STATE GOVERNMENT RELATIONS
2022 Indiana General Assembly Concludes Early
The Indiana General Assembly finished all legislative work for the 2022 session on Tuesday night, marking an early end to a session that was originally slated to end on March 14. Lawmakers worked late into the night on Tuesday negotiating final elements on a number of key legislative priorities, including HB 1002, the broad tax reduction package. All bills that passed now move to Gov. Holcomb’s desk for final action.
The governor has seven days upon receipt of a bill to sign it into law. He may also choose to not sign it, at which point it will automatically become law after seven days. The governor may also veto a bill, preventing the bill’s enactment into law. To date this session Gov. Holcomb has signed 83 bills into law, having received many of them late last week.
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 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 concurred upon by the House and passed a concurrence vote 78-10. It has been signed by the governor and is now law as a result of being effective upon passage.
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 passed a concurrence vote by the House 86-3 and is now headed to the governor’s desk.
Senate Bill 370 – Community Infrastructure Improvement Districts
Author: Sen. Brian Buchanan (R-District 7)
Bill summary: The bill creates a procedure to establish a Community Infrastructure Improvement District. It specifies that the procedure added by the bill allowing for the establishment of a Community Infrastructure Improvement District does not authorize the unit to establish a district that overlaps with an Economic Improvement District. It also requires a petition for the establishment of a Community Infrastructure Improvement District to include a rate and methodology report. It specifies the contents of the report. The bill specifies the basis upon which benefits accruing to parcels of real property within a Community Infrastructure Improvement District may be apportioned among those parcels. It also requires a determination that the aggregate assessments within a district do not exceed 30% of the projected assessed value of property within the district before a legislative body may adopt an ordinance to establish a district. The bill requires a Community Infrastructure Improvement Board to assist the county treasurer in order to make certain specified determinations and designations regarding annual assessments within a district. It adds specific provisions that apply to the Community Infrastructure Improvement Board’s issuance of revenue bonds.
Latest action: The bill was added and then later removed from the conference committee report on HB 1075.
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 fora 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) Provides that an individual subject to both an administrative license suspension and a court ordered license suspension must file a petition for specialized driving privileges in the court that ordered the suspension.
(20) Repeals a statute requiring the use of a turn signal 200 feet before making a turn.
Latest action: The bill passed a concurrence vote by the House 69-2 and is now headed to the governor’s desk.
House Bill 1002 – Various Tax Matters
Author: Rep. Tim Brown (R-District 41)
Bill summary: The bill does the following:
(1) Reduces the individual adjusted gross income tax rate from 3.23% in 2022 to 3.15% in 2023 and 2024.
(2) Phases down the individual adjusted gross income tax rate after 2024 depending on certain conditions being met.
(3) Adds a provision allowing a taxpayer to elect a special property tax valuation method for mini-mill equipment.
(4) Adds a provision from the house passed version of HB 1002 repealing the utility receipts and utility services use taxes.
(5) Adds a provision from the house passed version of HB 1002 requiring a utility that is subject to the jurisdiction of the Indiana utility regulatory commission (IURC) for the approval of rates and charges to file a rate adjustment with the IURC that adjusts the utility's rates and charges to reflect the repeal of the utility receipts tax.
(6) Adds a provision from the house passed version of HB 1002 requiring a utility that is subject to the utility receipts tax and not under the jurisdiction of the IURC to adjust the utility's rates and charges to reflect the repeal of the utility receipts tax.
(7) Adds a provision from the house passed version of HB 1002 requiring each utility to provide notice to the utility's customers that the adjustment in rates and charges reflects the repeal of the utility receipts tax.
(8) Adds a provision from the house passed version of HB 1002 specifying taxpayer procedure for the repeal of the utility receipts and utility services use tax.
(9) Specifies that the amount of excess combined reserves that maybe transferred to the pre-1996 account in 2022 may not exceed $2,500,000,000.
(10) Provides that the office of the secretary of family and social services may not enter into a final contract that would implement a risk based managed care program or capitated program for the specified Medicaid population before January 31, 2023.
Latest action: The bill passed both the House and Senate and is awaiting signatures to be sent to the governor’s desk.
FEDERAL GOVERNMENT RELATIONS
Biden Signs Executive Order to Advance Digital Assets, Explore CBDC
President Biden on Wednesday signed a long-awaited executive order directing government agencies to take “concrete steps” to advance the use of digital assets, including further exploration of a possible U.S. central bank digital currency, or CBDC. The order calls on the Fed to continue its ongoing work in this area and calls for “placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest.”
In addition, the order directs the Treasury Department and other agencies to develop policy recommendations to address the growing digital asset sector and ensure consumer protection; directs the Financial Stability Oversight Council to identify and mitigate systemic risks related to digital assets; and calls for a whole of government approach to direct “unprecedented focus” to mitigate illicit finance and national security risks posed by illicit use of digital assets.
