Indiana Legislature Stays Busy
submitted by Joshua Claybourn
Numerous bills continue before the Indiana legislature this session that would have the potential to substantially impact Hoosier municipalities and local governments. Accelerating Indiana Municipalities (AIM), formerly Indiana Association of Cities and Towns, offers its latest bill tracking list here. The road funding bill (HB 1002) has met some resistance from conservative lobbying groups due to the increase in gas taxes, but it appears to be headed to passage in some form.
Senator Proposes Dramatic Changes To Annexation
Senator James Buck of Kokomo authored SB 381 in an attempt to dramatically change the process of annexation in Indiana. SB 381 allows county commissioners to stop an annexation from taking place if the annexation ordinance is adopted by a city or town after June 30, 2017. If the commissioners deny the annexation, the annexation proceedings are terminated. The bill also adds requirements to what must be included in the annexation fiscal plan. SB 381 is scheduled for a hearing before the Senate Local Government Committee on February 8th.
Federal tax reform and bonds
The National Association of Bond Lawyers (NABL) has raised the specter of the new administration and Congress scaling back tax-exemption of government bonds. That would mean curtailing or eliminating the exclusion of interest on state and local bonds, which encourages private investment in the bonds and allows state and local governments to borrow at reduced rates. The NABL Board of Directors met in Washington January 25th to 27th and visited the members of the House Ways and Means and Senate Finance Committees, the co-chair of the House Municipal Caucus, and the staff of the committees. The reception was generally favorable but, as one Republican staff member rather bluntly pointed out, his boss would support a bill repealing some or all tax-exemptions. The Joint Committee on Taxation estimated that tax-exempt governmental bonds will cost the federal government $194 billion dollars for fiscal years 2016 through 2020.
Battle over local control continues
Indiana’s “Home Rule” grants to local municipalities any powers “…not expressly denied by the Indiana Constitution or a statute, or granted to another entity.” In other words, cities, towns, and counties generally have wide authority to govern their own jurisdictions. However, over the years that authority has been restricted and reigned in. First it was a ban on local governments setting a local minimum wage or regulating guns. Then came prohibitions on paid sick leave, housing regulations, worker schedules, and even plastic bags.
This session the legislature has targeted local regulation of short term rentals like Airbnb in HB 1133. The bill greatly restricts local control, especially with regard to zoning. A second reading amendment that would have made the bill less restrictive failed by only one vote and the third reading vote will likely be very close. Meanwhile, SB 213 would restrict local control and permitting of telecommunication projects like small cell towers or other projects on publicly owned utility poles, traffic signals, or signage structures. In addition to restricting local permitting, SB 213 also regulates the fees that a local unit may charge for the utilization of utility poles by telecom providers. This may impact existing contracts and rate structures that local units are currently operating under.
FOOTNOTE: This article was submitted by Joshua Claybourn.  Joshua is Counsel in Jackson Kelly’s Evansville office. He advises clients in matters of business and corporate law, governmental services, and public finance.
