ACTION LINES
INDIANA ASSOCIATION OF CITIES AND TOWNS MAGAZINE
MAY / JUNE 2016
WORK AHEAD
Road Funding, Fight to Curb Meth Dominate Post-Session Highlights
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CONTENTS MAY / JUNE 2016 VOLUME 19 / ISSUE 3
ACTION LINES IACT OFFICERS Greg Goodnight President Kokomo Mayor Lloyd Winnecke First Vice President Evansville Mayor Brenda Young Second Vice President Clerk-Treasurer, Nashville Matthew Greller Executive Director & Chief Executive Officer REGULAR STAFF CONTRIBUTORS Rhonda Cook Deputy Director and Chief Federal and State Policy Officer Benjamin Easley Graphic Design & Website Coordinator
Brian Gould Government Affairs Director Natalie Hurt Special Events & Conferences Director Erin JamisonKoenig Communications Coordinator
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IN THIS ISSUE: Breaking down the top issues for cities and towns after this year’s legislative session.
DEPARTMENTS IN ACTION
IN WRITING
4
MUNICIPAL DEADLINES
14 LEGISLATIVE RECAP
7
SPOTLIGHT ON LIT/LOIT
20 FROM THE EXECUTIVE DIRECTOR
Substantial Policy Changes to Local Income Taxes are on Track
Aggressive Anti-Meth Efforts Lead to Positive Change
Jennifer Simmons Deputy Director & Chief Operating Officer (COO)
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Jodie Woods General Counsel
IN MEMBERS
ADVERTISING
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MEMBER NEWS
Anne Trobaugh Corporate Relations Director
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CALENDAR & WEBINARS
IN BRIEF
12
MEMBER Q&A Cathy Gross, Monticello ADA Coordinator
26 INFOGRAPHIC
QUESTION OF THE MONTH Which Municipal Personnel Must Receive Training in Internal Control Standards?
IN PLACE 23 SPOTLIGHT ON ROAD FUNDING Road Package Paves the Way for Long-term Fix
Legislative Facts and Figures
Indiana Association of Cities and Towns | 125 W. Market St. Suite 240 Indianapolis, IN 46204 | Phone (317) 237-6200 | Fax (317) 237-6206 | www.citiesandtowns.org Actionlines (ISSN 1092-6259) is published by the Indiana Association of Cities and Towns. Statements of fact and opinion are the responsibility of the authors alone and do not imply an official opinion on the part of the officers, staff or membership of IACT. Indiana elected municipal officials receive an annual subscription to this publication through payment of their municipality’s membership dues. IACT Associate Members receive an annual subscription to this publication through payment of their annual membership dues. The annual subscription rate is $50. POSTMASTER: Send address changes to Actionlines, 125 W. Market St., Suite 240, Indianapolis, IN 46204.
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IN ACTION INSIDE • • •
Municipal Deadlines Spotlight on LIT/LOIT Question of the Month
MUNICIPAL DEADLINES MAY 16
Last day for library boards to hold a public hearing on a CPF plan, adopt a CPF plan, and submit the plan to the appropriate fiscal body. IC 36-12-12-3
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Last day to report and make payment of state and county income tax withheld during April to Department of State Revenue, Indianapolis.
31
Last day to certify delinquent Barrett Law assessments to the County Auditor. IC 36-9-37-23
JUNE 1
Last day to certify names of persons who have money due them for salaries, wages, or other reasons to the county treasurer for determining if such persons owe delinquent taxes. IC 6-1.1-22-14 Last day for cities and towns with population of 20,000 or more to file Annual Operational Report of Motor Vehicle Highway Fund with State Board of Accounts, 302 W. Washington Street, Indianapolis, Indiana, 46204.
20
Last day to report and make payment of state and county income tax withheld during May to Department of State Revenue, Indianapolis.
30
Property tax distribution of May collection. Last day for Redevelopment Commissions to report available TIF surplus AV or shortfall to county auditor, applicable taxing units and the Department of Local Government Finance. IC 36-7-14-39 End of first six months of current year.
JULY 1
Last day for county assessor to deliver the real estate book (i.e., roll 2016 pay 2017 real and personal property gross assessed values) to the county auditor. IC 6-1.1-3-17(b); IC 6-1.1-5- 14(b) Beginning of budget year for schools on a fiscal year budget pursuant to IC 6-1.1-17-5.6
4
20
Last day to report and make payment of state and county income tax withheld during June to the Department of State Revenue, Indianapolis.
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Last day to make report and complete payment of federal tax and F.I.C.A. (Social Security Tax) tax withheld in the second quarter of the year to the District Director of Internal Revenue. Make report and file quarterly unemployment compensation report with the Indiana Employment Security Division.
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This feature should not be considered a complete list of deadlines. If you know of an important deadline, please submit it to Erin Jamison-Koenig at ejamisonkoenig@citiesandtowns.org.
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XXXIII
MUNICIPAL LAW SEMINAR XXXIII J UNE 1 6 - 1 7 , 2 0 1 6 | I N D I A N A PO L I S MARRIO TT N O RTH 9.5 CL E CRE DI T S ( Pending Application) Municipal Law XXXIII is a seminar designed to keep the local government attorney current on important legislative and case law changes, both state and federal over the past year, and to provide up to 9.5 hours of continuing legal education (CLE) credits. The workshop sessions are focused strictly onlocal government law issues and are designed to make the role of the local government attorney easier. Highlights of this year’s seminar include presentations on constitutional revisions to the sign code, ordinanaces that are most likely to be challenged, and standing to sue. Seminar sessions will also benefit the new city, town or county attorney by covering the basics of topics such as police dicipline, municipal utilities and big equipment purchase. Application for 9.5 CLE credits is pending.
