Property tax reform took center stage during the just-completed session of the Indiana General Assembly. But lawmakers also grappled with a host of other measures with business implications. A roundup appears below.
ILLEGAL IMMIGRATION ENFORCEMENT
One of the session’s most divisive issues-whether to penalize companies that hire illegal immigrants-died during the waning hours.
Under the legislation, introduced by Sen. Mike Delph, R-Carmel, companies could have had their business licenses suspended, or revoked after three instances.
The Senate and House passed the bill earlier in the session, but it later died after conference committees from both chambers could not agree on provisions of the proposal.
Opponents of the legislation included the Indiana Chamber of Commerce and the Indiana Hospitality and Lodging Association.
The General Assembly this year legalized low-stakes gambling in Indiana’s taverns. Sen. Luke Kenley, R-Noblesville, said the move could generate $10 million to $20 million annually in new tax revenue, but legislators’ motive wasn’t money.
“The reason for doing this was to balance the scales a little bit, because we’d given such a broad-based exemption for fraternal organizations, veterans’ organizations and not-for-profits,” he said. “Regular tavern owners and bars felt their existence was threatened because they didn’t have the same entertainment to offer.”
“This was a fairly modest give,” Kenley continued. “It’s activity that will probably go on whether we make it legal or not.”
UNEMPLOYMENT TRUST FUND
At its peak back in 2000, Indiana’s Unemployment Insurance Trust fund held $1.6 billion. As of Feb. 22, it had just $212 million. That’s a problem legislators ignored this year, but one they surely will need to revisit soon.
In Indiana, employers are taxed on the first $7,000 in wages they pay each of their workers. The proceeds are held in the trust fund, where they collect interest until they’re used to pay unemployment benefits-struggling workers are eligible to collect $390 a week for 26 weeks.
Six years ago, the General Assembly
lowered employers’ taxes and boosted benefits for the unemployed. Over time, those actions have slowly drained the trust fund.
About 4.5 percent of Indiana’s work force, or 144,056 people, are unemployed. Many economists now believe the U.S. economy is in recession, which means unemployment claims likely will rise.
“It will definitely be something the General Assembly will have to consider in 2009,” said Joe DiLaura, press secretary for the Indiana Department of Workforce Development. “That was the strategy all along, because 2009 is a budget session.”
For several years, state regulators have sought more firepower to fight mortgage
crimes. In 2007, Indiana Secretary of State Todd Rokita won approval for tighter oversight of mortgage brokers, including new requirements for licensing exams and background checks. This year, the Legislature granted him even more controls.
Loan brokers’ 10-year criminal background checks will now be handled by the FBI, rather than the state police, with results fed into a national electronic registry. Legislators also beefed up criminal penalties for mortgage fraud and standardized disposal procedures for sensitive documents.
“We had a pretty good session. We got just about everything we wanted,” Rokita said. “You can really separate some of the bad apples just by making it harder for them to get into the business.”
Rokita plans to spend the rest of the year coordinating his fight against mortgage crime with other regulators, such as the Indiana Department of Financial Institutions, the Indiana Department of Insurance and the Indiana Attorney General’s Office. As the economy sours, Rokita expects evidence of previously unknown mortgage fraud to emerge.
“If you think of the economy as a high tide that covers a lot of sins, as it recedes you see where a lot of the rocks and shipwrecks were,” he said.
House Bill 1117 would have required utilities to obtain at least 6 percent of their electricity from renewable sources by 2020. It was modest, considering some measures that failed to advance called for a 25-per
cent renewable standard.
But the measure died in the final days of the session after backers balked at compromise provisions proposed by utilities. One unacceptable provision would have allowed utilities to recover more from ratepayers for capital expenses involving their transmission systems, said Grant Smith, executive director of Citizens Action Coalition.
Environmental groups have said a renewable energy standard, already passed by more than a dozen states, is fundamental to getting electric utilities serious about implementing alternatives to coal-powered generation.
AIR PASSENGER RIGHTS
Had Senate Bill 161 passed, it would have required anyone stranded on an aircraft on the ground in Indiana for more than three hours be served food and drinking water. Airlines would have to ensure working lavatories and adequate ventilation on their flights. It also would have created a state airline consumeradvocate office.
Sponsors Sen. Brandt Hershman, RMonticello, and Sen. Brent Waltz, RGreenwood, wanted to prevent the repeat of now-infamous stranded-on-the-runway incidents in Detroit and New York.
