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Synopsis of HB 1005- 2012 Session

There are a number of issues relative to Township Government included in House Bill 1005, which was passed by the Indiana Legislature in the 2012 session.

Effective January 1, 2013:

  • Provides that an employee of a county, city, town or township (unit) is considered to have resigned from employment with the unit if the employee assumes the elected executive office of the unit or becomes an elected member of the unit’s legislative or fiscal body.
  • Volunteer Firefighters
    • Provides that a volunteer firefighter may not assume or hold a position on the executive, legislative, or fiscal body of a unit that receives fire protection services from the department in which the volunteer firefighter serves.
      • Excludes fire protection services provided under mutual aid agreements
      • The restriction does not prohibit an employee or volunteer firefighter from holding an elected office of another unit
      • Allows an employee or a volunteer who assumes or holds an elected office on January 1, 2013, to continue to hold the office and be employed by the unit or serve as a volunteer firefighter until the expiration of the term of office.

Effective July 1, 2012

  • Nepotism
    • Provides that relatives may not be employed by a unit in positions that result in one relative being in the direct line of supervision of the other relative.
      • An individual who is employed by a unit on July 1, 2012, is not subject to the provisions regarding nepotism unless the individual has a break in employment with the unit
        • Not considered a break in employment are absence from the workplace while on paid or unpaid leave, including vacation, sick, or family medical leave, or worker’s compensation. Also if the individual’s employment with the unit is terminated followed by immediate reemployment by the unit, without the loss of payroll time.
    • The performance of the duties of a precinct election officer or a volunteer firefighter is not considered employment by a unit
    • An individual who is employed by a unit on the date the individual’s relative begins serving a term of an elected office of the unit may remain employed by the unit and maintain the individual’s position or rank (specific provisions for employees who are members of a merit police or fire department)
    • Individuals who are relatives may not be employed by a unit in a position that results in one relative being in the direct line of supervision of the other relative
  • Allows a township trustee whose office is located in the trustee’s personal residence to employ only one relative to work in the township trustee’s office and be in the trustee’s line of supervision, however it limits the total compensation of the township trustee’s employed relative to $5,000 per year.
  • This chapter does not abrogate or affect an employment contract with a unit that an individual is a party to and is in effect on the date the individual’s relative begins serving a term of an elected office of the unit.
  • Provides that a unit can enter into or renew (1) a contract for the procurement of goods and services; or (2) a contract for public works; with a relative of an elected official or a business entity in which a relative has an ownership interest if certain requirements are met
  • “Relative” is defined as: spouse; parent or stepparent; child or stepchild (includes adopted child); brother, sister, stepbrother or stepsister (includes brother or sister by the half-blood); niece or nephew; aunt or uncle; daughter-in-law or son-in-law;
  • Unit must adopt a nepotism policy
    • The legislative body of the unit shall adopt a policy that includes, at a minimum, the requirements set forth in this chapter.
      • The legislative unit may adopt a policy which includes requirements that are more stringent or detailed than any provision of this law, including applying to individuals who are exempted or excluded from the application of this law (the unit may prohibit the employment of a relative that is not otherwise prohibited by this law)
  • If a unit has not implemented a policy under this chapter, the department of local government finance may not approve the unit’s budget or any additional appropriations for the unit, for the ensuing calendar year until the state board of accounts certifies to the department of local government finance that the unit is in compliance with this chapter.
  • Reporting requirements
    • Requires the executive of the local unit to file with the annual personnel report (100-R) filed with the state board of accounts a statement regarding whether the unit has implemented a policy under the nepotism and contracting provisions.
    • Requires the executive of the local unit to include a statement with the annual report stating whether the unit has implemented a policy under this chapter
    • Each elected officer of the unit shall annually certify in writing, subject to the penalties for perjury, that the officer is in compliance with this code. An officer shall submit the certification to the executive of the unit not later than December 31 of each year.


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