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Wednesday, May 06, 2015

Ind. Gov't. - More on "Tax scofflaws get chance to pay without penalty" [Updated/Corrected]

The ILB has already had some questions on the tax amnesty plan reported on earlier this afternoon. A sample:

Saw your article on this topic. I’m shocked I hadn’t heard anything about this proposal (or now, law) prior to today, as I try to stay quite well-informed on local legislation, especially in my own practice area. (Your blog helps immensely in this regard!)

Does this appear to have been on the radar anywhere else? Was there any debate on the issue in the General Assembly?

I’m concerned that there wasn’t any chance for public input on this, or for input from the tax practitioner community.

It turns out this was a "budget surprise," language not passed by either house, but added to the budget conference committee report. According to an IBJ story:
Both the House and Senate versions of the budget had provided money for the Hoosier State [railroad from Indianapolis to Chicago], but the funding was withdrawn during a late conference committee because of a lower state revenue forecast.

Olson said fiscal leader Sen. Brandt Hershman, R-Buck Creek, came up with the tax-amnesty program. The program is expected to generate more than the $90 million allocated to the IEDC and INDOT.

Another IBJ story, this one by Ed Feigenbaum, says:
Surprises included ... the decision to fund the governor’s heavily lobbied and little-understood Regional Cities initiative via a tax amnesty program — not a stirring endorsement, but a win for him, nevertheless.
This long May 1st story by Chris Morissse Vizza of the Lafayette Journal and Courier is headed "Hoosier State train forging ahead," and reports, deep into the story:
Funding was restored after State Senator Brandt Hershman came up with a plan to allocate money from a new tax amnesty fund to reimburse INDOT for the cost of operating the Hoosier State.
This May 1 story from Niki Kelly of the Fort Wayne Journal Gazette reports, also deep within the story:
[Pence] also is pleased that lawmakers found $84 million in funding for a new regional cities initiative. The funding had been slashed and legislators weren’t particularly enthused about, it but Pence worked the issue hard. Eventually, they settled on allowing the governor to use money from an upcoming tax amnesty program.
The answers are found in the as-passed 2015 budget, HEA 1001, starting at SECTION 91 [pdf page 146]. SECTION 93 [pp 147-148] explains:
(1) The first eighty-four million dollars ($84,000,000) collected must be deposited into the
Indiana regional cities development fund established by IC 5-28-38-2.
(2) After making the deposits required under subdivision (1), the next six million dollars
($6,000,000) collected shall be transferred to the Indiana department of transportation to
reimburse the Indiana department of transportation for money expended by the Indiana
department of transportation under IC 8-23-2-18.5 for the operation of the Hoosier State Rail
Line. However, the total amount transferred under this subdivision to the Indiana department
of transportation may not exceed the lesser of:
(A) six million dollars ($6,000,000); or
(B) the total amount expended by the Indiana department of transportation under
IC 8-23-2-18.5 for the operation of the Hoosier State Rail Line after June 30, 2015, and before
July 1, 2017.
(3) Any remaining amounts collected must be deposited into the state general fund.
[Updated/Corrected at 2:50 PM] Niki Kelly of the Fort Wayne Journal Gazette writes to point out:
The tax amnesty program was included in two bills - 1349 and 441 - from day one. It was part of tax simplification Pence was pushing. It passed both the House and Senate multiple times. It was not a budget surprise except that they dedicated the money to Regional Cities.
Kelly adds that she noted at the end of a Jan. 30th story on one of those bills:
The bill also would provide for another one-time tax amnesty program expected to bring in up to $160 million in fiscal year 2017. Those who participated in the amnesty program under then-Gov. Mitch Daniels would not be allowed to enroll again.

Posted by Marcia Oddi on May 6, 2015 01:49 PM
Posted to Indiana Government