Final Issue | May 2017
LEGISLATIVE REPORT
Sponsored by
AN A-SESSION FOR THE
BUSINESS COMMUNITY
By Kevin Brinegar, president and CEO
F
www.bosepublicaffairs.com/how-could-31-7billion-impact-you
Resources
Kevin Brinegar: (317) 264-6882 or
[email protected]
Caryl Auslander: (317) 264-6880 or
[email protected]
Greg Ellis: (317) 264-6881 or
[email protected]
Mark Lawrance: (317) 264-7547 or
[email protected]
Mike Ripley: (317) 264-6883 or
[email protected]
Bill Waltz: (317) 264-6887 or
[email protected]
INDEX
inally! Indiana has a long-term road funding plan; one that is
significant – $1.2 billion – and should sustain us for the next
20 years. The Indiana Chamber made this issue its number
one priority because transportation infrastructure is so vital to
economic development – specifically attracting jobs and investments,
and growing incomes.
Yes, people will pay a little more to make that happen, but it’s primarily related to how
much you drive. And don’t forget, a large contributor to the overall fund mix will be a willing
business community. The payoff for everyone will be huge: improved travels with fewer
delays and vehicle repairs caused by crumbling roads. Hoosiers should see these new dollars
put to good use very soon, perhaps as early as this summer.
Entrepreneurs and businesses in general saw several other significant victories. More
money – to the tune of $250 million – is available for promising, innovative Hoosier
companies via the Next Level Trust Fund. They will also now have greater certainty that the
Venture Capital Investment Tax Credit will be there in the long term because its 2020
expiration date was removed. Another big boost is the money to encourage more direct
flights from Indiana airports to international and domestic destinations. And the “open data”
bill assures the state’s Management Performance Hub has maximum utility and will be a
great tool for policymakers, local government and economic development.
Meanwhile, we have all seen how the state’s brick-and-mortar stores have been hit
hard, but there is a little light at the end of the tunnel. With online sales tax collections
becoming more a question of when, not if, this will help level the playing field with their
online and mail counterparts. Not to mention, it also boosts Indiana’s sales tax base.
We were very pleased that the state’s pre-K pilot program received more than double its
original funding and outreach to students. Now, $22 million annually will help the most
at-risk youngsters in up to 20 counties get off to a good start with their education. Would we
have liked more funding? Of course. But that wasn’t the reality in this tight budget year.
ISTEP is in the past. ILEARN will be a shorter test for grades 3-8 and based on Indiana
standards as it should be. Much emphasis will be placed on getting the results back to
teachers and parents faster so that information is factored into teaching and homework time.
At the high school level, alternative testing will take place at the end of the school year. It’s
important that teacher evaluations and school A-F grades remain tied to these test scores.
That was a battle, but fortunately the need for accountability prevailed.
For decades, the Indiana Chamber has pushed for making the superintendent of public
instruction an appointed position, as are all other agency heads. Now, thanks to a push by
Gov. Holcomb, that will be the case. What we don’t agree with is waiting eight years to make it
happen. Nevertheless, this is a very positive step for making sustained education progress in the state.
The one area where the General Assembly had an opportunity to make significant
progress and chose not to was with the anti-smoking reforms. That’s unfortunate because
tobacco costs Indiana employers $6 billion annually in health care costs and lost
productivity; smoking also costs taxpayers over $5 million per year in Medicaid expense. But
we and other members of the Alliance for a Healthier Indiana will be back next year to
continue the crusade to reduce smoking rates in our state.
Historic Road Funding Bill Highlights Victory List . . . . . . . . . . 2
Top Education Matters Cross Finish Line . . . . . . . . . . . . . . 3
Ban of ‘Ban the Box’ Highlights Labor Area . . . . . . . . . . . . . 4
Much Positive Movement in Innovation Sector . . . . . . . . . . . . 5
Health Care Reform Bills Essentially Snuffed Out . . . . . . . . . . 6
Successes in Protecting Taxpayer Rights, Plus Other Modest Steps . . 7
Water, Energy and More Surface as 2017 Priorities . . . . . . . . . 8
Marion County Judges Bill Makes It Through . . . . . . . . . . . . 9
Legislative Scorecard . . . . . . . . . . . . . . . . . . . . . . . 12
HISTORIC ROAD FUNDING BILL
HIGHLIGHTS VICTORY LIST
By Mark Lawrance, vice president of engagement and innovation policy
After several years of laying the groundwork to address the
long-term shortfall in road funding (due to better gas mileage and
inflation), Indiana took a huge leap forward in 2017 with the
passage of HB 1002. This accomplishes a top Indiana Vision 2025
priority for the Indiana Chamber. And as a state, we are now in
position to better live up to our “Crossroads of America” slogan.
The largest new state investment in transportation infrastructure
in Indiana history, authored by Rep. Ed Soliday (R-Valparaiso) – to
the tune of $1.2 billion per year – promises to better maintain our
current roads, complete road projects that are underway (I-69, U.S.
31 upgrade, etc.) and allow for future new road improvements,
including adding traffic lanes where needed. It allocates nearly $870
million in new annual funding for state roads and bridges, as well as
$340 million average a year for local roads and bridges by 2025.
Various user fees were a much-needed part of the equation:
• Motorists will pay an additional 10 cents per gallon of gasoline,
special fuels and motor carrier surcharge taxes. To combat the
impact of inflation, those fuel taxes will be subject to an annual
increase over the next seven years of up to one cent per gallon so
inflation does not erode into the buying power of the new rate.
• Starting in 2020, all remaining sales taxes on gasoline purchases
will gradually shift from the General Fund into the State Highway
Fund. That transfer process of fuel sales tax to state road funding
will be complete by 2025. There is a mechanism where the
Governor and State Budget Committee can halt those incremental
fuel sales tax transfers, if a state financial emergency is declared.
• Annual vehicle registration fees will increase $15 for most cars,
hybrids (which use less fuel) will increase $50 per year and electric
vehicles (which use no fuel) will pay an extra $150 per year.
• Possible future tolling of Indiana roads. The Indiana Department
of Transportation (INDOT) will seek a Federal Highway
Administration waiver to toll interstate highways. Before any
public-private partnership agreement is completed for a toll road
project, it requires the Governor, INDOT and the Indiana Finance
Authority to have the State Budget Committee first review the
proposed agreement.
The bill, however, is not just about roads and bridges. Aviation
fuel taxes will be increased 10 cents and the increased revenue will
go to the Airport Development Grant Fund for airport capital
improvement matching taxes.
This ambitious bill goes a long way to accomplish an important
Indiana Vision 2025 goal to “develop and implement new fiscal
systems to support the array of transportation infrastructure projects
critical to economic growth”. The Chamber was a significant partner
in the coalition that successfully advocated for the passage of HB
1002. Dennis Faulkenberg, who chairs the Chamber’s Infrastructure
Committee, and other members of the committee were quite helpful
in guiding Chamber policy on this issue. The broader coalition
included labor unions, the Indiana Motor Truck Association, the
Association of Indiana Counties, Conexus and Advancing Indiana’s
Municipalities. We were pleased to work with them and appreciate
the work that led to the passage of this bill.
The Chamber is especially appreciative of the strong leadership
of Speaker Brian Bosma (R-Indianapolis), who made this a top
priority of the House for the past two sessions, and Senate President
Pro Tem David Long, who provided guidance to shepherd his caucus
as the bill went through the Senate. Author Soliday was a fierce and
tireless advocate for the bill. Other strong leadership came from
House Ways and Means Chairman Tim Brown (R-Crawfordsville),
Sen. Brandt Hershman (R-Buck Creek), Sen. Luke Kenley
(R-Noblesville), Rep. Holli Sullivan (R-Evansville) and the Senate
sponsor, Sen. Mike Crider (R-Greenfield).
2
This investment in Indiana’s future will
pay dividends for years to come. It proves
that Hoosiers are willing to pay a little
more ($60-$65 per year) if they know the
extra money will be spent on improving
roads in our state and their communities.
And now Indiana is no longer kicking the
can down the road to fund them. Welcome to the new, modern
Crossroads of America!
Double Tracking of South Shore Rail Line to Boost
Northwest Indiana Economy
For northwest Indiana, transportation connectivity with the
Chicago market is a major economic factor. Many areas of the
Region are primed for growth and that will be enhanced by the
passage of HB 1144, South Shore Rail Transit, authored by Rep. Hal
Slager (R-Schererville).
The South Shore Line provides commuter rail connectivity from
St. Joseph County west to downtown Chicago. It is presently a
single-track line in most places, which limits movement both east
and west, as well as hinders on-time performance. Therefore, most
legislators were in favor of the bill, as it creates an economic
structure for local and state investment in this project. Specifically,
the bill expands the single track between Gary and Michigan City,
and will construct significant improvements at five passenger stations.
These changes will add trains for more frequent service, reduce
delays and improve travel times.
