Today, the House Judiciary Committee is set to hear HB 1010 on eminent domain at 10:30 a.m. in the House Chambers. My analysis of the bill is available here.

The House Roads and Transportation Committee meets at 10:30 a.m. in Room 156-B. It is scheduled to hear HB 1103 which expands the definition of watercraft sales to include sales of trailers used exclusively for the transportation of watercraft. It is also scheduled to hear HB 1150 which allows for the use of antique license plates or replicas thereof on antique motor vehicles.

The Senate does not appear to have any committee hearings scheduled for today.

The Indy Star has an overview of introduced bills entitled Lawmakers propose several unique bills.

It mentions:
HB 1072 – mandating that schools teach about the Holocaust. (Mike Sylvester has an entry listing bills that seek to add new mandates to the school curriculum. In addition to HB 1072, there is HB 1047 – instruction of personal financial literacy and SB 45 – requiring instruction of human fetal development.)

The Star story also mentions, regulation of bungee jumping, criminalizing air guns on school property, exemption of background check fees for religious organizations, no death penalty without a jury recommendation, tax deduction for firefighters, criminalization of disorderly conduct near a funeral, regulation of interior designers, expansion of jury pool lists, lifetime hunting and trapping licenses, sentencing restrictions on the mentally ill, military family relief fund, increased fees for pesticide licenses and registration, surcharge on state parks, restrictions on spotlighting wild animals, and permitting in-state shipment of wine for personal use.

About 500 bills have apparently been introduced so far. A typical short session has fewer than 1,000 bills. The real question, of course, is seeing which bills actually get a committee hearing.

Telephone (de)regulation is up for discussion these days. I put the “de” in parentheses because deregulation bills, particularly with respect to utilities, are almost universally reregulation provisions. It’s not usually a matter of creating an unfettered marketplace. It’s usually a matter of rearranging who gets to do what to whom and under what circumstances. (The nature of all legislation, really.) The Indy Star has an article entitled Phone deregulation spurs debate.

Triggering the debate is SB 245. I have not yet read the bill, though I intend to. Whether it’s written such that I can understand what it’s doing is another question entirely. The Indiana Law Blog has some coverage today and links to a column by Lesley Stedman Weidenbrenner of the Louisville Courier Journal.

Without letting pesky “facts” and “details” cloud my vision, I’ll hazard a few general thoughts. First of all, utilities were regulated way back when for a reason. It was not done on a whim. First of all, these are services that the legislature decided most citizens pretty much ought to have. And by “utility” I have in mind electricity, water, sanitation, and basic telephone service. Second, these services tend to be thought of as “natural monopolies.” My understanding of why they are natural monopolies is because 1) they are pretty much necessities of life; and 2) they require a physical connection from one’s house to a network. Technology may have mitigated the natural monopoly status somewhat in the case of telecommunications, but that is not entirely certain. Third, pre-regulation utilities were known to abuse their superior bargaining position.

Keeping those factors in mind, if the General Assembly is determined to go on a deregulation adventure, I think it is critical that it keep the established providers of basic telephone service on a short leash until their competitors have advanced to the point where switching providers of basic telephone service is as easy as switching laundry detergent. In addition, legislators need to wrestle with the issue of subsidies. In my opinion, the issue of subsidies is where deregulating utilities runs off the tracks. The legislature has to consider not just ongoing subsidies, but ongoing subsidies.

The historical subsidies are the ones where telephone companies were given a monopoly such that they have had decades to build up their plant, networks, rights of way, pipes into the customers home, and other infrastructure that gives them an almost insurmountable leg up in terms of providing basic telephone service and the ability to leverage that advantage when providing more advanced communications services.

The ongoing subsidies are the ones where, presumably, the legislature will continue to mandate that more difficult to serve areas be subsidized so that residents can continue to get cheap phone service. Rural areas come to mind primarily — if nothing else, you have to string more wire (or other infrastructure) per person simply because rural areas are, by definition more sparsely populated. This kind of subsidy can, once again, be leveraged to give the recipient telecommunications company a leg up in providing other kinds of services or services in other areas. (Or, it can work to their disadvantage if, for example, certain companies are required to provide services to these areas without being somehow compensated for the extra expense.)

So, as I see it, if the legislature is determined to pursue (de)regulation, it has to keep existing providers in check long enough to allow competitors to become competitive. And, it has to somehow neutralize the subsidy problem. I’m not sure, however, that deregulation is necessary. I live in the small town of Monticello and my access to telecommunications services is pretty good. Plain old telephone service, DSL, cable internet, and cell phones are all available in this town of (I think) 6,000. The Indy Star article cites 4 other states that pursued telephone deregulation:

Arkansas, Massachusetts, Nebraska and Utah all saw basic residential phone rates rise from 1993 to 2004, according to a survey of sample cities by the Federal Communications Commission. Meanwhile, Indiana’s basic regulated phone rates remained flat.

