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March 9, 2018 TOP STORY Chamber-Priority SaaS Bill Set to Become Law This week, the Senate unanimously approved the House changes to Senate Bill 257 (Sales Tax on Software). This bill began as a top Chamber goal; it was embraced by the administration and made a priority of the Governor, the Senate got it introduced and rolling, then the House took good legislation and made it even better. The Senate concurrence vote means the bill is on its way to Gov. Holcomb and there will be SaaS (software as a service) tax clarity in Indiana! This is exactly what the Indiana Chamber has been working toward since last summer (www.indianachamber.com/saas) and it is good news for the SaaS industry. Senate Bill 257 is a straightforward piece of legislation that can reap very real economic benefits for the state. We thank legislators for listening to our members and taking this important step forward to demonstrate Indiana’s commitment to embracing the growth of the SaaS industry. The legislation puts Indiana in a very favorable position to attract more and more of this burgeoning business to our state. Resource: Bill Waltz at (317) 264-6887 or e-mail: [email protected] IN OTHER NEWS General Statehouse Where Key Bills Stand The 2018 Indiana legislative session is in the home stretch with an end date of this coming Wednesday. Another select group of business-related bills crossed the finish line this week (and last) and are ultimately headed to the Governor’s desk. Others are bound for conference committee to resolve differences between the House and Senate versions. Meanwhile, two bills saw their chances seemingly die altogether. Passed the General Assembly and on to the Governor: House Bill 1036 (Unemployment Insurance), authored by Rep. Dan Leonard (R-Huntington), codifies policy already being executed by the Department of Workforce Development regarding worker’s compensation being excluded as a wage for unemployment insurance (UI) purposes. In addition, the bill streamlines the collection fee to a flat $12 for withholding amounts from an individual’s income to repay UI benefit overpayments, which is preferable. The Chamber testified in favor of the legislation, which ultimately was concurred on by the House 92-0 on Tuesday. House Bill 1115 (Landowner Immunity for Trail Access), from Rep. Carey Hamilton (D-Indianapolis), clarifies that a property owner is not liable for an injury when a person goes upon or through the owner’s land to access a trail, a greenway, a park or another similar area used for recreational purposes. Also, the bill appropriately insulates business and individual property owners from liability. The Chamber indicated its support for the measure, which the Senate unanimously concurred on. House Bill 1278 (Economic Improvement Districts), authored by Rep. Sean Eberhart (R-Shelbyville), unfortunately will make it more difficult to establish an economic improvement district (EID) in Indiana communities. This bill requires that an EID petition garner signatures from 60% of property taxpayers AND 60% of the assessed valuation in that area; plus, it caps the time to accomplish that at 120 days, which may not be enough. The Chamber had advocated that a simple majority of property taxpayers and assessed valuation should be sufficient to allow for an EID to be set up in a community. Senate Bill 172 (Computer Science Curriculum), authored by Sen. Jeff Raatz (R-Richmond), requires that all K-12 schools offer one elective computer science course beginning in 2021. It also establishes the Next Level Computer Science grant program to provide professional development training dollars for educators. The Senate concurred 35-0 Thursday on this policy priority of the Chamber. We advocated that as more jobs are becoming automated and almost every company these days is a tech company of sorts, it was imperative to take this step for employers and students. A special thank you to board member Bill Soards of AT&T for his testimony in support of the bill. Senate Bill 225 (Continuing Opioid Education Requirements), authored by Sen. Randy Head (R- Logansport), educates providers that have a CSR (controlled substance registration) and, as a result, could reduce the number of opioid prescriptions and potentially decrease the overall supply of controlled substances. The Chamber supports this effort and communicated as such; the bill was unanimously concurred on by the House. Senate Bill 257 (Sales Tax on Software), authored by Sen. Travis Holdman and carried in the House by Rep. Tim Brown (R-Crawfordsville), creates tax clarity for Indiana’s software-as-a-service industry; see the Top Story. Senate Bill 353 (Regional Tax Credits), from Sen. Dennis Kruse (R-Auburn), in its final form, is a summer study committee recommendation that will look at taking away lesser-used tax credits for a more flexible economic development tax credit for communities to use to spur quality-of-place investments. The Chamber expects a more