This was a legislative priority of Gov. Eric Holcomb and, when
completed, will boost the northwest Indiana economy. Improvements
facilitated by this bill and funding mechanisms, which leverage local
and state funding, will allow the South Shore Line to be an even
better economic generator by as early as 2020.
We applaud Rep. Slager; his leadership was commendable as
he tenaciously led the bill successfully through the legislative process.
Enabling Legislation Allows Enhanced Local
Funding for Regional Infrastructure
Indiana is home to many unique communities and regional
economies. In southern Indiana, communities in Dubois County,
including Jasper and Huntingburg, have strong economic activity but
lack good road connectivity for the goods and services they provide.
They are not easily connected by interstate-grade roads to either I-64
to the south or I-69 to the west and north, so community leaders
wanted to do something to improve their situation.
That was the motivation behind SB 128, Regional Infrastructure
Improvement Projects, authored by Sen. Mark Messmer (R-Jasper).
His House partner on this bill was Rep. Mike Braun (R-Jasper), who
authored a similar measure in that chamber. The bill allows for
communities to create a regional development authority (RDA),
which allows for greater local participation in contributing toward a
desired regional infrastructure project. This provides that additional
funding may come from the RDA’s application for a federal
FASTLANE grant. It also allows a county or community participating
in an RDA to transfer money from its general or rainy day fund to the
RDA to provide funds for a regional transportation infrastructure
endeavor.
While the idea for the mechanism in SB 128 originated from the
Dubois County region, it is applicable to all areas of the state and
can enable those communities who want to accelerate the
construction of a transportation project.
Continued on page 11
Leading Business | Advancing Indiana
TOP EDUCATION MATTERS CROSS FINISH LINE
By Caryl Auslander, vice president of education and workforce development
Perseverance paid off in 2017. The Indiana Chamber was
finally able to put a check mark by many long-time legislative
priorities – pre-K expansion, appointing the state superintendent and
measures to encourage school district consolidation – while
successfully revamping the state’s high-stakes assessment system and
passing a comprehensive workforce development bill.
Check Them Off the List (for Now)
For the last decade, the Chamber has strongly advocated to
have a state-funded high quality pre-K program for children from
low-income families. While we were successful in achieving a small
pilot program for five counties a few years ago, we were able to
significantly increase the state’s investment this legislative session.
The Chamber helped to lead a strong coalition of community
leaders, businesses, philanthropies and providers to achieve $44
million appropriated in the two-year budget (HB 1001) to expand
the pilot. We can now increase the number of counties from the
original five to up to 20, with a preference given to rural areas.
Separately, we successfully advocated for a lowering of the county
match of dollars from a base of 10% down to 5%. In addition, we
worked on offering up to 20% of the appropriated dollars to be used
for capacity-building grants to allow for providers to grow more
high-quality placements. This was a priority for both the House and
Senate leadership, as well as Gov. Holcomb and the final bills passed
with strong bipartisan votes of 82-16 and 31-19, respectively.
The Chamber also were able to pass a bill (SB 248) that would
allow small school corporations situated in the same or adjoining
counties to consolidate services if 20% of legal voters in both school
districts petition the trustees of their respective school corporations. A
small school consolidation grant that was originally included in this
bill was moved into the budget to help offset costs. The Indiana
Chamber has been supportive of this legislation in previous sessions
and most recently, the Indiana Chamber Foundation has
commissioned and is finalizing a study that shows the direct
correlation between smaller school corporations and lower
postsecondary attainment for students.
The Chamber has had a long-standing policy to support the
opportunity to reduce administrative costs by merging or
consolidating administrative services in smaller school districts, which
we believe will in turn reduce the duplication of programs or
services, increase cost efficiencies relating to the use of school
facilities, plus reduce debt and provide for establishing other costcutting measures.
And we can now check off a legislative agenda item that the
Chamber has been advocating for over 30 years to complete. House
Bill 1005 will move the Superintendent of Public Instruction from an
elected to appointed position. We had originally advocated for this
bill with an effective date of 2021 (and therefore no election in
2020); however, the Senate version of the bill died by surprise on
the Senate floor on third reading. That meant to consider the House
version (which was virtually identical), the content had to be
“substantially different” than the failed bill, per Senate rules.
Therefore, the Senate amended the bill to change the effective
date to 2025 and include a residency requirement of two years and
have certain educational experience. The Chamber did not support
these changes as we felt that Indiana’s education leader should be
the best person available and no other appointed state agency
position has such required qualifications. However, it was decided by
Senate leadership and counsel that the changes had to remain for
the measure to proceed. So while we are extremely happy that we
were able to get the position appointed, we are disappointed with
the additional requirements. The Chamber will continue to advocate
for these to be stripped from statute in subsequent sessions, although
we feel that it will likely be a very difficult lift.
Leading Business | Advancing Indiana
ISTEP Meets ILEARN
As you may recall, last year the
Indiana Chamber supported a bill to
sunset the ISTEP statewide assessment in
the summer of 2017 and create an ISTEP
alternative panel to study how to move
forward given the issues with the current
test. During these panel sessions (which
included Chamber board member Marilyn
Moran-Townsend of Fort Wayne), a parade of national experts
agreed that it would take a minimum of two years to develop a new
test. Thus, the Chamber was pleased to support HB 1003, which
would move the ISTEP sunset to 2019 and call for the development
of the new test, ILEARN.
During this one-year delay, the Indiana Department of
Education will be tasked with developing the new test and finding a
vendor. The test parameters are similar to what was suggested by the
ISTEP alternatives panel, including:
• A new year-end test for grades 3-8, with testing social studies
once in fifth or eighth grade
• End-of-course high school exams for ninth grade biology and
tenth grade English and algebra 1, with an optional end-of-course
exam for U.S. government
• Changes to the graduation requirements by no longer having endof-course assessments count as the graduation exam, but rather
creating a number of graduation pathways (as determined by the
State Board of Education) which could include: passing ECAs,
SAT/ACT or ASVAB (Armed Services Vocational Aptitude Battery);
earning an industry certification; or earning AP, dual credit or
International Baccalaureate credits
• A shift to one test window instead of two, which will now take
place at the end of the school year to allow educators to have
more time to teach a full year of material and eliminate wasted
“dead time” post assessment
• Completion deadlines for test results – August 15, 2019, for the
first year and July 1 thereafter
• Opportunity for the State Board of Education to select test
products for the assessment that allows for comparison between
Indiana students and others in the U.S.
There was significant talk of decoupling ISTEP scores from teacher
evaluations until a new test was developed. The Chamber strongly
fought against these bills, amendments and discussions – and was
successful in negotiating that a study could take place to discuss this issue
over the summer. We would like to thank House Education Committee
Chairman Bob Behning (R-Indianapolis) and Senate Education Committee
Chairman Dennis Kruse (R-Auburn) for standing so strong on this issue.
Workforce Development Seen as Vital
Fortunately for the business community, workforce development
was a buzz phrase in both chambers and the Governor’s office this
session. Speaker of the House Brian Bosma (R-Indianapolis) was quoted
in the Indianapolis Business Journal late last year saying, “I’m not
being critical of any person or agency, but when you see there’s a
billion dollars being invested in workforce training, that it’s spread
out among 30 different programs in nine different agencies and we
haven’t really moved the dial on workforce, you start wondering that
maybe it’s not the people or the investments. Maybe it’s the system.”
Two priority bills moved throughout this session, which ended up
having key provisions merged together into one bill. The final result,
HB 198, better aligns workforce development activities throughout
state government, with a significant emphasis on making sure scarce
taxpayer dollars are being spent on high-wage, high-demand jobs training.
Not only were the legislative and executive branches working
Continued on page 9
3
BAN OF ‘BAN THE BOX’ HIGHLIGHTS LABOR AREA
By Mike Ripley, vice president of health care policy and employment law
Rarely do good ideas become law the first year they are
introduced, but SB 312 (Use of Criminal History Information in
Hiring) turned out to be a pleasant exception to that general rule. In
other parts of the country, “ban the box” legislation has taken hold –
preventing employers from obtaining or using criminal history
information early in the hiring process to the extent allowed by
federal or state law.
Essentially, this practice prohibits having a box or question on
an application asking about a person’s criminal background. Senate
Bill 312 stops this movement from taking place here at the state or
local level, and continues to allow Hoosier employers to gather and
use the information.
Laying the groundwork, the Indiana Chamber met with the bill’s
author, Sen. Phil Boots (R-Crawfordsville), chairman of the Senate
Pensions and Labor Committee, in early December about the
possibility of him carrying the legislation. The Chamber explained the
climate across the nation. Senator Boots, who had previously passed
legislation that would pre-empt local communities from mandating
scheduling practices on local businesses, felt this ban of ban the box
was right up his alley.
