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Indiana Legislative Update – Only Two Weeks Left (not that anyone is counting…)

With the end of the 2023 legislative session in sight, lawmakers raced to move bills to the finish line and on their way to Governor Holcomb’s desk. Some bills meet their death as the deadline for Senate bills to pass the House is Monday and for House bills to pass the Senate is Tuesday. Personalities “show” as lawmakers are more likely to preface their responses with, “while I have deepest respect for my fellow lawmaker….” and then lay out why they are absolutely wrong.  

The Senate GOP kicked off a busy statehouse day Thursday morning by outlining their version of the $43.3B state budget to the press shortly before Appropriations Chair Ryan Mishler (R-Mishawaka) settled into Committee to approve the budget and a whopping 17 other bills on the agenda with a looming noon deadline. 

With a focus on Education, the Senate version increases school funding $1.1B, returns to the Governor’s proposal of providing $160M for free textbooks, buys down the Pre-1996 unfunded pension liability, adds $100M for Student Learning Recovery programs, cash funds top priorities for universities, funds an operating increase for higher ed of 4% the first year and 6% the second, and raises eligibility for On My Way Pre-K from 127% to 150% of poverty levels.  Significant changes were made to eliminate CTE grants, giving schools more flexibility by rolling CTE into the formula and permitting charter schools to receive property tax dollars, while phasing out the charter school grants.  

As promised, there was no school voucher expansion in the Senate proposed budget. Choice vouchers will continue to be limited to families making less than 300% of free and reduced lunch eligibility, or $154,000 for a family of four. Outside the hearing, educators filled the halls with a “sea of red” and chants calling for lawmakers to end attacks on teachers and increase funding. “Today we gather to demand respect. To demand full funding of our schools. To demand to be paid as professionals,” said Keith Gambill, ISTA President, “Our students are counting on us to stand for them today.” ISTA is the largest union in Indiana and “works to ensure that educators have a stronger voice at the local and state level.”

Medicaid spending is forecast at $7.5B, an increase of $2B over the biennium, and comprises 17% of the entire state budget, “Medicaid is now outpacing K-12,” said Mishler, “This is the thing that scares me the most.” The budget goes on to fund SB1’s community mental health initiative ($15M in 2024; $20M in 2025); and SB4’s Public Health expansion ($75M in 2024; $150M in 2025).  Economic development remains a priority with READI grants, renamed Collaborative Communities, awarded another $500M in funding, plus $600M for the IEDC, $10M for the sports and tourism fund, and a new Employer Child Care Expenditure Credit, incentivizing providing childcare for employees. Multiple capital upgrades, funding for firefighter training, and salary increase for state police were also included. 

Support for an increase in the cigarette tax is building momentum. While some view the tobacco tax as an unreliable “declining source of revenue” or a “tax on the most vulnerable,” many lawmakers suggest the move makes sense as the state rolls out a very expensive health initiatives to improve health metrics in the state.

In the midst of it all, the Indiana Senate took time to recognize National Rifle Association CEO Wayne LaPierre, and Randy Kozuch, the interim executive director of the lobbying arm with a resolution from Sen. Jim Tomes (R-Wadesville), lending their gratitude and unwavering support of the 2nd amendment, in advance of the NRA’s 152nd annual convention in Indianapolis this weekend. Democrat Minority Leader Greg Taylor (D-Indianapolis) used the opportunity to call for “common sense gun legislation” and took his time pointing out that Democrats quietly endured the resolution and respectfully “showed decorum” in spite of disagreement with the resolution that came on the heels of several shootings, including the mass shooting that killed five Old National Bank employees in Louisville just the day before. Chip Perfect (R-Lawrenceburg) and Greg Walker (R-Columbus) joined the minority in declining to sign onto the resolution.  

With deadlines for bills to pass the “second” chamber this week, we enter a time known in the Statehouse as “Death Watch” where lobbyists work together to monitor the last minute negotiations between legislators during the Conference Committee process. Conference Committees (made up of legislators from both the House and Senate) are formed when the chamber of origin chooses to Dissent from the amendments that were made in the second chamber. The Committee is responsible for producing a Conference Committee Report (CCR) that becomes the “final draft” of the bill that must then be voted on by both the House and the Senate before the bill moves to the Governor’s desk for signature. 