M ore i n fo rma ti o n a n d r e g i s t r a t i o n a t C itiesA ndTo wns.o r g/Municipa l-La w
THURS DAY, J UN E 1 6 6.5 Continuing Legal Education Credits
c o n t i n ued
FRID AY, JUN E 17 3.0 Continuing Legal Education Credits
What Ordinances are Most Likely to be Challenged Registration, Welcome and Annoucements Sean Surrisi, President, IMLA Ken Falk, Legal Director, ACLU of Indiana Welcome and Annoucenements IMLA/IACT Staff Matthew Greller, Executive Director & CEO, IACT Concurrent Sessions: Andrew Mallon, Corporation Counsel, Indianapolis Police Discipline Basics Concurrent Sessions: Sean Surrisi, President, IMLA Chou-Il Lee, Of Counsel, Taft Stettinius & Hollister LLP Municipal Utilities Forum Utility Law Jurisdiction, Rates, the IURC Municipal Case Law Update (State), Federal Leg- Sign Code Revisions & Other Basics islative Matters, and State Legislative Update John Molitor, Attorney and Counsel to Carmel Plan Michael Griffiths, Of Counsel, Bingham Karen Arland, Of Counsel, Ice Miller LLP Commission & BZA Greenebaum Doll LLP Carolyn Coleman, Center Director Federal Charles Thompson, General Counsel and Executive Utility Collections & Easement Issues Advocacy, National League of Cities Director, National IMLA J. Christopher Janak, Partner, Bose Rhonda Cook, Deputy Director & Chief Federal McKinney & Evans LLP and State Policy Officer, IACT Dessert Break Stephen C. Unger, Partner, Bose Mark Crandley, Partner, Barnes and Thornburg LLP McKinney & Evans LLP Ryan Hoff, Director of Government Affairs & General Concurrent Sessions: Counsel, Association of Indiana Counties APRA with Special Focus on Police Videos Big Equipment Purchase Options Matthew Morgan, Partner, Barnes & Lisa A. Lee, Partner, Ice Miller LLP Municipal Case Law Update (Federal) Thornburg LLP Kerry A. Thompson, City Attorney, Scottsburg Douglas C. Haney, Corporation Counsel, Carmel Lindsey Moss, Assistant Government Affairs Standing to Sue Local Government Director & Legislative Counsel, IACT Luncheon Speaker Bradley M. Dick, Associate, Bose McKinney & Newer Issues Primarily Affecting Counties Evans LLP Municipal Case Law Update (Federal) Michael E. Duffy, General Counsel, Department of Local Government Finance Douglas C. Haney, Corporation Counsel, Carmel IMLA Annual Meeting Registration
Concurrent Sessions: Consolidation of Local Income Taxes Karen Arland, Of Counsel, Ice Miller LLP Rhonda Cook, Deputy Director & Chief Federal and State Policy Officer, IACT Heather R. James, Partner, Ice Miller LLP
Coffee Break Ethics Ronald Cross, County Attorney, Wayne County Charles Thompson, General Counsel and Executive Director, National IMLA
IN ACTION SPOTLIGHT ON LOIT/LIT RHONDA COOK, IACT DEPUTY DIRECTOR AND CHIEF FEDERAL AND STATE POLICY OFFICER
Substantial Policy Changes to Local Income Taxes are on Track A substantial change to local income tax policy is coming our way soon. Last year, HEA 1485-2015 passed into law, however, it had a delayed effective date of January 1, 2017. In 2017, as you plan for your 2018 budgets, the new system will be in play, so you will want to get up to speed soon on how it will work! Under the new system, we will refer to all local income taxes including the County Adjusted Gross Income Tax (CAGIT), the County Option Income Tax (COIT), the County Economic Development Income Tax (CEDIT), and the Public Safety Local Option Income Tax as “LIT” or “Local Income Tax.” The adopting body in each county, which is the county council in a county that currently has adopted CAGIT and the Local Income Tax Council (formerly known as the County Income Tax Council) in a current COIT county, will be responsible for setting the various rates for its county’s LIT. If a special income tax rate has been approved by the General Assembly for a particular unit, this rate will stay the same—the adopting body has no authority to change it. However, the adopting body will set the rate for all eligible units in the county under two categories: (1) Expenditures and (2) Property Tax Relief.
The Expenditure Rate can be set up to 2.5% and the adopting body will designate the use of the rate for certified shares, economic development and/or public safety. The Property Tax Relief Rate can be set up to 1.25% and the adopting body will designate where the relief is given— to the 1, 2, or 3% tax cap groups. Because the adopting body has control to make adjustments to the LIT rate and its uses from year to year which apply to all taxing units that receive LIT revenue, IACT had concerns about the need to protect those taxing units that currently have outstanding debt payable now by CAGIT, COIT or CEDIT. We addressed this problem in HEA 1081-2016. You can read more about HEA 1081 in this issue of Actionlines.
Looking for more information? Last month, IACT just hosted a webinar called “Simplifying the COIT Council Adoption Process” with the answers to many common questions. If you missed it, you can order a recording of the webinar ($17 for members) by visiting citiesandtowns.org/webinars.