Fast forward to the start of session. Senator Boots informed the
Chamber that Sen. Greg Taylor (D-Indianapolis) had serious
concerns about the bill because of its potential implications and
impact on African Americans. (Previously, the city of Indianapolis
passed an ordinance in 2014 banning this practice for vendors that
do business with the city.) The Chamber requested a meeting with
the two senators and David Swider, a leading labor attorney and
chairman of the Chamber’s Labor and Employment Committee.
Because Swider was able to address most of Sen. Taylor’s concerns,
Sen. Boots gave the bill a hearing.
During his testimony to the Senate Pensions and Labor
Committee, Swider discussed the history of how current federal laws
and interpretations by the Equal Employment Opportunity
Commission (EEOC) on convictions was derived. Historically,
screening applicants based upon convictions was acceptable but a
disproportionate amount of minorities having gone through the legal
system resulted in a disparate impact. The courts then said that the
question of a criminal conviction may be asked but there are four
factors that must be considered: whether the applicant committed the
offense (not just an arrest); the nature and gravity of the offense; the
time since the offense; and the nature of the job for which the
applicant has applied.
Several other business organizations also testified to the
importance of this bill.
Senator Chip Perfect (R-Lawrenceburg) was encourage to
amend the bill on second reading. The amendment most likely
proved to be the saving grace. It was patterned after Colorado law,
which states that criminal history information for an employee or a
former employee may not be introduced as evidence against an
employer in a civil action that is based on the conduct of the
employee or the former employee in certain circumstances.
The amendment was heralded as being pro-business and prohiring of convicted individuals. So much so that Indianapolis City
Councilman Vop Osili, who authored the city’s ban the box
ordinance, testified before the House Courts and Criminal Code
Committee that he didn’t like to see his policy pre-empted and
“gutted”, but given the potential positive impact of this provision he
could support it.
In discussions with Indiana Chamber members, however, there
is some disagreement as to how effective this amendment will
actually be. Chris Schrader, a member of the Chamber’s Labor and
Employment Committee and director of government affairs for the
Indiana State Council of SHRM, testified in committee that
employment decisions should be made based on qualification, not
4
on factors with no bearing on the ability to
perform job-related duties. The EEOC has
provided comprehensive guidance to
employers regarding consideration of
criminal records in the selection process.
The bill passed the committee 11-0 and
went on to pass the House 80-11.
Because of Sen. Perfect’s amendment,
the Indy Chamber changed from being
neutral to becoming a strong ally with the Chamber in promoting the
bill. Once the bill had also cleared the Senate, various groups –
including the Indiana Institute for Working Families, the ACLU of
Indiana and Indiana State Conference of the NAACP – penned an
open letter to Gov. Holcomb encouraging him not to sign SB 312
without an executive order that bars the state from seeking criminal
history on public sector worker applications. The Governor
announced such an executive order in late April and subsequently
signed the bill into law.
Work Share Continues to Get Cold Shoulder
In December, the Chamber introduced the work share policy to
the new chairman of the House Labor Committee, Heath VanNatter
(R-Kokomo). He made no commitment to hear a bill but indicated
that he would keep an open mind.
A work sharing program would allow employers to maintain a
skilled stable workforce during temporary economic downturns.
Employers then could reduce hours without layoffs, enabling workers
to keep their jobs, which hopefully could be returned to full-time
status once economic circumstances improve. Also part of the
equation: unemployment compensation to partially compensate
workers for their lost hours.
After several discussions with the Indiana Manufacturers
Association (IMA), the Department of Workforce Development
(DWD) and the Chamber, Rep. VanNatter decided to host a meeting
with the three parties present. He later informed us that he was being
told different things about the issue than what the Chamber was
being told and wanted everyone in the room at the same time.
Simply stated, the Chamber supports work share, but DWD and the
IMA do not.
What Rep. VanNatter was able to do was get the IMA to admit
in the Chamber’s presence that it was opposed to the bill. As a
result, Rep. VanNatter didn’t feel that he could move forward with
the two organizations in disagreement. In a subsequent discussion,
he did say that he would like to study the issue (himself) this summer
and then make up his own mind.
Over the course of the last five years, the bill has been heard
twice but no vote has ever been taken. This is very frustrating for a
measure that is a no-brainer and would garner bipartisan support –
if it can ever make it to that point!
Unemployment Insurance Bill Has Positive Outcome
When HB 1154, Unemployment Insurance (UI), authored by
Rep. Dan Leonard (R-Huntington), was being heard in the House,
the Chamber testified in favor of the bill as did the IMA. Specifically,
we supported the requirement for DWD to give its annual
presentation regarding the status of the unemployment compensation
system to the Interim Study Committee on Employment and Labor
(instead of the State Budget Committee, as provided in current law).
In committee, at the recommendation of the DWD, an
amendment was added that neither the IMA nor the Chamber had
access to that took the cap off of the Special Employment and
Training Services Fund, commonly referred to as the Penalty and
Interest Fund (P&I). The statute gives specific direction as to how
Continued on page 10
Leading Business | Advancing Indiana
MUCH POSITIVE MOVEMENT IN INNOVATION SECTOR
By Mark Lawrance, vice president of engagement and innovation policy
Last summer, the Indiana Chamber formed the Indiana Technology &
Innovation Council. A large part of the group’s mission it to protect
and advance the public policy interests of related organizations. The
Indiana Technology & Innovation Council’s Tech Policy Committee
developed an agenda going into the 2017 session with several
significant objectives.
We are happy to report – thanks to the work of many – that the
group’s first legislative session proved to be highly productive and
rewarding, with several key policies to advance innovation, technology
and entrepreneurship in Indiana set to become law. These include
enhancing early-stage and scale-up funding for promising Indiana
business opportunities, an increased focus on innovation and
entrepreneurship, better digital and physical connectivity with other
parts of the world, funding for better use of big data and providing
funding mechanisms to enhance regional infrastructure projects.
Case in point: There is a provision in the bill that allows Indiana
communities to designate local ordinances (and possibly resolutions)
to direct where and how those small cell devices can be put in their
community by making them an underground or buried utility area.
The deadline for seeking this additional protection was May 1.
Realizing this, Accelerate Indiana Municipalities (AIM) sent
information to its members around the state to quickly pass an
ordinance or resolution by that date. Almost 100 locales were
considering doing so. But that move may backfire on these same
communities whose citizens want better broadband. What’s more,
whether those new ordinances are legal remains to be seen.
The Chamber supports more and better broadband for Indiana
and strongly advocated for SB 213 during the process. We
appreciate the hard work of Sen. Hershman and Rep. Ober in
getting this legislation over the finish line.
Management and Performance Hub Information
Holds Promise
Major Tech, Innovation and Entrepreneurship Progress
Indiana has been a leader in using government data to improve
the delivery of services to its citizens. The Management and Performance
Hub (MPH) is an evolving integrated data system that links government
agency data and allows for data-driven analytics and research, which
can help inform policy and improve the delivery of government
services to come from that information. House Bill 1470, Government
Data, authored by Rep. David Ober (R-Albion), was the main vehicle
to codify the MPH and ensure it has maximum utility for taxpayers,
government agencies, the Legislature and other external stakeholders.
The measure started off smoothly, but when it got to the Senate,
it was derailed during a hearing before the Senate Commerce and
Technology Committee. Based on fear that the information would
not be secure or de-identified, the committee amended it to be only
a summer study committee issue. Fortunately, the original content
was restored by Sen. Brandt Hershman (R-Buck Creek), the bill’s
sponsor, on the Senate floor. The Chamber has supported HB 1470
to maximize its utility as a consistent data source and analytical tool
for a variety of public issues with multiple stakeholders.
Fortunately, the budget bill, HB 1001, authored by Rep. Tim
Brown (R-Crawfordsville) ended up providing good resources to the
MPH –$9 million per year for the next two years. This allows MPH
the ability to continue to develop to provide timely and accurate
information that can help track vital information for the state’s
economy, education and a host of other matters where better data
can help inform better decisions.
Municipalities Work to Hinder Small Cell
Legislation, But It Passes
A bill to more easily move Indiana’s mobile broadband connectivity
to the next generation of technology passed the Indiana General
Assembly. Senate Bill 213, Wireless Support Structures, authored by
Sen. Hershman, focused on streamlining permitting, fees and
co-location to increase coverage by current cell towers and facilitate more
rapid installation of small cell technology in Indiana communities.
Specifically, an objective was to eliminate excess fees and permitting
by local units of government that would hinder installation of small
cell antennas. A lot of misinformation was communicated by detractors
to say many of the antennas were the size of a refrigerator or Volkswagen,
when, in fact, they are much smaller. It is in the providers’ economic
interest to co-locate small cell antennas on current towers, light
poles or other structures.
This legislation also highlighted an interesting dynamic: Many
municipalities who want better broadband in their communities as an
economic development tool also want a “say” in the small cell tower
locations and to be able to collect fees and issue permits. And those
desires are quite strong.
Leading Business | Advancing Indiana
Several tech innovation issues ended up advancing in the state
biennial budget, HB 1001, authored by Rep. Tim Brown.
