STATE GOVERNMENT RELATIONS
House Bill 1002 - Various Tax Matters
Author: Rep. Tim Brown (R-Crawfordsville)
Bill Summary: The bill repeals a provision that would require the budget agency to transfer the amount of combined excess reserves that exceed $2.5 billion in calendar year 2022 to the pre-1996 account of the Indiana state teachers’ retirement fund. Amends provisions that provide for an automatic taxpayer refund if sufficient excess reserves are available to: (1) clarify the tax return filing requirement for a refund; (2) require that refunds be distributed before May 1 of the calendar year immediately following the year in which a determination is made that the state has excess reserves; (3) remove provisions that require a taxpayer to have adjusted gross income tax liability in order to qualify for the refund; and (4) remove provisions that require the refund to be made in the form of a refundable tax credit. Provides that the minimum valuation limitation applicable to the total amount of a taxpayer’s assessable depreciable personal property in a taxing district is 30% of the adjusted cost of the depreciable personal property purchased before Jan. 2, 2022. Provides an exemption from the 30% minimum valuation limitation for new depreciable personal property purchased after Jan. 1, 2022. Requires the department of local government finance to develop or amend forms for property taxation of assessable depreciable personal property. Repeals the utility receipts and utility services use taxes. Provides a state income tax credit for property taxes paid on certain business personal property. Specifies a formula for determining the amount of the credit. Removes the double direct test currently applied in production sales tax exemptions. Phases down the individual adjusted gross income tax rate from 3.23% in 2022 to 3% in 2026 and thereafter.
Latest action: The bill was heard in the House Ways and Means Committee on Jan. 12. It was voted out of committee 15-7.
House Bill 1224 - Government Investments and Contracts
Author: Rep. Ethan Manning (R-Miami County)
Bill Summary: This bill has the following provisions:
- Provides that the state, a political subdivision, or a separate or independent body corporate and politic may not make certain investments in companies that boycott energy companies or companies that do business with energy companies.
- Provides that a state or local governmental body may not enter into a contract with certain companies for the purchase of supplies or services unless the contract contains a written verification from the company that the company does not boycott energy companies and will not boycott energy companies during the term of the contract.
Latest action: The bill was assigned to the House Financial Institutions and Insurance Committee.
Senate Bill 351 - Virtual Currency
Author: Sen. Chris Garten (R-Scottsburg)
Bill Summary: The bill adds a new chapter to the Uniform Commercial Code (UCC) that governs transactions involving virtual currency and that does the following:
- Defines "virtual currency."
- Establishes the following:
- The extent to which a purchaser acquires rights and interests in virtual currency.
- The circumstances under which a qualifying purchaser acquires rights in a virtual currency free of any adverse claim.
- The conditions that must be satisfied for a person to be considered to have control over virtual currency.
It amends certain sections in the UCC chapter concerning secured transactions to reference virtual currency and to provide for the perfection of a security interest in virtual currency by:
- control; or
- the filing of a financing statement.
It amends the Indiana statute concerning unclaimed personal property to:
- conform the definition of "virtual currency" in that statute to the new definition set forth in the UCC; and
- authorize (rather than require, as specified in current law) the Attorney General to adopt rules regarding virtual currency and digital assets, to the extent such rules are consistent with, and not otherwise covered by:
- the bill's provisions; or
- any other Indiana law concerning virtual currency or digital assets.
Latest action: The bill was assigned to the Senate Judiciary Committee.
Senate Bill 408 - Community Investment by Financial Institutions
Author: Sen. Andy Zay (R-Huntington)
Bill Summary: The bill amends the statute authorizing a bank or trust company to make investments in community based economic development to also authorize investments in: (1) any community and economic development entity, community development project, or other public welfare investment; and (2) tax equity finance transactions; subject to the investments being made in compliance with applicable federal regulations and any regulation, rule, policy, or guidance adopted by the Department of Financial Institutions (DFI).
Latest action: The bill was assigned to the Senate Insurance and Financial Institutions Committee.
Hollingsworth Will Not Seek Re-election
Republican Congressman Trey Hollingsworth, who represents the ninth congressional district in southern Indiana, announced Wednesday, Jan. 12, that he will not seek reelection. His term will end in 2023.
