Week Ending April 28, 2017 – Legislative Summary
The 120th Indiana General Assembly adjourned sine die in the early morning hours of April 22. The final week of the legislative session included work on most major legislative initiatives from the governor’s office and the House and Senate. This session, 1,261 bills and joint resolutions were introduced. At the end, 271 bills and one joint resolution made it through the legislative process. Gov. Holcomb has vetoed one bill, HB 1523, which deals with search fees for public records.
Passage of Indiana’s next biennial budget highlighted the conclusion of the 2017 legislative session. The two-year $32 billion state budget lawmakers approved is balanced, has $1.9 billion in reserves, and provides funding increases for education, public safety and fighting drug abuse. Highlights of the budget include increasing K-12 funding by $345 million and university operating funds by $91.3 million, providing Indiana State Police and other state law enforcement officers with a pay increase to make their salary levels competitive with other states, and investing in programs to help Hoosier veterans.
The budget also includes $10 million for a new drug czar, $22 million to expand the state’s preschool pilot program, and $30 million to fund much of Gov. Holcomb’s economic development plans, which include subsidizing direct flights from Indiana airports and planning a new port on the Ohio River. It also provides $20 million for the Indiana Biosciences Research Institute in Indianapolis and gives Holcomb the flexibility to use $250 million from what his office is calling the Next Level Trust Fund to spur venture capital investments.
Legislation on road and infrastructure funding marked another key priority this session. HEA 1002 is a long-term funding plan that increases the gas tax and over time transfers additional sales tax revenues to roads. By 2024 the plan would generate more than $1.2 billion in new revenue for state and local road funding annually, according to legislative leaders. In 2018, it would result in $617 million in new money: $357 million for state roads and $260 million for local roads.
The funding plan increases the current 18-cent-per-gallon gasoline tax by 10 cents, an estimated $5 extra per month at the pump for the average driver. The gas tax increase in itself would result in $300 million in additional revenue in 2018. The special fuel tax, currently 16 cents per gallon, and the motor carrier surcharge tax, currently 11 cents per gallon, would also increase by 10 cents per gallon. All fuel tax rates would be indexed annually using a formula that incorporates inflation and Indiana personal income growth, meaning the taxes will likely increase over time. More fuel tax revenues will be dedicated to road construction and maintenance than before.
It also adds a new $15 annual statewide infrastructure improvement fee on all passenger vehicles registered in the state and increases registration fees 25 percent for trucks. Electric vehicles registered in the state have a new $150 annual fee and hybrids have a $50 annual fee. Those fees will be directed to a matching fund for local roads.
HEA 1002 also requires the Indiana Department of Transportation to study tolling and submit a waiver to the federal government that if approved would allow tolling on existing roads.
A bevy of education issues came before the General Assembly this session. The school funding formula in the state budget is closely followed by all schools in the state. In addition to the funding plan, lawmakers passed HEA 1003 which sets out a plan for the statewide testing program previously known as ISTEP. The new system will be called ILEARN and would be used for the first time in 2019, meaning ISTEP still has one more year of life. In the meantime, the Indiana Department of Education will be tasked with developing the new test and finding a vendor.
The expansion of the state’s preschool program was approved by the House 81-16 and the Senate 31-19. HEA 1004, authored by Rep. Bob Behning (R-Indianapolis) adds 15 counties to the original five-county program and increases spending by $10 million. It sets aside another $1 million for an online preschool program. Expanding the program was a major initiative of Gov. Holcomb’s agenda.
A bill to make the Superintendent of Public Instruction an appointed, rather than elected, position is headed to Gov. Holcomb’s desk. HEA 1005, authored by Speaker Bosma (R-Indianapolis), was another legislative priority for Gov. Holcomb. The original House version of the bill made the state schools superintendent an appointed position beginning in 2021. However, the Senate had defeated their version of the bill earlier in session. Therefore, the Senate had to make changes in order to comply with Senate Rules about hearing a bill that had already been voted down. Those changes include pushing the date back to 2025 and adding qualifications, including a background in education and a two-year residency requirement.
