IAA has a Successful Legislative Session
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 2017 IAA General Assembly Halftime Report
PDF of 2016 IAA Legislative Wrap-Up
The 2016 Indiana General Assembly concluded its work mid-March and although it was a “short” session (non-budget year), legislative leaders sought to tackle large issues. Ultimately, much work was accomplished on key overall issues such as infrastructure, which provided money for roads and bridges, but will require additional action in the future to ensure there is a long-term funding plan in place. On the multifamily side, the industry had a productive and successful session. The industry won big both on items initiated by IAA and those pieces of legislation that were stopped from being enacted. Thank you to all those members who were engaged –especially the Legislative Committee and others who took the initiative to help after reading the weekly legislative update. Below are several key pieces of legislation everyone in the industry should be aware of. Please do not hesitate to contact IAA for full pieces of legislation or with questions.
House Enrolled Act 1075 –Sewage fees and municipal sanitary sewer (Rep. Greg Beumer R-Farmland, Sen. Vaneta Becker R-Evansville). Provides that if a wastewater utility charges different rates for different classes of property based at least partially on consumption, the utility must charge a rental unit community a rate based at least partially on consumption. IAA successfully advocated for this language in response to learning that some members are being assessed a per unit monthly sewer fee even though the utilities are assessing other properties (commercial) at least partially based on water consumption. The language is effective once a utility seeks to increase their rates after July 1, regardless of whether or not they fall under the IURC purview. IAA believes assessing based on consumption will help to ensure a property and its residents are paying what is actually owed while also prohibiting properties from being billed a flat fee for vacant units.
House Enrolled Act 1288 –Poll takers (Rep. Kathy Richardson R-Noblesville, Sen. Greg Walker R-Columbus) contains language to repeal existing statute requiring a place of lodging to maintain lists of residents for certain periods relating to an election and repeals a statute requiring an individual to respond to a poll taker visiting the individual’s place of lodging. IAA requested this change due to the lack of poll takers conducting polls on properties and privacy concerns of providing resident information. The statute continues to require that properties provide reasonable access to those conducting polls.
House Enrolled Act 1273 –Various property tax matters (Rep. Dan Leonard R-Huntington, Sen. Ryan Mishler R-Bremen) contains a number of provisions but most importantly repeals remaining provisions authorizing a county fiscal body to adopt an ordinance to allow local agencies to require a person applying for a property tax exemption, a property tax deduction, a zoning change or zoning variance, a building permit, or any other locally issued license or permit to submit a uniform property tax disclosure form with the person’s application for the property tax exemption, property tax deduction, zoning change or zoning variance, building permit, or other locally issued license or permit. IAA defeated potentially harmful provisions concerning the Uniform Disclosure Form last session, although several references remained and it was important that these be repealed to ensure local units of government did not attempt to adopt such a Form.
House Enrolled Act 1360 –Realtor continuing education (Rep. Bob Morris R-Fort Wayne, Sen. Liz Brown R-Fort Wayne). Provides that following every license renewal period, the Indiana real estate commission (commission) in consultation with the professional licensing agency may randomly audit for compliance more than 1% but less than 10% of the licensed real estate brokers required to take continuing education courses. Requires a real estate continuing education course sponsor to submit certain documentation to the commission. Adds to the conditions under which the commission may deny, suspend, or revoke approval of a course sponsor. Allows the commission to enter into an agreement with certain entities to provide an electronic continuing education tracking system.
