NIPSCO Economic Development Update: Legislation Into Law

By: NIPSCO Last Updated: May 14, 2012

New laws passed by the Indiana General Assembly are woven into the fabric of economic development in the state.

Three In the News

The Indiana Chamber of Commerce highlighted three new pieces of legislation as having the potential to positively impact Hoosiers for generations to come.

HEA 1001: Right to Work for Employees
Indiana received national attention when the Right to Work Act was passed, and signed by Governor Daniels on February 1. Right-to-work for employees prohibits unions from requiring workers to join or pay dues to a labor union to get or keep a job in the state. It does not eliminate unions or collective bargaining, apply to federal employees, or affect collective bargaining in the construction industry. Indiana is the 23rd right-to-work state; the neighboring Midwest states Illinois, Michigan, Wisconsin and Kentucky are not.

HEA 1149: Smoking Ban
The Chamber commended legislators for passing a statewide smoking ban, which prohibits smoking in the majority of workplaces (bars/taverns and gambling institutions are major exceptions), all restaurants and within eight feet of a building's public entrance. According to the Chamber, the ban will protect 95 percent of Hoosiers while at work.

Kevin Brinegar, president of the Indiana Chamber of Commerce, said, Smoking has direct financial ramifications for all businesses that offer health care insurance and the employees who are covered, not to mention the health implications for those non-smokers who unavoidably encounter second-hand smoke.

SEA 293: Inheritance Tax
The law prescribes a ten-year phase-out (from 2013 to 2022) of the state's inheritance tax, which Brinegar described as unnecessarily burdensome for so many Hoosiers. Brinegar pointed to the small family-owned business as an example. The inheritance tax could be a tremendous hindrance, continuing after the death of the owner.

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From the Statehouse to Northwest Indiana

The topography of Northwest Indiana was a critical component in formulating one piece of legislation, while the area's location may give it a strategic advantage in using another new law.

HEA 1264: Flood Control in Lake County
In September 2008, heavy rains caused flooding along the Little Calumet River, inundating Munster and Hammond, and closing the Borman Expressway for a week. Dan Repay, executive director of the Little Calumet River Basin Development Commission, said that closing the Borman resulted in more than $800 million in lost commerce. The $275-million federal flood-control and recreation project in the Little Calumet River Basin began in the early 1980s. Repay estimated that 98 percent of the project is complete, but approximately $3 million worth of corrections are still needed. In addition, maintenance of the levees was an unfunded challenge.

Under House Enrolled Act (HEA) 1264 sponsored by State Representative Ed Soliday (R-Valparaiso), property owners in the flood zone will contribute to rebuild and repair the levees that protect against flooding.

This legislation will bring desperately needed flood relief, helping protect homes and businesses from frequent flood disasters. This is a major step towards reining in insurance rates, as well as removing the huge financial burden floods place on local communities, said Soliday.

Under the provisions of HEA 1264, the Little Calumet River Basin Development Commission is responsible for managing the flood control efforts.

Don Babcock, Director of NIPSCO Economic Development, and Chair of the Northwest Indiana Forum, said, The flooding had a huge negative impact on our economy. We have the correction in place, but the maintenance requires funding.

Donald Koliboski, Economic Development Director of the Forum, said, Fixing our water drainage problems is critical to economic development. When companies are looking to locate, the funding gives a sense of security when promoting Northwest Indiana.

SEA 302: Technology Equipment Property Tax Exemption
SEA 302 is Indiana's way of saying, Welcome to the data hotel.

In 2009, the state passed a property tax exemption on information technology equipment purchased for facilities such as data centers for companies that invested at least $10 million in the property. In the short span since, the concept of the data hotel, in which several companies are tenants in one facility, has become the model of the industry.

Before this new amendment, Koliboski said, Every company that went into a shared facility would have to invest $10 million. SEA 302 amends the original legislation so that the total investment in the facility is $10 million.

Babcock said that SEA 302 was an initiative of the Forum and IEDA. The tax exemption was a big project, said Skip Kuker, co-chairperson on the IEDA legislative committee. It was something we looked favorably upon as a group. Koliboski said, It is a substantial change, and will allow data centers to be more successful.

The Forum would like to see those data hotels take up residence in the area. Northwest Indiana is physically in a unique position, as an eastern 'suburb' of Chicago, to take advantage of the legislation, said Koliboski. It gives us a new tool to attract tech jobs here.

Following Through on a Decent Session
The technology equipment tax exemption is one example of the IEDA's effectiveness at legislative engineering.

A representative from each of Indiana's nine congressional districts sits on the IEDA legislative committee. The members realized the necessity to update a law that would benefit the state in general, and Northwest Indiana members, seeing the regional advantage in particular, took the lead on the issue, teaming with legislators and local leaders such as the Forum to advocate for its passage.

That's the way we run our legislative committee, said Kuker. We go with those who use the tool and have expertise in it. The people who use it are the best sellers of legislation.

Some bills supported by the various economic development organizations didn't make it through the session to become law, such as those offering changes to preservation tax credits and redevelopment commissions. Still, said legislative co-chair William Dory, Greencastle-Putnam County Development, Overall, for economic development, it was a decent session.