Alcohol issues became a major discussion late in session after two gas stations received alcohol permits to sell cold beer. Indiana’s alcohol laws date back to the Prohibition Era and many issues, such as no carryout sales on Sunday, remain embedded in the law. Each time these issues are discussed it opens a whole new dialogue about the industry as a whole. There is a growing push among lawmakers to incorporate a multi-year examination of the state’s alcohol laws in order to address market changes since the laws were adopted. In the end, the House and Senate approved legislation that would not allow the gas and convenience store to renew two licenses after April 2018.
It was an eventful legislative session this year. By measure of priority agenda items, Gov. Holcomb had a successful first session as the state’s new governor. The Digest of Enactments is a good reference to review all legislation that passed this session. Legislative Council will meet sometime in late May to assign interim study committee topics and begin setting the stage for the 2018 session.
Successful Legislation 2017
SB 303: Direct Primary Care Agreements (Koch)
- Status: Signed by the Governor on April 21
- Specifies that a direct primary care agreement is not insurance
- Specifies that a primary care provider or an employer of primary care provider that enters into a direct primary care agreement is not required to obtain an insurance certificate of authority
- Specifies requirements that must be included in a direct primary care agreement
HEA 1318: Insurance Matters (Carbaugh)
- Tthe IDOI omnibus bill, authored by House Insurance Chairman Martin Carbaugh (R – Ft. Wayne), includes the following pertinent items: Provides that a USPS intelligent mail bar code tracking record, a certificate of mailing, or another similar first class mail method may be used as proof of mailing. Provides that an insurance producer education course may concern sales, motivation, psychology, and time management up to a maximum of four hours during a renewal period. Amends the description of an extraordinary dividend or distribution for purposes of the insurance holding company system law. Allows a person to exercise certain rights connected to a netting agreement, qualified financial contract, or similar agreements without respect to any provision of IC 27. Defines “cyber liability” for purposes of the tort claims act and allows the state to purchase a policy of insurance to cover cyber liability risks. Adds SB 233 regarding innocent co-insureds. Calls for an interim study on the topic of statutory incorporation by reference in IC 27 of documents of the National Association of Insurance Commissioners.
Failed Legislation 2017
- SB 72: Coverage for Pharmacist Care (Grooms)
- SB 173: Dental and Optometry Service Coverage (Leising)
- SB 304: Individual Out-of-State Health Insurance (Koch)
- SB 305: Group Health Coverage for Farmers (Koch)
- HB 1028: Dental and Optometry Service Coverage (Bacon)
- HB 1059: Coverage for In Vitro Fertilization (Shackleford)
- HB 1138: Publication of Medicare information (Braun)
- HB 1139: Out-of-State Health Insurance (Braun)
- HB 1140: Hospital Publication of Contracts (Braun)
- HB 1273: Health Provider Notice to Covered Individuals (Baird)
Week Ending April 14, 2017
The Indiana General Assembly is nearing the conclusion of the 2017 legislative session set to adjourn sine die on Friday, April 21. This week, the House and Senate voted on bill concurrences in addition to conference committees taking place. Both chambers will begin voting on conference committee reports next week. In order to be considered for a vote, a conference committee report must contain the signatures of four conferees, typically one member from each of the four caucuses. However, on contentious legislation conferees can be replaced if their refusal to sign the report is seen as a roadblock in passing the legislation.
On Wednesday, the legislature received the April update of the state revenue forecast. The forecasters anticipate more revenue available to the state than what was initially predicted when the forecast was first revealed in December. For fiscal year (FY) 2017, which ends on June 30, the state is exceeding revenue expectations by $123.9 M. For FY 2018, the forecast predicts $107.4 M more than the December forecast, for total revenue of $15,588.2 M. For FY 2019, the forecast predicts $93.8 M more than the December forecast for total revenue of $16,180.8 M.
We expect late evenings next week as the legislature works to adopt conference committee reports that proceed out of the Rules Committees in both chambers.
