LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7314 NOTE PREPARED: Feb 13, 2025
BILL NUMBER: HB 1459 BILL AMENDED: Feb 13, 2025
SUBJECT: Water and Wastewater Utility Asset Management.
FIRST AUTHOR: Rep. Pressel BILL STATUS: 2
nd
Reading - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: (Amended) Asset Management Reporting and Review: This bill provides that a
water or wastewater utility (utility) that is not under the jurisdiction of the Indiana utility regulatory
commission (IURC) for the approval of rates and charges shall submit a report on the utility's asset
management program (program) to the IURC according to a schedule prescribed by the IURC. The bill
provides that a utility shall also include in the required report information detailing any federal consent
decree or other federal order to which the utility is subject at the time the report is submitted and requires
the IURC to adopt before September 1, 2025, a general administrative order (GAO) setting forth the:
(1) information required to be included in a utility's report;
(2) procedures for submission of the report; and
(3) reporting schedule for submitting a report.
It also provides that the IURC shall verify on a quadrennial basis: (1) the sufficiency of each utility's
program; and (2) the program's compliance with the IURC's GAO. The bill also provides that if the IURC
determines that specified deficiencies exist with respect to a utility's program, the IURC:
(1) shall notify the utility of the deficiency and provide the utility a time frame in which the utility
must correct the deficiency; and
(2) may require the utility to undergo an informal rate review.
Management Deficiency Protocols: The bill provides that if a utility receives two consecutive notices of a
deficiency from the IURC:
(1) the IURC shall assert jurisdiction over the rates and charges of the utility; and
(2) the utility must undergo a base rate case.
It also provides that the utility shall remain subject to the jurisdiction of the IURC for a minimum of five
years after the IURC's order in the required rate case and provides that if a utility receives three consecutive
notices of a deficiency over the course of three consecutive verifications, the IURC may initiate a
receivership proceeding with respect to the utility. It authorizes the IURC to enter into an agreement with:
(1) the Department of Environmental Management (IDEM); and (2) the Indiana Finance Authority (IFA);
to carry out these requirements.
HB 1459 1 Effective Date: July 1, 2025.
Explanation of State Expenditures: Management Deficiency Protocols: The bill provides that the IURC
shall assert jurisdiction over the rates and charges of a utility that undergoes two consecutive deficiency
notices. The IURC may initiate receivership of a utility if it issues three consecutive deficiency notices to
a utility and may do so in cooperation with the IFA and the IDEM. If several utilities are repeatedly deficient
in their asset management plans, the IURC’s workload may increase significantly.
Asset Management Reporting and Review: This bill will increase the workload of the IURC to (1) issue
guidelines for annual water and waste water utilities’ asset management program standards and submitting
procedures in addition to reporting schedules, (2) increase the workload of the IURC to quadrennially review
reports from utilities in the state concerning adoption and implementation of asset management plans, and
(3) notify utilities of deficiencies in their asset management and provide a timeframe to correct deficiencies
and potentially undergo informal rate reviews. These increases in IURC workload are expected to be
accomplished within existing resource and funding levels.
Additional Information - Water and wastewater utilities that currently receive financing under a state
revolving fund managed by the IFA (Clean Water State Revolving Fund, Drinking Water State Revolving
Fund, etc) are currently required to utilize an asset management plan.
The operating budget of the IURC is funded by regulated utilities operating in Indiana. The rate at which to
bill the utilities is based on the agencies' budgets, less reversions, divided by the total amount of gross
intrastate operating revenue received by the regulated utilities forthe previous fiscal year. Based on this
formula, utilities are currently billed approximately 0.12% of their gross intrastate operating revenues to fund
the IURC.
Explanation of State Revenues:
Explanation of Local Expenditures: (Revised) Asset Management Reporting and Review: The bill would
increase the workload of municipally-owned water and wastewater utilities to file annual reports with the
IURC concerning utilization of asset management plans. Municipal utilities are also required to report
information detailing any federal consent decree or other federal order they are subject at the time the report
is submitted. Additionally, to the extent a municipally-owned utility does not currently utilize an asset
management plan, the bill would increase local workload to implement a plan.
Explanation of Local Revenues:
State Agencies Affected: IFA, IURC, IDEM
Local Agencies Affected: Municipally-owned water and wastewater utilities.
Information Sources: https://www.in.gov/ifa/srf/files/Guidance-Packet-update-07-18-2024.pdf
Fiscal Analyst: Abdul Abdulkadri, 317-232-9852, Bill Brumbach, 317-232-9559
HB 1459 2