Immigration Committee Hears from Business

?????????????????????????????????????????????????????????????The Indiana Senate Select Committee on Immigration Issues conducted its third meeting recently; this time it was the business community which brought its case before Senate legislators. The Indiana Chamber made a very effective plea for Congress and the federal government to bring about comprehensive immigration reform.

At the Chamber’s request, subject experts Jon Baselice, Chris Schrader and Jenifer Brown testified – along with Chamber staff – on the impacts of immigration on companies.

Baselici is the director of immigration policy for the U.S. Chamber of Commerce, served on the staff of U.S. Sen. Marco Rubio (R-Florida) and assisted in drafting S.744, the comprehensive immigration reform bill that passed the Senate. He testified that our immigration system is working abysmally. The U.S. Chamber sees four areas for reform on immigration:

  1. Controlling our borders and preventing individuals from overstaying their visas
  2. Modernization of our legal immigration system, placing more value on a potential immigrant’s skills and talents, along with temporary worker programs
  3. An enhanced employment verification system as long as there is a preemption of state and local E-verify laws, adequate safe harbors for employers who use the system and the creation of an agricultural guest worker program that provides agribusinesses meaningful access to lawful workers in times of need
  4. What to do with the current undocumented population of 11.3 million.

Chris Schrader, president of the Society for Human Resource Management, presented a perspective on E-verify. He discussed its limitations, that there was no safe harbor for employers and that it is unable to authenticate identity. Jenifer Brown of Ice Miller testified on the actions available to Indiana under federal law (including the Immigration Reform and Control Act); the pros and cons of the federal E-verify system – explaining the complexities of the mandatory versus the non-mandatory system; the effect of unauthorized aliens upon the economic well-being of Indiana and the effect of their removal and changes in federal law or policy regarding legal immigration that could improve the Indiana economy. The Chamber also provided a presentation on the difficulties and the process of the I-9 employment eligibility verification form.

Among others testifying before the committee: the Indy Chamber of Commerce, Indiana Farm Bureau, Indiana State Building & Construction Trades Council, Indiana Builders Association and Indiana Restaurant & Lodging Association. Three more meetings are expected before a report is prepared for the Indiana Senate.

Telemedicine a Major Health Issue in 2016 Session

16358656House Bill 1263 (Telemedicine), authored by Rep. Cindy Kirchhofer (R-Indianapolis), was enthusiastically supported by the Indiana Chamber during the 2016 Indiana legislative session. Numerous organizations supported the concept and not one opposed; the Indiana State Medical Association remained neutral. The bill allows physicians, physician assistants, advanced practice nurses that have authority to prescribe drugs and optometrists to prescribe medicine to a patient via telemedicine services.

While everyone supported the concept, getting everyone to agree on the final version was a rocky process. Concerns ranged from existing patient/provider relationships, out of state providers, hospital relationships to standards of care and jurisdiction for medical malpractice. But by the end, the conference committee report had only one vote against in both houses.

Senate Bill 165 (Healthy Indiana Plan or HIP), authored by Sen. Patricia Miller (R-Indianapolis), is the Governor’s measure to repeal the former HIP plan and codify into statute the current HIP 2.0. The Pence administration believes that codifying the current plan strengthens its position with the Centers for Medicare and Medicaid Services for when the new 1115 Medicaid waiver is negotiated.

Opponents believe that codifying the existing plan leaves no room for flexibility. Chiropractic services under the HIP 2.0 plan were added in the House on second reading but removed in conference committee. The bill passed both houses, mostly along party lines with a few exceptions. The Chamber has been supportive of the core principles of HIP and HIP 2.0, offering an alternative to the Medicaid system by providing a power account (similar to an HSA) which encourages individual responsibility in a participant’s medical decisions.

 

Pseudoephedrine and Pharmacists

statehouse picEphedrine, pseudoephedrine and meth received a lot of discussion during session, especially when House Speaker Brian Bosma (R-Indianapolis) came out in November and said that something needed to be done about the state’s meth problem. The Chamber supported HB 1157/SB 161, which included putting individuals with drug-related felonies on the National Precursor Log Exchange (NPLEx) and thus would trigger a stop-sale alert; both bills passed. The Chamber has historically been opposed to making ephedrine products prescription only because of the inconvenience to consumers that need these products and the impacts on businesses that supply them; HB 1390 in its original form would have done that.

