Statehouse Update: Huge Win for Employers

By Aspire Economic Development + Chamber Alliance | | 2.22.22

Aspire Economic Development Chamber Alliance Johnson County Indiana

It was full speed ahead last week at the Statehouse with extended committee hearings and substantial debates once again dominating our days (and nights). While legislation seems to be moving, there is still a lot of space between the House and Senate as the Senate significantly amended many of the House priority bills in committee. And in a bit of good news, there was substantial movement on Aspire priority legislation last week. Let’s dive in.

We’re in the Money

It has been nothing but continued good news for state revenue projections. This has been driving the conversation in the Senate Tax and Fiscal Policy and House Ways and Means committees, although there are still significant differences in taxation. Hoosiers still do not know whether they will stand to receive any additional tax cuts— as leaders have not yet found a consensus point and we anticipate this shaking out in conference committee.

That said, this past week the Senate Tax & Fiscal Policy Committee stripped nearly $1.4 billion in tax cuts from HB1002, leaving language consistent with SB1 clarifying the state’s automatic tax refund law to ensure all filers receive this year's refund, not simply those with a current tax liability. HB 1002 is also the only moving vehicle with Business Personal Property Tax modification language alive. Trimming business personal property taxes will be a source of contention between the House and Senate - which can very likely affect other, unrelated bills. Stay tuned.

A Win for Employer COVID Health and Safety

In a HUGE win for the employer community, the bill aimed at preventing employer vaccine mandates and increasing employer costs was substantially changed last week. HB 1001 was amended in the Senate Health committee to comply with federal civil rights laws when it comes to religious exemptions. Employers are no longer on the hook for paying for testing for their employees (as an option in lieu of vaccination), health care workers can now fall under a federal vaccine mandate, and terminated employees are no longer eligible for unemployment if they fail to comply with a vaccination mandate. Aspire’s lobbyist testified in support of these sweeping changes after continued discussions with legislators and other partners at the Statehouse. The bill passed out of committee 8-2. We do not think the House is completely on board with these changes, so we anticipate that this will head straight to the conference committee at the end of the session.

HB 1001 companion SB 3 was also heard last week in House Health committees. It was not changed and will likely move to the Governor’s desk. As a reminder, SB 3 only contains the statewide health emergency language and NOT employer vaccine mandate language.

Smoking Taxes Slashed

The House Ways and Means Committee held a second hearing on SB 382, a Department of Revenue agency bill, which also contained language which slashed taxes on tobacco products. Specifically, taxes on e-cigarettes would be cut from 25% to 15%, taxes on some specialty cigars would be capped, and so would taxes on smokeless tobacco products.

An amendment was offered in committee that deletes the tax cap on premium cigars. Sadly, the tax cut on e-cigarettes is still alive in the bill language.

Aspire, and other business and health advocates, worked hard over the last few years to increase the taxes on tobacco and electronic smoking products. We are pushing back on this provision of SB 382 and asking for the tax cut language to be removed from the bill. Hoosiers do not need more reasons to make unhealthy choices, and Hoosier employers do not need any more cost increases to overcome. We will be looking for second reading amendments to reset this language.

State Tax Increment Finance Districts?

SB 361 is economic omnibus legislation for the Indiana Economic Development Corporation (IEDC) that was moving quietly and without much fanfare when we realized it contains language allowing the IEDC to create an “innovation district” and create a state-controlled Tax Increment Finance district (capturing new property revenue), without having to collaborate with local economic developers or local officials. While there are positive parts of this legislation, economic development organizations, like Aspire, and the Indiana Economic Development Association have significant concerns about ensuring local collaboration and control of local revenue. The bill has not yet been scheduled for a hearing in House Ways and Means. But because it already passed the Senate, the language could still be alive for the conference committee. We are staying engaged.

Help Wanted: Affordable Housing

Last week, we told you about SB 262. This bill creates a state tax credit against state tax liability for companies or shareholders who develop affordable and workforce housing. This is helpful because it layers over the federal incentives, making the development of affordable housing more profitable and attractive to builders. Aspire continues to convene builders and community leaders to identify opportunities for new workforce housing. If passed, SB 262 will make it easier for private developers to create the type of quality affordable housing our community needs. We are disappointed this bill has not been scheduled for a committee hearing. Time is running out. 

This week we are encountering another set of deadlines: Senate bills in the House that fail to move out of committee by Tuesday will be dead and likewise, House bills in the Senate that fail to move out of committee by Thursday will be dead. It is hard to believe we only have about 3 weeks to go until the end of the session. But in the halls of the Statehouse, that still leaves a LOT of time on the clock left for negotiations to (or not to) occur. We have the coffee flowing.