Legislature Full Of bills Impacting Local Government
submitted by Joshua A. Claybourn is Counsel in the Law Firm’s Of Jackson Kelly PLLC .Evansville, Indiana
With hundreds of bills before the Indiana legislature this session, many have the potential to substantially impact Hoosier municipalities and local governments. Accelerating Indiana Municipalities (AIM), formerly Indiana Association of Cities and Towns, has a helpful bill tracking list and legislative summary with bills affecting local government. Of particular note are three bills described in more detail below: road funding (HB 1002), personal property tax (HB 1311), and short term rentals (HB 1133).
Road funding
Both the House, Senate, and Governor all seem to agree on the need for more infrastructure and road funding this session with the only disagreement over how best to pay for it. HB 1002, which has received the most attention, provides for a gas tax increase and more fees on vehicle registrations.
Bill Would Reduce Property Tax Base
The personal property tax bill, HB 1311, reduces the property tax base in all communities by lowering the minimum floor on the value of depreciable personal property from 30% to 20% over a 10 year period. 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. HB 1311 would undoubtedly cause property tax rates to rise and force local governments to hit tax caps sooner. Because of the negative impact on local government revenue, AIM opposes the bill, but the Indiana Manufacturers’ Association and the Indiana Chamber of Commerce are supporting it.
Battle Over Airbnb listings
The city of Carmel has issued a warning to residents who list their homes or apartments on Airbnb that doing so is a violation of the city’s zoning ordinances. Building commissioner Jim Blanchard notified homeowners they must remove their home from Airbnb or similar websites within 10 days or face further action from the city’s code enforcement inspector until they have been granted a zoning change or legal variance from the city. “Your home is an area that is classified as a Residential Single Family zone, which means you are welcome to use your home as a residence,” the letter states. “But you are not able to suddenly turn it into a restaurant, a dry-cleaning business, factory or — as is apparently the case now — a hotel or bed-and-breakfast.”
In response to these type of attacks on networks like Airbnb, Rep. Lehman (R-Berne) introduced HB 1133 to prohibit local units from banning short term rentals and limit how locals may regulate them. As outlined in the bill, a “short term rental†is property offered to the public for rental for less than 30 consecutive days. The bill 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 nationwide and in Indiana to prevent local government from regulating certain activity. In March 2016 the Indy Star did a story on the subject, “State to locals: ‘You can’t do that. Or that. The illusion of home rule,” which notes existing bans on local regulation of ride sharing services like Uber and Lyft as well as bans on regulating plastic bags. Although AIM has not taken a position on this particular bill, AIM notes fundamental opposition to pre-emption legislation.
FOOTNOTES NOTES: Joshua A. Claybourn is Counsel in the Firm’s Evansville, Indiana, office. As a member of the Commercial Law and Health Care and Finance Practice Groups, Mr. Claybourn advises clients in matters of business and corporate law, governmental services and public finance. He has extensive experience providing solutions‑oriented advice on a wide range of legal issues, including complex commercial transactions, regulatory compliance and economic development.
Mr. Claybourn regularly provides counsel for governmental units on general municipal law issues and has represented governmental entities in negotiations of economic incentives, including tax abatements and tax increment financing. He also works with municipal units of government to secure public and private financing and serves as bond counsel for their financings, including general obligation, utility revenue and special taxing district issues.
Prior to joining Jackson Kelly, Mr. Claybourn worked in‑house with a large publicly‑traded energy holding company. As a result, Mr. Claybourn has extensive experience with municipal and utility matters before the Indiana Utility Regulatory Commission in numerous complaint cases, rulemakings and other proceedings. This experience provides him with the knowledge and skills to approach clients’ problems from both a legal and business perspective.
A native of Evansville, Mr. Claybourn is a graduate of the Indiana University Kelley School of Business and the Indiana University McKinney School of Law. He was recognized by Indiana Lawyer in its first statewide award as an “Up and Coming†lawyer. He is actively involved in the community and helps lead and support several civic and non‑profit