focused discussion on the matter during the 2019 budget session. The bill was concurred on by the Senate 49-0 on Tuesday. Senate Bill 362 (Regulation of Water and Wastewater Systems), authored by Sen. Ed Charbonneau, requires a cost-benefit analysis and asset-management plan before a new water or wastewater utility can provide service. The Indiana Chamber has been a vocal supporter of this bill, as it should reduce the number of small utilities that become distressed or troubled under Indiana law, thus keeping customers’ costs lower. On Wednesday, the Senate concurred on the House-passed version 46-0. Senate Bill 369 (Worker’s Compensation Drug Formulary), from Sen. Randy Head (R-Logansport), was returned to the Senate this week, which approved the amended version from the House 40-9. The bill requires (in worker’s comp cases) the use of prescription drugs listed on a specified drug formulary (i.e., physicians are only allowed to prescribe the drugs on the formulary); there is a process if they elect to use drugs not on the formulary. The Chamber testified in support of this measure because it should keep worker’s compensation prescription costs down and help to reduce the prescribing of opioids. Headed to Conference Committee for Final Debate: House Bill 1002 and Senate Bill 50 (Workforce Development), authored by Rep. Todd Huston (R-Fishers) and Sen. Doug Eckerty (R-Yorktown), are the mega workforce development bills this session. While we are awaiting final language in a conference committee report, we anticipate that the Chamber will NOT have a seat on the Governor’s new workforce cabinet; however, we will be consulted on the gubernatorial employer appointee. Though we support provisions in the bill like the Next Level Jobs employer training grants and CTE (career and technical education) student data becoming available to local employers, it is disappointing that the leading voice for the Indiana business community does not have a specified seat at the table of the new workforce cabinet. House Bill 1065 (High Speed Internet Service), authored by Rep. David Ober (R-Albion), raises the speed threshold of broadband in Indiana to more contemporary levels. The Senate also amended a rural broadband grant program into the House-passed version. The Chamber actively supported the bill’s service expansion and upgrade, as well as keeping the overall supervision of the state’s broadband with the Indiana Economic Development Corporation. House Bill 1267 (Water Infrastructure Taskforce), authored by Rep. Ed Soliday (R-Valparaiso) and Sen. Ed Charbonneau (R-Valparaiso), establishes a water infrastructure taskforce consisting of members appointed by the Governor. The bill also requires the group to undertake certain duties, including to develop a long-term plan for addressing drinking water, wastewater and storm water management needs in Indiana. This is a policy priority for the Chamber and we have continually indicated our support for this bill, which aligns with our 2014 water study and Indiana Vision 2025 economic development plan. What will be at the heart of conference committee discussions are specifics surrounding the appointments to the taskforce – how many, the process and if the Indiana Chamber is specifically named. House Bill 1341 (Autonomous Vehicles), from Ed Soliday (R-Valparaiso), defines how autonomous vehicles and truck platoons are tested and driven on Indiana roads. The measure passed the Senate 48-0 on Tuesday. The Chamber is advocating for the best balance of public safety and innovation for this fast-evolving mobility technology. House Bill 1426 (Education Matters), from Rep. Bob Behning (R-Indianapolis), unanimously passed the Senate on Tuesday. The Chamber-supported bill contains the single high school diploma model and reflects the work of the 2017 Graduation Pathways Taskforce. The author dissented to the Senate changes and we are awaiting final language in a conference committee; this was expected since this is a “various matters” bill, which could be a home for many last-minute education policy changes. This is a key piece of legislation for the Chamber and we will be strongly advocating for its passage. Senate Bill 224 (Behavioral Health and Human Services), authored by Sen. Randy Head (R-Logansport), includes an employer initiative to assist employees who fail a drug program. It also establishes best practice guidelines to assist employers with certain employees who agree to participate in a drug education and addiction treatment program. The Chamber testified in support of this measure. Senate Bill 242 (Tax Issues), authored by Sen. Travis Holdman (R-Markle), contains the variety of provisions identified by the Department of Revenue (DOR) over the course of the year that are needed to clean up administrative quirks in the law. It also includes an updated reference to the latest versions of the IRS code, in which taxpayers carry over their federal taxable income to serve as a base for determining their state tax liability.