Welcome to the 2017 legislative session!  As we, and our members, adjust to becoming Aim and all of the exciting changes that come along with it, we wanted to provide you with something familiar.  Something that you’ve long-expressed is one of Aim’s most helpful tools, our weekly Legislative Summary.  So welcome to your first Friday report on this week’s Top 5 happenings at the Statehouse.  And for our more voracious followers of the legislature, we’ve attached a more in-depth bill tracking list that allows you to follow the many, many bills that are being discussed in Indianapolis this session which could have an impact on Indiana’s municipalities.

 

 


Road Funding

  1. HB 1002 is the House Republican’s road funding bill.
  2. It proposes an increase in the gas tax by ten cents as well as a new $15 fee on vehicle registrations and a $150 fee on electric vehicles.
  3. It provides new money for locals to meet the estimated $1 billion need for additional local road funding revenue.

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RDC Property Acquisitions

  1. Senate Bill 152 is an Aim-initiated bill that gives redevelopment commissions greater flexibility to purchase property that is: 1) under a $25,000 threshold; 2) for sale at auction; or 3) that is blighted, unsafe, abandoned, foreclosed, or structurally damaged.
  2. Some of the statutory procedures that must be followed by RDCs today delay or even prevent their ability to acquire properties that they are otherwise in the best position to turn back into productive, tax-paying status. RDCs should have the ability to act nimbly in these situations.
  3. Jim Merritt introduced this bill for Aim. It has been assigned to the Senate Local Government Committee, where we will advocate for a hearing.

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Food & Beverage Tax

  1. Authorizes a municipal legislative body to adopt up to a 1% food and beverage tax as a means to further diversify revenue and adequately fund municipal services and infrastructure.
  2. Local units of government continue to search for a means to fund critical services and infrastructure that is demanded of constituents. This bill provides local units an option to collect revenue from all individuals that utilize those services, not just property owners.
  3. If your community would consider utilizing this option or would like to have the ability to utilize this option in the future then we advise you to contact your legislator and encourage them to support this bill and Representative Burton’s efforts.

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Cable Franchise Fees

  1. SB 127 dictates the local use of cable franchise fee revenue beginning in 2021.
  2. 90% of the revenue must be used on broadband-related expenditures or for certain educational or governmental programming. The other 10% may be used for any lawful purpose.
  3. The bill requires additional local reporting to the Indiana Utility Regulatory Commission and allows the IURC to adopt rules.

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State Board of Accounts

  1. Two SBOA bills outline new procedures for corrective action when an audited local unit has failed to observe a uniform compliance guideline or to comply with a specific law. The intent is to provide a clear set of procedures for addressing identified issues and insuring the SBOA has the authority to implement corrective action if needed.
  2. While it is important for identified issues to be addressed and corrected, we must insure this language is not creating a bureaucratic system that will result in unnecessary oversight.
  3. We will continue to work with SBOA and legislators on this language. We encourage our membership to contact us with additional thoughts or concerns about this SBOA initiative.

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House Republican Extensive Road Funding Plan Released

HB 1002  Transportation Infrastructure Funding (Soliday, R-Valparaiso)

On the second day of the 2017 session, Speaker Bosma held a press conference to announce the House Republican plan for road funding.  Several stakeholders (including Aim – represented by Mayors Fadness, McGuinness, Gentry and CEO Matt Greller) were in attendance.  The Speaker rolled out the details of HB 1002 – Transportation Infrastructure Funding.  The bill will be heard on January 25 in the House Ways and Means Committee.  As for the key components of the bill, HB 1002 calls for an approximate ten cent tax increase on gasoline, diesel and the motor carrier surcharge.  This would generate approximately $220 million in new revenue for locals.  Also, future gas tax increases would be indexed and automatic.  A registration fee of $15 will be added to all vehicles generating $90 million of new money for locals to be available via the Community Crossings grant program by FY 19.  A $150 electric vehicle fee will be applied to those vehicles raising $1.9 million by FY 19.  The bill also contains language provided by Aim to implement a program for INDOT to exchange federal road funding dollars with state dollars prior to distribution to locals, thereby alleviating locals from some of the federal red tape involved in using federal money.  The bill reduces the municipal population threshold for adoption of the wheel tax from 10,000 to 5,000.  It requires INDOT to study the issue of tolling as well as request from the Federal Highway Administration for a waiver to allow tolling on current interstates.

