STATE GOVERNMENT RELATIONS
Indiana General Assembly Eyes Early Finish
The Indiana General Assembly has scheduled the conclusion of the 2022 legislative session for Monday, March 14. Many lawmakers believe an earlier conclusion of session is likely, though several key legislative priorities still need to be finalized, including the broad tax package.
HB 1001, the employer vaccine requirement bill, was voted on this week, and there was a flurry of final negotiations on a number of other bills late this week. We expect the same pace moving into early next week. If the final key legislative priorities are finalized, expect the 2022 session to wind down this coming week.
House Bill 1001 – Administrative Authority; COVID-19 Immunizations
Author: Rep. Matt Lehman (R-District 79)
Bill summary: The bill does the following (amended):
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 concurred upon by the House and passed a concurrence vote 78-10. It has been signed by the governor.
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 third reading in the Senate 50-0 and is now eligible for a concurrence.
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 sent to a conference committee and is currently under negotiation regarding several provisions.
House Bill 1167 – Bureau of Motor Vehicles
Author: Rep. Jim Pressel (R-District 20)
Bill summary: This bill has the following provisions (amended):
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 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 database. (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 Dec. 31, 2021 terminates on Dec. 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 has been concurred upon.
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 taxor 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) Jan. 1, 2042 (or in the case of Monroe County, Jan. 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 website.
Latest action: The bill was dissented upon, making it eligible for a conference committee.
FEDERAL GOVERNMENT RELATIONS
Powell Signals Fed to Move Forward with Interest Rate Hikes
Federal Reserve Chairman Jerome Powell told members of the House Committee on Financial Services this week that he expects the Fed to raise interest rates at the next meeting of the Federal Open Market Committee on March 15-16. Powell told the committee that with inflation well above 2% and a strong labor market, it is appropriate to raise the target range for the federal funds rate and that he supports a 25-basis point rate hike.
Following the invasion of Ukraine by Russian troops, Powell warned that the near-term effects on the U.S. economy remain highly uncertain and that making monetary policy in this environment “requires a recognition that the economy evolves in unexpected ways” and “we will need to be nimble in responding to incoming data and the evolving outlook.” Powell also told the committee that energy prices have already moved up further due to the Ukraine war and that those increases are likely to move through the economy, push up inflation and weigh on spending. He added that “we can’t know how large or persistent those effects will be. That simply depends on events to come.”
Asked about the possible use of digital currencies in Russia to avoid recently enacted sanctions for the Ukraine invasion, Powell told the committee that it underscored the need for congressional action on digital finance, including cryptocurrencies. “Ultimately what's needed is a framework and in particular ways to prevent these unbacked cryptocurrencies from serving as a vehicle for terrorist finance and general criminal behavior, tax avoidance and the like,” Powell said.
GOP Senators Re-Introduce E-Sign Modernization Bill, Sen. Young Co-Author
The E-Sign Modernization Act was re-introduced this week by Sens. John Thune (R-S.D.), Jerry Moran (R-Kan.), Todd Young (R-Ind.) and Marsha Blackburn (R-Tenn.) that would streamline how consumers consent to receiving electronic documents, such as bank statements, account information and contracts. The bill was previously passed by the Senate Commerce Committee in the last Congress.
The E-Sign Modernization Act would update the 20-year-old E-Sign Act to reflect advancements in technology and shifting consumer preferences. Specifically, the bill would remove the current requirement for consumers to reasonably demonstrate that they can access documents electronically before they can receive an electronic version.
Fed Proposes Tiered Review Framework for Payments System Access
The Federal Reserve this week published for comment updates to the proposed guidelines it will use when evaluating requests for master accounts with the Fed or access to the agency’s financial services. The Fed originally issued its proposal in May 2021, amid growing requests from fintech firms and other nonbank providers to gain access to the payments system.
In the supplemental notice, the Fed re-proposed its principles for evaluating requests for accounts and services. In addition, the Fed also proposed to establish a three-tiered review framework to provide additional clarity regarding the review process for different types of institutions. Tier 1 would consist of eligible, federally insured institution, and would be “subject to a less intensive and more streamlined review.” Tier 2 would consist of eligible institutions that are not federally-insured but are subject (by statute) to prudential supervision by a federal banking agency; and any holding company of which would be subject to Federal Reserve oversight (by statute or by commitments). These institutions would generally receive an “intermediate” level of review, the Fed indicated.
Tier 3 would consist of eligible institutions that are not federally insured and not subject to prudential supervision by a federal banking agency at the institution or holding company level, and “would be subject to the strictest level of review.”
As the Fed considers which institutions can access to the payments system, some trade groups remain concerned that some lightly regulated chartered entities may introduce undue risk to the payments system if they are given direct access.
GOP Lawmakers Call Out USPS Expansion of Financial Products
A group of Republican lawmakers led by Rep. Blaine Luetkemeyer (R-Mo.) this week expressed concern about a recent attempt by the U.S. Postal Service to circumvent a statutorily required product approval process and expand its financial services offerings. Under the Postal Accountability and Enhancement Act, the USPS is required to file with the Postal Regulatory Commission and publish in the Federal Register when seeking to add a product. The USPS recently launched a pilot program through which consumers can exchange a paycheck or business check for a gift card in value of up to $500 but did not seek approval from the PRC before doing so, the lawmakers pointed out.
They added that the pilot is yet another indication that the USPS “is expanding its footprint by offering additional financial product and services,” and called on the PRC to assert its statutory authority with regards to the pilot program, and block USPS from adding any additional financial services in the future.
“Considering the USPS is $188 billion in debt, it is apparent the USPS is not in a position to expand financial services to consumers before they get their own fiscal house in order,” the lawmakers wrote.
NCUA Chairman: Credit Union Consumer Protection Standards Should Match Banks’
National Credit Union Administration Chairman Todd Harper this week made the case that consumer financial protection standards at credit unions should match those adhered to by the nation’s banks. Speaking at a credit union industry event, Harper said that “there cannot be one standard for bank customers and a different one for credit union members. Continuing such a dynamic only hurts the credit union members who we all have a duty to protect.”
In 2021, NCUA found violations of consumer compliance rules in nearly 15% of federal credit unions, the most common of which related to credit reporting, truth in lending, electronic fund transfers and equal credit opportunity rules, Harper said. NCUA also found in completed fair lending exams and reviews that in a majority of cases, there were weaknesses in compliance management systems.
Last year, the NCUA also resolved violations involving 64,000 credit union members subjected to unfair practices, leading to about $185,000 in restitution and remediation. “The logic that credit unions do not discriminate because they are owned by their members is a dangerous myth and one that should end,” Harper said. “Given the consumer compliance examination program for comparably sized community banks, our program’s scope is insufficient, especially for those credit unions between $1 billion and $10 billion in assets. We should be doing more, and we can do more.”