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 6559 NOTE PREPARED: Mar 12, 2024
BILL NUMBER: HB 1120 BILL AMENDED: Mar 8, 2024
SUBJECT: State and Local Administration.
FIRST AUTHOR: Rep. Thompson BILL STATUS: Enrolled
FIRST SPONSOR: Sen. Holdman
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: The bill contains the following provisions:
Pension Provisions
Deferred Compensation: The bill provides that a state employee may affirmatively elect to enroll in the
deferred compensation plan prior to the auto enroll date on day 31 of the state employee's employment.
DROP Period: The bill increases the maximum date that a member or participant of certain retirement funds
can participate in the deferred retirement option plan (DROP) from 36 to 60 months.
Delinquent Local Pensions: The bill requires certain political subdivisions to present to the Interim Study
Committee on Pension Management Oversight (PMOC) concerning a delinquent employee retirement plan
offered by the political subdivision.
State Police Supplemental Allowance Reserve Account: This bill requires, effective July 1, 2025, the trustee
of the State Police Pension Trust to maintain a supplemental allowance reserve account for the purpose of
paying postretirement benefit adjustments.
Tax Provisions
Veteran’s Deduction: This bill increases the assessed value (AV) limit for the disabled veteran property tax
deduction from $200,000 to $240,000.
HB 1120 1 Deduction Filing: The bill allows that, for purposes of various property tax deductions, an individual has
until January 15 of a calendar year in which property taxes are first due and payable to complete, date, and
file the required certified statement with the county auditor.
Controlled Projects: This bill extends through 2025 the expiration of the threshold amounts used for
determining whether a political subdivision's project is a controlled project and whether the petition and
remonstrance process or the referendum process applies based on the political subdivision's total debt service
tax rate. It also specifies that a political subdivision's total debt service tax rate does not include a tax rate
approved by voters for a referendum debt service tax levy.
This bill also reestablishes, and enumerates requirements and procedures for, a petition and remonstrance
and a referendum for controlled projects funded by debt service if the project scope changes from the purpose
initially advertised to taxpayers.
Referendum Tax: The bill extends the current cap on operating referendum tax that may be levied by a school
corporation to taxes due and payable in 2025, and provides a formula to determine the cap for that year.
Northwestern Indiana Regional Planning Commission: The bill provides parameters for the Northwestern
Indiana Regional Planning Commission (NIRPC), beginning with calendar year 2025 and for each year
thereafter through calendar year 2029, to annually adjust each participating county's portion of the budget.
Redevelopment Commissions: This bill adds a provision to allow a redevelopment commission to expend
revenues from its allocation fund that are allocated for police and fire services on both capital expenditures
and operating expenses as authorized in the 2023 session in HB 1454.
Township Firefighting/EMS: The bill provides that, if a township transitions from a single township
firefighting and emergency services fund to two separate funds as authorized under current law, the township
legislative body must approve a transfer of the remaining cash balance from the single fund to the two new
separate funds and determine the amounts attributable to each fund.
Howard County Innkeeper's Tax: This bill provides that, if the county fiscal body of Howard County makes
certain findings, the Howard County fiscal body may adopt an ordinance that would impose the innkeeper's
tax on a person engaged in the business of renting or furnishing rooms, lodgings, or accommodations located
within an inn, a hotel, or a motel for a period of more than 30 days. (Current law limits the imposition of the
innkeeper's tax to renting or furnishing rooms, lodgings, or accommodations for periods of less than 30 days.)
It provides that an ordinance would not apply to existing rooms, lodgings, or accommodations that were not
subject to the 30 day threshold prior to January 1, 2024. The bill also provides that an ordinance may not
become effective until after April 30, 2024, and must expire before July 1, 2025. It requires the county fiscal
body, if an ordinance is adopted, to reduce the tax for any person subject to the innkeeper's tax from 8%
(current law) to 6% until the ordinance expires. It also allows the county fiscal body to return the tax rate to
8% after the ordinance expires.
Homestead Definition: The bill reinstates a provision that was repealed in SEA 325-2023 (P.L.182-2023)
that includes as a "homestead" property that is an individual's principal place of residence, is located in
Indiana, and is owned by an entity, if the individual is a shareholder, partner, or member of the entity that
owns the property.
HB 1120 2 Residential Property Definition: This bill amends a redevelopment commission provision defining
"residential property" to apply to allocation areas established after June 30, 2025 (rather than June 30, 2024).
Economic Enhancement District: The bill amends certain language in provisions in HEA 1199-2024.
Grant County LIT: This bill makes amending changes to the Grant County local income tax (LIT) special
purpose rate added in HEA 1121-2024.
Task Force: The bill requires the State and Local Tax Review Task Force to study several additional topics
during the 2024 legislative interim.
Health and Human Services Provisions
Risk-Based Managed Care: This bill authorizes the office of the Secretary of Family and Social Services
(FSSA) to implement a risk based managed care program for certain Medicaid recipients. It requires the
Office of Medicaid Policy and Planning (OMPP) to convene a workgroup and, with managed care
organizations, to conduct a claims submission testing period before the risk based managed care program is
established.
Home Health Agency Cooperative Agreements: The bill authorizes the establishment of home health agency
cooperative agreements and provides for the expiration of those provisions on June 30, 2027. (A similar law
enacted in 2022 expired on July 1, 2023.) It specifies that a home health agency may contract directly or
indirectly through a network of home health agencies.
