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 6432 NOTE PREPARED: Feb 24, 2022
BILL NUMBER: SB 365 BILL AMENDED:
SUBJECT: Psychology Interjurisdictional Compact.
FIRST AUTHOR: Sen. Messmer BILL STATUS: As Passed House
FIRST SPONSOR: Rep. Ziemke
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: This bill establishes the Psychology Interjurisdictional Compact concerning
interjurisdictional telepsychology and the temporary authorization to practice psychology in another compact
state. The bill sets forth requirements of a compact state. It also sets forth the duties of the Psychology
Interjurisdictional Compact Commission.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Summary - Joining the compact would require additional workload and
resources for the Professional Licensing Agency (PLA) and State Board of Psychology (ISBP) that extend
beyond routine administrative functions. Implementation of the compact is expected to require between
$24,800 and $42,200 in staff salary costs in FY 2023. After implementation, the PLA is expected to incur
between $8,800 and $16,300 in ongoing annual operating expenses related to administering the compact.
PLA operating expenses are paid from General Fund appropriations.
Additionally, the Attorney General’s Office and the ISBP could experience an increase in workload for
investigatory and disciplinary procedures to the extent that complaints are made against out-of-state
practitioners practicing in Indiana under the compact or Indiana licensees practicing in other states. The ISBP
would also be required to pay any witness fees and travel expenses necessary to summon witnesses from
other compact states for hearings held by the ISBP. The volume of such complaints and disciplinary actions
is expected to be minimal.
SB 365 1 Estimated PLA Expenditures for the Psychology Interjurisdictional Compact
Expense
FY 2023 Subsequent Years
Low
Estimate
High
Estimate
Low
Estimate
High
Estimate
PLA & ISBP Implementation Costs* $24,800 $42,200 - -
PLA & ISBP Ongoing Administrative Costs* - - $6,800 $10,300
Annual Assessment Fee** - - $2,000 $6,000
TOTAL $24,800 $42,200 $8,800 $16,300
*Estimated salary cost of existing staff to complete the bill’s requirements.
**The compact’s annual assessment is currently set at the lesser of $10 per authorization holder or $6,000.
Additional Information - The Psychology Interjursidictional Compact is a multi-state agreement that allows
psychologists that are licensed in a compact state to:
(1) practice telepsychology for clients in distant compact states;
(2) temporarily practice in-person, face-to-face psychology in another compacting state for up to 30
days per calendar year.
There are currently 27 states that have adopted the compact, and an additional three states with pending
legislation. The Commission was formally established in July 2019.
PLA Workload: The PLA will likely dedicate a significant amount of staff time in FY 2023 toward adopting
rules relating to the compact, facilitating data sharing between the ISBP and the Compact Commission,
educating license holders on the compact, and other planning activities. Expected salary costs associated with
this workload are estimated between $24,800 and $42,200 based on current PLA staff salaries for the various
employee types likely to be involved and across a range of total hours that may be spent on compact
implementation. Ongoing workload for functions such as verifying licensure for compact applicants,
submitting investigative and disciplinary information to the compact database, and providing staff support
for Indiana’s Compact Commissioner is estimated to require between $6,800 and $10,300 in salary cost per
year. The funds and resources required for this work could be supplied through existing staff and resources
currently being used in other programs or with new appropriations. Ultimately, the source of funds and
resources required to satisfy the requirements of this bill will depend on legislative and administrative
actions.
Commission Membership: The Psychology Interjurisdictional Compact Commission is a body politic made
up of one delegate from each compact state. The ISBP would appoint one voting delegate to serve as
Indiana’s Compact Commissioner. The bill authorizes the Commission to levy an annual assessment on
Indiana as a compact state. This assessment is currently set at the lesser of $6,000 or $10 per compact
authorization holder licensed in a compact state. The bill states that the annual assessment is meant to cover
the cost of the Commission’s operations and activities. Therefore, it is assumed that any travel required of
Indiana’s appointed Compact Commissioner for Commission business would not result in additional costs
to the state beyond the amount of the annual assessment.
