LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7267 NOTE PREPARED: Jan 7, 2025
BILL NUMBER: SB 436 BILL AMENDED:
SUBJECT: Conversion to Class 3 City Status.
FIRST AUTHOR: Sen. Bohacek BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides that if the population of a second class city is reported by two
consecutive federal decennial censuses as having a population of less than 31,500, the city becomes a third
class city on January 1: (1) of the calendar year following the next municipal election held after the most
recent census; or (2) of the calendar year following the second municipal election held after the most recent
census, if the effective date of the most recent census and the municipal election are in the same calendar
year. It provides that if a city's population is less than 31,500 in the 2010 and 2020 censuses, the city becomes
a third class city on January 1, 2027.
The bill also provides that the population of the second class city is calculated by subtracting the portion of
the population of the city consisting of prison inmates from the population of the city reported by the federal
decennial census.
Effective Date: July 1, 2025.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures: This bill’s provision will result in a slight decrease in fiscal
expenditures pertaining to councilor compensation for those second class cities that meet the population
parameters referenced in the bill. Namely, if a second class city were to become a third class city, the
municipality’s legislative body would go from a nine-member council to a seven-member council.
Additionally, costs pertaining to council redistricting might potentially decrease since there would be fewer
districts when determining updated boundaries of the new districts.
Additional Information: According to U.S. Census Bureau data from the 2010 Census and the 2020 Census,
as well as data from the Indiana Department of Corrections Offender Population Report from April 1, 2020,
there are currently three second class cities that would meet the population parameters referenced in the bill:
Marion (Grant County), East Chicago (Lake County), and Michigan City (LaPorte County).
SB 436 1 Explanation of Local Revenues:
State Agencies Affected:
Local Agencies Affected: Second class cities.
Information Sources: U.S. Census Bureau 2010 Census and 2020 Census data: Indiana Department of
Correction Offender Population Report - April 1, 2020.
Fiscal Analyst: James Johnson, 317-232-9869.
SB 436 2