January 29, 2021

TOP STORIES Senate Passes COVID-19 Civil Immunity Bill, While SPONSORED BY: Reid Health House Readies for Vote on Similar Measure

SB 1 – Civil Immunity Related to COVID-19 Authored by Sen. Mark Messmer (R-Jasper)

Provides civil tort immunity for damages arising from COVID-19 on the premises owned or operated by a person, on any premises on which the person or an employee or agent of the person provided property or services to the individual, or during an activity managed, organized or sponsored by the person. Specifies that the immunities do not affect the duty of care owed by a nursing home to a patient. Defines COVID-19 protective product and provides https://www.reidhealth.org/careers civil immunity for harm that results from the design, manufacture, labeling, sale, distribution or donation of a COVID-19 protective product, except for an act or omission that constitutes gross negligence or willful or wanton misconduct (including fraud and intentionally tortious acts). Limits certain immunities to tort actions. Prohibits class action suits. Exempts fraud and intentionally tortious acts from specified immunities.

HB 1002 Civil Immunity Related to COVID-19 Authored by Rep. (R-Carmel)

Protects health care providers from professional discipline for certain acts or omissions arising from a disaster emergency unless the act or omission constitutes gross negligence, willful or wanton misconduct, or intentional misrepresentation. Prohibits filing a class action lawsuit against a defendant in a civil action allowed by the statute. Provides that a person is not liable to a claimant for loss, damage, injury or death arising from COVID-19 unless the claimant proves by clear and convincing evidence that the person caused the loss, damage, injury or death by an act or omission constituting gross negligence, willful or wanton misconduct, or intentional misrepresentation. Provides immunity from civil liability to certain persons, entities and facilities providing health care and other services for certain acts or omissions related to the provision of health care services and other services during a state disaster emergency.

Chamber position on both bills: Support (a top priority)

The latest: SB 1 bill was amended on second reading by Sen. Messmer, bringing the language closer to the House version (except it doesn’t include the health care provider provisions). The Senate passed SB 1 Thursday on third reading 40-8. The bill moves to the House where Rep. Torr is the House sponsor. Meanwhile, the House moved HB 1002 to third reading without any amendments; it is now ready for a full House vote.

Indiana Chamber action/commentary: The Chamber, the Manufacturers Association and the Insurance Institute of Indiana worked this week with HB 1002’s author, Rep. Torr, to discuss a few changes. It is expected that SB 1 will be heard next week in the House Judiciary Committee and then once it passes the House, a concurrence would then be necessary by Sen. Messmer. Likewise, it is expected that HB 1002 will pass the House next week.

Resources: Mike Ripley at (317) 264-6883 or email: [email protected]; Bill Waltz at (317) 264-6887 or email: [email protected]

Different Approach to Payroll Withholding This Year

SB 234 – Withholding Tax Remittance Authored by Sen. Linda Rogers (R-Granger)

This bill takes a very different approach to addressing the issue of potential mishandling of withholding tax remittances than what Sen. Rogers offered last year. Rather than requiring businesses to set up direct deposit accounts with the Indiana Department of Revenue to protect against fraud, this bill instead establishes registration requirements, notifications and more frequent deposits. Full description at http://www.iga.in.gov/legislative/2021/bills/senate/234.

Chamber position: Support

The latest: The Tax and Fiscal Policy Committee heard testimony from interested parties. The chair, Sen. Travis Holdman (R-Markle), indicated there would be amendments before the bill is voted on at a subsequent meeting.

Indiana Chamber action/commentary: The Chamber is supportive of Sen. Rogers’ objective and diligent efforts to address this issue (the possibility of a payroll company absconding with the payroll taxes they’ve been entrusted with by their business clients). Last year’s bill would have seriously disrupted the process and disturbed the ability of businesses to utilize and rely on the service payroll companies provide. Since last year, Sen. Rogers has worked determinedly with payroll company representatives, the Chamber and other stakeholders to find reasonable means for improving the withholding procedures in order to enhance the protection of businesses from misappropriations by a payroll service provider. Our focus at the Chamber has been to ensure that any changes, while well intentioned, do not result in a process that creates new problems, or makes compliance more cumbersome or costly. We testified that “while we can’t really know until implementation, it seems that SB 234 is clearing most of those hurdles.” But some more work may be necessary to meet these Chamber tests. We will continue to participate in the crafting and consideration of this new proposal.

