By Adam H. Berry, vice president of economic development and technology

* PDF version available for printing *

Indiana Chamber priorities in economic development and technology received a boost during the 2019 legislative session. In particular, progress was made in the areas of talent, place, capital and innovation.

Talent: Hate Crimes Bill Bolsters Hoosier Hospitality

Senate Bill 198 makes Indiana a state that has a hate crimes statute. It makes Indiana more attractive to talented individuals – of all races, religions, ethnicities and lifestyles – who employers want to recruit and a lot less welcoming to those of a criminal nature. This bill authorizes trial court judges to increase sentences of individuals whose crimes were motivated by bias toward the victim’s creed, color, disability, national origin, race, religion, sexual orientation or other “characteristic, trait, belief, practice, association or attribute,” including sex and gender identity.

In what might be considered the most controversial bill of this year’s session, SB 198 was not the “original” bias crimes measure. The Chamber and key members testified in support of SB 12, a comprehensive bias crimes bill, during a February hearing before the Senate Public Policy Committee, which passed the proposal 9-1, with Sen. Phil Boots (R-Crawfordsville) voting no. The full Senate, however, did not show SB 12 the same love, ultimately passing watered-down legislation that the Chamber deemed unacceptable and likely unconstitutional.

Fortunately, Speaker Brian Bosma and House Republicans had a “secret plan” to get Indiana off the list of five states without a hate crimes law. In a skillful move, House leadership amended SB 198 on second reading to include the crucial hate crimes language and the bill was passed the next day by a vote of 57-39. The Senate then elected to concur on the measure, sending it to the Governor’s desk.

Upon being signed into law, legal and judicial experts began weighing in and affirming that the broad protections in the bill, in addition to the referred list of categories, translates to coverage for ALL Hoosiers. Former Indiana Supreme Court Justice Frank Sullivan, Jr., a Democrat appointed to the bench in 1993 by Gov. Evan Bayh, said:

“The language of the bill is clear that acts of bias that are specifically referred to are not exclusive: Gender and gender identity, as well as age, citizenship, marital status, etc. are authorized to be used as an aggravating circumstance in determining a sentence every bit as much as race or religion or sexual identity. Just because a characteristic or trait is not specifically listed does not prevent it from being used to impose a harsher sentence. That was the conclusion reached by the Indiana Supreme Court in its unanimous Witmer v. State decision, a case in which I participated while a justice on the court.

“…To be clear: If a person thinks that under this law, he or she can commit a crime with bias due to a victim’s gender or gender identity without risk of a harsher sentence, that person is wrong.”

The Chamber thanks the entire business community for rallying behind the bias crimes initiative with special thanks going to Doug Boles (Indianapolis Motor Speedway), Chris Cerone (Zimmer Biomet), Dan Emerson (Indianapolis Colts), Larry Gigerich (Ginovus), Gretchen Gutman (Cook Group), John McDonald (Clear Object), Jim Morris, (Pacers Sports & Entertainment), Michael O’Conner (Lilly), and John Thompson (Thompson Distribution, First Electric Supply Co.) for being among the many Chamber members who testified in committee and/or contacted legislators directly.

Place: Broadband Expansion to Bring Rural Indiana Online

Senate Bill 460 also makes Indiana a better place to live, work, and start a business by facilitating the expansion of broadband into unserved, rural areas. The Chamber strongly supported this legislation because high-speed broadband is critical to long-term economic development.
Representative Ed Soliday (R-Valparaiso) became the champion of SB 460 and ensured that the bill’s final version had support from all of the key stakeholders; namely telecommunications companies and Indiana Electric Cooperatives.

Broadband expansion received a big boost late last year when Governor Holcomb announced that $100 million of the $1 billion received from the renegotiated toll road lease would be set aside for the effort. Senate Bill 460 codifies the framework for how the grant dollars will be distributed later this year.

Special thanks goes Pete Nemeth (Comcast), as well as Matt Long and Bill Soards (AT&T Indiana) for helping get this crucial legislation across the finish line.

