On April 16, 2025, Governor Mike Braun signed House Bill 1459 into law, significantly bolstering utility asset management and governance requirements for Indiana utilities. This legislative action is believed to be a response to the economic reality of rapidly increasing water and wastewater rates, which have more than doubled the general inflation rate (as illustrated in the chart above).
How will Indiana’s new House Enrolled Act 1459 impact your community’s water and wastewater utilities? Keep reading to learn what steps your utility can take to prepare.
Key points in this article:
- HEA 1459 applies to all public, municipal, not-for-profit, cooperative, conservancy districts, and regional water districts – including regional sewer districts (RSDs).
- The law requires subject utilities to submit a quadrennial (every four years) report that demonstrates managerial, financial, legal, and technical competence, including an asset management plan.
- A three-strike system for deficiencies can ultimately result in receivership.
- HEA 1459 mandates regular board training for utility governing bodies covering:
- Asset management best practices
- Fiduciary duties
- Financial management
- Environmental compliance
- By October 1, 2025, the IURC is required by HEA 1459 to provide detailed guidance on the reporting process and schedule, including a short-form version for utilities with fewer than 1,000 customers.
Who’s Affected and What’s Required
Indiana House Enrolled Act (HEA) 1459 establishes a structured framework for utility asset management and regulatory oversight across a wide range of public providers. The legislation applies to public, municipal, not-for-profit, cooperative, conservancy districts, and regional water and sewer utilities.
Under the new law, these entities are required to submit a detailed report every four years that demonstrates their technical, managerial, legal, and financial capabilities. The report must also include a comprehensive asset management plan compliant with Indiana Finance Authority (IFA) standards and updates on any federal compliance obligations.
Recognizing that many utility boards – such as those overseeing regional sewer districts – are composed of local volunteers without formal utility backgrounds, the law also mandates periodic training. These sessions cover essential topics such as fiduciary responsibilities, financial management, infrastructure planning, and environmental compliance.
What Happens If You Miss the Mark
To provide real enforcement power, HEA 1459 establishes a progressive compliance process. Utilities that fail to meet the required reporting or operational standards may first be subject to an informal rate review. A second round of deficiency results in a rate case hearing with the Indiana Utility Regulatory Commission (IURC). A third strike results in the utility being placed into receivership, transferring operational control to an external party.
To support implementation, the IURC is required to issue detailed guidance by October 1, 2025. This guidance will include a short-form reporting process for small utilities serving fewer than 1,000 customers.
Now is the time for utility boards to review existing practices and begin preparing to meet these new requirements, ensuring ongoing compliance and service reliability.
Conclusion & Next Steps
HEA 1459 represents a significant shift in utility regulation, encouraging proactive asset management and greater accountability. The aim is to prevent system failures and protect customers from unexpected rate hikes.
As the IURC prepares to release its updated guidance this fall, utilities are strongly encouraged to assess their asset management strategies and board readiness now.
BCS Management is here to help. We’ll provide a detailed update once the IURC releases its final documentation, helping your utility stay ahead of compliance mandates and maintain reliable service for your community.
Reach out to BCS today to schedule a compliance readiness review, board training session, or utility asset management consultation tailored to your district’s needs.
Image source: Indiana Utility Regulatory Commission, 2024 Annual Report, Water & Wastewater Division (pg. 74, https://www.in.gov/iurc/commission-reports/)