Colorado Court Decision May Impact Indiana’s ‘Lawsuit Lending’ Battle

10044552As the 2016 legislative session nears, an interesting development occurred in Colorado over an issue that the Indiana Chamber has been working on for the last several years. This week, the Colorado Supreme Court determined that the practice of litigation finance, or more commonly referred to as “lawsuit lending”, was determined to be a loan and subject to Colorado’s Uniform Consumer Credit Code (UCCC).

Lawsuit lending is the practice of advancing money to a plaintiff/someone involved in an accident in anticipation of winning a lawsuit in court. If the plaintiff is awarded a settlement, the advance must be repaid at considerably high interest rates. If the plaintiff loses the suit, there is no obligation to repay the loan.

Proponents of the industry have claimed that the advance is not a loan because there is no recourse if the suit is lost. Opponents (including the Indiana Chamber) believe that this process interjects a third party into the civil justice system and prolongs the settlement process.

The Colorado Supreme Court’s decision puts lower interest rate limits on the advance of these loans. Two companies doing business in Colorado stopped operating in 2010 after the state office that regulates Colorado’s UCCC determined that the state law applies to their businesses. After the two companies filed suit to overturn the regulatory opinion, the state attorney general’s office countersued. The companies were accused of unlicensed lending and charging “exorbitant” interest rates to plaintiffs.

In conclusion, the Colorado Supreme Court wrote: “We hold that litigation finance companies that agree to advance money to tort plaintiffs in exchange for future litigation proceeds are making ‘loans’ subject to Colorado’s UCCC even if the plaintiffs do not have an obligation to repay any deficiency if the litigation proceeds are ultimately less than the amount due. These transactions create a debt or an obligation to repay that grows with the passage of time. We agree with the court of appeals that these transactions are ‘loans’
under the code…”

Attempts to regulate the practice have been unsuccessful in Indiana. Hoosier proponents of the practice have indicated that subjecting finance companies to the UCCC in Indiana or subjecting them to an interest rate of less than 45% will put them out of business, so there has not been language that could bring about a compromise. The Indiana House of Representatives has passed a bill for several years that the Chamber has supported. However, the Senate has sided with the lenders and stifled the Chamber’s attempts to forward our position.

Still, the Colorado Supreme Court decision might be a game-changer in Indiana. It would not be surprising to see legislation introduced that will mirror what happened in Colorado. Last session, a similar measure was inserted as an amendment into a bill that came over from the House. The language was removed on the Senate floor before a vote was taken. Legislation this session that would be tied to Indiana’s UCCC should be assigned to the House Financial Institutions Committee, where it will find support.

Likewise, any bill tied to the UCCC should be sent to the Senate Insurance and Financial Institutions, chaired by Sen. Travis Holdman (R-Markle), where it would most likely find support. However, the issue historically has not been tied to the UCCC and has been assigned to the Civil Law Committee, where Sen. Joe Zakas (R-Granger) is chair. Senator Zakas has not been supportive of the Chamber’s lawsuit lending position.

The Chamber anticipates further debate on this issue as the new legislative session unfolds.

New and Improved Legislative Directory App a Hot Commodity for Government Affairs Teams


Want to have up-to-date information about the Indiana legislature, but you don’t want to carry a book around with you? How about using the smartphone or tablet you’re already working on?

The Legislative Directory app, developed by Indiana-based Bluebridge, is more than an electronic version of the long standing Legislative Directory. Here are some of the app benefits:

  • Updated and ready to use on the first day of the legislative session
  • Real time updates to information throughout the session and beyond
  • Less expensive than the book, but contains the same information
  • Legislators’ contact info can be downloaded to your phone

You can order the app online now (order through the Indiana Chamber, not the app stores). The app is days away from being available, at which time you will receive download links for your mobile device. (We’re updating the app throughout December as information comes in from legislators.) Bulk app purchases are now available too; your company contact will receive all of the download links for distribution as needed.

