It’s time for the craziest, most unpredictable time of the legislative session – conference committees! The Aim team is gearing up to be eight places at once next week as we follow bills headed for conference – as well keep an eye out for language that passed one house. This time of year some language can resurface in any germane bill. Read up below on road funding and annexation in particular to understand the latest as we head into this critical period. And please be on the lookout next week for Aim Action Alerts. When you see an Action Alert this time of year it tells you that time is of the essence and your help is critical to our efforts.
Road Funding
- HB 1002 passed out of the Senate on Wednesday by a vote of 34-13. The bill was approved by the Senate in the same form as when it left the Senate Tax & Fiscal committee. The bill will be heard Monday afternoon for the first conference committee of the session.
- There are numerous differences between the House and Senate plans. However, the primary concern for Aim is the difference of opinion between the House and Senate on the need for additional local revenue.
- Now that HB 1002 has successfully passed out of both chambers, our primary focus will be supporting revenue increases that properly fund all local infrastructure needs. The most influential way to do this is direct contact from local officials to state legislators in support of fully appropriating the local need.
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Small Cell Tower Regulation
- SB 213 was amended on the House floor this week to move forward as an interim study committee; however, we anticipate this bill has the potential to return to a previous version and pass as law this year.
- SB 213 is a high priority bill to several key legislators involved on the road funding debate, which means it will likely be used as leverage. Multiple outcomes are still possible given the bill passed both chambers in some form.
- We will keep a close eye on this bill over the next two weeks and how it plays a role in several other priority bills, like road funding. Local officials should remain engaged with their legislators and educate them on how this bill would impact your community.
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Short Term Rentals
- HB 1133 is the “Airbnb bill” that sets a statewide framework of regulation for short term rentals in Indiana. In addition to pre-empting locals’ ability to ban short term renting, it also greatly restricts local governments’ ability to use customary planning and zoning, even in areas zoned for residential use only.
- Aim has actively lobbied for amendments, but none have been accepted. It narrowly passed the Senate 27-20 this week with no substantive changes that would allow local governments to retain appropriate regulatory or zoning authority.
- This bill is headed to conference committee before it goes back to the full House and Senate for a final vote. Please contact your legislators and ask them to oppose HB 1133 unless the final version strikes a better balance for local governments vs. a statewide one-size-fits-all framework.
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Gaming Revenues to Local Units
- Gaming bill, HB 1350, passed in the Senate by a 28-20 vote this week. The vote did not follow party lines as senators from gaming communities tended to vote against the bill out of concern for loss of revenue to their local communities.
- HB 1350 stands to reduce gaming revenues for most riverboat communities as well as reduce revenues to non-riverboat communities under reforms to the hold-harmless distribution formula.
- The cumulative impact to riverboat communities is a reduction of $480,000 in 2019 followed by a projected $1.8 million loss in 2020 and 2021.
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Property Tax Matters
- HB 1450 is a bill that contains several tax-related and local government provisions.
- Last week, language was added that would have voided annexation remonstrance waivers signed after 1995. Thankfully that language was removed, but it could come back in another form or in another bill, so please ask your legislators to oppose any negative annexation language this year. The bill also contains an Aim initiative that clarifies that contracts over $50,000 only have to be uploaded to the Transparency Portal on a going-forward basis and does not apply to old contracts that meet the threshold.
- HB 1450 will continue to change throughout the conference committee process, so Aim will be actively monitoring to ensure negative language is not added.
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Senate Passes Road Funding Bill, Cruising On to Conference
HB 1002 Transportation Infrastructure (Soliday, R-Valparaiso; Brown, R-Crawfordsville; Steurewald, R-Avon; Sullivan, R-Evansville)
While there was initial concern the road funding bill may struggle for support in the Senate, it passed Wednesday by a relatively safe margin of 34-13. The primary concern at this time is working to address the difference of opinion between the House and Senate on necessary distribution levels to meet the local need. The latest fiscal analysis of the Senate plan shows local revenue was cut to $165 million from the original House plan of $315 million. Governor Holcomb announced last Friday that he believes the local need is somewhere in between the House and Senate plan, which places pressure on both chambers to compromise.
Regardless, both plans fall short of the Purdue LTAP estimated need of $775 million for local maintenance and preservation. The Purdue report was based on data collected from asset management plans submitted by local units in 2016, which show more than 25% of local roads and streets are rated in poor condition. In order to restore all poor-rated roads to fair condition by 2027, local units need an annual increase of $775 million. The question remains if the legislature will pass a large fiscal enhancement for road infrastructure, yet not achieve a long term plan to properly fund local roads and streets.
During their Thursday press conferences, both Senator Long and Speaker Bosma hinted that shifting some portion of the sales tax may still be a viable option as the conversation advances and they look for a viable option to increase local revenue. There has been less desire to do so from Senator Kenley who is considered the guardian of the budget bill.
Leadership is eager to move forward as HB 1002 was the first bill scheduled for a conference committee next Monday. It will likely be a brief committee hearing and then the intense negotiations will move behind closed doors. The final decision will likely be decided in the final week, after the next revenue forecast has been released.
