STATE GOVERNMENT RELATIONS
Indiana Lawmakers Nearing End of Session
The Indiana General Assembly is quickly approaching the end of the 2022 legislative session. Lawmakers concluded all final committee meetings this week due to pre-established deadlines. Third-reading deadlines will occur next week. The date set to conclude all legislative business is March 14, but many expect the conclusion to occur earlier.
House Bill 1048 – Sheriff’s Sale in Mortgage Foreclosure Action
Author: Rep. Sean Eberhart (R-District 57)
Bill summary: Allows the sheriff to conduct a public auction electronically. Prohibits certain persons and entities from purchasing a tract at a sheriff's sale. Raises the amount that a sheriff can charge for administrative fees from $200 to $350. Makes a conforming amendment. Makes a technical correction.
Latest action: The bill was amended in the Senate Local Government Committee and is now eligible for second reading amendments by the full Senate.
Senate Bill 361 – Economic Development
Author: Sen. Ryan Mishler (R-District 9)
Bill summary: The bill does the following:
Tax Credits: The bill makes certain amendments to the Hoosier Business Investment (HBI) tax credit, the Economic Development for a Growing Economy (EDGE) tax credit, the Headquarters Relocation tax credit, and the Redevelopment Tax Credit. The bill adds veteran owned businesses to the list of businesses that would qualify for an enhanced Venture Capital Tax Credit. The bill limits the total amount of credits that the IEDC may award for a calendar year for all taxpayers for all applicable tax credits to $300 million.
Augmentation: It provides for the augmentation of the amount appropriated to the IEDC in an amount not to exceed $300 million for the purposes of business promotion and innovation. The bill specifies that funds appropriated to the IEDC for the purposes of business promotion and innovation do not revert to the state General Fund.
Report: It requires the IEDC to identify state laws and regulations that burden existing businesses or inhibit creation of new businesses and provide a report with recommendations to the General Assembly and Budget Committee.
Innovation Development District: The bill specifies the procedure by which the IEDC may designate an area as an Innovation Development District. It provides that an Innovation Development District Board must be established to govern each Innovation Development District. The bill also requires the IEDC to enter into a final agreement with the board establishing the terms and conditions governing a district.
Innovation Development District Fund: It requires the board to establish a local Innovation Development District Fund for a district. The bill provides for the uses of money in a local Innovation Development District Fund. It provides that money in a local Innovation Development District Fund is continuously appropriated for the uses of the fund.
Workforce Retention and Recruitment Program and Fund: The bill authorizes a county, city, or town to establish a Workforce Retention and Recruitment Program and Fund for the purposes of recruiting and retaining individuals who will satisfy the current and future workforce needs of the unit's employers or provide substantial economic impact to the unit, including providing incentives in the form of grants or loans to qualified workers. It authorizes the unit to transfer money into the fund from other sources. The bill provides that the executive of the unit shall administer the fund in coordination with a Workforce Fund Board of Managers appointed by the executive of the unit.
Film and Media Tax Credit: The bill provides that the IEDC may award a tax credit for media production expenses for certain media productions in Indiana beginning July 1, 2023.
Latest action: The bill was amended in the House Ways and Means Committee and is now eligible for second reading amendments by the full House.