Medicaid Presentations: The bill requires FSSA to present to the Medicaid Oversight Committee a detailed
plan for monitoring expenses of the complete Medicaid program. It requires FSSA to present to the Budget
Committee a policy to set a required minimum percentage of the reimbursement for personal care services
under the home and community-based services waivers that must be paid to the individual providing the
direct service.
Regional Mental Health Facility Grants: This bill provides that grant awards authorized in the 2023 budget
bill and awarded after December 31, 2024, for regional mental health facility grants to counties for use in
constructing new facilities or renovating existing facilities to provide mental health services for certain
incarcerated individuals may not exceed $5 M per county (instead of $2.5 M per county).
Education Finance Provisions
Curricular Materials: The bill provides that distributions for curricular materials may not be considered for
purposes of determining whether a school corporation met the requirement to expend a minimum amount
of state tuition support for teacher compensation. It repeals the requirement that each school maintained by
a school corporation and each charter school establish a curricular materials account. The bill also requires
a public school to deposit distributions for curricular materials in: (1) the education fund of the school
corporation that maintains the school; or (2) the fund in which a charter school receives state tuition support.
Bonds: The bill removes a reference in current law to outstanding bonds for which a fee replacement
appropriation was made in a provision prohibiting a state educational institution from issuing bonds for
refunding or advance refunding of outstanding bonds without approval of the Budget Agency and the board
of trustees of the issuing state educational institution making certain findings.
HB 1120 3 Other Provisions
The bill adds trailer provisions containing clarifying language pertaining to SEA 228-2024 regarding
alcoholic beverage taxes on liquor, wine, and hard cider.
State Fair Dates: This bill requires the State Fair Commission to approve future dates of the state fair and
the State Fair Board to advise the commission on future dates of the state fair.
Sister City Agreements: The bill prohibits a unit from entering into a sister city or cooperative agreement with
a city, town, province, county, school, college, or university located in a foreign adversary.
This bill also makes technical corrections and makes conforming changes.
Effective Date: Upon passage; January 1, 2023 (retroactive); January 1, 2024 (retroactive); July 1, 2024;
January 1, 2025; July 1, 2025.
Explanation of State Expenditures:
Pension Provisions
DROP Period for EG&C and Old Police and Fire Funds: Based on an actuarial cost estimate, increasing the
DROP period from a maximum of three years to a maximum of five years for the EG&C Fund could increase
the present value of future benefits by an estimated $1.1 M, increase the actuarial accrued liability of the
EG&C Fund by an estimated $3.1 M, and reduce the funded status of the EG&C Fund by 1.52% (Cavanaugh
Macdonald Consulting, 2024). The employer contribution rate is not expected to increase; however, under
current law and funding policy, the employer contribution rate for the EG&C Fund is expected to decrease
from 20.75% in CY 2024 to 17.90% in CY 2025. This change could result in a smaller decrease in future
employer contribution rates for the EG&C Fund than is expected under current law. The estimate assumes
that people would enter the DROP one to two years earlier than they do under current law (see Table 1).
Table 1. Estimated Fiscal Impact of Increasing the EG&C Fund DROP Length Maximum from Three
Years to Five Years
Baseline under
Current Law
Proposed Change
Actuarial Accrued Liability $194.8 M $198.0 M $3.1 M
Funded Status 95.8% 94.3% (1.52%)
Source: Cavanaugh Macdonald Consulting. Results are shown as of June 30, 2023.
INPRS administers the 1977 Police Officers’ and Firefighters’ Pension and Disability Fund (‘77 Fund) and
the EG&C Fund and may have increased administrative workload related to the change in the DROP for
members of these funds. The administrative costs of the ‘77 Fund and the EG&C Fund are paid from the
fund.
Any impact due to DROP changes by members of the 1925 Police Pension Fund, 1937 Firefighters’ Pension
Fund, and 1953 Police Pension Fund would be minor. As of January 2023, there were fewer than five active
members remaining in these funds who would be eligible to enter the DROP. These police and firefighter
HB 1120 4 funds are administered at the local level and are funded through General Fund appropriations to the Pension
Relief Fund.
DROP is an optional pension benefit that allows fund members who are eligible for an unreduced retirement
benefit to continue to work and earn a salary and then retire with a pension benefit calculated as of the date
the individual entered the DROP, plus receive an additional amount equal to the total of the pension benefits
that the member would have been paid during the same period had the member retired at the time they
entered the DROP. The DROP benefit is payable either in a lump sum or three equal annual payments. The
bill would allow members currently in the DROP to extend their DROP period to 60 months total and allow
new entrants into the DROP after June 30, 2024, to enter the DROP for up to 60 months.
Delinquent Local Pensions: INPRS would have increased workload to send delinquency notices to political
subdivisions that have delinquent employee retirement plans. INPRS could likely fulfill that requirement
within their current state General Fund appropriation to complete a local pension report. INPRS was
appropriated $30,000 per year in FY 2024 and FY 2025 from the General Fund to complete a local pension
report that identifies political subdivisions that are making insufficient contributions to their local pension
plans.
If PMOC were to hold additional meetings to address political subdivisions with delinquent pensions, there
would be additional expenditures for legislator per diem and travel reimbursement for the committee
members. Any additional expenditures must be within the committee’s budget, which is established by the
Legislative Council.
State Police Supplemental Allowance Reserve Account: The bill establishes supplemental reserve accounts
for state police pension funds beginning July 1, 2025. The account would consist of amounts appropriated
or transferred by the General Assembly. The bill does not make an appropriation. Further legislation would
be required to make an appropriation for this purpose or to provide postretirement benefit increases,
thirteenth checks, or other pension benefit changes or adjustments for retirees and beneficiaries of state
police pensions.