The order also focuses on driving U.S. leadership and competitiveness in developing and using digital asset technologies and calls for a Treasury report on the future of money and payment systems, including implications for economic growth and financial inclusion, among other provisions. As policy conversations continue regarding the creation of a U.S. CBDC, many have raised concerns that the creation of such a currency could compete with bank deposits and limit banks’ ability to power economic growth.
House Clears Omnibus Spending Bill Containing Advocated Provisions
The omnibus appropriations package that the House passed Wednesday includes several banking-related provisions, including an $11 billion increase to the authorization cap for the Small Business Administration’s 504 loan program as well as $5 billion for debt refinancing.
Additionally, lawmakers authorized $295 million for community development financial institutions, including $35 million for the Treasury Department’s Bank Enterprise Award program. A coalition of trade groups previously urged House and Senate appropriations leaders to continue bipartisan support of at least $360 million in funding for the CDFI Fund in fiscal year 2022, with $42 million allocated for the BEA program. The House bill reflects a total increase of $25 million for CDFIs, with about $10 million for the BEA program specifically.
The Senate is expected to approve the spending package in the coming days, though it could face temporary delays if objections are raised.
FinCEN Flags Russian Attempts to Evade Sanctions
As the U.S. continues its crackdown against Russia over its recent invasion of Ukraine, the Financial Crimes Enforcement Network on Monday called on financial institutions to be vigilant against attempts to evade the expansive sanctions and restrictions currently in place. The advisory noted that “sanctioned Russian and Belarusian actors may seek to evade sanctions through various means, including through non-sanctioned Russian and Belarusian financial institutions and financial institutions in third countries.”
FinCEN noted several red flag indicators that could signal attempted sanctions evasions, including several related to convertible virtual currency, noting that “sanctioned persons, illicit actors and their related networks or facilitators may attempt to use CVC and anonymizing tools to evade U.S. sanctions and protect their assets around the globe, including in the United States.”
According to FinCEN, banks should specifically watch for transactions initiated from IP addresses located in Russia, Belarus or other sanctioned jurisdictions; transactions connected to CVC addresses listed on the Office of Foreign Assets Control’s lists of specially designated nationals and blocked persons; and customer use of a CVC exchanger or foreign-located money service businesses in a high-risk jurisdiction.
The advisory also reminded institutions of dangers posed by Russian-related ransomware campaigns.
Bipartisan Bill to Ease Libor Fixes Introduced in Senate
With two tenors of U.S. dollar Libor no longer being published the remainder set to cease by June 30, 2023, four senators this week introduced a bill that would address “tough legacy” contracts that reference Libor but cannot be easily changed.
The Economic Continuity and Stability Act – introduced by Sens. Jon Tester (D-Mont.), Thom Tillis (R-N.C.), Sherrod Brown (D-Ohio) and Pat Toomey (R-Pa.) – would direct the Federal Reserve to determine replacement rates for Libor-referencing contracts that lack fallback language and to provide a safe harbor from litigation over a change in rates after the cessation of Libor.
A companion bill in the House, H.R. 4616, passed by an overwhelming bipartisan vote of 415-9 in December. ABA and ICBA both signed the letter urging the Senate to advance the Libor bill quickly. “Industry participants, including consumer groups, investors, banks, and issuers have all expressed the need for uniform federal legislation and urged swift congressional action,” they wrote.
SBA Clawing Back Pandemic-Era Mispayments
The Small Business Administration indicated it will directly contact roughly 1,100 lenders after it made erroneous payments to borrowers on an estimated 8,000 loans under pandemic-era programs.
In an SBA briefing the agency indicated it made the incorrect 7(a) program payments under Section 1112 of the CARES Act and is attempting to claw back the funds from lenders. Under the law, the SBA was directed to make up to six months of loan payments for preexisting 7(a) loans during the pandemic.
During the briefing, the SBA said in the coming weeks it will launch the following six-part plan to recover the payments:
- SBA provides lenders with lists of potential mispayments.
- Lenders research payments to validate they requested correct loan amounts from SBA.
- Lenders provide results to SBA via a spreadsheet template and certify accuracy.
- SBA reviews the lender calculations.
- If lenders find overpayments, SBA will provide remittance instructions.
- Lenders will remit overpaid funds to SBA.
House Members Press Treasury on Tether Reserves
Two House Financial Services Committee members pressed the Treasury Department for information about reserves held by Tether, the largest stablecoin issuer. Reps. Josh Gottheimer (D-N.J.) and Trey Hollingsworth (R-Ind.) reportedly requested details on the assets Tether uses to back $80 billion of its U.S. dollar token, or USDT.
The Commodity Futures Trading Commission last year fined the stablecoin issuer $41 million for misleading claims that the USDT is fully backed by reserves. The agency said Tether’s stablecoin was fully backed for only one-quarter of a 26-month period. While the CFTC order requires Tether to cease and desist from further violations, the Gottheimer-Hollingsworth letter raises questions about the company’s auditing and reports of its holdings of Chinese commercial paper.
The letter comes as Washington debates a broader legal and regulatory framework for stablecoins and other digital assets, with a Biden administration executive order on crypto announced this week.