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The past week was marked by a flurry of activity in the General Assembly as the legislature works its way toward the midpoint when bills change houses. The deadline for bills introduced in the House to pass the House is February 25; the corresponding deadline in the Senate is February 26. To meet these deadlines almost all committee action will have to be completed next week, and there are still a number of bills that remain to be heard. 

During the past couple of weeks, some of the higher profile bills have been given hearing and the leaders of both houses announced that the constitutional amendment banning gay marriage in Indiana would not be heard this year because an expected decision from the U.S. Supreme Court could force Indiana to change its approach. Among the other issues that have gotten a lot of attention are the proposal to authorize Marion County and the doughnut counties around Indianapolis to hold a referendum on whether or not to increase their income tax to provide mass transit and the bill to authorize the general sale of alcohol on Sunday in Indiana.

PRODUCTIVITY FACTOR BILL TO BE “FAST TRACKED” IN HOUSE  House Speaker Brian Bosma (R-Indianapolis) announced this week that SB 319 (Sen. Jean Leising, R-Oldenburg), the bill that will delay the application of new soil productivity factors for another year, will be expedited in the House. The Department of Local Government Finance has advised county assessors to begin the March 1 assessment using the new soil productivity factors because the General Assembly has not finished the legislative process to delay their application. The House reportedly hopes to get a bill to the governor before March 1 to avoid both the discomfort and cost of a remedial assessment. Toward that end, SB 319, which is sponsored in the House by Reps. Don Lehe (R-Brookston), Bob Cherry (R-Greenfield) and Terry Goodin (D-Austin), will be heard in the House Ways & Means Committee on Monday morning.

SIMPSON HONORED BY HER FORMER COLLEAGUES  Former Senate Minority Leader Vi Simpson of Bloomington was honored for her service to the Senate with a number of tributes on the Senate floor on Tuesday as well as a reception in her honor. Sen. Simpson vacated her bid for re-election last year to accept her party’s nomination for lieutenant governor.

RIGHT TO HUNT, FISH AND RAISE MEAT  On Monday, the Senate Agriculture & Natural Resources Committee heard and unanimously approved Senate Joint Resolution SJR 7. The resolution, which was presented by its author, Sen. Brent Steele (R-Bedford), would insert into the Indiana Constitution language guaranteeing that the right to hunt, fish or raise meat could not be denied to Indiana citizens. An identical resolution to amend the state's constitution passed both houses of the General Assembly in 2012. The process to amend Indiana's constitution, which is set out in the constitution itself, provides that identical resolutions must pass two successively elected General Assemblies and then be ratified by the voters of the state at the next general election. This means that if both houses of the legislature approve SJR 7 it could appear on the ballot in November 2014. Farm Bureau supported the bill in 2012 and this again this year. Bob Kraft appeared before the committee and explained that this amendment is important because there are national organizations that have declared as their objective the removal of meat from the American diet. Kraft said he didn’t feel that such action was imminent in Indiana but that the amendment would provide an insurance policy to assure it would not happen in the future.

PERSONAL PROPERTY TAXES CONSIDERED IN HOUSE WAYS & MEANS  HB 1530, authored by Rep. Bob Morris (R-Ft Wayne), was heard on Thursday. HB 1530 provides that, beginning with the March 1, 2014, assessment date, a taxpayer is entitled to an exemption for the taxpayer’s new personal property located in a county, unless the county council adopts an ordinance specifying that the exemption does not apply to that particular county. As presented, the bill limits the exemption to the first $100,000 of a taxpayer’s new personal property located in the county. Katrina Hall supported the bill but opposed the $100,000 limit, stating that equipment acquisitions of farmers far exceed that number. The bill was opposed by lobbyists representing cities, towns and counties who are worried about erosion of their property tax base. The bill was held for further consideration.

HB 1349, authored by Rep. Bob Cherry (R-Greenfield), was heard along with HB 1530. It provides an assessed value deduction to offset the effects of the 30 percent minimum personal property tax depreciation floor for depreciable personal property or utility personal property that is acquired or installed after the 2013 assessment date. IFB supports this bill as well. The attention paid by both houses of the General Assembly to personal property tax is an encouraging sign that something might happen this session.