Tax Provisions
Department of Local Government Finance (DLGF): This bill will add additional workload for the DLGF in
CY 2024 when certifying CY 2025 school operating referendum tax rates and levies. The agency's current
level of resources should be sufficient to implement this provision.
Also, this bill requires the DLGF to provide to the NIRPC by no later than August 1 of each year the value
of each participating county’s maximum levy growth quotient for the ensuing budget/calendar year. The
DLGF’s current level of resources should be sufficient to implement this provision.
Task Force: The State and Local Tax Review Task Force must meet at least four times in CY 2024. There
would be no additional expense if the task force studies the additional topics during the remaining planned
meetings. However, if the task force holds additional meeting(s) to study the additional topics, then there will
be additional expenses for the members who receive per diem, mileage, and other travel reimbursements.
Howard County Innkeeper’s Tax: The extended innkeeper’s tax in Howard County would be collected and
remitted to the Department of State Revenue (DOR) in the same manner as the innkeeper’s tax within a
period of less than 30 days under current law. The DOR should be able to implement the bill’s requirements
HB 1120 5 within existing levels of staff and resources.
Health and Human Services Provisions
Risk-Based Managed Care Program: The bill requires the OMPP to convene a workgroup as prescribed in
the bill and, with federal approval of prepayments for providers in financial emergency, to oversee the
financial emergency process including making determinations that a provider is in a financial emergency.
The bill's provisions requiring testing of the claims submission process could increase costs for the managed
care organizations, which may be passed on to the Medicaid program. The FSSA reports that the bill's
requirements are within the agency's routine administrative functions.
Home Health Agency Cooperative Agreements: The bill's requirements represent an additional workload and
expenditure on the FSSA outside of the FSSA's routine administrative functions, and existing staffing and
resource levels, if currently being used to capacity, may be 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.
Medicaid Presentations: These requirements are within the FSSA's routine administrative functions and
should be able to be implemented with no additional appropriations, assuming near customary agency
staffing and resource levels. Some Medicaid administrative costs are reimbursed at 50% by the federal
government.
Education Finance Provisions
Bonds: Current law specifies that refunding bonds supported by fee replacement appropriations must be
approved by the Budget Agency and must result in a savings as set forth in a finding by the board of trustees
of the state educational institution. Current law specifies that refunding bonds may not have a longer term
than the outstanding bonds to be refunded. The bill provides that these provisions are not limited to the bonds
for which the General Assembly has made a fee replacement appropriation. It provides that the requirements
apply to refunding or advanced refunding of any outstanding bonds. This provision could increase the
workload of the Budget Agency. The increase would depend on the number of additional bonds to be
refunded due to current interest rate being lower than the rate of the original bonds.
Other Provisions
State Fair Dates: The bill transfers responsibility of approving future fair dates from the State Fair Board
(who would advise) to the State Fair Commission.
Explanation of State Revenues:
Explanation of Local Expenditures:
Pension Provisions
DROP Period: Based on an actuarial cost estimate, increasing the DROP period from a maximum of three
years to a maximum of five years could increase the present value of future benefits by an estimated $3.1 M,
increase the actuarial accrued liability of the ‘77 Fund by an estimated $84.9 M, reduce the funded status of
HB 1120 6 the ‘77 Fund by 0.89%, and increase the employer contribution rate by 0.57% (Cavanaugh Macdonald
Consulting, 2024). The estimate assumes that people would enter the DROP one to two years earlier than
they do under current law (see Table 2).
Table 2. Estimated Fiscal Impact of Increasing the ‘77 Fund DROP Length Maximum from Three Years to
Five Years
Baseline under
Current Law
Proposed Change
Actuarial Accrued Liability $8,796.3 M $8,881.2 M $84.9 M
Funded Status 93.2% 92.3% (0.89%)
Source: Cavanaugh Macdonald Consulting. Results are shown as of June 30, 2023.
As of June 30, 2022, there were 824 active members of the ‘77 Fund who were in the DROP program. The
‘77 Fund is funded through employer and employee contributions. For calendar year 2024, the employer
contribution rate is 19.1% of salary.
Any administrative impact to local employers due to DROP changes by members of the 1925 Police Pension
Fund, 1937 Firefighters’ Pension Fund, and 1953 Police Pension Fund would be minor.
Delinquent Local Pensions: Political subdivisions with delinquent local pensions would have increased
workload to create a plan to address insufficient funding of the local pension and present to PMOC regarding
their delinquent employee retirement plan.
Tax Provisions
Redevelopment Commissions: Under current law, redevelopment commissions are permitted to expend
revenues from a TIF district that are allocated for police and fire services on both capital expenditures and
operating expenses. This provision specifies that the expenditures may be made from the allocation fund.
Controlled Projects: These provisions could have an indeterminable impact on local units' expenditures and
related debt service property tax levies. In addition to the projects that would currently qualify as controlled
projects and projects that currently must go through the referendum process, additional projects could
become controlled projects and be subject to petition and remonstrance or referendum.
Under current law, the project cost and the unit’s gross AV determine whether the project will be controlled
and whether it must go through the referendum process. The unit must hold a referendum only if (1) the
referendum threshold is met, and (2) there are sufficient signatures on a petition requesting the referendum.
Additionally under current law, through December 31, 2024, a project is also considered a controlled project
for a taxing unit that has a total debt service tax rate that exceeds $0.40, and if the total debt service tax rate
is at least $0.80 then the unit must hold a referendum.
