Public Policy Dispatch:

04 Mar, 2014


February 28, 2014

Volume 14; Issue 9

COUNTY FARM BUREAU VISITS TO THE STATEHOUSE   Legislators will be in committee hearings for the rest of the session so we are not scheduling any more visits at this time.

Thank you to CassElkhartFranklinHancockLawrenceMonroePorterSullivanSwitzerland and Union counties for very successful visits this week.


ACTIVE LINK TO SURVIVING BILLS BEING FOLLOWED BY INDIANA FARM BUREAU   Members wishing more details about legislation being followed by Farm Bureau Statehouse lobbyists see IFB Tracking Report.

PERSONAL PROPERTY TAX PROPOSALS HANGING IN BALANCE   Both Houses of the General Assembly have worked on personal property reform proposals in the name of “Pro-Growth Tax Reform” attempting to align with Gov. Pence’s 2014 legislative goal of reducing Indiana’s personal-property tax. Proponents of this idea say that the property tax on business equipment takes away from employer resources that would otherwise be used to hire workers and expand their operations. Farm Bureau has said it increases the cost of investment and farmers pay tax on that investment over and over. Personal property tax is a disincentive to investment and impairs the ability to make future ones.

The challenge to cutting the tax for personal property taxpayers is that this tax provides a large amount of revenue to local government units, cities and towns, counties, schools, libraries, etc. A study by the Legislative Services Agency found that totally eliminating the PPT would reduce revenue for local government units by a collective $687 million, but neither the House or Senate have proposed total elimination of personal property tax. Indiana Farm Bureau’s policy opposes elimination without replacement revenue.

Both SB 1 (authored by Sen. Brandt Hershman, R-Buck Creek) and HB 1001 (authored by Rep. Eric Turner, R-Cicero) have been amended in the second house with the respective chamber’s ideas. At this point, both include a phase-down of the corporate income tax rate from 7.5 percent to 4.9 percent in 2022 or 2023. They both include a study commission that will review the entire property tax base, including how to eliminate personal property tax. Indiana Farm Bureau strongly supports the study portion of this bill and has asked for a specific seat on this commission. In your conversations with legislators on this issue, be sure to ask that IFB is at the table.

Both include a version of a super abatement that would extend the amount of time a local body could grant tax abatement. The Senate’s version of the super abatement starts at $3 million investments and also allows elimination of the 30 percent floor for this super abated property.

The primary difference in Senate and House versions is whether or not to have a local option or to eliminate small returns altogether. The question for Farm Bureau members is how does this help agriculture. The House version of the local option is so restrictive it probably does not apply to real-life situations in agriculture, but it easily could with some tweaking of what property qualifies. The next question is whether or not any locals would authorize the local option.

The Senate idea of exempting small valued personal property returns (that was originally those at $25,000 or less) would have affected 22,000 of the 35,000 farm returns filed. The Senate compromise proposal now only exempts property with a total purchase price of $20,000, which would help some startups in agriculture, primarily small, value-added ventures. The lower threshold reduces shifts and losses to local governments to $8 million and shifts to ag land at $800,000 statewide.

Senate and House fiscal leaders are in ongoing discussions with the Pence administration about the best way to reduce PPT without harming local governments’ ability to provide essential services. All legislators recognize that Indiana can’t rest on its laurels when it comes to creating jobs and economic prosperity. What should our tax climate look like to be competitive with other states while maintaining appropriate funding for essential government services?

From agriculture’s standpoint, we need to be included in the personal property discussion to offset the cost of doing business just like any other business. The state needs more jobs and growth of the tax base to counteract the increases we are seeing in the farmland base value. See a side-by-side comparison of SB 1 and HB 1001 as of Feb. 28, 2014.

ACTION ON SOIL PRODUCTIVITY FACTORS IN THE HOUSE   On Tuesday at its last meeting of the session, the Ways and Means Committee heard SB 111 dealing with the soil productivity factors. SB 111 was presented by its author, Sen. Jean Leising (R-Oldenburg). Rep. Don Lehe is the House sponsor but was chairing the final hearing of the House Agriculture Committee when the hearing occurred. Farm Bureau’s Katrina Hall testified in favor of a solution to the soil productivity factor issue.

