The 2008 session of the Indiana General Assembly adjourned sine die on Friday, March 14, 2008. Throughout the session media attention was focused on reforming Indiana’s property tax system. While this issue dominated the discussions, hundreds of other bills and resolutions were considered, over 150 of which have or will soon become law.
HB 1001 was the main vehicle through which property tax reform measures were advanced. HB 1001 passed by a vote of 82-17 in the House and 41-6 in the Senate and was signed into law by the Governor on 3/19/08. Key provisions of the final 600-plus page document include:
SJR1, the companion resolution to HB 1001, sets the property tax caps (1% on homesteads, 2% on rental properties and 3% on businesses) in stone through a constitutional amendment that, to become effective, will need to be approved again by the legislature either next year or in 2010. Voters would then have to approve such a change in 2010 for the constitution to be amended in 2012. SJR 1 passed by a vote of 79-20 in the House and 40-7 in the Senate and awaits signature by the Governor.
While lengthy debates on the elements of property tax reform were proceeding, CAC continued to focus its efforts on protecting the utility regulatory process to ensure the reasonableness of gas and electric utility rates and to stimulate development of a renewable energy market for Indiana’s economic, health and environmental benefit. The following is a summary of key bills in which CAC was actively involved:
HB 1280 – Energy Efficient Buildings
Status: Eligible for signature into law.
Authored by Rep. Matt Pierce (D, Bloomington), and joined by co-authors Terri Austin (D, Anderson) and Greg Porter (D, Indianapolis), as introduced HB 1280 would have required large, state, educational, and local public works building projects (other than public schools) – those that are newly constructed, as well as those subject to repair or alteration – to be designed with the goal of achieving the silver rating under the United States Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system, the Green Globes Two Globes level or an equivalent rating system accredited by the American National Standards Institute. These systems rate buildings based on the sustainability of the site, the materials and other resources, water and energy efficiency, indoor environmental quality, and innovation in design.
HB 1280 passed 7-3 out of the House Environmental Affairs Committee as amended on 1/23/08, and passed third reading in the House on 1/30/08 by a vote of 51-45. Sponsored in the Senate by Senators Brandt Hershman (R, Monticello), along with co-sponsors Vi Simpson (D, Bloomington) and Jean Breaux (D, Indianapolis), HB 1280 was amended in the Senate Energy and Environmental Affairs Committee on 2/20/08 and passed by a vote of 7-1. HB 1280 passed third reading in the Senate on 2/27/08 by a vote of 46-1.
As amended in the Senate, HB 1280 simply requires the Environmental Quality Service Council to study whether public entities should be required or encouraged to seek to achieve energy and environmental design ratings in the construction and renovation of buildings and structures, as well as related issues.
Representative and bill author Matt Pierce (D, Bloomington) initially dissented from the Senate amendments in an effort to forge a compromise in the final days of the session that would have preserved the bill’s key benefits - significant cost savings for Indiana taxpayers, improved worker health and productivity, and improved public and environmental health. When it became apparent that Senator Hershman (R, Monticello) would not agree to sign the conference committee report under any circumstance, Rep. Pierce changed his dissent to a concurrence to preserve the interim study rather than nothing at all.
Please take a moment to thank Representative Pierce (firstname.lastname@example.org) for his efforts to enact “green buildings” legislation and for his continuing advocacy on this important issue. Please also let Senator Hershman (email@example.com) know that his failure to support a legislative directive aimed at developing “green” design and construction for public works building projects constitutes a mandate on Indiana taxpayers to pay higher than necessary utility and maintenance costs for our government buildings, as well as higher costs associated with worker illness, lost productivity and the environmental impact caused by our continued over-reliance on a fossil-fuel-powered economy.
HB 1090 – Climate Registry
HB 1090 would have required Indiana to become a member of the Climate Registry, a collaboration between states (39 have joined), Canadian provinces and tribes to develop and manage a common greenhouse gas emissions reporting system in anticipation of future mandatory reduction policies. Authored by Representative Ryan Dvorak (D, South Bend), HB 1090 would have ensured Indiana’s place at the table in developing policies related to CO2 air emissions. Given Indiana’s disproportionate contribution to greenhouse gas emissions (1st in the nation in per person CO2 air emissions and 5th in CO2 air emissions from coal-fired power plants overall), Indiana’s participation in the Climate Registry is key to acknowledging our shortcomings and facing our challenges for the betterment of generations to come.