During the last week of session, the Chamber provided a written letter to the General Assembly on the conference committee report for SB 80 that was voted on in the House. The letter stated that the conference committee language prohibited consumers from
accessing multi-ingredient, time-released allergy products, such as Claritan-D, Allegra-D, Zyrtec-D and Mucinex-D – the most effective products for consumers suffering from allergies. The multi-use products are less likely to be used in meth than the single-ingredient products referenced in the conference committee report. The letter also suggested how to fix the problem.

Representative Ben Smaltz (R-Auburn) was the House sponsor and although he did not make the changes necessary to fix the conference committee report of SB 80, he did agree that the House-passed third reading version of SB 80 should be concurred upon in the Senate.That essentially amounted to the same thing as the fix and addressed the concerns the Chamber had.

The Indiana Chamber joined CVS, the Consumer Healthcare Products Association, the Indiana Pharmacists Alliance, the Indiana Retail Council, Bayer and Johnson & Johnson in penning a letter to encourage the Senate to concur on the House-passed version of SB 80 because it allowed legitimate cold and allergy sufferers the medicine they need while dramatically reducing sales of pseudephedrine to meth cooks and those they hire to purchase the drugs. Senate Bill 80 allows individuals who have a relationship with a pharmacist to purchase ephedrine and pseudoephedrine products.

It also allows the pharmacist to sell lesser amounts of ephedrine and pseudoephedrine products if there is no relationship. The House version was what ultimately became law.

Lawsuit Lending Legislation Made Big Leap in 2016 Session

10044552The most unbelievable surprise of the 2016 Indiana legislative session ended up being the bill to address the practice known as “lawsuit lending.” At the beginning and throughout much of the session, it was believed by all parties that this would be the year to reach an agreement on the issue. But as both sides began to define terms, it was clear that we weren’t really any closer than in years past.

Lawsuit lending or civil proceeding advance payment transactions, as described in HB 1127, is the practice where a third party finance company loans money to a plaintiff in anticipation of a favorable settlement in a lawsuit. The finance companies justify a high interest rate because if the plaintiff does not win the suit, there is no requirement to repay the amount financed/loaned.

The Chamber has always maintained that this practice has an adverse impact upon the settlement/litigation process. As has been the case previously, Rep. Matt Lehman (R-Berne) was the author in the House and Sen. Randy Head (R-Logansport) was the author in the Senate. The Chamber and coalition members have supported Rep. Lehman’s position and the lawsuit lending industry has supported Sen. Head’s.

Representative Lehman took a different approach this year and attempted to place the transactions under the Uniform Consumer Credit Code (UCCC). Because of the way that interest rates and deferral interest rates are calculated for banks under the UCCC, there was some confusion as to how these transactions would operate for lawsuit lending purposes. To keep a long story short: The industry wanted a $500 document fee on all transactions, 36% interest rate cap and a 36% deferral fee. Due to how their product is financed, it effectually produced an interest rate of 72% – which was totally unacceptable to the Chamber, the Indiana Manufacturers Association, the Insurance Institute of Indiana and other business interests. During conference committee time, Rep. Lehman made several proposals to find common ground.

The night before the last day of session, the Chamber met with Senate President Pro Tem David Long (R-Fort Wayne) to discuss our concerns. He thought a deal might still be struck. Early the final day, a conference committee report was presented and the legal finance industry was opposed to it. By 10:30 a.m., all parties agreed that the bill was dead and we would be back next year to fight even stronger. As a result, most of the coalition members had returned to their respective offices for the day. A little after 11 a.m., the local contract lobbyist for the American Legal Finance Association approached the Chamber to see if there could be a tweaking of the fees if the interest rates were kept lower. Around 12:30 p.m., Rep. Lehman asked the coalition if all of us could live with a 36% interest rate, a 7% service fee, a $250 document fee for loans under $5,000 and a $500 document fee for loans in excess of $5,000. The kicker was that Lehman said that it would be calculated based upon APR (Annual Percentage Rate).

Immediately the Chamber and others said take the deal. Without the APR the deal would have been OK at best, but with APR this was a game-changer. The rest of the afternoon and evening we worked ferociously to get the Senate Democrats to get Sen. Greg Taylor (D-Indianapolis) to sign the conference committee report and get the bill passed. The final HB 1127 passed the Senate 40-10 and was in the last batch of bills to be voted on in the House, passing by a margin of 63-32.

The Chamber wants to thank Jon Zarich, representing State Farm, and Michael Niland and Logan Harrison of the Insurance Institute for their amazing efforts. Their partnership with the Chamber helped make the passage of lawsuit lending possible after six long years.

