February 15, 2019 TOP STORIES

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1 February 15, 2019 TOP STORIES Chamber Pushing Venture Capital Transferability in Governor s Economic Development Package SPONSORED BY: Reid Health Senate Bill 563 Economic Development Authored by Sen. Travis Holdman (R-Markle) Makes a variety of changes to tax policy and tax incentive programs intended to promote and enhance economic development. The major components are: (1) moving to a market-based sourcing method for income apportionment for service companies; (2) a small business innovation voucher program to assist in research; (3) making the venture capital investment credit transferrable/saleable; (4) making the headquarters relocation credit available to small businesses; (5) including additional items to what qualifies for the Hoosier business investment tax credit; and (6) expanding the application of the redevelopment tax credit. Full details at The Latest: Held for amendment by the Tax and Fiscal Policy Committee. Chamber Action/Commentary: This bill embodies the Governor s economic development package. The Indiana Chamber testified in full support referring to its components as a thoughtful, well selected collection of meaningful changes. While supportive of all the provisions, we elevated the importance and positive impact of making the venture capital investment credit transferable. This element is something that the Chamber has laid the groundwork for and promoted for many years. Persistence pays off! Another aspect of significance is the change to how service providers income tax liability is determined. The change, generally speaking, will benefit companies that sell their services to out-of-state customers, avoid double taxing income and serve to remove a disincentive to companies locating in Indiana. Another notable provision will help small businesses obtain research assistance from universities. Beyond these items, the bill makes a number of additional useful refinements and modest expansions to existing tax credits all designed to make our economic development tools more effective.

2 Resources: Adam H. Berry at (317) or Bill Waltz at (317) or Bias Crimes Hearing on Monday Legislation to pass a bias crimes law takes center stage next week as SB 12, authored by Sen. Ron Alting (R-Lafayette) and Sen. Mike Bohacek (R-Michigan City), is set to go before the Senate Public Policy Committee Monday morning. This is a priority issue for the Indiana Chamber and we will be pushing for the most all-encompassing measure to be enacted. Senate Bill 12 does that and includes sexual orientation and gender identity among the list of protected categories. As we work to attract top talent from all over the U.S. and the world, individuals need to know that their friends and families will be safe from discrimination and welcome in our state. The Chamber s overriding goal is for a bill to pass in 2019 that would take Indiana off the list of just five states that currently don t have a bias/hate crimes law on the books. In addition to Indiana Chamber President Kevin Brinegar testifying at the public hearing, the Chamber has lined up several prominent business leaders to speak in favor of the bill s passage and on the impact it would have. Senate Bill 12 will need to be voted on next week in committee, where we expect a positive result. The bill could move to the Senate floor where things are anticipated to be more difficult quickly for consideration, with the voting deadline for the first half of the session being February 26. The Chamber and its coalition are continuing a full-court press on this issue with senators. Resource: Adam H. Berry at (317) or aberry@indianachamber.com Priority Asbestos Trust Bill Passes House Judiciary by Slim Margin House Bill 1181 Asbestos Litigation Authored by Rep. Matt Lehman (R-Berne) Requires certain disclosures regarding asbestos trust claims in civil asbestos actions. Requires a defendant to identify additional trust claims that a defendant believes a plaintiff is eligible for in a written motion. Requires a defendant to disclose, in the defendant s motion, the basis for the defendant s belief that a plaintiff is eligible for an additional trust claim. Prohibits a defendant from filing an additional motion alleging plaintiff eligibility for additional trust claims in certain instances. The Latest: The bill was amended to include language that requires a defendant to disclose in their motion the asbestos trust claims for which they believe that a plaintiff is eligible. No new testimony was allowed from the public. The bill ultimately passed the House Judiciary Committee by the narrow margin of 7-6. Chamber Action/Commentary: There was a bit of drama as the bill had to be held until Rep. Tony Cook (R-Cicero) returned to cast the tie-breaking vote.

