By Greg Ellis, vice president of energy and environmental policy

To borrow the title of Shakespeare’s comedy, this short session was predicted to be Much Ado About Nothing in the areas of energy, environment, infrastructure and alcohol. As things turned out, the pace was more like the movie series Fast and Furious. Let’s take a look at the highlights (and lowlights).

Good outcome for environmental matters

Senate Bill 454, authored by Sen. Mark Messmer (R-Jasper), and HB 1282, authored by Rep. Sean Eberhart (R-Shelbyville), dealt with Indiana’s Excess Liability Trust Fund (ELTF). These bills would have made changes to how claims for environmental remediation are paid out of the ELTF. Longevity of the ELTF was determined to be one of the Chamber’s legislative priorities for 2020. In 2017, the national average paid for these types of claims was $147,309. The average in Indiana for the same time period was $524,638.  While we support fundamental and transformational changes to IDEM’s implementation and administration of Indiana’s ELTF funds to pay for the cleanup of leaking underground storage tanks, we had to oppose these bills. They would have eliminated the ability of the administrator of the fund to pay claims that are determined to be reasonable and cost effective. Moreover, it would have required payment to parties already determined not to be eligible parties. Both bills fortunately died fairly early in the process.

It was a different fate for the Chamber-supported HB 1189, authored by Rep. Peggy Mayfield (R-Martinsville), which centers on firefighting foam. This was one of the rare bills to pass out of both houses unanimously. Its purpose is to prohibit the use of Class B firefighting foam containing an intentionally added PFAS chemical for training and testing purposes, unless the testing facility has implemented appropriate measures to prevent release of the foam into the environment. Although this bill creates an additional layer of regulation, containment of the chemical during training is a reasonable approach to the concerns about PFAS. Of note: Separately, the Environmental Protection Agency is studying PFAS chemicals to determine their risk and whether there needs to be additional regulation.

House Bill 1119, authored by Rep. Don Lehe (R-Brookston), and SB 438, authored by Sen. Jean Leising (R-Oldenburg), started out as almost identical bills dealing with pesticide use and application. Initially, we opposed both bills on the grounds that they would have unintended consequences to the overall business community (through imposing related civil penalties). However, Rep. Lehe and Sen. Leising worked with the Chamber, the agribusiness industry, the Indiana Farm Bureau and the lawn care industry to come up with workable legislation. In the end, we supported the minor changes contained in SB 438 and it passed out of both houses easily. Specifically, it requires the Pesticide Review Board to establish a working group to review civil penalties and for the working group to make recommendations concerning civil penalties to the board and the General Assembly before December 1, 2020.

As is customary, there was also the Indiana Department of Environmental Management (IDEM) technical corrections measure. House Bill 1309, authored by Rep. Dave Wolkins (R-Warsaw), revises references to federal regulations relating to variances from water quality standards. It provides that a variance from a water quality standard issued for a period of more than five years must be re-evaluated in accordance with the requirements of the federal rule on variances from water quality standards.

A variance relating to an NPDES permit may be submitted at any time before or after the issuance, renewal or modification of the NPDES permit.  The bill also eliminates the requirement that IDEM administer a certification examination for operators of water treatment plants, water distribution systems and wastewater treatment plants at least once per year. It instead requires IDEM to ensure that the examination is administered at least once per year and allows the examination to be administered by independent third parties authorized by the IDEM commissioner.  We supported the bill and it sailed through both houses.

I especially want to thank the members of the General Assembly that helped us make significant improvements to environmental legislation that would have had unintended long-term impacts on the business community and Indiana as a whole. These legislators include Sen. Leising, Rep. Lehe, Sen. Jim Merritt (R-Indianapolis) and Sen. Messmer. Additionally, Rep. Wolkins announced his retirement; he will be sorely missed as he also assisted on a number of environmental bills and led on needed measures over his many years of service.

Déjà vu with contentious energy discussions

Two significant energy bills introduced by Rep. Ed Soliday (R-Valparaiso) would almost certainly have had negative impacts for Indiana businesses. We opposed both and helped champion changes that made the bills much more favorable to ratepayers.

House Bill 1414 was the energy moratorium from the 2019 legislative session all over again.  The Chamber opposed this latest version in the House because of the likelihood of increased electric rates. Just like last year, other groups (not all typical Chamber allies) – including the Indiana Energy Association, the Indiana Industrial Energy Consumers, Indiana Manufacturers Association, Hoosier Environmental Council, Sierra Club and the Citizens Action Coalition – also opposed the bill.  As the legislation left the House, it had several components: a very burdensome procedure for utilities if they decided to retire an existing generating facility, the ability for a public utility to recover the cost of up to 90 days of reserve fuel supply, plus the awarding of high value workforce ready credit-bearing grants for job training for dislocated coal mine employees.

