LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7246 NOTE PREPARED: Mar 6, 2025
BILL NUMBER: HB 1198 BILL AMENDED: Mar 6, 2025
SUBJECT: Local Public Work Projects.
FIRST AUTHOR: Rep. Lawson BILL STATUS: CR Adopted - 2
nd
House
FIRST SPONSOR: Sen. Crider
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: (Amended) Public Works Contract Bidding: This bill changes the amount of a
public work project that a board may perform using its own workforce, without awarding a contract, from
an estimated cost of less than $250,000 to an estimated cost of less than $375,000, adjusted annually to
account for inflation. It provides that the Department of Local Government Finance (DLGF) shall annually
publish the adjusted cost estimate threshold on the department's website. It also removes the distinction
between a political subdivision that is a school corporation and a political subdivision that is not a school
corporation for the cost of a public work project that is not subject to certain procedures.
Federal Grant Funding: The bill provides that if a federal grant is to be issued to fund a portion of the
construction on a public work project, the successful bidder has 90 days to proceed with the contract.
Architect/Engineer Review: The bill provides that plans and specifications approved by an architect or
engineer are not required for certain public work on a public building.
Effective Date: July 1, 2025.
Explanation of State Expenditures: (Revised)Department of Local Government Finance (DLGF) - The
bill’s provision of requiring the DLGF to publish the adjusted cost estimate threshold to its website is within
the agency’s routine administrative functions and should be able to be implemented with no additional
appropriations, assuming near customary agency staffing and resource levels.
Explanation of State Revenues:
Explanation of Local Expenditures: Public Works Contract Bidding -The overall impact on local
expenditures is indeterminable. The actual fiscal impact will vary from locality to locality and will be
contingent on how many work projects reach the revised threshold to go through the public bidding process.
The bill’s requirements pertaining to the project cost thresholds for political subdivisions may result in a
decrease in the administrative workload for the applicable local unit of government if there is a decrease in
the need to go through the public bidding process. However, if the local unit had to go through the public
HB 1198 1 bidding process, it is possible that a contractor could come in at a lower bid than what it would cost to
perform the work using the unit’s own workers and equipment.
Federal Grant Funding– This provision would allow for 90 days from the awarding of the bid for the
successful bidder to begin the public work project if a portion is funded by Federal grants. This would be
inline with current practice when general obligation bonds are used to help finance construction of the public
work project.
Architect/Engineer Review– This provision may slightly reduce contract costs on certain local public work
projects, if there was no need to pay for the services of an architect or engineer review of the proposed
project.
Explanation of Local Revenues:
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Political subdivisions.
Information Sources:
Fiscal Analyst: James Johnson, 317-232-9869; Chris Baker, 317-232-9851.
HB 1198 2