Work Share Gets Dog and Pony Show, but No Vote

statehouse-picThe 2016 legislative session marked the first time in the last several years that the work share policy made it to the hearing stage, despite having strong bipartisan support. Still, the Chamber knew in advance of the hearing that Rep. Doug Gutwein (R-Francesville), chair of the committee, was probably not going to take a vote on the bill. Our plan was to give it our best shot and hope that the chairman would change his mind.

The bill’s author, Rep. Ober, testified that work share is a win-win for employers and employees, and he laid the groundwork for why the bill is important for both. Employers in an economic downturn retain skilled workers who receive partial unemployment compensation instead of being laid off. That means employers then do not have to rehire employees (and retrain) when the economy picks back up. Employees also retain their jobs and their employer sponsored benefits while drawing a prorated unemployment compensation benefit. Additionally, Rep. Karlee Macer (D-Indianapolis), a co-author on the bill, testified of her long-time support for the issue.

The Chamber presented study findings, released just this month; the research was conducted as a joint request by the Indiana Department of Workforce Development (DWD) and the Indiana Chamber. Noted economist Michael Hicks from Ball State University, the author of the study, was unable to be present for the hearing. The most important point made by the study was the impact on the economy. During the peak of national unemployment in 2010, Indiana having a work share program would have translated into $500,000 less in month to month income volatility and approximately 10,500 employees would have kept their jobs.

The Chamber would like to thank members Tom Easterday of Subaru Indiana Automotive and Mark Gramelspacher of Evergreen Global Advisors for taking the time out of their busy schedules to come testify before the committee in favor of work share. Their points to the committee were right on the mark. Easterday noted that Indiana is the most manufacturing intensive state in the U.S. Additionally, he talked about the state’s shortage of skilled workers and why retaining skilled workers during an economic downturn is so vital to manufacturing in Indiana – and a work share program can help accomplish that.

Gramelspacher testified, “There is a better way to run the unemployment program and that is work share. It creates a win-win from a lose-lose. This is a rare opportunity for the legislative body. Work share allows employers to maintain the employment relationship with known individuals and people that employers have already recruited, interviewed, tested, trained and invested in.”

The Indiana Institute for Working Families and AFL-CIO testified in favor of the bill as well.

The Indiana Manufacturers Association (IMA) testified that previously it was not supportive of work share, but because of the Chamber’s recent study it recognized the benefits and now supported the concept. However, the IMA then proceeded to express various concerns for implementing the actual program.

Prior to the hearing, the DWD representative acquiesced that the Chamber had been able to remove most of the agency’s arguments in opposition to the bill. In testimony, however, DWD opposed even moving the bill out of committee for further debate. That was a curious strategy, given the discussion before the hearing and the fact that the agency partnered with the Chamber on the study.

The Indiana Chamber brought forth two viable options to pay for the minimal cost to set up a state work share program and maintain it annually.

Nonetheless, the committee chairman followed DWD’s lead and announced at the close of the hearing that no vote was being taken then or essentially anytime this session.

Once again, here is why work share would be extremely beneficial for the state:

‘Lawsuit Lending’ and Asbestos Litigation Bills Expected

statehouse-picLast month the Indiana Chamber reported that a Colorado Supreme Court decision determined that “lawsuit lending” is a loan and will be regulated under the Uniform Consumer Credit Code (UCCC) in Colorado – and that it could impact what happens in the Indiana General Assembly. (Lawsuit lending is the practice of advancing money to a plaintiff/someone involved in an accident in anticipation of winning a lawsuit in court. If the plaintiff is awarded a settlement, the advance must be repaid at considerably high interest rates. If the plaintiff loses the suit, there is no obligation to repay the loan.)

Representative Matt Lehman (R-Berne), recently elected the House GOP Floor Leader, has indicated that he indeed will be filing his annual lawsuit lending bill – though it will look different. Previously the measure was titled Civil Proceeding Advance Payment Transaction (CPAP), which was defined as a nonrecourse transaction in which a person (CPAP provider) provides to a consumer claimant in a civil proceeding a funded amount. However, this year’s version will mirror the language in Colorado. The 2015 language specifically stated that the UCCC does not apply to a CPAP transaction; but his year’s bill (although not yet filed) will place the transaction under the UCCC.