A Chamber priority was to increase early stage capital in promising
Indiana companies. While making the Venture Capital Investment
(VCI) Tax Credit transferrable (to attract out-of-state investment to
Indiana) didn’t happen, it arguably worked out even better with the
creation of the $250 million Next Level Trust Fund. This allows for
up to half of the $500 million corpus from the Major Moves highway
infrastructure program to be used for investments outside of
conservative fixed income investments. It creates a Next Level Indiana
Fund investment board with fiduciary responsibility to direct
investments in equities or “funds of funds” which could be directed
toward promising Indiana businesses.
In addition to the Next Level Trust Fund, legislators adopted
options for Indiana public employees and teachers with defined
contribution plans to invest up to 20% of their contributions in an
Indiana-focused fund.
This summer, the Legislative Services Agency is conducting a deep
study of the impact of the VCI. That report is due in October 2017
and based on information that comes from that report, we hope to
better advocate for the enhancement of the tax credit during the
2018 session, if warranted. In SB 507, authored by Sen. Randy Head
(R-Logansport), the expiration date of the VCI tax credit of 2020 was
eliminated so the tax credit now has more certainty for the future.
House Bill 1001 also funded $30 million for the 21st Century
Research and Technology Fund. Additionally, $15 million for each of
the next two years was allocated for the Business Promotion and
Innovation Fund, which combined several requests. It gives authority
to the Governor and the Indiana Economic Development
Corporation (IEDC) to incentivize direct flights from international and
regional airports in Indiana, encourage regional development
activities (aka Regional Cities), advance innovation and
entrepreneurship education programs through strategic partnerships
and support international trade.
The Indiana Biosciences Research Institute was funded for $20
million for year two of the budget. This should pay dividends down
the road to further grow Indiana life sciences opportunities.
Better Performance Metrics to Recertify Technology Parks
Certified technology parks (CTPs) around the state will benefit
from House Bill 1601, authored by Rep. Todd Huston (R-Fishers).
The bill requires IEDC to develop new metrics for performance of
CTPs as they are up for recertification.
The IEDC will work with local units of government to develop
the metrics. They will include the criteria used to evaluate each
category of information by a CTP and a minimum threshold
Continued on page 10
5
HEALTH CARE REFORM BILLS ESSENTIALLY SNUFFED OUT
By Mike Ripley, vice president of health care policy and employment law
No other bill and provisions during the session were lobbied so
diligently by so many for so few results than the anti-smoking legislation,
HB 1578, authored by Rep. Cindy Kirchoffer (R-Beech Grove).
During the summer of 2016, the Indiana Chamber joined the
Alliance for a Healthier Indiana to promote long-term solutions to
Indiana’s consistently poor health rankings. The most recent data
placed Indiana in an unfavorable position: 39th overall (and for
smoking rate) among the 50 states. It was decided that smoking
would be the first health issue that the group would tackle.
House Bill 1578 was the response to the coalition’s initiative.
When originally filed, it contained four major points: 1) increase of
the cigarette tax by $1.50 per pack from $.995 to $2.495. Significant
research shows that increasing the cigarette tax reduces smoking
consumption; (2) raising the legal access age for tobacco products
from 18 to 21, as research shows that more than 90% of all smokers
begin before age 21; 3) provide appropriations for tobacco cessation
at $35 million per year. Indiana once had adequately funded
tobacco cessation and prevention at that level but most recently that
funding has dropped to $5 million annually; and (4) repeal the
protected status for smokers, (aka the smoker’s bill of rights).
The cost of smoking for Indiana businesses totals $6 billion
annually when adding together additional health care expenses and
loss of productivity. The Indiana Chamber has argued in past
sessions – and did so again in 2017 – that smoking is a behavior
and should not be a protected class under Indiana’s employment
statute. The Alliance for a Healthier Indiana was joined by numerous
other anti-tobacco organizations.
The bill was assigned to the House Public Health Committee,
where chair Kirchoffer heard her own bill. The Chamber provided
the committee with information regarding the costs to employers
associated with smoking. Jim Mills, chair of the Chamber’s Health
Care Policy Committee, testified on the importance of repealing the
preferential treatment for smokers.
After passing the committee 11-0, the bill was reassigned to the
House Ways and Means Committee where it took on major
changes. Despite testimony from the Indiana Chamber and the
Indiana Hospital Association (IHA), the Ways and Means Committee
lowered the cigarette tax to $1.00 per pack and tobacco cessation
funding to $7.5 million per year and placed those two issues in the
budget bill (HB 1001).
Representative Todd Huston (R-Fishers) made a motion to
remove the increase in the legal access age for tobacco products
from the bill, leaving only the repeal for the protected class for
smokers, which the committee then passed 19-4. Coalition members
lobbied to garner votes for third reading and a stripped-down HB
1578 passed the full House by a slim margin of 54-38.
In anticipation of HB 1578 being assigned to the Senate
Pensions and Labor Committee, the Chamber met with its chairman,
Sen. Phil Boots (R-Crawfordsville), who indicated that he would hear
the bill if we lobbied the members of his committee. However, he
made it very clear that he would vote against the bill.
Surprisingly, the bill ultimately was assigned to the Senate
Commerce and Technology Committee, chaired by Sen. Mark
Messmer (R-Jasper). The Chamber and the IHA met with Sen.
Messmer and obtained a commitment for a March 30 hearing date.
We firmly believed we had the votes to pass the legislation and had
contacted Jasper Engines to testify to the impact this legislation
would have on their business. But in an about-face, Sen. Messmer
did not place the bill on the committee schedule and as a result
there was no hearing. Subsequently, at our request, Jasper Engines
contacted Sen. Messmer and conveyed the company’s thoughts; Sen.
Messmer still declined to hear the bill.
Frustrated but undeterred we pressed on. House rules state that
if a bill passes one House it is eligible for conference committee, so
6
two more attempts were made. First the Chamber and the IHA met
with Rep. Dan Leonard (R-Huntington) and asked if he would be
willing to put 1578 into his HB 1154, the unemployment insurance
bill. During the conference committee hearing for HB 1154, the IHA
testified to the importance of the repeal and the Chamber provided
the committee data from Jasper Engines that it would have provided
had a hearing been held by Sen. Messmer. As expected, Sen. Boots,
the Senate Republican conferee, opposed the measure.
House Ways and Means Committee Chairman Tim Brown
(R-Crawfordsville) was also asked to put the HB 1578 repeal into the
budget bill. Instead, he surprisingly attempted to put it into the
conference committee report for HB 1493, Long-Term Care and
Home Health Agencies. Three conferees – Sen. Mark Stoops
(D-Bloomington), Rep. Pat Bauer (D-South Bend) and chairman
Brown – were favorable; while Sen. Ryan Mishler (R-Bremen) favored
the idea, he wanted to discuss it with Sen. Messmer since had not
given the bill a hearing in his committee.
According to Sen. Mishler, Sen. Messmer would not relent. Had
he not opposed it at this juncture, there would have been a fair
chance that each caucus would have signed the conference
committee report that included the repeal. But in the end, it died.
And despite several rallies, press conferences, media buys and
individual communications with legislators, the modest $1.00
increase in a pack of cigarettes was removed from the Senate’s
version of the budget bill. Senator Luke Kenley (R-Noblesville) told
the Chamber’s Executive Committee that a cigarette tax increase
should not be enacted because of the uncertainty with Medicaid
funding and the Affordable Care Act. The House Republicans stayed
strong for as long as they could but in the end no cigarette tax
passed in the budget. Out of the entire session, the only victory
related to smoking was an annual appropriation for $7.5 million for
tobacco cessation – a $2.5 million increase over the last budget.
The Chamber would like to thank the IHA’s Julie Halbig for her
keen mind, tireless work and partnership on this issue. The Indiana
State Medical Association and Anthem Blue Cross Blue Shield are
also partners in the Alliance for a Healthier Indiana.
Telemedicine for Eye Care Fails Even Basic Test
House Bill 1036, Ocular Telemedicine & Medical Devices,
authored by Rep. Kirchoffer, removed the restriction on prescribing
ophthalmic devices through telemedicine – which was prohibited in
statute that was enacted during the 2016 session. Current law allows
eye drops to be prescribed via telemedicine but prohibits the
prescription of contact lenses or eyewear.
In early December, the Chamber met with representatives from
the Ophthalmologists Association, the Optometrists Association and
a company called Opternative to discuss the possibility of drafting
legislation. Opternative has created a software application – with
technology created by an optometrist – that is able to determine eye
prescriptions via a computer and the internet. The company is conducting
business in 39 states but is prohibited from doing so in Indiana.
The Chamber has a standing position to support the use and
expansion of telemedicine/emerging technologies to potentially
increase access to care and reduce costs. The bill seemed
straightforward, but we were contacted by unhappy optometrists and
local chambers that had optometrists as members (never mind that
an optometrist created the Opternative application for telemedicine).