This provision extends the tax rate thresholds through CY 2025. Additionally, retroactive to January 1, 2024,
the thresholds are changed to exclude debt service rates imposed as a result of a referendum. Therefore, in
CY 2025, this provision will make any project a controlled project for a taxing unit that has a non-
referendum debt service tax rate that exceeds $0.40. Also, if the non-referendum debt service tax rate is at
least $0.80, then the unit must hold a referendum.
HB 1120 7 Since the uncontrolled project, petition and remonstrance, and referendum processes all have different levels
of public vetting, this bill could affect the likelihood that some projects ultimately get approved. Taxes levied
for projects that go through the petition and remonstrance process are subject to tax caps and could
potentially increase tax cap losses, while the taxes levied for referendum projects do not impact tax cap
losses.
Of the 290 school corporations, 148 corporations had a 2024 non-referendum debt service tax rate that
exceeded $0.40. The non-referendum debt tax rate in 15 of those school corporations was at least $0.80.
Additionally, two municipalities had 2024 non-referendum debt service tax rates that exceeded $0.40 but
were less than $0.80. No other taxing unit had a 2024 non-referendum debt service tax rate that exceeded
$0.40. [A list of taxing units with 2024 non-referendum debt service tax rates of at least $0.40 is shown as
Appendix A.]
Additionally, the bill permits taxpayers to petition for a hearing to determine whether a change in the scope
of an approved project is significant enough to warrant a new petition and remonstrance process or a new
referendum process (as was originally fulfilled).
Howard County Innkeeper’s Tax: Howard County could potentially incur a one-time increase in costs if they
hold an additional public hearing to discuss a proposed ordinance regarding the innkeeper’s tax. If the county
changes the innkeeper’s tax, the county fiscal officer would update the innkeeper’s tax forms and
instructions. The county fiscal body should be able to implement the bill’s provisions within existing levels
of staff and resources.
Northwestern Indiana Regional Planning Commission: This bill revises the methodology for how the
participating counties - Lake, LaPorte, and Porter - are apportioned the revenue that they contribute to help
fund the NIRPC’s annual budget. Currently, the county revenues used to fund the NIRPC’s annual
appropriations is based on a pro rata per capita basis. The rate is currently capped at not more than $0.70 per
capita for each participating county. This bill’s provisions adjust that rate to not more than the amount listed
below for each participating county for each year:
• CY 2025 - $0.86 per capita
• CY 2026 - $1.02 per capita
• CY 2027 - $1.18 per capita
• CY 2028 - $1.34 per capita
• CY 2029 - $1.50 per capita
Table 3 shows the revenue contributions from each participating county as included in the NIRPC’s annual
budget for CY 2024, adopted on December 7, 2023. The table also shows an estimated revenue contribution
amount from each county for CY 2025 through CY 2029 based on the annual per capita limits listed above.
HB 1120 8 Table 3. Estimated NIRPC Funding by County
County CY2024CY2025CY2026CY2027CY2028CY2029
Lake $349,090$428,882$508,674$588,466$668,258$748,050
LaPorte $78,692$96,679$114,665$132,652$150,639$168,626
Porter $121,251$148,966$176,680$204,395$232,109$259,824
Total $549,033$674,526$800,020$925,513$1,051,006$1,176,499
Starting with CY 2030, each participating county’s revenue contribution will be adjusted annually - using
the immediately preceding year’s amount as the base - based on the greater of the following: 1) the annual
percentage change in the CPI for all Urban Consumers as published by the U.S. Bureau of Labor Statistics
for the year preceding the ensuing year; or 2) the participating county's maximum levy growth quotient for
the ensuing year as determined under IC 6-1.1-18.5-2. The bill also specifies that the fiscal body for the
participating county must approve the adjusted contribution should this formula result in an amount in excess
of $1.50 per capita for the county.
According to the U.S. Bureau of Labor Statistics, the CPI for all Urban Consumers grew by 3.1% from
November 2022 to November 2023. Additionally, per HEA 1499-2023, the maximum levy growth quotient
for CY 2024 and CY 2025 for civil taxing units and school corporations may not exceed the lesser of 1.04
or 80% of the maximum levy growth quotient.
Education Finance Provisions
Curricular Materials: This provision requires public schools to deposit amounts currently in the curricular
materials account and distributions for curricular materials in the education fund (and in the case of a charter
school that does not have an education fund, the fund in which state tuition support distributions are placed)
rather than the curricular materials account. However, the bill specifies that amounts received from curricular
materials can still only be used to pay for the cost of curricular materials.
Other Provisions
Sister City Agreements: This bill would prohibit a county, city, town, or township from entering into a sister
city agreement or any cooperative agreement with a prohibited person. This provision may result in both a
reduced administrative workload and reduced fiscal expenditures for those units that have these agreements
with entities that would be classified as a prohibited person. [The bill defines “prohibited person” as a city,
town, province, county, school, college, or university located in a foreign adversary (as defined in 15 CFR
7.4).]
According to the Code of Federal Regulations, the following foreign governments or foreign non-government
persons are considered as foreign adversaries of the United States: China, Cuba, Iran, North Korea, Russia,
and the Maduro Regime in Venezuela. According to the Indiana Sister Cities website, 38 municipalities in
Indiana have sister city agreements. Of these 38 municipalities, 24 have agreements with an entity located
in one of the foreign adversary nations.
Explanation of Local Revenues:
Tax Provisions
HB 1120 9 Veteran’s Deduction: Beginning with taxes payable in CY 2025, this provision will result in an increase in
the number of disabled veterans who may qualify for the deduction. Based on current claim rates and
homestead values, an estimated additional 5,800 veterans could claim about $81 M in AV deductions worth
about $1.7 M in taxes. The new deductions will cause tax rates to rise, resulting in tax shifts to other
taxpayers to the extent that tax bills do not exceed the tax caps. Some of the tax shift will result in revenue
losses to taxing units through higher tax cap credits.