Resource: Bill Waltz at (317) 264-6887 or email: [email protected]

IN OTHER NEWS

Taxation and Public Finance Business Personal Property Minimum Threshold Exemption Getting Looked at Again

SB 336 – Assessments and Tax Exemptions Authored by Sen. Aaron Freeman (R-Indianapolis)

Provides that the business personal property exemption from taxation is based on the assessed value of the business personal property instead of the acquisition cost. Provides that a reward received for providing information that assists in the arrest, indictment or filing of charges against a person is exempt from the tax imposed on adjusted gross income. THE FOLLOWING PROVISIONS WERE AMENDED OUT OF THE BILL IN COMMITTEE: Provides that the minimum valuation applicable to the total amount of a taxpayer’s assessable depreciable personal property in a taxing district is 30% of the adjusted cost of the depreciable personal property beginning with the January 1, 2022, assessment date. Provides an exemption from the 30% minimum valuation limitation for new depreciable personal property purchased after December 31, 2021. Provides that for special integrated steel mill or oil refinery/petrochemical equipment purchased after December 31, 2021, a taxpayer may elect to calculate the true tax value of the equipment in the ninth year of acquisition and each year thereafter by multiplying the adjusted cost of the equipment by zero.

Chamber position: Support in part (no position on the taxability of reward money)

The latest: The bill was amended and passed by the Tax and Fiscal Policy Committee 11-3.

As amended, the bill changes the way the $40K “de minimus” exemption threshold for business personal property is calculated. Currently, a taxpayer is exempted from paying the tax if their property was purchased for less than $40K. Essentially, the change would expand the exemption to taxpayers whose total property would be valued at less than $40K after it is depreciated (under the assessment rules). With the amendment, the bill takes the form of the bill passed out of Tax and Fiscal Policy Committee last year, but died in the House. As introduced, the bill included changes that would have effectively phased out the application of the 30% depreciation floor; while also dealing with personal property, this change is distinct and separate from the “de minimus” exemption. The 30% floor applies to all personal property assessments. This provision was amended out of the bill, apparently for fiscal impact concerns.

Indiana Chamber action/commentary: The Chamber offered detailed testimony in favor of the introduced bill (both the “de minimus” threshold change and the phaseout of the 30% floor – achieved by not having it applied to newly acquired property). Retaining provisions to address the inequity of the 30% floor would have been preferred, but we nonetheless remain fully supportive of the amended bill, which now addresses only the calculation of the “de minimus” exemption. As we emphasized in our testimony, it is important that a taxpayer not have to “keep paying, in perpetuity, tax on property currently valued well below the threshold”. Finally, we should note that it would be even more desirable to find a method for changing the calculation such that a taxpayer does not have to do a “pro forma” return in order to determine whether they qualify for the exemption. We will continue to work with the interested parties to explore options that would deal with this matter as well.

Resource: Bill Waltz at (317) 264-6887 or email: [email protected]

Economic Development Bill Helping Small, Hospitality Businesses Passes Committee Unanimously

HB 1004 – Small Business Restart Grant Program Authored by Rep. (R-Jasper) Co-authored by Rep. (R-Attica) and Rep. Alan Morrison (R-Brazil)

Establishes the Hoosier hospitality small business restart grant program to provide grants to eligible entities to accelerate economic recovery from the impacts of the COVID-19 pandemic. Also creates the small business restart grant fund. Provides that the Indiana Economic Development Corporation (IEDC) administers the program and fund. Provides criteria for grants. Allows the IEDC to award grants from the fund. Makes a $30 million appropriation.

Chamber position: Support

The latest: On Wednesday, the bill was voted out of the House Ways and Means Committee unanimously (23-0).

