February 16, 2007
HOUSE BILL No. 1009
_____
DIGEST OF HB 1009
(Updated February 14, 2007 11:31 am - DI 73)
Citations Affected: IC 2-5; IC 4-3; IC 4-13; noncode.
Synopsis: Creates the privatization review committee (committee).
Requires a state agency to develop a privatization plan before
privatizing any state program. Requires the state agency to hold a
hearing on the plan and report the results of the hearing to the public
and the committee. Requires the committee to: (1) review a
privatization plan before the plan is implemented; and (2) make
advisory recommendations to the governor. Requires that certain
privatization contracts must be approved under the "Reorganization Act
of 1967". Provides that such a privatization contract entered into in
violation of the Reorganization Act of 1967 is void. Makes technical
changes in the Reorganization Act of 1967. Requires a state agency to
perform a cost benefit analysis before entering into a contract for
services. Requires the department of administration to compile
semiannual reports on the cost benefit analysis for each contract.
Effective: Upon passage.
Micon
January 17, 2007, read first time and referred to Committee on Rules and Legislative
Procedures.
February 13, 2007, reassigned to Committee on Interstate and International Cooperation.
February 15, 2007, amended, reported _ Do Pass.
February 16, 2007
First Regular Session 115th General Assembly (2007)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
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word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2006 Regular Session of the General Assembly.
HOUSE BILL No. 1009
A BILL FOR AN ACT to amend the Indiana Code concerning state
offices and administration.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 2-5-28; (07)HB1009.1.1. -->
SECTION 1. IC 2-5-28 IS ADDED TO THE INDIANA CODE AS
A
NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON
PASSAGE]:
Chapter 28. Privatization Review Committee
Sec. 1. The definitions in IC 4-13-1.8 apply throughout this
chapter.
Sec. 2. As used in this chapter, "committee" refers to the
privatization review committee established by section 3 of this
chapter.
Sec. 3. The privatization review committee is established to
review privatization plans before the implementation date.
Sec. 4. (a) The committee consists of the following members:
(1) Three (3) members of the house of representatives,
appointed by the speaker of the house of representatives.
(2) Three (3) members of the house of representatives,
appointed by the minority leader of the house of
representatives.
(3) Three (3) members of the senate, appointed by the
president pro tempore of the senate.
(4) Three (3) members of the senate, appointed by the
minority leader of the senate.
(5) Three (3) members of the public, appointed jointly by the
chairman and the vice chairman of the legislative council as
follows:
(A) One (1) representative of labor.
(B) One (1) representative of the business community.
(C) One (1) representative of a public university of the
state.
(b) Not more than two (2) members appointed under subsection
(a)(5) may be members of the same political party.
(c) The term of a member is four (4) years.
(d) If a legislative member of the committee ceases to be a
member of the chamber from which the member was appointed,
the member also ceases to be a member of the committee.
(e) A legislative member of the committee may be removed at
any time by the appointing authority who appointed the legislative
member.
(f) If a vacancy exists on the committee, the appointing
authority who appointed the former member whose position has
become vacant shall appoint an individual to fill the vacancy.
Sec. 5. (a) Each member of the committee who is not a member
of the general assembly is not entitled to the minimum salary per
diem provided by IC 4-10-11-2.1(b). The member is, however,
entitled to reimbursement for traveling expenses as provided under
IC 4-13-1-4 and other expenses actually incurred in connection
with the member's duties as provided in the state policies and
procedures established by the Indiana department of
administration and approved by the budget agency.
(b) Each member of the committee who is a member of the
general assembly is entitled to receive the same per diem, mileage,
and travel allowances paid to legislative members of interim study
committees established by the legislative council.
Sec. 6. The chairman of the legislative council shall appoint a
member of the committee to serve as the committee's chair.
Whenever there is a new chairman of the legislative council, the
new chairman may remove the committee's chair and appoint
another chair.