?OTM
QUESTION OF THE MONTH
Besides the town or city council’s requirement to ensure that the minimum internal control standards and procedures have been adopted by the city or town after June 30, 2016, it must also ensure that certain city or town personnel receive certain training. Who is the “personnel” that is required to have this training?
ANSWER: IC 5-11-1-27 (c) defines “personnel” as an officer or employee whose duties include receiving, processing, depositing, disbursing, or otherwise has access to funds belonging to a governmental entity. Funds are commonly thought of as money or cash equivalents and that is the position of the State Board of Accounts. Thus, at a minimum, the city or town has a duty to train on the city’s or town’s adopted internal control standards and procedures all of its employees whose job is to receive, process, deposit, disburse, or otherwise has access to city or town money or equivalents to cash. Note: The Accounting and Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7 has provisions that indicate all governmental assets, including personal and real property be adequately safeguarded.
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Government Services Bingham Greenebaum Doll LLP
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THIS IS AN ADVERTISEMENT
IN
INSIDE • • • •
Member News Calendar & Webinars Upcoming Workshops Member Q&A
MEMBERS MEMBER NEWS A new veterans medical facility in Edinburg is the first of its kind in the state. The Wakeman VA Clinic at Camp Atterbury offers primary medical care, physical therapy, mental health assessments, and technology-based, long-distance clinical health care. Krone North America, an agriculture equipment company, has announced plans to move its headquarters from Memphis, TN to Shelbyville. The company says it will invest $12.5 million to build its facility and create more than 100 high-wage jobs by 2021. A new compressed natural gas filling station has opened in South Bend. The multi-million dollar, fast-fuel center is the first of its kind in the region. A massive overhaul in and around the long-abandoned Indiana Steel and Wire property in Muncie has been announced. The highly-anticipated project will completely redevelop the city’s eastern corridor. A new pedestrian bridge in McCordsville will stretch 55 feet across Schulz Ditch, a drainage path that runs through the town. The bridge will connect with the town’s existing multi-use path to the north, which stretches more than 2 miles and connects to other pathways. Wakarusa and Wawaka were the latest stops for AT&T to roll out its high-speed mobile internet service. The company has launched its 4G LTE service in these northern communities. A proposed $4.6 million redevelopment of a historic building in Franklin is the latest in a string of projects that could help transform the city’s downtown. The Franklin Redevelopment Commission is partnering with the
Franklin-based Bemis Group and Kwang Casey, owner of Oaken Barrel Brewing Co. in Greenwood, to revitalize the former Verynit Garment Factory on East Wayne Street. Plainfield is launching a $25 million plan to upgrade its public safety facilities that includes building a new fire department headquarters and two fire stations. – IBJ Launched in 2011, the Stellar Communities Designation Program is a multi-agency partnership designed to recognize Indiana’s smaller communities that have identified comprehensive community and economic development projects and activities as well as next steps and key partnerships. This year’s finalists are: Division 1: • City of Rushville • City of Shelbyville • City of Warsaw
Division 2: • Town of Corydon • Town of Culver • City of Union City
A Valparaiso pizza parlor that dates back to the 1950s has been inducted into the Pizza Hall of Fame. Tony’s Place was nominated for the Hall of Fame by Indiana Dunes Tourism.
Tony and his wife Mary opened Tony’s Place in Valparaiso in 1955. The restaurant is now included in the Pizza Hall of Fame.
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IN MEMBERS
CALENDAR & WEBINAR IACT CALENDAR
AFFILIATE CALENDAR
MAY
MAY
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10
Annual Clerk-Treasurers School, Indianapolis
B
11
Annual Budget Workshop, Indianapolis
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Annual Budget Workshop, Jasper
JUNE
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Indiana ADA Coordinators Association Webinar– Title VI & ADA: How They Work Together
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11-13
IMMA Annual Conference, Nashville
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18
Trust Local Golf Outing, Greenwood
18-20
ICOM Annual Meeting & Ball State—ICI/IACT Mayors Institute, Greenwood
21
500 Festival Breakfast at the Brickyard, Speedway
22-25
IIMC 70th Annual Conference, Omaha, NE
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D
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Annual Budget Workshop, Fort Wayne
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2
Annual Budget Workshop, Merrillville
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16-17
Municipal Law Seminar XXXIII, Indianapolis
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JULY 21
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JUNE Webinar – Who is Minding the Store? Understanding State Internal Control Regulations IACT Communications and Media Relations Workshop, Indianapolis
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ILMCT 80th Annual Conference & State Board of Accounts School, Michigan City
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IMLA Annual Meeting, Indianapolis
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Northern Mayors Roundtable, Crown Point
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Southern Mayors Roundtable, Huntingburg
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24-27
84th Annual Conference of Mayors, Indianapolis
26-29
National Association of Regional Councils (NARC) 50th Annual Conference & Exhibition, Salt Lake City, UT
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Northern Mayors Roundtable, Whiting
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UPCOMING WEBINAR Who is Minding the Store? Understanding State Internal Control Regulations July 21, 2016 10:00 a.m. -- 11:30 a.m. This webinar is a continuation of the session offered in April. Join us for the latest on the new internal control regulations.
IACT webinars qualify for one credit through the IACT Municipal Management Institute, sponsored by Wessler Engineering.
