Indiana Climbs in Small Business Policy Index

Indiana ranks seventh in the Small Business & Entrepreneurship Council’s 2017 Small Business Policy Index (up from 10th in last year’s ranking).

This is the SBE Council’s 21st annual look at how public policies in the 50 states affect entrepreneurship, small businesses and the economy. The report ranks the 50 states according to 55 different policy measures, including a tax, regulatory and government spending measurements.

According to the report, the most entrepreneur-friendly states under the “Small Business Policy Index 2017” are Nevada, Texas, South Dakota, Wyoming, Florida, Washington, Indiana, Arizona, Alabama, and Ohio. In contrast, the policy environments that rank at the bottom include Rhode Island, Oregon, Iowa, Connecticut, Maine, Hawaii, Vermont, Minnesota, New York, New Jersey, and California.

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!

The Week in Federal Affairs

  • Obama regulation on coal industry is rolled back! On Thursday, President Trump repealed the Department of the Interior’s Stream Protection Rule. The Indiana Chamber previously had signed on to a letter in support of this action. The letter stated that the Stream Protection Rule “is a one-size-fits-all federal mandate that interferes with the longstanding federal-state balance in overseeing mining operations. It will place massive amounts of coal reserves – and the affordable energy they provide – off limits.” Congressman Larry Bucshon (IN-08) also issued a statement at this welcome news.
  • On Thursday, Senators Joe Donnelly and Todd Young introduced fellow Hoosier Seema Verma to the Senate Finance Committee immediately before the hearing on her experience to become administrator of the Centers for Medicare & Medicaid Services.
  • Young met with the chief of naval operations, Admiral John Richardson, to discuss the Naval Surface Warfare Center (NSWC) Crane and its critical support for our warfighters and national defense. During the meeting, Young urged Admiral Richardson to ensure that NSWC Crane is exempt from the hiring freeze so that it can continue its important work. Young’s meeting this week with Admiral Richardson follows his letter to Secretary of Defense Mattis on January 27.
  • Previously, Sen. Joe Donnelly met with Acting Secretary of the Army Robert Speer on the same subject.
  • Young was also among a group of legislators that met last Friday in Washington D.C. with Japanese Prime Minister Shinzo Abe. Young says the gathering involved a lot of discussion on global security and trade agreements, but his time with the prime minister was focused on economic issues. Read the Inside Indiana Business story, which also includes audio from Young.
  • Congressman Todd Rokita (IN-04) on Thursday re-introduced an important piece of legislation to protect the rights of workers. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act amends the National Labor Relations Act to allow employers to give merit-based bonuses, raises or other increases to an individual employee above the level set by the employee’s union contract. Per Rokita, a union contract should not be the ceiling on how much a good employee can earn and the RAISE Act would provide every worker with a chance to earn a bonus.
  • On Wednesday, the CEO of Aetna, one of the nation’s largest insurers echoed growing concerns that the Affordable Care Act is in a death spiral. According to a Politico report, Aetna’s CEO argued that, “More insurers will pull out of the government-run marketplaces in the coming weeks and many areas will have no insurers to provide Affordable Care Act coverage in 2018.” He went on to say, “It’s not going to get any better; it’s getting worse.”
  • On a related note, Rep. Bucshon recently introduced legislation to help stabilize the insurance markets by giving states the flexibility to meet the needs of their unique patient populations.
  • Congresswoman Susan Brooks (IN-05) introduced a measure this week to help veterans get the most from the GI Bill.
  • A honor for Rep. Pete Visclosky (IN-01): He recently received the U.S. Army’s Distinguished Civilian Service Award from Acting Secretary of the Army Robert Speer.

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.

Bill to Change Net Metering for Those Investing in Wind and Solar Energy

The Senate Utilities Committee heard a full day of testimony on SB 309 on February 9 from both sides. No vote was taken and the bill will be heard again on February 16.

Most of the committee testimony was focused on net metering. Senator Hershman offered an amendment on the floor and Sen. Tim Lanane (D-Anderson) indicated he will be offering additional amendments to be considered at the next hearing. The Indiana Chamber gave testimony in support of the bill, including stating: the expectations for energy needs are diverse; our concerns about net metering if we do not make a step forward; the potential for rising costs through continued litigation; and the concern of numerous parties intervening in cases which will further slow down the process and increase costs to both utilities and ratepayers.

Overall, we testified the current bill is a step in the right direction and can be used as a building block going forward.

This bill is truly a compromise of long-standing issues that industrial users and businesses, as well as residential ratepayers, have had with Indiana’s investor-owned utilities. It will not fix all of the concerns our members expressed, but is a first step in helping businesses control costs. It has elements of competitive procurement, net metering, distributive generation and transparency of utility rates. It will serve as a building block of the Chamber’s efforts to maintain Indiana’s historical competitive edge, given the increase in energy costs over the past decade. With that said, we will need to consider all of the amendments before ultimately taking a final position on the bill.

A Welcome Move: State’s Telecom Agreement With Agile Networks Denied

The state’s controversial proposed lease of its cell phone towers, fiber and public rights of way to Ohio-based Agile Networks officially won’t happen.