Separately, Rep Tom Washburne (R-Evansville) will be filing a bill regarding asbestos litigation. It’s expected to require a plaintiff who files a personal injury action involving an asbestos claim to provide information to all parties in the action regarding each asbestos claim the plaintiff has filed or anticipates to file against an asbestos trust. The bill’s intent is to provide transparency to asbestos litigation and to discourage a plaintiff from being able to file an asbestos suit against an employer and also file a claim to an asbestos trust.

Work Share Bill Filed with Hopes of Hearing in 2016

Representative David Ober (R-Albion) filed a work sharing bill on Organization Day. The House clerk’s office indicated that House Bill 1014 was the fourth bill to be filed. House Bill 1014 would create a work share program, which is one of the Indiana Chamber’s top priorities for the 2016 legislative session.

Work share is a voluntary program that allows employers to maintain a skilled and stable workforce during temporary downturns. It allows employees to keep their jobs and benefits instead of facing unemployment and further financial uncertainty. And the state wins through a reduction in job losses.

Here’s an example of how it works: Instead of laying off 10 workers due to decreased demand, a company could keep the full workforce in place but reduce the hours of 40 workers by 25%. The impacted employees would receive three-quarters of their normal salary, as well as be eligible for partial unemployment insurance benefits to supplement their reduced paycheck.

Just like regular unemployment insurance, work sharing benefits would not fully cover lost income. They would, however, help mitigate the loss. There is no negative impact on the state’s unemployment insurance fund. Instead of paying full benefits to a smaller group of recipients, a larger group of employees will receive limited benefits – but most importantly remain on the job.

Work share programs are in place in more than half the states. They are intended as temporary solutions, usually lasting no more than six months.

Representative Ober has been a champion of work share and is hopeful that this is the year that the bill will garner a hearing. The bill is expected to be assigned to House Employment, Labor and Pensions Committee, where Rep. Doug Gutwein (R-Francesville) presides as chairman.

Colorado Court Decision May Impact Indiana’s ‘Lawsuit Lending’ Battle

10044552As the 2016 legislative session nears, an interesting development occurred in Colorado over an issue that the Indiana Chamber has been working on for the last several years. This week, the Colorado Supreme Court determined that the practice of litigation finance, or more commonly referred to as “lawsuit lending”, was determined to be a loan and subject to Colorado’s Uniform Consumer Credit Code (UCCC).

Lawsuit lending is the practice of advancing money to a plaintiff/someone involved in an accident in anticipation of winning a lawsuit in court. If the plaintiff is awarded a settlement, the advance must be repaid at considerably high interest rates. If the plaintiff loses the suit, there is no obligation to repay the loan.

Proponents of the industry have claimed that the advance is not a loan because there is no recourse if the suit is lost. Opponents (including the Indiana Chamber) believe that this process interjects a third party into the civil justice system and prolongs the settlement process.

The Colorado Supreme Court’s decision puts lower interest rate limits on the advance of these loans. Two companies doing business in Colorado stopped operating in 2010 after the state office that regulates Colorado’s UCCC determined that the state law applies to their businesses. After the two companies filed suit to overturn the regulatory opinion, the state attorney general’s office countersued. The companies were accused of unlicensed lending and charging “exorbitant” interest rates to plaintiffs.

In conclusion, the Colorado Supreme Court wrote: “We hold that litigation finance companies that agree to advance money to tort plaintiffs in exchange for future litigation proceeds are making ‘loans’ subject to Colorado’s UCCC even if the plaintiffs do not have an obligation to repay any deficiency if the litigation proceeds are ultimately less than the amount due. These transactions create a debt or an obligation to repay that grows with the passage of time. We agree with the court of appeals that these transactions are ‘loans’
under the code…”

Attempts to regulate the practice have been unsuccessful in Indiana. Hoosier proponents of the practice have indicated that subjecting finance companies to the UCCC in Indiana or subjecting them to an interest rate of less than 45% will put them out of business, so there has not been language that could bring about a compromise. The Indiana House of Representatives has passed a bill for several years that the Chamber has supported. However, the Senate has sided with the lenders and stifled the Chamber’s attempts to forward our position.

Still, the Colorado Supreme Court decision might be a game-changer in Indiana. It would not be surprising to see legislation introduced that will mirror what happened in Colorado. Last session, a similar measure was inserted as an amendment into a bill that came over from the House. The language was removed on the Senate floor before a vote was taken. Legislation this session that would be tied to Indiana’s UCCC should be assigned to the House Financial Institutions Committee, where it will find support.

