See: Indiana State Legislative Update May 3, 2021 - Part 4

May 03, 2021 12:24 PM | Wendy Bayley (Administrator)

Indiana General Assembly Recesses for 2021

Legislation That Died During the 2021 Indiana General Assembly - Continued

SB 247 – Deceptive Consumer Sales Act

Author: Sen. Ron Alting, R-Lafayette

Bill summary

Makes the following changes to the Deceptive Consumer Sales Act: (1) with respect to an action brought by an individual consumer under the act, increases: (A) the amount of statutory damages for an uncured or incurable deceptive act from $500 to $2,000; and (B) the amount of statutory damages for a willful deceptive act from $1,000 to $6,000. (2) In an individual action or a class action under the act, requires the court to award reasonable attorney fees to a prevailing consumer (versus allowing the court to award reasonable attorney fees to the prevailing party in the action under current law). (3) Provides that an individual action or a class action may be brought under the act with respect to transactions involving the lease of real estate, notwithstanding the act’s exemption from such suits for consumer transactions in real property. (4) Removes the act’s exemption from individual actions or class actions under the act for violations of the federal Fair Debt Collection Practices Act. (5) Amends the provision concerning prerequisites to bringing an individual action or a class action under the act to provide that a consumer’s written notice of a deceptive act to the supplier in the consumer transaction: (A) must be given within the earliest of: (i) one year (versus six months under current law) after the initial discovery of the deceptive act; (ii) one year following the transaction; or (iii) any time limit of at least 30 days under any warranty applicable to the transaction; and (B) is sufficient under the act if the written notice is reasonably calculated to provide notice of the general nature of the deceptive act and the resulting damages. (6) Amends the provision concerning the statute of limitations for actions brought under the act to provide that such actions may not be brought more than six years (versus two years under current law) after the occurrence of the deceptive act.

Why it matters

SB 247 is a significant expansion of the damages and scope of the Indiana Deceptive Consumer Sales Act. The bill increases the damages from $500 to $2,000 per violation, and from a limit of $1,000 to $6,000 for a “willful” deceptive act. In addition, the bill makes an award of attorney fees against the violator mandatory, as opposed to permissive, by the court and eliminates the requirement that these attorney fees bear any resemblance to the actual work performed by the plaintiff’s counsel. The bill also removes real estate leases from the previously exempt category of real estate transactions currently in the code. The IMBA had significant concerns about the direction of this bill.

What happened

The bill did not receive a hearing in the Senate.


HB 1038 – Septic System Inspection Before Property Transfer

Author: Rep. Mike Aylesworth, R-Hebron

Bill summary

This bill has the following provisions: Septic System Inspection: The bill provides that, beginning July 1, 2022, before a fee simple interest in a dwelling connected to a residential onsite sewage system, a non-dwelling structure connected to a commercial onsite sewage system, or a lot or tract of land containing a water well in addition to a residential or commercial onsite sewage system may be transferred: (1) the residential or commercial onsite sewage system must be inspected by a qualified inspector and (if applicable) water from the water well must be tested by a qualified tester; (2) a document certifying that the inspection or testing has been conducted and setting forth the results of the inspection or testing must be provided to the local health department, the county recorder and the person to whom the fee simple interest is being transferred; and (3) any cause of failure of the residential or commercial onsite sewage system must be eliminated before the county recorder may record a deed transferring a fee simple interest in the property.

Civil Action: The bill provides exceptions. It also provides that the failure of the owner of the dwelling, non-dwelling structure, or lot or tract of land on which a water well is located to provide the document to the transferee or prospective transferee: (1) is a complete defense to an action brought by the owner against the prospective transferee for breach of a contract to purchase the property; and (2) is a breach of a legal duty owed to the transferee for which the transferee may bring a civil action against the owner for compensatory damages.

Owner: It provides that if an inspection indicates that a dwelling’s residential onsite sewage system exhibits any conditions constituting failure, or the testing of water from the water well indicates a reportable presence of arsenic, nitrate, lead or coliform bacteria: (1) the owner of the dwelling shall state the results of the inspection or testing in the disclosure form that the owner is required to prepare before an offer for the sale of the dwelling is accepted; and (2) the failure of the seller to state this information in the disclosure form makes the sale of the dwelling voidable at the election of the buyer, even after the closing.