Also factoring into the outcome of the road funding plan are the budget, small cell structure and gaming bills. These bills are all of interest to legislators involved in the road funding discussion.
The most important undertaking our members can focus on at this time is directly contacting your Senator and Representative expressing support for a long term dedicated plan that meets the long term local need for maintenance and preservation.
Aim Position: Support
Small Cell Towers Bill Modified to Interim Study Committee
SB 213 Support Structures for Wireless Facilities (Hershman, R-Buck Creek)
SB 213 took an interesting turn of events this week. Typically, the last week for bills to pass their respective chambers results in pressure to modify controversial bills so they continue through the process and that is what happened with SB 213. We anticipated there would be multiple floor amendments offered on the small cell structure bill, however, Rep. Ober called it for 2nd reading with no additional amendments on Monday. The following day the bill was pulled from the third reading calendar and returned to the second reading calendar for an amendment. The bill was amended into an interim study committee, which essentially means the bill will not become law this year and the legislature would return to address the issue in 2018 after studying the topic and identifying possible solutions.
While there appears to be little desire by the House to pass any major portion of this local preemption bill, there is still a strong possibility that a compromise will be reached over the next two weeks and the legislature will pass a model statewide policy for small cell structure locations.
Senator Hershman, the bill’s author, intends to continue working on a compromise over the next two weeks that will create a model for communication service providers to locate their structures and equipment in locations of concerns to residential property owners and businesses. We believe this can still be accomplished by working with local governments, rather than around them. We will remain engaged on the issue as discussions take place over the next two weeks.
Aim Position: Oppose
Legislation to Restrict Local Control over Short Term Rentals Headed to Conference Committee
HB 1133 Preemption of Local Bans on Short Term Rentals (Lehman, R-Berne)
HB 1133 addresses the practice of home-sharing in Indiana through online platforms like Airbnb, VRBO, HomeAway, etc. In addition to pre-empting locals’ ability to ban short term renting, it also establishes a statewide framework that significantly restricts the ability of local governments to respond to this practice through planning and zoning.
When Airbnb operators are renting out homes to a different set of renters every few days, that’s not just a home anymore, it’s an unregulated hotel (especially when the home is just an investment property for a commercial operator who does not live there at all). When homebuyers purchase homes in areas zoned for residential use only, they expect that their local government has the ability to enforce that use. But under this legislation, local governments have no ability to enforce customary residential zoning uses in neighborhoods.
The bill passed the Senate 27-20 this week and is headed to conference committee, where stakeholders will work to hammer out differences before it goes back to the full House and the Senate for a final vote. Throughout this process, Aim has actively lobbied for amendments that would provide a better balance for local governments, but none have been accepted.
Zoning is an inherently local function and it is critical for local governments to retain the ability to respond to what their constituents expect and demand. Please contact your legislators and ask them to oppose HB 1133 on final passage unless an agreement is reached that allows locals to appropriately regulate and zone for these short term rentals.
Locals Set to Lose Revenue under Gaming Bill
HB 1350 Gaming (Huston, R-Fishers)
HB 1350 passed third reading in the Senate by a 28-20 vote this week. For riverboats, that move inland (Evansville) the bill replaces the current admissions tax with a 3% supplemental wagering tax. Most riverboat communities stand to lose revenue to changes the bill makes with the admissions tax and wagering tax. The cumulative loss for all riverboat communities is $480,000 in 2019 and $1.8 million in 2020 and 2021. In addition, non-riverboat units will receive less starting in 2020 due to a reduction in revenue sharing distributions. Due to South Bend’s new federally approved Native American casino coming online, South Bend’s revenue sharing distribution is being eliminated altogether and it will be transferred to the State General Fund.
Aim Position: Concerns About Revenue Loss
Various Local Government Provisions in HB 1450
HB 1450 Property Tax Matters (Leonard, R-Huntington)
HB 1450 started as the Department of Local Government Finance’s clean-up bill and is now a “Christmas Tree” bill that contains many different provisions that impact local governments.
One harmful amendment that was added to the bill would have voided annexation remonstrance waivers signed after December 31, 1995. Retroactively voiding these waiver agreements disrupts decisions that were made in reliance on Indiana’s annexations laws at the time the agreements were made. The good news is that language was removed – thank you to everyone who contacted their legislators about it this week. The language could still come back in another form, so Aim will be monitoring closely. If you have not already, please ask your legislators to oppose any negative annexation language this year.
One of Aim’s legislative initiatives this year is also contained in the bill. Last year, legislation passed to require local units to upload certain contracts to the Transparency Portal. After passage, however, the DLGF interpreted the bill to mean that this applied to all contracts that met the $50,000 threshold (and not just those signed on a going-forward basis, as stakeholders believed at the time the bill passed). HB 1450 cleans this up to make clear that this is just for contracts signed after the bill’s passage.
This bill will continue to change in conference committee, so Aim will be keeping in close contact with the bill’s author, sponsors and conferees.