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Indiana Legislative Update – Sine Die (“without a day” set to reconvene)

In the true dramatic fashion that we all expect from our Legislature, the “last day of Session” started Thursday with legislators receiving “school runs” – a breakdown of how the funding formula in the budget  impacts  their local school corporations. Word quickly spread that legislators were unhappy with those numbers and by early afternoon, we knew that a new budget was in the works with an additional $300M (taken from the planned $1B contribution to the Pre-1996 Pension fund) added to the foundation formula for schools, bringing the increase for traditional public schools to a 5.9% increase in FY24 and a 2.1% increase in FY25. 

House rules require that a budget be published for review 24 hours before a vote, but that rule was ultimately waived (because the only thing new in the budget was the school funding formula). Legislators continued to use their time working on the other remaining bills with some consequential bills for healthcare (HB1004), Workforce/HS (HB1002), and Property Tax Relief (HB1499) getting settled at the very end just before the votes on the budget (HB1001) as the clock turned to Friday morning. 

The House wrapped up their work a little after 1:30 a.m. and the Senate adjourned sine die at 2:47 a.m. Shortly thereafter, the Governor announced at his press briefing that he is “happy to sign” this “generational impact” budget. In the end, the 2-year budget provided property tax cuts, funds initiatives to address mental health and abysmal public health metrics in the state, and more money for K-12 education. The budget contains unprecedented levels of commitment and investment in public education, public safety, public health, workforce development, economic development, and numerous quality of life and quality of place initiatives. It also addresses long neglected issues such as state trooper pay “that shows our reverence and respect for those who put their lives on the line,” assistance to firefighters, and elimination of school textbook fees.

At the end of the long night, leaders of both parties celebrated their hard work and praised their respective caucuses, “We are pleased to be able to get all of our agenda items across the finish line,” said Sen Pro Tem Rodric Bray (R-Martinsville), “from public safety to mental and public health and everything in between.”  Speaker Todd Huston (R-Fishers) boasted of an “incredibly productive session at the end,” but when asked about ISTA comments suggesting education funding was “still not enough for schools to give teachers raises,” the weary Speaker snapped, “With the amount of money schools are getting, why they wouldn’t prioritize teacher raises, I don’t know. The ISTA has never been happy with anything, so I don’t know why they would start now. Our revenue forecast went up because things are going so well in Indiana. We will just continue to focus and build on that,” said Huston with a shrug. Minority leaders weighed in as well, “House Democrats did a really good job this year making bills better,” said Leader Phil GiaQuinta  (R-Ft Wayne), while Senate Minority Leader Greg Taylor (D-Marion) looked at the time and joked, “My mom used to tell me after 3 a.m. it was the witching hour, but I think it was more to make sure I was home by 3:00,” he said with a chuckle, “I think we had some great opportunities to do monumental things for Hoosiers. Our budget had very noble beginnings and it was a race to the end. We had a lot of large and small victories with Democrat and Republican support.”

And with that, we have reached the close of the 2023 legislative session. We will continue to monitor the progress of your bills as they make their way to the Governor’s desk for signature.  You may join us in following their progress at the following link:  Governor Watchlist 2023

Your bill report is attached with bills listed numerically within High, Medium and Low Priority rankings. Any bills that didn’t pass have been deleted from your report. We’ll be in touch again once all bills have been signed by the Governor and/or there is other relevant news to share. Until then, here are notes on the last bills of Session to clear the Legislature:

  • The Conference Committee Report (CCR) for HB1002 is much like it was when it passed the House in February and will definitely transform the HS experience as was the original goal. The bill provides flexibility for diploma and career pathways; introduces intermediaries as 3rd parties to help connect students and employers; establishes Career Scholarship Accounts to support students who may need financial assistance with transportation, equipment, uniforms, etc. for a work-based experience/internship; creates the Career Coaching & Navigation System to help students build careers; and increases opportunities for teachers’ professional development to give them experience inside businesses in their communities. The CCR passed the House with a 74 – 23 vote and the Senate 35 – 15.
  • Senator Charbonneau (R-Valparaiso) introduced the Conference Committee Report on HB1004 saying the bill had certainly “morphed” throughout the process, but had “ended up in a sweet spot.” The final legislation creates the Healthcare Oversight Task Force to receive, study, and make recommendations re: hospital system prices; requires FSSA to study medicaid reimbursement rates for all 50 states; reduces/eliminates Prior Authorization requirements (originally in HB1003); provides tax credits for small businesses that adopt HRA’s in lieu of a traditional health plan; and several other provisions designed to “create a lot of data to drive decisions into the future.” The final CCR passed the House 90-7 and the Senate 45-5. 
  • The final version of HB1006 makes it one of the important pieces to addressing mental health issues as it creates options designed to keep people out of jail who may benefit more from treatments for addiction or mental health issues. The Conference Committee Report was approved by the House 91-0 and the Senate 39-7. 
  • Ways & Means Committee Chair Jeff Thompson (R-Lizton) introduced HB1499 to provide property tax relief over the next few years in reaction to statewide reports of increased property tax assessments and bills. The final CCR provides more than $100M in homeowner savings in the first year and as increases to the supplemental homestead deduction and reductions in the “maximum levy” calculations kick in over the next few years, even more should be saved. While many of us are upset with the increases we’re seeing, Ball State economist Michael Hicks points out the reality behind the numbers in this brief Twitter thread. The final CCR passed the House 98-0 and the Senate 49-1.
  • The Conference Committee Report (CCR) for HB1591 included the language E-REP has watched all session that supports the region’s work on early learning education via the On My Way PreK program. The bill eliminates the word “pilot” from the program and continues longitudinal studies on the students who participate in the PreK program. Unfortunately, the final version did not eliminate the local financial match that we had hoped for, but it is still positive movement for the program. The overall bill is a comprehensive education bill that had some controversial parts to it, too, but the CCR ultimately passed the House 65-29 and the Senate 40 – 10.
  • Legislators took SB3 into the Conference Committee process for minor changes making it a 2-year study and designating which legislative body appoints the Chair. The bill establishes the tax review task force to review Indiana’s income and other taxes with an end goal of finding a way to eliminate the state income tax. The CCR was approved by the Senate with a 50 – 0 vote and the House 96 – 0.
  • Local Public Health initiatives get a boost from SB4 as it defines “core public health services” to be delivered locally; increases the qualification requirements for local health officers; provides the method for allocating state funds to local health boards (funding is included in HB1001); requires the state department of health to identify state and county level metrics with annual reporting on the delivery of services designed to improve performance against the metrics. A health powers task force was temporarily included in SB4 to take a retrospective look at “what happened two years ago” during Covid, but the language was removed as SB4 is “looking forward, not backward,” said bill author, Sen Ed Charbonneau (R-Valparaiso), “This is the product of close to two-years of work by a whole lot of people,” began Charbonneau, “What we’ve ended up with here is a paradigm shift in the State of Indiana. We have historically been treating sick people. It’s never gonna change or bend that curve until we start preventing them from getting sick. This bill has gone through many iterations, added to and massaged and where we have ended up is a very good bill that is going to move us into the next level of health care which is preventative care in the State of Indiana.” The CCR passed the Senate 39-10 and the House 74-21. 
  • HB1106 creates a Mine Reclamation Tax Credit retroactive to January 1, 2023. Under the credit, a taxpayer may receive up to a 30% credit for their investment up to $5M. The state has budgeted $25M overall for the 5-year period until the credit expires at the end of 2027. The Conference Committee Report for the bill passed the House 94-0 and the Senate 48-1. 
  • HB1454 began as the Department of Local Government Finance’s agency bill and ended up as a 282-page bill covering all sorts of random tax issues. Of increased interest to E-REP, the bill: specifies expenditures that qualify for READI funding (Section 11, Page 9); creates the Historic Rehabilitation Tax Credit (Section 67, Page 105); increases the minimum broadband speed for a project to be eligible for funding (Sections 1-3 beginning on Page 1); and increases reporting required for local food & beverage taxes and gives most of them an expiration date of January 1, 2045 (beginning w/Section 49 on Page 52). The final CCR passed the House 76-20 and the Senate 35-15.  
  • After the House made SB20 a comprehensive alcohol bill adding in several provisions, the Conference Committee Report took the bill back to its original purpose allowing communities to create a Designated Outdoor Recreation Area (DORA) to enhance entertainment options with a sense of a “street party” atmosphere. The CCR passed the Senate 92-3 and the House 37-11. 
  • SB 246 amends 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 aviation fuel fees collected and disbursed through ELTF. Minor changes to the bill were agreed upon in conference committee with the House voting 85 – 0 and the Senate voting 48 – 0 in support. [PKB]