Sec. 7. The committee shall hold hearings to do the following:
(1) Review the plan of a state agency that proposes to enter
into a privatization contract that has a total value greater
than ten million dollars ($10,000,000).
(2) Make advisory recommendations to the governor
regarding the agency's plans.
Sec. 8. The committee may meet at any time during the year
upon the call of the chair.
Sec. 9. The affirmative votes of a majority of the members of the
committee are required for the committee to take action on any
recommendation.
Sec. 10. The legislative services agency shall staff the committee.
Sec. 11. The expenses of the committee shall be paid from
appropriations made to the legislative council or the legislative
services agency.
Sec. 12. Except as provided in this chapter, the committee shall
operate under the policies governing study committees adopted by
the legislative council.
SOURCE: IC 4-3-6-2; (07)HB1009.1.2. -->
SECTION 2. IC 4-3-6-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 2. (a) As used in this chapter,
(1) "agency" means any an executive or administrative department,
commission, council, board, bureau, division, service, office, officer,
administration, or other establishment in the executive or
administrative branch of the state government not provided for by the
Constitution of the State of Indiana. The term "agency" does not
include any of the following:
(1) The secretary of state.
(2) The auditor of state.
(3) The treasurer of state.
(4) The lieutenant governor.
(5) The state superintendent of public instruction. and
(6) The attorney general. nor
(7) The departments of which they are, an officer described in
any of subdivisions (1) through (6), by the statutes first adopted
setting out their the officer's duties, is the administrative heads.
head.
(b) "Private sector person" has the meaning set forth in
IC 4-13-1.8-4.
(c) "Privatization contract" has the meaning set forth in
IC 4-13-1.8-6.
(2) (d) "Reorganization" means any of the following:
(A) (1) The transfer of the whole or any part of any an agency, or
of the whole or any part of the functions thereof, of an agency, to
the jurisdiction and control of any other another agency.
(B) (2) The abolition of all or any part of the functions of any an
agency.
(C) (3) The consolidation or coordination of the whole or any part
of any an agency, or of the whole or any part of the functions
thereof, of an agency, with the whole or any part of any other
another agency or the functions thereof; of another agency.
(D) (4) The consolidation or coordination of any part of any an
agency or the functions thereof of an agency with any other part
of the same agency or the functions thereof; of the same agency.
(E) (5) The authorization of any an officer to delegate any of his
the officer's functions. or
(F) (6) The abolition of the whole or any part of any an agency
which agency or part does not have, or upon the taking effect of
a reorganization plan will not have, any functions.
(7) The awarding of a privatization contract that satisfies both
of the following:
(A) The contract has a value of more than one hundred
million dollars ($100,000,000).
(B) The term of the contract is more than two (2) years.
SOURCE: IC 4-3-6-3; (07)HB1009.1.3. -->
SECTION 3. IC 4-3-6-3 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 3. (a) The governor shall
examine, and from time to time reexamine, the organization of all
agencies of the state government, and shall determine what changes
therein in the organization of the agencies of state government are
necessary to accomplish the following purposes:
(1) To promote the better execution of the laws, the more
effective management of the executive and administrative branch
of the government and of its agencies and functions, and
expeditious administration of the public business.
(2) To reduce expenditures and promote economy to the fullest
extent consistent with the efficient operation of the government.
(3) To increase the efficiency of the operations of the government
to the fullest extent practicable.
(4) To group, coordinate, and consolidate agencies and functions
of the government, as nearly as possible according to major
purposes.
(5) To reduce the number of agencies by consolidating those
having similar functions under a single head, and to abolish
such
agencies or functions
thereof of agencies as may not be necessary
for the efficient conduct of the government.
(6) To eliminate overlapping and duplication of effort.
(7) To increase the control of the electorate over the policy
making functions of government.
(b) The general assembly declares that the public interest demands
the carrying out of the purposes specified in this section, and that these
purposes may be accomplished in great measure by proceeding under
the provisions of this chapter.
