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 6492 NOTE PREPARED: Dec 22, 2023
BILL NUMBER: HB 1196 BILL AMENDED:
SUBJECT: Health Finance Matters.
FIRST AUTHOR: Rep. Manning BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill adds capital projects, technology upgrades, and operational expenses for
certain county hospitals to the definition of "public safety" for purposes of local income tax revenue use. It
increases the maximum local income tax that may be imposed in certain counties if a tax rate is adopted for
purposes related to certain hospitals located in the county.
This bill establishes the Indiana Rural Hospital and Critical Health Care Services Fund (Rural Health Care
Services Fund) for the purpose of awarding grants to certain rural hospitals. It provides that the Indiana
Department of Health (IDOH) administers the Rural Health Care Services Fund.
This bill establishes the following: (1) The Health Workforce Student Loan Repayment Program (program).
(2) The Health Workforce Advisory Board (advisory board). (3) The Health Workforce Student Loan
Repayment Program Fund (repayment program fund) for the purpose of providing funds to repay outstanding
student loans of certain health providers who meet the program requirements. It provides that the IDOH shall
administer the program and repayment program fund. The bill provides that money in the repayment program
fund is continuously appropriated.
This bill establishes: (1) the imposition of fees at the time a license is issued or renewed for certain health
profession licenses; and (2) qualifications to receive a student loan repayment award under the program. It
provides that, beginning July 1, 2025, the IDOH and each board included in the program may award a student
loan repayment to an eligible applicant who is a provider licensed by the board.
This bill also repeals provisions concerning the following: (1) The Primary Care Physician Loan Forgiveness
Program. (2) The Mental Health Services Development Programs (3) The Dental Underserved Area and
HB 1196 1 Minority Recruitment Program.
The bill urges the Legislative Council to assign to an appropriate interim study committee the task of
studying topics related to the Rural Health Care Services Fund. It also urges the Legislative Council to assign
to an appropriate study committee the task of studying certain topics related to health care services.
Effective Date: Upon passage; July 1, 2024.
Explanation of State Expenditures: Local Income Tax: The Department of State Revenue, State Budget
Agency, and Department of Local Government Finance may experience an increase in administrative
workload should counties choose to adopt a LIT rate for paying for capital projects, technology upgrades,
and operational expenses of certain hospitals, based on eligibility requirements specified in the bill. These
agencies' current level of resources should be sufficient to implement this provision.
Rural Health Care Services Fund: This bill establishes the Indiana Rural Hospital and Critical Health Care
Services Fund, which will be used for the purpose of awarding grants to certain rural hospitals. The fund will
consist of (1) appropriations from the General Assembly; and (2) gifts, grants, and donations made to the
fund. The IDOH will administer the fund, and expenses of administering the fund will be paid from money
in the fund.
Health Workforce Student Loan Repayment Program and Fund: The bill will increase the workload of the
IDOH and add administrative expenses to establish and manage the Health Workforce Student Loan
Repayment Program. The IDOH will administer the fund established by the bill, adopt rules necessary to
establish eligibility requirements, and administer the program. The bill requires these administrative
expenditures to be paid for from the fund in an amount not to exceed $100,000 per biennium.
The bill provides that the program and fund will be administered by the IDOH, in consultation with the
Health Workforce Advisory Board and the following professional licensing boards: State Boards of
Dentistry, Medical Licensing, Nursing, Occupational Therapy, Behavioral Health and Human Services,
Optometry, Pharmacy, Physical Therapy, Physicians Assistants, Podiatric Medicine, Psychology,
Speech-Language Pathology and Audiology. The boards are responsible for collecting fees and making
awards. Additionally, the IDOH is required to determine award amounts, make awards, report on the
program, and adopt rules for the program.
The bill also establishes the Health Workforce Advisory Board, which will advise the IDOH on eligibility
requirements for the program, recommend which applicants be awarded student loan repayments, determine
award amounts, and identify areas of need for workforce and workforce development in the different health
professions. The Advisory Board will include members representing each of the following agencies or
organizations: the Professional Licensing Agency, the Department of Workforce Development, the Family
and Social Services Administration, the IDOH, the Commission for Higher Education, the Department of
Education, the General Assembly, the Indiana Commission to Combat Drug Abuse, the Governor’s
Workforce Cabinet, the Indiana Hospital Association, the Indiana Rural Health Association, the Indiana
Primary Health Care Association, the Indiana Minority Health Coalition, the Indiana Health Care
Association, the Indiana University Bowen Center for Health Workforce Research and Policy, and a licensed
nurse. Legislative members on the Advisory Board will be paid the same per diem, mileage, and travel
allowances provided to individuals who serve on interim study committees established by Legislative
Council. Members on the Advisory Board who are state employees and non-state employees will be
reimbursed as provided by the policies and procedures established by the Indiana Department of
HB 1196 2 Administration and approved by the State Budget Agency.