They took the view that this would negatively impact their businesses
and put patients’ health in jeopardy.
Members of the House Public Health Committee were getting the
same messages, which proved too powerful to overcome. Testimony on
the bill was given but no vote was ever taken. We went from having
a close vote in committee to not being able to even get support for a
harmless summer study committee on the issue – a rare occurrence.
Leading Business | Advancing Indiana
SUCCESSES IN PROTECTING TAXPAYER
RIGHTS, PLUS OTHER MODEST STEPS
By Bill Waltz, vice president of taxation and public finance
Much of the tax legislation proposed this session related to
procedure and process. Due dates for corporate returns, deadlines
for property tax assessment appeals, the burden of proof in Tax
Court, how the Tax Court is structured – and other such things.
Too much of it posed threats to the current rights that taxpayers
enjoy. Protecting and maintaining the rights of taxpayers (as they
comply with procedural requirements or seek a determination
regarding a tax dispute) became a chief cause of the Indiana
Chamber in several cases this session. But it wasn’t an entirely
defensive session as the Chamber was also able to forward some
affirmative causes as well, e.g. bringing Indiana closer to the goal of
collecting sales tax on internet purchases and improving the
marketability of recreational vehicles sold in Indiana.
While none of these items alone are momentous, they are
collectively important and significant.
Protecting You (and Your Wallet)
First, there was a bill (SB 546) introduced to substantially
reorganize the Tax Court. Why? This was our question. It seems that
some feel that the governmental entities should win many more
cases (meaning that taxpayers should be losing many more cases.)
Yes, taxpayers do win more frequently than the officials in charge of
assessing taxes. Why? Because the assessment determinations that
are disputed are those where the taxpayer feels they are being
charged more than the law requires them to pay – nobody needs to
appeal when the government has gotten it right.
The Chamber strongly believes in the value of a specialized
court with tax knowledge and expertise that allows for cases to be
resolved in a consistent and uniform manner. That was the original
purpose, and is the ongoing function of the Tax Court. The transition
to a new judge a few years ago has been a little bumpy, but it is all
smoothing out and restructuring the Court was exactly the wrong
thing to do. Fortunately, we were able to convince others of this and,
consequently, the bill did not receive a hearing.
Then there was the Department of Revenue (DOR) bill (SB 515);
generally speaking, it’s a good bill, except that in connection with
federal law changes it resulted in making corporate returns due on
the same day as federal returns. Existing law gave preparers a
30-day breathing period before the state return came due. Meaning
no harm, DOR and administration officials agreed to alter the
provision to maintain the more favored status quo.
Another problem bill (SB 501) sought to revamp the property tax
appeals procedures; it was later merged into SB 386 in the House.
The objectives of the bill were admirable, and it included some real
improvements to the process; most notably, it established a uniform
June 15 appeal deadline statewide. Previously, the deadline was tied
to the assessment notices and varied from county to county.
However, the provisions of SB 501/386 extended a bit too far in
attempting to streamline the process as it impacted a taxpayer’s
ability to correct what are typically clerical type mistakes made by the
assessor or other county officials.
These type errors have historically always been correctable for up
to three years, but the bill restricted many of them to a period of just 45 days.
This over encompassing contraction of rights – restricting the remedy
for taxpayers to correct errors – was unnecessary and unacceptable.
The Chamber concentrated its focus late in the session on
reinstating the full complement of existing rights back into this
procedural recodification. Here again, with the help of several
stakeholders, including the Indiana Manufacturers Association and
Indiana Farm Bureau, we were successful at protecting the legislation
from impinging on taxpayer rights. The Chamber wishes to recognize
the efforts of Rep. Mike Karickhoff (R-Kokomo) in working with the
Leading Business | Advancing Indiana
interested parties in the waning hours of
the session to successfully resolve these
concerns.
Separately, an issue that didn’t make
the headlines but you could have felt in
your wallet centers on school bonds. The
rating entities had concerns about the
state’s potential role in ensuring these payments are made by the
individual schools. Legislators took care of this with SB 196 and
Indiana avoided a rating downgrade. Otherwise, this would have
triggered increased interest rates on these bonds and cost taxpayers
millions in additional property taxes.
Tax Court Improvements
The Indiana Chamber Tax Policy Committee annually considers
procedural flaws that cause taxpayers headaches and discusses
possible remedies. This year, a selection of those that require a
legislative fix were compiled and outlined to Sen. Holdman
(R-Markle) who graciously agreed to introduce the items in SB 440.
Thanks to assistance from the Indiana Bar Association Tax Section,
these matters were presented to all the involved governmental
entities (primarily DOR and the attorney general’s office) and a
common ground was found in crafting mutually agreeable remedies.
One very significant provision corrects a statutory inequity
regarding the burden of proof in Tax Court (will spare you the
details.) Another has to do with the retention of audit records at the
DOR. Dry stuff, but of consequence to taxpayers when they are
forced to dispute a tax assessment. This bill will not get much
attention outside the tax litigation world, but should nonetheless be
acknowledged as a piece of legislation that makes Indiana just a
little more taxpayer friendly. Our gratitude to Sen. Holdman for
giving us the opportunity to make these small progressions.
Online Sales Tax Collection
Senator Luke Kenley (R-Noblesville) has been working on sales
tax issues related to online sales for many years. It is an issue that
still needs to be addressed at the federal level, either by Congress or
the U.S. Supreme Court. This year, he chose to push the issue a little
farther. He proposed SB 545 that was modeled after legislation
being pursued in other states with the intent of prodding the ultimate
solution of federal action. The bill (passed in HB 1129) puts in place
a requirement that online retailers selling more than $100,000 in
goods to Indiana residents (or conduct more than 200 transactions
in Indiana) must collect and remit Indiana sales tax from their customers,
even if they have no physical presence/legal nexus in Indiana.
This language (first passed in South Dakota) has been upheld in
lower federal courts and is expected to make it to the U.S. Supreme
Court (or be left to stand as federal precedent if the Court declines
the case.) The legislation authorizes DOR to seek a declaratory
judgement, via an Indiana court, validating its authority to force
collection of the sales tax under the new statutory provisions. It could
all play out in a legally complicated fashion. But it is nevertheless the
right thing to do. Some online retailers may choose to voluntarily
comply with the new law, even if they don’t believe they can be
legally compelled to do so yet.
Besides some level of voluntary compliance, the other positive
aspects of the legislation are that the more states that pass
something like this, the harder it will be for the Supreme Court or
Congress to continue to ignore the issue. And when one of those
entities ultimately takes action, Indiana will be perfectly poised to
fully implement the law and bring about the tax collection, thus
Continued on page 10
7
WATER, ENERGY AND MORE SURFACE AS
2017 PRIORITIES
By Greg Ellis, vice president of environmental and energy policy
An energized Indiana General Assembly got the lead out in
2017 and passed multiple environmental and energy bills. Senator
Ed Charbonneau (R-Valparaiso) once again championed water
resources legislation along with some help from Rep. David Ober
(R-Albion) and Rep. Heath VanNatter (R-Kokomo). Meanwhile, Sen.
Brandt Hershman (R-Buck Creek) and Rep. Ober moved muchneeded energy legislation, which should be considered a great first
step in a new energy plan for the state. Here are the highlights:
Old Business: Veto Override
Early in the session, Rep. David Wolkins (R-Warsaw) sought an
override of then-Gov. Pence’s veto of 2016’s HB 1082 – the “No
More Stringent Than” legislation. We supported this bill last year in
its final form. The House voted to override the veto 65-29. The
Senate veto override passed 49-1, with Sen. Mark Stoops
(D-Bloomington) as the only no vote. As a result, 2016’s HB 1082 is
now law; it prevents the Indiana Department of Environmental
Management (IDEM) from implementing rules adopted by the
Environmental Rules Board (ERB) or proposed by IDEM that would
be stricter than federal rules until the Legislative Council or interim
study committee has an opportunity to review them.
This law will create a high level of accountability and
transparency as the ERB and IDEM will have to justify their rule and
policy before the Legislature. It should provide certainty and give us
ample opportunity to comment on any proposed rule that we have
serious concerns with.
Environmental Legislation
While it was relatively quiet in what most would consider traditional
environmental legislation, there were a few bills of importance that
the Indiana Chamber supported and in one instance, had to work to
get some language changed to clarify what substance was really
being regulated. With that said, there were a number of bills that
dealt with one of the key goals of Indiana Vision 2025 – water.
These water measures are aimed to aid water utilities and promote
both economic and resource sustainability, and growth in Indiana.
House Bill 1230 regulates disposal of coal combustion residuals.
It authorizes ERB to adopt rules consistent with the regulations of the
U.S. Environmental Protection Agency (EPA) concerning standards for
the disposal of coal combustion residuals in landfills and surface
impoundments. This applies to electric utilities.
House Bill 1234 regulates storage of anhydrous ammonia.
