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March 12, 2021 TOP STORIES One

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March 12, 2021 TOP STORIES One March 12, 2021 TOP STORIES One Broadband Priority Bill Clears Next Hurdle, While SPONSORED BY: Reid Health Another Awaits a Vote – Both Looking Similar SB 377 – Broadband Development Authored by Sen. Andy Zay (R-Huntington) Sponsored by Rep. Ed Soliday (R-Valparaiso) Establishes 1) Indiana broadband expansion fund for deposit and distribution of federal broadband funding, 2) the Indiana Broadband Connectivity Program and 3) the Indiana Broadband Adoption Program. The rural broadband fund provision is similar to the existing statute except that it amends the priorities for eligible areas, as well as the priorities for eligible projects to https://www.reidhealth.org/careers elevate those that will serve more households at a lower cost to the state. The connectivity program permits residents and businesses to submit their address to an online portal to report that they have slow broadband. Then, providers may bid on a grant to service those addresses. Via the adoption program, the state will provide financial assistance to an individual who reports through the public broadband portal that internet connectivity or broadband internet connectivity is available at the individual's address but they are unable to afford the service. HB 1449 – Broadband Development Authored by Rep. Soliday Sponsored by Sen. Eric Koch (R-Bedford), Sen. Mark Messmer (R-Jasper) and Sen. Andy Zay (R- Huntington) This bill specifies the following priorities for the awarding of grants from the fund after June 30, 2021. Extending eligible broadband service to rural areas (for which only available internet connections are at actual speeds of less than 50 mbps downstream), as well as to public school corporation buildings and rural health clinics (for which only available internet connections are at actual speeds of less than 1,000 mbps downstream). Also extends eligible broadband service so to ensure that every resident Indiana student less than 23 years of age has at the student’s residence an access point providing such connection. Finally, the bill establishes the Indiana Broadband Connectivity Program, under which the Indiana Office of Community and Rural Affairs (OCRA) must establish a public broadband portal. Through the portal, an individual or business may report that minimum broadband internet is unavailable to them. Grants may be awarded specifically to connect those individuals and businesses. Chamber position: Support for both The latest: On Monday, the House Utilities, Energy and Telecommunications Committee heard SB 377, but held the bill to amend and vote at a future hearing. Then on Thursday, the Senate Utilities Committee voted unanimously to recommend passage of HB 1449 (9-0). However, that bill has been recommitted to the Senate Appropriations Committee where it awaits a hearing date. Indiana Chamber action/commentary: This week was a big week for broadband. The two “leading” broadband funding bills were heard in committee and took the next step towards passage. As a reminder, the House passed a version of the budget bill (HB 1001) that calls for $250 million in new broadband funding during the next biennium. Representative Soliday is adamant that one or both of the bills heard this week will pass. However, he hopes that the two bills will resemble each other once they get through their respective second houses. He also mentioned a couple times this week (i.e. when his committee heard SB 377 and when he introduced HB 1449 in the Senate committee) that the process of finalizing language is stymied somewhat by the ever-evolving activity in Washington, D.C. Things are coming into focus a bit more after the passage of the fourth stimulus bill on Wednesday, which could send upwards of $3 billion to Indiana that the state would be permitted to use for broadband expansion. The Indiana Chamber testified in favor of both bills during their respective hearings. The Chamber’s preference is for designating the largest portion of broadband funds towards the connectivity program – arguing in testimony that 1) it offers the most efficient use of state funds by guaranteeing 100% adoption by residents and businesses who currently lack access to high-speed broadband, and (2) the status quo has, to date, failed to produce impressive results both in terms of accomplishing new connectivity opportunities and/or adoption rates. Regardless of which bill ultimately passes, it is likely that OCRA will be precluded from funding projects proposed by satellite internet service providers. This was an interesting twist to the bill as satellite technology holds a lot of promise if the goal is to expand high-speed broadband throughout Indiana – especially to our rural communities. While