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 6005 NOTE PREPARED: Oct 2, 2023
BILL NUMBER: HB 1185 BILL AMENDED:
SUBJECT: Road Funding.
FIRST AUTHOR: Rep. Moed BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides that the amounts currently distributed from the Motor Vehicle
Highway Account (MVHA) and the Local Road and Street Account (LRS) to counties, cities, and towns
based upon the proportionate share of road and street mileage shall instead be distributed based on the
proportionate share of road and street vehicle miles traveled (VMT). It provides that the Indiana Department
of Transportation (INDOT) shall establish guidelines outlining the procedures required to determine vehicle
miles traveled.
The bill changes references from the "Auditor of State" to the "State Comptroller" to conform with
P.L.201-2023.
Effective Date: July 1, 2024.
Explanation of State Expenditures: This bill could increase the workload of the Indiana Department of
Transportation (INDOT) to study and calculate VMT. Currently, INDOT performs a biennial update of the
lane miles for purposes of determining local distributions of the MVHA. Additionally, INDOT (in
conjunction with the Federal Highway Authority) currently estimates VMT through continuous and short
term measurement sites to approximate traffic volume in areas of the state. Changing from lane miles to
VMT could require a significant investment for the creation of a database to track, certify, and host VMT
data.
Explanation of State Revenues:
Explanation of Local Expenditures:
HB 1185 1 Explanation of Local Revenues: Summary - This bill will impact local road funding distributions beginning
in FY 2025 by utilizing VMT instead of lane miles in the local road funding distribution formulas. The bill
is expected to shift a total of approximately (1) $79.4 M in local MVHA funding between counties and (2)
$6.9 M in the LRS funding between local units in the state.
Additional Information - Changing funding formula calculations from lane miles to VMT would impact (1)
county MVHA distributions and (2) intra-county LRS Account distributions.
MVHA: The MVHA funding formula uses lane miles when distributing funds to counties. Approximately
44.3% of local MVHA funds are distributed to counties based on lane miles. By changing lane miles to
VMT, counties with higher traffic volumes would receive additional MVHA distributions compared to
counties with less.
Based on estimates maintained by INDOT, changing from lane miles to VMT could increase local MVHA
funding for 26 counties. The remaining 66 counties would experience a decrease in local MVHA funding.
For FY 2023, approximately $256 M in local MVHA funds were distributed to counties based on lane
mileage. The amount of revenue that would be shifted between counties in the state is estimated to be
approximately $79.4 M per year.
The following table shows the 10 counties that gain and lose the most local MVHA funds by changing lane
miles to VMT.
County Local MVHA Increase
Per Year ($M)
County Local MVHA Decrease
Per Year ($M)
Marion $28.9 Pulaski ($2.4)
Lake $10.9 Randolph ($2.4)
Allen $5.2 Greene ($2.2)
Hamilton $4.0 Washington ($2.1)
Porter $3.6 Sullivan ($2.0)
Johnson $2.9 Parke ($2.0)
St. Joseph $2.8 Jay ($1.9)
Vanderburgh $2.6 Rush ($1.8)
Hendricks $2.6 Fulton ($1.8)
Elkhart $2.5 Benton ($1.7)
LRS: Local distributions are first made to counties based on vehicle registrations in each county as a percent
of total vehicle registrations in the state. The suballocation formula for these funds is based on lane miles
depending on if a county’s population is greater or less than 50,000. Changing the funding formula to
compute this suballocation based on VMT would only impact intra-county distributions between local units
of government within each county.
Based on estimates maintained by INDOT, this bill could (1) increase the LRS distributions of 167 local units
HB 1185 2 of government by a combined 4.49% and (2) decrease LRS funding to 559 local units of government. An
estimated 93 local units of government would experience no changes in LRS funding. For FY 2023,
approximately $153.1 M in LRS funds were distributed to local units. An estimated $6.9 M in annual LRS
revenue would be shifted between local units in the state.
State Agencies Affected: INDOT.
Local Agencies Affected: Counties and municipalities.
Information Sources: Andrea Zimmerman, INDOT; INDOT VMT estimates, 2022.
Fiscal Analyst: Bill Brumbach, 317-232-9559.
HB 1185 3