Indiana Farm Bureau Tuesday thanked Gov. Mitch Daniels for signing into law the act that reforms Indiana’s inheritance tax.

Senate Enrolled Act 293 phases out the state inheritance tax over a nine-year period beginning in 2013 and increases from $100,000 to $250,000 the amount that may be inherited by the next generation before the inheritance tax is assessed.

The increased exemptions will be in effect for the estates of anyone who died on or after Jan. 1, 2012. Phase-out begins Jan. 1, 2013, and the tax will be fully eliminated by 2021.

“Every farmer dreams of passing his farm down to his son or daughter, and the repeal of the inheritance tax eliminates at least one important barrier to that happening,” said IFB President Don Villwock. “This has been a policy objective for Indiana Farm Bureau for decades, and IFB members would like to thank the governor and the General Assembly for making it happen.”

Source: Indiana Farm Bureau

Bob Kraft

Three, important, agricultural, legislative issues saw action by the Indiana General Assembly last week. Most notably was action to phase out the Indiana inheritance tax. Both the House and Senate have passed bills that would phase out the tax over the next 10 years.   Bob Kraft, with Indiana Farm Bureau, says this is the realization of a long time goal of Farm Bureau, “SB 293 was passed by the House 80 to 17 will begin a 10 year phase out of the tax as well as increases the amount of money a person can inherit.” Kraft says this is a very good bill that will now move to a conference committee where he is confident it will not be weakened.

Kevin Alerding, with Ice Miller LLP, says the elimination of the inheritance tax will make estate planning much simpler for Indiana farm families, “It will require less planning to avoid having to pay the tax and will help speed the settlement of estates.” Alerding said the Indiana tax, in combination with the Federal Estate Tax, often meant a considerable burden for farm families trying to pass on the farm to the next generation.  More estate planning issues are discussed in the Ag Law section of this web site.

Kraft said another important issue acted upon by lawmakers last week was the one year delay in the implementation of new fertility standards for farmland tax assessment, “The two bills that passed, almost unanimously, prevent the state from changing the soil fertility factors used in assessing farmland until 2013.” This gives Indiana agriculture a chance to study and evaluate the new standards.

The legislature also passed bills that limits a city’s jurisdiction over underground aquifers 10 miles from their municipal boundaries.  SB 132, authored by Senator Beverly Gard, prevents city water districts from requiring a farmer to pay a fee or get a license to use water from an aquifer.   The bill passed the House by a vote of 71 to 27.

Kraft credits the work of IFB members in contacting their lawmakers for the action taken on these key pieces of legislation. He urged members to contact their lawmakers and thank them for their support.

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Bob Kraft

As the short session of the Indiana General Assembly winds down, several key pieces of legislation that will impact farmers are in need of action. Indiana Farm Bureau is calling on its members to lobby lawmakers on two key issues: farmland assessment and inheritance taxes.  The State Department of Local Government Finance has released new regulations on the assessment of farmland that take into account soil fertility factors. These new regulations were announced just a few weeks before assessment was to begin.  “The bottom line is that this would increase assessment by as much as 60% in some cases,” says Bob Kraft with Indiana Farm Bureau.  Legislators in both houses are upset with the last minute revisions.  In the Senate Appropriations Committee on Thursday, Sen. Brandt Hershman (R-Buck Creek) offered an amendment to HB 1190 (Rep. Suzanne Crouch, R-Evansville & Sen. Hershman) that will delay the effective date of the new DLGF rules by a year.  House Ways & Means Committee Chairman Jeff Espich has indicated that he expects a similar amendment on a Senate bill in his committee. Kraft is urging farmers to contact lawmakers to express support for a delay in the implementation of the new rules.