Although this was not a bill that we supported or opposed, the
language as introduced would have required every facility that stored
ammonia for more than 30 days to apply for approval of the storage
location from the state chemist’s office. This would have potentially
affected a number of the Chamber’s members and their processes
by adding another layer of regulation. The state chemist’s office
indicated that it only intended the legislation to apply to agricultural
ammonia, although that is not what the language indicated. We
wanted certainty and thanks go to Sen. Jean Leising (R-Oldenburg)
for adding clarifying language. Ammonia means agricultural
anhydrous ammonia that is intended for use as a fertilizer for
agricultural purposes.
Senate Bill 421 fixed issues with 2015’s Senate Bill 312 that
regulated above-ground storage tanks. The issues were pointed out
by the Chamber’s Environmental Policy Committee and ERB. The
law, as passed in 2015, required duplicative reporting of tanks and
contents to IDEM. The law had multiple exemptions for reporting and
was not effective. This bill repeals the 2015 law requiring owners of
certain above-ground storage tanks to register their tanks with IDEM.
It also urges the Legislative Council to assign the topic of public
8
water supply protection to the Interim Study
Committee on Environmental Affairs for
study this fall.
House Bill 1211 establishes the
Transborder Water Resources Authority as
a body to study the subject of ownership
rights in one or more transborder water
resources shared by Indiana and other states; explores the
desirability of entering into interstate compacts with other states
concerning the use of transborder water resources; and makes
recommendations concerning the content of any such interstate
compact. This bill is important to the sustainability and development
of Indiana’s water resources because there are a number of states
currently involved in litigation regarding their transborder water
resources. Fortunately, Indiana is not one of them; and this
legislation should aid in avoiding burdensome litigation.
Senate Bill 416 established the Infrastructure Assistance Fund.
Senate Bill 416, along with SB 511, were two bills championed by
Sen. Charbonneau. Senate Bill 511 was incorporated into SB 416.
This is a comprehensive water resources bill that is consistent with
the Chamber’s policy positions and Indiana Vision 2025. It requires
the Indiana Finance Authority (IFA) to study the ability of utilities to
provide clean and safe drinking water in Indiana for the foreseeable
future. It also requires the Indiana Utility Regulatory Commission
(IURC) to consider governmental requirements arising from
environmental law and their effect upon the utility’s operational
expenses in its deliberation.
The bill also requires ERB to adopt rules to carry out the intent
of the law concerning the safety of the public water supply. It
authorizes the commissioner of IDEM, when the point of water
collection of a public water system is being relocated, to require that
the water be tested at the new point of collection before the public
water system may begin to collect water at the new location. This
should help avoid situations like Flint, Michigan.
The most significant part of Senate Bill 416 is the establishment
of the Infrastructure Assistance Fund. This is a result of information
gathered through the Chamber’s 2014 water study and last year’s
study by the IFA that was conducted by Jack Wittman. The IFA study
projected need for the large amount of investment in infrastructure
that can’t be absorbed by business and residential ratepayers. The
Infrastructure Assistance Fund will provide grants, loans and other
financial assistance for the planning, designing, acquisition, construction,
renovation, improvement and expansion of public water systems.
It requires the IFA to administer the fund and to establish criteria
for the making of grants, loans and other financial assistance from
the fund. The bad news is that the Infrastructure Assistance Fund was
not funded during this session, but the framework is in place. Future
funding may also be achieved through the federal government,
depending on the current federal administration’s plans.
House Bill 1519, Infrastructure Development Zone, is the last
significant piece of water legislation and was authored by Rep.
VanNatter. We initially had concerns about this bill; specifically, the
proper allocation of costs, but supported it after those concerns were
addressed by an amendment. This bill adds wastewater to an already
existing law that allows gas and water utilities to extend services to
unserved or underserved areas for purposed of economic
development. The bill provides that a water or wastewater utility that
is requested to extend utility service to an infrastructure development
zone may petition the IURC for approval of the requested extension
of service and if the petition is approved, the IURC shall approve
rate schedules that include a surcharge payable by customers
Continued on page 11
Leading Business | Advancing Indiana
MARION COUNTY JUDGES BILL MAKES IT THROUGH
By Mike Ripley, vice president of health care policy and employment law
The issue was as controversial this year as last – HB 1036, Marion
County Judicial Selection, authored by Rep. Greg Steuerwald (R-Danville).
However, the reason for the bill is simple: the 7th U.S. Circuit Court
of Appeals upheld a previous ruling that deemed Marion County’s
current system of selecting judges unconstitutional. To remedy this,
HB 1036 establishes a 14-member judicial selection committee in
Marion County based upon the merit and qualifications of the candidates.
The next election cycle for judges is in 2018, so it was
imperative that legislation be passed this session. The presumable
alternative to a legislative fix was for the courts to design an election
process. And quite possibly, it is for that reason that the Senate may
have flinched in the end and agreed to the legislation. Numerous
organizations, including the Indiana Chamber, supported the bill.
Given that 20% of all business cases in Indiana flow through the
Marion Superior Courts, we felt it was vital to the business
community to have qualified, stable and diverse judges.
The Chamber gives credit to Rep. Steuerwald. From the
beginning, he took a very thoughtful approach – attempting to
consider all sides and incorporating many ideas, while taking a lot of
heat from various entities. In the Chamber’s estimation, his bill was
the most preferable path. But as was the case last year, Sen. Mike
Young (R-Indianapolis) had a difference of opinion as to how the
selection process ought to be conducted. He amended the bill in the
Senate to create four districts that would elect individuals to be
seated on the commission that would select the judges.
It was during conference committee where a showdown
occurred the last few days of session. Representative Steuerwald
asked for the Chamber to weigh in (again). We communicated that
he had put together a good bill and incorporated many ideas; we
suggested that he not budge from his position. It looked as though
the bill might die, with Sen. Young standing firm on an election
component. Eventually, though, the Senate acquiesced.
The bill passed the House 69-30 and 28-22 in the Senate. Of
note, Rep. Ed DeLaney (Indianapolis) was the only Democrat in
either House to vote for the bill.
SB 236 Asbestos Litigation and HB 1276 Product
Liability Actions
For more than two years, the Chamber has been working with
the Insurance Institute, the Indiana Manufacturers Association (IMA),
Nationwide and State Farm Insurance, along with the U.S. Chamber
of Commerce, on the issue of asbestos trust transparency. Asbestos
fund trusts have been established by firms that have filed for
reorganization under Chapter 11 of the United States Bankruptcy
Code to pay personal injury claims caused by exposure to asbestos.
At least 56 such trusts were established from the mid-1970s to
2011. As an example, if an individual has contracted mesothelioma
after working around asbestos, they may file a claim against a trust.
The problem is that in some cases they file a claim against the trust
and file suit against the reorganized company. The ideal situation would
be to not allow them to double dip, but at minimum there should be
some form of disclosure to the court that a claim has been filed with
the trust. Senate Bill 236 would have addressed that problem.
A separate but somewhat overlapping issue is that the Indiana
Supreme Court in March of 2016 determined that Indiana’s statute
of repose for asbestos was declared unconstitutional; HB 1176 was
proposed as the fix. Representative Jerry Torr (R-Carmel) was approached
about authoring the legislation. His preference was to carry the
statute of repose fix and not combine the two issues into one bill.
With that in mind, Sen. Susan Glick (R-LaGrange) was asked to
carry the transparency issue (SB 236). She spent considerable time
with the coalition to get the language right. During session, she hosted
a discussion between the business coalition and the trial lawyers,
who opposed just about anything we attempted to do with this issue.
When SB 236 was assigned to the Senate Judiciary Committee,
we knew we had our work cut out for us due to the makeup of that
committee (i.e., several trial lawyers). Three of the seven Republicans
generally favored the trial lawyers on tort issues, plus add in the two
Democrats on the committee and we were already five votes against
us right out of the block. Still, we worked the committee as hard as
possible. The Chamber and IMA, along with the lobbyist from
Nationwide, met with committee member Eric Koch (R-Bedford), an
attorney by trade, to try to hash out a resolution between what we
wanted and what the trail lawyers were pushing for.
Unfortunately, nothing materialized. As we got closer to the
Senate committee hearing, we were willing to negotiate down to the
trial lawyers’ position just to get a bill moving. During the hearing,
Kevin Knight of Ice Miller and an expert in asbestos litigation
represented the business community and made compelling
arguments as to the importance of having transparency. The Indiana
Trial Lawyers Association made the case for the opponents. The bill
ultimately failed 4-3, with three Republican voting in favor. The most
curious thing is that the vote was not recorded and cannot be found
as part of the Senate record!
