Road Funding Set for Conference Committee Showdown

The Chamber was pleased to see the Senate pass a long-term road funding bill (34-13). During the floor vote, the Chamber lobbying team worked to get additional votes for what might have been a much closer margin. Five Republican senators voted against the Chamber on HB 1002: John Crane (Avon), Mike Delph (Carmel), Aaron Freeman (Indianapolis), Jean Leising (Oldenburg) and Andy Zay (Huntington). One Democrat, David Niezgodski (South Bend), voted with the Chamber.

There are differences between the House and Senate proposals, however:

  • House version raises just over $1.1 billion per year; the Senate about $672 million a year.
  • House version converts all sales tax collected (well over $300 million) on fuel sales to road funding; the Senate does not.
  • House version has $15 annual registration fee for regular automobiles and $150 for electric cars; the Senate adds $75 fee for hybrids (the Chamber supports this addition).
  • House version has a 10-cent fuel tax increase for both gasoline and diesel fuel, with annual increase based on index from 2019-2024. The Senate phases in the fuel taxes: five cents per year for two years; diesel tax is three cents a year for two years. Both are indexed at no more than one cent a year per gallon from 2019-2014.
  • House version requires the Indiana Department of Transportation to seek a federal tolling waiver; the Senate says it may seek the same waiver but with the approval of the Governor.
  • Senate version contains a $5 per new tire sale use fee in addition to the current 25-cent fee; the House does not.
  • Senate version increases registration fees for trucks in lieu of additional diesel taxes.
  • Senate version adds a 10-cent per gallon aviation fuel excise tax, with revenue from that going to the airport development grant fund.

The “swim lanes” of the bill are now clearly defined. Work will continue during the next two weeks by the Chamber and our coalition partners to reconcile the differences between the two versions. We believe Indiana will finally end up with a long-term sustainable transportation infrastructure funding bill, one of our Indiana Vision 2025 goals.

Call to Action: Please contact your legislators to encourage them to support HB 1002. Let them know today that long-term funding is important to you and your company!

Mixed Bag With Tech, Entrepreneurship and Innovation Priorities in Senate Budget

The long-awaited announcement of the Senate initial version of the budget came late
last week. In it, there are several technology-related issues that were either included or dropped from the bill, as well as some funding amounts also reduced from the House version:

  • Transferability of the Venture Capital Tax Credit was deleted. The Chamber would like to see it included to increase the flow of venture capital funds for promising qualified businesses.
  • Funding of the 21 Fund (21st Century Research and Development Fund) remains at $20 million a year. The Chamber prefers $30 million a year.
  • Funding to backstop the initiation of direct flights to Europe was reinstated, although it is $4 million rather than $10 million over the two years. A good start.
  • Funding for the Management Performance Hub (MPH) was reduced to $6 million for two years, which is less than what the House reduced from the Governor’s original amount.
  • Keeps $20 million for the two years for the Indiana Biosciences Research Institute
  • Removed the Next Level Trust Fund, which would have provided investment guidelines and supervision to direct a portion of the Major Moves Trust Fund to invest in promising Indiana opportunities.
  • It allocates $1 million for the biennium for the Launch Indiana program.

We will work to keep the things we like in the bill and try to restore other items that were reduced or removed as it advances through the Senate and goes to conference committee. The Chamber will continue to educate legislators on these important economic development priorities currently in the bill.

Road Plan Under Construction as Senate Takes Its Turn

The Indiana Chamber was pleased overall to see the Senate response to the House road funding bill. Several aspects of the plan will be determined as this bill goes forward – including how it interfaces with the budget bill’s (HB 1001) evolution.

Some key Senate changes from the House road funding plan are:

  • removal of the sales tax revenue collected on fuel sales that would directly go to roads
  • a Chamber-supported $75 annual registration fee for hybrid vehicle
  • modified distribution of the state/local road funds
  • requirement change from “may” to “shall” for INDOT to seek a waiver to toll interstate highways
  • addition of a $100 annual transportation infrastructure improvement fee that applies to commercial
  • vehicles greater than 26,000 lbs.
  • addition of a $5 fee per new tire sale (currently 25 cents per tire)
  • addition of a 10-cents per gallon aviation fuel excise tax with revenue going to the airport development grant fund

This version of the bill should bring in about $672 million per year. Tolling has the potential of bringing in up to $400 million per year, when implemented. Removing the House proposed sales tax revenue collected on fuel sales that were earmarked for the highway fund reduces the total by over $300 million. As the bill moves forward, the Senate may have other cashflows in mind that can be repurposed to replace that revenue stream. Doing so will help get the road funding bill close to the $1.2 billion a year the extensive Funding Indiana’s Roads for a Stronger, Safer Tomorrow taskforce recommended last year.

The Chamber testified in support of this version of the bill. It keeps the discussion going and presents other ideas and options to be considered for the final version of the bill, which we will work to bring to a good landing at the end of session.

The Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap. We encourage members of the business community to contact your state senator to let them know they need to support HB 1002 to address the huge $1.2 million gap in Indiana’s road funding.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term road funding is important to you and your company!

Small Cell Broadband Legislation Has Robust Committee Hearing

The Chamber supports SB 213 to help enhance community broadband capacity and speed with the implementation of small cell towers.

The technology is changing and to get to 5G and increased mobile broadband speeds, the small towers have to be located with coverage in mind. These are not your grandfather’s big cell towers but are smaller and are often disguised and co-located with light poles and other utility poles. There was some concern raised by a couple of communities that wanted the ability to say where the towers should go. Ultimately, it is an engineering solution that must prevail based on the coverage area.