WILL THERE BE A TAX CUT THIS SESSION?  HB 1541, authored by Rep. Eric Turner (R-Cicero), includes a mix of state tax provisions. The bill repeals the automatic taxpayer refund and reduces the individual income tax rate from 3.4% to 3.06%, which is basically the income tax cut proposed by Gov. Pence. HB 1541 phases the tax cut down over three years rather than immediately. Katrina Hall testified in favor of the provisions that would phase-out inheritance over 5 years rather than the 9-year phase-out passed last session. She also expressed concern that tax cuts would inhibit the state’s ability to fund priorities important to IFB members, those being funding K-12 education, making higher education affordable, and investing in infrastructure – especially local roads. The bill was held for a later vote.

REDEVELOPMENT COMMISSION CHECKS AND BALANCES  SB 325, authored by Sen. Luke Kenley (R-Noblesville), provides that a redevelopment commission may not enter into any obligation payable from public funds without first obtaining the approval of the legislative or fiscal body of the unit that established the commission. It also includes a requirement that if a redevelopment commission acquires or sells real property, the redevelopment commission will include in its annual report a description of the real property and the terms under which the real property was acquired or sold. It limits when an executive session may be conducted for a discussion of strategy with respect to the acquisition, lease, or sale of real property by the redevelopment commission. Indiana Farm Bureau supported the bill because it provides much needed checks and balances and much more transparency. The bill was amended and left the committee by a vote of 8-1.

AGRICULTURAL CLASSIFICATION CLARIFIED  SB 531, authored by Sen. Doug Eckerty (R-Muncie), provides that land is to be assessed as agricultural if the land could be devoted to agricultural use or if a building or other real property improvement that is devoted to agricultural purposes is located on the land. As amended by the committee, it provides that land that is zoned for (instead of purchased for) residential, commercial, or industrial use is not to be assessed as agricultural land unless the land is devoted to agricultural use. The bill requires assessors to subtract from the value of a parcel land that is being used for various right-of-way purposes without any action having to be taken by the property owner. Finally, it prohibits the DLGF from adopting rules concerning tax representatives that restrict a residential property owner who is an individual from appointing someone else to act on the owner's behalf in a property tax appeal to the property tax assessment board of appeals so long as the person does so without being paid. Katrina Hall supported the bill and it passed to the full Senate by a vote of 13-0.

HOUSE COMMITTEE OKs MEASURE TO ENCOURAGE RURAL ECONOMIC DEVELOPMENT   The House Commerce Committee has unanimously approved HB 1462, a bill that will encourage entrepreneurial ventures in rural Indiana. Rep. Steve Davisson (R-Salem), the bill’s author, explained to the committee that it created a venture capital investment credit that could be used to reduce the tax liability of the recipient of the credit. The bill requires that the credit be certified by the Office of Community & Rural Affairs and would be available only in counties with a population of less than 50,000. Currently there are 63 Indiana counties with less than 50,000 population.   Bob Kraft testified in support of the bill for Farm Bureau.

SENATE APPROVES CHANGES IN GOVERNMENT MERGER LAW  On Thursday, by a vote of 46-3, the Senate approved SB 343 (Sen. Randy Head R-Logansport), the bill that will bring the procedures for a municipality to merge with a township or an unincorporated area of the county into line with Farm Bureau policy. Perhaps the most significant change in the process is the new provision that a proposed merger must be separately approved by the voters both inside the municipal limits and those outside the city or town. Katrina Hall testified in support of the bill in committee.

BILL TO MODIFY NOTICE FROM IDEM MOVING  SB 586 is awaiting final action in the Senate after its author, Sen. Ed Charbonneau (R-Valparaiso), agreed to address concerns raised by Farm Bureau’s Justin Schneider. Sen. Charbonneau introduced the bill at the request of the Department of Environmental Management, and in its original form it would have eliminated the requirement that a report of an IDEM inspection of property be sent by certified mail. Instead it would have provided that the report could be sent by email or if the owner requested by ordinary U.S. mail. As amended, the bill will require notices to be delivered in the manner prescribed by the state’s administrative procedures act unless the property owner specifically requests them to be delivered in another way that IDEM is capable of.
 
FARM BUREAU JOINS COALITION TO PROTECT NATURAL GAS PRICES  Farm Bureau has joined a new coalition to protect Hoosier natural gas customers from the financial risks of the proposed substitute natural gas (SNG) plant scheduled to be constructed near Rockport in Warrick County. As proposed, this loss will be passed on by the state and will be borne by Hoosier natural gas customers. The IG proposal will not reconcile losses and benefits from the project until the end of the 30-year term, with Hoosier gas customers paying 100 percent of any losses during the term.

The new coalition called ACT NOW to Protect Hoosier Gas Customers is supporting legislation to protect customers by mandating that losses and potential benefits be reconciled every three years. The three-year “true-up” will ensure that gas customers are not subsidizing the private development.