Order online now at

VIDEO: Oklahoma Native Packnett More Than “OK” for Northeast Indiana

Mike Packnett of Parkview Health (Fort Wayne) was honored as the Indiana Chamber’s 2015 Business Leader of the Year on Nov. 4. Packnett not only leads a successful hospital system, but works to enhance economic development in northeast Indiana.

Insurance Claims on Interim Agenda

The Interim Public Health, Behavioral Health and Human Services Committee conducted its final hearing in late October. The only topic of debate was the preliminary draft language that was offered by the chair, Sen. Patricia Miller (R-Indianapolis). The committee also prepared its final report for the Indiana General Assembly.

Senator Miller’s proposal addressed problems that she believes are occurring related to the handling and denial of health insurance claims. Her proposal would require the Department of Insurance to post on its web site information concerning internal and external grievance procedures for health insurance contracts. Examples include the process that a consumer should follow in filing a grievance along with a contact phone number of the department for the consumer. These provisions were generally accepted as reasonable provisions of the draft.

Controversy arose over the quarterly requirements that will be imposed on insurers regarding the denial of claims and additional burdens placed on them. The Indiana Department of Insurance testified that there really isn’t a problem regarding health claim denial in Indiana and while there have been problems among property and casualty insurers, that has not been the case with health insurers. Further testimony reflected that the department has the ability to do market conducts (on the distribution and sale of insurance), which determine problems with carriers.

Furthermore, the department conducts financial audits once every five years on every Indiana domestic insurer to make certain of insurer solvency and the ability to pay claims. Representative Matt Lehman (R-Berne) commented that the claim problem was .0004 of one percent – implying that there really isn’t any need to impose further requirements. The language passed the committee, with Sen. Jean Breaux (D-Indianapolis) and Rep. Lehman voting against the draft.

Look for Sen. Miller to draft legislation in the 2016 session similar to the language proposed in the draft. A bill may even move through the Senate, but may find more difficulty getting traction in its current form in the House. Still, there will be a fairly good chance that the grievance procedures and the web site information will find their way through the legislative process. The Chamber will be involved in the debate during the upcoming legislative session.

Tax Issues Aired by Interim Committee

The Interim Committee on Fiscal Policy, chaired by Sen. Brandt Hershman (R-Buck Creek), met three times in October and took testimony on several important issues.

At the first meeting, the group discussed the pros and cons of granting counties the general authority to adopt a food and beverage tax. Representatives for restaurateurs spoke against; county officials argued in favor of the measure. Following that debate was over four hours of testimony regarding property tax assessment procedures and appeals under Indiana’s market value in use standard – a continuation of the “big-box” issue that was addressed last session. The issue is being revisited as county officials think more needs to be done. Commissioner Jonathan Elrod of the Indiana Board of Tax Review presented a lengthy legal analysis; his memo and a flow chart of the process created under last session’s legislation (SB 436) are part of the collection of documents (Oct. 7 meeting) incorporated into the committee’s proposed final report (Oct. 21 meeting).

But in keeping with traditional practice, this committee is not making any recommendations for future legislation. The draft report simply references the volume of data, memos and other evidence brought before the committee during the course of its meetings. The committee has typically served as a forum to air the issues and collect information. Rarely is there any level of consensus on how difficult tax matters should be resolved; yet the information and discussions do often provide the impetus for various proposals in the next session. This will no doubt be the case as to the assessment issues and other matters considered by the committee.

In the following two meetings, the committee studied many substantial tax issues. It pondered the idea of permanently authorizing schools to pay for several operating expenses such as insurance, utilities and maintenance service with property tax revenues. Generally speaking, property taxes may only fund capital projects and debt service (since the state pays for general operating expenses via the school funding formula). But leeway to pay for these other items with property taxes has been granted on a temporary basis in the last several state budgets.

Purdue professor Larry DeBoer presented a cost-benefit analysis evidencing the ratio of tax pay to benefit received by different categories of taxpayers. No surprise to businesses, the ratio is not good. The committee also looked at farmland assessments (another almost perennial issue). Finally, the group received annual reports from the Legislative Services Agency’s fiscal analysts and economists evaluating existing tax incentives. These reports are always full of hard data on the utilization of numerous credits and deductions. These discussions included consideration of Tax Increment Financing (TIF) districts, the Earned Income Credit (EIC) and the Economic Development for a Growing Economy (EDGE) credits.

