(L-R) John Jackson, III, AIA and AIA Indiana Executive Director Jason Shelley, Hon. AIA.

HB 1575, Fire Prevention and Building Safety Commission, authored by Rep. Tim O’Brien (R - Evansville), was introduced to stop the current Fire Prevention and Building Safety Commission’s efforts to update Indiana’s outdated building codes. Unfortunately, this bill passed out of the Indiana General Assembly and has been signed into law by Gov. Holcomb. Thank you to all the Hoosier AIA members and friends for contacting your state legislators asking them to oppose HB 1575!

HB 1575 will force the removal of many experts from the current Commission who are essential to protecting public safety in Indiana’s built environment and they will be replaced by mostly residential builders, who have testified their primary concern is the cost resulting from updated building codes. It’s clear the composition of the new Commission will not have the expertise needed to review complex structures such as hospitals, schools, research and manufacturing facilities, etc. AIA Indiana strongly opposed HB 1575!

As introduced, HB 1575 called for the creation of a separate residential building commission within the Department of Homeland Security. The bill was amended in the Senate Local Government Committee to delete language creating a separate residential building commission. However, HB 1575 as it passed now calls for the removal of many experts from the current Commission, requires a two-thirds (2/3) vote of the Commission members in order to adopt a new building code instead of a simple majority, and allows for no more than three codes to be updated annually and then prohibits the Commission from updating a building code for at least five years. All of this will result in continued setbacks to advancing building safety and adhering to modern standards in Indiana.  

The advocates (Indiana Builders Association, Habitat for Humanity, Indiana Apartment Association) for HB 1575 have consistently opposed efforts to update our antiquated building codes. Hoosiers deserve to be protected from hazards in public spaces and where they live. Updated building codes allow for current technology and design standards which are vital not only for life safety but also essential to attracting economic development that comes from efficient design and construction of needed facilities in our communities. New projects often need variances from old codes to be built and that costs time and money.

AIA Indiana and our engineer allies (ACEC) worked hard to stop this bill from law but to no avail. AIA Indiana will continue to work to update Indiana’s outdated building codes regardless!

Thank you Jessica Franke, AIA for testifying in support of the state historic rehabilitation tax credit.

HB 1454, Department of Local Government Finance, is a large 282-page bill that includes language, on pages 105-108, establishing a new state historic preservation tax credit. This is a big win for AIA Indiana!

The bill would allow the Indiana Economic Development Corporation (IEDC) to award a credit, that is transferable, against a qualified taxpayer's state tax liability in an amount equal to 25% or 30% for a 501(c)(3) of the qualified taxpayer's qualified expenses related to the rehabilitation of a qualified historic structure. If the IEDC awards a credit, the Indiana Department of Revenue and the Office of Community and Rural Affairs will administer the allowance of the credit. The yearly aggregate amount allotted for the credit is $10 million through 2030.  

AIA Indiana believes these tax credits will provide a powerful economic incentive to preserve and redevelop the inventory of historic architecture throughout the state. Historic preservation tax credits reinvigorate blighted areas, create jobs, increase state tax rolls, provide affordable housing, and preserve our state’s architectural treasures. 

A special thank you to Rep. Ed Clere (R - New Albany) for his efforts in passing this language into law!

AIA Indiana YAF Day at the Statehouse - (L-R) Trisha Martin, Assoc. AIA, Ashley Thornberry, AIA, Shorf Afza, Assoc. AIA, Logan Gemmill, Assoc. AIA, and Jacob Chavez, Assoc. AIA

HB 1499, various tax matters, authored by Rep. Jeff Thompson (R - Lizton) and sponsored by Sen. Travis Holdman (R - Markle), is an effort by the General Assembly to alleviate property tax increases on homeowners. The bill as it passed the House in the first half of the session was more onerous than the final version but is still problematic as it relates to school construction matters. HB 1499 passed, in the late hours of the 2023 session, out of the House with a vote count of 98-0 and passed out of the Senate 49-1. The bill is expected to be signed into law by Gov. Holcomb.