Deduction Filing: Under current law, an application for the following property tax deductions must be
completed and dated in the calendar year prior to the year in which taxes are due and must be filed no later
than January 5 of the tax payable year: homestead standard, age 65 or over, blind or disabled, disabled
veterans, WWI surviving spouse, solar heating or cooling, solar power device, wind power device,
hydroelectric power device, geothermal heating or cooling, fertilizer/pesticide storage, model residence, and
residence in inventory.
Under this provision, a taxpayer may complete, date, and file the deduction application by January 15 of the
year in which the taxes are payable. This provision could result in a minimal increase in deduction filers each
year.
Property tax deductions reduce the net AV of the property, shifting taxes to other properties. Homes with
a standard deduction are subject to the 1% tax cap rather than the 2% residential tax cap. The deductions and
lower tax cap for homesteads can reduce net taxes.
Referendum Tax: The bill will limit the growth in certain school operating referendum levies in CY 2025.
This limit applies to only referenda that were passed before 2023, but not to a referendum passed at any time
during which a school corporation was designated as a distressed unit. The increase in the CY 2025
maximum levy for an operating referendum fund will be based on ADM growth plus adjustments, with a
minimum 6% growth and a maximum 12% growth. The referendum tax rate is still limited to the rate that
was approved in the referendum.
In CY 2024, 52 school corporations have school operating referendum levies that were passed prior to 2023
but not while a distressed unit. Based on ADM and AV growth estimates, it is estimated under this proposal
that these school corporations will have CY 2025 maximum operating referendum levies that total $19.8 M
less than under current law. [A list of affected school corporations and the estimated 2025 maximum levy
change is shown in Appendix B.]
If the reduced operating referendum maximum levy leads to reduced levies, then school revenues will be
reduced as compared to current law. Since referendum funds are not subject to tax caps, this provision will
have no tax cap impact.
Residential Property Definition: Effective July 1, 2024, under current law, the definition of residential
property is clarified as it relates to the base AV in a TIF area. Most TIF areas exclude residential AV from
the TIF increment. To do this, all residential AV is added to the base AV for the allocation area. This
provision delays the effective date of the clarification for one year. For new TIF areas established after June
30, 2025, this bill defines residential property as all homesteads plus the residential value that would qualify
for the non-homestead residential LIT credit. This clarification does not apply to any existing TIF areas.
Howard County Innkeeper’s Tax: The bill provides that, under certain conditions, the county fiscal body of
Howard County may adopt an ordinance that would impose the innkeeper’s tax on certain rentals with a
HB 1120 10 duration of more than 30 days. The ordinance may not become effective until after April 30, 2024, and must
expire before July 1, 2025. The bill provides that an ordinance would not apply to existing rooms, lodgings,
or accommodations that were not subject to the innkeeper’s tax prior to January 1, 2024, because the rental
period exceeded 30 days. Under the ordinance, the innkeeper's tax rate would be reduced from 8% (current
law) to 6% and would return to 8% after the ordinance expires.
The extended innkeeper’s tax would potentially increase the innkeeper’s tax base, while the innkeeper’s tax
rate reduction from 8% to 6% would have an offsetting effect. The overall impact on local tax revenue during
the time the ordinance is effective is indeterminable and would depend on the hotel demand in Howard
County.
Economic Enhancement District: Under HEA 1199-2024, the Indianapolis City-County Council may
establish an Economic Enhancement District (EED) centered on the downtown mile square. Property in the
EED may be required to pay an assessment. However, homesteads and multi-unit residential housing
properties are exempt from the assessment. This provision also exempts single-unit residential housing
properties, even if they are not homesteads. Exempt properties may opt-in to the assessment.
The exemption of non-homestead single-unit residential properties will reduce the base on which the
assessment may be made. If the council opts to generate the maximum $5.5 M annually permitted, then the
assessment on the remaining, nonexempt, properties will be higher than under HEA 1199. The fiscal impact
depends on whether the EED is created and on the total amount of the assessment.
Health and Human Services Provisions
Home Health Agency Cooperative Agreements: The bill will have an indeterminate revenue impact for
locally owned hospitals that own home health agencies. Any change in revenue would be based on the
hospital-owned home health agency joining a cooperative agreement and negotiating a higher reimbursement
rate.
Regional Mental Health Facility Grants: HEA 1001-2023 provided grants for the construction of new
facilities or renovating existing facilities. The bill expands the maximum grant amount awarded from $2.5
M to $5 M, which could result in an increase in the awarded amount, leading to fewer awards being
available.
State Agencies Affected: Department of Local Government Finance; State Board of Accounts; Department
of State Revenue; State Budget Agency; Family and Social Services Administration; Indiana Public
Retirement System; General Assembly; Indiana State Police; Treasurer of State; State Fair Board; State Fair
Commission; State educational institutions.
Local Agencies Affected: County auditors; Civil taxing units and school corporations; Redevelopment
commissions; Grant County; Howard County; City of Indianapolis; Locally owned hospitals; Northwestern
Indiana Regional Planning Commission; Local units with active members in the 1925 Police Pension Fund,
1937 Firefighters' Pension Fund, 1953 Police Pension Fund (Indianapolis), or '77 Fund.
Information Sources: LSA Property Tax Database; Local Government Database, Department of Local
Government Finance; Legislative Services Agency, Indiana Handbook of Taxes, Revenues, and
Appropriations, FY 2023. Department of State Revenue, County Innkeeper’s Tax Collections,
https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/county-innkeepers-tax/.
