2023 IGA Legislative Recap

• By: admin
• On: 05/29/2023 12:22:25
• In: State of Indiana Bill Track

• House Enrolled Act 1001 (Rep. Thompson/State Budget): https://iga.in.gov/legislative/2023/bills/house/1001 

  • The biennial budget bill took a number of twists and turns during the final days of session. Several versions of the bill's CCR were revised and released after concerns were raised by legislators and industry groups. 

  • One correction that had to be made was a Medicaid funding issue involving the Hospital Assessment Fee, which to resolve, required edits on only a few lines. 

  • The second budget correction involved K/12 education funding. The school funding runs for traditional public schools appeared under-funded and did not keep up with inflation. Top education officials fervently advocated with their local legislators for a funding formula increase, and ultimately, about $300M was diverted from paying the Pre-1996 Teacher Pension debt to the funding formula. The proposed school voucher expansion was set to consume more than $500 million of the planned $1.2 billion increase for K-12 funding over the next two years. The reworked plan in the budget pushed the total increase to nearly $1.5 billion. 

  • Other items included in the budget were $100 million to fund mental health resources around the state, extending an automatic inflation-related increase in the state gasoline tax by three years, and providing pay raises for the Governor and other statewide elected officials starting in 2025.

  • The budget also reduced the individual income tax rate to 2.9% by 2027 and increased spending on specific local projects, bringing that total up to $536 million in earmarked line items. 

  • Key items that were discussed throughout negotiations, but omitted in the final version of the bill were the cost-of-living adjustment (COLA) and 13th check for fixed income retirees who are part of the Indiana public pension program. 

  • HEA 1001 passed out of the House with a vote count of 70-27 and 39-10 in the Senate, largely along party lines. It was signed into public law by Governor Holcomb on May 4th. 

• House Enrolled Act 1050 (Rep. Pressel/Various Motor Vehicle Matters): https://iga.in.gov/legislative/2023/bills/house/1050 

  • The annual BMV agency bill included a number of provisions, including: allowing driving credentials for certain individuals granted parole, reviewing specialty group license plates, and changing the supplemental fees for a hybrid vehicle or EV to be determined by an annual index factor. The bill attracted the attention of media and Indianapolis-based local officials during the final weeks of session following the addition of language that would prohibit the city from enacting a “right on red” ban throughout the downtown area. That language remained in the bill, which was signed into law on May 4th. 

• Senate Enrolled Act 2 (Sen. Baldwin/Taxation of Passed Through Entities): https://iga.in.gov/legislative/2023/bills/senate/2

  • SEA 2 was the first bill signed into law by the Governor this session. After unanimously passing through both chambers, it was signed on February 22nd. The legislation changes state tax law so that LLCs and S Corps can deduct all state tax payments on federal tax returns, resulting in approximately $50 million in federal tax savings for Hoosier businesses.