Sunday sales, software bills become law

The 2018 legislative session ended in a chaotic fashion when the clock struck midnight on March 14 without lawmakers accomplishing several priority bills, including those that addressed school safety; focused on problems with the Gary and Muncie school districts; and would have regulated autonomous, self-driving vehicles in Indiana.
Gov. Eric Holcomb has called a special session for May to deal with some of these issues. But ultimately, several key items were left hanging and will have to wait until next year to be addressed.

Although Democrats called the Republican supermajority’s efforts this session a “waste of time,” several key items did get settled, like legalizing Sunday alcohol sales and a tech-industry priority of exempting software-as-a-service from sales tax.

Here is a rundown of key issues and where they stand:

Autonomous vehicles

Holcomb sought in his legislative agenda this year to advance innovation involving autonomous vehicles in Indiana—but the bill that addressed the topic died at the last minute.

It aimed to expand the testing and use of autonomous vehicles on state roads, but it would have required operators to get approval from a “state automated vehicle oversight task group.”

Holcomb said House Bill 1341 stalled because of “an honest disagreement about the balance” between safety and innovation. “I didn’t think it was mutually exclusive,” he said.

But as the General Assembly came to a close, Senate President Pro Tem David Long, R-Fort Wayne, blamed the failure of the bill on its author, Rep. Ed Soliday, R-Valparaiso, who he said had a “meltdown.”

Holcomb said he was disappointed the issue didn’t get resolved, but would not ask lawmakers to tackle it during the special session.

Sunday alcohol sales

The Legislature didn’t wait until the last minute to pass historic legislation to allow the carryout sale of alcohol on Sundays.

Senate Bill 1 passed both chambers easily, and Holcomb signed it into law in late February, making March 4 the first Sunday Hoosiers could buy alcohol.

The bill’s easy passage came after decades of political disagreements and bickering among interest groups. Liquor-store owners for years said they would lose business if grocers were able to sell alcohol on Sunday, and grocers said they were standing up for consumers by increasing convenience.

But the two groups came to a truce—at least on the Sunday-sales issue—this year, agreeing to let the issue move forward.

A proposal to allow Hoosiers to purchase cold beer from places other than liquor stores did not fare so well, but is expected to be considered again in 2019.

Software as a service taxation

A bill that exempts software as a service—or software operated from the cloud—from Indiana’s 7 percent sales tax passed both chambers.

SB 257 “will help make Indiana a leader in supporting the tech community by exempting all software as a service from Indiana’s sales tax,” Holcomb said in a statement.

Indiana becomes just the fourth state to pass such a law, although many exempt cloud-based software sales through rules.

Smoking age hike

Indiana House Republicans killed a bill in late January that would have increased the minimum legal age for buying tobacco products from 18 to 21.

HB 1380, authored by Rep. Charlie Brown, D-Gary, who is retiring this year, was supposed to be his capstone achievement after more than 30 years in the General Assembly. Instead, House Speaker Brian Bosma used a procedural maneuver to kill the bill—just one day after the House Public Health Committee approved it 9-0.

Advocates of the bill said increasing the smoking age could create a powerful disincentive in a state where one in five people smokes.

State school takeover

Lawmakers adjourned without voting on legislation that would expand state takeover measures in two financially troubled school districts.

The clock ran out before either chamber held a final vote on the controversial proposal, HB 1315.

Democratic lawmakers from Gary and Muncie, two public school districts the state took over in an unprecedented move last year, vehemently opposed the bill, which would have stripped power from the Gary school board and handed control of Muncie schools over to Ball State University.

The bill would also have created a system to help the state identify schools headed toward significant financial problems.

“It’s unfortunate, but the republic will survive,” Bosma said March 15. “If there was one bill the minority [party] really objected to, it was the Muncie/Gary school bill.”

Though some legislative leaders want to take another stab at the issue in the special session, Holcomb said he would prefer to wait.

“I don’t believe that it rises to the level of urgency to be dealt with right now,” he said.

School funding

Indiana lawmakers agreed to dip into reserves to make up a shortfall to get public schools the money they were promised—and they’re trying to make sure a similar shortfall doesn’t happen again.

Both the House and Senate overwhelmingly voted to approve the final plan in HB 1001, which was signed by the governor March 19.

Estimates on the size of the shortfall have ranged widely this year, starting at $9 million and growing as new information and student counts came in. Projections from the Legislative Services Agency reported by The Indianapolis Star had the gap at $22 million this year and almost $60 million next year.

The final bill requires the state to transfer money from reserves if public school enrollment is higher than expected, as well as to make up any shortages for students with disabilities or students pursuing career and technical education.

The budget shortfall, discovered late last year, resulted from miscalculations in how many students were expected to attend public schools over the next two years.

Hate crimes

Indiana remains one of just five states without a hate-crimes law after Republican Senate leaders sidelined a bill that targeted crimes motivated by bias.

Advocates say the move could deal a blow to the area’s bid to land the new Amazon headquarters after making the short list of 20 finalists.

The Republican majorities, however, could not overcome opposition within their ranks.