HB 1120 11 U.S. Department of Labor Bureau of Labor Statistics, Consumer Price Index - November 2023 News
Release; Northwestern Indiana Regional Planning Commission’s Budget website:
https://nirpc.org/people-and-leaders/business/budget/ ; Indiana Sister Cities:
https://www.indianasistercities.org/indiana-sister-cities ; Code of Federal Regulations:
https://www.ecfr.gov/current/title-15/subtitle-A/part-7/subpart-A/section-7.4; Cavanaugh Macdonald
Consulting. (2024, January 30). 1977 Police Officers’ and Firefighters’ Retirement Fund and Excise, Gaming
and Conservation Officers’ Retirement Fund – Extend DROP Period (with Adjustment for Contributions
during DROP period); Cavanaugh Macdonald Consulting, LLC. Indiana Public Retirement System Local
Public Safety Pension Relief Fund. Actuarial Valuation as of January 1, 2023.
https://www.in.gov/inprs/files/2023Valuation_IndianaPensionReliefFund.pdf; INPRS. 2024-2025 Employer
Contribution Rate Information. https://www.in.gov/inprs/employers/er-contribution-rate-info/; INPRS. 2022
Comprehensive Annual Financial Report. https://www.in.gov/inprs/annualreports.htm; McCready and
Keene, Inc. (2022). Department of State Police of Indiana Pension Trust Agreement Actuarial Valuations.
Fiscal Analyst: Bob Sigalow, 317-232-9859; Austin Spears, 317-234-9454; Camille Tesch, 317-232-5293;
Qian Li, 317-232-9671; James Johnson, 317-232-9869; Heather Puletz, 317-234-9484; Karen Rossen,
317-234-2106; Jason Barrett, 317-232-9809.
HB 1120 12 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
Boonville Civil City 0.6228 X
Dyer Civil Town 0.4533 X
0015Adams Central Community School Corp 0.5129 X
0025North Adams Community School Corp 0.4662 X
0035South Adams School Corporation 0.4030 X
0225Northwest Allen County School Corp 0.4752 X
0515Blackford County School Corporation 0.4148 X
0615Western Boone County School Corporation 0.5082 X
0630Zionsville Community School Corporation 0.6944 X
0755Delphi Community School Corporation 0.5497 X
0875Logansport Community School Corporation 0.7408 X
0935Borden-Henryville School Corporation 0.4165 X
0945Silver Creek School Corporation 0.6918 X
1000Clarksville Community School Corporation 0.7711 X
1010Greater Clark County School Corporation 0.6969 X
1150Clinton Central School Corporation 0.4143 X
1170Frankfort Community School Corporation 0.5414 X
1180Rossville Consolidated School Corp 0.4021 X
1560Sunman-Dearborn Community School Corp 0.5624 X
1600South Dearborn Community School Corp 0.6775 X
1820Garrett-Keyser-Butler Comm School Corp 0.5958 X
1875Delaware Community School Corporation 0.4445 X
1885Wes-Del Community School Corp 0.4155 X
1940Daleville Community Schools 0.5607 X
1970Muncie Community School Corporation 0.5005 X
2110Southwest Dubois County School Corp 0.4010 X
2120Greater Jasper Consolidated School Corp 0.5506 X
2155Fairfield Community School Corporation 0.5545 X
2260Baugo Community School Corporation 0.7900 X
2270Concord Community School Corporation 0.7756 X
2275Middlebury Community School Corporation 0.7995 X
2285Wa-Nee Community School Corporation 0.4484 X
2315Goshen Community School Corporation 0.4846 X
2435Attica Consolidated School Corporation 0.5110 X
2455Southeast Fountain School Corporation 0.4960 X
2645Rochester Community School Corporation 0.4064 X
2735North Gibson School Corporation 0.4758 X
2855Mississinewa Community School Corp 0.7031 X
2950Linton-Stockton School Corporation 0.7799 X
2960M.S.D. Shakamak School Corporation 0.4086 X
3005Hamilton Southeastern School Corporation 0.4830 X
3025Hamilton Heights School Corporation 0.6577 X
3030Westfield-Washington School Corporation 0.6402 X
3055Sheridan Community Schools 0.6604 X
3070Noblesville School Corporation 0.4567 X
3115Southern Hancock County Comm School Corp 0.6268 X
3125Greenfield Central Community School Corp 0.5834 X
3135Mt. Vernon Community School Corporation 1.1000 X X
3295Northwest Hendricks School Corporation 0.7778 X
HB 1120 13 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
3305Brownsburg Community School Corporation 1.0113 X X
3315Avon Community School Corporation 0.9780 X X
3325Danville Community School Corporation 0.8700 X X
3330Plainfield Community School Corporation 0.5190 X
3335Mill Creek Community School Corporation 0.5671 X
3405Blue River Valley School Corporation 0.9374 X X
3415South Henry School Corporation 0.4980 X
3445New Castle Community School Corporation 0.4011 X
3455Charles A. Beard Memorial School Corp 0.7876 X
3460Taylor Community School Corporation 0.7138 X
3470Northwestern School Corporation 0.4262 X
3480Eastern Howard Community School Corp 1.0000 X X
3490Western School Corporation 0.4792 X