HB 1090 passed 8-2 out of the House Environmental Affairs Committee on 1/23/08 and passed third reading in the House on 1/30/08 by a vote of 53-44. It was sponsored in the Senate by Senator Beverly Gard (R, Greenfield) and assigned to the Senate Utility and Regulatory Affairs Committee, chaired by Senator Brandt Hershman (R, Monticello), who let HB 1090 die by failing to schedule it for a hearing in his committee.
Please thank Representative Dvorak (firstname.lastname@example.org) for his efforts to pass HB 1090 to ensure a place at the table in developing policies to address Indiana’s disproportionate contribution to greenhouse gas emissions. Please let Senator Hershman (email@example.com) know that continued failure to address Indiana’s over-reliance on fossil fuels to meet its energy needs will needlessly saddle Indiana taxpayers and ratepayers with unreasonably high costs once carbon regulations are enacted.
SB 0223 – Coal Gasification and Substitute Natural Gas
Status: Signed into law by the Governor.
Authored by Senator Brandt Hershman (R, Monticello), with Senator Ryan Mishler (R, Bremen) as a second author and Senators Karen Tallian (D, Portage), John Waterman (R, Shelburn), and Dennis Kruse (R, Auburn) as co-authors, SB 223 allows an out-of-state venture capitalist firm that seeks to build a coal gasification plant in Southern Indiana to assign tax credits to coal and substitute natural gas producers outside of Indiana. CAC opposed last year’s legislation, which paved the way for construction of this coal plant, as it locked natural gas suppliers, and hence ratepayers, into 30 year contracts for the substitute natural gas, whatever the price, that neither the Indiana Utility Regulatory Commission or other governmental entity could subsequently change or even review. CAC raised concerns that it would also spew millions of new tons of CO2 into Indiana’s atmosphere each year.
Promises made last year to garner support for the coal plant – that it would use Indiana coal and produce substitute natural gas in Indiana – were removed in SB 223 in a classic “bait & switch” scheme designed to secure financing regardless of the negative impact to Indiana ratepayers or the economic best interests of the state.
SB 223 passed 10-0 out of the Senate Utilities and Regulatory Affairs Committee on 1/17/08 and passed third reading in the Senate on 1/29/08 by a vote of 47-0. The bill was sponsored in the House by Rep. Russ Stilwell (D, Boonville) with co-sponsors Reps. Dave Crooks (D, Washington), Jack Lutz (R, Anderson) and Eric Koch (R, Bedford). SB 223 passed out of the House Commerce, Energy and Utilities Committee on 2/14/08 by a vote of 8-0, and passed third reading in the House on 2/28/08 by vote of 88-10. Because it passed the House without any amendments, it became eligible for signature into law by the Governor, who signed SB 223 into law on 3/12/08.
Please let the Governor (firstname.lastname@example.org) know your opposition to so-called economic development initiatives that:
HB 1117 – Various Utility Matters
Authored by Representative Russell Stilwell (D, Boonville), with co-authors Reps. Eric Koch (R, Bedford), Kreg Battles (D, Vincennes), and Jack Lutz, (R, Anderson), HB 1117 as introduced contained identical language to that in SB 223 (described immediately above). It passed 9-1 out of the House Commerce, Energy and Utilities Committee on 1/24/08 in that form. An amendment offered by Rep. Dale Grubb (D, Covington) on second reading, establishing a 10% tax credit for purchases of energy-generating wind or anaerobic digestion equipment from Indiana businesses, passed by voice vote.
HB 1117 passed third reading in the House by a vote of 81-8 and was heard in the Senate Utilities and Regulatory Affairs Committee on 2/14/08. At the hearing, bill sponsor/committee chair, Senator Brandt Hershman (R, Monticello), stripped out Rep. Grubb’s tax credit language and inserted the language from SB 224 (described below).
As amended, HB 1117 now included the original language, paving the way for a coal gasification plant financed by captive ratepayers locked into long term contracts for the substitute natural gas and over which the IURC and the state has no power to alter, regardless of the availability of cheaper prices offered by other natural gas suppliers. It also contained two tracker provisions that would have weakened the utility regulatory process and allowed utilities to reap massive profits at the expense of ratepayers regardless of the reasonableness or necessity of the investment. Finally, it contained a pseudo-RES (see SB 224 below) that would have ensured:
HB 1117 narrowly passed out of the Senate committee, as amended, by a vote of 6-5, and passed on third reading in the Senate on 2/19/08 by a vote of 33 to12. Thankfully, the bill’s author, Rep. Russ Stilwell, dissented from the Senate amendments once the bill was returned to the House, setting up a conference committee process where negotiations designed to resolve differences in House and Senate versions of the bill got underway in the final days of the 2008 session.