And, we have the cautionary tale of California which pursued electricity deregulation based on the promise of lower electric bills. Instead, they got rolling blackouts and cheated out of vast sums of money by the likes of Enron. With that sort of scandal as a distinct possibility, my preliminary advice to legislators is to take an “if it ain’t broke, don’t fix it” approach. Unless, of course, Governor Daniels wants to go the way of former California Governor Gray Davis who was ousted in a special election in large part in the wake of the electric deregulation/rolling blackout turmoil.

House Bill 1010 on eminent domain is scheduled to be heard in the House Judiciary Comittee. The bill would, obviously, modify eminent domain procedures. Currently, a condemnor is required to make an effort to purchase the property voluntarily. The bill specifies that that effort must include “good faith negotiations,” submitting a proposed purchase price to the owner, and providing the owner with an appraisal. No deadline is apparently set for the property owner to accept or decline the offer which may become important in relation to some of the other new provisions.

If a condemnor’s acquisition offer is rejected, it must proceed with an action to condemn the property within 2 years of making the offer. If it fails to do so, it has to wait another 5 years after the expiration of the 2 year period to “initiate” a new condemnation action. I’m not sure if “initiate” means to make another offer to purchase or filing a condemnation action. The 2 year time period to begin a condemnation action is expanded to 6 years for the Indiana Dept. of Transportation if it’s to be used in a state highway or toll road project. The 6 year period also applies to a condemnor acquiring land or a property right for a feeder road to a state road project.

The bill requires an appraiser appointed for the purpose of valuing condemned land for a court to be professionally engaged as an appraiser or professionally trained as an appraiser.

The bill keeps the Governor’s highway privatization plan in mind. It has a chapter that really escalates the costs of condemnation when it will benefit a private party. (I’ll call this chapter the “windfall provision” since it results in a healthy unearned profit for the land owner.) For everybody else, the test of the chapter’s applicability is whether ownership or control of the parcel will be transferred to another private person. For the Department of Transportation only transfer of ownership will trigger the windfall provisions for the owner. If the DOT transfers control, but not actual ownership, the windfall provision does not apply. So, if the DOT takes your land and gives a private company a 100 year exclusive operating agreement for the road that goes over the land, no windfall for you.

Condemnation can only take place under the windfall provision if 1) the land contains a structure that is a public or private nuisance; 2) the parcel contains a dwelling that is unfit for human habitation; 3) the parcel contains a structure that is a fire hazard or is unfit for its intended use; 4) the parcel is in a developed neighborhood but is vacant and has become a place for the accumulation of trash or vermin; 5) the parcel is the subject of tax delinquencies exceeding the value of the parcel; 6) the parcel is the subject of code violations that haven’t been substantially corrected within 1 year of the notice of violation; 7) the parcel poses a threat to public health or safety because the parcel contains environmental contamination; or 8) the parcel has been abandoned. (I’ll call this laundry list “run down pieces of property”.) Even if the property is one of these run down parcels, the condemnor still cannot proceed unless it is not reasonably possible to acquire the property by another means within 5% of the cost of what condemnation will cost. Finally, the benefit of condemnation must be something more than increasing the property tax base of a government entity. If all of those conditions apply, the condemnor may proceed to acquire the run down property, control or ownership of which will be transferred to a private entity. If the run down piece of property is farm land, the condemnor must pay the owner 125% of what it’s worth or transfer an equal acreage to the owner. If the run down piece of property is owner-occupied, the owner is to receive 150% of what the run down property was worth. In all cases, the owner’s relocation costs must also be paid. If the owner of the run down property holds out and incurs attorney’s fees in excess of $1,000, the condemnor has to pay that as well.

Finally, the bill applies to any condemnation action filed on or after November 23, 2005. There may be some real or perceived magic to organization day which took place on November 22, 2005 that makes the General Assembly believe that it can alter the law retroactively in this fashion. I don’t know the law of ex post facto laws and whatnot to form an opinion as to whether this is legal. But it certainly seems unfair to change the rules in the middle of a process.

Update It just occurred to me that the term “private person” doesn’t seem to be defined for purposes of the windfall provision. Does this mean that a privately owned electric company or railroad can’t condemn property?

The House Judiciary Committee considered the following:

HB 1040 The technical corrections bill. This is the most important bill during any session. And I’m not just saying that because I drafted one. O.k., yes I am. But, still, it’s a thankless piece of drudgery that keeps our Code among the best in the country. Every year, somebody in the Office of Code Revision keeps a big folder full of technical problems discovered in the Code and compiles them into one big bill. Sometimes it’s a real judgment call as to whether a change is “technical” or is “substantive.” But, if you have to think too hard about it, it’s not “technical.” The worst thing that could happen is something substantive sliding through in that bill. Legislators would stop trusting that it made no substantive changes and the bill would become as hard to pass as any other bill.

