LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7314 NOTE PREPARED: Mar 25, 2025
BILL NUMBER: HB 1459 BILL AMENDED: Mar 20, 2025
SUBJECT: Water and Wastewater Utility Asset Management.
FIRST AUTHOR: Rep. Pressel BILL STATUS: As Passed Senate
FIRST SPONSOR: Sen. Koch
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: Asset Management Reporting and Review: This bill provides that beginning
January 1, 2026, 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 on a quadrennial basis according to a schedule prescribed
by the IURC.
It provides that a utility's report must include information:
(1) demonstrating the utility's efforts to implement the Indiana Finance Authority's (IFA) guidelines for asset
management programs; and
(2) certifying that:
(A) the utility has the technical, managerial, legal, and financial capability to support those efforts;
and
(B) for a report submitted after December 31, 2026, the governing body of the utility has completed
a training or continuing education program, as required under the bill, at least one time during the four year
reporting period.
The bill provides that evidence that a utility has submitted an asset management program to the IFA in
connection with an application for a grant, loan, or other financial assistance may be provided by the utility
to satisfy the requirement to demonstrate the utility's efforts to implement the IFA's guidelines for asset
management programs.
It requires the IURC to adopt before October 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, including a simplified alternative reporting form that a utility
with less than 1,000 customers may elect to submit;
(3) quadrennial reporting schedule for submitting a report; and
(4) criteria to be used by the IURC in making certain determinations about a utility's asset management
program.
HB 1459 1 It 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.
Management Deficiency Protocols: The bill 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. It 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 base rate cases under the statutory procedure that applies to wastewater utilities that
have been issued two enforcement orders by the department of environmental management. It 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.
The bill authorizes the IURC to enter into an agreement with: (1) the Department of Environmental
Management (IDEM); and (2) the IFA; to carry out these requirements. It authorizes the IURC to delegate
its authority to: (1) review reports submitted by utilities under the bill's provisions; and (2) issue
determinations and notices of deficiency; to technical staff, subject to the right of a utility to appeal a
determination by technical staff to the full IURC.
Asset Management Training: The bill provides that beginning January 1, 2027, the governing body of a
utility must, on at least a quadrennial basis, complete a training or continuing education program that: (1)
includes instruction on specified topics; and (2) is offered by: (A) the IURC; (B) the drinking water and
wastewater infrastructure research and extension program; or (C) a statewide not-for-profit association for
rural water or wastewater utilities.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Asset Management Reporting and Review: An asset management plan
is a strategic outline of how a utility manages items such as its pumps, motors, pipes, infrastructure,
inventory, as well as technical and managerial assets to maintain the reliability and cost efficiency of its
operation system. The IURC will review asset management plans for utilities outside of its rate approving
jurisdiction.
This bill will increase the workload of the IURC to (1) issue guidelines for annual water and wastewater
utilities’ asset management program standards and submitting procedures in addition to reporting schedules
before October 1, 2025, (2) 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. Before
October 1, 2025 the IURC must also develop alternative reporting procedures for water and wastewater
utilities with less than 1,000 customers and issue a general administrative order outlining the criteria used
to determine whether a utility has undertaken efforts to properly implement their asset management plan.
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. Evidence that a utility has submitted
HB 1459 2 a management program tot the IFA in connection to receiving financial assistance, it may satisfy asset
management plan submission requirements with the IURC.
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 0.15% of their gross intrastate operating revenues to fund
the IURC.
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.
The IURC may delegate its authority to review reports submitted by utilities to its technical staff who will
issue determinations about asset management program implementation. The full IURC will also receive
utility appeals regarding technical staffs’ determinations.
Asset Management Training: The IURC must publish on its website, no later than January 1, 2027, a list of
providers offering training for utility asset management.
Explanation of State Revenues:
Explanation of Local Expenditures: 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. The cost of developing an asset management
program will depend on the utility’s size, the current completeness of their system data, and the complexity
of their system.
Asset Management Training: This bill requires that beginning on January 1, 2027, the governing body of a
water or wastewater utility must complete training on best practices for training, implementing, and
maintaining an asset management program, thus increasing the workload of municipalities that do not
currently perform this. They must also receive training on complying with environmental regulations.
Additional Information - The IURC has a Small Utility Workshop for water and wastewater utilities
concerning rules and reuglations related to the commission and utility best practices.
Explanation of Local Revenues:
State Agencies Affected: IFA, IURC, IDEM
Local Agencies Affected: Municipally-owned water and wastewater utilities.
Information Sources: IFA; https://www.in.gov/ifa/srf/files/Guidance-Packet-update-07-18-2024.pdf, IURC
HB 1459 3 Small Utility Workshop; https://www.in.gov/iurc/water-and-wastewater-division/small-utility-workshop/
Fiscal Analyst: Abdul Abdulkadri, 317-232-9852, Bill Brumbach, 317-232-9559
HB 1459 4