Annexation law gives landowners more clout

Forty-nine days after the start of the 2015 Indiana General Assembly, many landowners fighting municipalities around the state got what they wanted. The Senate had approved legislation eliminating involuntary annexations.

But whatever celebration erupted did not last long.

The House of Representatives tossed the elimination language in favor of provisions that make it somewhat easier for landowners to remonstrate. And by the time the measure was signed into law, authors and sponsors of Senate Enrolled Act 330 only seemed to agree the new annexation law will likely need to be revisited next session.

Boots

Sen. Phil Boots, one of the bill’s authors, was disappointed in the changes. The Crawfordsville Republican said he wanted to force municipalities to get support for an annexation rather than force property holders to organize and contribute funds to stop the process.

Property owners under SEA 330 still will have to collect signatures to show that most oppose being part of a city or town. However, the threshold for the opposition’s success has been lowered.

Currently, 65 percent of landowners must oppose the annexation in order to appeal the ordinance in court. Once the new statute takes effect July 1, remonstrators will be able to get a court hearing if a simple majority of 51 percent opposes the incorporation. If the opposition reaches 65 percent, then the anne

xation process will end.

“This is clearly a whole lot better than what we have now,” said Thrasher Buschmann & Voelkel P.C. attorney Steve Buschmann, who has represented remonstrators in several annexation fights.

The Indiana Associations of Cities and Towns sees the lower thresholds as better than eliminating involuntary annexation altogether. The association’s executive director, Matthew Greller, said the provisions in the bill that require municipalities to conduct a series of public meetings about the proposed annexation and to have a fiscal plan are good elements.

However, he said not providing an avenue for urban areas to incorporate new territory despite opposition could hinder progress.

“Sometimes an annexation needs to be done for the greater good,” Greller said. “To take away the palette that cities and towns nationwide have had for 100 years doesn’t seem like a good thing to me.”

Stripping the language

Boots was a member of the 2014 Interim Study Committee on Government which examined annexation. He said the committee drafted the bill with the landowners in mind. He views legislators as working for landowners and if an annexation will bring a benefit, then the city or town should be able to convince property holders of that.

Negele

The interim committee chair, Rep. Sharon Negele, R-Attica, introduced House Bill 1561, which did not go as far as to end involuntary annexation. She said it had broad support until Senate Bill 330 came out of the Senate, and the Indiana Farm Bureau switched to promoting the Senate’s measure.

As a sponsor of SB 330 in the House, she stripped the restriction on involuntary annexation from the Senate bill and inserted provisions from her bill that set the thresholds for remonstrators to get a hearing and to prevent the annexation.

Boots attributed Negele’s reworking of his bill to her sympathy for municipalities. He noted she was a clerk-treasurer for nine years prior to being elected to the Legislature.
That is a charge Negele said she has heard before from Boots. She described their debates over the annexation bill as “heated but friendly” and said her goal was to balance the measure so the end result was palatable to landowners, municipalities, counties and the Farm Bureau.

“It was a good process,” Negele said. “I felt we came up with a product that is workable.”

In particular, she said the new law provides more protection against “bad actors.” The measure will cause municipalities to have “thoughtful consideration of annexations” and will help to “stop the land grabbing.”

Brownsburg battle

Shortly after the Legislature adjourned, the Indiana Court of Appeals found for the remonstrators fighting an annexation by Brownsburg. It reversed the ruling from Hendricks Superior Court in Fight Against Brownsburg Annexation, et al. v. Town of Brownsburg, Indiana, et al., 32A01-1407-PL-300.

The Brownsburg battle came down to signatures on the remonstrance petition. Remonstrators began collecting signatures from landowners after the town council introduced the ordinance that would incorporate 1,193 parcels. At trial, the town argued the 200 signatures obtained before the final ordinance was adopted were invalid.

The Court of Appeals found the current statute is silent on when signatures for a remonstrance can be collected.

Sabrina Graham, a leader in the Brownsburg opposition, still was frustrated, pointing out the ruling was not a true victory.

“What win?” she asked. “We won the right to have a remonstrance hearing. That is going to cost us (more money). It’s just unfair.”
In a footnote to its decision, the Court of Appeals drew attention to the changes coming to Indiana’s annexation law. Among the provisions is one that requires signatures on a remonstrance petition be dated after the ordinance is adopted. Had that provision already been in effect, the outcome of the Brownsburg case could have been different.

This language was added in conference committee and few had a clear memory of why and how the provision was inserted.
Graham, who was very active during the legislative session, said the section was inserted because legislators wanted the annexation law to conform with the statute that outlines the process for remonstrating bonds.

Based on the work in the Brownsburg fight, Graham said the coming requirement on when signatures can be collected would make getting to the 65-percent level more difficult, especially for large annexations.

The loophole

But everything changes if the municipality declares the annexation is for economic development. A provision provides room for annexation ordinances which are for an “economic development project” to be appealed to court even if the remonstrators collect 65 percent of landowners’ signatures.

Hoff

Ryan Hoff, general counsel for the Association of Indiana Counties, called the provision a loophole. He argued residents living in a county should have a say in annexations.

“If the loophole is going to remain, I think the definition (of economic development project) needs a fair amount of work,” Hoff said.

Although the provision does mandate time limits for when the project must begin and end, Negele conceded the language needs to be tweaked. She said the Dec. 31, 2016, effective date for the provision was included to force legislators to revisit the issue and rework the economic development section.

The Indiana Association of Cities and Towns sees the provision as necessary to ensure big projects which benefit the larger community are not scuttled by a handful of property owners. If a large manufacturing operation wants to move into Indiana, a few landowners holding big tracts of territory should not be able to derail the project, Greller said.

Broden

In discussing his overall opposition to the new law, Sen. John Broden echoed the frustration with annexation foes being able to interrupt growth. The South Bend Democrat added himself as a sponsor of SEA 330 as part of his strategy to be included in the conference committee and keep a hand in adjusting the final version.

Broden objects to the conventional wisdom that when a majority of landowners oppose an annexation, it means the annexation is inherently bad public policy. Maybe expanding the city limits is not in the best interests of the affected property holders, he said, but the annexation might benefit future economic development, which is good for the region and the state.

Graham also is not satisfied with the final bill. She plans to return to the Statehouse next session.

“I think it’s worse than the prior statute,” she said of SEA 330. “If this is the statute we’re stuck with, let’s work on improving the wording.”•