February 21, 2020

TOP STORIES House Public Health Hears Smoking and Vaping Age SPONSORED BY: Reid Health Increase Bill to Strengthen Law

SB 1 – Tobacco and Vaping Smoking Age Authored by Sen. (R-Valparaiso) Sponsored by Rep. Cindy Kirchhofer (R-Beech Grove)

Prohibits a person who is less than 21 years of age from buying or possessing: (1) tobacco; (2) e-liquids or (3) electronic cigarettes. Makes conforming changes regarding enforcement provisions, sales certificates, prohibition of delivery sales and notices posted at retail establishments and at vending machines. Provides that a retail establishment that sells an e-liquid to a person less than 21 https://www.reidhealth.org/careers years of age is subject to a civil judgment for an infraction. Triples the civil judgment for an infraction for: (1) a retail establishment that sells or distributes tobacco, an e-liquid or an electronic cigarette to a person less than 21 years of age and (2) certain retail establishments that allow an underage person to enter their establishment. Requires a merchant who mails or ships cigarettes as part of a delivery sale to use a shipping service that requires a customer to present identification if they appear to be less than 30 years of age. Makes it a Class B infraction for a person to knowingly sell a tobacco product that contains Vitamin E Acetate.

Chamber position: Support

The latest: Held by the House Public Health Committee; bill is expected to be voted on next week.

Indiana Chamber action/commentary: The Chamber, the Indiana Department of Health, the American Lung Association and a group of other interested parties testified in favor of the bill. The Indiana Grocery and Convenience Store Association only supports raising the age, but not the penalties. The Chamber testified that smoking costs Indiana employers $6.2 billion a year in higher health care costs, absenteeism and lost productivity. The risks for youth with nicotine begins early, as nicotine changes the way synapses are formed – which can harm parts of the brain that control attention and learning. The recent federal law only prohibits the sale to minors, not the possession, so we believe further legislation is warranted. This issue is also something that has gained public approval, with two-thirds of Hoosiers supporting the legal age increase and 73% in favor of raising the cigarette tax by $2 to reduce our high smoking rates.

Resource: Mike Ripley at (317) 264-6883 or email: [email protected] House Committee Makes Unfortunate Changes to Senate Version of Pesticides Bill; Fate Still Uncertain

SB 438 – Regulation of Pesticide Use and Application Authored by Sen. Jean Leising (R-Oldenburg)

Creates the civil penalty advisory panel to study and recommend a system for use in determining the civil penalties that may be imposed for a violation of the laws governing pesticide use and application. It requires the panel to make recommendations concerning the study to the Pesticide Review Board and General Assembly before December 1, 2020.

Chamber Position: Oppose

The latest: The bill was heard in the House Committee on Agriculture and Rural Development on Tuesday. The committee chair, Rep. Don Lehe (R-Brookston), offered an amendment that changed the language to what was originally in HB 1119. The amended bill establishes a new schedule of civil penalties in statute, which are significantly higher and requires the state chemist to impose the penalties. The amended bill, which cleared the committee 11-0, is scheduled for second reading in the full House on February 24.

Indiana Chamber action/commentary: We testified in support of the bill prior to the amendment because it would require input from groups, including business, before changes could be made to civil penalty amounts and their application to violations. The other testimony ranged from flat-out opposition to any changes to the existing law to support, from the agriculture community, of the amended bill.

The subsequent approved amendment to SB 438 now makes the measure unacceptable, so we are in full opposition. The Chamber’s concerns are for unintended impacts on lawn care companies as well as other businesses that use/apply pesticides. Both Rep. Lehe and Sen. Leising indicated that the bill needs work, and they want to cooperate with the different trade groups and interested parties to make it better. This bill is destined for conference committee if it passes out of the House.

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

IDEM Seeks Business Input on New Water Permit Fees

The Indiana Department of Environmental Management (IDEM) is now soliciting public comment on new rules and amendments to a collection of rules concerning water program permit fees as required by House Enrolled Act 1278 in 2019. Specifically, IDEM seeks comment on the affected citations listed below and any other provisions of Title 327 that may be affected by this rulemaking. The comment period ends on March 20, 2020. Details at http://iac.iga.in.gov/iac/20200219-IR-327200026FNA.xml.pdf.