The two bills that the coalition is supporting are SB 510 (Sen. Doug Eckerty, R-Yorktown) and HB 1515 (Rep. Suzanne Crouch, R-Evansville). SB 510 had been scheduled for a hearing in the Senate Utilities Committee on Thursday morning but it was removed from the scheduled late Wednesday afternoon.

A week ago, Farm Bureau’s Bob Kraft supported a bill that will facilitate the build-out of natural gas delivery infrastructure into rural Indiana. With natural gas prices at record lows, the availability of natural gas represents considerable savings to those farmers who can take advantage of it. That advantage could be lost if gas customers are asked to support the synthetic natural gas through the rates they pay. 

SEVERAL AG RELATED ALCOHOL BILLS CONTINUE TO MOVE  A number of bills dealing with Indiana-produced wine and beer continue to move through the legislative process.

• HB 1293 (Rep. Ed Clere, R-New Albany) creates an artisan distiller’s permit that would allow craft breweries and farm wineries to manufacture up to 10,000 gallons of liquor in a calendar year passed the House by a vote of 91-8 on Tuesday.
• HB 1017 (Rep. Eric Koch, R-Bedford) would allow farm wineries to self-distribute their product. It was approved by the Public Policy Committee on Wednesday.
• SB 100 and SB 401 (both authored by Sen. Jim Banks, R-Columbia City) both passed the Senate on Tuesday. SB 100 will allow craft breweries to sell their product in carry-out containers at farmers markets and SB 401 will allow them to participate in up to 45 trade shows or exhibitions a year with the approval of the alcohol and tobacco commission.

CME GROUP REDUCES TRADING HOURS  The CME Group (CME) has sent letters to customers advising that it will reduce trading hours for grain and oilseed futures and options contracts. CME did not specify how it would revise hours but noted that the exchange is seeking input from its customer base.

CME also stated that it would support a pause in trading during the release of USDA reports as long as the pause was consistent across all exchanges trading similar contracts. CME’s major competitor, the InterContinental Exchange (ICE), responded that it will not revise hours and will continue trading during report release. 

On January 1, several timing changes impacting futures trading were implemented.

• USDA’s National Agricultural Statistics Service (NASS) and the World Agricultural Outlook Board (WAOB) began issuing major crop reports at 11 a.m. CST. The release timing was changed due to an expansion of electronic futures trading hours that became effective last spring. Since 1994, major NASS reports were released at 7:30 a.m. CST, which now occurs during electronic trading hours for CME and ICE. 
• In conjunction with USDA’s new report release times, CME shifted its open outcry trading hours. CME previously opened pit trade at 7:20 a.m. CST on USDA report days and now has a 9:30 a.m. CST open for grain and soybean futures and options on those days.

While exchanges have the ability to set the trading hours for each contract traded, they are required to notify the Commodity Futures Trading Commission (CFTC) of any changes to the contract. CFTC must approve changes in trading hours. Farm Bureau has advocated for an hour-long pause in trading around the time of the release of major reports. 

EU REDUCES IMPORT BARRIERS  The European Union has announced that new rules, effective on February 25, will allow for the use of lactic acid washes (a food safety measure) for imports of U.S. beef and will also allow for the importation of live swine from the U.S. These actions meet some of the issues that the U.S. sought to resolve before deciding whether to launch negotiations on a comprehensive trade agreement with the EU.

The initiation of trade discussions between the U.S. and EU will only be announced after the release of a joint report on the viability of a U.S.-EU trade agreement.

RUSSIA TO BAN U.S. BEEF AND PORK IMPORTS  Russia has notified the U.S. that it will ban imports of U.S. pork and beef beginning on February 11 as they may contain the growth promoter ractopamine. In response, USDA has pointed out that Russia is obliged to implement and follow the Codex Commission’s acceptable residue level standard for ractopamine in imported meat products. This standard was adopted by the international food standards organization in July 2012. Russia currently bans the use of ractopamine by its producers.
 
Canada and Brazil have given Russia assurance that their products will be certified ractopamine-free before being shipped to Russia.

POSTAL SERVICE TO CUT SATURDAY DELIVERY  The U.S. Postal Service has announced that it will stop delivering mail on Saturdays beginning in August, although package deliveries will continue and post offices will remain open. The change in delivery schedules was made in response to the $15.9 billion loss the USPS sustained in 2012. The change will save about $2 billion annually.
 
American Farm Bureau supports discontinuing Saturday mail delivery if it is economically advantageous.

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