House Judiciary Committee Chairman Steuerwald had
scheduled the hearing for HB 1276 on the same day and at about
the same time as 236 in the Senate committee. Author Torr
indicated that the committee was good to go and that there should
be no problems. However, the wheels fell off during a standard precommittee meeting when Rep. Tom Washburne (R-Inglefield) asked
questions about the bill’s potential reach (i.e. will it apply to more
than asbestos). So the coalition then got the unfortunate news that
Rep. Torr had pulled HB 1276 from the committee calendar.
These two bills highlight the difficulty in getting tort reform
passed in the General Assembly at present. That said, we will be
back next year to try again!
Education
Continued from page 3
together on this effort, they also pulled in the Department of
Workforce Development (DWD), the Department of Education and
the Commission for Higher Education (CHE) for collaboration.
Also included in the legislation was developing a pilot program
for schools to utilize a career explorer program to help Hoosier
students better align their studies for future careers. Starting next
school year, the Department of Education will implement the
curriculum pilot for all students in grade eight attending the selected
15 schools. The pilot can continue for one to two years and after
that, every public school (both traditional and charter) must include it
in the school’s curriculum for all students in eighth grade.
Leading Business | Advancing Indiana
The legislation also started a new program for adult workers
looking to further their postsecondary attainment goals. The
Workforce Readiness Grant seeks to target the 1.4 million workingage Hoosiers who have a high school education or less and another
580,000 who have some college credit but not an undergraduate
degree or high-quality certificate. This grant opportunity pays the
cost to earn a high value certificate at Ivy Tech, Vincennes University
or an approved workforce training provider. The high value
certificates would be in areas of high employer demand, wage, job
placement and program completion rate. CHE will oversee creditbearing programs and DWD the non-credit-bearing programs.
9
Labor
Continued from page 4
those funds are to be dispersed by DWD. The funds are collected
because of employers’ penalties and interest from unemployment
insurance. When the fund reaches $8.5 million, any excess is to be
transferred to the Unemployment Insurance Benefit Fund. Under the
current statute, DWD has a $5 million cap to disperse funds unless it
obtains an additional amount approved by the State Budget
Committee. This amendment removed that cap altogether.
Representative Leonard supported the idea and believed that the
statute is very prescriptive on how those funds are dispersed and that the
ratio of return that DWD gets back on fraud and abuse was worth
removing the cap. This is where Rep. Leonard and the IMA locked
horns. The IMA’s complaint was that DWD had nearly $19.4 million
dollars in the P&I fund and had not transferred the excess over to the
UI fund, and that the cap should remain so this would keep DWD in
check (to which the Chamber would concur) as required by statute.
In the Senate Pensions and Labor Committee, Chairman Phil
Boots (R-Crawfordsville) added the caps back into the bill.
In the final conference committee report, Leonard included a
date as to when the DWD must transfer funds to the UI benefit fund
and left the cap in, but suspended it for fiscal years 2017 and 2018.
In the end, HB 1154 passed both houses with only one no vote
between them!
FMLA Measure Gets Study Treatment
Senate Bill 253, Paid Family and Medical Leave Program, was
authored by Sen. Karen Tallian (D-Portage). The original version
required the Commissioner of Labor to develop guidelines and
procedures to establish a paid family and medical leave program;
the Chamber was strongly opposed. Senator Boots allowed the bill
to be heard as a study issue to be brought before the Interim Study
Committee on Labor and Employment.
The Chamber, which officially moved to a neutral position for
study legislation, communicated that we would oppose any mandate
to increase FMLA in any form – state or federal. That would include
opposition to a voluntary leave program that would make no
employer requirements on contribution but that might require
employers to administer a program for employees. The study bill
easily passed both the House and Senate.
Tax
Continued from page 7
finally eliminating the unfair advantage that online retailers currently
enjoy over in-state brick and mortar retailers.
RV Sales Tax Exemption Passes
Progress was made on another difficult situation detrimental to
the recreational vehicle (RV) industry. Current law requires Indiana
RV dealers to impose Indiana sales tax on sales to their out-of-state
customers. This has for years been a problem because it makes many
potential buyers reluctant to buy Indiana-made RVs from Indiana
dealers when they have to pay Indiana sales tax, then seek a credit from
their home state when they register the vehicle. And if their home
state sales tax is less than Indiana’s, they don’t receive a full credit.
Indiana does participate in reciprocal agreements with many
states that cover many transactions, but the complications have
always presented problems. To rectify the matter, the Chamber
worked to pass SB 172 this session. It specifies that Indiana may not
collect more than the resident’s home state tax. And it encourages
DOR to pursue agreements with the key remaining states with which
Indiana does not have reciprocity agreements in place. If agreements
can’t be reached after two years, the legislation contemplates correcting
the matter by exempting the RV sales to out-of-state residents.
Phaseout of Double Taxing Riverboats and Overall
Summary
Another bill to note, as one that takes on an old issue, is HB
1350. It phases out the add-back provision that requires casinos to
pay income tax on the wagering tax – essentially a double tax. This
practice of double taxation was sanctioned in 2004, and pleas to fix
it have gone unheeded, until now. However, it is slow relief in that it
is an eight-year phaseout that will not be complete until 2025.
Summing up the tax activity this session: Our defenses were
tested. Some meaningful procedural improvements were gained. And
some important steps were taken on several old issues.
And we would be remiss to not add that two policies we
continue to actively follow and engage on when needed – sales tax
on services and mandatory combined reporting – were not even
introduced in legislation for 2017. This is in part due to our dogged
efforts explaining to those interested in these matters why they are
bad for Indiana’s tax climate.
Another Good Two-Year State Budget
It is $32 billion. It provides healthy funding increases for
education. It addresses a lot of important priorities. It is balanced,
structurally sound, maintains a prudent level of reserves and so on.
Indiana has so regularly generated a good budget that these things
are almost taken for granted. The fiscal leaders and their staff in the
House, Senate and the Governor’s office have so routinely put out
an extraordinary product that it is understandable if people don’t get
excited. But the fact that they so consistently meet these critical
standards in formulating a state budget plays a large role in why
Indiana has prospered and is ranked so favorably as a place to do
business. While I too am guilty of this complacency, I must not fail to
note the significance and positive impact of being able to make
these same comments, budget after budget.
Innovation and Technology
Continued from page 5
requirement to be recertified in each category.
This is good for both state and local governments to ensure the
CTPs are truly being an effective driver of economic activity for that
community and region. The bill did not receive any no votes during
10
the legislative process and was supported in a bipartisan fashion. The
Chamber backed the bill and appreciates the good work that Rep. Huston
and Sen. Hershman, the Senate sponsor, did to ensure its passage.
Leading Business | Advancing Indiana
Infrastructure
Continued from page 2
Prospect of Less Red Tape for Indiana Small Businesses
The Indiana Chamber supported the language in HB 1157,
Small Business Duplicative Reporting, authored by Rep. Doug Miller
(R-Elkhart). The policy is simple in concept, but hopefully effective in
generating ideas to make early-stage and small business interactions
with state government in Indiana even more business-friendly.
It requires the Indiana Economic Development Corporation to
develop a means to survey small business reporting of duplicative
state reporting requirements. The Chamber offered to assist by
convening small business members to do further work on this idea.
The outcomes of the business feedback will be given to the House
Committee on Government Reduction for consideration of ideas to
reduce red tape.
The Chamber appreciates the nearly-unanimous support of this
bill by legislators. Hopefully, good ideas will come from the process
outlined in this bill, which complements work completed last year by
Secretary of State Connie Lawson’s office to streamline start-up
business paperwork and registration with the INBIZ web site.
Energy and Environment
Continued from page 5
located in the geographic area within the jurisdiction of the
governmental entity that requested the extension of service.
A significant change that this makes is an amendment to the
statute concerning infrastructure improvement charges for eligible
water and wastewater utilities to change the definition of “eligible
infrastructure improvements” with respect to municipally-owned
utilities and not-for-profit utilities; and specifies that the adjustment of
an eligible utility’s basic rates and charges to provide for the
recovery of infrastructure improvement costs shall be calculated as a
monthly fixed charge based upon meter size. This provision should
make everyone pay their fair share and likely reduce the cost
currently paid by a large individual user of water.
Another significant provision of this bill allows a public water
utility to seek to include customer lead service line improvements as
eligible infrastructure improvements for purposes of the statute
concerning infrastructure improvement charges for water and
wastewater utilities. This should promote efficiency and public health,
which should reduce costs in the end.
Energy Legislation
Senate Bill 309, authored by Sen. Hershman, was the most
significant energy bill of the session; Rep. Ober was the House sponsor.
The Chamber supported it and worked closely with a number of our
members and allies to move it along. The bill would not have gone
to Gov. Holcomb’s desk if not for everyone’s hard work.
The bill received a lot of unfair publicity and criticism, which
was often the result of inaccurate information being put out by its
opponents, as it made it through the legislative process. Although
the bill was publicized as a solar bill, that was not what this bill was
about. It was titled as distributive generation but it had many moving
parts. The bill addresses rising energy costs and a long-standing
struggle between the investor-owned electric utilities and larger
consumers of energy.
