Indiana State Legislative Update May 3, 2021 - Part 2

May 03, 2021 12:09 PM | Wendy Bayley (Administrator)

Indiana General Assembly Recesses for 2021

Legislation That Passed the 2021 Indiana General Assembly - Continued

SEA 400 – Statewide Electronic Lien and Title System

Author: Sen. Chris Garten, R-Charlestown

House Sponsor: Rep. Jim Pressel, R-Rolling Prairie

Bill summary

Requires the Bureau of Motor Vehicles to implement a statewide electronic lien and title system (system) to process: (1) vehicle titles; (2) certificate of title data in which a lien is notated; and (3) the notification, maintenance and release of security interests in vehicles; through electronic means instead of paper documents. Provides that the BMV may: (1) contract with one or more qualified vendors to develop and implement a system; or (2) develop an interface to provide qualified electronic lien service providers secure access to data to facilitate the creation of a system. Sets forth certain requirements that apply if the bureau elects to implement the system through a qualified vendor versus through qualified electronic lien service providers. Specifies that a contract entered into between the BMV and: (1) a qualified vendor; or (2) a qualified electronic lien service provider; may not provide for any costs or charges payable by the bureau to the qualified vendor or the qualified electronic lien service provider. Sets forth dates by which the BMV must implement and allow or require the use of: (1) a statewide electronic lien system; and (2) a statewide electronic title system. Sets forth certain conditions that apply to the use of a statewide electronic lien system implemented by the BMV under these provisions. Provides that under certain circumstances, the bureau may not charge state agencies or their agents with certain fees associated with the statewide electronic lien and title system. Authorizes the bureau to adopt rules, including emergency rules, to implement these provisions.

Why it matters

SEA 400 requires the Bureau of Motor Vehicles to implement a statewide electronic lien and title system to process: (a) vehicle titles; (b) certificate of title data in which a lien is notated; and (c) the notification, maintenance and release of security interests in vehicles; through electronic means instead of paper documents. The bill requires the use of this system for liens starting July 1, 2022, and for titles starting July 1 ,2023, for all entities that are part of the transaction, including lenders. The IMBA worked closely with the author of the legislation and had no objections to the mandated use of these systems based on the positive benefit of the electronic lien and title process for lenders.

What happened

The bill passed the General Assembly and was signed by the governor.


HEA 1001 – State Budget

Author: Rep. Tim Brown, R-Crawfordsville

Senate Sponsor: Sen. Ryan Mishler, R-Bremen

Bill summary

This bill appropriates money for capital expenditures, the operation of the state, K-12 and higher education, the delivery of Medicaid and other services, and various other distributions and purposes. The bill also makes a number of other changes. Those more relevant to financial institutions are listed below.

Regional Economic Acceleration and Development Fund: The bill establishes the READI fund to provide grants and loans to support economic development and regional economic acceleration and development. It provides that the Indiana Economic Development Corporation shall administer the fund. It also requires the IEDC to establish a policy for the Regional Economic Acceleration and Development Initiative. The bill repeals the Regional Cities Development Fund.

Internal Revenue Code: The bill provides certain add backs and subtractions used in determining Indiana adjusted gross income. It changes the definition of “Internal Revenue Code” in the adjusted gross income tax law to mean the Internal Revenue Code of 1986 as amended and in effect on March 31, 2021. The bill provides that in the case of an amendment to a federal statute that is made outside of Title 26 of the U.S. Code and affects federal adjusted gross income, federal taxable income, federal tax credits or other federal tax attributes, the federal statute shall be considered to be part of the Internal Revenue Code as amended and in effect on March 31, 2021.

Venture Capital Investment Tax Credit: The bill amends the venture capital investment tax credit to apply to taxpayers that provide qualified investment capital to certain qualified Indiana investment funds (qualified fund). The bill provides that the IEDC may only certify a fund as a qualified fund if the fund meets the definition of a venture capital fund under federal regulations, and the fund makes investments according to specified policy requirements and priorities. The bill provides that a taxpayer may not claim a credit certified with regard to a qualified fund before July 1, 2023. It specifies the maximum available tax credits in a calendar year with regard to a qualified fund. It also increases the maximum available tax credits in a calendar year with regard to qualified Indiana businesses under current law, including an additional increase in the maximum amount if the qualified Indiana business is a minority business enterprise or a women’s business enterprise. It caps the total amount of credits that the IEDC may award in a calendar year at $20 million, provided that not more than $7.5 million is awarded for proposed investments in a qualified fund.

Hoosier Business Investment Tax Credit: The bill provides that, in the case of the Hoosier business investment tax credit, the IEDC may under a written agreement accelerate payment (at a discounted amount) of any unused excess tax credit that certain taxpayers would otherwise be eligible to carry forward to a subsequent tax year. It provides that a written agreement for an accelerated payment may include a provision for liquidated damages: (1) for failure to comply with the terms and conditions for the tax credit; (2) that are in addition to any tax assessment the Department of Revenue may make for noncompliance; and (3) in the case of a partnership, S corporation or similar pass-through entity, that are personally guaranteed by the partners, shareholders or members of the pass-through entity. It provides that the total amount of accelerated tax credits that the IEDC may approve may not exceed $17 million in a state fiscal year.

Foster Care Support Tax Credit: The bill provides a tax credit against adjusted gross income tax and financial institutions tax liability for monetary contributions to a qualifying foster care organization equal to 50% of the amount of the contribution, but not to exceed $10,000 for a taxable year. It defines a “qualifying foster care organization.” It also caps the total amount of the tax credits allowed in any state fiscal year to $2 million and sunsets the tax credit on July 1, 2025.

Why it matters

The bill establishes Indiana’s operating budget for the coming two years. It also makes a number of other changes that fall outside of the budget drafting process, including an enhancement of the Venture Capital Investment Tax Credit, the creation a program similar to Regional Cities titled Regional Economic Acceleration and Development Initiative (READI) and language that brings the Indiana tax code up-to-date with federal tax code changes made in 2020. The bill may also incorporate federal tax provisions that are decoupled from state tax code for purposes of liability. The Department of Revenue added a provision that will reduce net operating loss deductions available to individual taxpayers as related to pass-through entities.

What happened

The bill passed the General Assembly and was signed by the governor.


See: Indiana State Legislative Update May 3, 2021 -  Part 3


Contact Us:

© Indiana Mortgage Bankers Association

19359 Alpine Drive

Lawrenceburg, IN  47025

Office:  (812) 537-1003

Email:  ExecDir@IndianaMBA.org

Powered by Wild Apricot Membership Software