Legislative updates: Key changes in HEA 1210

House Enrolled Act 1210 (HEA 1210) introduces several important legislative updates that will impact local income tax (LIT) structures, fire and EMS funding, and broader local government operations across Indiana. 

Here’s a breakdown of the most significant changes and what they mean for local officials.  

Local income tax (LIT) structure: Extended and enhanced

HEA 1210 provides greater stability and planning flexibility for local governments by extending and refining the local income tax framework. 

Key updates include: 

• Implementation of new LIT structure delayed until 2029  

The introduction of the updated local income tax (LIT) framework will now take effect in 2029, giving local governments additional time to prepare for the transition.  

• Shift to annual adoption cycles 
  Initial adoption of LIT will last for three years, after which jurisdictions will move to annual adoption cycles.  
• Expanded participation for municipalities 
  All cities and towns can now opt into the county wide municipal services rate, creating opportunities for more coordinated funding approaches.  
• Creation of municipal unit strategic taskforces 
  Counties may establish a local strategic task force made up of one representative from the county council and the fiscal officer of each municipality for collaborative long-term planning. These groups will: 
• Develop a county-wide LIT strategy  
• Submit a non-binding report to the General Assembly outlining recommended distribution approaches  
• Debt service safeguard requirement 
  Even if a county or municipality does not renew its LIT rate, it must still be set at a level sufficient to generate at least 1.25x the amount required for LIT-backed debt service and lease payments. 

This helps increase lender confidence and may lead to more favorable borrowing terms.

Additional legislative provisions to note 

 HEA 1210 includes several other changes that may affect budgeting, compliance, and long-term planning: 

• Maximum levy growth quotient adjustment 
  The calculation reverts to a six-year average of non-farm personal income, with projections for 2027 estimated at approximately 5.6%.  
• Digital public notices permitted (starting July 1, 2027) 
  Public notice requirements can be satisfied by posting on local government websites, reducing reliance on traditional publishing methods.  
• Equipment replacement fund limitations 
  Fire protection territory equipment replacement funds are now subject to the maximum permissible levy limit.  
• Repeal of population-based levy increase petitions 
  Fire districts and territories can no longer petition for maximum levy increases based on 10-year population growth.  
• Township levy increase provisions 
  Certain townships may still petition for increases to the maximum property tax levy specifically for fire protection and EMS services.  
• Tax rate cap for new fire districts 
  Fire districts established after Dec. 31, 2025, may not impose a tax rate exceeding $0.40.