Week Ending April 7, 2017
This week marked the final week of legislative activity before conference committees begin. As bills pass each chamber, the original author can either concur or dissent on changes that the opposite chamber made to their bill. The General Assembly constantly updates the conference committee grid with announcements of a bill concurrence or dissent, conferees and advisors, and scheduled meeting times. Conference committees can often meet with very short notice. This process will continue the next two weeks as the Indiana General Assembly is set to adjourn sine die on April 21.
The Senate passed its state budget proposal Thursday by a vote of 39-9. The $32.1 billion Senate plan would spend slightly more than the House proposal. HB 1001 includes a $358 million increase for K-12 education, but it would provide $6 million less per year than the House and Gov. Eric Holcomb wanted for the state’s preschool program. A state fiscal forecast will be released next week which will guide the final negotiations of the biennial state budget.
The Senate also approved another key piece of legislation this week dealing with road and infrastructure funding. HB 1002 was approved by a vote of 34-13. This bill will be another conference committee battle between the House and Senate. Both House and Senate versions include a $15 vehicle registration fee, a 10-cent gasoline tax increase and a provision giving the governor authority to seek interstate tolling. Differences include the Senate’s proposed $5 fee on tires and fee increase on commercial vehicles. The House version moves all of the proceeds from the state’s sales tax on gasoline to roads and would fill the resulting hole in the budget with a higher cigarette tax. The cigarette tax increase was removed from HB 1001 by the Senate.
The alcohol lobby has been quite busy the past few weeks as issues have heated up near the end of session. One particular part of Indiana law has risen to the forefront amid a controversy that recently surfaced. Under Indiana law, only liquor stores can sell cold beer for carryout. Grocery stores and convenience stores cannot. A convenience store, with a restaurant conversion, applied and was approved for a permit by the Indiana Alcohol and Tobacco Commission to serve cold beer by following numerous strict guidelines.
Some have described this as a loophole. However, it has been made clear this is perfectly legal under current Indiana law. Once this issue was discussed in House and Senate Public Policy Committees, lawmakers quickly realized the wide-reaching effects any small tweak to the alcohol code would have on the entire industry. These discussions led lawmakers to push for a study of the state’s alcohol laws.
As it stands now, the House version, SB 358, was not called down on third reading by its sponsor, Rep. Ben Smaltz. Therefore, the current Senate version of HB 1496 will be the vehicle during conference committee discussions. The House amended a winery bill that would have enabled this particular convenience store, as well as a handful of other businesses, to keep its current alcohol permit which allows them to sell cold beer. The legislation also called for a study to allow lawmakers ample time to review and possibly rewrite the state’s alcohol code.
The Senate has taken a different approach passing a version calling for establishments that want to sell cold beer for carryout prove that 60-percent of their sales come from on premise consumption. Additionally, the Senate version provides the convenience store permit at issue would expire at the end of the year.
We are now in the midst of the conference committee process the next two weeks. Conference committees are a hectic and often times unpredictable process as lawmakers finalize legislation and make deals to accomplish caucus goals.
Week Ending March 17, 2017
The second half of session is in full-swing now as Statehouse committees got to work this week. The budget bill, HB 1001, continues to be the main focus in the Senate Appropriations Committee. State agencies, universities and others presented to the committee on their various funding requests. Chairman Luke Kenley (R-Noblesville), plans to hold a committee vote on HB 1001 on March 30.
The Senate continues to differ from the House on their plan for preschool funding in Indiana. The Senate Education Committee amended HB 1004 to mirror their own version of the legislation to expand state-funded preschool and offer additional funding to other early learning initiatives. The amendment cuts the proposed increase for the On My Way Pre-K program from $20 million to $6 million during the next two years. It also creates a new fund to help families pay for virtual preschool classes. The amended bill now heads to the Senate Appropriations Committee.
Two full weeks of committees remain as the committee report deadline in both chambers is April 3.
Week Ending March 10, 2017
The Indiana General Assembly kicked-off the second half of session this week. Just below 30 percent of bills introduced this session made it past the halfway point. 675 House Bills were introduced and 164 are still alive. 570 Senate Bills were introduced and 198 are still alive. There were six House Joint Resolutions introduced and zero made it past the halfway point. Out of ten Senate Joint Resolutions introduced, only one made the cut: SJR 7, the proposed constitutional balanced budget amendment. Authored by Sen. Brandt Hershman (R-Buck Creek), SJR 7 provides that the total amount of expense appropriations enacted by the Indiana General Assembly for a biennial budget may not exceed the estimated revenue of the state in the biennial budget period.
