Introduced Version
SENATE BILL No. 458
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 8-1; IC 32-24-4-5.
Synopsis: Extension of water services. Allows a water or wastewater
utility to extend service up to three miles to a: (1) public school,
including a charter school; or (2) nonpublic school that employs one or
more employees; without a deposit or other adequate assurance of
performance from the customer if certain conditions are met. Provides
that the extension qualifies as an eligible infrastructure improvement
for purposes of infrastructure improvement charges. Provides that a
public utility must conduct an outreach program before it condemns
land for the purpose of extending a water or wastewater main.
Establishes certain meeting and notice requirements for the outreach
program.
Effective: January 1, 2025 (retroactive); July 1, 2025.
Niemeyer
January 13, 2025, read first time and referred to Committee on Utilities.
2025 IN 458—LS 6622/DI 153 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,
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
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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. 458
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 8-1-2-46.2, AS AMENDED BY P.L.189-2021,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 46.2. (a) The following
4 definitions apply throughout this section:
5 (1) "Developed but underserved area" means an area in which the
6 prospective service would be provided predominantly to existing
7 and occupied structures:
8 (A) that receive water from private wells; or
9 (B) from which wastewater is disposed of through onsite
10 private systems such as septic tanks.
11 (2) "Water or wastewater utility" means a public utility, other than
12 a not-for-profit utility, as defined in section 125(a) of this chapter,
13 that provides water or wastewater service to the public.
14 (b) Notwithstanding any law or rule governing extension of service,
15 a water or wastewater utility may, on a nondiscriminatory basis, extend
16 service:
17 (1) for economic development purposes;
2025 IN 458—LS 6622/DI 153 2
1 (2) to rural areas; or
2 (3) to developed but underserved areas;
3 without a deposit or other adequate assurance of performance from the
4 customer, to the extent that the extension of service results in a positive
5 contribution to the utility's overall cost of service over a twenty (20)
6 year period. For the purposes of this subsection, a water or wastewater
7 utility's extension of service to a developed but underserved area will
8 be considered as resulting in a positive contribution to the utility's
9 overall cost of service over a twenty (20) year period to the extent that
10 rates to be paid by fifty percent (50%) or more of the customers who
11 could be served by the extension of service would enable the utility to
12 fully recover the weighted cost of debt and depreciation expense
13 attributable to the cost of the main extension for the extension of
14 service.
15 (c) If a water or wastewater utility determines that an extension of
16 service described in subsection (b) will not result in a positive
17 contribution to the utility's overall cost of service over a twenty (20)
18 year period, the water or wastewater utility, in extending service, may
19 require a deposit or other adequate assurance of performance from:
20 (1) the developer of the project;
21 (2) a local, regional, or state economic development organization;
22 or
23 (3) the customers to be served by the extension of service.
24 (d) Subsection (e) applies if:
25 (1) a county executive, a municipal legislative body, or, in Marion
26 County, the county fiscal body, establishes an infrastructure
27 development zone under IC 6-1.1-12.5-4; and
28 (2) the county executive, municipal legislative body, or county
29 fiscal body requests a public utility to extend water or wastewater
30 utility service to the geographic territory established as the
31 infrastructure development zone.
32 (e) A water or wastewater utility that receives a request described
33 in subsection (d)(2) may file a petition with the commission seeking
34 approval of the requested extension of service. If the commission
35 approves the petition, in future general rate cases, the commission shall
36 approve rate schedules that include a surcharge payable only by
37 customers located in the geographic area within the jurisdiction of the
38 governmental entity described in subsection (d), or, if requested by the
39 governmental entity, only within the geographic area established as an
40 infrastructure development zone. The surcharge shall recover
41 depreciation expense, weighted cost of capital, and federal and state
42 income tax applicable to the extension of water or wastewater utility
2025 IN 458—LS 6622/DI 153 3
1 service.
2 (f) Notwithstanding any law or rule governing extension of
3 service, a water or wastewater utility may, on a nondiscriminatory
4 basis, extend service a distance of not more than three (3) miles to
5 a:
6 (1) public school (as defined in IC 20-18-2-15), including a
7 charter school (as defined in IC 20-24-1-4); or
8 (2) nonpublic school (as defined in IC 20-18-2-12) that
9 employs one (1) or more employees;
10 without a deposit or other adequate assurance of performance
11 from the customer for a project which is accepted by the utility or
12 for which construction begins after January 1, 2025. An extension
13 under this subsection qualifies as an eligible infrastructure
14 improvement (as defined in IC 8-1-31-5), notwithstanding that the
15 purpose of the extension is to connect as a new customer a public
16 school or a nonpublic school.
