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Utility district bill reaches governor’s desk


An Indiana House Bill aimed at changing how regional utility districts can operate has reached the governor’s desk this week after passing both houses in the General Assembly.

HB 1117 could get the governor’s signature yet this week and, if so, would become effective July 1.

One condition of the bill that could have a significant impact on utility districts is the option for property owners to opt out of a sewer system if they can certify that their septic system is “functioning satisfactorily.” Certification would come from the local health department. The bill notes that the certification would be obtained at the property owner’s expense.

Under the legislation, a property owner who qualifies for the exemption can opt out of connecting to a sewer system for an initial period of 10 years, which starts at the date the new septic system was installed. Property owners can apply for two additional five-year extensions of the exemption, for a total of 20 years. The exemption would be attached to the property and could apply to subsequent owners, who may also apply for the extension if the exemption is still under the 20-year maximum.

The legislation also provides several exemptions for properties that would not have to connect to a sewer system, including having property that is at least 10 acres in size and the owner can “demonstrate the availability of at least two areas on the property for the collection and treatment of sewage that will protect human health and the environment,” among other qualifiers.

It is the exemption out of connecting to a system that could create the most problems for future projects. LaGrange County Regional Utility District Board President Mike Sutter noted, “Anytime one user leaves the system, it puts that much more pressure on the other users.” For each person who is able to opt out, the remaining users will have to absorb those costs.

Sutter pointed out that it also puts a lot of pressure on the county’s health department in determining what constitutes a working septic system.

Ultimately, the legislation, if signed into law, may be tested in court by a property owner who is initially denied an exemption by a health department and takes the matter to court.

The legislation also changes how youth camps can be billed. The bill provides that each bed at a youth camp as defined in the bill will be billed at one-eighth of one residential equivalent unit. The equivalent unit is used in calculating the rates for each district.

Under billing, the legislation states that districts that use flat rates in billing must provide a written statement that “summarizes the calculations and processes used to determine the amount of the flat charge.”




The legislation also provides for a method for users to object to rate ordinances. The bill states that a group of ratepayers may file a written petition objecting to the initial rates and charges of the district.

If signed, the bill would also prohibit utility districts from foreclosing on properties that have only a utility district lien placed on it. The LaGrange County Regional Utility District has noted several times that it has never foreclosed on a property.

The bill also includes wording that would limit a district’s ability to acquire land for right-of-ways to 50 ft. in width.