The Senate hit the ground running first thing Monday morning with an initial hearing on the budget bill. Budget hearings will continue on a regular basis as the legislature discusses the biennial budget plan. An important budget forecast will be released in mid-April. This budget forecast is significant for fiscal leaders as they craft the budget before the end of session.
Committees on the House side are also gearing up as legislators work to hear a bevy of bills and get them moving along in the process. Three weeks of committee hearings remain as the committee report deadline of April 3 approaches.
Week Ending February 24, 2017
One of Gov. Holcomb’s agenda items encountered a rocky path in the Senate this week. House Republican and Senate Republican leadership also backed legislation that would make the Superintendent of Public Instruction an appointed position, following the term of current State Superintendent Jennifer McCormick. Surprisingly, SB 179 failed in the Senate by a vote of 23-26.
There has been discussion regarding a Senate rule which provides that when a bill dies or is defeated, bills with “that exact language or substantially similar language shall be considered decisively defeated and shall not be considered again during the session.” This rule is unique to the Senate. However, it is unlikely the issue will be considered dead and instead will be resurrected in some form or fashion this session. The House version of the issue contained in HB 1005 passed by a vote of 68-29.
Another overarching topic this session dealing with preschool funding has received pushback from some fiscal leaders. Gov. Holcomb asked the legislature for a $10 million a year increase to the On My Way Pre-K program. Senate Appropriations Chair Luke Kenley, R, Noblesville, amended SB 276 in committee this week to provide for a $3 million per year expansion instead of $10 million per year. The amended bill also allocates $1 million to a preschool program that would be taught at home. SB 276 will be up for a vote in the full Senate next week.
Governor Eric Holcomb signed the first bill of the session into law this week. House Enrolled Act 1507, authored by State Rep. Ed Soliday, R, Valparaiso, provides more options for communities to transport Hoosier students with developmental disabilities. HEA 1507 is the first bill Gov. Holcomb has signed into law as Indiana governor and the first bill of the 2017 legislative session to make its way to his desk. It passed both chambers of the General Assembly unanimously.
The first half of the 2017 Indiana General Assembly will conclude next week as the House wraps up on Monday and the Senate on Tuesday. The state budget, HB 1001, will be up for a third reading vote in the House on Monday. Legislators will return to the Statehouse on March 6 to begin the final half of session.
February 14, 2017
Week Ending January 27, 2017
The House Roads and Transportation Committee held a combined meeting this week with the House Ways & Means Committee to discuss a plan for road and infrastructure funding contained in HB 1002, authored by Rep. Ed Soliday (R, Valparaiso). The Indiana Department of Transportation (INDOT) provided information on what is needed in order to maintain and improve statewide road conditions. INDOT said an average of $1 billion per year over the next 20 years will be required.
INDOT’s funding breakdown includes:
- $390 million per year to get 95 percent of the current pavement it maintains up to a “fair or better” rating. Indiana roadways currently carry an 89 percent rating.
- $400 million per year to get 98 percent of the approximately 5,600 bridges up to a “fair or better” rating. Currently, 94 percent of state-maintained bridges reach the mark. Some 45 percent of the bridges for which INDOT is responsible are 15 years of age or older and could need to be replaced over the next five years.
HB 1002 was amended in committee and approved by a vote of 8-5. Key provisions include the following:
- An initial 10-cent increase in the state gas tax.
- Possible further increases each year after based on inflation and wages. An amendment to the bill added Wednesday would cap any one-year increase at one penny.
- New registration fees on all vehicles.
- A slow shift in spending of sales tax revenue from gasoline so that it is eventually all spent on roads.
The bill also provides that INDOT can apply to the federal government for an interstate waiver which could allow tolling on roads, after a study by state transportation officials is completed. A full summary of what is currently contained in the bill is provided in the fiscal impact statement.