Aim Position:  Support

 

Greater Flexibility to Address Problem Properties

SB 152  Local Redevelopment (Merritt, R-Indianapolis)

In general, redevelopment commissions must follow cumbersome statutory procedures before they are permitted to buy property. Based on member feedback, a few tweaks have been identified that would give RDCs greater flexibility without negatively impacting accountability safeguards.

First, current law requires an RDC to have all properties it seeks to acquire on its acquisition list. This prevents the RDC from acting quickly when an unexpected purchase opportunity arises (e.g. when a property is destroyed by a fire) because the RDC has to go back and amend the acquisition list. SB 152 would allow RDCs to purchase unsafe, abandoned, foreclosed, or structurally damaged properties that are not on the acquisition list.

Second, SB 152 would allow RDCs to purchase properties without first obtaining two appraisals if the purchase price is less than $25,000 or if the property is for sale at auction. The $25,000 threshold brings RDCs into conformity with the civil cities’ current ability to acquire properties without appraisals. In the case of auctions, an auction itself is the better metric of fair market value than an appraisal.

Sen. Merritt has championed legislation in the past to help cities and towns deal with problem properties, and we are pleased he has agreed to author this legislation. SB 152 is already scheduled to be heard in committee on January 11.

Aim Position: Support

 

Pursuit of Uniform Food and Beverage Authority Continues

HB 1096 Uniform Municipal Food and Beverage Tax (Burton, R-Whiteland)                       

The 2017 General Assembly continues to move towards statewide authority for a uniform municipal food and beverage tax.  While it is very early in the process there appears to be additional support not only within the House of Representatives but also from members of the House Ways and Means Committee.  Representative Woody Burton is garnering support from colleagues, some of whom have vocally opposed this revenue mechanism in the past, who feel it is time to level the playing field. Currently 13 counties and 14 municipalities have adopted a food and beverage ordinance with a few others that have the authority to do so.

This legislation allows the local legislative body to adopt up to a 1% food and beverage tax on all nonexempt purchases.  The language currently allows for local units to treat this new revenue as additional revenue for the purposes of fixing their budgets.  The revenue may also be utilized for the purpose of reducing a municipalities property tax levy rate, providing property tax relief, replacing revenue reductions from the property tax caps, paying debt service, capital projects, road and street repairs, as well as a few other options.

The 2017 session appears primed to provide fiscal support for locals with additional resources and tools to address much needed infrastructure projects, public safety needs, and fiscal challenges.  This authority would be a great resource to have in the tool box.

Aim Position: Support

 

Restricted Uses on Cable Franchise Fees

SB 127  Video Service Franchise Fees (L. Brown, R-Fort Wayne)

SB 127 would require a local unit to use 90% of its franchise fee revenue for specific purposes beginning in 2021. The purposes include:  (1) Investments in, or incentives for investments in, infrastructure, facilities, and technologies used in the deployment or transmission of eligible broadband and advanced services (2) Obtaining certification as a broadband ready community through the Indiana economic development corporation. (3) Programs to promote the adoption of broadband/advanced services by residential, commercial, and other entities in underserved areas. (4) Public, educational, or governmental programming. The remaining amount of the franchise fee not required to be used for one of the specified purposes may be used by the unit for administrative expenses incurred in connection with the franchise fee, or for any other lawful purpose. It requires a unit to submit information in its annual report to the Indiana utility regulatory commission (IURC) regarding the unit’s use of franchise fees collected and spent on the required purposes.  It authorizes the IURC to adopt rules to implement these provisions.

Aim Position:  Oppose

 

SBOA Bill to Address Corrective Actions and Deny Budgets

HB 1031 State Examiner Findings (Slager R-Schererville)
SB 159 State Examiner Findings (Niemeyer (R-Lowell)

There are identical Senate and House bills that have been introduced at the request of the State Board of Accounts.  The language specifies requirements for corrective action to be taken when an audited local unit fails to comply with certain guidelines or laws.  If there is a determined need for corrective action to be taken, the local unit must develop a corrective action plan that will correct identified issues within 6 months.  If the corrective action plan and course of action have not been completed within 6 months, the State Board of Accounts shall present a recommended course of action to the Audit Committee.  Additional language requires the Department of Local Government Finance to deny the budget or supplemental appropriation of an audited entity if ordered to do so by the Audit Committee for failure to comply with certain guidelines or laws.

Aim Position:  Oppose Certain Provisions
 

Click for More Bills of Interest.

The Terminal