SB 187

                                              *SB0187.2*
                                                             January 21, 2026
           SENATE BILL No. 187
                 _____
   DIGEST OF SB 187 (Updated January 20, 2026 11:49 am - DI 129)
Citations Affected: IC 13-11; IC 13-26.
Synopsis: Regional sewer districts. Specifies that a board of trustees
of a regional water, sewage, or solid waste district (board) must notify
the district authority in writing before taking certain actions. Provides
that a trustee appointed to a board serves at the pleasure of the
appointing authority. Prohibits a regional water, sewage, or solid waste
district (district) created after June 30, 2026, from incurring any
indebtedness without first obtaining the approval of the county fiscal
body. Specifies that if a district created after June 30, 2026, contains
territory in more than one county, the district must first obtain the
approval of each county fiscal body in which the district contains
territory before incurring any indebtedness. Establishes a timeline for
the county fiscal body to approve or deny a district's request to incur
indebtedness.
Effective: July 1, 2026.
                  Bohacek, Baldwin
   January 6, 2026, read first time and referred to Committee on Environmental Affairs.
   January 13, 2026, amended, reported favorably — Do Pass; reassigned to Committee on
Tax and Fiscal Policy.
   January 20, 2026, amended, reported favorably — Do Pass.
SB 187—LS 6801/DI 153
                                                                             January 21, 2026
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   SENATE BILL No. 187
    A BILL FOR AN ACT to amend the Indiana Code concerning
 environmental law.
     Be it enacted by the General Assembly of the State of Indiana:
1    SECTION 1. IC 13-11-2-107.3 IS ADDED TO THE INDIANA
2 CODE AS A NEW SECTION TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2026]: Sec. 107.3. "Indebtedness", for
4 purposes of IC 13-26-10-0.5, has the meaning set forth in
5 IC 13-26-10-0.5(a).
6    SECTION 2. IC 13-26-1-2 IS AMENDED TO READ AS
7 FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 2. (a) At any time after
8 the creation of a district, the district, after motion by the district's board
9 after first notifying in writing the district authority established
10 under IC 13-26-11-15, may file a petition with the department
11 requesting the approval of the department permitting the district to:
12(1) increase or add to the district's purposes or modify the district
13plan approved by the department;
14(2) abandon or surrender all or part of a purpose or plan approved
15by the department; or
16(3) subject to IC 13-26-4-1, increase the number of persons
17serving on the board of trustees.
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1     (b) The department may:
2(1) approve;
3(2) modify and approve; or
4(3) reject;
5  a request received under this section.
6     SECTION 3. IC 13-26-4-3 IS AMENDED TO READ AS
7 FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 3. (a) Instead of
8 electing the board, an order establishing a district may provide for
9 appointments to the board by the elected executive or legislative
10 officers of the eligible entities having territory in the district.
11     (b) An appointed trustee under this chapter serves at the
12 pleasure of the appointing authority.
13     SECTION 4. IC 13-26-5-2, AS AMENDED BY P.L.232-2023,
14 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2026]: Sec. 2. After first notifying in writing the district
16 authority established under IC 13-26-11-15, a district may do the
17 following:
18(1) Sue or be sued.
19(2) Make contracts in the exercise of the rights, powers, and
20duties conferred upon the district.
21(3) Adopt and alter a seal and use the seal by causing the seal to
22be impressed, affixed, reproduced, or otherwise used. However,
23the failure to affix a seal does not affect the validity of an
24instrument.
25(4) Adopt, amend, and repeal the following:
26(A) Bylaws for the administration of the district's affairs.
27(B) Rules and regulations for the following:
28(i) The control of the administration and operation of the
29district's service and facilities.
30(ii) The exercise of all of the district's rights of ownership.
31(5) Construct, acquire, lease, operate, or manage works and obtain
32rights, easements, licenses, money, contracts, accounts, liens,
33books, records, maps, or other property, whether real, personal, or
34mixed, of a person or an eligible entity.
35(6) Assume in whole or in part any liability or obligation of:
36(A) a person;
37(B) a nonprofit water, sewage, or solid waste project system;
38or
39(C) an eligible entity;
40including a pledge of part or all of the net revenues of a works to
41the debt service on outstanding bonds of an entity in whole or in
42part in the district and including a right on the part of the district
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1     to indemnify and protect a contracting party from loss or liability
2     by reason of the failure of the district to perform an agreement
3     assumed by the district or to act or discharge an obligation.
4     (7) Fix, alter, charge, and collect reasonable rates and other
5     charges in the area served by the district's facilities to every
6     person whose premises are, whether directly or indirectly,
7     supplied with water or provided with sewage or solid waste
8     services by the facilities for the purpose of providing for the
9     following:
10(A) The payment of the expenses of the district.