House Bill 1167 – Bureau of Motor Vehicles
Author: Rep. Jim Pressel (R-District 20)
Bill summary: This bill has the following provisions:(1) Allows an advanced practice registered nurse (APRN) to sign certain health documents concerning driving privileges. (2) Requires the Bureau of Motor Vehicles (BMV) to establish and maintain an audit working group. (3) Provides that meetings of the audit working group are not subject to open door laws. (4) Provides that the BMV, rather than the State Board of Accounts, is required to conduct an audit of each license branch. (5) Amends certain dates regarding the statewide electronic lien and title system (system). (6) Removes system provisions concerning qualified service provider payments, participation notification, and annual fees. (7) Provides that the Bureau and participating qualified service providers or lienholders may charge certain system fees, but sunsets the provisions on July 1, 2025.(8) Amends dates concerning the voluntary or required use of the system. (9) Requires the BMV to distribute at least one time each month the fees collected and deposited from certain special group recognition license plates. (10) Repeals the law providing for the Earlham College trust license plate. (11) Provides that interference with highway traffic is considered unreasonable if the interference occurs for more than 10 consecutive minutes except for: (A) machinery or equipment used in highway construction or maintenance by the Indiana Department of Transportation, counties, or municipalities; and (B) firefighting apparatus owned or operated by a political subdivision or a volunteer fire department. (12) Provides that a public agency or towing service that obtains the name and address of the owner of or lienholder on a vehicle shall, not later than three business days after obtaining the name and address, notify the owner of the vehicle and any lienholder on the vehicle, as indicated by the certificate of title or as discovered by a search of the National Motor Vehicle Title Information System or an equivalent and commonly available data base. (13) Requires the BMV to process an electronic application for a certificate of authority not more than five business days after the submission of the application if the application meets certain requirements. (14) Provides that an individual is not required to be a citizen of the United States as shown in the records of the BMV to apply for a replacement driver's license or learner's permit by electronic service. (15) Provides that a suspension for failure to satisfy a judgment imposed before December 31, 2021 terminates on December 31, 2024. (16) Removes the requirement that the BMV collect an administrative penalty if a dealer fails to apply for a certificate of title for a motor vehicle that is purchased or acquired in a state that does not have a certificate of title law. (17) Provides that a manufacturer or distributor may not sell or offer to sell, directly or indirectly, a new motor vehicle to the general public in Indiana except through a new motor vehicle dealer holding a franchise for the line make covering the new motor vehicle. (18) Provides that the sales of new motor vehicles by a manufacturer or franchisor to the federal government, a charitable organization, an employee of the manufacturer or distributor, or a manufacturer or distributor under certain conditions. (19) Makes technical corrections.
Latest action: The bill was amended in the Senate Homeland Security and Transportation Committee and is now eligible for second reading amendments by the full Senate.
House Bill 1002 – Various Tax Matters
Author: Rep. Tim Brown (R-District 41)
Bill summary: The bill does the following:
Automatic Taxpayer Refund: It removes a provision that requires taxpayers to have adjusted gross income tax liability in order to qualify for an automatic taxpayer refund. It makes clarifying changes.
State Lottery Commission: It provides that before the State Lottery Commission may implement an expansion of gaming either by adopting rules, entering into contracts, or any other action, the rule, contract, or action must be authorized by the General Assembly. It defines "expansion of gaming" for purposes of the requirement.
Local Taxes: It requires each local unit that imposes an innkeeper's tax or food and beverage tax to annually report information concerning distributions and expenditures of amounts received from the innkeeper's tax or food and beverage tax. It extends the Nashville Food and Beverage Tax expiration date from July 1, 2023, to July 1, 2043. It provides that food and beverage taxes currently authorized under IC 6-9 and that do not otherwise contain an expiration date (other than the stadium and convention building authority food and beverage tax and the historic hotels food and beverage tax) shall expire on the later of: (1) January 1, 2042 (or in the case of Monroe County, January 1, 2044); or (2) the date on which all bonds or lease agreements outstanding on March 15, 2022, are completely paid. It requires each local unit that imposes a food and beverage tax that is subject to the expiration provision to provide to the Department of Local Government Finance (DLGF) a list of each bond or lease agreement outstanding on March 15, 2022, and the date on which each will be completely paid. It requires the DLGF to publish the information on the gateway Internet web site.
Latest action: The bill was amended in the Senate Tax and Fiscal Policy Committee and is awaiting a third reading vote by the full Senate.