We recognize that SB 309 is not a one-size-fits-all or fix-all.
Everyone’s energy needs and expectations are different, so this is a
difficult area to come up with a solution that everyone will be completely
satisfied with. The Chamber’s goal was to reduce or maintain current
energy rates. Moreover, this bill addresses several areas of concern.
It expands current state law regarding cogeneration for users
that generate their own energy with a capacity above 80 megawatts.
The generation can occur at the site or be located at a contiguous
property and must be integrated with the host operation if it is
contiguous. The bill includes organic waste biomass facilities within
the definition of an “alternative energy production facility”.
The bill increases transparency of rates through the posting of
periodic review of rates by the IURC. The bill also requires the IURC
to review the rates charged by electric utilities for backup power to
eligible facilities and for purchases of power from eligible facilities,
and to identify the extent to which the rates meet specified criteria.
Leading Business | Advancing Indiana
The bill also provides for competitive procurement. Before the
IURC can grant to an electricity supplier that is a public utility a
certificate of public convenience and necessity for the construction of
an electric facility with a generating capacity of more than 80
megawatts, it must find that the electricity supplier allowed or will
allow third parties to submit firm and binding bids for the
construction of the proposed facility. It provides that a public utility
that installs a wind, a solar or an organic waste biomass project with
a nameplate capacity of not more than 50,000 kilowatts – and uses
a contractor that is subject to Indiana unemployment taxes selected
through a competitive procurement process – is not required to
obtain a certificate of public convenience and necessity for the
project from the IURC.
The bill was amended in the House in response to concerns by
school corporations and their advisors. It urges the Legislative
Council to assign the topic of self-generation of electricity by school
corporations to the Interim Study Committee on Energy, Utilities and
Telecommunications.
The portion of the bill that received the most attention dealt with
net metering, which is a billing mechanism that credits renewable
energy system owners for the excess self-generated electricity they
add to the grid.
The bill provides that a net-metering tariff of an electricity
supplier must remain available to its customers until the aggregate
amount of net-metering facility nameplate capacity equals at least
1.5% of the electricity supplier’s most recent summer peak load or
July 1, 2022, whichever occurs earlier. Currently, net metering is
governed under the IURC and is capped at 1% of the peak summer
load. Current law is silent on what happens when the 1% is reached.
The bill grandfathers existing net-metering customers at the current
retail rate they are receiving from the utilities for 30 years or 15
years, depending on when their energy source was installed.
While the bill will end net metering for those outside the
timeframes, as net metering is currently defined, the customers that
decide to produce their own energy (one megawatt or less), outside
of those grandfathered and are not operating under a net-metering
tariff, fall within the definition of distributed generation. The bill
requires the investor-owned electric utilities to petition the IURC for
approval of a rate for procurement of excess distributed generation
once the 1.5% net-metering cap or five years is reached.
Although the law for producers of their own energy of between
one megawatt and 80 megawatts remains relatively unchanged, this
bill is a significant step toward achieving varying energy needs and
controlling costs by giving more options to business consumers.
Going forward, the bill can be used as a building block in future
legislative sessions. The status quo or current stalemate on these
issues is changing. Without any changes to current law, continued
litigation of energy issues/costs would continue, which increases the
costs to both ratepayers and the utilities.
11
LEGISLATIVE SCORECARD 2017
Bill #
1st house 2nd House
Chamber
Position 1 2 3 4 5 6 7 8 9 10
Description
CIVIL JUSTICE
HB 1036 Marion County judicial selection process
HB 1276 Repeal of certain product liability actions
SB 236
Requires certain disclosures regarding asbestos litigation
ECONOMIC DEVELOPMENT
HB 1002 Long-term road funding
HB 1144 South Shore rail transit districts
HB 1157 Less reporting red tape for small businesses
SB 128
Regional development authority creation by local
communities
EDUCATION/WORKFORCE DEVELOPMENT
HB 1003 New statewide student assessment called ILEARN
HB 1004 Expansion of state-funded pre-K program
HB 1005 Making the state superintendent office appointed
HB 1007 Expansion of course access methods
HB 1008 Requires job demand data use for career and technical
education
HB 1009 School financial management
HB 1281 Various higher education policies
HB 1382 Updates for charter schools, authorizers and other
entities
HB 1386 Competency-based education
HB 1389 Teacher bonuses for student success
HB 1396 Teacher licensing for military spouses
SB 108
Threshold for failing school intervention
SB 182
Sets parameters for superintendent contracts
SB 198
Better cooperation on career and technical education
SB 35
Makes it optional for testing to be part of teacher
evaluations
SB 88
Possible negative impact to school calendar
SB 248
Consolidation of school administrative functions
Status
S
S
S
Signed
Died
Died
S
S
S
S
Signed
Signed
Signed
Signed
S
S
SIP
S
S
Signed
Signed
Signed
Signed
Passed in SB 198
S
S
S
Signed
Signed
Signed
S
S
S
S
S
S
O
Died
Died
Signed
Signed
Signed
Signed
Died
O
S
Died
Signed
= Policy passed in other bill(s)
Status and Position Key
1
2
3
4
–
–
–
–
First Reading
Committee Action
Second Reading
Third Reading
5
6
7
8
–
–
–
–
Committee Referral
Committee Action
Second Reading
Third Reading
9 – Conference Committee
10 – Action by Governor
S – Chamber Supports
O – Chamber Opposes
N – Neutral
O/S – Oppose/Support in Part
OIP – Oppose in Part
SIP – Support in Part
LEGISLATIVE COMMUNICATIONS
In the spring/summer, watch for three key components of the Chamber’s ongoing legislative communications effort:
Interim Update
2017 Legislative Vote Analysis
2017 Return on Investment
The Interim Update, issued monthly, includes
the latest legislative, regulatory and judicial
developments at the state and federal levels.
Want to know if your legislator voted for
pro-economy, pro-jobs legislation? The answers
will be revealed in the 2017 Legislative Vote
Analysis, which will be published in June/July.
In this annual fiscal assessment, learn what
the Chamber’s lobbying efforts at the
Statehouse mean to your pocket.
12
Leading Business | Advancing Indiana
LEGISLATIVE SCORECARD 2017
Bill #
Description
ENERGY/ENVIRONMENT
HB 1211 Establishes the Indiana-Kentucky Transborder
Groundwater Authority
HB 1230 Regulation of coal combustible residuals
HB 1408 Time reduction in issuing a permit to construct a
commercial on-site sewage system
HB 1519 Allows extension of wastewater services by utilities
SB 309
Distributed generation
SB 376
Governance of rural electric membership cooperatives
SB 416
Water resources infrastructure
SB 421
Technical corrections regarding above-ground storage
tank registration
SB 472
Requests to locate underground utility facilities
SB 511
Provide clean and safe drinking water in Indiana for
the foreseeable future
HEALTH
HB 1001
HB 1331
HB 1578
LABOR
HB 1154
HB 1464
SB 312
CARE/INSURANCE
Significant increase to the state’s sales tax on cigarettes
Expanding telemedicine to ocular needs
Removal of smokers’ special protections in hiring process
Unemployment insurance
Work Sharing Unemployment Benefits
Prohibiting “ban the box” action against employers
who seek criminal history info in the hiring process
TAXATION/PUBLIC FINANCE
HB 1001 State’s two-year budget
HB 1031 Complying with state examiner’s findings
HB 1350 Phase-out of double taxing riverboats
HB 1351 Excise tax to replace personal property tax on rented
equipment vehicles
SB 172
RV sales tax exemption
SB 196
Avoiding downgrade of school bond rating
SB 386
Improvements to property tax appeal process
SB 440
Improvements to state tax dispute procedures
SB 449
Examination of how audit companies are paid
SB 501
Recodification of property tax appeal statutes
SB 515
Tax administration
SB 545
Online sales tax collection
TECHNOLOGY
HB 1001 Innovation elements in the state budget
HB 1001 Makes the Venture Capital Investment Tax Credit
transferable (was in state budget)
HB 1470 Establishes the Management and Performance Hub as
a state agency
HB 1601 Improved tech park certification process
SB 213
More rapidly deploy 5G technology via small cell towers
SB 507
Venture capital certainty in economic development bill
Leading Business | Advancing Indiana
1st house 2nd House
Chamber
Position 1 2 3 4 5 6 7 8 9 10
Status
S
Signed
S
S
Signed
Died
S
S
S
S
S
Signed
Signed
Signed
Signed
Signed
S
S
Signed
Passed in SB 416
S
S
S
Provision Died
Died
Died
SIP
S
S
Signed
Died
Signed
SIP
S
S
S
Signed
Signed
Signed
Died
S
S
SIP
S
S
S
S
S
Signed
Signed
Signed
Signed
Signed
Passed in SB 386
Signed
Passed in HB 1129
(signed)
S
S
Signed
Provision Died
S
Signed
S
S
S
Signed
Signed
Signed
13