11(B) The construction, acquisition, improvement, extension,
12repair, maintenance, and operation of the district's facilities
13and properties.
14(C) The payment of principal or interest on the district's
15obligations.
16(D) To fulfill the terms of agreements made with:
17(i) the purchasers or holders of any obligations; or
18(ii) a person or an eligible entity.
19     (8) Except as provided in sections 2.5 and 2.6 of this chapter,
20     require connection to the district's sewer system of property
21     producing sewage or similar waste, and require the
22     discontinuance of use of privies, cesspools, septic tanks, and
23     similar structures if:
24(A) there is an available sanitary sewer within three hundred
25(300) feet of:
26(i) the property line, if the property is adjacent to a body of
27water, including a lake, river, or reservoir;
28(ii) any part of a subdivision, or land that is divided or
29proposed to be divided into lots, whether contiguous or
30subject to zoning requirements, for the purpose of sale or
31lease as part of a larger common plan of development or
32sale; or
33(iii) for all other properties, the improvement or other
34structure from which the sewage or similar waste is
35discharged;
36(B) the district has given written notice by certified mail to the
37property owner at the address of the property at least ninety
38(90) days before a date for connection to be stated in the notice
39and the notice includes a list of the applicable exemptions
40from connecting to the sewer system available to the property
41owner that are described in section 2.5 of this chapter; and
42(C) if the property is located outside the district's territory:
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1(i) the district has obtained and provided to the property
2owner (along with the notice required by clause (B)) a letter
3of recommendation from the local health department that
4there is a possible threat to the public's health; and
5(ii) if the property is also located within the extraterritorial
6jurisdiction of a municipal sewage works under IC 36-9-23
7or a public sanitation department under IC 36-9-25, the
8municipal works board or department of public sanitation
9has acknowledged in writing that the property is within the
10municipal sewage works or department of public sanitation's
11extraterritorial jurisdiction, but the municipal works board
12or department of public sanitation is unable to provide sewer
13service.
14     However, a district may not require the owner of a property
15     described in this subdivision to connect to the district's sewer
16     system if the property is already connected to a sewer system that
17     has received an NPDES permit and has been determined to be
18     functioning satisfactorily.
19     (9) Provide by ordinance for a reasonable penalty, not to exceed
20     one hundred dollars ($100) per day, for failure to connect and also
21     apply to the circuit or superior court of the county in which the
22     property is located for an order to force connection, with the cost
23     of the action, including reasonable attorney's fees of the district,
24     to be assessed by the court against the property owner in the
25     action.
26     (10) Refuse the services of the district's facilities if the rates or
27     other charges are not paid by the user.
28     (11) Control and supervise all property, works, easements,
29     licenses, money, contracts, accounts, liens, books, records, maps,
30     or other property rights and interests conveyed, delivered,
31     transferred, or assigned to the district.
32     (12) Construct, acquire by purchase or otherwise, operate, lease,
33     preserve, and maintain works considered necessary to accomplish
34     the purposes of the district's establishment within or outside the
35     district and enter into contracts for the operation of works owned,
36     leased, or held by another entity, whether public or private.
37     (13) Hold, encumber, control, acquire by donation, purchase, or
38     condemnation, construct, own, lease as lessee or lessor, use, and
39     sell interests in real and personal property or franchises within or
40     outside the district for:
41(A) the location or protection of works;
42(B) the relocation of buildings, structures, and improvements
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1situated on land required by the district or for any other
2necessary purpose; or
3(C) obtaining or storing material to be used in constructing and
4maintaining the works.
5     (14) Upon consent of two-thirds (2/3) of the members of the
6     board, merge or combine with another district into a single district
7     on terms so that the surviving district:
8(A) is possessed of all rights, franchises, and authority of the
9constituent districts; and
10(B) is subject to all the liabilities, obligations, and duties of
11each of the constituent districts, with all rights of creditors of
12the constituent districts being preserved unimpaired.
13     (15) Provide by agreement with another eligible entity for the
14     joint construction of works the district is authorized to construct
15     if the construction is for the district's own benefit and that of the
16     other entity. For this purpose the cooperating entities may jointly
17     appropriate land either within or outside their respective borders
18     if all subsequent proceedings, actions, powers, liabilities, rights,
19     and duties are those set forth by statute.
20     (16) Enter into contracts with a person, an eligible entity, the
21     state, or the United States to provide services to the contracting
22     party for any of the following:
23(A) The distribution or purification of water.
24(B) The collection or treatment of sanitary sewage.
25(C) The collection, disposal, or recovery of solid waste.
26     (17) Make provision for, contract for, or sell the district's
27     byproducts or waste.
28     (18) Exercise the power of eminent domain, including for
29     purposes of siting sewer or water utility infrastructure, but only
30     after the district attempts to use existing public rights-of-way or
31     easements.