SB 365 2 Current ISBP License Counts: As of November 2021, there were 1,394 psychologists physically located in
Indiana with active Indiana licenses. In order for Indiana to be subject to the maximum $6,000 annual
assessment, 600 or more of these licensees would need to receive telepsychology authorization or temporary
authorization to practice in distant states under the compact. As a point of comparison, the State of Missouri
joined the compact in 2018 and now has approximately 200 licensees that live in-state and have obtained
compact privileges. Given that Indiana and Missouri have nearly identical numbers of licensed psychologists
and similar population sizes, the ISBP may reasonably expect approximately 200 current in-state license
holders to obtain compact privileges. In this case, the ISBP’s annual assessment fee would be approximately
$2,000.
Uniform Data Set: Upon joining the compact, the bill would require the ISBP to submit a uniform data set
containing certain identifying, licensure, and disciplinary information to the Commission’s coordinated
database on all participating practitioners. Rules adopted by the Compact Commission require compact states
to provide proof of active licensure for compact authorization applicants and to submit investigatory and
disciplinary information to the existing database managed by the Association of State and Provincial
Psychology Boards (ASPPB). Similar requirements were included in the authorization of the Nurse Licensure
Compact, which was recently implemented by the PLA. The PLA reported costs of approximately $130,000
for harmonizing its licensure database with the Nurse Licensure Compact’s national database, an effort that
was funded through a grant awarded by the Nurse Licensure Compact Commission. To the extent that PLA
determines that the data sharing requirements of the compact necessitate similar customization of PLA’s
existing licensure database, similar information technology costs may be incurred. However, the Psychology
Interjurisdictional Compact Commission’s rules do not expressly require the harmonization of states’
databases with the ASPPB’s, and the Compact Commission does not currently offer funding for this type of
project.
Adverse Action: The bill requires the ISBP or the Attorney General’s Office to investigate and take
appropriate action concerning reported inappropriate conduct engaged in by:
(1) an ISBP licensee practicing in a distant state; and
(2) a psychologist practicing under temporary authorization in Indiana in the same manner that ISBP
would act if the conduct had occurred by a licensee in Indiana.
Additionally, ISBP may take adverse action against:
(1) a distant state psychologist’s authority to practice telepsychology in Indiana; and
(2) an ISBP licensee as a result of adverse action taken by a distant state against that practitioner.
Explanation of State Revenues: Summary - If a significant number of out-of-state psychologists who hold
Indiana licenses choose to forego license renewal for compact authorization to practice virtually or on a
limited basis in-person in Indiana, there could be a reduction in General Fund revenue from license fees
estimated between $13,700 and $41,100 per biennium. Any reduction in revenue would not be expected until
FY 2024 when compact privileges begin to be granted in Indiana. [Approximately 70% of psychologist
license fee revenue is collected in odd numbered years.]
Additional Information - ISBP currently collects a biennial license fee of $100 for psychologists. In FY 2020
and FY 2021, ISBP collected approximately $237,800 from license fees. As of November 2021, 548 out of
Indiana’s 1,942 licensed psychologists live outside of Indiana. Estimates of possible revenue reduction
assume between 25% and 75% of these individuals would choose not to renew their Indiana licenses upon
receiving compact privileges.
SB 365 3 Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Professional Licensing Agency, State Board of Psychology; Attorney General.
Local Agencies Affected:
Information Sources: PLA, Search and Verify Tool;
PSYPACT, Map of Participating States: https://psypact.site-ym.com/page/psypactmap;
PSYPACT, Rule on Coordinated Licensure Information System:
https://cdn.ymaws.com/psypact.site-ym.com/resource/resmgr/final_rules/Rule_on_Coordinated_Licensur
.pdf;
Missouri Division of Professional Registration, Licensee Search:
https://pr.mo.gov/licensee-search-division.asp;
Legislative Services Agency, Indiana Handbook of Taxes, Revenues, and Appropriations, Fiscal Year
2021;
Eric Sears, Professional Licensing Agency.
Fiscal Analyst: Chris Baker, 317-232-9851.
SB 365 4