Capital: Persistence Pays Off

Long overdue economic development priorities also will become law and make Indiana more attractive for investment and businesses looking to relocate. Provisions within SB 563, the Governor’s economic development bill, and HB 1405, legislation exempting new data centers from sales tax, are products of the Chamber’s technology and economic development policy committees, chaired by John McDonald and Larry Gigerich, respectively.

Of critical importance to the Chamber was making the Venture Capital Investment (VCI) tax credit transferable, i.e. sellable. The Chamber has advocated for VCI assignability for several years, but it was repeatedly blocked. In this budget session, the Chamber took full advantage of each committee hearing to highlight the importance of VCI assignability for attracting out-of-state capital.

VCI assignability is in the final version of SB 563, but early stage companies and entrepreneurs will have to wait another year to experience its payoff. That’s because in April, the Senate removed an $8 million appropriation to the 21 Fund (21st Century Research and Technology Fund) and to get it back, the Governor’s office agreed to a one-year delay to VCI assignability. This bargain indicates VCI assignability will result in more investment activity in the very near future.

Similarly, HB 1405 is sure to spur previously unseen economic development in a variety of ways. Indiana is not considered by data center site selectors because other states (including Ohio and Iowa) offer incentives for developers. House Bill 1405 changes that in a big way by exempting data center equipment and most electricity used at the facility from the state’s 7% sales tax. The new law also allows local units of government to exempt machinery and equipment from business personal property taxes.

Getting here, however, took several tries. A similar bill was introduced during the 2018 session but did not receive a hearing. This year, however, the Chamber pointed to a specific project in Northwest Indiana that could see $160 million in new investment as a result of HB 1405.

The data center is planned as a $40 million, 105,000-square-foot project at the site of the former State Line power plant in Hammond. Tom Dakich, the project’s lead developer and a Merrillville native, told the Chamber in 2018 that tax incentives like those in HB 1405 would help the project realize its full potential: a $200 million campus with 400,000 square feet of lake-cooled data storage.

The Senate and House overwhelmingly supported the final legislation, which also provides similar tax incentives to encourage other data centers to locate elsewhere in the state.

Innovation: Engineering a Framework for Sports Betting and Car Sharing

House Bill 1015 changes the gambling landscape in Indiana in multiple ways, but the Chamber’s priority was legalizing sports betting at state casinos, racinos and off-track betting parlors in light of the 2018 U.S. Supreme Court decision that permits the activity contingent upon state authorization.

The Chamber prioritized the initiative after a careful assessment of the opportunity costs should the General Assembly forego legalizing sports betting in Indiana and thus, potentially losing revenue and casino patrons to neighboring states.

The measure took a winding road to the Governor’s desk, mostly due to provisions of the bill not related to sports wagering – namely, allowing for the relocation of two riverboat casinos in Gary, one inland within Gary and one to Terre Haute, and moving the date for racinos to have table games with live dealers to the beginning of next year. Sports wagering never received much contention, but it remained at risk as it was unclear if the factions fighting over the other parts of the bill would be able to settle their differences.

Another new form of commerce blessed by the General Assembly: peer-to-peer car sharing. Ultimately, HB 1362 was passed unanimously by both houses but only after a session full of ironing out insurance, liability, licensing, titling and taxing concerns.

Peer-to-peer car sharing means that an individual can make his or her car available to someone else looking to rent a car. This practice has impacted car rentals as it did other industries, including taxi driving and providing short-term accommodations. Indiana imposes a 4% excise tax on car rentals and at least two counties impose additional taxes. House Bill 1362 is an attempt to level the playing field for traditional rental car companies to remain competitive with industry newcomers that enable car sharing via online platforms like Turo and Getaround.

This measure represents the latest example of the General Assembly’s accommodation of the rising sharing economy but likely will not be the last. Regardless, the Chamber joins the breadth of stakeholders who feel lawmakers got this one right.

Resource: Adam H. Berry at (317) 264-6892 or email: [email protected]