House Bill 1001 – Administrative Authority; COVID-19 Immunizations
Author: Rep. Matt Lehman (R-District 79)
Bill summary: The bill does the following:
Medicaid: The bill allows the secretary of Family and Social Services (FSSA Secretary) to issue a waiver of human services statutory provisions and administrative rules if the FSSA Secretary determines that the waiver is necessary to claim certain enhanced federal matching funds available to the Medicaid program.
Supplemental Nutrition Assistance Program (SNAP): The bill allows the FSSA Secretary to issue an emergency declaration for purposes of participating in specified authorized federal Supplemental Nutrition Assistance Program (SNAP) emergency allotments.
Reporting: It requires the FSSA Secretary to prepare and submit any waivers or emergency declarations to the Budget Committee.
Immunizations: The bill allows the State Health Commissioner of the State Department of Health (IDOH) or the IDOH Commissioner's designated public health authority to issue standing orders, prescriptions, or protocols to administer or dispense certain immunizations for individuals who are at least five years old. (Current law limits the age for the Commissioner's issuance of standing orders, prescriptions, and protocols for individuals who are at least 11 years old).
Immunization Passports: The bill defines "Indiana governmental entity" and specifies that an Indiana governmental entity (current law refers to a state or local unit) may not issue or require an immunization passport.
Unemployment Insurance: The bill provides that an individual is not disqualified from unemployment benefits if the individual has complied with the requirements for seeking an exemption from an employer's COVID-19 immunization requirements and was discharged from employment for failing or refusing to receive an immunization against COVID-19.
Employers: The bill provides that an employer may not impose a requirement that employees receive an immunization against COVID-19 unless the employer provides individual exemptions that allow an employee to opt out of the requirement on the basis of medical reasons, religious reasons, or immunity from COVID-19 acquired from a prior infection with COVID-19.
Latest action: The bill was amended in the Senate Health and Provider Services Committee and is awaiting a third reading vote by the full Senate.
FEDERAL GOVERNMENT RELATIONS
ABA, ICBA Urge Congress to Raise Small-Business Loan Program Cap
A coalition of trade groups Wednesday urged congressional leaders to increase the authorization level for the Small Business Administration’s 504 loan program. Demand is expected to reach the program’s authorization cap of $7.5 billion in early summer, likely June, the groups said. Without congressional action, the program would be unavailable to small businesses for an entire quarter of the fiscal year until the authorization level resets, they added.
The program previously reached its congressionally authorized cap on Sept. 7, 2021, and SBA was unable to approve new 504 loans until the program’s authorization level reset on Oct. 1. That three-week shutdown of the program caused a number of issues for small-business borrowers, including the loss of real estate and endangered escrow, the groups wrote.
CFPB Issues Fact Sheet on Calculating Interest for ARMs to Satisfy QM Definition
The Consumer Financial Protection Bureau Wednesday released a four-page fact sheet on calculating prepaid interest on so-called “short-reset” adjustable-rate mortgages and step-rate loans. The bureau's price-based General Qualified Mortgage definition contains a special rule for calculating annual percentage rates on these kinds of loans where the interest rate may or will change within five years of the first regular periodic payment due date.
Biden Administration Imposes New Financial Sanctions Against Russia Over Ukraine
President Biden on Tuesday announced a number of new sanctions against two Russian state-owned financial institutions, five Kremlin-connected individuals and additional restrictions on Russian sovereign debt in response to Russia’s decision to deploy troops to the Donetsk and Luhansk regions of eastern Ukraine.
In a statement, the Treasury Department indicated that the actions ensure that Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank and Promsvyazbank Public Joint Stock Company, along with 42 of their subsidiaries, can no longer do business in the United States and are cut off from the U.S. financial system.
All of these entities’ assets under U.S. jurisdiction will be immediately frozen, Treasury indicated, adding that U.S. individuals and entities are prohibited from doing business with these institutions unless authorized by Treasury's Office of Foreign Assets Control.
