Introduced Version
SENATE BILL No. 427
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1.
Synopsis: Nonjurisdictional water utilities. Includes water utilities
within the scope of the statute that subjects wastewater utilities that: (1)
are not under the jurisdiction of the Indiana utility regulatory
commission (IURC) for the approval of rates and charges; and (2) have
been issued one or more enforcement orders by the department of
environmental management; to a series of oversight actions by the
IURC for each additional enforcement order, including rate review, rate
regulation, and the initiation of a receivership proceeding. Makes a
conforming amendment to the statute that governs the process by which
water utilities and wastewater utilities may withdraw from the
jurisdiction of the IURC.
Effective: July 1, 2025.
Koch
January 13, 2025, read first time and referred to Committee on Utilities.
2025 IN 427—LS 7230/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. 427
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 8-1-1.9-5, AS ADDED BY P.L.18-2022, SECTION
2 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1,
3 2025]: Sec. 5. (a) This section applies to a water or wastewater utility
4 that:
5 (1) is not subject to the jurisdiction of the commission for the
6 approval of rates and charges; and
7 (2) has been issued one (1) or more enforcement orders after:
8 (A) June 30, 2022, in connection with the provision of
9 wastewater service; or
10 (B) June 30, 2025, in connection with the provision of
11 water service.
12 (b) As used in this section, "department enforcement action" means
13 an action of the department of environmental management commenced
14 under IC 13-30-3.
15 (c) As used in this section, "enforcement order" means an order,
16 including an agreed order under IC 13-30-3-3:
17 (1) resulting from a department enforcement action; and
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1 (2) relating to environmental or health and human safety issues.
2 (d) Notwithstanding section 3 of this chapter, as used in this
3 section, "wastewater "water or wastewater utility" means any of the
4 following that provides water service, wastewater service, or both
5 water service and wastewater service to the public in Indiana:
6 (1) A public utility (as defined in IC 8-1-2-1(a)).
7 (2) A municipally owned utility (as defined in IC 8-1-2-1(h)).
8 (3) A not-for-profit utility (as defined in IC 8-1-2-125(a)).
9 (4) A cooperatively owned corporation.
10 (5) A conservancy district established under IC 14-33.
11 (6) A regional water or sewer district established under IC 13-26.
12 (e) The following apply to a water or wastewater utility that is
13 subject to this section:
14 (1) Except as provided in clause (C) in the case of a water
15 utility, upon the issuance of the first enforcement order with
16 respect to the water or wastewater utility, the commission shall
17 do the following:
18 (A) Perform an informal review, using such procedures as the
19 commission may choose, of the rates and charges of the water
20 or wastewater utility to determine if the rates and charges are
21 sufficient to:
22 (i) operate and maintain the water or wastewater utility's
23 distribution system or collection and treatment system, as
24 applicable; and
25 (ii) pay all obligations of the water or wastewater utility's
26 distribution system or collection and treatment system, as
27 applicable. and
28 (B) Determine whether all elements of an adequate asset
29 management program are in place with respect to the water or
30 wastewater utility's distribution system or collection and
31 treatment system, as applicable.
32 (C) In the case of a water utility, the commission shall not:
33 (i) initiate an informal review of the water utility's rates
34 and charges under clause (A); or
35 (ii) proceed to determine whether all elements of an
36 adequate asset management program are in place with
37 respect to the water utility's distribution system under
38 clause (B);
39 unless twelve (12) months have elapsed since the effective
40 date of the first enforcement order and the water utility
41 has not remedied within that time the violation for which
42 the enforcement order was issued.
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1 In making a determination under clause (B), the commission may
2 consult with the drinking water and wastewater infrastructure
3 research and extension program authorized by IC 5-1.2-11.5-10.
4 Notwithstanding IC 8-1-1-5(b), commission staff shall not be
5 subject to cross examination in any subsequent proceeding in
6 connection with any documents prepared during an informal
7 review under this subdivision.