17 SECTION 2. IC 8-1-31-5, AS AMENDED BY P.L.61-2022,
18 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 5. As used in this
20 chapter, "eligible infrastructure improvements" means projects that:
21 (1) are:
22 (A) new water or wastewater utility distribution or collection
23 plant projects; or
24 (B) projects to relocate existing utility plant, including projects
25 to relocate utility plant or equipment to accommodate the
26 construction, reconstruction, or improvement of a highway,
27 street, or road (as defined in IC 8-23-1-23), including projects
28 under IC 8-25;
29 (2) do not increase revenues by connecting to new customers,
30 even if the projects provide greater available capacity with respect
31 to an eligible utility's distribution or collection plant; and
32 (3) either:
33 (A) for a public utility:
34 (i) are in service and used and useful; and
35 (ii) were not included in the public utility's rate base in its
36 most recent general rate case; or
37 (B) for a municipally owned or not-for-profit utility:
38 (i) are or will be extensions or replacements of projects
39 described in subdivision (1), as described in section
40 5.5(2)(B) or 5.5(3)(B) of this chapter, as applicable;
41 (ii) were not included on the utility's balance sheet as plant
42 in service in the utility's most recent general rate case; and
2025 IN 458—LS 6622/DI 153 4
1 (iii) are not infrastructure improvements that are being
2 recovered or have been recovered through rates or another
3 rate adjustment mechanism.
4 An extension under IC 8-1-2-46.2(f) is an eligible infrastructure
5 improvement.
6 SECTION 3. IC 32-24-4-5 IS ADDED TO THE INDIANA CODE
7 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
8 1, 2025]: Sec. 5. (a) A public utility may not take, acquire,
9 condemn, or appropriate land, real estate, or any interest in the
10 land or real estate for the purpose of extending a water or
11 wastewater main unless the public utility conducts an outreach
12 program under subsection (b).
13 (b) Not earlier than four (4) months before a public utility
14 presents an offer of purchase under IC 32-24-1-5, the public utility
15 shall conduct an outreach program to inform citizens regarding the
16 proposed extension. The outreach program must conduct at least
17 two (2) public information meetings regarding the proposed
18 extension. The public information meetings must provide citizens
19 with the following information:
20 (1) Maps showing the proposed boundaries of the extension.
21 (2) The expected completion date of the total extension
22 project.
23 (3) The nature of the work the public utility would complete
24 on each parcel of land needed or intended to be taken for the
25 extension.
26 (c) The public utility shall provide notice of the dates, times, and
27 locations of the outreach program meetings in a newspaper of
28 general circulation in the county where the extension is proposed
29 not later than thirty (30) days before the date of each meeting. The
30 public utility shall also send notice to each owner of land, if the
31 person's land is needed or intended to be taken for the extension,
32 not later than thirty (30) days before the date of the first meeting
33 of the outreach program. The notice to landowners shall be sent by
34 first class mail, certified mail with return receipt requested, or any
35 other means of delivery that includes a return receipt and must
36 include the following information:
37 (1) A statement that:
38 (A) the public utility intends to extend a water or
39 wastewater main;
40 (B) the landowner's property is needed for the extension;
41 and
42 (C) the public utility can acquire land through
2025 IN 458—LS 6622/DI 153 5
1 condemnation if certain conditions are met.
2 (2) The public utility is conducting an outreach program for
3 the purpose of providing information to landowners and the
4 public regarding the proposed extension.
5 (3) The date, time, and location of the meetings to be
6 conducted under the outreach program.
7 (d) The notice shall be sent to the address of the landowner as
8 listed on the tax duplicate. If the municipality provides evidence
9 that the notice was sent:
10 (1) by certified mail, with return receipt requested or any
11 other means of delivery that includes a return receipt; and
12 (2) in accordance with this section;
13 it is not necessary that the landowner accept receipt of the notice.
14 (e) A public utility shall provide notice of a project to extend a
15 water or wastewater main to a county zoning authority that has
16 jurisdiction over the area.
2025 IN 458—LS 6622/DI 153