2014 Public Affairs Newsletter: Legislative Wrap Up
The short session of the 118th Indiana General Assembly has adjourned, with both chambers adjourning sine die in the late hours of Thursday, March 13. The House of Representatives adjourned Sine Die around 10:20 p.m. and the Senate followed suit shortly after around 10:40 p.m. Both chambers of the legislature successfully completed their workload on time, sending 224 enrolled acts to the Governor's desk. When session began on Monday, January 6, 882 bills were introduced, including numerous issues of contention. House Joint Resolution 3, the same-sex marriage ban, was on the table, along with early education funding, daycare reform, and business personal property tax cuts. Valiant efforts were made on both sides of the aisle to work together and pass those bills legislators hoped would positively impact our state.
In his second year in office, Governor Mike Pence laid out his legislative agenda during his State of the State address. His key initiatives included transportation funding, early childhood education, business personal property tax reform, and adoption tax credits. With these and others, the governor hoped to achieve the following objectives:
• Increase private sector employment
• Attract new investments in Indiana
• Focus on manufacturing, agriculture and life sciences jobs
• Improve math and reading skills for Indiana students
• Increase graduation rates
• Improve the quality of the Hoosier workforce
• Improve the health and safety of Hoosier families
Economic Development and Tax. Senate Enrolled Act 1, the business tax package, called for the cutting of the corporate income tax and the financial institutions tax to 4.9 percent by 2022. The bill also gives local governments options to exempt small businesses from the business personal property tax, to eliminate property taxes on non-utility new business personal property, and to establish a super abatement of new business personal property. The bill also creates the Commission on Business Personal Property and Business Taxation and establishes a propane sales tax credit for Hoosiers hit hard by high energy costs during the harsh winter.
Other Tax/Economic Development Matters. House Enrolled Act 1020 is another noteworthy economic development bill that will be studied during the summer interim session. The bill requires the Commission on State Tax and Financing Policy to review, analyze, and evaluate state and local tax incentives. The evaluation is to include the attributes and policy goals, economic parameters, original scope and purpose of each tax incentive, and how they have changed over time.
Marriage. On January 27, the House voted 52-43 to amend House Joint Resolution 3, the proposed constitutional amendment to ban same-sex marriage in the state of Indiana. The resolution originally read:
"Only a marriage between one (1) man and one (1) woman shall be valid or recognized as a marriage in Indiana. A legal status identical or substantially similar to that of marriage for unmarried individuals shall not be valid or recognized."
An amendment was adopted removing the second sentence, which would have banned civil unions. The Senate passed the amended measure shortly after, on February 17, with a vote of 32-17. To amend the constitution, two separately elected legislatures must pass identical bills before it can go before the voters in a public referendum. HJR 3 passed the legislature in 2011 with the second sentence attached, so the amendment to remove the second sentence will delay the process another year at the least.
Proponents of the ban included social conservatives, churches, and family groups, including the Indiana Family Institute, Advance Indiana, and the American Family Association of Indiana. "The ideal of marriage deserved to be protected and passed on to the next generation," said Micah Clark, Executive Director of the American Family Association of Indiana. "Hoosiers should have been allowed the right to vote on this, rather than risk another two years of having a new definition of marriage forced upon every church, school and business in Indiana."
Opponents, on the other hand, included civil rights activists, universities, corporations, the Indiana Chamber, and advocacy groups. “This issue is not just one for our lesbian and gay employees,” said Steve Fry, Senior Vice President for Human Resources at Eli Lilly. “We must recognize that younger people, most especially young professionals, do not support marriage discrimination… We need talent from every corner of the earth.”
Education. House Enrolled Act 1004, one of Governor Pence's primary goals, authorizes FSSA to provide grants to certain entities that provide early education services to eligible children. It also requires FSSA to conduct a study of the pilot program in order to determine achievement levels in kindergarten and later grades. “Helping students achieve their full potential later in life starts with a solid educational foundation," said Speaker of the House Brian Bosma (R-Indianapolis), at the bill's signing on March 27. "By expanding opportunities to low-income children through quality Pre-K education, we are supporting a stronger future for all Hoosier children.”
Another Pence Administration initiative, House Enrolled Act 1003, proposes a program to prepare young Hoosiers for the workforce. The legislation provides grants to eligible school corporations and charter schools who support cooperative arrangements with businesses for the training of students. Participating businesses are then eligible to receive an EDGE tax credit. The bill also renames the Indiana Workforce Intelligence System the Indiana Network of Knowledge (INK), and requires state agencies to submit data to the INK, and gives private sector employers, groups, associations, agencies and other entities the option to submit data as well.
One of the more contentious bills passed this session was Senate Enrolled Act 91, which removes Indiana from the Common Core education system. The passage of this bill makes Indiana the first state in the nation to do so. To replace Common Core, the measure also requires the Board of Education to adopted college and career readiness standards before July 1 of this year. Proponents of the bill believed Common Core was ineffective and stripped power from the states. “I believe when we reach the end of this process there are going to be many other states around the country that will take a hard look at the way Indiana has taken a step back, designed our own standards, and done it in a way where we drew on educators, we drew on citizens and parents, and developed standards that meet the needs of our people," said Governor Pence. Opponents, however, felt that a repeal of Common Core would overly burden school systems and teachers. “Public schools had been told two years before to start adopting the Common Core standards," said Senator Tim Skinner (D-Terre Haute). "They started doing what they were told to do and started incorporating those into the examinations and lessons.”
