It’s the end of the second week of session and the Aim bill tracking list continues to grow. We expect at least 100 more bills to drop next week and then we’ll have a complete picture of the bills to watch this session. Check out the highlights below and watch your emails frequently this week. Committee action has already ramped up and we may need your support as the process unfolds!
- We anticipate the road funding bill, HB 1002, and will move very quickly in the House, which means the time in now to contact your legislators with support for the proposal and to remind them that the local need is just as great as the state need.
- Providing a long term funding mechanism for local units of government has remained a key part of the discussion and legislators are well aware that constituents demand their local streets are improved.
- Additional data to support the need for a long term funding strategy has been provided by the Local Technical Assistance Program at Purdue University.
Personal Property Tax
- HB 1311 reduces the property tax base in all communities by lowering the minimum floor on personal property from 30% to 20%.
- The effect of the change is that property tax rates will rise and there will be a greater negative impact from the tax caps.
- The Indiana Manufacturers’ Association and the Indiana Chamber of Commerce are supporting this change.
Short Term Rentals
- HB 1133 is a pre-emption bill that prohibits local governments from banning companies like AirBnB and VRBO from operating in their communities, and also sets parameters for how locals may regulate them.
- These pre-emption bills are largely driven by the American Legislative Exchange Council (ALEC). ALEC provides state legislators with model pre-emption legislation, and we are among many state municipal leagues across the country who see legislation like this with majorities who are not sympathetic to our concerns.
- This bill will be heard in the House next week, and will likely be amended several times throughout the process. Aim will continue to be engaged on the issue.
SBOA Audit Enforcement
- SBOA has requested legislation that gives them greater enforcement tools when an audited unit consistently fails to comply with certain guidelines and laws. Identical versions have been filed in both the House and the Senate.
- Because this applies to all audited units of government, government stakeholders are working together to ensure this new process is fair and does not punish good faith actors.
- Both bills will be heard in committee on January 17, where they are likely to be favorably amended.
State Board of Accounts Redevelopment Commission Appointment
- Two similar bills were introduced to change the membership of redevelopment commissions to require that a member of the local school board be appointed as a voting member.
- Municipal RDCs would still be a 5-member commission, so adding a school board member as a voting member changes the current balance of appointees.
- Neither bill has been scheduled for a hearing at this time, but the Chairman of the committee to which the bills were assigned is inclined to hear one of them in committee in the coming weeks.
Road Funding is Moving in the Fast Lane
HB 1002 Transportation Infrastructure Funding (Soliday, R-Valparaiso; T. Brown, R-Crawfordsville; Steurewald, R-Avon; Sullivan, R-Evansville)
The House has their foot on the gas pedal with HB 1002 which is scheduled for a joint committee hearing on January 25th. The House Ways and Means committee along with the House Roads and Transportation committee will hear testimony on the road funding package which we anticipate will quickly move on to the Senate. Aim will be represented by several Mayors who will provide testimony in support of the road funding package as well as insure the local need remains front and center as legislators debate the details of this bill. Discussions are taking place among legislators and the Republican caucus is shoring up support for the plan in its current form. We strongly encourage our membership to show public support for legislators and assist them with educating the public that now is the time to make an investment that will pave the way for economic growth in Indiana.
New data that was released from Purdue University’s Local Technical Assistance Program shows an annual need of more than $1 Billion over the next decade to improve local road conditions to fair or good. This data is of critical importance as we communicate with legislators and encourage them to remain supportive of addressing city and town road infrastructure. The data within the report was culminated from the asset management plans submitted by more than 325 local units of government in 2016. This report provides an assessment for more than 65,000 miles of local roads in Indiana that found more than 25% of city and town streets are in poor condition.
Bill Reduces Property Tax Base
HB 1311 State and Local Taxation Annexation (Leonard, R-Huntington)
HB 1311 is supported by the Indiana Chamber of Commerce and the Indiana Manufacturers’ Association. It reduces the minimum floor on the value of depreciable personal property from 30% to 20% over a 10 year period beginning with the January 1, 2018 assessment date. In addition, the bill eliminates the addbacks of a taxpayer’s federal income tax deduction for income attributable to domestic production activities in the definitions of “adjusted gross income” under the adjusted gross income tax law and the financial institutions tax law.
Legislation to Preempt Local Bans on Short Term Rentals and Outline Regulation Requirements
HB 1133 Preemption of Local Bans on Short Term Rentals (Lehman, R-Berne)
HB 1133 would prohibit local units from banning short term rentals and limits how locals may regulate them. This bill was referred to the House Government and Regulatory Reform Committee and is scheduled for a hearing on January 17th.
As outlined in the bill, a “short term rental” is property offered to the public for rental for less than 30 consecutive days. The intent is to pre-empt locals from banning residents from using companies like AirBnB and VRBO. The bill also prohibits locals from regulating how these businesses operate in their communities, except in statutorily-defined instances – for example, fire and building safety, sanitation, transportation, traffic control and pollution control.
This legislation follows a trend we are seeing in state legislatures across the country to pre-empt local governments from regulating a wide range of activity. Local governments need to have the ability to protect the health, safety and welfare of their residents and Aim has a fundamental opposition to pre-emption legislation. This bill will be heard in committee next week.
New SBOA Enforcement Process for Non-Compliant Government Units
SB 159 State Examiner Findings (Niemeyer, R-Lowell)
HB 1031 State Examiner Findings (Slager, R-Schererville)
At the request of the State Board of Accounts, two identical bills have been filed that contain new requirements for corrective action when audited government units fail to comply with certain guidelines and specific laws.
Under SB 159 and HB 1031 as currently drafted, if an SBOA examination report contains a finding that a unit is out of compliance and then a subsequent report contains the same finding, the unit is required to file a corrective action plan with the SBOA. Once the plan is filed, the unit has six months to correct the issues. If not corrected after six months, the SBOA will present a memo to the Audit Committee. The Audit Committee may then take several actions, including one that would result in the DLGF’s denial of the unit’s budget.
It is Aim’s understanding that the budget denial language will be removed, and we will continue to work with other government stakeholders to ensure these new measures are not unnecessarily punitive on units making good faith efforts to resolve audit issues. Both bills have been scheduled for a committee hearing in the House and the Senate on January 17.
Legislation to Change Membership of RDCs to Require Voting School Board Member
HB 1082 Redevelopment Commission Membership (Cook, R-Cicero)
HB 1131 Appointments to Local Boards and Commissions (Clere, R-New Albany)
How redevelopment commissions interact with their local school corporations is a hot topic at the Statehouse, and two similar bills have been introduced this session that would require one of the five municipal RDC members to be an elected school board member.
Both bills retain the current 5-member make-up of municipal RDCs, but their approach in how the school board member is appointed differs. Under HB 1082, the city or town council appoints two members just as they do today, but at least one of the three municipal executive appointments must be a school board member. Under HB 1131, the council and the executive get two appointments each and the fifth appointment must be a school board member, chosen by the school board itself.
Changing the membership of RDCs to include a school board official as a voting member of the RDC is a significant policy shift that would impact every municipal RDC in the state. Although neither bill has been scheduled for a hearing at this time, the Chairman of the House Government and Regulatory Reform Committee told Aim that he is likely to hear some version of this idea in the coming weeks, so stay tuned for updates.