Another issue requires farmer support is efforts to eliminate the Indiana inheritance tax. On Thursday in the House Ways & Means Committee, Rep. Eric Turner (R-Cicero) presented SB 293 rather than the author, Sen. Jim Smith (R-Charlestown).  SB 293 includes changes to the exemptions in the inheritance tax law and contains phase-down language.  As the bill left the Senate, it does not completely eliminate the inheritance tax.  Farm Bureau’s Katrina Hall testified in favor of the bill, noting how dramatically IFB members are affected by inheritance tax and stressed preference for the complete elimination language that is included in HB 1199, authored by Rep. Eric Turner (R-Cicero).  HB 1199 phases-out the inheritance tax over 10 years starting two years from now.  HB 1199 has not yet been scheduled for a hearing in the Senate. Kraft is urging Farm Bureau members to lobby lawmakers for the elimination of the tax.

Kraft said IFB is also seeking farmer support for legislation that would prevent cities and towns from having jurisdiction over aquifers.  The House Utilities Committee heard testimony on SB 132 (Sen. Beverly Gard, R-Greenfield & Rep. Dave Wolkins, R-Winona Lake).  The bill will require the Indiana Utility Regulatory Commission to collect, compile, and publicize in the aggregate data regarding water use by water utilities in Indiana.  The controversial portion of the bill is a section that would exclude underground aquifers from the definition of “watercourse” as that term is used in several statutes that give cities and towns the authority to regulate “watercourses” ten miles outside their municipal boundaries.  A Supreme Court decision last fall concluded that municipalities had the authority to regulate aquifers.  This means that a town could require a farmer to obtain a permit to pump water from the aquifer with a well on the farmer’s property, or they could prohibit the withdrawal of water altogether.  It could also set up a race among municipalities that are within ten miles of one another to claim the aquifer first.  Farm Bureau is one of the strongest voices calling for the legislative reversal of the Supreme Court’s decision to include aquifers in the definition of “watercourse.” At the hearing last Wednesday, Farm Bureau’s Justin Schneider testified in support of the bill.  The Indiana Association of Cities & Towns and several mayors testified against reversing the Supreme Court’s decision.  Following a lengthy hearing, Committee Chair Jack Lutz (R-Anderson) decided not to take a vote on the bill but announced that a vote would be taken this week.  Legislators are being asked by the mayors of the municipalities in their districts to vote against SB 132.  All legislators need to hear from their constituents who support the bill.

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Ashlie Kolb

A record crowd of young farmers gathered for the Indiana Young Farmers Conference this past weekend in Indianapolis.  Over 630 farm families gathered for two days of education and inspiration.   The keynote session on Saturday morning featured Ashley Kolb and Neil Mylet, two young entrepreneurs who have developed thriving careers from their family farms. Kolb, a nationally syndicated Country Music Journalist, said their point was to encourage rural young people to  chase their dreams, “Don’t let your upbringing or where you currently live stop you from reaching your full potential.” She said living on a farm or in a small town does not mean you cannot have a big impact.

In her presentation, she used the example of Randy Owen of the country music group Alabama, “Despite his success, he has never moved to Nashville and never heft his family farm in Ft. Payne, AL.”  She added you may not be a celebrity but, even living in rural American, you can still make things happen.

Neil Mylet

Neil Mylet, a Purdue alum, is founder of LoadOut Technologies, a firm that has developed innovative technology for agriculture using Smartphones.  He told the young farm audience that “NO” is a word they may hear a lot, but not to be discouraged because this rural generation has a lot to contribute to agriculture and to society.   He encouraged them to think in bigger terms than just their farm or rural community and to use their talents and technology to reach a bigger world.   LoadOut is doing that by helping firms like Hoosier Ag Today develop mobile applications to communicate with farmers.    LoadOut is also working with rural communities in Afghanistan and Africa to help them connect and communicate with the rest of the world.

Kolb says rural America is ripe with very bright and talented young people who can foster innovation both inside and outside of agriculture, “Our biggest goal is to encourage entrepreneurship, especially in rural America.”  Kolb and Mylet’s upbeat and entertaining presentation was well-received.  They said they are presenting this program to young people across the country.

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