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IN MEMBERS UPCOMING WORKSHOPS IACT Annual Budget Workshops
Communications and Media Relations Workshop
This is a must attend event for anyone involved with the budgeting process. It will inform municipal officials about recent legislative action that affects budgeting, and it will also focus on how to budget for 2017. This workshop teaches the budgeting process from start to finish and the role played by each municipal member.
July 26, 2016 Renaissance Indianapolis North Hotel
Registration: 9:30 a.m. Workshop: 10:00 a.m. – 3:00 p.m.
In July, members can attend a day of learning and skill refreshing during IACT’s Communications and Media Relations Workshop. The fast-paced seminar will provide rapid fire review of basic communications practices and media training tips you need to know. We’ll also review the latest in social media and hear directly from several reporters who cover all levels of government and strategic communications experts. Check the IACT website regularly. Agenda and speaker information will be available soon!
Wednesday, May 11 Indianapolis (Eastern) Indianapolis Marriott North
Wednesday, June 1 Fort Wayne (Eastern) Grand Wayne Convention Center
Thursday, May 26 Jasper (Eastern) KlubHaus 61
Thursday, June 2 Merrillville (Central) Radisson Hotel at Star Plaza
Registration: 9:30 a.m. Workshop: 10:00 a.m. – 3:00 p.m.
October 4 - 6, 2016 | French Lick, Indiana
SAVE THE DATE French Lick will once again be home to the 2016 IACT Annual Conference & Exhibition. The conference will begin on Tuesday, October 4 and run though Thursday, October 6. It will showcase more than 25 workshops and nearly 150 experts in municipal government, state agencies, non-profits and universities will be represented in the exhibit hall.
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IN MEMBERS
MEMBER Q&A
CATHY GROSS MONTICELLO ADA COORDINATOR
On behalf of IACT and our members, we would like to start by thanking you for being the Indiana ADA Coordinators Association Coordinator. Your leadership and dedication have made the first year of the Association a great one! To start can you please tell us about the Indiana ADA Coordinators Association? What benefits would an ADA Coordinator find in joining the Association? The Indiana ADA Coordinators Association was formed to assist ADA Coordinators in the State of Indiana as they perform their day to day duties, specifically to provide a network and forum for coordinators from all disciplines as they implement ADA Transition Plans. ADA Coordinators are usually appointed and these responsibilities are in addition to already full plates. We are providing training opportunities, strategies, and solutions for our members and their communities through positive relationships with INDOT and the Federal Highway Administration. Providing an association that can respond to their questions without re-creating the wheel is proving to be especially helpful.
As the newest IACT affiliate group, what do you hope to see in the next year and beyond? We hope to see continued growth and engagement, not only with our IACT Coordinators, but with our most recent partnership with the Association of Indiana Counties ADA Coordinators. ADA Title II responsibilities and Title VI of the Civil Cathy Gross Rights Act Implementation Plans can overlap and complement each other so we hope to welcome the Title VI Implementation Plan Coordinators to our association and afford them the same benefits our ADA Coordinators now receive. What do you see as the most important reason for a municipality to have an ADA Coordinator? The role of ADA Coordinator is not optional, it is a requirement under Title II of the Americans with Disabilities Act. We are obligated to make sure our facilities, programs, and services are accessible, however, the most important reason is that it is the right thing to do. Monticello has found that when we address the responsibilities with a good attitude, good things happen. What has been the most satisfying moment in serving as the ADA Coordinator for Monticello? It is difficult to determine one most satisfying moment. The past four years have seen tremendous progress with our sidewalk plan, our partnership with White County providing a new Constitution Plaza, and an Emergency Notification System. Additionally, grants and memorial contributions made a purchase of a portable wheelchair lift possible. Liz’s Lift is a memorial to our Clerk-Treasurer Liz Oilar who lost a valiant battle with a brain tumor and is available to all. The overall most satisfying aspect of the position has been seeing our partnerships and collaborative efforts create a more accessible and engaged community, not only for our friends with disabilities, but for everyone who lives and visits Monticello. Looking back on your time as Monticello ADA Coordinator, what is one piece of advice you would give to someone who is about to start in a similar role?
In addition to being the Coordinator of the Indiana ADA Coordinators Assocation, IACT’s newest affiliate group, Cathy Gross is also the ADA Coordinator for Monticello, Indiana, home to Indiana Beach amusement park.
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Don’t panic! Remember we are doing this for all the right reasons. Open your mind and your heart. Learn as much as you can. Engage, and eat this elephant one bite at a time.
FOR 25 YEARS WE HAVE PROVIDED THE PROTECTION THAT INDIANA’S PUBLIC SAFETY OFFICERS DESERVE. Quarter Century of Claims Paid: 60,901 Dollar amount paid out: $201,627,981
www.ipep.net
administered by:
IN WRITING
Road Funding, Curbing Meth Production and Ag Land Assessment Changes among Top Bills you need to Know About For a short, non-budget writing legislative session this one packed a wallop! Many major fiscal and policy issues were addressed in what is typically a more administrative session. In this edition of Actionlines we’ve chosen to highlight 12 important new laws impacting municipalities. In our annual IACT Statehouse Report, online now, you’ll find a more comprehensive listing of bills for your review. Visit citiesandtowns.org or issuu.com/IndianaCitiesTowns for more information. PLEDGE FOR A LONG-TERM SOLUTION ACCOMPANIES MAJOR ROAD FUNDING PACKAGE Road funding was primed to be the focal point of the 2016 legislative session as both Senate and House leadership indicated on Organization Day this issue would be a top priority for legislators.
