(A) Purpose. The state enacted I.C. 36-1-20.2 and 36-1-21 which mandates cities, towns, townships and counties in the state to establish minimum requirements as specified in I.C. 36-1-20.2 and 36-1-21, regarding the employment of relatives of other employees and elected officials of the city, town, township or county. To comply with these statutory mandates, the city sets forth the following anti- nepotism policy.
(B) Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
DIRECT LINE OF SUPERVISION. For the purposes of this policy, an elected officer or employee who is in a position to affect the terms and conditions of another individual’s employment, including making decisions about work assignments, compensation, grievances, advancement or performance evaluation. The term does not include the responsibilities of the executive, legislative body or fiscal body of the city, as provided by law, to make decisions regarding salary ordinances, budgets or personnel policies of the city.
EMPLOYED. For purposes of this policy an individual who is employed by the city on a full- time, part-time, temporary, intermittent or hourly basis. The term does not include an individual who holds only an elected office. The term includes an individual who is a party to an employment contract with the city.
MEMBER OF THE FIRE DEPARTMENT. For the purposes of this policy, the Fire Chief or a firefighter appointed to the Department.
MEMBER OF THE POLICE DEPARTMENT. For the purposes of this policy, the Police Chief or a police officer appointed to the Department.
RELATIVE.
(a) Any of the following:
1. A spouse;
2. A parent or stepparent;
3. A child or stepchild;
4. A brother, sister, stepbrother or stepsister;
5. A niece or nephew;
6. An aunt or uncle; and/or
7. A daughter-in-law or son-in-law.
(b) For purposes of this policy, an adopted child of an individual is treated as a natural child of the individual.
(c) For purposes of this policy, the terms BROTHER and SISTER include a brother or sister by the half blood.
(C) Prohibited nepotistic hiring.
(1) Individuals who are relatives may not be employed by the city in a position that results in one relative being in the direct line of supervision of the other relative.
(2) (a) Individuals who are employed by the city on the date the individual’s relative begins serving a term of an elected office of the city, and is not otherwise exempt as provided for in this policy or I.C. 36-1-20.2 may remain employed by the city and maintain the individual’s position or rank even if the individual’s employment would otherwise violate this policy.
(b) If the new position would violate division (C)(1) above, such an individual however, may not:
1. Be promoted to a position; or
2. Be promoted to a position that is not within the merit ranks, in the case of an individual who is a member of a merit Police Department or merit Fire Department.
(3) Unless a unit’s policy provides otherwise, a Sheriff’s spouse may be employed as prison matron for the county under I.C. 36-8-10-5 and the spouse may be in the Sheriff’s direct line of supervision.
(4) Unless a unit’s policy provides otherwise, an individual may be hired in the position of deputy coroner and be in the coroner’s direct line of supervision:
(a) Who served as coroner;
(b) Who is currently ineligible to serve as coroner under Article 6, § 2(b) of the Constitution of the state;
(c) Who, as coroner, received certification under I.C. 36-2-14-22.3; and
(d) Whose successor in the office of coroner is a relative of the individual.
(5) (a) If a township trustee’s office is located in the township trustee’s personal residence, unless a unit’s policy provides otherwise, the township trustee may hire only one employee who is a relative.
(b) The employee:
1. May be hired to work only in the township trustee’s office;
2. May be in the township trustee’s direct line of supervision; and
3. May not receive total salary, benefits and compensation that exceed $5,000 per year.
(6) This policy does not abrogate or affect an employment contract with the city that:
(a) An individual is a party to; and
(b) Is in effect on the date the individual’s relative begins serving a term of an elected office of the unit.
(7) (a) This policy does not apply to an individual who is employed by the city on July 1, 2012, unless the individual has a break in employment with the city.
(b) The following are not considered a break in employment with the city:
1. The individual is absent from the workplace while on paid or unpaid leave, including vacation, sick or family medical leave or workers’ compensation; and
2. The individual’s employment with the unit is terminated followed by immediate reemployment by the city, without loss of payroll time.
