LEGISLATIVE SERVICES AGENCY
Office OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7491 NOTE PREPARED: Jan 29, 2025
BILL NUMBER: SB 463 BILL AMENDED:
SUBJECT: Child Care Matters.
FIRST AUTHOR: Sen. Charbonneau BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: Child Care Expenditure Tax Credits: The bill adds additional qualified child care
expenditures for purposes of the employer child care expenditure tax credit and extends the availability of
the credit through July 1, 2027.
Early Learning Advisory Committee: The bill adds a representative of an out-of-school-time program to the
membership of the Early Learning Advisory Committee (ELAC). This bill requires the Office to adopt
emergency rules not later than July 1, 2025, to implement the recommendations issued by ELAC.
Staff Ratio and Group Size: The bill sets forth age ranges for which a licensed child care center shall
maintain:
(1) staff to child ratios; and
(2) maximum group sizes.
The bill also provides that:
(1) the required staff to child ratio for each age range is equal to the lowest staff to child
ratio for that age range under the laws of Illinois, Kentucky, Michigan, and Ohio (bordering
states), unless the lowest staff to child ratio for the age range in the bordering states is higher
than the staff to child ratio for the age range in Indiana; and
(2) the required maximum group size for each age range is equal to the highest maximum
group size for that age range under the laws of the bordering states, unless the highest
maximum group size for the age range in the bordering states is less than the maximum
group size for the age range in Indiana.
The bill requires:
(1) the Office of the Secretary of Family and Social Services (Office) to post the required
staff to child ratios and maximum group sizes on the Office's website not later than
December 1 of each year; and
(2) a licensed child care center to maintain the posted staff to child ratios and maximum
group sizes for the duration of the next calendar year.
SB 463 1 Micro Center Pilot Program: The bill provides that if the Office has received at least five applications from
child care providers wishing to participate in the Micro Center Pilot Program (pilot program) but has selected
less than five applicants for participation in the pilot program, the Office shall select additional applicants
for participation in the pilot program such that at least five child care providers are participating in the pilot
program.
Local Child Care Assistance Program: The bill establishes the Local Child Care Assistance Program
(program) for the purpose of providing a county with assistance in expanding the availability of child care
in the county and provides the following with regard to the program:
(1) That the Office shall administer the program and may provide matching grants to a
county participating in the program.
(2) That a county that wishes to receive a matching grant must enter into a memorandum of
understanding with Office regarding the purposes for which the county may use the
matching grant.
(3) The requirements for:
(A) a county that receives a matching grant under the program to report
specified information to the Office; and
(B) the Office to submit an annual report to the Legislative Council
regarding the program.
Effective Date: Upon passage; July 1, 2025.
Explanation of State Expenditures: Local Child Care Assistance Program: The bill will increase
expenditures for the FSSA between $100,000 and $305,000 for staff in the early years of this program,
depending on the number of new staff required. The program cost is based on needing one to three additional
staff members for implementation of the program, with average annual salary similar to the three staff serving
the On My Way Pre-K program. Ultimately, the total cost of the program will be based on the number of
counties participating, the amount of county matching funds transferred for state matching, and requirements
of the memoranda of understanding.
The Local Child Care Assistance Grant Fund is established by the bill to be administered by the Office, with
the administration costs paid by the fund. The fund consists of appropriations, grants, gifts, and donations,
and participating county transfers. The fund does not revert to the state General Fund.
Early Learning Advisory Committee: The bill will increase the workload of the Office of Early Childhood
and Out-of-School Learning (OECOSL), primarily due to the rule promulgation and recommendation
implementation deadlines in the bill. The OECOSL implemented some recommendations within current laws
and regulations. The OECOSL will have additional workload for legal and financial evaluation of the
recommendations.
Staff Ratio and Group Size: The bill’s requirements represent an additional workload on the Office to
annually survey surrounding states and post staff to child ratio information on its website. Also, the Office’s
workload will increase to regulate child care entities for compliance with information postings and group size
and staffing ratios. These additional duties should be able to be implemented with no additional
appropriations, assuming near customary agency staffing and resource levels.
Child Care Expenditure Tax Credits: The DOR will incur additional expenses to revise tax forms,
SB 463 2 instructions, and software to reflect the changes made by the bill. The DOR's current level of resources
should be sufficient to implement expansion of the child care expenditure tax credit.
Explanation of State Revenues: Child Care Expenditure Tax Credits: The bill would allow employers to
claim the nonrefundable credit on operating costs of an employer-operated child care facility and extends
the expiration of the credit from July 1, 2025 to July 1, 2027. The bill will reduce General Fund revenue in
FY 2026 through FY 2028 by up to $2.5 M.
A taxpayer can claim a credit amount equal to the lesser of 50% of qualified expenditures or $100,000. The
credit may be applied against tax liability for Adjusted Gross Income (AGI) Tax, the Insurance Premiums
Tax, the Nonprofit Agricultural Organization Health Coverage Tax, and the Financial Institutions Tax. The
credit may be carried forward for three years.
Staff Ratio and Group Size: A violations of child care center regulations may result in an action against the
license of the facility, a civil penalty of up to $1,000, or a Class B misdemeanor. Civil penalties are deposited
in the Child Care Fund, a nonreverting fund.
Penalty Provision: If additional court cases occur and fines are collected, revenue to both the Common
School Fund (from fines) and the state General Fund (from court fees) would increase. The maximum fine
for a Class B misdemeanor is $1,000. The total fee revenue per case would range between $113 and $138.
The amount of court fees deposited will vary depending on whether the case is filed in a court of record or
a municipal court. The following linked document describes the fees and distribution of the revenue: Court
fees imposed in criminal, juvenile, and civil violation cases.
Explanation of Local Expenditures: Local Child Care Assistance Program: Participating counties receive
state matching grants for county funds for the program. These counties will have increased workload to
prepare grant requests, enter into memoranda of understanding with Office, remit match funds to the Office,
and prepare reports for Office.
Penalty Provision: A Class B misdemeanor is punishable by up to 180 days in jail.
Explanation of Local Revenues: Local Child Care Assistance Program: State matching grants are available
to participating counties for county-funded matching grants. The county may accept private donations
(although these funds do not receive state matching dollars).
Penalty Provision: If additional court actions occur and a guilty verdict is entered, more revenue will be
collected by certain local units. If the case is filed in a court of record, the county general fund will receive
$47.40 and qualifying municipalities will receive a share of $3.60. If the case is filed in a municipal court,
the county receives $30, and the municipality will receive $46. The following linked document describes the
fees and distribution of the revenue: Court fees imposed in criminal, juvenile, and civil violation cases.
State Agencies Affected: Office of the Secretary of Family and Social Services; Indiana Department of
Revenue.
Local Agencies Affected: Trial courts, local law enforcement agencies, participating counties.
Information Sources: Courtney Penn, OECOSL; Indiana Supreme Court; Indiana Trial Court Fee Manual;
https://iga.in.gov/publications/tax_expenditure_report/2024%20Tax%20Expenditure%20Review%20FIN
AL.pdf.
SB 463 3 Fiscal Analyst: Karen Rossen, 317-234-2106, Dhiann Kinsworthy-Blye, 317-234-1360; Camille Tesch,
317-232-5293.
SB 463 4