Indiana Chamber action/commentary: The hospitality industry has unquestionably suffered most from the COVID-19 pandemic. As of September 2020, one in six restaurants had shuttered due to the pandemic. In December, another 500,000 hospitality jobs were lost nationally bringing the total to 3.9 million, or down by approximately 23%. In Indiana, 20% of restaurants are now permanently closed and 250,000 Hoosiers in the restaurant industry alone have lost their jobs.

In testimony, the Indiana Chamber argued that this bill will help small businesses in need of bridge funding until enough people are vaccinated and life returns closer to normal. Furthermore, we pointed out that eight in 10 restaurant owners started in entry-level industry positions and their businesses are in jeopardy through no fault of their own. Further, the way that many small hospitality businesses are funded (e.g., credit cards, mortgages, etc.) means that when their business closes, it results in complete and utter financial ruin.

Through this bill, eligible businesses may receive up to $10,000 per month with a maximum total grant amount of $50,000. This may not be enough, but every little bit will help.

Resource: Adam H. Berry at (317) 264-6892 or email: [email protected]

Labor Relations Bill to Tighten Fraud Guidelines for Unemployment Insurance System Moves On

HB 1152 – Unemployment Insurance Authored by Rep. (R-Huntington)

Clarifies provisions concerning the overpayment of unemployment benefits resulting from fraud or failure to disclose wages and the forfeiture of benefits or wage credits.

Chamber position: Support

The latest: The bill passed a hotly divided House Employment, Labor and Pensions Committee along a party line vote of 8-4. Representative Leonard indicated that there was an exceedingly large amount of claims this past year due to COVID-19 and this bill is trying to clean up any fraud and abuse within the system. An amendment offered by Rep. (D-Evansville) that would have returned the language to a “material fact” rather than “any fact” was defeated on party lines, but not before Rep. David Abbot (R-Rome City) changed his vote to a “no” – admitting that he had been mistaken for having voted for Rep. Hatfield’s amendment.

Indiana Chamber action/commentary: The AFL-CIO and House Democrats argued that this bill puts claims of fraud on people who made honest good faith errors and increases repercussions to those who unknowingly make mistakes. The Indiana Chamber commended the Department of Workforce Development for the work the agency did over the past summer under the circumstances. The Chamber supports any and all efforts to crack down on fraud to the unemployment insurance system to protect the trust fund.

Resource: Mike Ripley at (317) 264-6883 or email: [email protected]

Education and Workforce Development Chamber Champions Bills to Reverse Learning Loss, Increase Student Access to Financial Aid

HB 1008 – Student Learning Recovery Grant Program Authored by Rep. (R-Fort Wayne)

Establishes the student learning recovery grant program with a $150 million appropriation from the state general fund for the purpose of addressing student learning loss resulting from education disruptions during the COVID-19 pandemic.

Chamber position: Support

The latest: Passed by the House Ways and Means Committee 23-0.

Indiana Chamber action/commentary: The Chamber joined a number of education advocates in supporting this bill that aims to ensure Indiana schools take proactive steps to reverse pandemic-related learning loss, which the available data and anecdotal evidence suggests is both significant and widespread, especially among low-income and other at-risk student populations who were already behind prior to COVID-19.

Based on committee testimony and discussion by lawmakers, there seems to be an overwhelming consensus that a robust statewide intervention strategy is warranted. To the extent that there is disagreement, it centers not on the purpose and intent of the proposal but rather the process and mechanics for how the funds are distributed to local K-12 schools. The Chamber was among the supporters that praised the bill’s emphasis on encouraging schools to partner with community-based non-profit organizations in their region as well as ensuring recipients had a clearly articulated plan for how the funds would be targeted to students with the greatest need. With the latter point in mind, the Chamber further advocated for a data-driven approach that leverages relevant assessment data from state iLEARN exams and/or local diagnostic assessments to ensure that schools focus their attention (and the additional taxpayer dollars) where the learning loss is most acute.