(8) For purposes of this policy, the performance of the following duties is not considered employment by unit:
(a) A precinct election officer (as defined in I.C. 3-5-2-40.1) that are imposed by I.C. 3; or
(b) A volunteer firefighter.
(D) Prohibited nepotistic contracting.
(1) For purposes of this division of the policy ELECTED OFFICIAL means:
(a) The executive or a member of the executive body of the city;
(b) A member of the legislative body of the city; or
(c) A member of the fiscal body of the city.
(2) Only if the requirements of this division (D) are satisfied and the elected official does not violate I.C. 35-44-1-3, the city may enter into a contract or renew a contract for the procurement of goods and services or a contract for public works with:
(a) An individual who is a relative of an elected official; or
(b) A business entity that is wholly or partially owned by a relative of an elected official.
(3) The city may enter into a contract or renew a contract with an individual who is a relative of an elected official; or a business entity that is wholly or partially owned by a relative if the elected official does not violate I.C. 35-44.1-1-3 and:
(a) The elected official files with the city a full disclosure, which must:
1. Be in writing;
2. Describe the contract or purchase to be made by the city;
3. Describe the relationship that the elected official has to the individual or business entity that contracts or purchases;
4. Be affirmed under penalty of perjury;
5. Be submitted to the Common Council of the city and be accepted by the Common Council of the city in a public meeting of the city prior to final action on the contract or purchase; and
6. Be filed not later than 15 days after final action on the contract or purchase with:
a. The State Board of Accounts; and
b. The Clerk of the County Court.
(b) The appropriate agency of the city:
1. Makes a certified statement that the contract amount or purchase price was the lowest amount or price bid or offered;
2. Makes a certified statement of the reasons why the vendor or contractor was selected; and
3. The city satisfies any other requirements under I.C. 5-22 or I.C. 36-1-12.
(4) This policy does not affect the initial term of a contract in existence at the time the term of office of the elected official of the city begins.
(E) Employment of relatives.
(1) I.C. 36-1-20.2 establishes the requirements regarding the employment of relatives. The legislative body of a unit must adopt a policy that includes, at a minimum, the statutory requirements recited below. However, the policy may include requirements that are more stringent or detailed than any provision below and apply to individuals who are exempted or excluded from the application of this statute. For example, a unit may prohibit the employment of a relative that is not otherwise prohibited by this statute.
(2) The annual report filed by a unit with SBOA under I.C. 5-11-13-1 must include a statement by the executive of the unit stating whether the unit has implemented an anti-nepotism policy.
(F) Certification requirement. Each elected officer of a unit must annually certify in writing, subject to the penalties for perjury, that the officer has not violated this statute. Each officer must submit the certification to the executive of the unit not later than December 31 of each year.
(G) Failure to comply.
(1) If SBOA finds that a unit has not implemented an anti-nepotism policy in compliance with I.C. 36-1-20.2, it must forward the information to the Department.
(2) For the ensuing calendar year until SBOA certifies to the Department that the unit is in compliance with I.C. 36-1-20.2, if a unit has not implemented such a policy, the Department may not approve:
(a) The unit’s budget; or
(b) Any additional appropriations for the unit;
(H) Anti-nepotism policy regarding contracting with relatives.
(1) Section 8 of HEA-1005 creates a new statute at I.C. 36-1-21 that establishes minimum requirements regarding contracting with relatives of elected officials of a unit. This new statute also requires that the legislative body of a unit adopt an anti-nepotism policy and that the unit’s executive file an annual certified statement with SBOA stating that the unit’s legislative body adopted such a policy. Failure to implement a policy will prevent the Department from approving the unit’s budget or additional appropriations for the ensuing year.
(2) Below are guidelines prescribed by I.C. 36-1-21 for the content and adoption of an anti-nepotism policy regarding contracting with relatives of elected officials of a unit.
