LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7551 NOTE PREPARED: Feb 6, 2025
BILL NUMBER: HB 1503 BILL AMENDED:
SUBJECT: Adoption Incentive Programs.
FIRST AUTHOR: Rep. McGuire BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: Indiana Adoption Services Authority: The bill creates the Indiana Adoption
Services Authority and establishes the board of directors of the authority. It sets forth the duties and powers
of the authority and the board.
Zero Cost Adoption Fund and General Operating Fund: The bill establishes the Zero Cost Adoption Fund
to provide financial assistance, benefits, services, or other assistance for specified purposes pertaining to
foster care, adoption, and postadoption assistance, including assistance with college savings and
arrangements for reduced college tuition for an adopted child. It provides that money in the fund may not be
used to pay the general operating, administrative, and capital expenses and establishes a separate, general
operating fund for the authority to pay those expenses. The bill specifies that assistance provided from the
fund is supplemental to adoption assistance payments or an adoption subsidy.
The bill also makes an appropriation.
Tax Credit: The bill provides a tax credit for contributions made to the fund in an amount equal to 50% of
the contribution. It specifies that the total amount of tax credits allowed may not exceed $18.5 M for each
state fiscal year.
It makes conforming changes.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Zero Cost Adoption Fund: The bill establishes the nonreverting Zero
Cost Adoption Fund, consisting of a $25 M state General Fund appropriation for the FY 2026 - FY 2027
biennium, private sector contributions, gifts, grants, devises, and bequests. Money in the fund may be used
to make contributions into a 529 college savings plan of $10,000 per adopted child, as well as to support
various adoption assistance efforts as prescribed in the bill.
General Operating Fund: The bill also establishes the General Operating Fund, which consists of state
HB 1503 1 General Fund appropriations; however, the bill does not make an appropriation to this fund.
Indiana Adoption Services Authority and Board: The bill establishes the Indiana Adoption Services
Authority and establishes the board of directors of the authority. The board of directors consists of four state
employees and five Governor appointed members. All members will receive reimbursement for travel
expenses and other expenses actually incurred in connection with the board member’s duties.
Department of State Revenue (DOR): The bill’s requirements will increase workload for the DOR but should
be able to be implemented using existing staffing and resources.
Explanation of State Revenues: The bill establishes a new nonrefundable tax credit for donations to the
Zero Cost Adoption Fund beginning in tax year 2026. The bill could reduce General Fund revenues by an
indeterminable amount annually beginning in FY 2027. The total amount of tax credit allowed per fiscal year
may not exceed $18.5 M. The actual amount will depend on the amount of contributions made to the Zero
Cost Adoption Fund. The credit amount is equal to 50% of the qualified contributions made to the fund.
The credit could be applied to Individual Adjusted Gross Income Tax, Corporate Adjusted Gross Income
Tax, Financial Institutions Tax, Insurance Premiums Tax, or Nonprofit Agricultural Organization Health
Coverage Tax. The credit could be carried forward for up to nine years.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue.
Local Agencies Affected:
Information Sources:
Fiscal Analyst: Camille Tesch, 317-232-5293.
HB 1503 2