Local lawmakers discuss session as it enters final days

With the clock counting down on this year’s legislative session, local lawmakers discussed some of the highlights so far during a chamber luncheon Friday.

State Reps. Michelle Davis, Mike Speedy and John Young, and State Sens. Aaron Freeman, Jack Sandlin and Greg Walker were the featured panelists during Aspire Johnson County’s latest Legislation Matters event at Valle Vista Golf Club Wedding Venue and Conference Center in Greenwood. Officials discussed the 2022 session of the Indiana General Assembly in a Q-and-A format with a moderator.

One of the first bills discussed was House Bill 1001, which took aim at ending Gov. Eric Holcomb’s COVID-19 public health emergency, and also authorized several administrative actions that would allow Indiana to continue to receive federal emergency funding. The bill previously had provisions that would have forced businesses to give requested religious exemptions from COVID-19 vaccine requirements, but that was removed from the bill in the Senate.

The final bill requires businesses to grant medical vaccine exemptions approved by doctors for workers, along with religious exemptions as required by federal law, and mandates that employers accept as a vaccine exemption a worker’s medical test results showing some level of “natural immunity” through a previous infection. Employees could be required to undergo COVID-19 tests up to twice a week, the Associated Press reported.

Holcomb signed the bill into law Thursday, and he later signed an order ending it immediately, rather than letting it expire on Saturday.

“We feel like that’s a good step in the right direction as we try to move from this pandemic to something that is endemic,” Sen. Rodric Bray, R-Martinsville, told the crowd of business leaders Friday

While the bill does have new language compared to the original version, several of the original exemptions are still there. It was challenging for lawmakers to balance the needs and rights between businesses and employees, Bray said.

Walker, R-Columbus, said he voted against the bill due to concerns he had over its constitutionality. Lawmakers made provisions for some pre-existing contractual relationships and not all, which would hinder the performance of contracts, something the Indiana Constitution says should not happen, he said.

Lawmakers also discussed the state’s fiscal condition and recent discussions about tax cuts. HB 1002 would have originally cut the state’s income, utility receipts and business personal property taxes. Local governments, however, were concerned about a provision that would cut business personal property taxes by giving business owners a 10-year tax holiday beginning in 2024, from the 30% maximum depreciation floor for all new equipment that qualifies under the Business Personal Property Tax. These are typically large pieces of equipment purchased to facilitate manufacturing, sorting or warehousing functions at large businesses.

The current bill, however, has no tax cuts at all after the Senate removed the provisions. Right now, it is in a House-Senate conference committee where lawmakers are negotiating its final outcome.

The bill is a priority for House Republican caucus and would give the state an advantage when it comes to attracting businesses. It would take a step in making Indiana more competitive economically, said Speedy, R-Indianapolis.

Freeman, R-Indianapolis, told the crowd he met with Franklin Mayor Steve Barnett several weeks ago about Barnett’s concerns about the bill. He and Barnett did not agree, which was OK, but Freeman still supported the bill because now is the time to help small businesses, he said.

“Indiana is really focused on tax relief, and we need to do it in a great, responsible way,” said Sandlin, R-Indianapolis.

Bray told business leaders that the idea of doing substantial permanent tax cuts during a non-budget year, along with inflation and supply chain issues, makes him nervous to support them. These items suggested to him that the state’s revenue might not continue to flow in as it has, he said.

HB 1002 is before a joint House-Senate conference committee where changes to the bill are expected. Once that is done, both chambers will vote on the bill again.

Lawmakers met with Holcomb about the bill earlier this week, and Bray believes all parties will soon find themselves in a place where they wouldn’t regret their decision in the future, he said.

Later, local legislators discussed possible changes to the state’s vaping tax. Right now, closed-system vaping products are taxed at 25%, but SB 382 would drop the rate to 15%, the bill says.

The tax was first approved last session, and has yet to go into effect because lawmakers were aware that a 25% tax may not be the right amount. Lawmakers delayed its effective date because they wanted to make sure the tax was near equal to other related taxes, Bray said.

The tax rate for open-system products is set at 15%, so this would match that rate, which is expected to remain unchanged.

The bill is expected to go to a joint House-Senate conference committee for minor changes, but is expected to be sent to the governor before the end of the session.

Senate Bill 361, a bill that would create a mechanism for the Indiana Economic Development Corporation to create innovative development districts, was also discussed Friday. These districts would help attract larger economic development projects, such as high-end advanced manufacturing, lawmakers say.

The goal of the bill is to bring more cooperation between local governments that are competing for the same end result with developments. For example, when Honda builds a plant in Greensburg, Columbus cheers along with Jennings County and other areas, Walker said.

“Why are we developing local packages when we could be more marketable and more successful when we pull resources from (multiple areas),” he said. “It seems to only follow that we would want to develop tools that allow for those conversations to be robust and cooperative instead of pitting one county and city against each other.”

Some communities, though, may want to be pit against one another. As long as the tools are optional in the legislation, they are worth discussing, Walker said.

By creating the mechanism, it increases the odds for companies that could be transformative for communities and the state to come to Indiana. There could be billions of dollars in investment, Bray said.

The main issue the bill is facing right now is making sure local governments have the ability to be involved and give input, he said.

Local governments had raised concerns about how much control the state would have over local tax money generated through the innovation districts. Following changes by a House committee, the bill now creates a separate fund for each district and stipulates that the revenue can only be used in the district where it was generated. The amendment removed local income from the captured taxes.

Discussions between both chambers about the bill are continuing, the Indianapolis Business Journal reported.