The politically dynamic conversation in the General Assembly ranged from a long term fundamental change for funding to focusing on a short term package to provide a shot in the arm for Indiana’s infrastructure. The opposition to a long term change was a request to accurately recognize our statewide need, identify possible revenue sources and discuss potential funding options during the 2017 budget session. At the conclusion of the session, HEA 1001 was passed to provide locals with additional resources, new revenue options and establishes a bridge to continue the discussion over the summer and into the 2017 legislative session. HEA 1001 allows municipalities with a population greater than 10,000 to implement a municipal wheel and excise surtax, whether or not the County already has a wheel tax. HEA 1001 also creates a Local Road and Bridge Matching Grant Program to be implemented by INDOT that will allocate more than $150 million dollars in the first year, $70 million in year two and $100 million in year three. These funds will require the municipality provide a 1:1 match and will likely have a maximum amount allowable per project. In
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order for a local unit to implement a wheel tax or access the matching grant program they will have to utilize an INDOT approved asset management plan. Details on the asset management plan, grant program and application process will be released later this spring. Also of great importance in HEA 1001 is the creation of a task force to study the local and state infrastructure needs as well as identifying revenue options to pay for these needs. Meetings will start this summer with the administration, legislative leaders as well as local stakeholders. STATE LOOSENS THE REIGNS AND RETURNS LOIT TRUST RESERVES TO LOCALS, REDUCES FUTURE RETENTION REQUIREMENT TO 15% SEA 67 played a significant part of the road funding debate as legislators worked to identify revenue sources without increasing taxes. Senate Republicans identified the LOIT Trust Reserve as an option to return local revenue for the purpose of being used on infrastructure. The state maintains the reserve accounts to prevent drastic reductions in LOIT distributions during years of declining collections, i.e. the 2008 recession. SEA 67 calls for $430 million to be distributed to all eligible entities with a requirement that Cities, Towns and Counties spend 75% of their funds on infrastructure or maintain them in the rainy day fund for future infrastructure uses. The specific allowable uses are listed in SEA 67 which are very similar to LRS purposes. The remaining 25% of the funds may be used for any general purpose. Many entities plan to use these funds as a match for the Local Road and Bridge Program which will double the impact of those dollars. An additional improvement in SEA 67, the LOIT Trust Reserve threshold is being reduced from the current 50% to 15%. A fiscal analysis indicates most units will reach the new threshold in the next 3-4 years and at that point they will start receiving their full distribution. Locals should be thoughtful of utilizing their special distribution prior to their LOIT reserve reaching its 15% threshold. The special distribution for your community can be located on the IACT website on our 2016 legislative session page.
IN WRITING COMPLICATED TAX BILL CONTAINS WINNING AND LOSING LANGUAGE FOR LOCALS Although there were several components to SEA 308, here is a highlight of the more critical changes passed in the bill for cities and towns: First, SEA 308 made a major change to the formula for farmland assessment. The result of this change is that it will be helpful to farmers, but it causes a loss of tax base and a shift of the tax burden to other property owners. Homeowners are the hardest hit. By 2019, it is projected that there will be a statewide loss in assessed value of $8.9 billion resulting in a $23.3 million loss in revenue to local governments. Second, SEA 308 contained IACT initiative language to help fast growing communities by allowing them to have an automatic levy increase. The final language passed in the bill was crafted very narrowly, so it only benefits three communities. However, the bill does call for an interim committee to further examine the issue of allowing an exemption from the maximum levy limits for growing communities. The third notable provision in the bill applies to the 29 counties where the adopting body for local income taxes is the Local Income Tax Council (formerly known as the County Income Tax Council). If the Local Income Tax Council in these counties does not designate part of the expenditure rate toward its Public Safety Answer Point (PSAP), then the county council can step in and designate up to 0.1% of the expenditure rate to go to the county for this purpose. COMBATTING INDIANA’S DOMESTIC METH LAB PROBLEM EASIER UNDER SEA 80 For three straight years, Indiana has led the nation in the number of meth lab seizures. Although it is great news that law enforcement is busting so many labs, it is unacceptable that meth cooks can still so easily get their hands on pseudoephedrine (a key ingredient) to make meth in the first place. This session, several bills were introduced in an effort to eliminate domestic meth labs. IACT initially supported a bill that would have required a prescription to obtain pseudoephedrine (PSE), but this approach did not have enough support to make it through the legislative process. Instead, IACT supported legislation spearheaded by Representative Ben Smaltz and Senator Randy Head that will change the way PSE-containing products are sold in Indiana. Two bills – SB 80 and HB 1390 – were moving at the same time, but SEA 80 was the one that ultimately passed. Beginning July 1, 2016, a person who does not have a “relationship on record” with a pharmacy will not be allowed to obtain the current daily limit of over-the-counter PSE unless a pharmacist makes a professional determination that the person has a legitimate medical need for the product. Even if a person does have a relationship on record, a pharmacist may still refuse to sell the product if he/she believes the customer is seeking PSE for illegitimate purposes. If the pharmacist determines that any individual does not have a legitimate need, he/she will offer either a “meth-resistant” PSE product or a 24-pack of 30mg PSE (which is much less than what a meth cook needs).