Bills on your previous report that did not clear the Committee passage deadline and are now dead are: HB1003 Health Matters; HB1179 Professional Licensing; HB1290 Earned Income Tax Credit; HB1349 Outdoor Refreshment Areas; SB6 Health Care Billing Forms; SB12 Material Harmful to Minors; SB37 Food & Beverage Taxes; SB292 INPRS Investments; SB300 Residential TIF; SB303 Privacy Protections for Nonprofit Organizations; SB339 Attainable Home Ownership Tax Credit; SB340 Imagination Library; SB388 Food & Beverage Taxes

In the meantime, you can follow the progress of bills in the coming weeks at Governor Watchlist 2023; bills on your report that started the journey to the Governor this week include:

  • SB271 Certified Technology Parks
  • SB46 County Option Circuit Breaker Tax Credit
  • SB473 Limits on Discharges into the Ohio River
  • HB1132 Land Use Task Force

Your bill report is attached with bills listed numerically within High, Medium and Low Priority rankings. We have highlighted some bills that had action this week and included a reminder of the remaining deadlines for the Session.

  • The original HB1002, the House priority bill hoping to “reinvent high school” and better prepare students for the workforce, has now been reduced to a bill emphasizing career counseling for students. Language eliminated from the bill through Senate Committee hearings include: the Career Savings Accounts, access to 21st century scholars funding, and one-on-one meetings with intermediaries. The very basic bill passed the Appropriations Committee Thursday morning 9-3 and will be considered by the full Senate next week before ultimately winding up in a conference committee where House members will surely work to add back to the bill some of the eliminated language. 
  • HB1006 passed the Senate on Monday with a 48-0 vote creating options designed to keep people out of jail who may benefit more from treatments for addiction or mental health issues. The bill is a priority for the House GOP and is one of several increasing the focus on the value of mental health treatment and funding. Next up is for the House to either vote to Concur with the Senate amendments or Dissent and send the bill to conference committee.
  • The Senate passed HB1449 on Tuesday with a 48-0 vote. The bill hopes to increase college-going rates in Indiana by automatically enrolling 7th and 8th graders into the 21st Century Scholars program, assuming they meet the program’s requirements. The amended bill returns to the House, where it is assumed to receive a vote to Concur.
  • The Committee hearing for HB1499 brought some amusement this week as one woman left the normally formal Senate Tax and Fiscal Committee giggling after addressing Chair Travis Holdman (R-Markle) as the “Sparkle from Markle” as she requested lawmakers freeze assessed valuations and property taxes for seniors, “I’m being squeezed out of my home. I can’t afford to move. I can’t afford to stay.” Ultimately, the Committee stripped the majority of tax relief from the bill and inserted portions of SB37, SB388, and SB428 regarding food and beverage taxes by local units. The ability for individual counties’ rights to offer relief at the local level and increased deductions for Hoosiers over 65 survived. The “Sparkle from Markle” apologized for the “rather harsh” treatment of the House version of the bill, but promised “permanent” relief was ahead for Hoosiers as Senators stood firm in their resolve to pay off the state’s debt obligation to the Indiana teacher pension fund.  
  • SB3 will establish the state and local tax review task force for legislators and tax experts to consider Indiana’s overall taxes and revenues with a goal of determining whether the state can completely eliminate the income tax. The House amended the bill on Thursday to ensure the task force completes their work no later than December 1, 2023 (instead of 2024). The bill is up for final House vote on Monday. 
  • SB3 will establish the state and local tax review task force for legislators and tax experts to consider Indiana’s overall taxes and revenues with a goal of determining whether the state can completely eliminate the income tax. The House amended the bill on Thursday to ensure the task force completes their work no later than December 1, 2023 (instead of 2024). The bill is up for final House vote on Monday. 
  • During a 2nd Reading hearing on SB4, House members adopted several amendments to the comprehensive public health bill, including: clarifying that counties are able to opt in and out of the programs; increasing county commissioner control over health department hiring; increasing the required information disclosures when administering vaccines; and requiring a “look back” at the COVID-era emergency response to determine what went well and what didn’t. An increase in the cigarette tax was even briefly considered before the amendment author withdrew it in recognition of the rules against increasing a tax in a Senate bill. The bill will be eligible for a final House vote next Monday and likely an active conference committee negotiation after that.
  • HB1008 cleared the Senate on Thursday with a 38-9 vote. The bill puts barriers around the IN Public Retirement System (INPRS) board for investing IN pension dollars with entities that emphasize “ESG” commitments. Banks and other critics have assailed the bill as anti-free market while bill supporters insist it must be done to protect investments and IN businesses that operate in the ESG-targeted industries. The bill returns to the House for final consideration with either a vote to concur with the Senate changes or to go to conference committee. 