CITATIONS AFFECTED: 327 IAC 5; 327 IAC 8; 327 IAC 15; 327 IAC 19-7

IN OTHER NEWS

Labor Relations Senate Pensions and Labor Committee Passes Key UI Bill

HB 1111 – Unemployment Authored by Rep. Dan Leonard (R-Huntington) Sponsored by Sen. John Ruckelshaus (R-Indianapolis)

Provides a new schedule of rates for calendar years after December 31, 2020. Provides new contribution rates for calendar years after 2020. The bill reduces the number of schedules from nine to five. It also locks in rates through 2025 – currently Schedule E that will become the new Schedule C. After 2025, the bill sets trigger amounts that could move the rates up or down based upon the balance of the trust fund.

Chamber position: Support

The latest: No testimony was taken. The amendment from Sen. (R-Crawfordsville) got the bill in the form as listed above. Senator (D-Portage) asked to offer two amendments. The first would increase the wage base by $500 (currently at $9,500 for SUTA, the state tax unemployment insurance tax). The Indiana Department of Workforce Development (DWD) believes this would generate an additional $20 million in taxes from employers. The second amendment would increase the wage base multiplier from .47 to .53. Currently, a totally unemployed, eligible claimant’s weekly benefit amount (WBA) is computed by dividing his/her total base period wages by 52. That number is then multiplied by .47 to arrive at a WBA with a maximum of $390. DWD believes that this would cost almost an additional $2 million to employers. Senator Tallian further stated that there had not been a benefit increase since 2005.

But Sen. Boots did not allow either amendment. He didn’t disagree that it may be time for a benefit increase. However, the intent currently is to try to get the trust fund balance solvent. The Chamber agreed and had communicated those sentiments to the Senate sponsor, John Ruckelshaus. Subsequently, the bill passed the committee 9-0; it now moves to the Senate floor for second reading.

Indiana Chamber action/commentary: In the Senate, we do expect there will be amendments for a benefit increase, but those amendments will not be successful. The bill is expected to pass the Senate easily. Meanwhile, Rep. Leonard has indicated that he will most likely concur when the bill returns to the House.

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

Education and Workforce Development QUICK HITS: Two Positive Bills, One Negative One Moving in Senate

House Bill 1002 (Teacher Evaluations), authored by Rep. Anthony Cook (R-Cicero), was heard by the Senate Education Committee this week with the committee expected to vote on the bill next week. The Chamber testified in opposition to the bill alongside other education reform advocates, including the Institute for Quality Education and the Foundation for Excellence in Education. The measure removes a current state requirement that local school districts’ educator evaluation systems be based, in part, on “objective measures of student achievement,” including Indiana’s ILEARN assessments. This change would preclude schools from using student assessment results – both overall performance and learning growth – in gauging the effectiveness of their classroom teachers. The Chamber believes jettisoning objective data-driven measures altogether in favor of subjective measures like classroom observations by school principals sends the message that “results don’t matter” and sets a troubling precedent for future progress in Indiana education. It’s worth noting that about 98% of Indiana teachers are rated “effective” or “highly effective” by their administrators. Other policy advocates, including the National Council on Teacher Quality, have joined the Chamber in opposing the proposed change to teacher evaluations.

House Bill 1009 (Various Welfare Matters), authored by Rep. Chuck Goodrich (R-Noblesville), passed the Senate Family and Children Services Committee this week on a vote of 9-0. The bill subsequently passed second reading by the full Senate. Supported by the Chamber, the measure provides that money earned by a student participating in a paid internship or related work-based learning experience does not impact the Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) benefits received by the student’s family. The Chamber believes work-based learning is key strategy in strengthening Indiana’s talent pipeline and supports removing barriers that could prevent students from engaging in these meaningful experiences.

House Bill 1082 (Various Higher Education Matters), authored by Rep. Bob Heaton (R-Terre Haute), passed the Senate Education and Career Development Committee 13-0. Supported by the Chamber, the measure makes a number of technical changes to state financial aid programs, including increased flexibility that enables students eligible for the EARN Indiana work-study program to participate in full-time internship opportunities during the summer term.