PSE
PSE
PSE
Throughout the session, we faced significant opposition from the manufacturers of PSE, corporate pharmacies and others, but Representative Smaltz and Senator Head worked hard to bring everyone together to craft a law which will significantly reduce the number of meth labs in Indiana without unduly burdening any particular special interest. Although this is not the straight prescription-only approach for which IACT was originally lobbying, we think this legislation will have a meaningful impact in our fight against domestic meth production. NEW BUDGET CERTIFICATION DEADLINE AMONG CHANGES AIMED AT HELPING LOCALS IACT began meeting with the Department of Local Government Finance (DLGF) in the fall of 2015 to discuss extensive reform of the local government budgeting process involving the modification of several reporting deadlines. The objective of SEA 321 is to improve the ability of local governments to prepare and pass accurate budgets in a timely manner. These changes will take place in the budget year following 2018. Some noticeable changes will be a requirement for DLGF to certify a municipality’s budget, levy and tax rate no later than December 31 unless the entity has issued new debt in December. Another noticeable change is the repeal of non-binding County review of local budgets, levies and tax rates. The DLGF and County Auditor will realize most of the changes to deadlines and reporting, however, there will be some minor changes at the city and town level. The November 1 deadline for a municipality to adopt a budget remains in place. NEW RESTRICTIONS ON CITY/TOWN SEWER CONNECTION REQUIREMENTS Under previous statute a municipality could require a property owner outside of the municipality’s corporate limits to connect to municipal sewer service if the utility extended those services. Often times a municipality will extend utility services at the request of property owners, a developer, or a new business. On the passage of HEA 1075 municipalities may no longer require property owners to connect if the property owner can verify they have a functioning septic or wetland sewer system. This may cause greater concern with a municipality’s ability to collect annexation waivers and maintaining contiguity if the municipality deems it necessary to one day extend its corporate limits where property owners are utilizing municipal services.
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IN WRITING Language was also added that requires a municipality that bills rental communities of five or more units a flat fee based on number of units to transition to consumption based billing for the complex. This does not mean billing for individual unit consumption but the consumption of the entire complex as a whole. This change will not be required to take place until the unit conducts a rate study or implements a rate change. NEW FRAMEWORK IN PLACE FOR RESPONDING TO APRA REQUESTS FOR LAW ENFORCEMENT RECORDINGS Emerging technology and policy decisions to embrace it often highlight the need for laws to change to account for the new way of “doing business.” As more and more local police departments across the state begin body-worn camera and dashboard camera programs for their police officers, it became clear that this session was an appropriate time to pass legislation to create a new framework for public records requests for law enforcement recordings. Under HEA 1019, all law enforcement recordings (defined as any audio, visual, or audiovisual recording of a law enforcement activity) must be retained for at least 190 days beginning July 1, 2016. When individuals request recordings, departments are authorized to charge a fee of up to $150 for the costs associated with preparing the recording for release. Another important provision of HEA 1019 creates a class of individuals called “requestors” who have the right to inspect a recording at least twice with their attorney present if they so choose. The most common requestor will likely be a person in the recording (or that person’s representative if deceased), but a requestor may also be a person whose property is depicted in the video or a crime/ tort victim if the recording is relevant to their situation. Although requestors are entitled to inspect the recording, they aren’t automatically entitled to receive a copy. If denied a copy, a requestor may sue the department using the typical APRA request denial appeals process. For any other member of the public who is not a requestor (e.g. the media), if a request for a recording is denied and the person sues, the burden of proof is on the department to show why it should not be released. The burden, however, is relatively generous – the department will only need to prove by a preponderance of the evidence that releasing the video would pose a significant risk of harm to someone, would interfere with an ongoing investigation or proceeding, or would not serve the public interest. As HEA 1019 moved through the process, there was some concerning language inserted that would have required departments to release certain recordings (e.g. if it “pertained to” a civil rights violation or excessive use
of force). IACT and the Association of the Chiefs of Police successfully supported the removal of this language, but the author of the bill warned that if he hears of departments that are abusing the standard/erring on the side of non-disclosure, then he will be back to tighten it up for everyone. Ultimately, we think the final product of HEA 1019 is a fair approach that balances public access to recordings without impairing local police departments’ public safety operations. IACT is appreciative of the work of Representative Kevin Mahan and Senator Rod Bray, the author and sponsor of the bill. NEW TRANSPARENCY PORTAL REQUIREMENTS FOR CERTAIN CONTRACTS SEA 327, authored by Senator Eric Bassler, requires political subdivisions to upload to the Transparency Portal any contract with an amount payable for the year that exceeds 10% of the unit’s property tax levy or $50,000, whichever is less. Eligible contracts must be uploaded no later than 60 days after the contract is executed. One situation it may be important to consider in determining whether a contract must be uploaded is in the case of a contract that contains an hourly rate. If the contract is silent on the total amount an hourly rate may be paid for the year, then it probably should be uploaded if there is any possibility the total amount for the year would exceed $50,000 or 10% of the unit’s property tax levy. If, however, the contract states that the hourly rate may be paid up to a total amount of $49,999.99 for the year, it would not have to be uploaded (unless a lesser amount would still be more than 10% of the unit’s property tax levy). SEA 327 goes into effect July 1, 2016. ….MORE NEW TRANSPARENCY PORTAL REQUIREMENTS SEA 126 is another bill that requires more information to be posted on the Transparency Portal. After July 1, 2017, the DLGF will be required to post on the Transparency Portal an annual financial and operational summary of each political subdivision. This summary may include a unit’s total operating budget, number of employees, outstanding debt, disbursements, assessed value and tax rates, revenue, and the information that is currently available today on a unit’s fiscal health indicator dashboard. Although it does not mandate that municipalities have a website, if the municipality does have one then they are required to post a link to the Portal on the home page. Also in SEA 126 is the requirement that the DLGF post on the Transparency Portal a list of expenditures, specifically identifying those for personal services, operating
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IN WRITING services, and debt service (including lease payments). The DLGF will also be required to post a list of fund balances, specifically identifying balances in funds that are being used to accumulate money for future capital needs. Expenditure data and fund balance reports are already available on Gateway today, but the DLGF may need some additional information from municipalities in the future to identify whether a cumulative fund is being used to accumulate money for future capital needs. Finally, SEA 126 asks for an interim study committee on expanding the availability of “open data” (e.g. making machinereadable data sets available electronically in useable formats). With the continued movement toward making government more transparent, expect to see more legislation like this in the future.