The committee’s draft report, and everything that was presented in each of the three meetings, is available for downloading, and archived video of the meetings is available at the at the General Assembly web site.

Student Scores: ISTEP and ‘National Report Card’

The Indiana State Board of Education (SBOE) met last month with the plan to set cut scores and finalize ISTEP grades from the 2014-2015 school year. As a reminder, setting cut scores is done by a panel of educators that determines the passing score for that year’s test. However, during that meeting, questions were raised regarding the differences between the online and paper-pencil versions of the exam. This was identified in a report submitted to the Indiana Department of Education in early October – yet that report was not provided to the test’s Technical Advisory Committee or the SBOE until right before the meeting. The SBOE then requested a comparison study done by its own test experts to determine any discrepancies. Sarah O’Brien, vice chair of the SBOE, had originally made this request back in July.

SBOE – after the comparison studies were in hand – set pass-fail benchmarks for the latest ISTEP scores. What’s anticipated is that a notable increase in students will see drops in their scores, with a portion falling below the pass line. While no one wants to see test scores go down, it is explainable as students and teachers were adjusting to the new, more rigorous academic standards and a new assessment that were adopted for the same school year. In other words, this drop is expected, and many other states have experienced similar decreases. In fact, Indiana’s scores were either on par or higher than other states that have recently adopted new standards and/or a new assessment. While the news of dropping ISTEP scores is disappointing, it is important to note that the changes to the standards will benefit students as they will be more prepared for college and career in the future. The Indiana Chamber appreciates all of the hard work of Indiana teachers and students.

Due to this somewhat turbulent transition year, Gov. Pence released a letter to Superintendent of Public Instruction Glenda Ritz and SBOE members recently stating that he is working with leadership in the Indiana General Assembly to have legislation drafted to ensure that the 2014-2015 test results would not negatively impact teacher evaluations or performance bonuses this year. The Chamber has a longstanding policy to support accountability and transparency for students and teachers but understands that unforeseen circumstances with ISTEP delays and testing issues would allow the need for this pause.

Positive news:

The recently-released National Assessment of Educational Progress (NAEP) scores – aka a “National Report Card” – shows that Indiana is achieving more than other states in all four categories:

  • Fourth grade math: Indiana 248; national average 240
  • Eighth grade math: 287; 281
  • Fourth grade reading: 227; 221
  • Eighth grade reading: 268; 264

Indiana is actually widening its advantage over other states. We commend our teachers and school administrators for their important role in helping our students reach these higher levels of achievement.

While our ISTEP scores are lower as expected, these NAEP scores reinforce that our students are achieving at a higher overall level than many of their counterparts. We expect that to accelerate going forward with the enhanced college and career ready standards in place.

Get Your Tickets for the 2016 Central Indiana Legislative Preview

???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Get a sneak peek of the upcoming General Assembly session at the Indiana Chamber’s 2016 Central Indiana Legislative Preview on Monday, November 16.

You will hear directly from the four caucus leaders – Speaker of the House Brian Bosma, House Minority Leader Scott Pelath, Senate President Pro Tem David Long and Senate Minority Floor Leader Tim Lanane – on what their top issues will be and how they see the session playing out.

What’s more, the panel will share perspectives on key issues in areas such as workforce development, transportation and taxation – all of which have great impact on employers statewide.

The Indiana Chamber will preview the session and reveal its top pro-jobs, pro-economy priorities for the new legislative year.

“This may be a short session but there will be many crucial policies considered. Our preview will be the first public forum for the legislative leaders and it’s always insightful to listen to their viewpoints,” offers Indiana Chamber President Kevin Brinegar. “The priorities we unveil are the ones the Chamber will be pushing hard and what we believe will have the most far-reaching, positive impact on our membership.”

In addition, the Indiana Chamber will honor four legislators as Small Business Champions in recognition of their achievements in enhancing the state’s small business climate.