For the third session in a row, the General Assembly has recognized the need to stop the unjustified tax increases proposed by the DLGF in the soil productivity factors issued back in February, 2012. The bill was amended in committee with the goal of putting the factors back to the original ones, in use since 1979, until such time as new factors are adopted in an open rule making process. Concerns that the General Assembly should have final say were raised by Rep. David Ober (R-Albion) but the committee passed the bill out 18-0. On Thursday, a second reading amendment by Ober was placed into SB 111. The amendment provided a Jan. 1, 2015 deadline for the DLGF to adopt new soil productivity factors. The bill is eligible for third reading in the House on Monday and it is anticipated that it will go to conference committee since the Senate version included a simple delay.

Members are asked to thank House and Senate members for their support of this issue. It is critical to stop a $57.4 million tax shift to farmers.

ANNEXATION BILL MOVES IN HOUSE   On Tuesday, SB 273 dealing with annexation was amended and moved out of committee after two weeks of negotiation with cities and towns. SB 273 (authored by Sen. Buck, R-Kokomo) was presented by the House sponsor Rep. Robert Cherry (R-Greenfield). The committee amendment provides for an annexation moratorium beginning April 1 and ending July 1, 2015 which provides time for the study committee in the bill to thoroughly assess the issue and for the next General Assembly to act. Katrina Hall supported the moratorium along with the Association of Indiana Counties. The bill moved through second reading on Thursday without amendments and is eligible for third reading in the House on Monday. Please ask legislators to support SB 273 to protect farmers from unreasonable annexation proposals.

ALLEN COUNTY SINGLE COUNTY EXECUTIVE BILL MOVES   On Tuesday, the Senate Elections Committee chaired by Sen. Joe Zakas (R-South Bend), approved an amendment to HB 1318 which is a bill dealing with election reforms. The amendment authorizes a November 2014 referendum in Allen County to decide whether to have three county commissioners or a single county executive. If chosen, the single county executive would first be elected in 2018. The county council would become the legislative body and have nine district seats rather than district and at-large as they do now. In spite of testimony by Indiana Farm Bureau and the Association of Indiana Counties, the measure passed out of committee 6-1 with the lone dissenting vote from Sen. Jim Banks (R-Columbia City). The amendments were accepted on second reading and the bill is eligible for final vote on Monday in Senate. Members are asked to contact their senators asking them to oppose HB 1318.

ATTORNEYS HEAR ABOUT AG POLICY   At the annual Indiana University-Indianapolis Law School environmental continuing legal education program, Farm Bureau’s Justin Schneider spoke about the need for state policies to protect agriculture from litigation and attempts to control practices farmers can use. He was joined in the debate by Linda Chezem, professor at Purdue University and a retired judge from the Indiana Court of Appeals. The policy being discussed was the recently passed SB 186. Alternative viewpoints were offered by Kim Ferraro of the Hoosier Environmental Council and Rep. Ed DeLaney (D-Indianapolis).

INDIANA LAWMAKERS FOCUS ON AGRICULTURE   This week’s episode of Indiana Lawmakers featured a panel discussion about ag and environmental issues before the General Assembly. Justin Schneider was joined on the panel by Rep. David Wolkins (R-Warsaw), Rep. Matt Pierce (R-Bloomington) and Jesse Kharbanda of the Hoosier Environmental Council. The program, taped by WFYI, is available on several PBS stations this weekend.

AMENDMENT FOR HUNTING PRESERVE BILL FAILS TO ADVANCE   After a bill regarding hunting preserves failed in the Senate by one vote, an amendment was drafted in the House to be offered for inclusion in another bill. However, the amendment was not offered from the floor and the issue has once again stalled in the General Assembly.

BILL ON “NO MORE STRINGENT” ENVIRONMENTAL STANDARDS STALLS IN SENATE   HB 1143 (Rep. Dave Wolkins, R-Warsaw) received a hearing in the Senate Environmental Affairs Committee but did not receive a vote. The intent of the bill was to limit state adopted rules which are based upon corresponding federal regulations to a standard which is no more stringent than the federal standard. Justin Schneider testified in support of the bill and explained that rules based upon delegated powers from EPA should be limited by what the federal rules are and should not exceed what federal laws such as the Clean Air Act and Clean Water Act allow. The hearing included nearly an hour’s worth of testimony from individuals who alleged that livestock farmers are generally poor operators and that the bill was an attempt to get rid of the state rules for CFOs, even though testimony from both Schneider and Wolkins indicated that this bill would have no impact on existing regulations and that existing statutes required the more stringent regulations for CFOs than exist under the federal level. The intensity of the rhetoric was somewhat astonishing and shows a more concerted effort by environmental groups to target agriculture.


