LEGISLATIVE SERVICES AGENCY OFFICE OF FISCAL AND MANAGEMENT ANALYSIS FISCAL IMPACT STATEMENT LS 7592 NOTE PREPARED: Jan 15, 2025 BILL NUMBER: HB 1006 BILL AMENDED: SUBJECT: Prosecutors. FIRST AUTHOR: Rep. Jeter BILL STATUS: As Introduced FIRST SPONSOR: FUNDS AFFECTED:XGENERAL IMPACT: State & Local XDEDICATED FEDERAL Summary of Legislation: This bill has the following provisions: A. It establishes the Special Prosecutor Unit, the Prosecutor Review Board, and the Public Prosecution Fund. B. It establishes guidelines and standards for services under which counties may be eligible for reimbursement for prosecution expenditures. C. It relocates provisions concerning duties of the Public Defender Council. It repeals provisions governing the Public Defender Council. D. It also makes conforming changes. Effective Date: July 1, 2025. Explanation of State Expenditures: Summary: The bill could significantly increase state expenditures from the Public Prosecution Fund and Public Defense Fund. If requests for reimbursement from the dedicated funds are approved, overall state expenditures are estimated to potentially increase between $63.4 M and $71.1 M annually, beginning in FY 2026. Any increase in state expenditures from these dedicated funds would depend upon the counties eligibility, availability of funds, and the administrative agency authorizations. The bill repeals the Indiana Public Defender Council (IPDC) and transfers all funds, appropriations, powers, duties, and liabilities of the executive state agency to the Commission on Court Appointed Attorneys (CCAA). It also creates a Prosecutor Review Board, Special Prosecutor Fund, and Special Prosecutor Unit administered by the Indiana Prosecuting Attorneys Council (IPAC). As a result, the bill will increase agency workloads and administrative responsibilities for the CCAA and the IPAC. HB 1006 1 Additional Information - Reimbursement for Prosecutorial Services: A county auditor may request reimbursement from the Public Prosecution Fund for an amount equal to 50% of the county’s expenditures for prosecutorial services provided to a defendant in all noncapital and capital cases, except misdemeanors. To the extent that requests for reimbursements are approved by the IPAC, state expenditures are estimated to increase between $51.4 M and $59.1 M annually, beginning in FY 2026. Actual expenditures will depend on the counties eligible and the amount certified for reimbursement by the IPAC. OFMA assumes all counties will receive 50% reimbursement for all prosecutorial expenses. This estimate is based on the reported county expenditures for prosecuting attorney departments in CY 2023 from the Indiana Gateway. OFMA found 91 counties reporting expenditures for prosecutorial services. These expenditures include salaries and wages, employee benefits, other personal services, professional services, printing and advertising, rentals, other services and charges, operating supplies, machinery equipment and vehicles, communication and transportation. For the purposes of this analysis, the estimated minimum costs represents 50% reimbursement for salaries, wages, and employee benefits. Therefore, if certain county expenses are excluded from reimbursement, the estimated cost to the state could decrease. The following table shows the median, average, and range of 2023 salary/wages and employee benefits for prosecutorial expenditures from reporting counties. County Expenditures High Cost Counties (5)Low Cost Counties (5) Median $383,305 Marion Parke Average $1.13 M Lake Union Minimum $5,000 Allen Benton Maximum $25.42 M St. Joseph Fountain Number Reporting 91 Tippecanoe Blackford Public Defense Fund: A county auditor may request reimbursement from the Public Defense Fund for an amount equal to 50% of the county’s or multi-county public defender’s office’s expenditures for indigent defense services provided in noncapital cases, and up to 50% reimbursement for misdemeanor cases. If authorized and approved by the CCAA, OFMA estimates the bill could potentially increase state expenditures from the fund by approximately $11.8 M annually, beginning in FY 2026. This estimate does not include the 10% increase in misdemeanor reimbursement for the pilot project. Any increase in state expenditures from the fund would depend upon the counties selected and authorization by the CCAA. The CCAA reimburses counties for the following costs of providing indigent defense services: attorney fees, investigations, expert witnesses, paralegal, transcript costs, and costs of direct appeals. Under current statute (IC 33-40-6-6), if the balance in the Public Defense Fund is not adequate to fully reimburse all certified claims in noncapital cases, the CCAA shall prorate reimbursement of certified claims in noncapital cases. CCAA Misdemeanor Pilot Project: Under current law, beginning July 1, 2025, the CCAA may begin reimbursing selected pilot counties up to 40% of the county’s or multi-county public defender’s office’s expenditures for indigent defense services provided in misdemeanor cases. The bill increases the HB 1006 2 reimbursable amount by 10% for the pilot project. If additional claims are approved, state expenditures are estimated to increase between $62,000 and $80,000 annually, beginning in FY 2026. Any increase in state expenditures from the fund would depend upon the counties selected and authorization by the CCAA. Currently, the CCAA has received 20 applications for participation in the misdemeanor pilot project. Under current law, the CCAA may select up to 12 counties for the pilot