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Indiana Legislative Update – One Bill Heads to the Governor; Most are Midway    

We’ve hit the “halfway” point of the legislative session, which means that bills have either passed their “house of origin” (House bills passed the House, Senate bills passed the Senate) or they are considered dead. It also means that lawmakers take an extra-long weekend to refresh and review the bills sent from the other House. While content of a now-dead bill could come back as an amendment to another bill – less likely during this short session – those bill numbers will not be seen the rest of Session. 

Wetlands bill sets a fast pace

In very rare timing, Wetlands legislation has passed the House and Senate and could be signed by the Governor by the end of the week. It is nearly unheard of for a piece of legislation to maneuver the process this quickly. Legislative leaders committed early to fast-track HB 1383, which is the result of many years of work by the courts and legislative bodies at the state and federal level. A U.S. Supreme Court case from this past summer left up to state governments to decide if wetlands without a surface connection to a body of water would be regulated, because without the connection, they were not “waters of the U.S.” protected by the clean water act.

Isolated wetlands in Indiana will continue to receive some protection under the bill. Divided into 3 classes, mitigation will not be required for Class 1 with general permits available for Class 2 impacts. In addition to these legislative changes, the “worksheet” used by IDEM for classification has been updated and streamlined.

Medicaid Forecasting Error

In a state budget committee hearing in late 2023, a senior analyst for the Senate Republican caucus stunned lawmakers with the announcement of a $984M budget shortfall in Medicaid funding “due to a combination of state budget reversions and unexpected growth in services for aging and disabled Hoosiers” – the single biggest driver was unanticipated demand for home and community based services. The Family and Social Services Administration (FSSA) stated the “unanticipated increase in Medicaid expenditures threatened the sustainability of the entire Medicaid program” and there was talk of “tough decisions ahead” among committee members.

In January 2024, FSSA announced cost saving changes, identifying an anticipated reduction of $300M in services funded to families in the Hoosier state. One of the biggest changes proposed impacts legally responsible individuals, or LRI’s (parents of a minor child who are paid personal care attendants), which resulted in protests at the statehouse and news coverage of the struggle as lawmakers attempted to balance the needs of devastated families and the fiscal impact on the state budget. ARC of Indiana issued a Call to Action, urging parents to submit comments to FSSA before the Feb 16th deadline and praised Lt Gov Suzanne Crouch, a candidate for Indiana Governor and leader of the Intellectual and Developmental Task Force, who is calling for FSSA to pause implementation of the cuts and demanding an independent audit of FSSA. “What I’ve just heard from FSSA is ‘we’re working on it’ and ‘we’re trying to get information.’ If they could make a billion dollar mistake that we know about, what else do we not know about, yet. At this point in time, until these questions can be answered, I would call upon FSSA to pause their timetable for the implementation of this program,” said Crouch, “We are going to be judged by how we care for the most vulnerable among us.” Lawmakers have gone silent on the matter, killing HB1386, the Medicaid agency bill, which passed unanimously out of committee, rather than hearing 10 proposed amendments filed which aimed to hold FSSA responsible and requiring quarterly forecasts and prohibiting future reversions from Medicaid to other areas of the state budget in response to the agency’s embarrassing budgetary failure. Lawmakers will revisit the Indiana budget, including Medicaid spending, in 2025.

Bills of Specific Interest

Your updated Bill Track is attached with each bill marked as High, Medium, and Low Priority with only bills that have survived the first half (passed the house of origin). As always, please let us know if you would like to add/remove any bills or change the priority coding of any bill. 

You’ll notice the Important Dates section is a little light this week. While there are some Committee hearings set for next week, there will be more added by the end of day Friday and again once Legislators return to the Statehouse on Monday.  

Here are highlights from action this week on your bills: 

