2026 Statehouse Recap: Key Outcomes for Employers and Communities
The 2026 Indiana General Assembly ended on Friday, February 27, meeting the statutory deadline for a “short session.” Legislators introduced 742 bills despite the tighter timeline that comes with an even-numbered year session. Of those, 163 reached Governor Braun’s desk, including 89 House bills and 74 Senate bills. The Governor did not veto any legislation this session and signed all but one measure, allowing SB 91, which extends Indiana’s syringe exchange program, to become law without his signature.
At the outset of session, Aspire identified two primary legislative priorities: modernizing government systems and strengthening public safety as essential drivers of business confidence and community vitality. The session ultimately produced meaningful movement on several issues tied to employer competitiveness, community investment, and the efficiency of local government.
Government Modernization
HEA 1003 advanced Aspire’s modernization priority by targeting state boards, commissions, committees, and councils viewed as outdated or unproductive. The original bill would have eliminated or modified 63 entities by the end of this year. The final version cut that number roughly in half and delayed most changes until July 2027. While scaled back, it still reflects continued legislative interest in streamlining state structures.
Township reform also advanced. Two measures, HB 1315 and SB 270, passed the first half of session. In the second half, portions of HB 1315 were folded into SB 270, which directs the Department of Local Government Finance to evaluate township performance and requires consolidation for townships falling below defined thresholds. Underperforming townships will be required to merge with a higher performing township or, where at least 80 percent of boundaries and 51 percent of population overlap with a municipality, the underperforming township will be merged and dissolved into the municipality.
The final law, SEA 270, is projected to eliminate roughly 325 of Indiana’s 1,000 townships. While it does not fully resolve overlapping layers of local government, it is a meaningful step toward the more efficient structure Aspire supports.
Public Safety
Aspire’s second major priority was public safety, because businesses invest, jobs grow, and families choose communities where they feel secure. SJR 1 advanced that priority by proposing a constitutional amendment allowing judges to deny bail in certain non-capital cases when a defendant poses a substantial risk to another person or the community. The resolution passed both chambers unamended and will now go before voters this fall as Public Question #1.
HB 1251, concerning emergency ambulance services, did not make final passage. The bill would have designated emergency medical services as essential services and required counties to identify unserved areas and ensure coverage through direct service, contract, or interlocal agreement. Dependable emergency response infrastructure remains important for employers and communities alike.
Child Care
Although child care was not one of Aspire’s two headline priorities, it remained an important business issue because it directly affects labor force participation, talent attraction, and employee retention.
HEA 1177 was a meaningful win. It expands eligibility for Indiana’s employer child care expenditure income tax credit from businesses with up to 100 employees to those with up to 500 employees and broadens eligible expenses beyond startup and capital costs to include operating costs and payments that support employee child care access. It also allows redevelopment commissions to use TIF revenue to encourage construction or expansion of child care facilities. Aspire testified in support of this bill during session.
Additional bills passed which did not change the budget but changed eligibility for established funds. SEA 4 included a provision adding the Child Care and Development Fund to the list of entities eligible for allocations from the state’s existing $300 million Financial Responsibility and Opportunity Growth Fund. Access to this fund could help alleviate the child care voucher wait list. And HB 1018 gives school-age child care providers more flexibility by allowing grant dollars to support transportation-related expenses.
On the regulatory front, HEA 1152 prevents homeowners associations from blocking legally licensed in-home child care programs.
Together, these measures do not solve Indiana’s child care shortage, but they do address barriers limiting supply and access.
Economic Development Incentives and Quality of Place
HEA 1406 raises the IEDC’s annual tax credit certification cap from $250 million to $300 million beginning July 1, 2025, with $50 million reserved each year for community projects and development authorities.
It also creates the “Small Town Opportunity Initiative” to support downtown redevelopment and rehabilitation projects of at least $15 million in smaller communities. Eligible projects may receive redevelopment tax credits equal to 20 percent of qualified investment for for-profit taxpayers and 30 percent for nonprofit taxpayers. The law also directs the IEDC to award $35 million each fiscal year to development authorities for qualified redevelopment investments.
For Aspire, these tools matter because quality-of-place investment is directly tied to talent attraction, private investment, and the competitiveness of smaller communities.
Local Government Finance
HEA 1210 served as an important follow-up to last year’s SEA 1 property tax changes. It pushes back implementation of new local income tax adoption requirements from 2028 to 2029, largely because the Department of Local Government Finance still needs time to update its systems so parcels can be accurately assigned to the correct municipality. The bill also pushes out until 2031 the annual readoption requirement for local income tax rates enacted in SEA 1-2025 and lowers the population threshold from 7,000 to 3,500 for a city or town to opt into a countywide LIT rate instead of adopting its own municipal rate. These are technical changes, but they affect how predictably local governments can plan services and investments that support growth.
Bills That Did Not Advance
Several additional bills Aspire monitored did not make it across the finish line.
HB 1333, dealing with land use and development, would have allowed chairs at public meetings to give preference to local voices. Aspire watched the bill because local decision-making can be distorted when public processes are dominated by organized non-constituent participation.
HB 1101, on regional economic development, would have required the IEDC to divide Indiana into 15 economic development regions and establish a commission for each. Aspire had concerns because the bill placed too much emphasis on top-down regionalization at the expense of existing local organizations and strategies.
SB 264, which proposed changes to EDGE tax credit standards, also failed to advance. Aspire was concerned the bill’s higher wage thresholds and new wage growth requirements could reduce Indiana’s competitiveness for business attraction and expansion projects.
The 2026 session produced meaningful progress. Aspire saw forward movement on public safety, government modernization, child care, and community investment. We questioned proposals that could weaken local responsiveness or reduce Indiana’s economic competitiveness that, thankfully, did not advance.
That remains Aspire’s reason for engaging at the Statehouse: advancing practical, pro-growth policy that helps employers succeed, strengthens communities, and supports long-term economic vitality in Johnson County and across Indiana. We thank all our member investors for supporting this work, and we already have an eye toward 2027!