Likewise, any bill tied to the UCCC should be sent to the Senate Insurance and Financial Institutions, chaired by Sen. Travis Holdman (R-Markle), where it would most likely find support. However, the issue historically has not been tied to the UCCC and has been assigned to the Civil Law Committee, where Sen. Joe Zakas (R-Granger) is chair. Senator Zakas has not been supportive of the Chamber’s lawsuit lending position.

The Chamber anticipates further debate on this issue as the new legislative session unfolds.

Insurance Claims on Interim Agenda

The Interim Public Health, Behavioral Health and Human Services Committee conducted its final hearing in late October. The only topic of debate was the preliminary draft language that was offered by the chair, Sen. Patricia Miller (R-Indianapolis). The committee also prepared its final report for the Indiana General Assembly.

Senator Miller’s proposal addressed problems that she believes are occurring related to the handling and denial of health insurance claims. Her proposal would require the Department of Insurance to post on its web site information concerning internal and external grievance procedures for health insurance contracts. Examples include the process that a consumer should follow in filing a grievance along with a contact phone number of the department for the consumer. These provisions were generally accepted as reasonable provisions of the draft.

Controversy arose over the quarterly requirements that will be imposed on insurers regarding the denial of claims and additional burdens placed on them. The Indiana Department of Insurance testified that there really isn’t a problem regarding health claim denial in Indiana and while there have been problems among property and casualty insurers, that has not been the case with health insurers. Further testimony reflected that the department has the ability to do market conducts (on the distribution and sale of insurance), which determine problems with carriers.

Furthermore, the department conducts financial audits once every five years on every Indiana domestic insurer to make certain of insurer solvency and the ability to pay claims. Representative Matt Lehman (R-Berne) commented that the claim problem was .0004 of one percent – implying that there really isn’t any need to impose further requirements. The language passed the committee, with Sen. Jean Breaux (D-Indianapolis) and Rep. Lehman voting against the draft.

Look for Sen. Miller to draft legislation in the 2016 session similar to the language proposed in the draft. A bill may even move through the Senate, but may find more difficulty getting traction in its current form in the House. Still, there will be a fairly good chance that the grievance procedures and the web site information will find their way through the legislative process. The Chamber will be involved in the debate during the upcoming legislative session.

Tobacco, E-Cigarettes and Cigarette Tax Topics in Interim Study Meeting

On October 6, the Interim Public Policy Committee met for nearly four hours to discuss a host of issues related to tobacco and e-cigarettes.

The group first entertained debate regarding whether smoking should be prohibited in bars, casinos and private clubs, as well as the fiscal impact of such a move. State law was passed in 2012 that prohibited smoking in the workplace with the aforementioned businesses excluded. The Casino Association testified in support of maintaining the carve-out. Representative Charlie Brown (D-Gary) asked the Indiana Chamber’s if its policy was still to support a workplace ban on smoking; we confirmed it is.

The most interesting exchange surrounded whether e-cigarettes should be defined as tobacco products and the potential taxation of them. Proponents of e-cigarettes testified that because nothing burns, no smoke is released and these products should not be classified as tobacco. The liquid in e-cigarettes contains 0, 3, 6, 12 and 18mg/ml of nicotine, thus enabling these products to be used as cessation devices. Prohibiting them and/or taxing them as tobacco products would treat them as products that are as harmful as cigarettes; they are generally considered not to be in that category. A manufacturer of e-liquid testified that a 20-cent tax per milliliter would put him out of business.

Testimony was also provided that Indiana University’s Prevention Resource Center conducted a survey among Indiana high school seniors and found that 25% had used a vaping device in the past month. That was a higher number than had used traditional tobacco products. Both are prohibited for sale to minors.

Further discussion revolved around the impact of taxation on the consumption of cigarettes. Several individuals testified that studies indicate (including one fiscal modeling of Indiana) that a 10% increase in the price of a pack of cigarettes results in a 3-5% reduction in tobacco consumption. The fiscal analysis that was conducted indicated that a 50-cent tax increase on a pack of cigarettes would generate approximately $137 million in additional revenue.

The Indiana Chamber testified that the state’s overall health ranking is 41st nationwide and 39th for smoking. Indiana has decreased from 25.6% to 21.9% of adult smokers in the population since the enactment of the 2012 smoking ban. While acknowledging the studies referenced above, the Chamber also cited a recent study from the Cato Institute that indicates that it may take a 100% increase in the cigarette tax to accomplish a 2-3% decrease in tobacco use.

No decisions were made about any of the topics discussed. The committee will meet again on October 22.