The language that passed in HEA 1290 still permits RDC funds to be kept in the unit’s general account, but RDC monies must be accounted for separately, the daily balance of RDC funds must be maintained in a separate ledger statement, and the daily balance of RDC funds must not be below zero. All RDC funds must be accessible to the RDC at any time. If there is a need for the unit to borrow from RDC funds in the short term, the RDC must agree and both the unit’s fiscal body and the RDC must pass resolutions stating the conditions of the loan. All loans must be repaid by the end of the calendar year.
MARKET SEGMENTATION LANGUAGE BEGINS ADDRESSING DARK STORE ASSESSMENT ISSUE
HEA 1081 was a clean-up bill for last year’s comprehensive local income tax reform bill, HEA 1485-2015. Under last year’s HEA 1485, the adopting body for local income taxes (which is either the county council or the Local Income Tax Council) will now set the local income tax rates for all units in the county. The adopting body will set the rate for expenditures (which includes public safety, economic development, and certified shares) and the rate for property tax relief. Due to the flexibility now given to the adopting body to set and adjust rates, there was need to protect those units that have outstanding debt payable by a local income tax. IACT worked on language passed in HEA 1081 that provides this protection.
There are several provisions in HEA 1290, however, two are most notable. In the past few years, several big box retail stores have challenged their tax assessments. They argue that the value of their buildings should be compared to the sale price of a vacant big box store. These challenges have resulted in a loss of tax base around the state and have caused local government units to lose revenue. To address this problem, HEA 1290 contains language which requires the Department of Local Government Finance (DLGF) to provide for the classification of property improvements on the basis of “market segmentation.” This change will allow assessors, when valuing retail and commercial properties, to look at additional factors such as traffic, population, and the income of the population in the area where the property is located. In addition to the market segmentation language, IACT worked to shape the language in HEA 1290 which addresses redevelopment commission (RDC) funds. Last year, SEA 118-2015 required the fiscal officer of a unit to be the treasurer of RDC monies. This year, an amendment was added to HB 1290 in the Senate that would have required RDC funds to be kept in a separate checking account. After hearing from our fiscal officers that this requirement would be very burdensome, IACT worked to get the language revised.
INCOME TAX COUNCIL AUTHORITY AMENDED TO PROTECT UNITS WITH INCOME TAX BACKED DEBT
IACT INITIATIVE HELPS CLEAR UP SOME BAD ANNEXATION LANGUAGE FROM 2015 HEA 1298 was an IACT initiated bill to make clean-up changes from last year’s SEA 330-2015. IACT worked prior to the legislative session to gain consensus on these changes with the Indiana Farm Bureau and the Association of Indiana Counties. Under the provisions in the bill, first, changes were made to the contiguity requirements when a municipality is only annexing a public highway. Second, the number of required public outreach meetings was reduced from six to three for voluntary annexations. Third, language passed which now spells out the process for how waivers to the right to remonstrate against an annexation are checked against the list of signers of a remonstrance petition. The municipality is required to include data regarding existing waivers in its fiscal plan. The municipality will also submit this data to the county auditor, so that auditor, in certifying the names on the remonstrance petition, can cross reference the waiver list with the names on the petition. Finally, language was also included in this bill to allow the Town of Syracuse to annex its non-contiguous industrial park. This article was compiled by the IACT Legislative Team.
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IN WRITING COLUMNS • •
Legislative Recap From the Executive Director
FROM THE EXECUTIVE DIRECTOR & CEO MATTHEW C. GRELLER
Aggressive Anti-Meth Efforts Lead to Positive Change For years IACT has advocated aggressively to make products containing pseudoephedrine prescription-only medications. There is plenty of data showing states that have implemented this requirement can nearly eradicate the presence of “homecooked” meth. While the momentum for the prescription requirement has been gradually building, too many in the General Assembly are not yet supportive. We started the session with a great deal of optimism on the issue of scheduling pseudoephedrine products, making them available only to those with a prescription. Many leaders were voicing their support for more control and evidence was showing that greater accountability via the NPLEx monitory system alone wasn’t going to solve the problem. While we learned fairly early in the session that a strict prescription-only requirement would not be moving forward, talks of a serious alternative remained constant throughout. Stories of meth abuse and the horrible toxic consequences of home-cooked meth labs are not new to me. This is a problem the IACT membership has been debating, lamenting and struggling to address for the last decade. I thought I truly understood the gravity of the problem until I heard one determined lawmaker offer his take at an IACT event in February. If you haven’t talked with State Representative Ben Smaltz about the State of Indiana’s meth lab crisis, you should. Representative Smaltz speaks on the topic like a seasoned researcher, veteran police officer, exhausted social worker and frustrated prosecutor all wrapped up into the same human being. In my years of working with legislators I have rarely worked with a lawmaker who dives into any issue to the extent Representative Smaltz dove into understanding the meth epidemic.