Indiana State Department of Health: The bill also requires the Indiana State Department of Health to adopt rules establishing: (1) requirements and standards for inspections and testing; (2) qualifications for inspectors and testers; and (3) requirements and standards for the training and certification of inspectors and testers.

Why it matters

The bill provides that before a residential or commercial property is transferred, it must be inspected by a qualified inspector for failure. If any indications of failure would be identified, the residential or commercial onsite sewage system failure must be addressed before the county recorder may record a deed transferring a fee simple interest in the property. The bill would create new challenges to the transfer of real estate. The IMBA monitored the legislation.

What happened

The bill did not receive a hearing in the House.


HB 1345 – Minimum Wage

Author: Rep. Pat Boy, D-Michigan City

Bill summary

The bill increases the minimum wage paid to certain employees in Indiana as follows: (1) after June 30, 2022, from $7.25 an hour to $8.20 an hour, (2) after Dec. 31, 2022, from $8.20 an hour to $9.15 an hour, (3) after Dec. 31, 2023, from $9.15 an hour to $10.10 an hour, (4) after Dec. 31, 2024, from $10.10 an hour to $11.00 an hour. The bill also provides that after Dec. 31, 2024, and each subsequent Dec 31, the hourly minimum wage increases at the same percentage as any increase in the Consumer Price Index for the preceding calendar year. The bill increases the cash wage paid to tipped employees as follows: (1) after June 30, 2022, from $2.13 an hour to $3.00 an hour, (2) after Dec. 31, 2022, from $3.00 an hour to $4.28 an hour, (3) after Dec. 31, 2023, from $4.28 an hour to $5.56 an hour, (4) after Dec. 31, 2024, from $5.56 an hour to $6.85 an hour. It provides that after Dec. 31, 2025, and continuing for each subsequent Dec. 31, the cash wage required to be paid to employees is equal to 70% of the hourly minimum wage. The bill also provides that, if the federal minimum wage or cash wage is higher than the state minimum wage or cash wage, employers are required to pay the higher federal rate.

Why it matters

The bill increased the minimum wage paid to certain employees in Indiana to $11.00 an hour. The bill would have stair stepped the increase up over three years. While this issue falls under general employment, the IMBA was monitoring the bill due to its impact on members.

What happened

The bill did not receive a hearing in the House.


HB 1411 – Consumer Loan Finance Charges
Author: Rep. Jeff Ellington, R-Bloomington

Bill summary

This bill makes the following changes to the Uniform Consumer Credit Code: (1) provides that for a consumer loan, a lender may contract for a loan finance charge not exceeding 36% per year, in the case of a loan agreement entered into after June 30, 2021 (versus a loan finance charge not exceeding 25% in the case of a loan agreement entered into before July 1, 2021, and in the case of any consumer loan under current law); (2) amends the definition of “supervised loan” to provide that the term applies only to specified consumer loans for which a loan agreement is entered into before July 1, 2021); (3) amends the provisions concerning the permitted loan finance charge for supervised loans to provide that the provisions apply only to a loan agreement (or to an agreement for the refinancing or consolidation of a loan) that is entered before July 1, 2021; (4) specifies that if a supervised loan entered into by a lender and a debtor before July 1, 2021, is paid in full by a new loan from the same lender after June 30, 2021, the new loan is not considered a supervised loan and is subject to provisions on the permitted loan finance charge for consumer loans. The bill also makes conforming changes to provisions in the Indiana Code that reference the permitted finance charge for supervised loans.

Why it matters

Provides that for a consumer loan, a lender may contract for a loan finance charge not exceeding 36% per year, in the case of a loan agreement entered into after June 30, 2021 (versus a loan finance charge not exceeding 25%, in the case of a loan agreement entered into before July 1, 2021, and in the case of any consumer loan under current law). The IMBA was neutral on the bill.

What happened

The bill did not receive a hearing in the House.


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