3500Kokomo School Corporation 0.4763 X
3640Medora Community School Corporation 0.9176 X X
3675Seymour Community School Corporation 0.4846 X
3695Brownstown Central Community School Corp 0.4086 X
3710Crothersville Community School Corp 0.6599 X
3945Jay County School Corporation 0.4532 X
4145Clark-Pleasant Community School Corp 0.9648 X X
4205Center Grove Community School Corp 0.7184 X
4215Edinburgh Community School Corporation 0.6454 X
4225Franklin Community School Corporation 0.7999 X
4255Nineveh-Hensley-Jackson United Sch Corp 0.5368 X
4335Vincennes Community School Corporation 0.4228 X
4415Warsaw Community School Corporation 0.4276 X
4445Tippecanoe Valley School Corporation 0.4230 X
4455Whitko Community School Corporation 0.4423 X
4580Hanover Community School Corporation 0.5463 X
4590River Forest Community School Corp 0.6303 X
4600Merrillville School Corporation 0.5077 X
4645Tri Creek School Corporation 0.7495 X
4650Lake Ridge School Corporation 1.3729 X X
4660Crown Point Community School Corporation 0.7887 X
4680Lake Station School Corporation 0.7916 X
4690Gary Community School Corporation 0.7081 X
4700Griffith Public School Corporation 0.7395 X
4710Hammond City School Corporation 0.5141 X
4720Highland Town School Corporation 0.5839 X
4730School City Of Hobart School Corporation 1.0258 X X
4860New Durham Township School Corporation 0.5074 X
4925Michigan City Area School Corporation 0.4328 X
4940South Central Community School Corp 0.5146 X
4945Laporte Community School Corporation 0.4415 X
5085Mitchell Community School Corporation 0.6514 X
5245Frankton-Lapel Community School Corp 0.8181 X X
5255South Madison Community School Corp 0.6444 X
5275Anderson Community School Corporation 0.6492 X
5280Elwood Community School Corporation 0.8579 X X
HB 1120 14 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
5300M.S.D. Decatur Township School Corp 0.6942 X
5310Franklin Township Community School Corp 0.6653 X
5360M.S.D. Warren Township School Corp 0.5200 X
5375M.S.D. Wayne Township School Corporation 1.0000 X X
5380Beech Grove City School Corporation 1.1184 X X
5470Argos Community School Corporation 0.5239 X
5485Plymouth Community School Corp 0.4762 X
5625Oak Hill United School Corporation 0.7282 X
5635Peru Community School Corporation 0.6680 X
5705Richland-Bean Blossom Comm School Corp 0.6462 X
5845South Montgomery Community School Corp 0.4426 X
5855Crawfordsville Community School Corp 0.7375 X
5900Monroe-Gregg School Corporation 0.6853 X
5930Mooresville Consolidated School Corp 0.4078 X
6080Rising Sun-Ohio County Comm School Corp 0.5437 X
6260Southwest Parke Community School Corp 0.4463 X
6325Perry Central Community School Corp 0.4615 X
6340Cannelton City School Corporation 1.3211 X X
6350Tell City-Troy Township School Corp 0.6898 X
6460Boone Township School Corporation 0.7890 X
6510East Porter County School Corporation 0.5386 X
6520Porter Township School Corporation 0.5771 X
6530Union Township School Corporation 0.4242 X
6705South Putnam Community School Corp 0.6400 X
6715North Putnam Community School Corp 0.6942 X
6755Greencastle Community School Corporation 0.6199 X
6835Randolph Eastern School Corporation 0.5303 X
6865South Ripley Community School Corp 0.4628 X
6910Milan Community School Corporation 0.5179 X
7150John Glenn School Corporation 0.4488 X
7175Penn-Harris-Madison-School Corporation 0.4265 X
7200Mishawaka City School Corporation 0.6870 X
7215Union-North United School Corporation 0.5672 X
7230Scott County District No. 1 School Corp 0.4065 X
7255Scott County District No. 2 School Corp 0.4456 X
7285Shelby Eastern School Corporation 0.5477 X
7350Northwestern Consolidated School Corp 0.4180 X
7365Shelbyville Central School Corporation 0.5621 X
7525Knox Community School Corporation 0.4007 X
7865Tippecanoe School Corporation 0.4778 X
7875West Lafayette Community School Corp 0.4909 X
7945Tipton Community School Corporation 0.4177 X
8045Manchester Community School Corporation 0.4531 X
8050M.S.D. Wabash County School Corporation 0.5882 X
8060Wabash City School Corporation 0.6424 X
8115M.S.D. Warren County School Corp 0.5187 X
8205Salem Community School Corporation 0.5008 X
8215East Washington School Corporation 0.4338 X
8355Western Wayne School Corporation 0.4785 X
HB 1120 15 Appendix A.
2024 Non-Referendum Debt Service Tax Rates Exceeding $0.40
Non-Referendum Non-RefNon-Ref
Corp Municipality / School Corporation Debt Rate > $0.40 >= $0.80
8360Centerville-Abington Comm School Corp 0.4786 X
8375Northeastern Wayne School Corporation 0.4501 X
8445M.S.D. Bluffton-Harrison School Corp 0.4879 X
Count 150 15
HB 1120 16 Appendix B.
