27 Hoosier Banker May 2016 However, all of the foreclosure mischief language and criminal trespass language in SB 204 was amended into SB 183. HB 1321 – Sales Tax on Services Rep. Tim Brown, R-Crawfordsville Bill summary: The bill decreases the state gross retail (sales) and use tax from 7 percent to 3.1 percent. It provides that the sales and use tax applies to transactions involving services. The bill repeals most sales and use tax exemptions, except some exemptions that are available to a person because of the type of organization. It eliminates the double direct test for the sales and use tax exemption for various transactions involving various types of tangible personal property. It establishes a new single direct test that provides an exemption for tangible personal property or a service that is acquired by a person for the person’s direct use or consumption in the production of tangible personal property. Details: This legislation would apply to financial institutions regarding taxation of services. There has been speculation over the past few years about the Indiana General Assembly exploring this significant tax policy change; however, HB 1321 was withdrawn shortly after it was introduced. The IBA expects this issue to emerge again in the future. The IBA will be opposed to any tax on services as performed by a financial institution. Outcome: The bill was withdrawn almost immediately after it was introduced for consideration. SB 344 – Civil Rights Sen. Travis Holdman, R-Markle Bill summary: The following is a detailed synopsis of the last version of the bill before it was withdrawn for consideration. SB 344 contains a non-severability clause stating that the bill’s provisions “are the result of the General Assembly’s balancing of different religious views and matters of conscience so that individuals of good faith can live and work together without undue litigation or burden.” Civil rights provisions: • Adds sexual orientation, active-duty military status and veteran status to Indiana’s non-discrimination laws for employment, housing, public accommodations, education and access to credit. • Calls for a legislative study committee on the topic of discrimination based on gender identity. • Provides an exemption from the civil rights provisions related to sexual orientation for religiously affiliated nonprofits and houses of worship. In addition to this broad definition of “religious or religious affiliated organization,” the bill exempts the following: o Nonprofits organized with the “one primary purpose of offering religious-centered programs” o Educational nonprofits organized with the “one primary purpose to encourage students to incorporate a religious point of view in the academic and practical activities of students and graduates” o Adoption services and crisis pregnancy services organized with the “one primary purpose to encourage the carrying of pregnancies to full term” • Provides an exemption from the civil rights provisions related to sexual orientation for businesses with five or fewer employees when the business is providing marriage-related services (including, but not limited to, wedding services and marriage counseling). Effect on local civil rights ordinances: • Maintains all local civil rights ordinances as they existed on Dec. 31, 2015. Prohibits new local ordinances that differ from state civil rights law regarding who is covered and what penalties can be levied. Standard of review for constitutional rights: • Repeals the Religious Freedom Restoration Act (including the RFRA “fix”) and codifies the Indiana Supreme Court’s existing standard of review for claims involving the following Indiana constitutional rights: 1. The right to worship (Article 1, Section 2) 2. The right to free exercise and enjoyment of religious opinions and the right of conscience (Article 1, Section 3) 3. Freedom of religion (Article 1, Section 4) 4. Freedom of thought, speech, writing and printing (Article 1, Section 9) 5. The right to assemble (Article 1, Section 31) • The newly codified standard of review for these rights would be the “material burden” standard as already used by the Indiana Supreme Court. This standard specifies that a government action is unconstitutional if it burdens a right in such a way that “the right, as impaired, no longer serves the purpose for which it was designed” (quote from the 1993 Price vs. State ruling). Prohibition on government sanctions against religious organizations: • Prohibits the state and local government from taking any discriminatory action against clergy, houses of worship and religious-affiliated nonprofits based on their beliefs and actions regarding marriage. o This provision would, for example, prevent the government from revoking the tax-exempt status of a covered organization or denying a state contract to a covered organization. • Allows religious-affiliated state contractors to limit their hiring to individuals who follow the teachings of the contractor’s religion, to the extent already permitted for federal contractors under federal law. Prohibition on government denial of licenses: • Prohibits the state and local governments from denying any license to a person based on the applicant’s lawful activities related to marriage and sexual orientation. o This provision would, for example, prevent a county clerk from denying a marriage license to a same-sex couple. Protection against unfounded discrimination claims: • Requires the state and local civil rights commissions to adopt policies and procedures to protect people from unfounded charges of discrimination. Details: Sen. Holdman, author of the bill, declared that he would not call the bill down to be eligible for second reading amendments, effectively killing the bill due to the second reading deadline the following day. This occurred after several weeks of intense negotiations on different components of what would be included in the bill. The bill ultimately did not have enough support from either caucus to move forward as drafted. Outcome: SB 344 died, due to legislative inaction. t
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