SOURCE: IC 4-3-6-4; (07)HB1009.1.4. -->
SECTION 4. IC 4-3-6-4 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4.
(a) This section applies
whenever the governor, after investigation, finds that
(1) the transfer of the whole or any part of any agency, or of the
whole or any part of the functions thereof, to the jurisdiction and
control of any other agency;
(2) the abolition of all or any part of the functions of any agency;
(3) the consolidation or coordination of the whole or any part of
any agency, or of the whole or any part of the functions thereof,
with the whole or any part of any other agency or the functions
thereof;
(4) the consolidation or coordination of any part of any agency or
the functions thereof with any other part of the same agency or the
functions thereof;
(5) the authorization of any officer to delegate any of that officer's
functions; or
(6) the abolition of the whole or any part of any agency which
agency or part does not have, or upon the taking effect of the
reorganization plan will not have any functions;
a reorganization is necessary to accomplish one (1) or more of the
purposes of this chapter.
(b) If this section applies, the governor shall
do the following:
(1) Prepare a reorganization plan for accomplishing the changes
in government indicated by the governor's findings included in the
plan.
and shall
(2) Submit the plan in an electronic format under IC 5-14-6 to the
general assembly, together with a declaration that, with respect to
each reorganization included in the plan the governor has found
that the reorganization is necessary to accomplish one (1) or more
of the purposes of this chapter.
(c) The governor, in the message submitting a reorganization plan,
shall specify, must state both of the following:
(1) With respect to each abolition of a function included in the
plan, the statutory authority for the exercise of the function.
and
shall specify
(2) The reduction of expenditures which it is probable will be
brought about by the taking effect of the reorganizations included
in the plan.
(d) After submission of the governor's reorganization plan, the
privatization review committee shall review the plan as provided
in IC 2-5-28 if the reorganization is the awarding of a privatization
contract described in section 2(d)(7) of this chapter.
SOURCE: IC 4-3-6-5; (07)HB1009.1.5. -->
SECTION 5. IC 4-3-6-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) Any A reorganization
plan submitted by the governor under this chapter (a) shall may:
(1) change, in cases he deems the governor considers necessary,
the name of any an agency affected by a the reorganization and
the title of its the agency's head; and shall
(2) designate the name of any the agency resulting from a the
reorganization and the title of its the agency's head.
(b) A reorganization plan may include provisions for the
appointment and compensation of the head and one (1) or more other
officers of any an agency, including an agency resulting from a
consolidation or other type of reorganization, if the governor finds, and
in his the governor's message submitting the plan declares, that by
reason of a reorganization made by the plan such provisions are
necessary. The agency head so provided for may be an individual or
may be a commission or board with two (2) or more members. The
terms of office of any an appointee shall may not be fixed at more than
four (4) years. The compensation shall may not be at a rate in excess
of greater than that found by the governor to prevail in respect of
comparable officers in the executive and administrative branch.
(c) shall A reorganization plan must make provisions for the
transfer or other disposition of the records, property, and personnel
affected by any the reorganization.
(d) shall A reorganization plan must make provision for the
transfer of such unexpended balances of appropriations, and of other
funds, available for use in connection with any function or agency
affected by a the reorganization, as he deems necessary by reason the
governor considers necessary because of the reorganization for use
in connection with the functions affected by the reorganization, or for
the use of the agency which has such functions after the reorganization
plan is effective. Transferred unexpended balances so transferred
shall may be used only for the purposes for which the appropriation
was originally made.
(e) shall A reorganization plan must make provision for
terminating the affairs of any agency abolished. and
(f) shall A reorganization plan must enumerate all statutes which
may be repealed if the reorganization plan becomes effective.
