New Indiana Laws to Take Effect July 1, 2022

The 2022 legislative session wrapped up on March 9, 2022, ending a short session that was packed with several high-profile bills. One of the key priorities of the 2022 legislative session was comprehensive tax reform, which resulted in a $1.1 billion tax cut for Hoosier residents. Other widely discussed bills included the repeal of the handgun permit requirements and a bill addressing high school student participation in sports. Below is a summary of some of the key legislative developments from the 2022 session.

TAXES

Perhaps the most significant piece of legislation in 2022 was HEA 1002.Legislators from both chambers spent most of the session negotiating the terms of this legislation, which culminated in the passage of HEA 1002.Key provisions include a cut in the state income tax rate from 3.23% to 2.9% over seven (7) years if certain economic conditions are met and repeal of the utility receipts tax.

Another new bill for 2022 was HEA 1303.This bill allows an Indiana taxpayer to obtain a credit against state income taxes for contributions made to an Indiana ABLE 529A savings plan. The amount of the credit is equal to the lesser of (i) 20% of the amount of contributions to the Indiana ABLE 529A savings plan, (ii) $500, or (iii) the taxpayer’s adjusted gross income tax as reduced by any credits.

REAL ESTATE/DEVELOPMENT

SEA 119 allows a designating body such as a city, town, or county to declare an area predominately used for agricultural purposes as an economic revitalization area. The practical effect of this law is that certain agricultural improvements such as barns, grain bins, and silos as well as farm equipment such as combines and tractors may now qualify for a property tax abatement. The abatement on an agricultural improvement is based on the increase in assessed value as a result of the improvement and lasts for a maximum period of five years. To obtain an agricultural abatement, property owners will need to follow a similar process as other applicants, including the filing of a statement of benefits.

HEA 1048 made a few changes to sheriff’s sales for foreclosure properties. Sheriffs are now permitted to conduct the public foreclosure action electronically. In addition, this law establishes a list of persons who are ineligible to bid on properties in a foreclosure sale. These ineligible bidders include persons who are subject to certain orders under an unsafe premises law (e.g., neighborhood code enforcement orders), persons who owe delinquent real or personal property taxes, business entities if any of the business’s members are subject to enforcement actions under an unsafe premises law, and foreign businesses that have not obtained a certificate of authority from the Indiana Secretary of State. Bidders will now be required to sign a statement certifying they are not ineligible to bid.

Another new development relates to the authority of homeowner’s associations to regulate solar power systems within their communities. Under prior law, homeowner’s associations could prohibit residents from installing solar devices on their roofs and in their yards. As a result of HEA 1196, which took effect March 14, 2022, if a homeowner requests to install a solar system on the homeowner’s property and that request is denied by the homeowner’s association or architectural board, the property owner may petition the members of the association for approval to install the solar system. If the petition is signed by the lesser of 65% of the members of the association or the minimum number of members required to amend the association’s bylaws or covenants, the homeowner can submit the petition to the association’s board. Upon receipt of an approved petition, the association’s board cannot deny the request from the homeowner. The bill also places limitations on the reasons for which a homeowner’s association may deny a request for a solar system.

HEA 1262 prescribes certain rules for eminent domain actions that involve the taking of an outdoor advertising sign. INDOT is now required to provide notice of a project at least 12 months prior to the project beginning if the project will involve the taking of an outdoor advertising sign. In addition, any entity that exercises eminent domain is now required to pay full compensation for an outdoor advertising sign in an amount equal to the fair market value of interests associated with the sign, including leasehold interests and access rights.

UTILITIES

2022 also saw some changes with respect to the utility industry. One of the bills that generated a lot of discussion this session was HEA 1245.This law prohibits most municipally owned utilities from charging a “capacity related fee,” (e.g., a system development charge, availability fee, and interceptor fee) or tap fee that includes contributions in aid of construction. This law was intended to prevent utilities from double dipping by charging capacity related fees even if some or all of the infrastructure at issue was financed by a contribution in aid of construction.

SEA 272 and SEA 273 both arose out of the wastewater task force that was created during the 2021 legislative session. Both laws offer a comprehensive set of regulations with respect to the financing and development of water and wastewater assets. Some of the key provisions include requirements for maintaining and providing an asset management program as a condition of receiving a grant, loan, or other financial assistance from the IFA.SEA 272 also establishes rules for utilities that are not under the jurisdiction of the IURC with respect to the approval of rates and charges if the utility receives enforcement orders from IDEM. For example, if a utility that is not currently under the IURC’s jurisdiction receives two (2) enforcement actions from IDEM within two (2) years, the utility becomes subject to the jurisdiction of the IURC with respect to the approval of rates for a minimum period of either five (5) years or one (1) year after the filing of a second base rate case.

ESTATE PLANNING

During the 2022 legislative session, there were a couple of key changes in the area of estate planning. SEA 67 increases the value of small estates that can be distributed by affidavit or summary estate distribution procedures from $50,000.00 to $100,000.00.Thus, if the value of the estate, after taking into consideration liens and other encumbrances, is less than $100,000.00, the opening of an estate under IC 29-1-7 or 29-1-7.5 is not necessary. In addition, HEA 1205 establishes the Uniform Trust Decanting Act in Indiana and grants certain powers to trustees such as the power of a trustee of an irrevocable trust to appoint a successor trustee or multiple trustees and to make limited modifications to an irrevocable trust, including an asset transfer to a new trust.

MISCELLANEOUS

HEA 1041 generated a lot of attention during the 2022 legislative session. This law requires school corporations to designate athletic teams or sports as being male, female, or co-educational and prohibits males (based on the student's biological sex at birth in accordance with the student's genetics and reproductive biology) from participating in an athletic team or sport that has been designated by the school as female. This bill was vetoed by Governor Holcomb, and the general assembly was called back for an override vote, which passed by wide margins in both the house and the senate.

HEA 1296 removed the license requirements for handgun owners to carry their firearms in this State. Although this bill generally allows law-abiding handgun owners to carry on their person or vehicle within this State, there still are some places where guns are not permitted. These include school property, school buses, aircrafts, airports, and shipping ports. With the passage of this law, Indiana joins 21 other states that allow some form of permit-less carry.

Barrett McNagny LLP is a full-service law firm with a dedicated team that can help you navigate the impacts of any new laws on you or your business. If you have any questions about the 2022 legislative session and what these laws mean for you, please contact one of our professionals today.

About the Author:

Brandon J. Almas focuses his practice in the area of real estate and land use law, with a focus in the area of utility, regulatory and municipal law. He can be reached at 260.423.8819 or at bja@barrettlaw.com

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