LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6922 NOTE PREPARED: Jan 7, 2021
BILL NUMBER: HB 1518 BILL AMENDED:
SUBJECT: Fuel Taxes.
FIRST AUTHOR: Rep. Jacob BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
X DEDICATED
FEDERAL
Summary of Legislation: This bill resets the gasoline tax and the special fuel tax rates beginning July 1,
2021, to the rates that were in effect in June 30, 2020. It eliminates the annual index factor for the rates going
forward.
Effective Date: Upon passage.
Explanation of State Expenditures: This bill could minimally decrease the workload of the Department
of State Revenue to no longer index or calculate these annual tax rates. These are routine functions of the
agency.
Explanation of State Revenues: Summary - The bill’s estimated revenue losses to the State Highway Fund
(Indiana Department of Transportation) and the Motor Carrier Regulation Fund (Department of State
Revenue) are included in the following table.
Fiscal Year State Highway Fund ($M) Motor Carrier Regulation Fund ($M)
FY 2022 (55.8 - 62.4) (0.5 - 0.7)
FY 2023 (80.4 - 93.9) (0.7 - 1.0)
FY 2024 (105.2 - 125.7) (0.8 - 1.3)
FY 2025 (130.0 - 157.8) (1.0 - 1.7)
HB 1518 1
Additional Information - This bill will reduce revenue the state receives from fuel taxes beginning in FY
2022 by reducing the gasoline tax and special fuel tax rates to the FY 2020 rates, as well as removing the
indexing factors in statute that annually raise fuel tax rates. The following table shows fuel tax rates for FY
2020 and FY 2021, as well as the estimated and proposed fuel tax rates for FY 2022.
Fuel Tax Type FY 2020 rate FY 2021 rate FY 2022 rate FY 2022 rate
(estimated) (proposed)
Gasoline $0.30 $0.31 $0.32 $0.30
Special Fuel $0.49 $0.51 $0.53 $0.49
By removing the indexing formula, the state would receive less fuel tax revenue in years beyond FY 2022.
The expected tax rate will remain at the FY 2020 rate. Considering economic projections, it is estimated that
the indexing formula used to calculate the annual fuel tax rate adjustment would have continued to yield
additional revenue.
Explanation of Local Expenditures:
Explanation of Local Revenues: The bill’s estimated revenue losses to local units of government from the
road funding formula are included in the following table.
Fiscal Year Local Units of Government Share
of Fuel Tax Revenue ($M)
FY 2022 (33.8 - 37.8)
FY 2023 (48.8 - 56.9)
FY 2024 (63.8 - 76.2)
FY 2025 (78.9 - 95.7)
State Agencies Affected: Indiana Department of Transportation; Department of State Revenue.
Local Agencies Affected: All.
Information Sources: Legislative Services Agency, Indiana Handbook of Taxes, Revenues, and
Appropriations, FY 2020; U.S. Energy Information Administration; U.S. Bureau of Labor and Statistics
Consumer Price Index data.
Fiscal Analyst: Bill Brumbach, 317-232-9559.
HB 1518 2


Statutes affected:
1. Introduced House Bill (H): 6-6-1.1-201, 6-6-1.6-3, 6-6-2.5-28