The bill expands a supplemental deduction that’s currently set to a flat 25%. Homeowners with properties worth less than $600,00 will see assessed value deductions of 35% for taxes this year, 40% for 2024, 37.5% for 2025 and 35% for those due afterward. Those with properties worth more than $600,00 will get deductions 10 percentage points lower each year. HB 1499 also raises income eligibility for senior citizen property tax deductions by linking the caps to the cost-of-living increases applied to Social Security benefits. The bill limits school corporation operating referendum tax levies approved before this year that are payable in 2024 — to a 3% increase of this year’s maximum tax, or to the 2024 maximum. Other provisions will make it easier for property owners to contest their property tax assessments and let counties choose to provide their own property tax relief.

Of most concern to AIA Indiana is language in HB 1499 concerning controlled projects. The bill modifies, through December 31, 2024, the threshold amounts used for determining whether a political subdivision's project is a controlled project and whether the petition and remonstrance process or the referendum process applies based on the political subdivision's total debt service tax rate, but excludes certain projects for which a public hearing to issue bonds or enter into a lease has been conducted before July 1, 2023. It creates an exception, through December 31, 2024, to a provision subjecting a controlled project in a political subdivision with a total debt service rate of $0.80 per $100 of AV to the referendum process, if: (1) the political subdivision submits a request to the Department of Local Government Finance (DLGF) seeking a waiver of the provision; (2) the proposed controlled project is a response to a maintenance emergency; and (3) the DLGF determines that the maintenance emergency is sufficient to waive the provision. The bill amends an exclusion from the definition of "controlled project" for projects required by a court order. It also defines "maintenance emergency".

This provision could have an indeterminable impact on local units' expenditures and related debt service property tax levies. In addition to the projects that would currently qualify as controlled projects and projects that currently must go through the referendum process, additional projects could become controlled projects and be subject to referendum. 

Under current law, the project cost and the unit’s gross AV determine whether the project will be controlled and whether it must go through the referendum process. In addition, through December 31, 2024, this provision will also make any project a controlled project for a taxing unit that has a total debt service tax rate that exceeds $0.40. Also, through December 31, 2024, if the total debt service tax rate is at least $0.80 then the unit must hold a referendum. (Under current law, the unit must hold a referendum only if [1] the referendum threshold is met, and [2] there are sufficient signatures on a petition requesting the referendum.) This provision does not apply to a project if a public hearing for the project is conducted before July 1, 2023. Additionally, a taxing unit may request a waiver of the referendum requirement in this provision if the project addresses an emergency as defined in the bill. 

Since the uncontrolled project, petition and remonstrance, and referendum processes all have different levels of public vetting, this bill could affect the likelihood that some projects ultimately get approved. Taxes levied for projects that go through the petition and remonstrance process are subject to tax caps and could potentially increase tax cap losses, while the taxes levied for referendum projects do not impact tax cap losses.

Of the 290 school corporations, 152 corporations have a 2023 total debt service tax rate that exceeds $0.40. The tax rate in 28 of those school corporations is at least $0.80. In addition, three municipalities have 2023 debt service tax rates that exceed $0.40, but are less than $0.80. No other taxing units have a 2023 total debt service tax rate that exceeds $0.40. 

(L-R) Sen. Jim Buck (R - Kokomo) and Chase Miller, AIA

SB 3, state and local tax review task force, authored by Sen. Travis Holdman (R - Markle) and Rep. Jeff Thompson (R - Lizton), would establish a task force to study Indiana’s tax laws and the feasibility of eliminating the state’s income tax and homestead property taxes. A concern of AIA Indiana related to this effort is that it will bring forth a sales tax on services that could include the taxing of architecture and design services. AIA Indiana will closely monitor the work of the task force.

SB 3 passed out of the Senate with a vote count of 50-0 and 98-0 in the House. The bill is expected to be signed into law by Gov. Holcomb.