  • Following up on legislation from 2023, HB1387 intends to “clean up inconsistent language” which established a revolving loan fund for residential infrastructure. The Indiana Finance Authority will provide reporting for the program and will document the impact of the 2023 bill into the future. The bill was unchanged from the introduced version and has been referred to the Senate for consideration.
  • One of the “education agenda” bills this session, SB8 will require all high schools to offer the IN College Core with secondary credits; requires all state higher ed institutions to offer at least one baccalaureate program structured to allow graduation within 3 years, and creates more avenues for associates degrees. The bill previously passed through 2 committees without a single no vote and the full Senate continued that trend on Tuesday when they passed the bill 48-0. 
  • SB10 establishes a new grant program within FSSA for communities to establish first responder teams to proactively address frequent 911 callers vs. always responding reactively. The idea came from Noblesville Mayor Chris Jenson to create the grants worth up to $100,000 to provide training and support for the first responders enabling them to connect the community member with the services an the providers who can help with addiction, mental health crises, etc. No new dollars are created for the program (until perhaps next year’s budget draft), but FSSA can use existing fund and accept gifts and donations to fund the program over this next year. The bill passed the Senate with a 48-0 vote on Tuesday.
  • Trying to add another tool to the toolbox of improving access to high-quality, affordable child care and against the concerns of Democrat legislators re: the potential for shifting property tax burdens to homeowners, SB147 passed the Senate Monday 39-9. The bill creates a property tax exemption to for-profit and employer-based child care providers, which will reduce operational costs, which can ideally be passed along to parents and/or to pay the childcare employees better. We will continue to support this bill as it moves through the House. 
  • SB233 will “help align federal grant processes and FSSA procedures as a follow-up bill to 2023’s SB1,” according to the bill’s author Senator Mike Crider (R-Greenfield). The goal is to help protect the safety net provided by Community Mental Health Centers. The bill passed the Senate 48-0. 
  • SB61 is one of those bills that doesn’t make anyone truly happy for the moment, but is “alive for further negotiation” in the 2nd half of Session. It allows communities to establish Tourism Improvement Districts (TID’s) if 65% of the businesses in the district and 65% of the owners’ assessed real property value support it (TID supporters think that threshold is too high). The bill’s provision prohibiting Marion County (Indy) from being able to create a TID is also a sore spot, esp. as the House has passed HB1199, which eliminates Indy’s Economic Enhancement District (similar to a TID). Senator Holdman (R-Markle) noted in committee that having this Senate bill addressing similar subjects will give the Senate a greater voice in those discussions. The Sente passed the bill 47-1 with Senator Aaron Freeman (R-Indianapolis) as the lone no vote (he does not support Indy having any of these options).  
  • SB132, authored by Sen Liz Brown (R-Ft Wayne) is an omnibus measure that provides for direct payment for out of network dentists, includes payment deadline requirements for FSSA’s rollout of managed long term care program called “Pathways to Aging” set to go live in July 2024, removes barriers for nurses from other countries, addresses telehealth concerns, and does cleanup of health administrator licensing. The bill passed 3rd reading 47-1, with Sen Greg Walker being the sole dissenter.  The bill now advances to the House for further consideration.
  • SB146 would allow an employee 18 years of age to ring up the sale of alcohol or serve drinks prepared at a bar in a restaurant. (Current age is 19). A 10 minute grace period was added to the civil penalties portion of the code regarding time clock violations. Similar language in HB1093 has advanced to the Senate for consideration in the second half of the session.
  • SB190 is part of Governor Holcomb’s legislative agenda and will update state disaster relief efforts. The bill would allow the state fund (funded by taxes on fireworks sales) to increase the amount awarded overall, and allow some funds to be used for mitigation, not just relief. The bill has been sent to the House for consideration.
  • SB 206 is the IDEM agency bill for this year. The introduced version contained language on easements and restrictive covenants and created a cause of action to gain access to property in need of remediation where an owner resisted. These two items were too much of a load on the bill and were stripped out in committee this week. The remaining content of the bill deals with email communication for the purpose of notice by IDEM and some boards along with enhancements to the permitting of biomass gasification facilities. The bill has been referred to the House for consideration. 
  • Sen Chris Garten (R-Henryville), Chair of the Government Reform Task Force, presented SB297, as a “bill restores the role of the legislature to decide major policy issues in the state.” The bill that requires state agencies to conduct a cost/benefit analysis of all provisional and interim rules, and if any rule is estimated to cost $1M in implementation and compliance for Hoosier businesses, individuals or regulated communities, the rule must come before the Legislature for approval before it is implemented. Sen Rodney Pol (D-Gary) questioned the need for the legislation as it seemed to only apply to 2 rules implemented over the last ~10 years, and raised concerns that agencies are in place to “deal with issues on a more specific, technical and efficient level” than state lawmakers. He cited agency statistics that revealed that in 2022, 57 rules were approved – 25% in 8 days, 50% in 18 days and 75% in 60 days. Questions also were brought as to the issue of “separation of powers” to which the bill author insisted “Is this a separation of powers issue? Unequivocally no. Why? Because this rulemaking authority comes from this branch of government, not the constitution. We want to ensure there is meaningful legislative oversight of fees levied against taxpayers. This bill would capture anything with a million dollar compliance cost to Hoosier taxpayers. We should be responsible for that,” urged Garten, “not an unelected bureaucrat.” The bill passed 41-8.
  • Introducing the “feel good bill of the Session,” Rep. Blake Johnson (D-Indianapolis) presented HB1019 for final passage in the House to make child operated refreshment (lemonade) stands legal by prohibiting Health Departments and HOA’s from regulating them into non-existence. Legislators see these stands as a way for young people to explore entrepreneurship and manage money. After several puns and plays on words – it was the first bill of the day on Monday – the bill ultimately passed 98-0.

Important Dates

  • Tuesday, February 13: Senate Tax & Fiscal Policy
  • HB1121 Local Income Taxes (Thompson)
  • HB1328 Department of Local Government Finance (Snow)
  • Tuesday, February 27: Deadline for Senate Bills to pass out of House Committee
  • Thursday, February 29: Deadline for House Bills to pass out of Senate Committee
  • Monday, March 4: Deadline for Senate Bills to pass the House
  • Tuesday, March 5: Deadline for House Bills to pass the Senate
  • Thursday, March 14: Deadline for Legislature to Adjourn Sine Die