LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6110 NOTE PREPARED: Oct 28, 2024
BILL NUMBER: HB 1085 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: This bill provides that the amounts currently distributed from the Motor Vehicle
Highway Account (MVHA) and the Local Road and Street (LRS) Account 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).
The bill also provides that the Indiana Department of Transportation (INDOT) shall establish guidelines
outlining the procedures required to determine vehicle miles traveled.
Effective Date: July 1, 2025.
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, with the last update performed in
2024.
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:
Explanation of Local Revenues: Summary - This bill will impact local road funding distributions beginning
in FY 2026 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) $77.7 M in local MVHA funding between counties and (2)
$14.7 M in the LRS funding between municipalities in the state.
HB 1085 1 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 22 counties. The remaining 70 counties would experience a decrease in local MVHA funding.
For FY 2024, approximately $263.8 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 $77.4 M per year.
The following table shows the 10 counties that gain and lose the most local MVHA funds by changing lane
miles to VMT.
County Local MVHA Increase
Per Year ($ M)
County Local MVHA Decrease
Per Year ($ M)
Marion $28.3 Randolph ($2.2)
Lake $9.7 Pulaski ($2.1)
Allen $8.7 Greene ($2.0)
Hamilton $6.2 Sullivan ($1.8)
Porter $3.0 Jay ($1.8)
Johnson $3.0 Washington ($1.8)
Vanderburgh $2.9 Knox ($1.7)
St. Joseph $2.5 Parke ($1.7)
Hendricks $2.4 Cass ($1.7)
Elkhart $2.0 Benton ($1.6)
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
and whether 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 municipalities within
each county.
Based on estimates maintained by INDOT, this bill could (1) increase the LRS distributions of 143
municipalities and (2) decrease LRS funding to 530 municipalities. An estimated 95 cities and towns would
experience no changes in LRS funding. For FY 2024, approximately $157 M in LRS funds were distributed
to municipalities. An estimated $14.7 M in annual LRS revenue would be shifted between cities and towns
in the state.
HB 1085 2 State Agencies Affected: INDOT.
Local Agencies Affected: Counties and municipalities.
Information Sources: Andrea Zimmerman, INDOT; INDOT VMT estimates, updated August 2024.
Fiscal Analyst: Bill Brumbach, 317-232-9559.
HB 1085 3