3 This is an Indiana Chamber priority bill and would bring needed transparency to the legal process. It does not stop anyone from bringing suit against a company they believe caused exposure to asbestos. What the bill does do is allow a jury to have all the information to make an informed decision. The Chamber is working with coalition members to secure votes for passage of the bill on the House floor. Resource: Mike Ripley at (317) or mripley@indianachamber.com House Again Rejects Township Reform, Common Sense House Bill 1650 Elimination of Township Advisory Boards Authored by Rep. Cindy Ziemke (R-Batesville) Eliminates three-member township boards that oversee the township trustee in all townships except in Marion County. Full details at The Latest: The bill was defeated by the full House on Tuesday. Chamber Action/Commentary: Last year, the House majority let die legislation that would have required the merger of over 300 of the smallest townships in the state (those with less than 1,200 residents). This week, the House voted down a bill that would have eliminated township boards some nearly 3,000 elected officials whose role can be easily replaced by the county council. Both measures represented modest, practical and reasonable steps to reform the structure of township government in Indiana. But both proposals ran into opposition from those with a direct interest in propagating a system that defies common logic. The sheer number of townships in Indiana, 1,005, evidences the need for some streamlining of functions. Additionally, there is a need for county involvement in order to compare township operations with an eye toward best practices and broader accountability. The Indiana Chamber has steadfastly advocated for reforms to this structure and the reallocation of services performed by this unneeded layer of government. Township government, however, has been resilient in resisting reform and protecting its turf. Resource: Bill Waltz at (317) or bwaltz@indianachamber.com IN OTHER NEWS Labor Relations Worker s Comp Benefit Increase Heard in Committee, Fails on Tie Vote Senate Bill 358 Worker s Compensation Authored by Sen. Karen Tallian (D-Portage) Increases benefits for injuries and disablements by 10% each year for three years, beginning on July 1, Chamber Position: Oppose The Latest: The chairman of the Senate Pensions and Labor Committee, Sen. Phil Boots (R- Crawfordsville), took a vote on the bill and it failed 5-5. It is uncertain whether we will be hearing more

4 of this issue before the committee deadline. Chamber Action/Commentary: Senator Tallian stated that there was an increase in benefits each year from She indicated that employers premium rates had lowered over the last three years. Chairman Boots amended the bill and reduced the increase to 2% each year before the final committee vote. The Indiana Chamber stated its opposition to the increase unless there is a package deal that assists employers along with the benefit increase for employees. IOSHA Bill Responding to Worker s Death Moves in Committee; Chamber Gets It Improved House Bill 1341 Occupational Safety and Health Authored by Rep. Martin Carbaugh (R-Fort Wayne) As introduced, provides that if an employer willfully violates any standard, rule, order or provision of the Indiana Occupational Safety and Health Act and the violation results in the death of an employee, the commissioner of labor shall assess a civil penalty of $100,000 for each employee whose death results from the violation. Chamber Position: Neutral The Latest: The bill was amended so that an employer who knowingly violates any standard, rule or order that involves an employee fatality shall be assessed a civil penalty of not less than $9,472 for each violation and may be assessed a civil penalty of up to $132,598. Previously in the bill, the $100,000 amount was a flat fine; this new figure will be based on an investigation and could be less or reach a maximum of $132,598. The bill unanimously passed the House Labor Committee. Chamber Action/Commentary: The bill attempts to address a tragic death that occurred in January 2018 at the now-closed Fort Wayne Plastics (which was later bought out by a St. Louis firm). Shacarra Hogue (age 23) was on her third day on the job when she was crushed by a press that she stepped up into as a coworker started the machine. Fort Wayne Plastics had removed safety features from the press and Hogue used a stepladder to enter it. The company received a $6,300 fine for the violation. Hogue s parents, who supported the bill, testified that she was hired as a temporary worker and had no training or supervision. The Indiana Chamber testified that the actions of this company were indefensible and offered condolences to the family. We appreciate the discussion that we have had with Rep. Carbaugh, who is trying to do something helpful for employee safety that does not hurt business in the process. The Chamber recommended changes to the amendment that was offered and Chairman Heath VanNatter (R- Kokomo) made those changes via a chairman s amendment. As passed by the committee, the Chamber is officially neutral on the bill. Resource: Mike Ripley at (317) or mripley@indianachamber.com Education and Workforce Development Wide-Ranging Bill That Includes Career-Technical Education Heard in Committee House Bill 1629 Various Education Matters Authored by Rep. Robert Behning (R-Indianapolis)