It’s abundantly clear that the pandemic has wreaked havoc on student learning over the past year with schools pivoting back and forth from in-person to remote instruction and parents juggling work responsibilities with their unexpected second jobs as untrained teaching assistants. The Chamber supports an aggressive and proactive response to reversing the resulting learning loss, one which should be guided by objective student data and targeted to where the needs are greatest. Given the strong bipartisan support for this measure, there seems little doubt that this bill will pass in some form. The main question at this point is how exactly the funds will be distributed and how they’ll be used. The current language leaves most of those details in the hands of the state Department of Education, so we’ll be watching this closely moving forward, both during and long after the 2021 General Assembly adjourns.

SB 54 – FAFSA Requirement Authored by Sen. Jean Leising (R-Oldenburg)

Requires Indiana high school seniors to complete the Free Application for Federal Student Aid (FAFSA) unless: 1) the student’s parent signs a waiver that the student understands what the FAFSA is and declines to complete it; or 2) the student’s principal waives the requirement due to extenuating circumstances.

Chamber position: Support

The latest: Heard by the Senate Education Committee this week; vote expected next week.

Indiana Chamber action/commentary: Senate Bill 54 aims to increase student access to grants and scholarships that can help Hoosiers complete education and training beyond high school. Completing the FAFSA qualifies students for a variety of financial aid opportunities available from the state and other sources, including Indiana’s Next Level Jobs program that offers more than 150 tuition-free, short-term training options in the state’s highest-demand job sectors. These industry-aligned job training programs are available to all Hoosier high school graduates (regardless of family income), but they must file the FAFSA to be eligible.

Despite having one of the most generous state financial aid systems in the country, Indiana lags its peers in FAFSA completion both nationally (ranked 38th) and among Midwestern states (ranked eighth out of 11). Indiana’s FAFSA filing rate has been on the decline for the last few years, a troubling trend that has disproportionately impacted low-income, rural and urban students, and one which has been further exacerbated by the COVID-19 pandemic. As of this January, Indiana’s FAFSA filing rate is down by almost 11% among all high school seniors and double that (22% decline) for low-income students.

In committee testimony, SB 54 received strong backing from the Indiana Chamber and other advocates who see the consumer-friendly legislation as both a student equity issue and an economic growth driver. Supporters noted that a growing number of states, including Louisiana, Texas, Illinois, California and Nebraska are embracing similar policies due to its positive impact in not only boosting FAFSA filing but also improving high school graduation rates, college-going and related measures. Opposition to the bill came from education association representatives who acknowledged the benefits (several noted that their own children had filed the FAFSA) but lamented that it would place an administrative burden on local schools. Advocates countered that statewide nonprofit INvestEd – along with numerous business and community organizations – has committed to aiding local FAFSA efforts, plus real-time data provided by the Indiana Commission for Higher Education is available to help schools pinpoint which students have completed the FAFSA.

For the past two years, this common-sense proposal has been considered and passed by both chambers of the , albeit not in the same legislative session. During this time, we’ve seen Indiana continue to lose ground in FAFSA completion at the expense of student opportunity and to the detriment of our state’s workforce. Given the clear benefits to both students and our state, we will continue to advocate strongly for SB 54 this session and call upon state lawmakers from both sides of the aisle to make up for lost time and adopt this consumer-friendly policy in 2021.

Chamber Announces Talent Development Clearinghouse to Strengthen State’s Workforce

Our new Talent Development Clearinghouse will help employers enhance the skills of their workforce and assist individuals in learning about education and training needed for available jobs and emerging careers. Online resources will be the cornerstone of the clearinghouse, which we expect to launch by the end of 2021.

The Talent Development Clearinghouse is being made possible by a $2.5 million Lilly Endowment Inc. grant to our Institute for Workforce Excellence (http://www.indianachamber.com/workforce), which will manage the endeavor. Clearinghouse resources will be available through a web site, which will be the foundation for a peer-to-peer learning network designed to help stakeholders connect with one another and work together. In addition, the Institute for Workforce Excellence will offer concierge-level technical assistance from in-house staff to employers, Indiana workers, non-profit organizations, community partners and higher education institutions.

