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 7125 NOTE PREPARED: Jan 5, 2022
BILL NUMBER: SB 395 BILL AMENDED:
SUBJECT: Licensing of Independent Electrical Contractors.
FIRST AUTHOR: Sen. Niemeyer BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill establishes the Indiana Commission on Independent Electrical
Contractors. The bill specifies various forms of electrical work that are not subject to regulation by the
commission. The bill provides for the issuance of a statewide license for independent electrical contractors.
It specifies duties and privileges associated with holding a statewide license. The bill also specifies powers
and duties of political subdivisions with respect to the statewide license. It provides that the penalty imposed
upon a political subdivision that fails to recognize and honor a statewide license is the intercept of part of
the local income taxes that would be distributed to the political subdivision.
Effective Date: July 1, 2022.
Explanation of State Expenditures: To establish the five-member Commission on Independent Electrical
Contractors and to develop the new license and regulations for electrical contractors, the Professional
Licensing Agency (PLA) will require additional workload estimated between $58,200 and $85,800 in salary
costs in FY 2023. Ongoing administrative costs for PLA and the Commission are estimated between $11,500
and $17,300 per year. If existing staffing and resource levels are insufficient for full implementation, the
additional funds and resources required could be supplied through existing staff and resources currently
being used in another program 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.
The following table provides an overview of expected costs.
SB 395 1 Estimated Costs for New Professional License
Expenditure Type Explanation Estimated Annual Cost
License Development*
Salary cost to PLA to develop
new license (includes rule
development and IT
expenditures)
$58,200 to $85,800
(FY 2023 only)
Board Member Meeting and Travel
Expenses**
Expenses of five members on the
new commission (assumes between
four and six meetings per year)
$2,700 to $4,100
Ongoing Staff and Miscellaneous
Expenditures
License administration and
overhead costs
$8,800 to $13,200
Total Ongoing Costs
Board meetings plus
administrative costs
$11,500 to $17,300
*One-time start-up expenditure, which equates to the salary cost of existing PLA staff to develop the independent electrical
contractor licenses.
**FY 2019 PLA board member reimbursement data is used for this estimate because a high volume of board meetings in FY 2020
and FY 2021 were held remotely, resulting in decreased travel reimbursements. To the extent remote meetings continue, travel
reimbursements may be lower.
Explanation of State Revenues: The bill provides that independent electrical contractor licenses would be
renewed every three years, with license and renewal fees set by the commission. The PLA sets most license
renewal fees at $50 or higher. Current law requires all license fee revenue must equal the costs to maintain
professional boards annually. The actual revenue the bill would generate from license fees would depend on
the fee levels set by the commission and the number of contractors that obtain licenses..
Explanation of Local Expenditures:
Explanation of Local Revenues: If a local political subdivision refuses to honor the statewide independent
electrical contractor license within its jurisdiction, the bill would allow the Auditor of State to withhold 1%
of the subdivision’s monthly local income tax allocation until the commission finds that the subdivision has
complied with the bill’s requirements. Additionally, local political subdivisions that currently issue licenses
to electrical contractors could potentially collect fewer license fees to the extent that contractors operating
in their jurisdiction forego local licensure in favor of statewide licenses.
State Agencies Affected: Professional Licensing Agency, Auditor of State.
Local Agencies Affected: Local taxing units, local licensing agencies.
Information Sources: State staffing tables.
SB 395 2 Fiscal Analyst: Adam White, 317-234-1360; Olivia Smith, 317-232-9869.
SB 395 3