Senate Enrolled Act 309 State and local taxation (Sen. Brandt Hershman R-Buck Creek, Rep. Tim Brown R-Crawfordsville). Eliminates the exemption for property taxes during the planning and construction of a residence that is conveyed upon completion to a low income individual by a nonprofit organization. Restricts but does not eliminate the exemption for property taxes for improvements on real property that are constructed, rehabilitated, or acquired for the purpose of providing low income housing. Specifies that the payments in lieu of taxes (PILOTS) that may be required from a property owner claiming such an exemption may not be imposed for an assessment date occurring after January 1, 2017. Eliminates the property tax deduction State and local taxation. Eliminates the exemption for property taxes during the planning and construction of a residence that is conveyed upon completion to a low income individual by a nonprofit organization. Restricts but does not eliminate the exemption for property taxes for improvements on real property that are constructed, rehabilitated, or acquired for the purpose of providing low income housing. Specifies that the payments in lieu of taxes (PILOTS) that may be required from a property owner claiming such an exemption may not be imposed for an assessment date occurring after January 1, 2017. Eliminates the property tax deduction for residential rehabilitation of a dwelling. Eliminates the property tax deduction for rehabilitation of a structure over 50 years old. Provides that the state use tax is imposed on a contractor’s conversion of construction material into real property if that construction material was purchased by the contractor. Specifies, however, that the use tax does not apply to conversions of construction material if: (1) the sales or use tax has been previously imposed on the contractor’s acquisition or use of that construction material; (2) the person for whom the construction material is being converted could have purchased the construction material exempt from the sales and use tax (as evidenced by an exemption certificate) if that person had directly purchased the material from a retail merchant in a retail transaction; or (3) the conversion of the construction material into real property is governed by a time and material contract. Provides that a contractor is a retail merchant making a retail transaction when the contractor disposes of tangible personal property or converts tangible personal property into real property under a time and material contract. Specifies that a person is a retail merchant making a retail transaction for purposes of state gross retail and use taxes when the person rents or furnishes rooms, lodgings, or accommodations (lodgings) that: (1) are rented or furnished for periods of less than 30 days; and (2) are located in a house, condominium, or apartment in which lodgings are rented or furnished for transient residential housing for consideration. Defines “facilitator” as a person who: (1) contracts with a person who rents or furnishes lodgings for consideration to market the lodgings through the Internet; and (2) accepts payment from the consumer for the lodging. Provides that a facilitator is a retail merchant making a retail transaction when the facilitator accepts payment from the consumer for lodgings rented or furnished in Indiana. Provides that a retail merchant who rents or furnishes lodgings shall provide to the consumer of the lodging an itemized statement separately stating all of the following: (1) The part of the gross retail income that is charged for the rental or furnishing of the lodging. (2) Any taxes collected by the person renting or furnishing the lodging. (3) Any part of the gross retail income that is a fee, commission, or other charge of a facilitator. Provides that a penalty of $25 is imposed on a facilitator for each transaction in which the facilitator fails to separately state such information…Provides that if an ordinance has been adopted requiring the payment of the innkeeper’s tax to the county treasurer instead of the department, the county treasurer has the same rights and powers with respect to refunding the innkeeper’s tax as the department…Urges the legislative council to assign to a study committee the topic of the eligibility of low income housing for a property tax exemption. This bill contains a number of provisions that IAA has been monitoring throughout session, including:
- The low-income housing exemption and PILOTS associated will sunset, although projects with existing agreements were grandfathered which was important to IAA.
- IAA has been cautioning that changes to short-term rental providers could be forthcoming and while the language still allows multifamily properties to offer these arrangements for under 30 days, the statute now specifically mentions apartments. Beginning in 2018, those offering leases for less than 29 days provide an itemized statement to the individual renting the unit.
- Members offering time and material contracts will want to pay close attention to the new language which is in response to a court decision regarding Lowe’s issued last summer.
- The language urging the legislative council to assign to a summer study committee the topic of the eligibility of low income housing for a property tax exemption is the result of a last-minute attempt to revive Senate Bill 225 which provided a property tax exemption for certain affordable housing providers. The Indiana Association for Community and Economic Development (IACED) attempted to have the language inserted into SEA 309 during the final days of session. The Association of Indiana Counties had opposed 225 in the Senate but worked with IACED as well as one provider of senior housing on a “compromise” amongst themselves before submitting it to legislative leaders. IAA was not involved in these discussions and upon review of their agreed upon language recognized it as doing more harm than good for our membership. After consulting with members, legislators knowledgeable on the issue and local assessors, it was apparent that it would have put affordable properties in jeopardy of losing existing partial property tax exemptions if they did not qualify under the combined bill and new language. The original intent was to clarify a bad tax decision and provide statewide consistency with regard to affordable housing property tax exemptions, but with the new language it was obvious that the bill no longer achieved its intended purpose. Therefore IAA opposed the “compromise” which resulted in the language being pulled and replaced with a study committee.