Resource: Jason Bearce at (317) 264-6880 or email: [email protected]

Quick Takes Latest on Bills Banning Utility Services, Updating Alcohol Laws

House Bill 1191 (Local Unit Power to Prohibit Utility Connection), authored by Rep. (R-Rolling Prairie), cleared the House Utilities, Energy and Telecommunications Committee this week. An amendment was introduced that required a net monetary savings for overall costs associated with the electrical energy supplied to a state educational institution’s facilities before they could take certain actions relating to energy. No testimony was taken on the amendment, although there was significant debate among the committee members. The amendment and the amended bill passed 9-4; the bill is eligible for further action in the House. We testified in support of the introduced version two weeks ago. This legislation will prohibit units of local government from passing ordinances from banning utility services based upon fuel service. This has happened in some locations throughout the United States. Typically, it is directed at fossil fuels (such as heating and cooking with natural gas), but sometimes applies to renewable energy sources as well.

House Bill 1396 (Alcoholic Beverages and Tobacco), authored by Rep. (R-Auburn), contains 19 provisions that update Indiana’s existing alcohol laws. The Chamber-backed bill was heard in the House Public Policy Committee on Tuesday; however, no vote was taken. Chairman Smaltz indicated there are a couple of issues that need to be worked on before the bill will be voted on. We indicated our support for the measure and believe the state would be better off to modernize and take the inefficiencies out of the current system. The Chamber supports more logical and equitable policies that level the playing field for producers, distributors and retailers, as well as facilitate consumer convenience. Not to mention, COVID-19 has changed many things, including how alcoholic beverages are produced, distributed, sold and consumed.

Resource: Greg Ellis at (317) 264-6881 or email: [email protected] Energy and Environment Trio of Bills Clear Committee Hurdle

HB 1220 – 21st Century Energy Policy Development Task Force Authored by Rep. Jim Pressel (R-Rolling Prairie)

Re-establishes the 21st Century Energy Policy Development Task Force, following its expiration on December 2, 2020. The task force will study management of stranded utility assets, methods to ensure fairness across customer classes, appropriate regulation of distributed energy resources, the impact of utility plant or fuel source site closures on communities, the state of energy efficiency efforts in Indiana, local experiences with green zones, methods for the state to encourage electricity storage technology research, the impact of large-scale electric vehicle deployment on the electric grid, electric vehicle charging station ownership and demand response and pricing systems. Requires the task force to develop recommendations for the General Assembly and the Governor. The task force must issue a report setting forth the recommendations developed no later than November 1, 2022.

Chamber position: Support

The latest: The bill was heard in the House Utilities Committee on Tuesday. It passed on a vote of 9-4, with the four no votes due to the makeup of the task force members. The bill is now eligible for further action in the House.

Indiana Chamber action/commentary: We testified in support of the bill. The Indiana Chamber Foundation conducted an energy study (Powering Indiana’s Economic Future) that was released in late November 2020. The study has references and finding on the subjects that the task force will be studying. The study notes that Indiana does not need to be a first mover in implementing any policy actions; experience in other jurisdictions can be mined to improve outcomes in Indiana. There is no need to reinvent the wheel. The Chamber Foundation’s study can be used to complement the work of the task force as subjects are studied and recommendations developed.

HB 1287 – Water or Wastewater Service for Underserved Areas Authored by Rep. Ed Soliday (R-Valparaiso)

Allows a water or wastewater utility to extend service to a developed but underserved area without a deposit from customers if the extension of service will result in a positive contribution to the utility’s overall cost of service over a 20-year period. It defines a “developed but underserved area” as an area in which prospective service would be provided predominantly to existing and occupied structures that receive water from private wells or from which wastewater is disposed of through on-site private systems such as septic tanks. It also provides that if a water or wastewater utility determines that an extension of service to a developed but underserved area will not result in a positive contribution to the utility’s overall cost of service over a 20-year period, the utility may require a deposit or other adequate assurance of performance from the customers to be served by the extension of service.

