On April 16, 2025, Governor Mike Braun signed House Bill 1459 into law, significantly bolstering asset management and governance requirements for Indiana utilities. The new legislation required the IURC to issue guidance by October 1, 2025. This blog is the follow up from my first post in the series (linked here) introducing this new regulation.
How will Indiana’s new House Enrolled Act 1459 impact your community’s water and wastewater utilities? Read to the end to be ready.
Key points in this article:
- Reporting is staggered based on utility type and name, with the first reports due on July 1, 2026 (for Water Utilities A-L). Deficiencies are phased: in the first cycle (2026-2029), the only deficiency is failure to submit the report. In the second cycle (2030-2033) and beyond, deficiencies expand to include lacking a system map/asset inventory, failing to certify capabilities, and not completing management training.
- HEA 1459 established a progressive penalty system. Three consecutive notices of deficiency can ultimately lead to the utility being placed into receivership, making proactive preparation and timely reporting essential.
- Utilities must immediately determine their reporting year (staggered by type and name), ensure they possess core assets like a system map and asset inventory for future compliance, assess management readiness against the GAO 2025-03’s financial and legal requirements, and plan for mandatory board training to prepare for the first reporting deadlines.
Photo by Casey Smith, Indiana Capital Chronicle
HEA 1459 mandated that the Indiana Utility Regulatory Commission (IURC) issue a General Administrative Order (GAO) by October 1, 2025, to set forth the specifics of compliance. The IURC delivered, approving GAO 2025-03 on September 24, 2025. This guidance is crucial for utilities not under IURC jurisdiction for rates and charges (which includes many regional sewer districts) as it details the quadrennial (every four years) reporting requirements for their asset management programs (AMPs).
Key Reporting Requirements from GAO 2025-03
The report requires detailed information across four main categories, certifying that the utility has the technical, managerial, legal, and financial capability to support its asset management plan (AMP) efforts:
- Asset Management
- System mapping and level of detail.
- Written inventory of utility assets and level of detail.
- Infrastructure inspections, criticality review, repair, and maintenance program with cost estimates.
- Analysis of customer rates necessary to support the AMP.
- Cybersecurity assessment frequency, if performed.
- Managerial Capabilities: Evidence of technical and managerial competence, such as operator certifications and licenses, an operating plan, written standard operating procedures (SOPs), etc.
- Financial Capabilities: Essential financial details, including historical financial statements, the financial budget, when rates were last reviewed, and the date of the last financial audit.
- Legal Capabilities: Information on in-house or outside counsel, the organizing statute/ordinance, and the status of any federal consent decrees or state agency orders.
The guidance also provides a simplified alternative reporting form through the online questionnaire for small water or wastewater utilities (those serving fewer than 1,000 customers).
Reporting Schedule and Deficiency Criteria
Utilities must be prepared for the quadrennial reporting cycle, which is staggered based on utility type and name. The reports are due by July 1st in their scheduled year.
- Water Utilities: Report in the first two years of each four-year cycle.
- Legal names A-L report in the first year
- Legal names M-Z report in the second year
- Wastewater Utilities: Report in the third and fourth years of each four-year cycle.
- Legal names A-L report in the third year
- Legal names M-Z report in the fourth year
- Combined Utilities: Must report separately for their water services (per the water schedule) and wastewater services (per the wastewater schedule).
Deficiency Criteria: A Phased Approach
First Four-Year Cycle (2026-2029): The only deficiency will be the failure to submit a report according to the established schedule.
Second Four-Year Cycle (2030-2033) and Thereafter: New deficiency criteria take effect. A utility will be determined deficient for issues such as failure to have a system map or asset inventory or failure of management to complete training within the prior four years.
HEA 1459 created a progressive enforcement system for utilities. One deficiency can lead to an informal rate review. Two consecutive notices result in a full IURC rate case. Three consecutive notices may lead to receivership.
Your Next Steps for Compliance
The IURC has now provided the final guidance for HEA 1459 compliance. Given that the first wave of reports is due by July 1, 2026, for water utilities with legal names A-L, the time for proactive preparation is now.
We strongly encourage you to:
- Determine when your utility’s report is due based on its type (water/wastewater) and legal name.
- Ensure you have both a system map and a complete asset inventory. While only a deficiency starting in the second cycle (2030-2033), having these now is critical for a strong initial report and future compliance.
- Review your technical, managerial, financial, and legal documentation against the detailed requirements in GAO 2025-03 to identify any gaps.
- Though mandatory training begins January 1, 2027, preparing now will help your board understand their fiduciary duties and the new AMP requirements.
BCS Management is ready to help your utility navigate these new mandates. Reach out to BCS today to schedule a compliance readiness review, a board training session, or an asset management planning consultation tailored to your district’s needs.