Financing, transfer, and improvement of utility assets.

Requires that the priority ranking system used by the Indiana finance authority in making loans or other financial assistance from: (1) the drinking water revolving loan fund; or (2) the wastewater revolving loan fund; must prioritize loans securing longer term benefits over shorter term projects, all other factors being equal. Provides that not later than 60 days after the effective date of a change in the applicable federal or state income tax rate as a result of new legislation, a water or wastewater utility shall petition the utility regulatory commission (IURC) for a water or wastewater utility surcharge that adjusts the water or wastewater utility's rates and charges to provide recovery for the change in the federal or state income tax rate. Provides that a water or wastewater utility that serves fewer than 8,000 customers may, but is not required to, file a petition for such a surcharge. Provides that a surcharge shall be calculated to reflect the difference between: (1) the amount of federal or state income taxes that each existing rate or charge of the water or wastewater utility was designed to recover based on the income tax rate in effect at the time the rate or charge was approved; and (2) the amount of federal or state income taxes that would have been embedded in the given rate or charge had the new tax rate been in effect at the time of approval. Provides that a surcharge shall not include normalization of a water or wastewater utility's accumulated deferred income taxes. Provides that the IURC shall approve a proposed surcharge if the IURC finds that: (1) the surcharge has been calculated correctly; and (2) the water or wastewater utility's proposal is just and reasonable. Provides that an approved surcharge shall operate on a prospective basis. Amends the applicability language of the statute governing the transfer, acquisition, and improvement of utilities by municipalities to specify that the statute applies to a municipally owned electric, water, wastewater, or combined water and wastewater utility.