Student loan repayment awards will be made by IDOH and the boards to eligible applicants beginning July
1, 2025. Award recipients may receive multiple awards until their student loan balance has been paid off.
Award recipients must agree to provide services in an Indiana health workforce shortage area for a specified
number of years among other requirements.
This bill also establishes the Health Workforce Student Loan Repayment Fund in conjunction with program.
The fund will consist of: (1) appropriations from the General Assembly; (2) professional licensing fees; and
(3) gifts, grants, devises, or bequests made to the fund. The IDOH will administer the fund, and expenses of
administering the fund will be paid from money in the fund. The bill provides that money in the fund is
continuously appropriated to carry out purposes of the fund and that administrative expenses paid from the
fund may not exceed $100,000 per biennium. The bill establishes a formula for allocating money from the
fund to each board and the IDOH to grant awards. A separate account will be created within the fund for each
board. Every two years any money in the separate accounts will revert to the fund. Money in the fund,
however, does not revert to the General Fund. Awards made from the fund could total approximately $2.7
M per biennium based on the expected fee revenue to be deposited in the fund, less the $100,000 cap on
administrative expenses. This estimate does not include gifts to the fund or appropriations that could be made
by the General Assembly.
Repeal of Other Health Workforce Programs: The bill’s repeal of other health workforce programs should
not have a fiscal impact. These programs are currently not receiving appropriations from the state budget.
Interim Study Committees: The Legislative Council could assign the topics listed in the bill to an existing
interim study committee or establish a new interim study committee to study these topics during the next
interim. Interim study committees operate on budgets established by the Legislative Council based on
committee size. Legislative Council resolutions in the past have established budgets for interim study
committees in the amount of $13,500 per interim for committees with fewer than 16 members and $17,500
for committees with 16 members or more.
If the Legislative Council were to assign this topic to an existing committee and the committee were to have
any extra meetings to address this topic, 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.
Explanation of State Revenues: License Fees: Beginning in October 2024, the bill establishes that new fees
will be charged with licenses issued and renewed by the boards participating in the program. The fees will
be charged at a rate of $10 for a license with issuance and renewal fees of $100 or less, and $20 for a license
with issuance and renewal fees greater than $100. Licenses for the professions subject to the new fees are
renewed biennially, so fee revenue will not be consistent from year to year. The fund is expected to collect
approximately $734,000 in FY 2025 and $2.1 M in FY 2026 based on current and projected license counts
and license fee revenue cycles for the professions subject to the new fees. Fees collected under this bill will
be deposited in the Health Workforce Student Loan Repayment Fund. Over the last seven years, license
counts for the professions that would be subject to the new fees have grown by an average of 2.4% per year.
Explanation of Local Expenditures: Local Income Tax: The bill allows a county fiscal body to adopt an
ordinance that imposes a LIT rate for paying for capital projects, technology upgrades, and operational
expenses of certain hospitals, based on eligibility requirements specified in the bill. A county fiscal body
HB 1196 3 should have sufficient resources to pass the required ordinance and establish the specified fund.
Explanation of Local Revenues: Local Income Tax: Under this bill’s provisions, counties may choose to
adopt a LIT rate for paying for capital projects, technology upgrades, and operational expenses of certain
hospitals. The adopted tax rate must be in increments of 0.01% and may not exceed 0.25%. The revenue
attributable to the rate is distributed to the county unit and must be maintained in a separate dedicated county
fund and used only for the purposes of covering costs related to paying for capital projects, technology
upgrades, and operational expenses of certain hospitals.
Should counties choose to adopt a LIT rate for the purpose previously noted, the county unit could receive
their first certified distribution of this revenue in CY 2025 if the county fiscal body passes an ordinance
before November 1, 2024. The table at the end of the fiscal note contains CY 2025 and CY 2026 revenue
estimates for each 0.1% of a rate a county may impose. Ultimately, the fiscal impact depends on local
decisions.
Additional Information - The bill increases the maximum possible local income tax expenditure rate for those
counties that meet the population and hospital eligibility requirements specified in the bill. Currently, the
maximum expenditure rate for all counties other than Marion County is 2.5%. The maximum rate for Marion
County is 2.75%. Assuming that a county meets the eligibility requirements specified in the bill, if a county
fiscal body imposes this rate, it may adopt a rate that does not exceed 0.25%, which could ultimately result
in the county having a maximum overall expenditure rate of 2.75%. In the table below, any county listed as
a “N/A” signifies that the county does not meet the population and hospitable eligibility requirements
specified in the bill.