Working closely with Representatives Grubb and Battles, Representative Stilwell, the key House conferee, made a concerted effort to listen to and address targeted concerns raised by CAC. Senator Richard Young (D, Milltown), one of the two Senate conferees, likewise attempted to advocate for CAC’s key concerns in an effort to reach a reasonable compromise that preserved a strong RES. Despite our good faith attempts to forge a consensus document, our efforts were thwarted when Senator Hershman, the other Senate conferee, offered a competing conference committee report in the final hours of the session that not only rejected every one of CAC’s concerns, but contained new language, never before considered by the House or Senate, further ensuring utility profits, further weakening regulatory oversight, and further guaranteeing that a meaningful renewable energy market would never be developed in Indiana.
Faced with such unreasonable demands by an industry so unwilling to compromise in any manner, shape or form, Representative Stilwell had no alternative but to let HB 1117 die in the final hours of the last day of the 2008 session. With the death of HB 1117 comes the end of another attempt this year to strengthen Indiana’s economy and improve its public and environmental health through development of a renewable energy market sector.
Please thank Representative Stilwell (email@example.com), Representative Grubb (firstname.lastname@example.org) and Senator Young (email@example.com) for their willingness to support a meaningful RES and work with us in an effort to address key concerns associated with utility attempts to weaken the regulatory process and reap profits above and beyond their authorized investment rate of return.
Please remind Senator Hershman (firstname.lastname@example.org) that Indiana’s Alternative Utility Regulation Statute provides all the flexibility utilities need to obtain regulatory approval for non-traditional investments, and that provisions such as those contained in his version of the conference committee report on HB 1117 only serve to further deregulate the industry and unjustly enrich privately owned utility investors on the backs of Indiana ratepayers.
SB 0224 – Various Utility Matters
Authored by Senator Brandt Hershman (R, Monticello), and joined by co-authors Senators Ryan Mishler (R, Bremen), Dennis Kruse (R, Auburn) and Jean Breaux (D, Indianapolis), SB 224 contained a pseudo-RES – renewable energy resources were defined to include largely non-polluting, renewable sources of energy (other than energy from burning tires, garbage and other waste in waste-to-energy facilities). However, of the 6% standard to be achieved by the year 2020, 50% of it could be met using “advanced energy resources”, a new term that nevertheless included old, non-renewable resources such as waste coal (extremely high in mercury content) and “clean” coal (that, while capable of reducing sulfur dioxide, nitrogen oxide, mercury and other toxic air emissions, would add to Indiana’s disproportionate contribution to greenhouse gas emissions responsible for global warming), and that could encompass nuclear power.
SB 224 also included two pro-utility trackers that would have weakened the utility regulatory process by requiring the Indiana Utility Regulatory Commission (IURC) to approve investments regardless of whether they are just, reasonable and in the public interest. These tracker provisions could result in significant and unjustified increases in electricity rates.
SB 224 passed out of the Senate Utilities and Regulatory Affairs Committee on 1/22/08 by a vote of 6-3. An amendment offered by Senator Hershman on second reading to further expand the reach of one of the tracker provisions was adopted by voice vote. Meanwhile, Senator Lanane’s (D, Anderson) RES amendment – calling for 25% of Indiana’s electricity to be produced from truly renewable resources by 2025 – was defeated, and SB 224 passed the Senate on third reading by a vote of 39-9. SB 224 was sponsored in the House by Reps. Kreg Battles (D, Vincennes), and co-sponsors Dale Grubb (D, Covington), Jack Lutz (R, Anderson) and Dave Crooks (D, Washington). It was assigned to the House Commerce, Energy and Utilities Committee but failed to receive a hearing and is now dead thanks to Chairman Crooks’ unwillingness to consider anti-ratepayer/pro-utility legislation. In the final days of the legislative session, Senator Hershman offered language from SB 224 in his version of the conference committee report on HB 1117 (described above), but his efforts ultimately proved unsuccessful.
Please thank Representative Crooks (email@example.com) for protecting Indiana ratepayers by standing up to ongoing utility lobby efforts to deregulate the industry, for his efforts to pass a strong RES (he was the author of HB 1102, a stand-alone, meaningful RES, that failed to pass his committee 3-8 in the first half of the 2008 session) and for his fair and balanced approach to addressing the competing interests of utilities and ratepayers. With his retirement this year from the legislature, Indiana is losing one of it’s strongest leaders in the renewable energy movement. Please be sure to thank him for the tremendous contributions he has made in advancing this cause and for his willingness to listen to and work with CAC and other environmental groups.
Paul Chase, J.D.
CAC Governmental Affairs Liaison
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