Governor Eric Holcomb put an end to it in an announcement Thursday. The Indiana Chamber applauds his decision and had been advocating for such a resolution.

Funds from the proposed $50 million lease were earmarked for bicentennial construction projects, with the Agile agreement promoted as a way to bring greater connectivity to rural areas.

Beginning last September, after learning in more detail about the agreement, the Chamber voiced significant concerns and objections on behalf of the state’s telecommunications industry.

Chamber President and CEO Kevin Brinegar had numerous discussions with the Indiana Finance Authority and State Budget Committee members – the groups needing to approve the deal. The Chamber made a clear request that the agreement not proceed.

Therefore, we are very pleased that Gov. Eric Holcomb shared our belief that this deal was bad for Indiana.

In his statement, the Governor said: “I have asked the Office of Management and Budget to assess how best to move forward and to develop alternatives we might pursue. Enhancing broadband availability in rural parts of our state will be an important part of my consideration.”

The Chamber believes that’s the correct approach.

Our board-approved position supports free market competition in the delivery of advanced telecommunications services. Yet this deal went too far and essentially suppressed this important principle. Not to mention, good Hoosier companies inexplicably were not even given equal opportunity to bid for the project.

Additionally, all industry players and competing technologies should be on a level playing field. However, this proposed deal would have only served to pit the state against private providers.

Getting better broadband access to rural areas of the state should be a priority. That was unlikely to happen with the now-defunct deal, which would have done nothing to drive Agile Networks to serve our rural areas. The company’s publicized plans were to build in the state’s largest cities – Evansville, Fort Wayne and Indianapolis – where cable and broadband services and competitive choices already exist.

Looking ahead, the Chamber pledges to work with state government in any way it can to advance the effort to truly bring connectivity to rural parts of the state. These areas must be brought up to date technologically to help reverse their downward population and economic trends.

Learn About Alliance for a Healthier Indiana; Reducing State’s Smoking Rate First Up

The Alliance for a Healthier Indiana formed last year; it includes health care professionals, advocates, and community and business leaders from across the state who are committed to improving the health of citizens.

The Indiana Chamber is among the four founding organizations; the others are the Indiana Hospital Association, Indiana State Medical Association and Anthem Blue Cross and Blue Shield in Indiana. The group’s chairman is Bryan Mills, CEO of Community Health Network.

The group came together to jointly pursue public policy measures in several critical areas of need. Indiana ranks at the bottom in many important health metrics including tobacco use, obesity, infant mortality and opioid abuse – and these are just a few critical examples. Our progress toward improvement is impeded by Indiana’s low public health spending per capita.

This contributes to higher health care spending, challenges for employers who want to provide health insurance, premature deaths, poor work and school attendance, and perpetuation of poverty. Our terrible health measures create a negative image for Indiana, making it more difficult to recruit new businesses and professionals looking for a healthy place to live, work and raise a family.

The Alliance will ultimately tackle public health issues such as obesity, infant mortality and opioid abuse. But the first priority is to substantially reduce tobacco usage, which is the leading cause of preventable death in Indiana. The severity of the problem was reinforced just this week during a presentation to the Senate Health and Provider Services Committee by Dr. Jerome Adams, Indiana’s state health commissioner. He emphatically said: “The number one issue that the Legislature could address is smoking.“

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!

A Step Closer to Sales Tax Collection for Online Purchases

The Indiana Chamber supports SB 545 (Sales Tax Collection by Remote Sellers).

This bill takes an important step toward the Legislature requiring online retailers who have no physical presence in Indiana to collect Indiana sales tax from their Indiana customers when they make online purchases. Ultimately, one of two things must happen for the requirement to go into full effect. Either the U.S. Supreme Court has to determine that states are allowed to impose this requirement based on their economic activity in the state (and the nominal burden associated with it), or Congress must pass legislation to authorize states to require the online sellers to collect a state’s sales tax.

The issue is pending before both bodies and several states are passing legislation to put pressure on one of the two entities to act and resolve the issue. Senate Bill 545 is modeled after a South Dakota law that is under review by the high court. It is designed to put Indiana in the position of making the requirement effective as soon as an Indiana court declares the collection valid under federal law. So this remains legally complicated, but SB 545 is a thoughtful and sound approach.

Senator Luke Kenley has pursued this issue diligently for many years – doing everything possible to address the problem of the sales and use tax on these transactions going uncollected. He is to be commended for his pursuit in the past and for formulating this legislation. In-state brick and mortar retailers are put in an unfair position when their online competitors are not required to collect and remit Indiana’s sales tax (as they are), effectively giving the “remote sellers” a 7% price advantage. Additionally, Indiana’s sales tax base is diminished each year as the online sales market continues to grow at rapid rates. What’s more, this is not a new tax since purchasers are already legally obligated to report their online purchases and pay the “use” tax when they file their income tax returns. But the reality is very few people comply with this law.

The Chamber supported the bill in committee this week and, in fact, has been working along with Sen. Kenley for years to achieve, by some means, state authorization for collecting these unpaid taxes. The objective is set forth in our Indiana Vision 2025 economic plan and we just might, after years of complications, be getting closer to obtaining this goal.