LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6739 NOTE PREPARED: Dec 29, 2021
BILL NUMBER: HB 1139 BILL AMENDED:
SUBJECT: Regulation of Dams.
FIRST AUTHOR: Rep. Leonard BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides that the laws regulating dams apply only to a structure that
meets two or more of the following conditions:
(1) Exceeds 20 feet in height.
(2) Has a drainage area above the dam of more than one square mile.
(3) Impounds a volume of more than 100 acre-feet of water.
The bill requires the Department of Natural Resources (DNR) to establish a classification system for dams
based on:
(1) the height of the structure and the volume of water impounded by the structure; and
(2) the force of the water and the likely consequences resulting from the uncontrolled release of its
contents due to a failure or misoperation of the structure.
The bill also changes the classification categories for dams from high hazard, significant hazard, and low
hazard to high capacity, significant capacity, and low capacity. It changes the standard to determine potential
consequences for a failure from "may cause" to "likely to cause". It requires the DNR to have jurisdiction
over a dam to raise the dam's classification to high capacity upon receiving a request from a downstream
owner. It provides that changes to the law do not affect past inspections.
Effective Date: July 1, 2022.
Explanation of State Expenditures: The bill would likely decrease the number of dam inspections
performed by the DNR, which would decrease state expenditures [See Explanation of State Revenues for
more information.] The DNR reports that the costs of completing dam inspections is 5 to 10 times higher than
HB 1139 1 the revenue generated from the dam inspection fee, so any decrease in state revenue would be accompanied
by a larger decrease in state expenditures.
Explanation of State Revenues: The bill may potentially lower the number of dams regulated by the DNR,
as it requires a dam to meet two or more conditions (instead of one or more) to be considered a dam under
the DNR’s jurisdiction. It is unknown how many dams would no longer be under the DNR’s jurisdiction.
Under current law, the DNR regulates 1,388 dams (278 high hazard; 321 significant hazard; and 789 low
hazard). The DNR does not inspect high hazard structures. These inspections are to be done by professionally
licensed engineers every 2 years, and the owner must submit a report on the inspection to the DNR. The DNR
is to inspect significant hazard dams every 3 years and charge $200 per inspection. The DNR is to inspect
low hazard structures every 5 years and charge $100 per inspection.
The bill requires dam classification to be based on the dam’s height and volume of water impounded in
addition to the force of the water in the case of a dam failure. It also changes the standard to determine
potential consequences for a dam failure from "may cause" to "likely to cause" which could reclassify some
structures down, such that a structure that was a high hazard structure would now become a significant
capacity structure (and would be inspected by the DNR rather than by an outside engineer), or a significant
hazard structure may become a low capacity structure (still inspected by the DNR, but the inspection fee is
less and is done less often). The extent that these reclassifications would happen is unknown.
The bill also requires the DNR to have jurisdiction over a dam to raise the dam's classification to high
capacity (in response to a written request from a downstream owner).
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of Natural Resources.
Local Agencies Affected:
Information Sources: https://www.in.gov/dnr/water/dams-and-levees/
Department of Natural Resources.
Fiscal Analyst: Heather Puletz, 317-234-9484.
HB 1139 2