Discussion on the terminology of the funding increase continues to go back and forth: is it a tax or is it a user fee? That answer depends on who you ask.
Hundreds of Hoosiers rallied at the Statehouse on Wednesday during a hearing on SB 276, authored by Sen. Travis Holdman (R, Markle). Rallies took place in support of the All IN 4 Pre-K coalition to lobby lawmakers to grow the state’s existing pre-k program. The state currently funds the pilot On My Way Pre-K program for low-income families in Marion, Allen, Jackson, Lake and Vanderburgh counties. More than 2,400 children participated in the second full year of the program.
Pre-k advocates are asking for an additional $50 million in state funding to meet the growing demand for these programs across the state. There is also a House bill on this matter, HB 1004, which will be heard next week.
A proposal to increase salaries for statewide elected officeholders stalled this week. Authored by Sen. Randy Head (R, Logansport), SB 60 as introduced specified that (1) beginning January 11, 2021, the salary of the governor is equal to the annual salary of a circuit court judge in Marion County; and (2) beginning January 1, 2018, the salary of certain state elected officials is equal to 85% of the salary of a circuit court judge in Marion County. The governor’s $111,000 salary would have increased by about $30,000 in 2021. It would have given raises starting in 2018 to the lieutenant governor, secretary of state, auditor, treasurer, attorney general and state schools superintendent. Their salaries would increase to $119,000. Currently they each make less than $100,000 a year.
Sen. Head issued a statement announcing he will amend the bill to make it a study committee to take a closer look at how the salaries of Indiana’s elected officials compare with other states.
As we near the conclusion of the first month of session, it is worth mentioning some upcoming key deadlines in House and Senate. In the House, the last day to adopt committee reports is February 21. The House Second Reading deadline is February 23 and the Third Reading deadline is February 27. In the Senate, the last day to adopt committee reports is February 23. The Senate Second Reading deadline is February 27 and the Third Reading deadline is February 28. Bills will switch chambers the first week of March when the legislature concludes the first half of the 2017 budget session.
A key budget forecast will occur in mid-April which will be utilized in final budget negotiations. The Indiana General Assembly must adjourn sine die no later than April 29.
Week Ending January 20, 2017
Governor Eric Holcomb delivered his first State of the State address Tuesday evening to a joint session of the Indiana General Assembly. Gov. Holcomb proposed a set of transformational priorities, called his five pillars: (1) Cultivate a strong and diverse economy to ensure that Indiana remains a magnet for jobs; (2) fund a long-term roads and bridges plan that takes the greatest advantage of our location; (3) develop a 21st century skilled and ready workforce; (4) attack the drug epidemic, and (5) provide great government service at a great value to taxpayers.
Gov. Holcomb expressed his support for increasing the skills of Indiana’s workforce in order to strengthen the state’s economy. Holcomb also stated his support for a proposed balanced budget amendment to the Indiana constitution, a resolution which passed the Senate Tax & Fiscal Policy Committee this week. Senate Joint Resolution 7, authored by Sen. Brandt Hershman, provides that the total amount of expense appropriations enacted by the general assembly for a biennial budget may not exceed the estimated revenue of the state in the biennial budget period.
Chief Justice Loretta Rush delivered the State of the Judiciary address on Wednesday afternoon. The Chief Justice is required to provide lawmakers with an update on the “condition of the courts” according to Article 7, Section 3, of the Indiana Constitution. The 2017 address “Praise for our Partners in Justice” focused on the work of clerks, public defenders, prosecutors, probation officers, volunteers, advocates, law enforcement, interpreters, service providers, mentors, educators, local government officials, attorneys, and others whose contributions are vital to the success of the judicial branch.
Committee hearings geared up this week as bill lists continue to be handed down in the House and Senate. Speaker Bosma indicated there are still about one hundred bills yet to be assigned to committees. State agencies and universities delivered their budget presentations to the Ways & Means Committee as members work to craft the biennial state budget.
Legislative business concluded on Wednesday as a large Indiana delegation travels to Washington, D.C. for the Presidential Inauguration. We continue reviewing legislation as a number of new bills posted this week. Committee hearings will increase next week when lawmakers return on Monday.