HOUSE BILL No. 1502
DIGEST OF INTRODUCED BILL
Citations Affected: IC 5-4-1-18; IC 5-11; IC 5-14-1.5-6.1; IC 5-24;
IC 9-14-3-0.3; IC 13-14-13.
Synopsis: State board of accounts matters. Increases the amount of the
surety bond that must be filed by various local government officials.
Provides that the periodic financial reports filed by state and local
government entities with the state examiner of the state board of
accounts (SBOA) must be filed electronically. Permits the state
examiner to conduct performance audits of the same public offices and
officers, state offices, state institutions, and entities that are currently
subject to financial audits by the SBOA. Removes certain restrictions
on the payment of travel expenses to field examiners of the SBOA for
assignments within their county of residence. Permits the governing
body of a public agency to conduct an executive session for purposes
of meeting with the SBOA in an entrance conference or exit conference
during the audit process. Repeals a statute requiring the SBOA to
implement and administer a method to be used by the state to conduct
authenticated electronic transactions using digital signatures. Makes
conforming changes to reflect the repeal of the digital signature statute.
Effective: July 1, 2009.
January 14, 2009, read first time and referred to Committee on Ways and Means.
First Regular Session 116th General Assembly (2009)
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between statutes enacted by the 2008 Regular Session of the General Assembly.
HOUSE BILL No. 1502
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 5-4-1-18; (09)IN1502.1.1. -->
SECTION 1. IC 5-4-1-18, AS AMENDED BY P.L.146-2008,
SECTION 34, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 18. (a) Except as provided in subsection (b), the
following city, town, county, or township officers and employees shall
file an individual surety bond:
(1) City judges, controllers, clerks, and clerk-treasurers.
(2) Town judges and clerk-treasurers.
(3) Auditors, treasurers, recorders, surveyors, sheriffs, coroners,
assessors, and clerks.
(4) Township trustees.
(5) Those employees directed to file an individual bond by the
fiscal body of a city, town, or county.
(6) Township assessors (if any).
(b) The fiscal body of a city, town, county, or township may by
ordinance authorize the purchase of a blanket bond or a crime
insurance policy endorsed to include faithful performance to cover the
faithful performance of all employees, commission members, and
persons acting on behalf of the local government unit, including those
officers described in subsection (a).
(c) The fiscal bodies of the respective units shall fix the amount of
the bond of city controllers, city clerk-treasurers, town clerk-treasurers,
Barrett Law fund custodians, county treasurers, county sheriffs, circuit
court clerks, township trustees, and conservancy district financial
clerks as follows:
(1) The amount must equal
fifteen thirty thousand dollars
($15,000) ($30,000) for each one million dollars ($1,000,000) of
receipts of the officer's office during the last complete fiscal year
before the purchase of the bond, subject to subdivision (2).
(2) The amount may not be less than
fifteen thirty thousand
dollars ($15,000) ($30,000) nor more than three hundred
thousand dollars ($300,000).
County auditors shall file bonds in amounts of not less than
thirty thousand dollars ($15,000), ($30,000), as fixed by the fiscal
body of the county. The amount of the bond of any other person
required to file an individual bond shall be fixed by the fiscal body of
the unit at not less than eight fifteen thousand five hundred dollars
(d) A controller of a solid waste management district established
under IC 13-21 or IC 13-9.5 (before its repeal) shall file an individual
surety bond in an amount:
(1) fixed by the board of directors of the solid waste management
(2) that is at least
fifteen thirty thousand dollars ($15,000).
(e) Except as provided under subsection (d), a person who is
required to file an individual surety bond by the board of directors of
a solid waste management district established under IC 13-21 or
IC 13-9.5 (before its repeal) shall file a bond in an amount fixed by the
board of directors.
(f) In 1982 and every four (4) years after that, the state examiner
shall review the bond amounts fixed under this section and report in an
electronic format under IC 5-14-6 to the general assembly whether
changes are necessary to ensure adequate and economical coverage.
(g) The commissioner of insurance shall prescribe the form of the
bonds or crime policies required by this section, in consultation with
the commission on public records under IC 5-15-5.1-6.
SOURCE: IC 5-11-1-4; (09)IN1502.1.2. -->
SECTION 2. IC 5-11-1-4, AS AMENDED BY P.L.189-2005,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 4. (a) The state examiner shall require from every
municipality and every state or local governmental unit, entity, or
instrumentality financial reports covering the full period of each fiscal
year. Except as provided by subsection (b), these reports shall be
prepared, verified, and filed with the state examiner not later than thirty
(30) days after the close of each fiscal year. The reports must be filed
electronically, in the manner prescribed by the state examiner.