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

Taxation and Public Finance Senate Tax and Fiscal Policy Committee Hears RV Sales Bill

HB 1059 – Sales Tax on Recreational Vehicles Authored by Rep. Doug Miller (R-Elkhart)

Provides that for certain transactions involving a cargo trailer or recreational vehicle that occur after June 30, 2025, the state gross retail tax rate is the rate of the nonreciprocal state or foreign country (excluding any locally imposed tax rates) in which the cargo trailer or recreational vehicle will be titled or registered, as certified by the seller and purchaser in an affidavit prescribed by the Indiana Department of Revenue. Provides that for certain transactions involving a cargo trailer or recreational vehicle that occur after June 30, 2020, and before July 1, 2025, the transaction is exempt from the state gross retail tax regardless of whether the state or foreign country has a reciprocal agreement with Indiana. Provides that the seller and purchaser must certify the requirements of the provision in an affidavit prescribed by the department.

Chamber position: Support

The latest: Heard by the Senate Tax and Fiscal Policy Committee this week; no vote taken.

After receiving testimony, the chairman indicated that the bill is likely to be amended prior to a vote next week.

Indiana Chamber action/commentary: The history of this legislation, exactly what the bill does and the nature of the problem it addresses continue to be the subject of confusion and much discussion among the committee members. What it’s designed to do is remove impediments that Indiana RV dealerships face in sales to residents of eight states with which Indiana does not have reciprocity agreements regarding the collection of sales tax. Being forced to collect Indiana sales tax from these non-resident potential buyers who intend to register/title the RV in their home state puts the Indiana dealers at a disadvantage in competing with out-of-state dealers who do not require local sales tax to be collected from these same non-residents.

The Chamber has consistently supported all efforts to rectify this situation. Our testimony emphasized the illogical position of having policies in place that effectively make it more difficult for Indiana dealers to take advantage of selling RV products that are manufactured in such great volume within Indiana. The committee appears poised to pass an amended bill next week. Moreover, the prospects are good that it will not fall victim to the conference committee disagreements that resulted in a similar bill dying last session.

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

Economic Development Committee Hears, Holds Central Indiana Regional Development Bill

SB 350 – Central Indiana Regional Development Authority Authored by Sen. (R-Markle) Sponsored by Rep. Timothy Brown (R-Crawfordsville)

Authorize counties and municipalities within the Indianapolis metropolitan area to establish a central Indiana regional development authority pilot that will sunset on July 1, 2025. Requires counties and municipalities that wish to establish the development authority to adopt substantially similar resolutions to adopt a preliminary strategic economic development plan. Provides that the development authority shall be governed by a strategy committee composed of members selected according to the terms of the preliminary development plan adopted to establish the development authority. Specifies the duties of the development authority. Requires the development authority to prepare a comprehensive strategic economic development plan. Expands the definition of “economic development projects” under the local income tax statute to permit expenditures on projects and programs that will attract and retain businesses and talent. Codifies the establishment and governing provisions of the Indianapolis metropolitan planning organization.

Chamber position: Support

The latest: On Thursday, the House Ways and Means Committee held SB 350. Chairman Brown said that it will be on the calendar next week as “amend and vote” only.

Indiana Chamber action/commentary: Immediately upon the Senate passing SB 350 48-1 on February 4, the Chamber began lobbying members of the House to hear the bill in committee. Some committee chairs have been reluctant to hear a lot of bills during the second half, so the fact that SB 350 was heard was a small victory in itself.

Senator Holdman opened the hearing by giving a high-level overview of the bill’s genesis and evolution. (Originally it was a broader bill that included taxing authority, but the Chamber, working with the author, developed the amendment for the current central Indiana pilot). Advocates who testified in support of the bill included mayors Scott Fadness (Fishers) and Andy Cook (Westfield), the Association of Indiana Counties and the Indy Chamber.

The Chamber began testimony by sharing with the committee data indicating that the state is facing a major slowdown to the growth of its workforce. We provided data showing that the state ranks in the bottom half of all states in socio-economic metrics such as per capita income, high school graduation rates, college degrees, access to high-speed broadband, and obesity and smoking rates. We said that despite Indiana being widely regarded as “business friendly” there are many areas in which we must improve, and tackling these issues depends on grassroots and regional cooperation.

Our testimony concluded by reiterating the Chamber’s position that (1) SB 350 is a positive step in the right direction, (2) it gives central Indiana a starting point to develop a comprehensive, quality of place strategy and (3) it will serve as a pilot for future regional development statewide – something upon which the future well-being of our state relies.