we wait to see where things land, it is important to note that high-speed broadband expansion has been a top Chamber legislative priority for over a decade. Both SB 377 and HB 1449 are giant steps in the right direction to ensure access to and adoption of high-speed broadband, regardless of the city, town or community in which an individual or business resides. Resource: Adam H. Berry at (317) 264-6892 or email: [email protected] Student Equity/Workforce Bill Gains Momentum With Unanimous Committee Vote SB 54 – FAFSA Requirement Authored by Sen. Jean Leising (R-Oldenburg); co-authored by Sen. Stacey Donato (R-Logansport), Sen. Dennis Kruse (R-Auburn) and Sen. Eddie Melton (D-Gary); co-sponsored by Rep. Bob Behning (R- Indianapolis) and Rep. Jeff Thompson (R-Lizton) The bill would require 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 or counselor waives the requirement due to extenuating circumstances. As amended, the bill also provides a “FAFSA completion improvement award” incentive for local schools. Chamber position: Support The latest: Passed by House Education Committee 13-0 and then recommitted to the House Ways and Means Committee for consideration. Indiana Chamber action/commentary: Completing the FAFSA qualifies students for a variety of financial aid opportunities available from the state and other sources. The Chamber views this priority policy as both a workforce development driver and a lever for breaking the cycle of generational poverty by placing more Hoosier students on the path to upward mobility. State data show that students from educated/affluent families are the most likely to complete the FAFSA while low-income and minority students are the least likely to do so. Strong advocacy from the Chamber and its coalition partners spurred the House Education Committee to amend and pass SB 54 with unanimous bipartisan support this week. The amendment, developed with support from House Ways and Means Committee members, includes a FAFSA completion award that provides a financial incentive for schools to increase the FAFSA-filing percentage for their low-income students – the group that most needs financial aid but is least likely to complete the FAFSA. Though few could argue the benefits for both students/families and the state in its original form, the bill’s evolution to an incentive-based approach seemed to sway lawmakers who were concerned that the policy (which has proved effective in other states) could be overly burdensome to local schools. Credit goes to Rep. Ed Clere (R-New Albany) for proposing the pay-for-performance approach, to Rep. Thompson for refining the mechanism for doing so through the state’s school funding formula and to Chairman Bob Behning (R-Indianapolis) for successfully shepherding the bill through the House Education Committee. Though it’s far too early in the process to declare victory, momentum seems to be building to ensure this common sense, consumer-friendly policy becomes state law. Resource: Jason Bearce at (317) 264-6880 or email: [email protected] House Takes Up Senate Bill on Business Personal Property ‘De Minimus’ Exemption 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. Chamber position: Support in Part (No position on the taxability of reward money) The latest: The bill was heard in the House Ways and Means Committee and held for possible amendment. Last year this bill passed the Senate but did not receive a hearing in the House. Indiana Chamber action/commentary: The primary objective of the bill is to base the $40,000 “de minimus” exemption threshold on the depreciated value of the property instead of the purchase or acquisition cost. The Chamber testified in support, citing the need to recognize depreciation in order to make the threshold reflect a true value-based threshold. We argued that a small business owner who bought equipment years ago at a cost that exceeds the $40,000 qualifying threshold by a small margin and is not worth anywhere near that amount anymore “shouldn’t be stuck paying tax on it forever.” Our testimony concluded with the suggestion that this bill is a “small fix with a small price tag, and it helps the very people they (the legislators) are trying to help right now: small businesses.” Some discussion focused on the administrative process involved in having to establish the assessed value rather than the purchase price in order to determine qualification for the exemption. Opponents focused on the possibility of appeals and the loss of revenue. We are in communication with the Ways and Means chair in effort to ensure the desirable outcome on the bill. Resource: Bill Waltz at (317) 264-6887 or email: [email protected] IN OTHER NEWS Taxation and Public Finance House Ways and Means Committee Reviewing DOR Bill SB 383 – Various Tax Matters Authored by Sen.
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