(b) The following shall prepare, verify, and file the reports required
under subsection (a) not later than sixty (60) days after the close of
each fiscal year:
(1) A municipal government.
(2) A public library.
(3) A district (as defined in IC 13-11-2-58(a)) that owns a landfill
(as defined in IC 13-11-2-116(c)).
SOURCE: IC 5-11-1-9; (09)IN1502.1.3. -->
SECTION 3. IC 5-11-1-9, AS AMENDED BY P.L.217-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 9. (a) The state examiner, personally or through
the deputy examiners, field examiners, or private examiners, shall
examine all accounts and all financial affairs of every public office and
officer, state office, state institution, and entity.
(b) An examination of an entity deriving:
(1) less than fifty percent (50%); or
(2) at least fifty percent (50%) but less than one hundred thousand
dollars ($100,000) if the entity is organized as a not-for-profit
of its disbursements during the period of time subject to an
examination from appropriations, public funds, taxes, and other sources
of public expense shall be limited to matters relevant to the use of the
public money received by the entity.
(c) The examination of an entity described in subsection (b) may be
waived or deferred by the state examiner if the state examiner
determines in writing that all disbursements of public money during the
period subject to examination were made for the purposes for which the
money was received. However, the:
(1) Indiana economic development corporation created by
IC 5-28-3 and the corporation's funds, accounts, and financial
(2) department of financial institutions established by
IC 28-11-1-1 and the department's funds, accounts, and financial
shall be examined biennially by the state board of accounts.
(d) On every examination under this section, inquiry shall be made
as to the following:
(1) The financial condition and resources of each municipality,
office, institution, or entity.
(2) Whether the laws of the state and the uniform compliance
guidelines of the state board of accounts established under section
24 of this chapter have been complied with.
(3) The methods and accuracy of the accounts and reports of the
The examinations shall be made without notice.
(e) If during an examination of a state office under this chapter the
examiner encounters an inefficiency in the operation of the state office,
the examiner may comment on the inefficiency in the examiner's report.
(f) The state examiner, deputy examiners, any field examiner, or any
private examiner, when engaged in making any examination or when
engaged in any official duty devolved upon them by the state examiner,
is entitled to do the following:
(1) Enter into any state, county, city, township, or other public
office in this state, or any entity, agency, or instrumentality, and
examine any books, papers, documents, or electronically stored
information for the purpose of making an examination.
(2) Have access, in the presence of the custodian or the
custodian's deputy, to the cash drawers and cash in the custody of
(3) During business hours, examine the public accounts in any
depository that has public funds in its custody pursuant to the
laws of this state.
(g) The state examiner, deputy examiner, or any field examiner,
when engaged in making any examination authorized by law, may issue
subpoenas for witnesses to appear before the examiner in person or to
produce books, papers, or other records (including records stored in
electronic data processing systems) for inspection and examination.
The state examiner, deputy examiner, and any field examiner may
administer oaths and examine witnesses under oath orally or by
interrogatories concerning the matters under investigation and
examination. Under the authority of the state examiner, the oral
examinations may be transcribed with the reasonable expense paid by
the examined person in the same manner as the compensation of the
field examiner is paid. The subpoenas shall be served by any person
authorized to serve civil process from any court in this state. If a
witness duly subpoenaed refuses to attend, refuses to produce
information required in the subpoena, or attends and refuses to be
sworn or affirmed, or to testify when called upon to do so, the examiner
may apply to the circuit court having jurisdiction of the witness for the
enforcement of attendance and answers to questions as provided by the
law governing the taking of depositions.
(h) The state examiner may conduct a performance audit of any
public office and officer, state office, state institution, or entity.
SOURCE: IC 5-11-4-2; (09)IN1502.1.4. -->
SECTION 4. IC 5-11-4-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 2. Traveling expenses of field
examiners shall be allowed and paid on the same basis as provided by
law for other state officers and employees when engaged on
outside the county of their actual residence during the full
period of such assignment: Provided, That examiners working outside
of the county of their actual residence and returning to their homes
daily shall be allowed transportation expense at the rate established by
the budget committee for other state officers and employees: Provided,
further, That the same transportation expense may be allowed
examiners when required to travel within the county of their actual
residence while engaged in two (2) or more separate assignments.