The House Utilities, Energy and Telecommunications Committee will consider amendments in the coming week or so, and then hopefully the bill will be voted out for further consideration on the Senate floor.

Bumpy Road for Road Funding in Senate?

The Chamber recently testified in support of HB 1002, citing the need for long-term, sustainable funding to adequately maintain, finish what we have started to build and build out our priority new road projects. We also noted that we do not see where the state can magically find the funds in the present budget to address the need outside of taxes, plus the additional 10 cents a gallon to ensure our road quality is a wise investment.

There were no amendments offered as of yet but it is safe to say the bill will have several committee amendments to change it.

Additionally, there are several major issues to iron out in this bill. One is whether to dedicate all of the sales taxes collected on fuel sales to road funding or keep most of that revenue flowing into the general fund. Another is what the Senate will do with the $1 a pack cigarette tax increase passed by the House. The cigarette tax increase would have replaced much of the revenue in the general fund if the fuel sales tax would have gone to the road fund. Yet another issue is to toll or not to toll major interstate highways. While that is a pure user fee for roads, there is quite a disagreement about if and where such tolls should be considered.

Another aspect is there are legislators who don’t want to be labelled as “raising taxes” and shy away from the fiscal realities of our very important road infrastructure.

Folks, this is an investment in our future that won’t cost that much individually and has the potential to enhance commerce and Indiana’s “Crossroads of America” location advantage.

The Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Local Option Transportation Bill Moves Forward

SB 128 was amended on the Senate floor last week and passed third reading yesterday. It was previously determined that HB 1141, with similar language, would not move out of committee and efforts would be focused on the Senate legislation.

These were two bills with similar goals – to allow for communities all around Indiana to supplement road funding to enhance the possibility for a priority regional project – and were introduced in their respective legislative bodies. Both bills would apply to all areas of the state and create a mechanism for local communities to create a regional development authority, which can be used to apply for federal grants, create separate funding for a particular road project, give them the authority to issue bonds and have a referendum to raise property taxes to pay for transportation infrastructure.

The authors of both bills are from Jasper, and they see great economic value in connecting their community and surrounding communities with Interstate 69. They want to create options for communities to step up to provide additional local funds to enhance the possibility of getting a road built sooner.

The Chamber supports the effort as it creates a viable local funding option and it doesn’t require INDOT to elevate the priority. However, if the funding is there, it is more likely to happen. The authors and other supporters will continue to work on moving the Senate bill through the process.

Many Tech, Entrepreneurship and Innovation Priorities Remain in Budget Bill

The House Republicans’ budget priorities were recently announced, as HB 1001 goes from the Governor’s initial budget priorities to more in-depth House consideration. The Chamber was glad to see several technology and innovation priorities in the bill including:

  • Makes the Venture Capital Tax Credit transferrable to people who don’t have Indiana tax liability. It also removes the 2021 expiration date of the tax credit, which helps enhance certainty
  • Several parts of the $1 billion over 10 years for innovation and entrepreneurship plan:
    • It caps the amount of the Next Level Trust Fund that can be invested in Indiana businesses to 50% of that $500 million fund. It still appoints a board of trustees to oversee the investment policy of the fund
    • Has $20 million over the two years for the Indiana Biosciences Research Institute
    • Due to budget pressure, it reduced the 21st Century Research and Development Fund by $10 million per year to $20 million per year
    • It allocates $1 million for the biennium for the Launch Indiana program

We expect many changes in HB 1001 as it advances through the legislature. The Chamber will continue to educate legislators on these important economic development priorities currently in the bill and why they need to remain.

Road Funding Bill Now Travels to Senate

Chamber-supported HB 1002 was amended last week on the House Floor and then passed 61-36 largely along party lines and is now up for consideration by the Senate.

The floor amendment prohibits any new toll road within 75 miles of any other toll road, terminates the gas tax indexing after July 2024 and allows additional time for public comment before a significant road project begins. Earlier, changes were made to the bill to have all sales taxes collected on fuel costs to be designated for roads (currently it’s only a penny of the seven-cent tax) starting in 2018 versus a phase-in of the sales tax to roads over three years through 2021. This creates a potential general fund budget deficit of over $300 million a year that must be addressed, either through budget cuts or other identified revenue sources. Moreover, the Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Better Data for Indiana Bill Advances

The Indiana Chamber supports HB 1470 (on management of government data), authored by Rep. David Ober.

During the second hearing last week, language was added to reframe how the MPH will be built out. Included is how data can be accessed that could make state government and agencies more transparent, how legislative services could use information from MPH for data-driven policy and various operational aspects of the MPH for information input and output. The Chamber will continue to work with Rep. Ober and the administration to ensure the MPH is as useful as possible for the executive and legislative branches of government, as well as offers strong external uses for stakeholders outside of government.

Heard by the Government and Regulatory Reform Committee; amended and passed 8-0, and now headed to the full House.

Real Journey Begins for Transportation Funding Bill

During a six-hour hearing before the House Roads and Transportation Committee, there were some technical changes made in the bill and the annual increase for the fuel tax was capped to no more than one cent per year. Chamber President Kevin Brinegar provided testimony that this bill was about “revenue recovery” on the lost buying power of the gas tax since it was last raised. (Read the Chamber’s full testimony.) That lost revenue, plus better fuel economy means less money for roads. The Chamber is grateful to board members Drew Coolidge with SIRVA (moving company) in Fort Wayne and John Thompson (owner of several Indiana-based businesses) who testified how better roads impact their business, their communities and Indiana. House Bill 1002 will be considered in the coming weeks by the Ways and Means Committee before the desired House floor vote.

Call to Action: Connect with your state representative via our grassroots page. Let them know today that long-term funding is important to you and your company!