The Senate made significant changes to the bill by removing the 90-day fuel supply language, expanding the dislocated worker language and making the process for retiring an electric generating facility less burdensome (than the House version). We strongly supported the Senate changes. But when the bill went to conference committee to hash out the differences, Rep. Soliday took the opportunity to add the majority of the House procedural language back into the bill. The legislation subsequently passed out of both houses by fairly slim margins (28-21 and 55-38). As passed, it’s one we opposed in part and supported in part. It will help displaced workers but has the potential to increase rates with the procedural changes (expiring in May 2021) for retiring existing generating facilities.

House Bill 1327 (Power Charge Indifference Adjustment) had two parts. First, it provided that in acting upon a petition for the construction, purchase or lease of an electric generation facility, the Indiana Utility Regulatory Commission (IURC) shall consider the amount, ownership, current and potential uses, as well current and potential assessed value of any land required for the facility; the outstanding costs associated with any of the applicant’s existing facilities or infrastructure that will be retired or replaced, in whole or in part, in connection with the facility.  Second, it would establish a power charge indifference adjustment with respect to a customer that reduces its load as customer of an electric utility because of the customer’s use of a cogeneration facility or the termination of a contract under which the customer has agreed to purchase a designated amount or percentage of electricity from the electric utility to meet the customer’s demand for electricity.

The first part of the bill would have added steps to an already thorough process for new construction or replacement of electric generation.  These changes would likely increase costs and thus raise electricity rates. The second part of the bill would make it more difficult for businesses to manage their energy needs by making it harder to generate their own electricity if they decide that it is more economical for them to do so. It would curtail the freedom to contract for energy by codifying penalties for termination of energy contracts. Fortunately, Rep. Soliday decided to pull the bill from consideration at the House Utilities Committee hearing.

Ultimately, the House and Senate leadership indicated that this session wasn’t the time for energy legislation because we need to wait on the findings of the 21st Century Energy Task Force and the Chamber’s energy study slated for a late 2020 release. That means, in 2021, we should expect significant legislation in the energy arena.

Infrastructure progress continues where needed

As anticipated, Sen. Ed Charbonneau (R-Valparaiso) once again took on water – in the best possible way. His approach and desired results the last three sessions are consistent with the goals of the Chamber’s agenda and its 2014 water study, as well as the Indiana Vision 2025 plan.

Senate Bill 254 amends the law allowing the adjustment of a water or wastewater utility’s rates and charges to enable the utility to recover the cost of eligible infrastructure improvements associated with the construction, reconstruction or improvement of a highway, street or road.   The bill amends the law that allows a public water utility to treat the costs of replacing customer-owned lead service lines as eligible infrastructure improvements for which a utility’s rates and charges may be adjusted, by providing that the law applies to municipally owned utilities as well as public utilities.

Meanwhile, SB 46, authored by Sen. Aaron Freeman (R-Indianapolis), was a bill that we strongly opposed. It would have exempted property where religious services are held regularly, property that belongs to a school corporation and is used for educational purposes, plus property that is assessed as agricultural land for property tax purposes from paying user fees for the operation and maintenance of a storm water system assessed by a municipal department of storm water management, the board of a county department of storm water management or the board of public works of a consolidated WORD MISSING HERE.  This would have shifted all of those costs to business and residential properties. The bill passed out of the Senate only after it was amended to be a summer study and didn’t receive a committee hearing in the House.

Alcohol initiatives get cold shoulder

There were a number of alcohol related bills that were introduced this session, highlighted by:

  • House Bill 1431, authored by Rep. Ben Smaltz (R-Auburn), which proposed eliminating the Indiana residency requirements for holding an alcoholic beverage dealer’s permit
  • Senate Bill 37 would have repealed provisions that prohibit a grocery store (including a convenience store) or a drug store from selling and delivering cold beer for carryout
  • Senate Bill 95, authored by Sen. Ron Alting (R-Lafayette), would have allowed a waiter, waitress or server who is at least 18 years of age (instead of at least 19 years of age, under current law) to serve alcoholic beverages in a dining room of a restaurant or hotel, if the person completes an alcohol server training program and is supervised by a person at least 21 years of age who has completed an alcohol server training program

The Chamber supports more logical and equitable alcohol policies that level the playing field for producers, distributors and retailers, as well as facilitate consumer convenience. Unfortunately, none of the bills received a committee hearing. The unusual thing about that is two of the three bills were authored by the committee chairs, who ultimately determined that these issues should be dealt with during the 2021 long legislative session.

Resource: Greg Ellis at (317) 264-6881 or email: [email protected]