5 Bills includes several provisions aligned with Indiana Chamber policy priorities, including expansion of state-supported internships and career-technical education (CTE) programming for high school students and a new high school graduation requirement designed to increase student access to financial aid for further education and workforce training. The Latest: Heard by House Education Committee this week with a committee vote expected next week. Chamber Action/Commentary: This bill includes proposals that would increase student access to workbased learning and technical education programming. The bill would expand the state s EARN Indiana program, which currently supports internship opportunities for low-income college students, to include high school students as well. The EARN program has been embraced by Hoosier students and employers alike, providing meaningful work-and-learn experience for students and a cost subsidy to employers who provide these opportunities. The Indiana Chamber helps connect students and employers to the EARN Indiana funds through the Indiana INTERNnet platform and welcomes the opportunity to increase statewide access to quality internship experiences for both high school and college students. What s more, HB 1629 would make student completion of the Free Application for Federal Student Aid (FAFSA) a high school graduation requirement, albeit with an opt-out option. The FAFSA is a prerequisite for accessing need- and merit-based financial aid from the state, federal government and related sources, including the high-demand, short-term certificate programs supported by the Governor s Next Level Jobs initiative. The bill also encourages school districts Career and Technical Education Centers to allow students who attend charter schools and non-public schools to access their CTE programming. The bottom line: HB 1629 would help more Hoosier students gain the relevant work experience and skills Indiana employers need and our state s economy demands. Resource: Jason Bearce at (317) or jbearce@indianachamber.com Taxation and Public Finance Revisions Called for in Department of Revenue Bill; Chamber Opposes Two of Them Senate Bill 565 Department of State Revenue Authored by Sen. Travis Holdman (R-Markle) Contains numerous changes to the administrative procedures governing the operations of the department of revenue. Full details at in Part/Oppose in Part The Latest: Passed the Senate Tax and Fiscal Policy Committee and now headed to the Senate floor for consideration. Chamber Action/Commentary: This is the Department of Revenue s (DOR) agency bill a compilation of wish-list items things the agency wants to help it do its job. The Indiana Chamber supports the

6 department in its effort to tweak the statutes in ways that improve the administration of the agency s functions, but this bill also has a history of including changes that are not viewed favorably by the taxpayer community. While the bulk of this bill falls into the first category, a couple sections propose changes that the Chamber strongly opposes. These proposals would unnecessarily restrict the rights of taxpayers. One impairs the ability of taxpayers to substantiate their position in a tax dispute. The other limits the taxpayers ability to collect interest on overpayments. The Chamber explained its objections to the committee, and we will be working to see if the issues can be worked out with DOR. Holdman suggested he might address our concerns with a second reading amendment. Administrative Law Judge Pool Bill Refined House Bill 1223 Administrative Law Judges Authored by Rep. Greg Steuerwald (R-Danville) Creates an office to administer a pool of administrative law judges to adjudicate claims arising out of multiple state agencies. A list of exception for certain entities is included in the bill. Full details at The Latest: The bill was passed unanimously by the House Judiciary Committee. Chamber Action/Commentary: The Indiana Chamber has been working with the author to ensure that this bill encompasses only those agencies with an organizational structure that would be enhanced by utilizing administrative law judges drawn from a pool as contemplated by this bill. Certain exemptions were warranted based on the subject matter expertise and independence of administrative law judges employed by some state entities. The Chamber is grateful to the author for listening and working with us in the difficult exercise of determining which agencies and entities would be subject to this legislation and which needed to be excluded. More Movies Coming to Indiana? House Bill 1070 Film and Media Production Rebate Authored by Rep. David Frizzell (R-Indianapolis) Authorizes the Indiana Economic Development Corporation (IEDC) to approve and issue a film and media production expenditure rebate to a qualified applicant that proposes to make a qualified production expenditure of at least $500,000 in Indiana. Requires the IEDC to enter into an agreement with a qualified applicant for the rebate and specifies the terms that must be in the agreement. Establishes the criteria for approving a rebate and the procedures for claiming a rebate. Provides that the IEDC may not issue a rebate to a qualified applicant after December 31, Chamber Position: Proposal warrants consideration (no official position at this time). The Latest: Held by the House Ways and Means Committee. Chamber Action/Commentary: The Chamber does not have a specific position on this legislation but

