Indiana General Assembly
Adjourned for 2022
The Indiana General Assembly has concluded all legislative business for the 2022 legislative session, working late into the night and finishing in the early morning of March 9. The Indiana General Assembly adjourned and declared sine die several days earlier than the legislative calendar dictated for the end of session. This timely adjournment marks a significant contrast to last year when we saw the legislature conclude session without declaring sine die, taking an unprecedented 363 days to adjourn for the year.
For the 2022 session, legislators introduced 898 bills between both the Senate and House. Of these, 265 bills, or roughly 30% of the bills introduced, survived the first half of session. Of those 265 bills that survived to the halfway point, 177 bills, roughly 20%, were ultimately passed to be sent to the governor's desk for signature into law. Of the 898 introduced bills, the IMBA started session tracking 220 of them, with only 53 of those bills making it to the governor’s desk.
Of the bills the IMBA was tracking throughout session, a handful will directly impact the industry when enacted. SEA 371 bill was directly shepherded throughout the process by the IMBA and was essential to the industry. SEA 371 gave lenders ease of mind with protections regarding the sunsetting of the LIBOR interest rate, providing a clear replacement base interest rate for contracts that reference LIBOR, as the rate will no longer exist in June of 2023. This bill was effective immediately upon the governor's signature, becoming law on March 10.
On a broader COVID-19 front, the General Assembly enacted parameters regarding vaccine passports and vaccine mandates in the workplace. The General Assembly banned the ability of local governments to require vaccine passports and dictated that if employers mandate vaccinations, they must provide individual exemptions to opt-out for medical or religious reasons, or due to immunity from previous infection with COVID-19. Additionally, with Indiana's large surplus, fiscal leadership set the goal of cutting taxes this legislative session, with the finalized agreement cutting Indiana taxes by $1 billion.
Each session comes with challenges in the form of bills or legislative ideas that would create significant disruptions to the banking industry, and this year was no different. The IMBA was successful in advocating to prevent several troubling bills from passing. Most notably, the IMBA was central to defeating HB 1224, a bill that would have disallowed state government from investing or contracting with companies that “boycott” energy companies. This bill would have created a new significant risk to financial institutions of being labeled as “boycotting” the fossil fuels industry based on business decisions. The industry also fought back against similar legislation that applied to the firearms industry through a bill that functioned in a similar manner to the fossil fuels bill, applying the framework to gun dealers and manufacturers (HB 1409). It is expected that both approaches to "forced" finance will return next session.
The IMBA faced a serious debate regarding a new concept of establishing special tax or special assessment districts. These districts would use a super lien to sell bonds and use the proceeds to fund general development, both for infrastructure and broader development. Senate Bill 370 is expected to be brought back next session, and creating a lien priority for these assessments will be central to the debate.
Other troubling issues expected to return in coming years include bills focused on creating new penalties for lenders related to discrimination in lending (HB 1326) and an extension of sales tax to services (HB 1083). The IMBA had significant concerns about each of these bills this session and opposed both bills as they were drafted.
The IMBA extends special thanks to the many legislators and bankers who worked toward satisfactory outcomes on issues of concern to the financial services industry. The effort and engagement put forward by so many will ensure that Indiana continues to be a state in which financial institutions can serve their customers well and positively impact Indiana communities and the broader economy.