Ultimately, though, the bill appears to have been a solution in search of a problem: Relatively few loaded planes are stranded on the ground for extended periods at Indianapolis International Airport.
MASS TRANSIT FUNDING
Transit proponents couldn’t quite get HB 1245, by Rep. Terri Austin, D-Anderson, to the station.
The measure would have allowed a transit authority to capture a portion of state sales tax from within a district to improve transportation infrastructure-such as building a mass transit system.
Though the bill got stuck in committee, it won overwhelming initial support in the House, with a vote of 90-7.
“There’s a lot of reason for optimism. Legislators are willing to talk about it,” said Ehren Bingaman, executive director of the Central Indiana Regional Transportation Authority. He expects a legislative study committee this summer will look at additional funding options.
The Indianapolis Metropolitan Planning Organization has been studying the potential of light rail from downtown to northeastern suburbs.
A handful of states have passed laws requiring that anyone selling or leasingout a vehicle with an “event data recorder” disclose its presence.
The black boxes are part of a vehicle’s air bag system, capturing information such as the speed a vehicle is traveling prior to air bag deployment. But the information also can be used to prosecute motorists in the event of a fatal accident. And privacy advocates also say insurers can harvest the information to justify rate increases.
A bill proposed by Rep. Earl Harris, DEast Chicago, broke down in the House Committee on Roads and Transportation and never emerged.
Producers are ready to yell “Action! now that they’ve gotten their long fought-for tax perks into law. This year the Legislature overrode Gov. Mitch Daniels’ vote on House Bill 1388, putting into law tax refunds for in-state spending for certain film and music projects.
Lawmakers then tweaked the perks through House Bill 1125, adding a $5 million annual cap on the refunds. Under the new law, filmmakers can get 15 per cent of in-state spending refunded for any project spending more than $100,000. If the project’s budget exceeds $6 million, state approval is needed for the refund.
For video and music projects, the budget must exceed $50,000 to get the 15-percent refund. Or if a producer wants a simpler perk, he can get a waiver of sales taxes on production expenses. All the breaks expire at the end of 2011.
“Now the real work begins,” said Greg Malone, president of the Indiana Media Industry Network. “We feel a real obli gation to help shepherd the industry to success and see that the incentives … provide opportunities.”
SPORTS TAX BREAK
The Legislature is doing its part to woo the 2012 Super Bowl to town by
exempting the National Football League from paying any taxes on the event if it chooses Indianapolis. Lawmakers granted this perk for last year’s bid, too, but this year’s move added the NCAA, exempting any Final Four-related events from taxation.
The NCAA perk could equate to a loss of about $300,000 in tax revenue, but is part of new bid requirements for cities vying to host the Final Four. In 2004, the NCAA promised to hold the Final Four
once every five years in Indianapolis through 2039. But to cash in on that deal, Indianapolis must keep up with bid requirements.
House Bill 1055-also known as the “HHGregg bill”-started moving through the Legislature like a commission-hungry salesman during a bigscreen TV sale. But then the bill hit a wall of opposition from business and labor interests.
The bill, which passed the House and a Senate committee, would have required insurers to send payments to doctors, hospitals and other health care providers-even if those providers are “out of network,” meaning they have not negotiated prices with a particular health insurer.
Some doctors’ groups named the bill after HHGregg, the Indianapolis electronics retailer, for the televisions and other expensive gadgets some patients buy with the insurance checks. They spend the money thinking it’s a windfall, not realizing they are supposed to forward payment to the medical provider.
Doctors favored the bill, but health
insurers and business groups opposed it, fearing it would hamper their ability to form preferred-provider organizations. PPOs negotiate discounts that help hold down health care costs. The opponents reasoned that if doctors were able to collect payments directly from insurers without joining a network, they might be less inclined to do so.
“It will slowly eat away at the PPOs,” said David Holt, health policy lobbyist for the Indiana Chamber of Commerce. “The chamber, the labor unions, the insurers allied together to defeat it.” Holt said the chamber would have agreed to a compromise that allowed for direct payment from health insurers to emergency room doctors.
Julie Halbig, a lobbyist for the Indiana Hospital Association, said doctors and hospitals need to join health insurers’ networks because they make most of their money from commercially insured patients. She also noted that more than 20 other states have adopted similar laws-without dire consequences.
“If they’re able to do it, I’m not sure what’s the big deal,” she said.