SOURCE: IC 4-3-6-7; (07)HB1009.1.6. -->
SECTION 6. IC 4-3-6-7 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 7. (a) Each A reorganization
plan shall be presented by the governor to the general assembly in the
form of must include a bill that if enacted by the general assembly:
(1) would authorize the reorganization; and
(2) if necessary, would make any statutory changes required
to implement the reorganization.
(b) Each A reorganization plan so submitted by the governor shall
take takes effect only if and when it the bill is enacted as a law by the
general assembly in accordance with the Constitution of the State of
Indiana.
(c) A privatization contract described in section 2(d)(7) of this
chapter entered into in violation of this chapter is void.
SOURCE: IC 4-3-6-8; (07)HB1009.1.7. -->
SECTION 7. IC 4-3-6-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8. (a) As used in this section,
"action" refers to an authorization, a designation, a directive, a
determination, an order, a permit, a policy, a privilege, a
regulation, a requirement, a rule, or any other action.
(a) (b) An act and any regulation or other action made, prescribed,
issued, granted, or performed in respect of or by any an agency or
function affected by a reorganization under this chapter, before the
effective date of the reorganization, shall, except to the extent
rescinded, modified, superseded, or made inapplicable by or under
authority of law or by the abolition of a function, have has the same
effect as if the reorganization had not been made. If any such act,
regulation, or other an action has vested the function in the agency
from which it is removed under the plan, the function shall, insofar as
it is to be exercised after the plan becomes effective, be considered as
vested in the agency under which the function is placed by the plan.
(b) As used in this section, "regulation or other action" means any
regulation, rule, order, policy, determination, directive, authorization,
permit, privilege, requirement, designation, or other action.
SOURCE: IC 4-3-6-9; (07)HB1009.1.8. -->
SECTION 8. IC 4-3-6-9 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9.
No (a) A legal action, or
other proceeding lawfully commenced by or against the head of
any an
agency or
other an officer of the state, in
his the officer's official
capacity or in relation to the discharge of
his the officer's official
duties,
shall does not abate by
reason of the taking effect of
any a
reorganization plan under
the provisions of this chapter.
The
(b) A court may, on motion or supplemental petition filed at any
time within twelve (12) months after the reorganization plan takes
effect, showing a necessity for a survival of the action, or other
proceeding to obtain a settlement of the questions involved, allow the
same to be maintained by or against the successor of such head the
agency or officer under the reorganization effected by the plan or, if
there is no successor, against such the agency or officer as the governor
shall designate.
SOURCE: IC 4-13-1.8; (07)HB1009.1.9. -->
SECTION 9. IC 4-13-1.8 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Chapter 1.8. Privatization Contracts
Sec. 1. This chapter applies to a privatization contract that has
a total dollar amount greater than ten million dollars
($10,000,000).
Sec. 2. As used in this chapter, "committee" refers to the
privatization review committee established by IC 2-5-28-3.
Sec. 3. As used in this chapter, "implementation date" means
the date on which a state agency transfers administration of a
program to a private sector person that will operate the program.
Sec. 4. As used in this chapter, "private sector person" refers to
a person not principally a part of or associated with a
governmental unit.
Sec. 5. As used in this chapter, "privatization" refers to the
transfer to a private sector person of a program currently
provided or performed directly by the employees of a state agency.
Sec. 6. (a) As used in this chapter, "privatization contract"
refers to a contract entered into by a state agency with a private
sector person for the privatization of a program.
(b) The term does not include contracting with a private sector
person to provide services on a temporary or an emergency basis.
Sec. 7. As used in this chapter, "program" means a legislatively
or administratively created function, project, provision of services,
or duty of a state agency.
Sec. 8. As used in this chapter, "state agency" has the meaning
set forth in IC 4-13-1-1(b).
Sec. 9. Before a state agency enters into a privatization contract,
the state agency must prepare a privatization plan that includes the
following:
(1) A description of the program to be privatized, including a
reference to the legal authority under which the program was
created.
(2) Detailed budget information that includes a list of
revenues and expenditures for the two (2) most recent fiscal
years.