Senate Enrolled Act 216 –Traffic enforcement in residential complexes (Sen. Brandt Hershman R-Buck Creek, Rep. Randy Truitt R-Lafayette). Allows a unit to enforce moving traffic ordinances on the property of a residential complex if the following apply: (1) The unit adopts an ordinance permitting the enforcement of such ordinances in residential complexes. (2) The owner of the residential complex enters into an enforcement contract with the unit. (3) The owner of the residential complex installs signs notifying residents and visitors of the enforcement of moving traffic ordinances. Requires a unit’s law enforcement agency to issue e-tickets for moving violations in a residential complex if the law enforcement agency already issues e-tickets for other Traffic enforcement in residential complexes. Allows a unit to enforce moving traffic ordinances on the property of a residential complex if the following apply: (1) The unit adopts an ordinance permitting the enforcement of such ordinances in residential complexes. (2) The owner of the residential complex enters into an enforcement contract with the unit. (3) The owner of the residential complex installs signs notifying residents and visitors of the enforcement of moving traffic ordinances. Requires a unit’s law enforcement agency to issue e-tickets for moving violations in a residential complex if the law enforcement agency already issues e-tickets for other traffic violations. Provides certain immunities to the owner of a residential complex that enters into an enforcement contract with a unit. Provides that the statute expires December 31, 2020. Requires the division of state court administration to submit reports to the legislative council relating to the enforcement of moving traffic ordinances on the property of residential complexes. This legislation was requested by the Lafayette Police Department and IAA spent a lot of time ensuring that members have the much needed flexibility and immunity should they request this voluntary agreement. Fair Housing and civil rights experts have cautioned that these types of agreements could lead to issues with residents depending on how they are enforced.
Senate Enrolled Act 323 –Legislative studies (Sen. Brandt Hershman R-Buck Creek, Rep. Todd Huston R-Fishers). Requires the legislative services agency to: (1) study the combined reporting approach to apportioning income and transfer pricing for income tax purposes; and (2) report the results of the study before October 1, 2016, to the legislative council and to the interim study committee on fiscal policy. Requires the interim study committee on fiscal policy to hold at least one public hearing at which the legislative services agency presents the results of the study. Urges the legislative council to assign an interim study committee certain other study topics.
The bill initially contained language mandating combined reporting, but after hearing from a number of impacted industries the language was removed and replaced with that which requires further study. IAA will be monitoring the study and any future attempts to mandate this practice as it could impact members within the industry.
House Enrolled Act 1082 –Environmental rules and policies (Rep. Dave Wolkins R-Winona Lake, Sen. Ed Charbonneau R-Valparaiso). Requires the department of environmental management (IDEM) to report annually to the legislative council: (1) any administrative rule adopted by the environmental rules board (board) or proposed by IDEM; (2) any operating policy or procedure instituted or altered by IDEM; and (3) any nonrule policy or statement put into effect by IDEM; during the previous year that constitutes a change in the policy previously followed by IDEM under the provisions of IC 13 and the rules adopted by the board. Provides that, if notice given by IDEM concerning a proposed rule identifies an element of the Environmental rules and policies. Requires the department of environmental management (IDEM) to report annually to the legislative council: (1) any administrative rule adopted by the environmental rules board (board) or proposed by IDEM; (2) any operating policy or procedure instituted or altered by IDEM; and (3) any nonrule policy or statement put into effect by IDEM; during the previous year that constitutes a change in the policy previously followed by IDEM under the provisions of IC 13 and the rules adopted by the board. Provides that, if notice given by IDEM concerning a proposed rule identifies an element of the proposed rule that imposes a restriction or requirement more stringent than a restriction or requirement imposed under federal law, the proposed rule does not become effective until the adjournment sine die of the regular session of the general assembly that begins after IDEM provides the notice. Provides an exception for the adoption of emergency rules in response to emergency situations. Governor Mike Pence vetoed this legislation citing concerns over clean water. This bill had a lot of support from legislators and industry groups who had compromised on the final language which was weaker than the introduced version which prohibited IDEM from adopting any rule seen as more stringent than what the federal government requires.