7 encouraged the committee to give the proposal serious consideration and acknowledged the potential benefits that might be realized if such a rebate program is put into law. Resource: Bill Waltz at (317) or bwaltz@indianachamber.com Energy/Environment/Infrastructure Chamber Backs Protection of Key Workers Senate Bill 304 Intimidation Against Utility Workers Authored by Sen. Eric Koch (R-Bedford) As introduced, provides that a person who communicates a threat to another person with the intent of interfering with the provision of utility service or communications service for a dwelling, building or other structure commits intimidation, a Class A misdemeanor. Provides that the offense is a Level 6 felony if the person to whom the threat is communicated is an employee or agent of a utility company or a communications service provider engaged in the performance of the person s duties on behalf of the utility or the communications service provider. The Latest: The Senate Committee on Corrections and Criminal Law heard the bill on Tuesday and adopted an amendment to the bill that would add this protection to all workers going onto private property if their occupation requires them to do so. The bill passed unanimously 8-0 and is now eligible for further action on the Senate floor. Chamber Action/Commentary: This bill provides additional needed protection to workers that often interface with people in difficult situations without the ability to protect themselves. Needed Fix for Distressed Water/Wastewater Utilities Garners Unanimous Approval Senate Bill 472 Utility Rates and Acquisitions Authored by Sen. Eric Koch (R-Bedford) This bill provides that an order affecting rates of service may be entered by the Indiana Utility Regulatory Commission (IURC) without a formal public hearing in the case of any public or municipally owned utility that serves less than 5,000 customers or has initiated a rate case on behalf of a single division of the utility and that division serves less than 5,000 customers and has an IURC-approved schedule of rates and charges that is separate and independent from that of any other division of the utility. (Current law permits the IURC to enter a service rate order without a public hearing only in the case of a public or municipally owned utility that itself serves less than 5,000 customers.) Changes the term distressed utility to offered utility for purposes of provisions regarding acquisition of water or wastewater utilities. The Latest: Heard this week by the Senate Utilities Committee and passed The bill is now eligible for further action on the Senate floor. Chamber Action/Commentary: The Indiana Chamber testified in support of this bill, which tweaks existing law and adds some clarification to issues that have recently been litigated. It should reduce litigation

8 costs of water/wastewater utilities going forward that would otherwise have been rolled into utility rates as an increase. It promotes efficiencies in the process and economies of scale in water infrastructure. This is consistent with findings in the Chamber s 2014 water study, goals of the Indiana Vision 2025 plan and our long-term position on water resources. Resource: Greg Ellis at (317) or gellis@indianachamber.com Health Care Cost Sharing Bill Heard in House Insurance House Bill 1307 Health Care Service Cost Sharing Authored by Rep. Ron Bacon (R-Chandler) Requires a state employee health plan, a policy of accident and sickness insurance, and a contract with a health maintenance organization to provide coverage for treatment of ectodermal dysplasia. Chamber Position: Oppose The Latest: Representative Martin Carbaugh (R-Fort Wayne), House Insurance Committee chairman, held the bill and did not take a vote on it or any amendments. The Chamber expects the bill to be dead for the rest of the session Chamber Action/Commentary: The bill would allow for a manufacturer s drug coupon to be used toward a patient s insurance plan deductible. The National Hemophilia Foundation, PHARMA, the American Cancer Society and Little Red Door Cancer Agency all favored the bill. Care Source, Anthem, the Indiana Chamber and the Indiana Association of Health Plans opposed the bill. The carriers testified that this increases cost to the plan and causes the patient to stay on a more expensive drug. The Chamber testified that we have a standing position to oppose mandates on health insurance plans. Further, this bill impacts the state health plan financially (state budget), policy of accident and sickness (which includes individual and group market) and health maintenance organizations. Additionally, a full 80% of the market isn t even covered by the bill. An amendment was also introduced to exempt the state health plan. The fiscal impact reveals three options because of the significant cost to the state: 1) greater employee cost share; 2) reduction in benefits or elimination; or 3) lowering of wages. The same impacts to the state plan in the introduced version would apply to employers with the most likely result a cost-shifting to employees. So, the bill would actually be driving up the co-pays and cost shares on the people who you are attempting to help! Resource: Mike Ripley at (317) or mripley@indianachamber.com Quick Hits Meeting With Sen. Braun; Wage Assignment Bill Strategically Pulled; Meaningful School Accountability Moves On On the federal front On February 11, the Indiana Chamber s Greg Ellis and Jeff Brantley met with U.S. Sen. Mike Braun in his Indianapolis office. The Chamber highlighted key issues that its membership has

