Introduced Version
SENATE BILL No. 426
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1; IC 14-26-2-16.
Synopsis: Water utility infrastructure. Amends the statute governing
the acquisition of water utilities and wastewater utilities to require the
Indiana utility regulatory commission to consider and authorize
mechanisms to allow utility companies to integrate into their systems,
invest in, and earn on acquired utility assets. Amends the statute
governing the recovery of costs for eligible infrastructure
improvements made by water or wastewater utilities to provide that, in
the case of a public utility (as defined in the Indiana Code),
"infrastructure improvement costs" eligible for recovery include: (1)
deferred depreciation expense; and (2) post in service carrying costs;
for the eligible infrastructure improvements. Amends the Indiana Code
section prohibiting the department of natural resources (department)
from regulating certain activities within the 100 year flood level of a
water supply reservoir owned and operated by a municipality or a
public utility for the purpose of providing water utility service to the
public to also prohibit the department from ordering the closure or
removal, or the partial closure or removal, of: (1) a dam that forms such
a water supply reservoir; or (2) a dam that forms or contains a body of
water that is used to supply one or more private water wells; if the
closure or removal, or the partial closure or removal, of the dam would
impact the provision of water utility service to the public or the supply
of water to one or more private water wells.
Effective: Upon passage; July 1, 2025.
Koch
January 13, 2025, read first time and referred to Committee on Utilities.
2025 IN 426—LS 7170/DI 101 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 426
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 8-1-30.3-0.5 IS ADDED TO THE INDIANA
2 CODE AS A NEW SECTION TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2025]: Sec. 0.5. (a) To encourage the
4 consolidation of utility companies under this chapter, the
5 commission shall consider and authorize mechanisms:
6 (1) outside of a general rate case; and
7 (2) in addition to the inclusion of a cost differential in a utility
8 company's rate base under section 5 of this chapter;
9 to allow utility companies to integrate into their systems, invest in,
10 and earn on acquired utility assets.
11 (b) The commission may adopt rules under IC 4-22-2 to
12 implement this section.
13 SECTION 2. IC 8-1-31-5.5, AS AMENDED BY P.L.61-2022,
14 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2025]: Sec. 5.5. As used in this chapter, "infrastructure
16 improvement costs" means the following:
17 (1) For a public utility:
2025 IN 426—LS 7170/DI 101 2
1 (A) depreciation expenses, including deferred depreciation
2 expense beginning with the in service date of eligible
3 infrastructure improvements;
4 (B) property taxes to be paid by the public utility based upon
5 the first assessment date following placement in service; and
6 (C) pretax return; and
7 (D) post in service carrying costs, compounded monthly
8 and based on the overall weighted cost of capital most
9 recently approved by the commission;
10 associated with eligible infrastructure improvements.
11 (2) The following for a municipally owned utility:
12 (A) Depreciation expenses.
13 (B) Adequate money for making extensions and replacements
14 of eligible infrastructure improvements to the extent not
15 provided for through depreciation, as provided in
16 IC 8-1.5-3-8(c).
17 (C) Debt service on funds borrowed to pay for eligible
18 infrastructure improvements.
19 (D) To the extent applicable, property taxes to be paid by the
20 municipally owned utility based upon the first assessment date
21 following placement in service of eligible infrastructure
22 improvements.
23 (3) The following for a not-for-profit utility:
24 (A) Debt service on funds borrowed to pay for eligible
25 infrastructure improvements.
26 (B) Adequate money for making extensions and replacements
27 of eligible infrastructure improvements.
28 (C) To the extent applicable, property taxes to be paid by the
29 not-for-profit utility based upon the first assessment date
30 following placement in service of eligible infrastructure
31 improvements.
32 SECTION 3. IC 14-26-2-16, AS AMENDED BY P.L.164-2024,
33 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
34 UPON PASSAGE]: Sec. 16. (a) As used in this section, "water supply
35 reservoir" means a body of water formed by a dam wholly owned and
36 operated by a municipality or a public utility (as defined in IC 8-1-2-1)
37 for the purpose of providing water utility service to the public. The
38 term does not include the following:
39 (1) Tributary streams that drain into the body of water.
40 (2) Wetlands associated with those streams.
41 (b) Notwithstanding any other law, the department may not regulate
42 the following activities conducted within the one hundred (100) year
2025 IN 426—LS 7170/DI 101 3
1 flood level of a water supply reservoir:
2 (1) Sediment removal, dredging for the purpose of providing
3 water supply storage, seawall construction, or the maintenance of
4 water intake structures.
5 (2) Restoration or stabilization of the shoreline.
6 (c) A person may perform an activity under subsection (b) without
7 a permit issued by the department.
8 (d) Subject to subsection (e) and notwithstanding any other law,
9 the department may not order the closure or removal, or the
10 partial closure or removal, of:
11 (1) a dam described in subsection (a); or
12 (2) a dam that forms or contains a body of water that is used
13 to supply one (1) or more private water wells, including a dam
14 described in IC 14-27-7.7;
15 if the closure or removal, or the partial closure or removal, of the
16 dam would impact either the provision of water utility service to
17 the public or the supply of water to one (1) or more private water
18 wells, as applicable.
19 (d) (e) This section does not restrict the department's ability to
20 regulate the safety or maintenance of a dam or other control structure
21 under IC 14-27-7.5, including the department's authority to take
22 emergency measures under IC 14-27-7.5-12.
23 SECTION 4. An emergency is declared for this act.
2025 IN 426—LS 7170/DI 101