Other Approved Legislation of Interest
House Enrolled Act 1025 Alternate rezoning procedure (Rep. Doug Miller R-Elkhart, Sen. Carlin Yoder R-Middlebury)
House Enrolled Act 1211 Methamphetamine and Criminal Mischief (Rep. Martin Carbaugh R-Ft. Wayne, Sen. Liz Brown R-Ft. Wayne)
House Enrolled Act 1222 Condominiums and Homeowners Associations (Rep. Woody Burton R-Whiteland, Sen. Jim Buck R-Kokomo)
Senate Enrolled Act 1 Administrative law Study Commission (Sen. Brent Steele R-Bedford, Rep. Greg Steuerwald R-Brownsburg)
Senate Enrolled Act 301 Workforce Education (Sen. Luke Kenley R-Noblesville, Rep. Todd Huston R-Fishers)
Senate Enrolled Act 378 Indiana Economic Development Corporation (Sen. Carlin Yoder R-Middlebury, Rep. Ben Smaltz R-Auburn)
Legislation that Died
HB 1091 Affirmative Defenses in Eviction Actions (Rep. Robin Shackleford D-Indianapolis)
HB 1232 Background Checks for Real Estate Brokers (Rep. Ed Clere R-New Albany)
HB 1348 Posting of False Business Reviews (Rep. Wes Culver R-Goshen)
HB 1357 Data Breaches (Rep. Bill Fine R-Highland)
SB 285 Employment of Unauthorized Aliens (Sen. Mike Delph R-Carmel)
SB 312 Licensing of Electrical Contractors (Sen. Rick Niemeyer R-Lowell)
SB 344 Civil Rights (Sen. Travis Holdman R-Markle)
SB 348 Carbon Monoxide Alarms (Sen. John Broden D-South Bend)
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
Aspen Management USA
Becovic Management Group of Indiana
Birge & Held Asset Management, LLC
Block Multifamily Group
Braden & Associates-Architonics, Inc.
Brookside Properties Inc.
Cagan Mgmt. Group
Cardinal Group Management
Dominion Realty, Inc.
Edward Rose & Sons
Emmert Property Management
Empire Realty Investments
Engel Realty Company, LLC
Englert Mgmt Corp.
Flaherty & Collins Properties
Fore Property Company
Fort Wayne Housing Authority
Four Seasons Realty
Gene B. Glick Company, Inc.
Hendricks Commercial Properties, LLC
Heugel Realty, Inc.
Investors Property Services
J.C. Hart Company, Inc.
JKG Property Group, LLC
John & Stacy Hayes
Maple Crest Realty Corp.
Mark III Mgmt. Corp.
Maxus Properties, Inc.
NRP Management, LLC
Paramount Management, Inc.
Peal Real Estate Management
Picnic Lawn Apartments, LLC
RealAmerica Management, LLC
Residential Management Co., LLC
Twin Lakes Apartments, LLC
Urbahns Group an Indianapolis Co.
WARM Properties, LLC
Whitney Management Corp.
Gold Investors ($1.00-$1.49 per unit)
Barrett & Stokely, Inc.
Hills Property Management
Silver Investors ($.50-$.99 per unit)
Andover Management Corp./In Good Company
DBA Candlelight Terrace, LLC
O’Neil Property Management
Bronze Investors (up to $.50 per unit)
AMP Residential, LLC
James Management Group, LLC
Booster Club (Associate Member Investors)
A2 Windows & Doors LLC
Ap INSPECTIONS & environmental services
ATI Energy Group, LLC
Ball State University
Bam Outdoor, Inc.
BBG Construction, LLC
City Wide Paving, Inc.
Community Green Landscape Group, Inc.
Custom Concrete Co, Inc.
Deceuninck North America
Details Cleaning Solutions, LLC
Direct Fitness Solutions
Ecore Commercial Flooring
Exterior Building Products
Falcon Carpet of Indiana, Inc.
Fry Electric, Inc.
Full Care of Indianapolis
Great Lakes Commercial Laundry Sales, Inc.
Heartland Golf Cars & Equipment
Holt Construction Group, Inc.
Indiana’s Finest Wrecker
Indy Coin Laundry (Cincinnati Coin Laundry)
Jahnke Painting, Inc.
Jetz Service Company, Inc.
Johnson’s Commercial Flooring
Kermans Fine Flooring
Kinder Electric Co, Inc.
L.B. Gray, LLC A Debt Collection Agency
Landman Beatty, Lawyers
Maintenance Supply Headquarters
Monon Technology Group
Nation Tenant Network – Indiana/Ohio
On The Scene LLC
Quantum Graphix, LLC
Realgy Energy Services
Rite Rug Company
Roto Rooter Plumbing, Inc.
Sandlin Law Group P.C.
Sign A Rama
Sims-Lohman Fine Kitchens & Granite
Summer Classics Contract
Surface Connection, Inc.
Total Restorations General Contractors Inc.
TSI Energy Solutions
University Loft Company
Van Rooy Restoration
WarrenCo Construction & Paving, Inc.
Whelan & Associates
*As of February 15, 2017