8 (2) If within two (2) years of the effective date of the first
9 enforcement order a second enforcement order is issued with
10 respect to the water or wastewater utility within two (2) years of
11 the effective date of the first enforcement order, in connection
12 with the same type of service for which the first enforcement
13 order was issued, the water or wastewater utility:
14 (A) shall undergo a base rate case before the commission; and
15 (B) becomes subject to the jurisdiction of the commission for
16 the approval of rates and charges upon the effective date of the
17 second enforcement order;
18 with respect to that service. After this first required rate case,
19 the water or wastewater utility shall undergo one (1) subsequent
20 rate case before the commission not earlier than three (3) years
21 after the effective date of the commission's order in the first rate
22 case under this subdivision. The water or wastewater utility shall
23 remain subject to the jurisdiction of the commission for the
24 approval of rates and charges for a minimum of five (5) years
25 from the effective date of the commission's order in the first rate
26 case under this subdivision and for at least one (1) year after the
27 effective date of the commission's order in the second rate case
28 under this subdivision. For purposes of determining rates and
29 charges under this subdivision, if the a wastewater utility also
30 provides storm water services or is considered a combined sewer
31 system, the commission may consider any revenues collected by
32 the wastewater utility for storm water services. However, the
33 commission may not order storm water rates to be adjusted.
34 (3) Notwithstanding IC 8-1-2.7, if the water or wastewater utility:
35 (A) satisfies the requirements set forth in subdivision (2); and
36 (B) is not issued any additional enforcement orders during the
37 rate regulation period described in subdivision (2);
38 the water or wastewater utility shall provide to the commission
39 written notice to that effect. If the commission determines that the
40 water or wastewater utility has satisfied the requirements set
41 forth in subdivision (2) and has not been issued any additional
42 enforcement orders during the rate regulation period described in
2025 IN 427—LS 7230/DI 101 4
1 subdivision (2), the water or wastewater utility shall be
2 withdrawn from the commission's jurisdiction.
3 (4) If, during the rate regulation period described in subdivision
4 (2):
5 (A) one (1) or more additional enforcement orders are issued
6 with respect to the water or wastewater utility in connection
7 with the same service for which the first two (2)
8 enforcement orders were issued; or
9 (B) the commissioner of the department of environmental
10 management otherwise determines that environmental or
11 health and human safety considerations so warrant;
12 the commission may, in consultation with the department of
13 environmental management, initiate a receivership proceeding
14 with respect to the water or wastewater utility.
15 (5) Subdivision (1) applies with respect to any enforcement order
16 that is issued with respect to the water or wastewater utility after
17 the completion of the rate regulation period described in
18 subdivision (2).
19 (f) The commission may enter into an agreement with the
20 department to carry out the requirements set forth in subsection (e).
21 (g) An action by the department of environmental management
22 under this section is subject to review under IC 4-21.5.
23 (h) An action by the commission under this section is subject to
24 review under IC 8-1-3.
25 SECTION 2. IC 8-1-2.7-2, AS AMENDED BY P.L.60-2024,
26 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
27 JULY 1, 2025]: Sec. 2. (a) This chapter provides the exclusive statutory
28 manner for a utility described in section 1.3(a)(1) or 1.3(a)(2) of this
29 chapter to withdraw from the jurisdiction of the commission for the
30 approval of the following:
31 (1) Rates and charges.
32 (2) Stocks, bonds, notes, or other evidence of indebtedness.
33 (3) Rules.
34 (4) The annual report filing requirement.
35 (b) Notwithstanding any other provision in this article, a sewer
36 disposal company described in section 1.3(a)(2) of this chapter shall
37 not initiate operations or provide service or seek commission authority
38 to do so within a territory for which the commission has granted
39 operating and territorial authority to any other entity, which has not
40 been revoked.
41 (c) A sewage disposal company described in section 1.3(a)(2) of this
42 chapter that has withdrawn from commission jurisdiction under this
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1 chapter shall offer service to all customers within the territory for
2 which the commission has granted the utility territorial authority.
3 (d) A sewage disposal company utility described in section
4 1.3(a)(1) or 1.3(a)(2) of this chapter that is subject to the commission's
5 jurisdiction under IC 8-1-1.9-5(e)(2) for having been issued more than
6 one (1) enforcement order (as defined in IC 8-1-1.9-5(c)) within the
7 time specified in IC 8-1-1.9-5(e)(2) may not seek to withdraw from the
8 commission's jurisdiction under this chapter during the rate regulation
9 period set forth in IC 8-1-1.9-5(e)(2).
2025 IN 427—LS 7230/DI 101