(3) A list of:
(A) all state employees currently employed by the state
agency to administer the program; and
(B) the estimated effect of the privatization on the
employment status of each state employee employed by the
agency.
(4) A list of the:
(A) assets of the program; and
(B) proposed disposition of the assets.
(5) An estimate of:
(A) cost savings; or
(B) additional costs;
resulting from privatizing the program compared to the costs
of the existing program. Cost estimates must include the
estimated cost to the state for inspection, supervision, and
monitoring of the program if the privatization is
implemented. The estimate must also include an estimate of
any costs that would be incurred if the privatization contract
is discontinued.
(6) An estimate of the changes in individual wages and
benefits that will result from the privatization.
(7) Descriptions and plans for ways the privatization will
deliver the same or better services at a lower cost.
(8) Information on whether the contract will be awarded to an
out-of-state business (as defined in IC 4-13.6-6-2.5 and
IC 5-22-15-20(b)).
Sec. 10. (a) Not less than sixty (60) days before a privatization
plan becomes effective, the state agency must submit the plan to
the committee.
(b) The committee shall hold a hearing on the privatization plan
not less than thirty (30) days before the date on which the
privatization plan becomes effective.
(c) The committee shall make an advisory recommendation
concerning the privatization plan to the governor not later than
five (5) days after the hearing held under subsection (b). The
committee shall forward a copy of the recommendation under this
subsection to the legislative council in an electronic format under
IC 5-14-6.
SOURCE: IC 4-13-2-14.4; (07)HB1009.1.10. -->
SECTION 10. IC 4-13-2-14.4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 14.4.
(a) As used
in this section, "cost benefit analysis" means a comprehensive
study to identify and compare the total cost, quality, technical
expertise, and timeliness of a service performed by a state
employee with the total cost, quality, technical expertise, and
timeliness of the same service provided under a contract for
services.
(b) Before a state agency may enter into a contract for services to be
provided in lieu of appointing employees to available positions, the
agency must justify the cost effectiveness of the contract to the
commissioner of the department of administration. and conduct a cost
benefit analysis.
(c) The cost benefit analysis required by subsection (b) must be:
(1) submitted to the commissioner;
(2) submitted to the legislative council; and
(3) made available to the public;
at least ninety (90) days before the effective date of the contract.
The analysis submitted to the legislative council must be in an
electronic format under IC 5-14-6.
(d) The commissioner of the Indiana department of
administration shall twice each year compile and make available
for public inspection a report concerning the cost benefit analysis
of each contract for services awarded by each state agency. Before
February 1 of each year, the commissioner shall compile and make
available a report covering the six (6) month period ending
December 31 of the preceding calendar year. Before August 1 of
each year, the commissioner shall compile and make available a
report covering the six (6) month period ending June 30 of that
year. The commissioner shall also submit a copy of the report to
the legislative council in an electronic format under IC 5-14-6.
SOURCE: ; (07)HB1009.1.11. -->
SECTION 11. [EFFECTIVE UPON PASSAGE] (a) As used in this
SECTION, "committee" refers to the privatization review
committee established by IC 2-5-28-3, as added by this act.
(b) Each appointing authority specified in IC 2-5-28-4, as added
by this act, shall make appointments to the committee under
IC 2-5-28-4, as added by this act, not later than three (3) weeks
after the effective date of this SECTION.
(c) This SECTION expires July 1, 2007.
SOURCE: ; (07)HB1009.1.12. -->
SECTION 12. [EFFECTIVE UPON PASSAGE] (a)
Notwithstanding IC 4-13-2-14.4(c), as amended by this act, the
commissioner of the Indiana department of administration is not
required to file a report concerning the cost benefit analysis of each
contract for services until February 1, 2008.
(b) This SECTION expires July 1, 2008.
SOURCE: ; (07)HB1009.1.13. -->
SECTION 13.
An emergency is declared for this act.