unnecessary noises, code violations and failure to keep vacant property secured against entry. After a property reaches the 5 run threshold, the owner is sent an abatement notice and subject to penalties which include: $250 for the first violation, $500 for the second violation and $2,500 for the third and any subsequent violation within the 30-day period. There is a victim exception included and runs requiring ambulance or medical service response do not count against the property. IAA was successful in removing a provision which also restricted the number of runs for theft of under $50 and raising the overall runs to 5 in a 30-day period. Unfortunately the Council did not provide for the runs to be calculated on a per unit basis which would have put it on par with single-family residences and other types of rental property. Please contact IAA if your property receives an abatement notice as monitoring enforcement of this language is important.
Evansville City Council adopted changes to the “Good Neighbor” Ordinance which was initially adopted over IAA objections in 2014. This time IAA, as well as the Apartment Association of Southern Indiana (AASI), were involved in discussions and were able to get some changes to the proposed amendment. First, there was a proposed change to require those found in possession of marijuana to be automatically evicted through an Eviction Filing Order issued by Police. IAA/AASI was able to clarify only those over a certain amount are automatically evicted while those with lesser amounts receive a Nuisance Determination. Language was also added to clarify that the properties and owners will receive notices from the Police Department as there appeared to be instances where a property was not notified of prohibited activity and clarified if a resident moves on their own that the property cannot still be forced to begin eviction proceedings. The property must now also send a file-stamped copy of the eviction filing within three business days of its filing with the clerk when it is initiated by an Eviction Filing Order, as opposed to having to provide the document within 24-hours of its filing with the Department added as a service party to the proceeding. IAA and AASI still have concerns with the overall ordinance and its potential for having a disparate impact and expressed this to the Council.
Please contact [email protected] for copies of these ordinances.
The IMFHPAC is IAA’s bi-partisan political action committee that invests in candidates who are supportive of industry issues and are pro-business legislators. These funds aid in the election of candidates whose legislative voting records and/or positions on multifamily issues will enhance the business climate in Indiana. The IMFHPAC enables corporations and individuals to pool their political contributions and support candidates which help further IAA’s legislative objectives. A collective effort allows for visibility and access to candidates.
The effectiveness of IAA’s efforts and our ability to work toward favorably resolving these issues is dependent upon our level of exposure in the legislative arena, which IMFHPAC funds will help secure.
Click here for PAC brochure and instructions on how to donate.
Indiana Multifamily Housing Political Action Committee Contributor List*
Platinum Investors ($1.50 per unit)
3 Point Property Management
5910 Carrollton Apartments, LLC
Banner Property Management, LLC
Birge & Held Asset Management
Block Multifamily Group
Braden & Associates-Architonics, Inc.
Bridges Property Management
Brookside Properties Inc.
Cardinal Group Management
Carr Property Group
Cityscape Residential, LLC
Consolidated Property Management
CORE Realty Holdings Management, Inc.
Core Redevelopment LLC
Corner Stone Properties & Rental, LLC
Deylen Realty, Inc.
Dominion Realty, Inc.
Eighteen Capital Group
Emmert Property Management
Englert Management Corporation
Fairway Purdue Partners, LLC
Flaherty & Collins Properties
Four Seasons Realty
Gene B. Glick Company, Inc.
Greystone Property Management Corporation
Hamilton Pointe Property Management
Hendricks Commercial Properties, LLC
Heugel Realty, Inc.
Hills Property Management
Hunt Pacific Management
Indy Town LP
Indy Up, LLC
J.C. Hart Company, Inc.
John & Stacy Hayes
John Boner Neighborhood Centers, Inc.
Joplin Apartments LLC
Keystone Realty Group
Madisonville-West Properties, Inc.
Maple Crest Realty Corporation
Meridian Management Corporation
Metropolitan/Collegiate Housing Services, Inc.
Milhaus Management, LLC
Millennia Housing Management
Monarch Investment & Management Group
Monument Realty & Management
Novogroder Companies, Inc.
Olympus Properties, LLC
Paramount Management, Inc.
Park Forest Homes LTD
Precision Equity, LLC
Premier Real Estate Management, LLC
Purple Blaze Enterprises, Inc.
Ray Rapchak Holdings
RBG Properties, LLC
Realty Investment Co.
Realty & Mortgage Co.
Residential Management Co., LLC
Retiree Housing Management, Inc.
Rise Real Estate
Sentinel Real Estate Corp.
Sentry Management Services Inc.
Sheehan Property Management, Inc.
Sundance Property Management, Inc.
TBH Realty & Management
The Garrett Companies
Twin Lakes Apartments, LLC
Urbahns Group an Indianapolis Co.
Van Rooy Properties
WARM Properties, LLC
Whitney Management Corporation.
Gold Investors ($1.00-$1.49 per unit)
Barrett & Stokely Affordable Management
Barrett & Stokely, Inc.
Mark III Management Corporation
Zinger Property Group, Inc.
Silver Investors ($.50-$.99 per unit)
DBA Candlelight Terrace, LLC
Fore Property Company
In Good Company
Morgan Management LLC
OT Management LLC
Pedcor Management Corporation
Regency Windsor Management, Inc.
Bronze Investors (up to $.50 per unit)
AMP Residential, LLC
Intrepid Professional Group
IRT Management, LLC
James Management Group, LLC
Pedcor Homes Corp.
The Wilkinson Family of Companies
Booster Club (Associate Member Investors)
Action Pest Control
ap INSPECTIONS & environmental services
Bam Outdoor, Inc.
Baumgartner & Company
BBG Construction, LLC
BrightView Landscapes, LLC
Cochran Exteriors LLC
Community Green Landscape Group, Inc.
Cook’s Towing Service, Inc.
Corporate Imaging Concepts, Inc.
Deceuninck North America
Details Cleaning Solutions, LLC
Exterior Building Products
Falcon Carpet of Indiana, Inc.
Ferguson Facilities Supply
Floor & Wall Inc.
Heartland Golf Cars & Equipment
ICS Advanced Technologies
Impact Trash Solutions, LLC
Indy Coin Laundry (Cincinnati Coin Laundry)
Jahnke Painting, Inc.
Jetz Service Company, Inc.
Johnson’s Commercial Flooring
Kentuckiana General Construction
KMP Hydrant Services, LLC
Koorsen Fire and Security
L.B. Gray, LLC A Debt Collection Agency
Landman Beatty, Lawyers
May Oberfell Lorber
Mohawk Industries, Inc.
Monon Technology Group
National Tenant Network – Indiana/Ohio
ONLINE Rental Exchange
On The Scene LLC
PHD Carpet & Janitorial Service, Inc.
Pillar Group Risk Management
Planes Moving & Storage
PPG Architectural Coatings
PR Mortgage & Investment Corp.
PTF Cabinets & Tops
Ray’s Trash Service
Red Capital Group
Roto Rooter Plumbing, Inc.
Ryan Fire Protection
Sandlin Law Group P.C.
Schiff A/C & Heating
Sims-Lohman Fine Kitchens & Granite
Stanley Steemer of Evansville
Star Disposal of Indiana
Total Restoration General Contractors Inc.
Total Roofing & Construction Services Inc.
Trane – Ingersoll Rand
TSI Energy Solutions
University Loft Company
Van Rooy Restoration
WarrenCo Construction & Paving, Inc.
Whelan & Associates
Wilmar Industries, Inc.
*As of March 19, 2018