Chamber position: Support

The latest: The bill was heard in the House Utilities Committee on Tuesday and passed by a vote of 13-0; it is now eligible for further action in the House.

Indiana Chamber action/commentary: We testified in support of the bill, which is consistent with the Indiana Chamber’s Water Study. It would allow regulated water and wastewater utilities to extend service to an underserved area (wells and septic systems). It also sets parameters for when a deposit can be collected so that the costs of the extension are not shifted to other ratepayers.

SB 348 – Wastewater Task Force Authored by Sen. Eric Koch (R-Bedford)

Establishes the task force on wastewater infrastructure investment and service to underserved areas. The bill sets forth the duties of the task force and requires it to develop a long-term plan for addressing wastewater needs in Indiana. Also requires the task force to issue a report with recommendations to members of the General Assembly and the Governor no later than December 1, 2021.

Chamber position: Support

The latest: The bill was heard in the Senate Utilities Committee on Thursday. It passed by a vote of 9-1, with Sen. Jean Leising (R-Oldenburg) voting no because she wanted to pass an amendment to increase the partisan diversity on the task force. The bill is now eligible for further action in the Senate.

Indiana Chamber action/commentary: The Chamber provided testimony in support of the bill, which is in line with one of the drivers of our Indiana Vision 2025 plan and recommendations of the Chamber Foundation’s 2014 water study. The task force will develop a long-term plan for addressing wastewater needs in Indiana. An integral part of a water resources plan is the ability of the state’s water utilities to create and execute long-range plans.

Resource: Greg Ellis at (317) 264-6881 or email: [email protected]

Health Care Testimony Given on Disclosures Related to Prescription Drugs

SB 131 – Disclosures Related to Prescription Drugs Authored by Sen. Mike Bohacek (R-Michigan City)

Beginning January 1, 2022, requires: (1) a state employee health plan, a policy of accident and sickness insurance, and a health maintenance organization contract to provide to a covered individual the wholesale acquisition cost of a prescription drug not later than 60 days after the prescription drug is dispensed or administered to the covered individual; and (2) a state employee health plan, a policy of accident and sickness insurance, and a health maintenance organization contract to provide a covered individual with the amount of the rebate received by the health plan for a prescription drug dispensed for the covered individual if the amount of the rebate exceeds 15% of the wholesale acquisition cost of the prescription drug.

Chamber position: Oppose

The latest: Insurance and Financial Institutions Committee Chairman Andy Zay (R-Huntington) allowed testimony on the bill but took no vote.

Indiana Chamber action/commentary: The bill requires written notifications, which could cost millions of dollars because there are millions of prescriptions. The Chamber made no comments related to the merits of the bill. Our concerns are related to the administrative costs associated with the notification requirements of the bill. Those administrative costs are passed along to the small group plans to which employers pay the bulk of those premiums. The Legislative Services Agency’s fiscal report demonstrates that small units of government non-ERISA plans will be impacted. The Chamber pointed out that this will be the case for small employer fully insured plans as well. The Chamber and Anthem have been asked to participate in discussions to make the bill better.

Resource: Mike Ripley at (317) 264-6883 or email: [email protected]

EVENTS / INFORMATION

February 5 – Monthly Policy Issue Call – Indiana Chamber members can hear the Chamber’s lobbying team offer analysis of the General Assembly action; members can also ask questions important to their business. Register today to attend; you can also replay the first call of 2021, on January 8, previewing the legislative activity. Go to www.indianachamber.com/policycalls.

The 2021 Indiana General Assembly Legislative Directory will keep you connected with state legislators during the new session and beyond! It comes as both a booklet and an app. Each contains contact information for all 150 state legislators and much more. The app – which has real-time updates throughout the session – is available now for iPhones; the booklet ships NEXT WEEK. A discount is given for purchasing both versions as well as bulk quantities of the book. Order online at https://www.indianachamber.com/directory or by calling (800) 824-6885.