State Agencies Affected: State Department of Health; Professional Licensing Agency; Department of
Workforce Development; Family and Social Services Administration; Commission for Higher Education;
Department of Education; General Assembly; Governor’s Workforce Cabinet; Treasurer of State;
Department of Local Government Finance; Department of State Revenue; State Budget Agency.
Local Agencies Affected: County fiscal bodies.
Information Sources: Legislative Services Agency, Indiana Handbook of Taxes, Revenues, and
Appropriations, Fiscal Year 2023; Professional Licensing Agency, License Counts as of June 30, 2023; U.S.
Census Bureau, 2020 Census County Population Parameters; Indiana Department of Health Licensed
Hospitals Directory: https://www.in.gov/health/reports/QAMIS/hosdir/wdirhos.htm
Fiscal Analyst: James Johnson, 317-232-9869; Karen Rossen, 317-234-2106; Jasmine Noel, 317-234-1360;
Camille Tesch, 317-232-5293.
HB 1196 4 Estimated Local Income Tax Revenue from a 0.1% LIT Rate ($M)*
CY 2025 CY 2026 CY 2025 CY 2026
Adams $ 1.080 $ 1.115 Lawrence $ 1.173 $ 1.208
Allen N/A N/A Madison N/A N/A
Bartholomew N/A N/A Marion N/A N/A
Benton N/A N/A Marshall $ 1.553 $ 1.605
Blackford $ 0.272 $ 0.276 Martin N/A N/A
Boone N/A N/A Miami $ 0.725 $ 0.745
Brown N/A N/A Monroe N/A N/A
Carroll N/A N/A Montgomery N/A N/A
Cass $ 0.874 $ 0.894 Morgan N/A N/A
Clark N/A N/A Newton N/A N/A
Clay $ 0.666 $ 0.693 Noble N/A N/A
Clinton $ 0.842 $ 0.867 Ohio N/A N/A
Crawford N/A N/A Orange $ 0.438 $ 0.455
Daviess $ 1.001 $ 1.041 Owen N/A N/A
Dearborn N/A N/A Parke N/A N/A
Decatur $ 0.742 $ 0.766 Perry $ 0.500 $ 0.520
DeKalb N/A N/A Pike N/A N/A
Delaware N/A N/A Porter N/A N/A
Dubois N/A N/A Posey N/A N/A
Elkhart N/A N/A Pulaski $ 0.354 $ 0.363
Fayette N/A N/A Putnam $ 0.964 $ 1.004
Floyd N/A N/A Randolph $ 0.605 $ 0.623
Fountain N/A N/A Ripley $ 0.806 $ 0.819
Franklin N/A N/A Rush $ 0.484 $ 0.505
Fulton $ 0.524 $ 0.540 St. Joseph N/A N/A
Gibson $ 1.174 $ 1.199 Scott $ 0.536 $ 0.552
Grant N/A N/A Shelby N/A N/A
Greene $ 0.780 $ 0.803 Spencer N/A N/A
Hamilton N/A N/A Starke N/A N/A
Hancock N/A N/A Steuben $ 1.211 $ 1.264
Harrison $ 1.164 $ 1.214 Sullivan $ 0.504 $ 0.524
Hendricks N/A N/A Switzerland N/A N/A
Henry N/A N/A Tippecanoe N/A N/A
Howard N/A N/A Tipton $ 0.452 $ 0.466
Huntington N/A N/A Union N/A N/A
Jackson $ 1.263 $ 1.307 Vanderburgh N/A N/A
Jasper $ 1.067 $ 1.114 Vermillion N/A N/A
Jay $ 0.485 $ 0.506 Vigo N/A N/A
Jefferson N/A N/A Wabash N/A N/A
HB 1196 5 CY 2025 CY 2026 CY 2025 CY 2026
Jennings $ 0.643 $ 0.666 Warren $ 0.294 $ 0.309
Johnson N/A N/A Warrick N/A N/A
Knox $ 1.018 $ 1.039 Washington $ 0.657 $ 0.676
Kosciusko N/A N/A Wayne N/A N/A
LaGrange $ 1.497 $ 1.553 Wells N/A N/A
Lake N/A N/A White $ 0.752 $ 0.783
LaPorte N/A N/A Whitley N/A N/A
*A county may impose a rate of up to 0.25% for paying for capital projects, technology upgrades, and
operational expenses of certain hospitals.
HB 1196 6