State Sen. Mrvan Retires
After 43 years of service in the General Assembly, State Sen. Frank Mrvan (D-Hammond) has officially announced his retirement on Tuesday. He released the following statement: "Today, I notified Indiana State Senate Majority Leader Rodric Bray that I am retiring effective January 11, 2022."
FEDERAL GOVERNMENT RELATIONS
Supreme Court Strikes Down Vaccine Mandate for Large Employers
The Supreme Court yesterday blocked the employer vaccine mandate issued by the Occupational Safety and Health Administration, which would have required employers with 100 or more employees to ensure staff are vaccinated or tested weekly for COVID-19, among other requirements.
In mid-December, business groups challenging the vaccine mandate filed an application with the Supreme Court for an emergency stay of the mandate. The Sixth Circuit Court of Appeals previously upheld the mandate. The stay by the Supreme Court is effective until the challengers can appeal the Sixth Circuit’s decision in that court and to the Supreme Court, a process that likely will take at least several months.
In a separate ruling yesterday, the court upheld a nationwide vaccine mandate for workers at federally funded healthcare facilities.
FDIC Tumult Likely to Slow Banking Sector Consolidation
The brisk pace of consolidation recently seen in the banking sector will likely slow due to the resignation of Federal Deposit Insurance Corp. Chairman Jelena McWilliams, the only Republican on the agency's board. "We expect near-term pressure on financials on the accelerating regulatory shift, particularly for banks with pending deals that would form a combined entity with assets over $100 billion," Raymond James analyst Ed Mills wrote.
Banking Committee to Consider Fed, FHFA Nominees
The Senate Banking Committee on Jan. 11 considered the nomination of Jerome Powell to serve a second term as Federal Reserve chairman, and on Jan. 13, the committee consider the nominations of Lael Brainard to serve as vice-chair of the Fed and Sandra Thompson to serve as director of the Federal Housing Finance Agency.
Powell Vows to Fight Inflation in Second Term
Federal Reserve Chairman Jerome Powell told the Senate banking committee on Tuesday that the central bank will act to prevent inflation from growing unchecked. "We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched," Powell said in prepared remarks for his confirmation hearing for a second four-year term.
Powell: Climate Stress Scenarios to be Key Tool
Climate change stress tests will "be a key tool going forward," Powell told the Senate Banking Committee members during his confirmation hearing on Tuesday. Powell told the committee that the Fed is looking at climate stress tests and is focused on "assuring that the large financial institutions understand all the risks that they are taking, including the risks that may be inherent in their business model regarding climate change over time."
"Our role on climate change is a limited one, but it is an important one – and it is to assure that the banking institutions that we regulate understand their risks and can manage them," said Powell. Powell acknowledged that if he is confirmed, climate change would be a top priority over the coming years as it relates to the Fed's existing mandate. He added, however, that the broader policies addressing climate change must come from legislators and the private sector.
Clarida to Retire from Fed Board
Federal Reserve Vice Chairman Richard Clarida said that he would resign from the Federal Reserve Board of Governors on Jan. 14. Clarida has been a member of the board and vice-chair since September 2018 and has represented the board internationally at the International Monetary Fund.
Fed Clarifies Its Approach to HOLA Flexibility
The Federal Reserve has released a long-awaited set of frequently asked questions regarding its approach with regard to Office of the Comptroller of the Currency-regulated federal savings associations and federal mutual savings banks that choose to exercise the option to become a "covered savings association," as allowed by Section 206 of the 2018 S. 2155 regulatory reform law. The law provided additional flexibility for institutions chartered under the Home Owners Loan Act. The FAQs address consequences under the Bank Holding Company Act, Federal Reserve Act, and related regulations and reporting requirements.
The FAQs clarify that mutual holding companies do not have to convert and clarify that compliance with the qualified thrift lender test for CSAs is under the purview of the OCC, not the Fed. Additionally, they clarify that the parameters of the Bank Holding Company Act would apply to companies that control CSAs and that CSAs would have to become members of the Federal Reserve system, but their primary federal regulator (the OCC) would not change.
BofA to End Non-Sufficient Funds Fees
Beginning in February, Bank of America will no longer charge non-sufficient funds fees as part of its overdraft services. The bank will also stop charging a transfer fee for its Balance Connect service beginning in May.