(a) Definitions. For the purpose of this division (H), the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ELECTED OFFICIAL.
a. The executive or a member of the executive body of the unit;
b. A member of the legislative body of the unit; or
c. A member of the fiscal body of the unit.
RELATIVE.
a. Any of the following:
i. A spouse;
ii. A parent or stepparent;
iii. A child or stepchild;
iv. A brother, sister, stepbrother or stepsister;
v. A niece or nephew;
vi. An aunt or uncle; or
vii. A daughter-in-law or son-in-law.
b. An adopted child of an individual is treated as a natural child of the individual. The terms BROTHER and SISTER include a brother or sister by the half blood.
(b) Contracting with a unit.
1. I.C. 36-1-21 establishes minimum requirements regarding contracting with a unit. The legislative body of a unit must adopt a policy that includes, at a minimum, the requirements set forth below. However, the policy may:
a. Include requirements that are more stringent or detailed than any provision below; and
b. Apply to individuals who are exempted or excluded from the application of this statute.
2. A unit may prohibit or restrict an individual from entering into a contract with the unit that is not otherwise prohibited or restricted by this statute.
3. The annual report filed by a unit with SBOA under I.C. 5-11-13-1 must include a statement by the executive of the unit stating whether the unit has implemented a policy under this statute.
(c) Contracting practices.
1. A unit may enter into a contract or renew a contract for the procurement of goods and services or a contract for public works with:
a. An individual who is a relative of an elected official; or
b. A business entity that is wholly or partially owned by a relative of an elected official; only if the requirements below are satisfied and the elected official does not violate I.C. 35-44-1-3.
2. A unit may enter into a contract or renew a contract with an individual or business entity described above if:
a. The elected official files with the unit a full disclosure, which must:
i. Be in writing;
ii. Describe the contract or purchase to be made by the unit;
iii. Describe the relationship that the elected official has to the individual or business entity that contracts or purchases;
iv. Be affirmed under penalty of perjury;
v. Be submitted to the legislative body of the unit and be accepted by the legislative body in a public meeting of the unit prior to final action on the contract or purchase; and
vi. Be filed, not later than 15 days after final action on the contract or purchase, with:
A. SBOA; and
B. The Clerk of the Circuit Court in the county where the unit takes final action on the contract or purchase.
b. The appropriate agency of the unit:
i. Makes a certified statement that the contract amount or purchase price was the lowest amount or price bid or offered; or
ii. Makes a certified statement of the reasons why the vendor or contractor was selected.
c. The unit satisfies any other requirements under I.C. 5-22 or 36-1-12.
3. An elected official must also comply with the disclosure provisions of I.C. 35-44-1-3, if applicable.
4. These provisions do not affect the initial term of a contract in existence at the time the term of office of the elected official of the unit begins.
(d) Certification requirement. Each elected officer of a unit must annually certify in writing, subject to the penalties for perjury, that the officer is in compliance with this statute. An officer must submit the certification to the executive of the unit not later than December 31 of each year.
(e) Failure to comply.
1. If SBOA finds that a unit has not implemented an anti-nepotism policy in compliance with I.C. 36-1-21, it must forward the information to the Department.
2. If a unit has not implemented a policy under this statute, the Department may not approve the following for the ensuing calendar year until SBOA certifies to the Department that the unit has adopted a policy under this statute:
a. The unit’s budget; or
b. Any additional appropriations for the unit.
(f) Department approval contingent on adoption of policy.
1. Section 2 of HEA 1005 introduces a new statute at I.C. 5-11-13-1.1. Accordingly, a unit’s personnel report, as defined by I.C. 5-11-13-1, submitted after December 31, 2012 must include a statement by the unit’s executive that the unit implemented an anti-nepotism policy under I.C. 36-1-20.2 and 36-1-21.
2. The Department may not approve the unit’s budget or any additional appropriations for the unit for the ensuing calendar year if the unit does not implement such a policy.
(Res. 2012-8, passed 5-15-2012)