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

Health Care Senate Insurance Does Not Move Amendment to Allow for Assignment of Benefits and Arbitration for Dispute Resolution for EMS Transportation

HB 1372 – Various Insurance Matters Authored by Rep. Martin Carbaugh (R-Fort Wayne) Sponsored by Sen. Eric Bassler (R-Washington)

Authorizes a local unit to establish and maintain: (1) an individual self-insurance program to provide health care benefits to its employees; and (2) a health savings account program under which employees may set aside funds tax-free to pay for medical expenses. Provides that a provider of ambulance service that transports a covered individual to an in-network facility or from an in-network facility to another facility shall not charge more than the amount allowed under the network plan applying to the covered individual’s coverage. Makes changes in the law concerning the permissible investments of life insurance.

Chamber position: Neutral (without amendment)

The latest: The amendment would have allowed an assignment of benefit by the individual for the emergency medical services (EMS) provider and allowed for arbitration in a dispute.

Indiana Chamber action/commentary: The Chamber has a long-standing policy that opposes assignment of benefits. An out-of-network provider is not entitled to receive a check as they are not a party to the contract because they aren’t in the network. Regarding the dispute resolution through arbitration, that is a line in the sand for employers – because if we allow it for EMS (though they are different than other providers), the physicians have already said that they want arbitration to be a part of their disputes as well.

We communicated these problems related to this amendment to Chairman Bassler. He subsequently changed the amendment to be a study committee on the issue.

Pharmacy Benefit Managers Bill in Spotlight in Senate Health and Provider Services Committee

HB 1042 – Pharmacy Benefit Managers Authored by Rep. Steve Davisson (R-Salem) Sponsored by Sen. (R-Fort Wayne)

Requires a pharmacy benefit manager (PBM) to obtain a license issued by the Indiana Department of Insurance (DOI) and sets forth requirements of the PBM. Provides for the DOI commissioner to adopt rules to specify licensure, financial standards and reporting requirements that apply to a pharmacy benefit manager. Sets forth requirements and prohibitions of a PBM. Allows a party that has contracted with a PBM to request an audit of compliance at least one time per year. Makes violations of the chapter concerning PBMs an unfair or deceptive act or practice in the business of insurance. Repeals the chapter of existing language on PBMs and moves the language concerning maximum allowable cost lists to the new chapter. Allows a PBM to obtain the license not later than December 31, 2020, in order to do business in Indiana and provide services for any health provider contract beginning January 1, 2021. (The introduced version of this bill was prepared by the Interim Study Committee on Public Health, Behavioral Health and Human Services.

Chamber position: Oppose in part

The latest: The bill was amended to encompass the language in SB 241, Sen. Brown’s PBM legislation. The measure then passed the Senate Health and Provider Services Committee 9-0 as amended.

Indiana Chamber action/commentary: The Chamber testified that we have consistently stated less regulation is more. Therefore, if legislation is going to be passed, we prefer Sen. Brown’s version over this bill. The Chamber further testified that TrueScripts founder Nathan Gabhart (a Chamber member) was a pharmacist and then created his own PBM. He has made suggestions/recommendations to SB 241, which Sen Brown has received. It is our recommendation that his suggestions be taken into serious consideration as this bill moves forward. Senator Brown indicated that there would be second reading amendments but no indication of what those might be.

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

EVENTS / INFORMATION

Legislative Agenda – The second edition of the Indiana Chamber 2020 Legislative Agenda, matching our positions to bills is online at www.indianachamber.com/agenda was distributed last week to legislators This document matches our policy positions (developed by employees from member companies and approved by our board of directors) to specific legislation introduced in the House and Senate. Votes on the bills contained in this document – those that make it to the House or Senate floor – will be used to score lawmakers in our annual Legislative Vote Analysis (www.indianachamber.com/lva).

The 2020 Legislative Directory will keep you connected with state legislators during the General Assembly session and beyond. It’s available as a handbook and app. Booklets are in stock and the app is ready to download. Order at https://www.indianachamber.com/directory!

Earlier this month, the Wellness Council of Indiana announced a new addiction treatment and recovery program via Centerstone, a mental health and addiction treatment services provider. Through the exclusive partnership, any Indiana employer can give their current or prospective workers a second chance through this award-winning model recognized by the U.S. Department of Labor. More information is available at www.wellnessindiana.org/secondchance.