The traditional 2016 Central Indiana Legislative Preview program runs from 11 a.m. to 1 p.m. and will take place at the Hyatt Regency in the Regency Ballroom (second floor) in downtown Indianapolis. New this year is a networking/coffee break portion that begins at 10 a.m. and coincides with registration.

Tickets are $55 per person and include lunch. Register online or call Nick at (800) 824-6885.

Chamber Board Votes to Support Expansion of State’s Civil Rights Law

?????????????????????????????????????????The Indiana Chamber of Commerce Board of Directors voted overwhelmingly at its annual fall meeting Wednesday to support expanding the state’s civil rights law to include protection for sexual orientation and gender identity.

The Indiana Chamber Board of Directors is comprised of more than 100 top business executives and civic leaders from throughout the state.

“We believe this expansion is a necessary action for the General Assembly to take,” says Indiana Chamber President and CEO Kevin Brinegar. “After the negative perception of our state generated by the Religious Freedom Restoration Act in the spring, we need to get this right in order to secure the reputation of Indiana as a hospitable and welcoming place.

“The time has come for Indiana to expand protections against potential discrimination. This action will increase the state’s future business competitiveness in the recruitment, attraction and retention of talent, as well as enhance respect for all employers and employees. We encourage our state leaders to work together to take this next critical step.”

The Indiana Chamber’s annual fall board meeting is where the organization’s public policy positions (formed by members serving on various policy committees) for the upcoming sessions of the General Assembly and Congress are discussed and acted upon.

Teacher Shortage Concerns at Forefront of Interim Study Group

Portrait of students taking notes while their classmate is raising his hand

A popular phrase in Indiana these days is the term “teacher shortage.” So much so that the Indiana General Assembly leadership asked the Education Interim Study Committee to schedule an extra meeting on Oct.19 to discuss this issue.

This marathon committee hearing lasted close to nine hours and featured testimony from many people (both from Indiana and around the country). Data is often conflicting – while there may be fewer potential teachers applying to education schools, it seems to be that there are pockets of shortages (in STEM, special education and secondary schools). (In fact, a Michael Hicks/Ball State study released last Wednesday said there was actually a surplus of teachers, except for these specialty areas). Emphasis was also provided – with bipartisan support – on the importance of mentoring, as well as flexibility of teacher pay and grant incentive programs in shortage areas.

The study committee proposed 20 recommendations to be put into its final report of the year – of which 17 were agreed upon. But this does not mean that they might turn into actual legislation during the 2016 General Assembly session. Many of these recommendations dealt with further study, but the biggest recommendation called for new money to be used to increase salaries for teachers and other educators for the first 10 years of their career. However, the 2016 legislative session is not a budget session, which essentially handcuffs the ability to propose any new funding.

All in all, while we do not expect the 2016 legislative session to be dubbed another “education session,” we should anticipate some comprehensive bills when it comes to testing, accountability and teacher shortage solutions. The Indiana Chamber is immersed in these policy issues and is in constant contact with policymakers to ensure that we are part of those discussions.

Remarks on Indiana’s Scores on ‘National Report Card’ for Student Achievement

Indiana Chamber of Commerce President and CEO Kevin Brinegar reacts to the latest National Assessment of Educational Progress (NAEP) scoring or “national report card” on student achievement:

“Hoosier students are outpacing the national average and, in fact, Indiana is widening its advantage over other states. This is welcome news and is an important metric. We commend our teachers and school administrators for their important role in helping our students reach these higher levels of achievement.

“Our new ISTEP scores are lower due to the implementation of more rigorous, but important, college and career readiness standards, which will better prepare students for post-secondary education and ultimately create a much stronger workforce.

“But in the big picture, these NAEP scores reinforce that our students are achieving at a higher overall level than many of their counterparts. We expect that to accelerate going forward with the enhanced college and career ready standards in place.”

In mathematics, Indiana fourth graders averaged a score of 248 with a national average of 240 points. Hoosier eight graders in mathematics averaged a score of 287 with a national average of 281 points. Similarly in reading, Indiana fourth graders averaged a score of 227, higher than a national average of 221 points and eighth grade students averaged a score of 268 with a national average of 264 points.