9 identified. Some of those issues include the continued concern over tariffs/trade, the negative impacts of a medical device tax and general tax issues. Senator Braun also highlighted areas of interests that he is looking into health care, infrastructure, tax issues and the federal budget, among others. The senator said that he looks forward to working with the Chamber and its members. We conveyed our appreciation for the meeting and establishing good lines of communication on matters most important to the Hoosier business community. House Bill 1404 (School Accountability), authored by Rep. Tony Cook (R-Cicero), passed committee this week 8-4. The Chamber-backed measure aims to align the state s A-F school accountability system, which is currently based on standardized test scores and graduation rates, with metrics more closely linked to students long-term success. House Bill 1410 (Wage Assignments for Uniform Rentals), authored by Rep. Jack Jordan (R-Bremen) was removed from the House calendar on Thursday. The Chamber-supported bill provides that a wage assignment may be made to pay for the rental or use of uniforms as well as the purchase of equipment needed for a job. The reason for the bill being pulled: House Republicans are waiting on a similar measure, SB 99 (which passed the Senate 49-0). Look for SB 99 to be heard in the House Labor Committee and amended to be retroactive to 2015 as HB 1410 was. This is an important bill to companies that may rent clothing for their employees. The Chamber will be working to secure a hearing in the House Labor Committee; Chairman Heath VanNatter (R-Kokomo) is the main House sponsor. House Bill 1182 (Worker s Compensation), authored by Rep. Matt Lehman (R-Berne) was unanimously passed by the House This Chamber-supported bill clarifies who is responsible for worker s compensation for volunteer firefighters (it wouldn t be employers). The Senate sponsor is Sen. Phil Boots (R-Crawfordsville), who is also chairman of the Senate Pensions and Labor Committee. The Chamber anticipates this bill will be moving in the Senate and will be pushing to ensure that happens. Environmental Rules Board Rulemaking Concerns Addressed The Indiana Environmental Rules Board (ERB) convened on February 13 to vote on pending rules and deal with other matters. Prior to the meeting, the Chamber contacted the Indiana Department of Environmental Management (IDEM) with concerns over Draft Rule # This rulemaking proposes amendments to 329 IAC 3.1 that would update the hazardous waste rules to be consistent and equivalent with recently promulgated federal hazardous waste rules; it also proposes technical amendments, clarifications and corrections to existing hazardous waste rules. Essentially, it adopts sections of the Code of Federal Regulations. What was unclear is whether they were the most up-to-date standards and were, therefore, no more stringent that current federal law. IDEM pulled the rulemaking from the ERB agenda for further review. The proposed rule will be heard at the ERB s May 2019 meeting. House Bill 1580 (Coverage for Ectodermal Dysplasia Treatment), authored by Rep. Mara Candelaria Reardon (D-Munster), died in committee 5-6. Originally the bill was not to be voted on. This health mandate would have required a state employee health plan, a policy of accident and sickness insurance, and a contract with a health maintenance organization to provide coverage for treatment of ectodermal dysplasia. The Chamber opposed the bill due to the mandate; we were the only organization to testify on the bill. Resources: Greg Ellis at (317) or gellis@indianachamber.com; Jason Bearce at (317) or jbearce@indianachamber.com; Mike Ripley at (317) or mripley@indianachamber.com

10 EVENTS/INFORMATION The 2019 Legislative Directory will keep you connected with state legislators during the General Assembly session and beyond. It s available as a handbook and app. UPDATE: Booklets are now in hand and preorders have been processed for quick shipment. For additional orders: The first edition of the Indiana Chamber 2019 Legislative Agenda is now online at 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. We plan to use votes on the bills those that make it to the House or Senate floor contained in this document in our annual Legislative Vote Analysis. March 12 Chamber Day Dinner (formerly Legislative Dinner) Join top policymakers and business leaders from throughout the state at the premier legislative event of the year, held at the Indiana Roof Ballroom. The keynote will be delivered by Arthur C. Brooks, president of the American Enterprise Institute and best-selling author. Register to attend at