“It’s a matter of people’s opinions. We just couldn’t come to consensus,” Republican Senate leader David Long of Fort Wayne, said in January.

A recent poll conducted by Ball State University found 65 percent of Indiana residents support the creation of a hate-crimes law. But a deep thread of social conservatism runs throughout the Statehouse, and lawmakers faced pressure from activists who argue that such a law would create a special protected class of victims.

SB 418 by Republican Sen. Susan Glick would have specifically stated that a judge could take into account during sentencing whether a crime was motivated by race, religion, color, sex, gender identity, disability, national origin, ancestry, sexual orientation or ethnicity.

A provision that would have protected transgender people was a particular sticking point.

Redistricting

Advocates for redistricting reform were disappointed again this year when even modest attempts to set standards for redrawing maps every 10 years were shot down in the House.

Rep. Milo Smith, R-Columbus, did not give a hearing to several election-related bills, including SB 326, which would have set criteria lawmakers would have to consider when drawing the maps, and HB 1014, which would have created an independent redistricting commission.

Bosma told reporters he wants to wait for a U.S. Supreme Court ruling on another state’s redistricting process before moving forward with legislation.

Workforce development

Indiana lawmakers approved a somewhat controversial bill focused on workforce development, over the concerns of the Indiana Manufacturers Association as well as lawmakers who believed it will increase bureaucracy and put at risk at least $50 million in federal funding.

Legislators also approved other minor tweaks to the workforce system, such as directing the nonpartisan Legislative Services Agency to review the state’s myriad programs and expanding eligibility for Holcomb’s new workforce grant program.

Lawmakers started the session saying that reforming the state’s muddled workforce development system was the top priority.

Instead, they shut down bigger proposals—such as creating a tax credit to lure employees to Indiana, redirecting corporate income tax revenue to pay for workforce training, and creating a fifth year of high school to focus on specific workforce training.

“We were supposed to have an elephant, folks,” said Rep. Ed Delaney, D-Indianapolis. “We got a mouse. The second-biggest business lobby can’t bring itself to endorse this bill.”

But Holcomb said the bills “will strengthen tools to prepare Hoosiers quickly for high-demand, high-wage jobs.” And his team maintained it doesn’t believe the changes will risk any federal money.

SB 50, which passed the Senate 39-9 and the House 67-29, scraps the current State Workforce Innovation Council and replaces it with a governor’s workforce cabinet.

The less-controversial proposal, HB 1002, passed both chambers unanimously.

Computer science

SB 172, which has already been signed by the governor, requires public schools to offer computer science classes as an elective in high schools, as well as a part of the science curriculum for all K-12 students, by 2021.

The bill also sets up a grant program to help pay for teacher training in computer science.

Light-rail ban

Killed this year was a proposal to reverse a ban that prevents Marion County from developing a light-rail mass transit project.

State Sen. Jim Merritt, R-Indianapolis, declined to call HB 1080, which he sponsored in the Senate, before a key deadline. The ban was approved in 2014 and it restricts public spending on light-rail projects in Marion and surrounding counties.

Previously, the proposal had faced smooth sailing throughout the legislative process, passing the full House 95-0. But Indianapolis’ ongoing pothole problem created an opening to amend the bill.

Sen. Mike Delph, R-Carmel, filed an amendment that would have precluded the county from spending public money on a light-rail project until the county has “substantially remedied the pothole problem” and developed and implemented an “acceptable written plan” to remedy potholes in the future.

Payday lending

A payday lending bill that critics charged would have allowed predatory lending practices was killed in the Senate after passing the House.

A spokesman for Sen. Mark Messmer, R-Jasper, said he ruled out giving the bill a hearing in his Commerce and Technology Committee. That killed HB 1319.

It was also opposed by faith-based groups.

It’s a felony under state law to offer loans with an annual percentage rate of more than 72 percent. But the bill called for the creation of a new type of payday loan that would have allowed for annual percentage rates of up to 222 percent.

CBD oil

Lawmakers approved a bill that will allow the possession, use and retail sale of low-THC hemp extract, also known as cannabidiol oil or CBD oil.

But even as supporters cheered the measure’s passage, some warned that SB 52 creates burdensome regulation and that the legislation could find itself in similar trouble as a vaping law passed two years ago that wound up creating a monopoly.

Rep. Bill Friend, R-Macy, said the goal of the bill was to “clear up confusion surrounding CBD oil that was created last summer and fall.”

Indiana Attorney General Curtis Hill last year declared CBD oil illegal, creating a firestorm in the state surrounding the extract, which many said helps relieve various health ailments. Holcomb stepped in, putting a moratorium on enforcement of the law, keeping products on the shelves until the Legislature dealt with the issue.

The bill allows CBD oil that contains 0.3 percent or less of tetrahydrocannabinol, or THC, the chemical compound in cannabis responsible for a euphoric high. The bill also includes regulations regarding testing, packaging and labeling.

Among other rules, it requires those who distribute CBD oil to use a distributor that “has a certificate of analysis prepared by an independent testing laboratory” to show the oil meets requirements.•