Estimated CY 2025 School Operating Referendum Maximum Levy Change
CorpSchool Corporation
2024
Estimated
Max Levy @
Adjusted
Maximum
Rate
2025
Estimated
Max Levy @
Authorized
Rate
2025
Estimated
Max Levy
Proposed
Est. %
Growth
2025
Potential
Change in
Max Levy
0125MSD of SW Allen County 6,634,200 7,682,700 7,032,3006.0% -650,400
0365Bartholomew Con School Corp 9,334,30010,156,200 9,948,7006.6% -207,500
0395Benton Community School Corp 4,315,000 5,144,200 4,573,9006.0% -570,300
0630Zionsville Community Schools 11,755,80013,560,30012,781,7008.7% -778,600
0665Lebanon Community School Corp 3,492,500 6,036,500 3,749,8007.4% -2,286,700
1315Barr-Reeve Com Schools Inc 1,038,700 1,241,900 1,122,7008.1% -119,200
2100Southeast Dubois County School Corp 984,200 1,152,800 1,043,3006.0% -109,500
2285Wa-Nee Community School Corp. 1,566,400 1,763,100 1,660,4006.0% -102,700
2315Goshen Community Schools 5,664,900 6,431,600 6,004,8006.0% -426,800
3030Westfield-Washington Schools 9,684,80011,880,60010,831,50011.8% -1,049,100
3070Noblesville Schools 20,038,40023,519,80021,240,7006.0% -2,279,100
3135Mt Vernon Community Sch Corp 3,037,400 4,741,400 3,354,80010.4% -1,386,600
3160Lanesville Community School Corp 482,100 565,300 511,0006.0% -54,300
3315Avon Community School Corp. 16,397,20018,595,90017,768,1008.4% -827,800
4145Clark-Pleasant School Corp. 2,994,300 3,546,800 3,190,3006.5% -356,500
4215Edinburgh Community School Corp 862,900 956,900 914,7006.0% -42,200
4225Franklin Community School Corp. 5,052,000 5,619,300 5,355,1006.0% -264,200
4515Prairie Heights School Corp. 2,300,400 2,645,600 2,438,4006.0% -207,200
4525Westview School Corporation 4,959,300 5,674,400 5,256,9006.0% -417,500
4580Hanover Community School Corp 4,671,100 5,471,100 5,164,10010.6% -307,000
4590River Forest Community Sch Corp 2,665,000 2,862,800 2,862,8007.4% 0
4615Lake Central School Corporation 10,752,70011,642,00011,397,9006.0% -244,100
4660Crown Point Community School Corp. 8,162,400 9,013,500 8,714,3006.8% -299,200
4680Lake Station Community Schools 1,371,700 1,515,700 1,454,0006.0% -61,700
4700Griffith Public School Corporation 3,062,900 3,502,300 3,246,7006.0% -255,600
4710School City of Hammond 15,116,10016,256,40016,023,1006.0% -233,300
4730School City of Hobart 2,593,400 2,878,800 2,749,0006.0% -129,800
5275Anderson Community School Corp. 2,379,800 2,531,700 2,522,6006.0% -9,100
5300M S D Decatur Township 7,644,800 8,573,900 8,103,5006.0% -470,400
5340M S D Perry Township 21,812,50024,469,90023,121,3006.0% -1,348,600
5360M S D Warren Township 7,651,200 8,496,000 8,110,3006.0% -385,700
5370MSD Washington Township 19,140,00020,705,70020,288,4006.0% -417,300
5375M S D Wayne Township 15,439,70016,542,70016,366,1006.0% -176,600
5380Beech Grove City Schools 3,554,900 3,991,800 3,768,2006.0% -223,600
5385Indianapolis Public Schools 41,766,20045,044,80044,272,2006.0% -772,600
5455Culver Community School Corp. 1,834,700 2,079,600 1,959,7006.8% -119,900
5480Bremen Public Schools 410,300 438,800 438,8006.9% 0
5740Monroe County Com Sch Corp 17,893,90019,209,10018,967,5006.0% -241,600
5910Eminence Community School Corp 862,900 987,800 914,7006.0% -73,100
6340Cannelton City Schools 81,700 85,900 85,9005.1% 0
6460MSD Boone 718,600 787,300 761,7006.0% -25,600
6470Duneland School Corporation 8,361,400 9,013,700 8,863,1006.0% -150,600
6530Union Township School Corp 1,849,900 2,073,500 1,960,9006.0% -112,600
6560Valparaiso Community Schools 6,866,100 7,597,200 7,331,3006.8% -265,900
7205South Bend Community Sch Corp 29,527,60032,002,00031,299,3006.0% -702,700
7495Oregon-Davis School Corp. 854,000 987,900 905,2006.0% -82,700
7610Hamilton Community Schools 2,413,400 2,874,100 2,689,00011.4% -185,100
8030Vigo County School Corporation 7,736,800 8,154,600 8,154,6005.4% 0
8355Western Wayne Schools 547,400 582,900 580,2006.0% -2,700
8425Southern Wells Com Schools 571,900 660,900 607,7006.3% -53,200
8525Frontier School Corporation 1,086,300 1,300,100 1,151,5006.0% -148,600
HB 1120 17 Appendix B.
Estimated CY 2025 School Operating Referendum Maximum Levy Change
CorpSchool Corporation
2024
Estimated
Max Levy @
Adjusted
Maximum
Rate
2025
Estimated
Max Levy @
Authorized
Rate
2025
Estimated
Max Levy
Proposed
Est. %
Growth
2025
Potential
Change in
Max Levy
8625Smith-Green Community School Corp. 2,864,400 3,199,300 3,036,3006.0% -163,000
Total 362,860,500406,449,100386,651,0006.6% -19,798,100
NOTE:
LSA utilized historic growth rates along with estimates of the expected impact of the Choice Scholarship Program
expansion from HEA 1001-2023 on public school ADM to estimate Spring ADMs through 2031. Ultimately, school
corporations' future ADM will be influenced by a number of factors, including but not limited to:
1. Population changes
2. Any future policy changes that may impact where students attend schools
3. Future charter school growth rates
HB 1120 18