project. Indiana Public Defense Council: On July 1, 2025, all powers, duties, agreements and liabilities of the IPDC will transfer to the CCAA as the successor entity. All provisions concerning the duties and responsibilities of the IPDC will transfer to the CCAA. All records and property of the IPDC, including appropriations and other funds under the control or supervision of the IPDC, will transfer to the CCAA. Any reference to the IPDC in a statute, rule, or other document is considered a reference to the CCAA. The bill will significantly increase the administrative workload and responsibilities of the CCAA. The CCAA has 1 executive director, 3 director positions (public policy, research, and operations), 1 staff attorney, and 2 program support specialist. Therefore, these changes are expected to have minimal cost savings in the short-term. OFMA assumes that all existing program staff, training staff, and directors will transfer to the CCAA and will continue to fulfill the duties and responsibilities under the successor entity. As a result, the CCAA could experience some cost savings for human resources, payroll, and any duplicative administrative tasks already performed by current CCAA staff. Currently, the IPDC has 10 staff attorneys and 2 administrative staff. Indiana Prosecuting Attorney’s Council (IPAC): The bill will increase the workload and administrative expenditures of the IPAC to administer the Public Prosecution Fund, Special Prosecutor Unit Fund, and Special Prosecutor Unit. The IPAC shall adopt guidelines, standards, and requirements for services under which the counties will be eligible for reimbursement under the Public Prosecution Fund. It requires the IPAC to establish guidelines for the minimum and maximum caseloads of prosecuting attorney’s offices and determine whether the county has a noncompliant prosecuting attorney. The IPAC shall also include in its report information regarding requested reimbursements and amounts certified for reimbursement to each county prosecuting attorney’s office. The IPAC shall withhold prosecutorial reimbursement funds to the extent a report is received from the prosecutor review board alleging a prosecuting attorney to be a noncompliant prosecuting attorney. Public Prosecution Fund: The bill establishes a nonreverting Public Prosecution Fund to receive revenues for county reimbursement and administrative expenses. The IPAC shall administer the fund. The IPAC shall give priority to certified claims for reimbursement in capital cases. If the balance in the fund is not adequate to fully reimburse all certified all in noncapital cases, the IPAC shall prorate reimbursement of certified claims in noncapital cases. Special Prosecutor Unit Fund: The bill establishes a nonreverting Special Prosecutor Fund and requires IPAC to administer the fund. The fund may be used to establish and maintain the Special Prosecutor Unit. The IPAC may use the money from the fund to provide supplies, logistics, administration, personnel, training, technical assistance, and other reasonable support to establish and maintain the unit. It also provides that IPAC may supplement the fund with money received under IC 33-39-10-2, if the IPAC makes a claim with an appointing county and the claim is approved by the judge from the appointing judicial circuit. Special Prosecutor Unit: The bill establishes the Special Prosecutor Unit to increase the number of qualified special prosecuting attorneys available for appointment. The unit reports directly to the executive director of IPAC or the director’s designee. The units consists of a division chief, attorneys serving as prosecuting HB 1006 3 attorneys, and support staff. The bill provides that individual members of the unit have the same immunity relating to investigations and prosecutions as those carried out by elected prosecutors and deputy prosecutors of any individual judicial circuit. It also provides the salary of the division chief, attorneys, and support staff shall be consistent with pay schedules approved by the executive director of IPAC. These provisions will increase state expenditures and IPAC workload to implement and administer the unit. Adding prosecuting attorneys to the Prosecuting Attorneys' Retirement Fund (PARF) would increase the unfunded liability in PARF and would require an increase in future state General Fund appropriations for PARF. The annual appropriation amount is set in the biennial budget based on the estimated actuarially determined contribution amount needed to actuarially fund the plan. In the most recent actuarial valuation for PARF as of June 30, 2023, the actuarially determined contribution amount for PARF is 16.93% percent of salary. Explanation of State Revenues: Court Fee Revenue: To the extent this bill reduces potential civil filings, revenue from court fees may be impacted. However, reductions in revenue from court fees are expected to be minimal. Explanation of Local Expenditures: Summary - The bill could significantly reduce local expenditures to the extent counties are eligible to recoup costs incurred for prosecutorial services and indigent defense services for noncapital and misdemeanor cases. OFMA estimates local expenditures could potentially be reduced by approximately $63.6 M and $71.3 M annually, beginning in FY 2026. However, the actual fiscal impact will depend on the participating counties. If a special prosecutor is appointed, the bill could increase local expenditure for the appointing county. It also establishes a prosecutor review board to investigate allegations of