Introduced Version




Citations Affected: IC 4-12-13.

Synopsis: Review of privatization plans. Requires a state agency to develop a privatization plan before privatizing any state program. Requires a state agency to hold a hearing on the plan and report the results of the hearing to the public and the budget committee. Requires the budget committee to review privatization plans before implementation and to make advisory recommendations to the governor.

Effective: July 1, 2006.


    January 9, 2006, read first time and referred to Committee on Governmental Affairs and Interstate Cooperation.


Second Regular Session 114th General Assembly (2006)

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    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:

     Chapter 13. Privatization of State Services
    Sec. 1. (a) The definitions in this section apply throughout this chapter.
    (b) "Implementation date" means the date on which a state agency turns over administration of a program to a private entity that will operate the program.
    (c) "Private sector" refers to any entity or individual not principally a part of or associated with a governmental unit.

     (d) "Privatize" refers to a state agency contracting with the private sector to provide services that are conducted directly by the employees of a state agency before the privatization. The term does not include contracting with the private sector to provide services on a temporary or emergency basis.
    (e) "Program" means a legislatively or administratively created

function, project, or duty of a state agency.
     (f) "State agency" has the meaning set forth in IC 4-13-1-1(b).
     Sec. 2. Before a state agency privatizes a program, 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 employee.
        (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 of 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 current and future economic impact of privatization on other state programs, including:
            (A) public assistance programs;
            (B) unemployment insurance programs;
            (C) retirement programs; and
            (D) agency personal services budgets designated to pay accrued vacation and sick leave benefits.

         (7) An estimate of the increases or decreases in the cost and quality of services or goods provided to the public that will result from the privatization.
        (8) An estimate of the changes in individual wages and benefits that will result from the privatization.
        (9) Descriptions and plans for ways the privatization will

deliver the same or better services at a lower cost.
        (10) A narrative explanation and justification for the privatization.

     Sec. 3. At least one hundred eighty (180) days before the implementation date of the privatization, the state agency shall release the privatization plan prepared under section 2 of this chapter to the public and to the budget committee.
     Sec. 4. At least ninety (90) days before the implementation date of the privatization, the state agency shall conduct at least one (1) public hearing on the privatization plan at which public comments and testimony must be received. A public hearing under this chapter must be held in compliance with IC 5-14-1.5.
     Sec. 5. At least forty-five (45) days before the implementation date of the privatization, the state agency shall release to the:
        (1) public; and
        (2) budget committee;
a summary of the hearing or hearings conducted under section 4 of this chapter.
    Sec. 6. At least thirty (30) days before the implementation date of the privatization, the budget committee shall review the privatization plan and the findings of the hearings held by the state agency. After review of the plan and the hearing or hearings, the budget committee shall make an advisory recommendation to the governor concerning the proposed privatization.
    Sec. 7. At least fifteen (15) days before the implementation date of the privatization, the governor shall approve or disapprove the privatization plan. The governor shall issue a written statement stating the reasons for approval or disapproval of the plan.