Separately, the administration imposed new sanctions on five individuals the Treasury considers to be members of Russian President Vladimir Putin’s inner circle. In addition, Treasury imposed new restrictions on U.S. banks’ ability to finance new Russian debt starting on March 1.
OCC Issues FAQs on Final Rule to Rescind 2020 CRA Regulations
The Office of the Comptroller of the Currency on Tuesday issued a set of frequently asked questions on its final rule to rescind its 2020 Community Reinvestment Act rule and replace it with rules based on the 1995 CRA rules that were jointly adopted by the OCC, Federal Reserve and Federal Deposit Insurance Corp.
The FAQs address qualifying activities, transition period, examination administration, assessment areas, targeted geographic areas, data reporting, changes to public notices and strategic plans.
Bowman Strikes Hawkish Tone on Inflation
In a speech at the American Bankers Association Community Banking Conference on Monday, Fed Governor Michelle Bowman called for “forceful action” to rein in price inflation, which she called “much too high.” Bowman said that she “would not be surprised to see several opportunities to increase that rate over the coming meetings” of the Federal Open Market Committee, starting with the next FOMC meeting in March. Raising rates will complement the scheduled end of Fed asset purchases next month, which will “remove another source of unneeded stimulus,” she added.
“In the near term, I expect that uncomfortably high inflation will persist at least through the first half of 2022,” Bowman said. “We may see signs of inflation easing in the second half of the year, but there is a substantial risk that high inflation could persist.”
Brainard: Federal Reserve Needs to Prepare for Payment Landscape of the Future
In remarks at an industry event last week, Federal Reserve Governor Lael Brainard said that the Fed needs to be preparing for the payment landscape of the future even as it makes improvements to meet today’s needs. Brainard said that the Fed has been thinking critically about whether there is a role for a U.S. central bank digital currency and about potential costs and benefits, including through a recently issued research paper that is currently open for public comment.
She noted that it is prudent for the Fed to explore if a central bank digital currency could preserve some of the same and effective elements of the current financial system “in a way that is complementary to the private sector innovations transforming the financial landscape of the future.” She added that it is essential that the U.S. be on the frontier of research and policy development regarding central bank digital currencies, as international developments related to central bank digital currencies can have implications for the global financial system.
N.Y. Fed’s Williams Signals Rate Increases at Next Fed Meeting
In remarks at an industry event last week, Federal Reserve Bank of New York President and CEO John Williams signaled that the Fed is likely to begin raising interest rates at its next meeting, as expected by analysts, and that the Fed could begin reducing its holdings of Treasury and mortgage-based securities sometime later in the year.
“Taken together, these two sets of actions steadily raising the target range for the federal funds rate and steadily bringing down our securities holdings – should help bring demand closer to supply,” Williams said. “In fact, even though we haven't done either of these things yet, financial conditions have already responded based on the expectation of Fed action.”
CFPB Launches Review of Automated Appraisal Models
The Consumer Financial Protection Bureau released an outline of options to strengthen oversight of computer models used to help determine home valuations. The CFPB said both in-person appraisals and automated valuation models that use data to value homes appear to be susceptible to bias and inaccuracy without regulatory safeguards.
Automated valuation models can pose fair lending risks, particularly if flawed versions of these models digitally redline certain neighborhoods and further perpetuate disparities, the agency indicated. The CFPB added it is working to ensure confidence in automated estimates, protect against data manipulation, avoid conflicts of interest, require random sample testing and reviews, and address any other relevant factors. The Dodd-Frank Act tasked the CFPB and other regulators with implementing rules on appraisal models. The Biden administration last year launched an interagency task force to address appraisal inequities. The CFPB indicated it will convene a Small Business Review Panel under the Small Business Regulatory Enforcement Fairness Act to collect advice and recommendations from small entities that would be affected by a proposed rulemaking, which ultimately will be issued jointly with other regulators.