HB 1046 Heritage Barn Property Tax Deduction (Rep. Cherry, R-Greenfield)
Amended in committee on Tuesday, second reading on Thursday and eligible for third reading.

HB 1083 Child Labor Law makes technical fix for farm families (Rep. Jerry Torr, R-Carmel)
Heard in Senate committee on Wednesday.

HB 1217 Single Contact Point for Wetland Work Permits (Rep. Steve Davisson, R-Salem)
Second reading amendments on Thursday.

HB 1219 Farm Products and Vehicles aligns truck plates with Map 21 (Rep. Bob Cherry, R-Greenfield)
Second reading on Thursday.

HB 1234 Property Tax Matters including prohibition from county employees serving on PTABOA, provides an additional week to pay property tax bills (Rep. Jeff Thompson, R-New Salem)
Second reading amendments on Thursday.

HB 1266 Local Government Finance Issues including changes to budget notices (Rep. Daniel Leonard, R-Huntington)
Second reading on Thursday.

HB 1307 Various Natural Resource Matters (Rep. Sean Eberhart, R-Shelbyville)
Second reading amendments on Thursday.

SB 118 Reforms to Tax Increment Financing (Sen. Pete Miller, R-Avon)
Second reading on Wednesday.

SB 176 Central Indiana Mass Transit (Sen. Pat Miller, R-Indianapolis)
Second reading amendments on Thursday.

SB 179 Various Ag Matters Concerning Local Foods (Sen. Jim Banks, R-Columbia City)
Second reading without amendments on Thursday.

SB 357 Industrial Hemp (Sen. Richard Young, D-Milltown)
Second reading amended on Thursday.

SB 367 Tax Matters includes Rural Entrepreneur Program for OCRA (Sen. Brandt Hershman, R-Buck Creek)
Second reading amendments on Thursday.

SB 420 Property Tax Deadlines changes assessment date to Jan. 1 but filing deadlines stay at May 15 (Sen. Randy Head, R-Logansport)
Second reading without amendments on Thursday.

SJR 9 Right to Hunt and Fish (Sen. Brent Steele, R-Bedford)
Third reading on Monday.


HB 1039 Indiana Grown Initiative (Rep. Matt Lehman, R-Berne)
Returned to House with amendments.

HB 1053 Levee Associations (Rep. Mark Messmer, R-Jasper)
Returned to House with amendments.

HB 1076 INDOT Eminent Domain Actions (Rep. Dennis Zent, R-Angola)
Passed third reading in Senate 47-0

HB 1099 Annexation of Noncontiguous Property (Rep. Rick Niemeyer, R-Lowell)
Third reading on Thursday 48-0.

HB 1216 Zoning Commitments and Annexation (Rep. Randy Truitt, R-West Lafayette)
Third reading on Thursday 39-9.

HB 1300 Dairy Products (Rep. Don Lehe, R-Brookston)
Returned to House with amendments.

HB 1342 Environmental Fees (Rep. David Wolkins, R-Warsaw)
Third reading on Thursday 48-0.

HB 1350 Agricultural Seed Testing (Rep. Jim Baird, R-Greencastle)
Returned to House without amendments.

SB 80 Interim Study Committee Structure (Sen. David Long, R-Fort Wayne)
Third reading 93-0 on Thursday.

SB 101 Ag Trespass (Sen. Travis Holdman, R-Markle)
Returned to Senate with amendments after third reading vote of 73-25.

HB 106 Local Government Transparency (Sen. Ed Charbonneau, R-Valparaiso)
Returned to second house with dissent.

SB 114 Excused Absence from School for Attendance at State Fair (Sen. Jean Leising, R-Oldenburg)
Returned to Senate with amendments.

SB 186 State Policy of Agriculture and Farmers Rights (Sen. Carlin Yoder, R-Middlebury)
Returned to Senate without amendments.

SB 271 Water Related Study Committee (Sen. Ed Charbonneau, R-Valparaiso)
Third reading passed 92-0 on Thursday.

SB 339 Allow Alcoholic Beverages at State Fair (Sen. Jim Merritt, R-Indianapolis)
Returned to Senate without amendments.

SB 359 Confined Feeding, Composting and Manure Storage (Sen. Ed Charbonneau, R-Valparaiso)
Returned to Senate with amendments.


HB 1143 Environmental Rules and Standards (Rep. David Wolkins, R-Warsaw)
Committee hearing Monday with no action.

