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 6255 NOTE PREPARED: Nov 30, 2023
BILL NUMBER: HB 1319 BILL AMENDED:
SUBJECT: Cosmetology Licensure Compact.
FIRST AUTHOR: Rep. Miller D BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: The bill establishes the Cosmetology Licensure Compact. It provides the
requirements states must follow in order to participate in the compact. The bill provides that a cosmetologist
may practice in member states so long as the cosmetologist meets certain criteria. The bill establishes a
governing commission and sets out its powers, duties, financing, and liability. It also provides various
mechanisms for the member states and the governing commission to regulate the interstate practice of
cosmetology. It provides for various contingencies, including the process to effect, amend, enforce, withdraw
from, or terminate the compact.
Effective Date: July 1, 2024.
Explanation of State Expenditures: Summary– Joining the Cosmetology Licensure Compact would
increase the workload of the Professional Licensing Agency (PLA) and the State Board of Cosmetology and
Barber Examiners (Board) beyond routine administrative functions. Implementation of the compact is
expected to require between $30,800 and $52,800 in staffing costs in FY 2025, assuming the compact will
have enough member states to begin operation. After implementation, the PLA would incur between $8,800
and $20,200 in ongoing annual operating expenses related to administering the compact.
PLA operating expenses are paid from General Fund appropriations. The following table provides a
breakdown of estimated initial and ongoing expenditures required for the State to join the Cosmetology
Licensure Compact. [The dates assume joining the compact beginning in FY 2025. Currently, the compact
does not yet have seven member states (the number necessary for the compact to begin). There are three
current member states and five states that have pending legislation to join the compact.]
HB 1319 1 Estimated State Expenditures for the Cosmetology Licensure Compact
Expense
FY 2025^ FY 2026 & Subsequent
Years
Low
Estimate
High
Estimate
Low
Estimate
High
Estimate
PLA & Board of Cosmetology and Barber
Examiners Implementation Costs*
$30,800 $52,800 - -
PLA & Board of Cosmetology and Barber
Examiners Ongoing Administrative Costs*
- - $8,800 $13,200
Delegate Travel** - - $0 $1,000
Annual Assessment Fee*** - - $0 $6,000
TOTAL $30,800 $52,800 $8,800 $20,200
^Assumes Indiana would join CL Compact in FY 2025
*Estimated salary cost of existing staff to complete the bill’s requirements.
**Includes average costs for domestic airfare, lodging, meals, and ground transportation.
***Possible assessment fee range based on assessments of similar license compacts.
Additionally, the Attorney General’s Office and the Board would 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 Cosmetology Licensure Compact or Indiana licensees practicing
in other states. The Board 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 Board. The volume of such complaints
and disciplinary actions is expected to be minimal.
Commissioner Travel– It is assumed that any travel required of Indiana’s appointed delegate for Commission
business would be at the expense of the PLA. However, the bill provides that the Commission must meet at
least once per year and may meet by telecommunication, video conference, or other similar electronic means.
Costs for Indiana’s delegate to attend annual meetings are estimated between $0 (if electronic meetings are
held) and $1,000 per year, based on recent domestic airfare and lodging costs.
Uniform Data Set– Upon joining the compact, the bill would require the PLA to submit a uniform database
containing certain identifying, licensure, and disciplinary information to the Commission’s coordinated
database on all participating practitioners. 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 the 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.
Each member state would be required to monitor the database to determine whether adverse action has been
taken against any licensee or license applicant.
Adverse Action: The bill grants Indiana the authority to investigate and take adverse action against a
cosmetologist’s compact privileges in Indiana. It is likely the Attorney General’s Office and the Board would
HB 1319 2 be the state’s advocates for investigating and taking adverse action. It is likely the Attorney General and the
Board would conduct any investigations and take action within their existing staff and resource levels.
Annual Compact Membership Fee– A state membership fee has not yet been established. The Cosmetology
Licensure Compact Commission will set up any fee or state assessments. Only two active licensure compacts
assess the state with a participation fee.
Currently, the Interstate Medical Licensure Compact Commission charges a service fee to each interstate
license applicant. However, the Nursing Compact charges member states an annual fee of $6,000. Therefore,
the impact above assumes a minimum fee of $0 to a maximum fee of $6,000 that would be assessed,
depending on what the Cosmetology Licensure Compact governing body decides.
Explanation of State Revenues: Summary– About 7.5% percent of total active Indiana cosmetology licenses
have an address outside of Indiana. About four-percent of Indiana active license holders list an out-of-state
address in a border state to Indiana. Although, non-border out-of-state license holders may choose to forego
an Indiana license renewal for a compact license to practice in Indiana, it is likely the forgoing of the Indiana
license will mostly occur with license holders with a bordering state address. Therefore, it is estimated
potential revenue loss will range between 4% and 7.5% of total Indiana license holders that may not renew
their Indiana license. The reduction in General Fund revenue could range from $68,700 to $129,100 per
biennium. However, the bill provides that member states may charge a fee for granting compact privileges.
Therefore, Indiana could potentially recoup some or all of this lost revenue through compact privilege fees
depending on rules adopted by the Compact Commission relating to member state fees. Any revenue impact
would not be expected until the fiscal year that compact privileges begin to be granted in Indiana (FY 2025
at the earliest).
Additional Information - Licensed cosmetologists pay a biennial fee of $40. In FY 2022 and FY 2023, the
Board of Dentistry collected approximately $2.15 M from license fees, with the annual revenue collected
being nearly evenly split. As of November 29, 2023, there were 42,868 cosmetologists with an active Indiana
license, of which 3,228 had listed an out-of-state address.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana General Assembly; Professional Licensing Agency; State Board of
Dentistry; Attorney General.
Local Agencies Affected:
Information Sources: https://cosmetologycompact.org/compact-map/;
https://www.imlcc.org/wp-content/uploads/2020/02/IMLCC-Rule-Chapter-3-Administrative-Rule-on-Fee
s-Amended-May-22-2017.pdf; https://www.ncsbn.org/public-files/FY21-NLCAnnualReport.pdf;
https://ddhcompact.org/faq/; PLA license search and verify tool.
Fiscal Analyst: Chris Baker, 317-232-9851.
HB 1319 3