32     (19) Remove or change the location of a fence, building, railroad,
33     canal, or other structure or improvement located within or outside
34     the district. If:
35(A) it is not feasible or economical to move the building,
36structure, or improvement situated in or upon land acquired;
37and
38(B) the cost is determined by the board to be less than that of
39purchase or condemnation;
40     the district may acquire land and construct, acquire, or install
41     buildings, structures, or improvements similar in purpose to be
42     exchanged for the buildings, structures, or improvements under
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1      contracts entered into between the owner and the district.
2      (20) Employ consulting engineers, superintendents, managers,
3      and other engineering, construction, and accounting experts,
4      attorneys, bond counsel, employees, and agents that are necessary
5      for the accomplishment of the district's purpose and fix their
6      compensation.
7      (21) Procure insurance against loss to the district by reason of
8      damages to the district's properties, works, or improvements
9      resulting from fire, theft, accident, or other casualty or because of
10      the liability of the district for damages to persons or property
11      occurring in the operations of the district's works and
12      improvements or the conduct of the district's activities.
13      (22) Exercise the powers of the district without obtaining the
14      consent of other eligible entities. However, the district shall:
15(A) restore or repair all public or private property damaged in
16carrying out the powers of the district and place the property
17in the property's original condition as nearly as practicable; or
18(B) pay adequate compensation for the property.
19      (23) Dispose of, by public or private sale or lease, real or personal
20      property determined by the board to be no longer necessary or
21      needed for the operation or purposes of the district.
22    SECTION 5. IC 13-26-10-0.5 IS ADDED TO THE INDIANA
23 CODE AS A NEW SECTION TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2026]: Sec. 0.5. (a) As used in this section,
25 "indebtedness" includes leases, contracts, bonds, and public
26 private partnership obligations.
27    (b) A district created after June 30, 2026, may not incur any
28 indebtedness under this chapter without first obtaining the
29 approval of the county fiscal body in which the district is located
30 before the district may incur the indebtedness.
31    (c) If a district created after June 30, 2026, contains territory in
32 more than one (1) county, the district may not incur any
33 indebtedness under this chapter without first obtaining the
34 approval of the county fiscal body of each county in which the
35 district contains territory before the district may incur the
36 indebtedness.
37    (d) A county fiscal body must approve or deny the district's
38 request to incur indebtedness under subsection (b) or (c)
39 (whichever applies) not later than sixty (60) days after the date the
40 district makes a request to the county fiscal body to incur the
41 indebtedness.
 SB 187—LS 6801/DI 153
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                   COMMITTEE REPORT
   Mr. President: The Senate Committee on Environmental Affairs, to
which was referred Senate Bill No. 187, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
   Page 6, line 18, after "district" insert "created after June 30,
2026,".
   Page 6, line 21, after "district" insert "created after June 30,
2026,".
and when so amended that said bill do pass and be reassigned to the
Senate Committee on Tax and Fiscal Policy.
   (Reference is to SB 187 as introduced.)
                                         NIEMEYER, Chairperson
Committee Vote: Yeas 6, Nays 2.
                          _____
                   COMMITTEE REPORT
   Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred Senate Bill No. 187, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
   Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
   "SECTION 1. IC 13-11-2-107.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 107.3. "Indebtedness", for
purposes of IC 13-26-10-0.5, has the meaning set forth in
IC 13-26-10-0.5(a).".
   Page 1, line 4, delete "and in consultation with" and insert "after
first notifying in writing".
   Page 2, line 10, delete "In consultation with" and insert "After first
notifying in writing".
   Page 6, delete lines 16 through 33, begin a new paragraph and
insert:
   "SECTION 5. IC 13-26-10-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 0.5. (a) As used in this section,
SB 187—LS 6801/DI 153
                              8
"indebtedness" includes leases, contracts, bonds, and public
private partnership obligations.
   (b) A district created after June 30, 2026, may not incur any
indebtedness under this chapter without first obtaining the
approval of the county fiscal body in which the district is located
before the district may incur the indebtedness.
   (c) If a district created after June 30, 2026, contains territory in
more than one (1) county, the district may not incur any
indebtedness under this chapter without first obtaining the
approval of the county fiscal body of each county in which the
district contains territory before the district may incur the
indebtedness.
   (d) A county fiscal body must approve or deny the district's
request to incur indebtedness under subsection (b) or (c)
(whichever applies) not later than sixty (60) days after the date the
district makes a request to the county fiscal body to incur the
indebtedness.".
   Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
   (Reference is to SB 187 as printed January 14, 2026.)
                                        HOLDMAN, Chairperson
Committee Vote: Yeas 12, Nays 0.
SB 187—LS 6801/DI 153