HB 1112 Communications of sympathy. Prohibits a court from admitting a communication of sympathy into evidence in a civil case. This was listed on the calendar, but either 1) didn’t get heard; 2) didn’t get a vote; or 3) the vote hasn’t shown up on the LSA web site yet. It says that a communication expressing sympathy, an apology, or a general sense of benevolence may not be introduced as evidence offered to prove liability of the communicator. Interesting bill. I’ve read where there are apparently studies showing that a simple “I’m sorry” would head off a fair amount of litigation. But, of course, nobody wants to have their heartfelt apologies come back to bite them in the ass when they get in front of the jury.

HB 1114 – Various property matters. This bill does a few things. But the big one appears to be a watering down of the privacy burdens imposed on a County Recorder with respect to recording documents containing social security numbers. It also eliminated the fee and associated fund designed to compensate the recorders for that burden. It passed the Committee 11-0.

HB 1134 – Recodification of Title 21. Along with the technical corrections bills, the recodifications are an important part of making Indiana’s Code among the nation’s best. The goal of the recodifications is to provide better organization of a particular Title of the Indiana Code and simplify the language to the extent possible without making substantive changes to the law. Title 21 is the K-12 education finance law. It passed the committee 11-0.

The House Roads and Transportation Committee considered:

HB 1013 The “In God We Trust” License Plate. (Previously discussed here.) This passed the committee 7 to 1. I couldn’t find the committee vote, so I don’t know who the brave soul was who opposed the addition of a 31st (at least) kind of license plate in Indiana.

HB 1021 Hay baling on interstate rights-of-way. This requires the Dept. of Transportation to develop a program to contract with farmers to harvest hay along the rights-of-way of interstate highways. The only real direction provided is that the program must provide a preference for farmers who have land adjacent to the right of way, that the State be held harmless for the baling activity, and that the farmers maintain liability insurance. No vote was recorded on this one, so I’m not sure if it actually got the scheduled hearing.

HB 1030 Notice of license branch closings. Requires that notice of a proposed closing of a license branch in a county be published in the county. I’m a little surprised this wasn’t already the law. But, obviously this is in response to the autocratic tactics employed by BMV Commissioner Joel Silverman in shutting down BMV branches this summer.

HB 1038 Permits for oversized or overweight vehicles. If a permit is granted for an an oversized or overweight tractor-semitrailer and load, the permit must allow operation from 1/2 hour before sunrise to 1/2 hour after sunset and must allow operation without an escort vehicle if the tractor and load do not exceed 90 feet in length. Adopted 10-0.

HB 1056 Certificate of salvage title. Changes the law concerning when a salvage title must be issued. Currently, in cases where an owner is insured but chooses to keep his or her vehicle after the wreck, a salvage title is required where insurer and insurance company reach a settlement agreement but where the insurer determines it’s “economically impracticable” to repair the vehicle. (In cases where the insurance company acquires the vehicle from the insured, the standard is whether the cost of repair exceeds 70% of the pre-crash value.) This bill changes the “owner-retained” standard from “economically impractical” to a 70% cost of repair standard. However, the bill excludes from the 70% calculation the cost of repairing airbags, tires, sound systems, and sales tax. Essentially, I think, this bill makes it easier for an individual to keep driving his or her vehicle after a crash without obtaining a salvage title, making it easier for that person to sell their vehicle to someone else later.

The Indy Star has an article entitled Panel OKs ‘In God We Trust’ plate. Since Rep. Burton has re-introduced old legislation, I’ll feel free to regurgitate one of my old blog posts.

Thank, um, God. House Bill 1029 1013 – The ‘In God We Trust’ License Plate passed the House Roads and Transportation Committee by a vote of 89 – 3. 7 – 1. Now, how many of those Representatives do you think really thought what the state really, really needed was an “In God We Trust” license plate, and how many of them do you think just didn’t want to be the person “voting against god”?

Last time I counted, we already have 30 different kinds of license plates in Indiana. The list:

1. Standard plates;
2. prisoner of war license plates;
3. disabled veteran license plates;
4. Purple Heart license plates;
5. Indiana Guard Reserve license plates;
6. license plates for persons with disabilities;
7. amateur radio operator license plates;
8. civic event license plates;
9. environmental license plates;
10. kids first trust license plates;
11. education license plates;
12. drug free Indiana trust license plates;
13. Indiana FFA trust license plates;
14. Indiana firefighter license plates;
15. Indiana food bank trust license plates;
16. Indiana girl scouts trust license plates;
17. Indiana boy scouts trust license plates;
18. Indiana retired armed forces member license plates;
19. Indiana antique car museum trust license plates;
20. D.A.R.E. Indiana trust license plates;
21. Indiana arts trust license plates;
22. Indiana health trust license plates;
23. Indiana mental health trust license plates;
24. Indiana Native American trust license plates;
25. Pearl Harbor survivor license plates;
26. Indiana state educational institution trust license plates;
27. Lewis and Clark bicentennial license plates;
28. Riley Children’s Foundation license plates;
29. special group recognition license plates;
30. Indiana National Guard license plates.