noncompliant prosecuting attorneys and issue a report to the IPAC. Additional Information - Reimbursement for Prosecutorial Services: The bill could result in significant cost savings to counties that are eligible for reimbursement from the Public Prosecution Fund for an amount equal to 50% of the county’s prosecuting attorney’s office’s expenditures for prosecutorial services provided in noncapital and capital cases, except misdemeanors. If requests for reimbursements are approved by the IPAC, OFMA estimates local expenditures could potentially be reduced by approximately $51.4 M and $59.1 M annually, beginning in FY 2026. Actual revenue increase will depend on the counties eligible and the amount certified for reimbursement by the IPAC. OFMA assumes all counties will receive 50% reimbursement for all prosecutorial expenses. (See Explanation of State Expenditures for details.) Public Defense Fund: The bill could potentially reduce local expenditures for indigent defense services in noncapital cases. It increases the current reimbursement rate to an amount equal to 50% of the county’s or multi-county public defender’s office’s expenditures for indigent defense services in noncapital cases. As a result, to the extent future request for reimbursement are authorized and approved by the CCAA, OFMA estimates the bill could potentially reduce local expenditures by approximately $11.8 M annually, beginning in FY 2026. Any decrease in local expenditures would depend upon the counties selected and authorization by the CCAA. (See Explanation of State Expenditures for details.) CCAA Misdemeanor Pilot Project: The bill increases the reimbursable amount by 10% for the pilot project. If additional claims are approved, OFMA estimates the bill could potentially reduce local expenditures by approximately $244,339 and $279,245 annually, beginning in FY 2062. Any decrease in local expenditures for indigent services would depend upon the counties selected and authorized by the CCAA. (See HB 1006 4 Explanation of State Expenditures for details.) Prosecutor Review Board: The bill establishes the prosecutor review board, comprising of five members who are also members of the board of directors of the IPAC and appointed by the IPAC, to investigate an allegation that a prosecutor is a noncompliant prosecutor. The IPAC membership shall approve the appointment of five members to the review board. A member of the board is not entitled to reimbursement from the state for traveling expenses or other expenses incurred in connection with the member’s duties, but may be entitled to reimbursement from an appointing county. The board of directors of the IPAC is the chairperson of the review board. The board shall issue a report to the IPAC and the alleged noncompliant prosecuting attorney. Upon receipt of noncompliance, the IPAC shall withhold reimbursement funding from the county. These new requirements for the IPAC should be able to be implemented with existing resources. Any additional expenditures for the appointing county will depend on the decisions of the prosecutor review board, the appointed judge, and the appointed special prosecutor. Payments to the special prosecutor would come from the county in which the noncompliant prosecutor serves. If good cause is shown, the appointing judge may increase the scope of the special prosecutor's duties, establish a longer term for the special prosecutor, or appoint more special prosecutors to assist the special prosecuting attorney. The judge may require the special prosecuting attorney to submit periodic reports. Special Prosecuting Unit: A special prosecutor employed by the IPAC special prosecutor unit shall be paid (1) an estimated hourly rate of $79 (assuming an 8 hour day) or $635 per day based upon the regular salary of a full-time prosecuting attorney of the appointing circuit adjusted for weekends and holidays; (2) travel expenses and reasonable accommodation expenses actually incurred; and (3) other reasonable expenses actually incurred, including the costs of investigation, trial and discovery preparation, and other trial expenses. The maximum salary for a special prosecuting attorney may not exceed the annual salary of a full- time prosecuting attorney. Each full-time prosecuting attorney receives a salary of $183,513 in FY 2024 and is adjusted each year based on the salaries of employees in the executive branch who receive a similar salary (IC 33-38-5-8.1). (See Explanation of State Expenditures for details.) County Auditor: The bill requires a county auditor to submit quarterly to the IPAC information to be included in the report regarding reimbursements requested and received from the Public Prosecution Fund for the county’s expenditures for prosecutorial services. This provision will have a minor administrative workload impact on eligible county auditors. Explanation of Local Revenues: Court Fee Revenue: To the extent this bill reduces potential civil filings, revenue from court fees may be impacted. However, reductions in revenue from court fees are expected to be minimal. State Agencies Affected: Indiana Commission for Court Appointed Attorneys; Indiana Public Defender Council; Indiana Prosecuting Attorneys Council; Indiana General Assembly. Local Agencies Affected: All counties; county auditors. Information Sources: Indiana Commission Court Appointed Attorneys; Indiana Public Defender Council; Indiana Prosecuting Attorneys Council; Indiana Gateway for Government Units, https://gateway.ifionline.org/default.aspx. Fiscal Analyst: Corrin Harvey, 317-234-9438. HB 1006 5