HB 1241 Environmental Coverage (Rep. Martin Carbaugh, R-Fort Wayne)
Thursday committee failed 3-6.


CAMP TAX PROPOSAL DETAILS FARM MEASURES   House Ways and Means Committee Chairman Rep. Dave Camp (R-Mich.) released a discussion draft of a bill to overhaul the tax code on Wednesday, seeking among other things, to allow “farms of all sizes” to use cash accounting practices and setting a tax rate of no higher than 25 percent for farms and other businesses, according to a summary of the plan. Some of the agriculture-specific highlights from Camp’s proposed Tax Reform Act of 2014:

  • Fertilizer tax deduction: The plan calls for the repeal of the deduction for expenditures for fertilizer and other farming materials in tax years after 2014, a move that would increase tax revenues by $3.4 billion by 2023.
  • Net operating loss deduction: The bill repeals special five-year carry back provisions for deductions for farming losses, and put the sector in line with the two years allowed in most other industries.
  • Depreciable business assets expensing: The bill would make permanent provisions for farmers and small business owners to expense depreciable assets of up to $25,000 for property of up to $200,000 as compared to the 2013 rates of $500,000 and $2 million, respectively. The change, which is estimated to reduce government revenues by $54.9 billion, marks “a significant reduction from the 2013 levels for small businesses and farms that have struggled through the economic challenges of the past six years to build their businesses and hire new employees,” according to the proposal.
  • Averaging for farm income: The bill would repeal a current tax code provision that allows for farmers to compute tax year liability by averaging the prior three-year period, going into effect after tax year 2014. The provision is estimated to increase government coffers by $0.3 billion by 2023.

See a section-by-section summary of the discussion draft.

FARM BUREAU URGES HOUSE REPUBLICAN LEADERSHIP TO TAKE ON IMMIGRATION REFORM   The American Farm Bureau Federation, as part of a multi-industry coalition of 636 business organizations, 154 of them agriculture-related, is urging Congress to move forward with immigration reform this year.

In a letter sent to House Republican leadership this week, the coalition noted that all of the signatories are “united in the belief that we can and must do better for our economy and country by modernizing our immigration system.” Further, “Done properly, reform will deter illegal immigration, protect and complement our U.S. workforce, better respond to changing economic and demographic needs, and generate greater productivity and economic activity, while respecting family unity.” Read More

TPP NEGOTIATIONS CONTINUE DESPITE CHALLENGES WITH JAPAN   Earlier this week, trade ministers from each of the 12 nations of the Trans-Pacific Partnership talks met in Singapore for another round of trade negotiations where a fair amount of progress was made. According to U.S. Trade Secretary Michael Froman, the TPP talks are closer than ever to reaching a broad deal among all countries. However, some hang-ups remain; most notably Japan and its insistence on not reducing tariffs on imported autos and agricultural products.

Some commodity groups, primarily the livestock sector, have said they would rather see the world’s third largest economy out of the talks than allow it to maintain “unreasonable protections” for its so-called five “sacred” items: rice, dairy, beef and pork, wheat and barley, and sugar. Those categories cover 586 of the country’s more than 9,000 tariff lines.

Farm Bureau policy for trade negotiations objectives:

  • Include all agricultural products and policies in the negotiations.
  • Elimination of non-tariff trade barriers.
  • Ensure market access for biotechnology products.
  • Address issues concerning import sensitive products.
  • Opposition to the use of geographic indicators.

FEDERAL EMINENT DOMAIN BILL PASSES HOUSE   The House of Representatives passed H.R. 1944 this week, the Private Property Rights Protection Act of 2013. The bill prohibits states that receive economic development funding from exercising eminent domain for private economic development. Violation of that provision would result in loss of all economic development funding for a period of two years. The bill creates a private right of action for any landowner who suffers injury as a result of a violation of any provision of this act. The bill also prohibits any use of eminent domain for economic development by the federal government. This bill does not change state law, but it does prevent federal agencies from exercising eminent domain for private economic development. Farm Bureau supported the bill and is pleased with the outcome.

RESOURCES AVAILABLE TO ASSIST FARMERS UNDERSTAND THE NEW FARM BILL   The University of Illinois has announced a new farmdoc online webinar series for 2014, which begins on Feb. 27 and ends Mar. 31. The Agricultural Act of 2014, or farm bill, will be the focus of several of the webinars, including Feb. 27 – crop insurance and Mar. 5 – understanding the new commodity program.

All of the webinars are free but registration is required. See the complete webinar schedule.

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