I’m glad to see that, once again, the General Assembly is doing its best to keep Hoosiers safe from the scourge of unregistered interior designers. House Bill 1063 introduced by Representatives Hinkle, Torr, and Micon, makes it a Class B misdemeanor to designate one’s self as a registered interior designer. It also makes a person ineligible to register as an interior design if the person has a civil judgment entered against them for negligently practicing interior design.

This is at least Representative Hinkle’s second attempt at regulating interior designers. He tried to get this one through last year as HB 1434. Maybe there is a vital public policy interest being served here, but to me it just sounds silly. Is negligent interior design really such a threat to Hoosiers that we have to get the government involved?

There are now some more House Bills online. Previously it had just been HB 1001 – Elimination of child welfare levies. In addition, now, we have:

* HB 1001 — Elimination of child welfare levies.
* HB 1011 — Miscellaneous election law matters.
* HB 1012 — Charges for small consumer loans.
* HB 1013 — In God We Trust license plate.
* HB 1014 — Indiana time zones.
* HB 1015 — Residential property tax deduction.
* HB 1016 — Pretrial fees.
* HB 1017 — Property appraisers.
* HB 1018 — Water authority audits.
* HB 1019 — Employee’s right to work.
* HB 1020 — Regulation of teen clubs.
* HB 1021 — Hay baling on interstate rights-of-way.
* HB 1022 — State fair commission.
* HB 1023 — Addiction treatment facilities.
* HB 1024 — Kidnapping and criminal confinement.
* HB 1025 — Howard County innkeeper’s tax.

HB 1014 on time zones is by Rep. Crooks and requires the following:

Requires a public question to be placed on the 2006 general election ballot asking voters whether the state should petition the federal government to place all of Indiana in the Central Time Zone except Clark, Dearborn, Floyd, Harrison, and Ohio counties. Provides that if the voters approve the public question, the governor shall: (1) petition the United States Department of Transportation to initiate proceedings to change the time zone boundary so that all of Indiana except the named counties is located in the Central Time Zone; and (2) develop evidence and present the best case to the Department of Transportation to support the requested change.

As I’ve mentioned before, I think it’s a mistake to leave those 5 southeastern counties out of the mix. I think the state would be best served on one time zone. Nobody is going to like having the time line through their back yard, but the state is only 140 miles wide. There is no compelling justification for dividing the state.

Here is a bill I like. Senator Lanane has introduced SB 113 which requires a state agency to develop a privatization plan before privatizing any state agency.

Before a state agency privatizes a program, the state agency must prepare a privatization plan that includes the following:

A description of the program to be privatized, including a reference to the legal authority under which the program was created.

Detailed budget information that includes a list of revenues and expenditures for the two (2) most recent fiscal years.

A list of all state employees currently employed by the state agency to administer the program; and the estimated effect of the privatization on the employment status of each employee.

A list of the assets of the program; and proposed disposition of the assets.

An estimate of cost savings or additional costs resulting from privatizing the program compared to the costs of the existing program. Cost estimates must include the estimated cost to the state of inspection, supervision, and monitoring of the program if the privatization is implemented. The estimate must also include an estimate of any costs that would be incurred if the privatization contract is discontinued.

An estimate of the current and future economic impact of privatization on other state programs, including public assistance programs, unemployment insurance programs, retirement programs, and agency personal services budgets designated to pay accrued vacation and sick leave benefits.

An estimate of the increases or decreases in the cost and quality of services or goods provided to the public that will result from the privatization.

An estimate of the changes in individual wages and benefits that will result from the privatization.

Descriptions and plans for ways the privatization will deliver the same or better services at a lower cost.

This bill demonstrates a good understanding of the hidden costs of privatization. If an agency is privatized, even though the initial costs may be off the books, suddenly we might have the potential of poorer quality service coupled with the children of former state employees increasing the burden on our Medicaid programs while the top executives of the private company take large profits out of state. Or maybe not. That’s why it’s a study, rather than a prohibition of privatization.

In an apparent effort to counteract BMV Commissioner Silverman’s closing of Bureau of Motor Vehicle branches, Senator Paul introduced SB 92 which requires at least one full service license branch in Cambridge City, Dunkirk, Hagerstown, Parker City, and Union City. I believe all of these municipalities are in or around Senator Paul’s east-central (Richmond area) district. If ever a bill had the potential to become a Christmas tree, this is it. Structured as it is, it is inevitable that each legislator will want to introduce an amendment to add small communities in his or her district.