  • A bill to encourage development on reclaimed coal mining land, HB1106, passed the Senate on Monday with a 49-0 vote. It is expected to encourage development in the 22 counties in SW IN that have these reclaimed land by providing a tax credit for a qualified investments. The bill returns to the House where author Rep. Shane Lindauer (R-Jasper) has filed a motion to dissent to the Senate amendment, which was a relatively minor change limiting how long the tax credit can be “carried forward.” 
  • SB7 will be ready for final passage in the House on Monday after a 2nd committee hearing on Tuesday and moving through 2nd Reading on the House floor Thursday. The bill will prohibit non-compete agreements for primary care physicians and makes any other physician non-compete agreements not enforceable if: the employer terminates the physician without cause; the physician terminates their employment for cause; or the physician’s employment contract has expired with all obligations fulfilled. Several legislators, including Rep Ryan Hatfield (D-Evansville) expressed concerns about the impact that focusing this bill on primary care physicians will have on rural hospitals where most care is provided by those types of doctors. That debate will certainly continue next week during the final House vote on the bill.
  • SB20 started as a bill to allow local communities to designate outdoor refreshment areas that would enhance entertainment options with a sense of a “street party” atmosphere. The House Public Policy Committee significantly amended the bill to keep the outdoor refreshment area language and include several other alcohol and hemp-related issues. The bill passed the House on Monday with a 79-19 vote and Sen Liz Brown (R-Fort Wayne), the bill’s author, has already filed a Motion to Dissent from the House amendments sending the bill to conference committee. 
  • The House voted 97-0 on Monday to pass SB160, adding Indiana to 17 other states as members of the Professional Counselors Licensure Compact. Legislators anticipate the compact will increase services for patients, esp. for college students and military personnel/families getting counseling through telehealth. The bill returned to the Senate where they quickly took action on Thursday to Concur with the House amendments with a 46-1 vote, sending the bill to the Governor. 
  • The House passed SB246 with a 94-2 vote expanding the Excess Liability Trust Fund (ELTF) to cover tanks that are above ground in addition to underground tanks, which have been substantially taken care of. The bill also includes tanks at airports, the funding of initial site characterization changes for the release of petroleum and language from HB1072 dealing with aviation fuel fees collected and disbursed through ELTF. The bill returns to the Senate where they will need to Concur or Dissent from the House amendments. 
  • SB326 passed the House on Wednesday 85-9. The bill addresses several issues for Sports & Convention Development Areas (PSCDA’s) that exist across the state. One section of the bill includes language added in the House to increase the amount of revenue captured to no more than $10 (up from $5 in current law) per resident to support local sporting activities. This increase will allow approximately $3.5M in improvements to the Ford Center over the coming years. 
  • The Senate voted 48-0 on Monday for HB1200 to extend the Government Reform Task Force through 2025 with reports required each November. The Task Force is ten legislators responsible for reviewing state agencies to identify regulations, rules, and practices that might be altered to reduce the burden on citizens and businesses across the state. The bill returns to the House with amendments for either a concurrence vote or the need for a conference committee. 
  • SB5 passed the House on Monday with a 98-0 vote making Indiana the 6th state to pass this language that provides consumer protection of data effective January 1, 2026 allowing time for businesses to ramp up their systems to be sure they can comply with the new privacy rules. On Thursday, the Senate voted to Concur with the amendments made in the House with a 47-0 vote. The bill now moves to the Governor.
  • SB344 passed the House 96-0 to further support the work of the NE IN Strategic Development Commission by adding members and adding responsibilities resulting from a study conducted over the last year, which is similar to the Talent EVV plan. While it is not currently included in the SB344 draft, the NE IN delegation is attempting to get an annual appropriation of $15M in the budget to conduct this work. That appropriation is also not part of the Senate’s proposed budget at this time. E-REP will continue to watch for such a proposal during the conference committee negotiations and will actively advocate that any funding applied to this sort of community development should be accessible to any region with a comprehensive plan.

    Important Dates:

    • Monday, April 17: Deadline for Senate Bills to pass the House
    • Tuesday, April 18: Deadline for House Bills to pass the Senate
    • Saturday, April 29: Deadline for the Legislature to adjourn Sine Die

    *Committee hearings only require a 24(ish) hour notice, so this schedule is updated frequently and is therefore not comprehensive of all the activity we anticipate next week.