Another piece of legislation that will impact education is Senate Enrolled Act 229, a bill dealing primarily with firearm matters. The measure allows individuals who may legally possess a firearm to keep it locked in the trunk, glove compartment, or stored out of plain sight in their car in public school parking lots. This removes a former provision that would have allowed for a person to be convicted of a felony for the same actions. Students who participate in shooting sports teams may possess a firearm, but must still keep the equipment locked in their motor vehicle while on school property.
Judicial Reform and Criminal Code. The General Assembly passed House Enrolled Act 1006, which attempts to codify the criminal code, revamping and correcting loopholes from last year's reform bill. One of the provisions of this bill requires that an individual serve at least 75 percent of their given sentence. Additionally, another level of conviction was added, allowing Indiana to now have six levels of felonies. Changes made to the Indiana Code go into effect on July 1.
House Enrolled Act 1009 attempts to protect individuals by mandating that police obtain a warrant before using an aerial drone, or requiring a person to provide a password to a computer, mobile phone, or other electronic device. Additional requests in the bill will allow the interim study committee to research and address privacy issues in relation to digital privacy. The bill also prohibits the use of a real-time tracking instrument that is capable of obtaining geolocation information concerning a cellular device unless certain conditions are met.
Health. House Enrolled Act 1258 establishes a telehealth pilot program, requiring the medical licensing board to report the results of the program to the General Assembly by July 1 of 2016.
The long-awaited daycare reform bill, House Enrolled Act 1036, raises standards for daycare facilities that receive federal funds. Daycare providers wishing to receive Child Care and Development Fund (CCDF) voucher payments must complete 12 hours of advanced training in health, education, and safety. The requirements would apply to both licensed and unlicensed facilities that are supported by taxpayer dollars. The legislation would require daycares to create schedules of daily play activities, meal and snack times, and offer drinking water at all times. A provision was also added to prevent religious instruction and activities from being taken into account, to appease opponents of the measure who believe it encroaches on the religious freedom of church-affiliated daycares.
Transportation. During this year's legislative session, nearly $400 million of funding was appropriated to fix roadways severely damaged by this year's harsh winter weather through House Enrolled Act 1002. From December 1 to mid-March there were 13,209 potholes reported throughout the state. Funds will be transferred to the construction fund before July 1, 2014, and a review will be conducted by January of next year to evaluate if more funding is needed. “Our infrastructure makes Indiana a national transportation hub and a global distribution powerhouse, and it is one of the reasons Indiana continues to be recognized as a great place to do business," said Governor Pence at the bill's signing in Valparaiso on March 26.
The mass transit bill, Senate Enrolled Act 176, narrowly passed both chambers. It allows for eligible counties to hold a public referendum on whether to expand public transportation services. Eligible counties include Delaware, Hamilton, Hancock, Johnson, Madison, and Marion. These counties are now authorizes to fund mass transit through local option income taxes, and other alternative sources of revenue including interlocal agreements, public-private partnerships, and bonding. “Our capital city is a world class destination and needs a world class transit system," Governor Pence remarked. "While I still have reservations about the sustainability of expanded mass transit services, I signed this bill because the General Assembly made significant improvements during the legislative process, bringing to closure years of debate on this issue."
Agriculture. In order to address agriculture trespassing violations, the General Assembly passed Senate Enrolled Act 101. The bill adds causing property damage to an agricultural operation to the existing crime of institutional criminal mischief. It provides that a person commits criminal trespass if the person enters the production portion of an agricultural operation or any part of the real property of an agricultural operation without consent and causes property damage.
A constitutional amendment was also offered this session to preserve the right to hunt, fish, and harvest wildlife. Senate Joint Resolution 9 must be passed by two separately elected legislatures before being sent to the voters for a referendum. If an identical resolution is passed next year, SJR 9 could be on the ballot in November 2015.
Senate Enrolled Act 357 authorizes the state seed commissioner to license the cultivation and production of industrial hemp, subject to federal approval. The bill establishes requirements to obtain a license and authorizes inspections by the state police and audits by the State Seed Commissioner. The bill also makes a conforming amendment to the definition of "marijuana."
Looking Ahead: What's next?
Summer Study Committees. Every year, after the legislative session is completed, the Legislative Council meets to assign topics to study during the interim, as well as establish any new interim committees that are needed to examine particular issues that may have arisen during session. These committees will lay the groundwork for much of the legislation to come before the General Assembly during the 2015 legislative session.
2015 Elections. The General Assembly will reconvene in January 2015 for a long session that will set the budget for the next two years. Next year's session could also include new faces and staff members as elections for all House seats and half of the Senate seats, along with several state offices, will be held in November.
A combined eight legislators will not seek reelection this year. Five Senators have announced their retirement: Sue Landske (R-Cedar Lake), Johnny Nugent (R-Lawrenceburg), Allen Paul (R-Richmond), Tom Wyss (R-Fort Wayne), and Lindel Hume (D-Princeton). Senators Landske, Paul, and Wyss all hold leadership positions in committees or in the majority caucus. With their seats up for re-election, 2015 could bring a new dynamic to the Indiana Senate. Representatives Mark Messmer (R-Jasper), Rick Niemeyer (R-Lowell), and Tim Neese (R-Elkhart) have also announced they will not seek reelection. Representative Messmer will instead become a candidate for Senate in Senator Hume's district, and Representative Niemeyer will run for Senator Landske's open seat. With only eight open seats, a majority shift in either the House or Senate is not expected.
If you have any questions about Indiana, Ohio, or Illinois legislation, regulation, or procurement opportunities and how they can impact your business, please contact one of the professionals in the Ice Miller Public Affairs Group.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.