Road funding: historic bill guarantees sustainable funding for rural roads and bridges

HB1002 Graph
The most substantial win for rural Indiana this General Assembly legislative session is the road funding bill guaranteeing sustainable funding for rural roads and bridges.

Funding for rural roads was Farm Bureau’s top priority this legislative session. The resulting bill, House Enrolled Act 1002, is a truly historic bill for Indiana, providing $260 million this next year for local roads and bridges and over $6 billion in new money for state and local roads over the next seven years.

The bill provides a framework for road funding that relies on user fees: increased fuel taxes, uniform registration fee increases and the shift of the sales tax on gasoline to road funding.

“The General Assembly has shown that tax increases are not their way of normally doing business. In this instance, the tax increase was the responsible thing to do,” said Randy Kron, INFB president. “Our grassroots membership developed policy a few  years ago to support increased fuel taxes and fees for roads and bridges in order to maintain Indiana’s competitive advantage in moving products to processing facilities and ultimately to the consumer. That policy guided our efforts on HEA 1002.”

The passage of HEA 1002 was historic in that it will provide the largest infrastructure investment in Indiana history. Key provisions of the bill include:

  • $260 million of new money for local roads and bridges before June 30, 2018.
  • Incremental increase in new local road funding to $340 million in 2024.
  • Over $6 billion in new resources for state and local roads over the next seven years.

As previously mentioned, the bill relies on user fees from increased fuel taxes and vehicle registration and the shifting of the sales tax on gasoline to road funding. The gas, diesel and motor carrier surcharge will increase 10 cents.

Hoosiers also will pay increased vehicle registration fees. Passenger vehicles will see an annual increase of $15, hybrid vehicles will see an increase of $50 and electric vehicles will see an increase of $150.

In addition, registration fees go up by approximately 25 percent for trucks over 26,000 pounds:

Gross weight over

Weight equal to or less than

Farm plate fee increase

Commercial truck plate fee increase






















The bill requires that 50 percent of funds distributed to a local government from the motor vehicle highway account be used for construction, reconstruction or maintenance of roads instead of road related personnel. For small counties and cities (counties with a population of 50,000 or less or cities with the population of 10,000 or less) to be eligible for Community Crossings grants for local roads and bridges, the bill requires only a 25 percent match from the local government unit rather than the 50 percent match for larger counties and cities.