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Representative Smaltz read reports, talked to his counterparts and state officials in other states, went to the active crime scenes where meth labs were found, and talked to those responsible for helping the children who had to be taken from their homes and decontaminated. He interviewed pharmacists, doctors and those who actually use pseudoephedrine medications. Representative Smaltz made it his mission to understand all sides of this issue backwards and forwards. In the end, due to the dogged work of Representative Smaltz and his counterpart in the Senate, Senator Randy Head, the aggressive efforts of the IACT legislative team, many public safety advocates, several IACT municipal members, and, of course, many other legislators eager for a solution, meaningful meth lab mitigation measures were passed this session. Like most pieces of legislation SEA 80 isn’t perfect, and it doesn’t include everything we asked for, but Senate Enrolled Act 80 has the real likelihood of making a difference in the local fight against meth labs. See page 15 for more information on SEA 80. When IACT is involved in advancing legislative policy that will most definitely impact the lives of Hoosiers in a very positive way, like significant road funding options or dramatically reducing domestic meth production, it’s a great reminder of the vital role we play assisting municipal leaders. Sessions like this also provide another critical reminder. While we don’t always get exactly what we want, like the complete scheduling of pseudoephedrine, the end result can still make a big difference.
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IN PLACE SPOTLIGHT ON ROAD FUNDING JENNIFER SIMMONS, IACT DEPUTY DIRECTOR AND COO
Road Package Paves the Way for Long-term Fix As they adjourned, putting another session of the Indiana General Assembly into the history books, lawmakers accomplished what they set out to do and what many thought would never happen. They passed meaningful and immediate road funding legislation that contains a framework for a longer-term solution. Two bills, HEA 1001 and SEA 67 both contain vital components to help municipalities address road funding needs. IACT worked with legislative leaders and executive branch officials throughout the session to see that any language passed in these bills was of maximum benefit to municipalities, with as few burdensome restrictions as possible. While there is more work to do, these bills represent a huge step in the right direction towards a long-term road funding solution in Indiana. As a testament to the legislature and governor’s commitment to addressing our state’s serious road funding deficit, the FIRSST Task Force Was established in HEA 1001. FIRSST stands for Funding Indiana’s Roads for a Stronger, Safer Tomorrow. Beginning immediately, the Task Force is charged with looking forward to the coming legislative session and making recommendations aimed at the future of infrastructure funding in Indiana. Another forward looking measure addressed in HEA 1001 is additional funding for the Local Technical Assistance Program, LTAP. $500,000 was allocated for LTAP to perform additional data gathering on local infrastructure needs and to develop an asset management system model for local governments. In terms of road funding, the session yielded additional funds, local options and a way forward. IACT looks forward to meaningfully engaging with the FIRSST Task Force and being a positive advocate for a longer-term solution to our state’s infrastructure funding program. Road Funding Package Locals will receive more than $400 million in LOIT Trust Reserves no later than June 1, 2016. 75% of a community’s distribution must be spent on LRS purposes or place in Rainy Day for use on the same. 25% of the returned LOIT Trust Reserves can be spent on any lawful purpose. There is no time constraint on when these funds must be expended. Municipalities with populations greater than 10,000 may now adopt a municipal wheel tax. This provision applies to 76 Indiana cities and towns. Even if your county has an existing wheel tax, eligible municipalities can still adopt a wheel tax.
If an eligible municipality utilizes an asset management plan and chooses to implement the wheel and excise tax, this can generate a $25 excise tax and $40 wheel tax for registered vehicles within the city or town. A Local Road and Bridge Matching Account (LRBMA) was established at INDOT. This permanent matching grant program creates a new revenue source for local infrastructure projects. Estimated revenue for the first year is between $150M and $189M. LRBMA grants will be a 1:1 match, with no minimum threshold. INDOT is considering placing a maximum grant amount for each project but may not restrict the number of applications each entitity may apply for. Only communities using an asset management plan and application approved by INDOT will receive funding under the program. We anticipate having a finalized asset management plan and grant application from INDOT later this spring. A positive note for smaller rural communities is that 50% of the funds allocated under the LRBMA program must be awarded in counties with a population less than 50,000.
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IN BRIEF INFOGRAPHIC: LEGISLATIVE FACTS AND FIGURES
779 Bills and Resolutions Introduced 219 Bills and Joint Resolutions Passed 129 Will Impact Cities and Towns
3 Big Wins for Cities and Towns
15 Legislators have announced they will not seek reelection in 2016.
HEA 1001 provides additional resources and revenue for local road funding. HEA 1290 adds additional language to assist with assessments of commercial property appeals. SEA 80 increases restrictions on meth manufacturers trying to acquire PSE. HEA 1053 prevents municipal government from implementing ordinances regulating plastic bags.
Indiana farmland will decrease in assessed value by $14.5 billion throughout the next 3 years, resulting in $49.2 million circuit breaker loss, due to SEA 308.
76 563
76 out of 563
cities and towns may now implement a municipal wheel tax.
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2 7
Two-sevenths
of gas sales tax will now be dedicated to Indiana infrastructure.
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