Claims under this section for such compensation and traveling
expense, when approved by the state examiner, shall be filed with the
auditor of state monthly, who shall draw his a warrant in payment of
same. the claims.
SOURCE: IC 5-14-1.5-6.1; (09)IN1502.1.5. -->
SECTION 5. IC 5-14-1.5-6.1, AS AMENDED BY P.L.120-2008,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 6.1. (a) As used in this section, "public official"
means a person:
(1) who is a member of a governing body of a public agency; or
(2) whose tenure and compensation are fixed by law and who
executes an oath.
(b) Executive sessions may be held only in the following instances:
(1) Where authorized by federal or state statute.
(2) For discussion of strategy with respect to any of the following:
(A) Collective bargaining.
(B) Initiation of litigation or litigation that is either pending or
has been threatened specifically in writing.
(C) The implementation of security systems.
(D) The purchase or lease of real property by the governing
body up to the time a contract or option to purchase or lease is
executed by the parties.
However, all such strategy discussions must be necessary for
competitive or bargaining reasons and may not include
competitive or bargaining adversaries.
(3) For discussion of the assessment, design, and implementation
of school safety and security measures, plans, and systems.
(4) Interviews and negotiations with industrial or commercial
prospects or agents of industrial or commercial prospects by the
Indiana economic development corporation, the office of tourism
development, the Indiana finance authority, the ports of Indiana,
an economic development commission, the Indiana state
department of agriculture, a local economic development
organization (as defined in IC 5-28-11-2(3)), or a governing body
of a political subdivision.
(5) To receive information about and interview prospective
(6) With respect to any individual over whom the governing body
(A) to receive information concerning the individual's alleged
(B) to discuss, before a determination, the individual's status
as an employee, a student, or an independent contractor who
(i) a physician; or
(ii) a school bus driver.
(7) For discussion of records classified as confidential by state or
(8) To discuss before a placement decision an individual student's
abilities, past performance, behavior, and needs.
(9) To discuss a job performance evaluation of individual
employees. This subdivision does not apply to a discussion of the
salary, compensation, or benefits of employees during a budget
(10) When considering the appointment of a public official, to do
(A) Develop a list of prospective appointees.
(B) Consider applications.
(C) Make one (1) initial exclusion of prospective appointees
from further consideration.
Notwithstanding IC 5-14-3-4(b)(12), a governing body may
release and shall make available for inspection and copying in
accordance with IC 5-14-3-3 identifying information concerning
prospective appointees not initially excluded from further
consideration. An initial exclusion of prospective appointees from
further consideration may not reduce the number of prospective
appointees to fewer than three (3) unless there are fewer than
three (3) prospective appointees. Interviews of prospective
appointees must be conducted at a meeting that is open to the
(11) To train school board members with an outside consultant
about the performance of the role of the members as public
(12) To prepare or score examinations used in issuing licenses,
certificates, permits, or registrations under IC 25.
(13) To discuss information and intelligence intended to prevent,
mitigate, or respond to the threat of terrorism.
(14) To meet with the state board of accounts in an entrance
conference or exit conference during the audit process under
(c) A final action must be taken at a meeting open to the public.
(d) Public notice of executive sessions must state the subject matter
by specific reference to the enumerated instance or instances for which
executive sessions may be held under subsection (b). The requirements
stated in section 4 of this chapter for memoranda and minutes being
made available to the public is modified as to executive sessions in that
the memoranda and minutes must identify the subject matter
considered by specific reference to the enumerated instance or
instances for which public notice was given. The governing body shall
certify by a statement in the memoranda and minutes of the governing
body that no subject matter was discussed in the executive session
other than the subject matter specified in the public notice.
(e) A governing body may not conduct an executive session during
a meeting, except as otherwise permitted by applicable statute. A
meeting may not be recessed and reconvened with the intent of
circumventing this subsection.
SOURCE: IC 9-14-3-0.3; (09)IN1502.1.6. -->
SECTION 6. IC 9-14-3-0.3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 0.3. As used in this
chapter, "digital signature"
has the meaning set forth in IC 5-24-2-1.
means an electronic identifier that:
(1) is created by a computer and is executed or adopted by the
party using it with the intent to authenticate a writing; and
(2) transforms a message using an asymmetric cryptosystem
such that a person having the initial message and the signer's
public key can accurately determine whether:
(A) the transformation was created using the private key
that corresponds to the signer's public key; and
(B) the initial message has been altered since the
transformation was made.
SOURCE: IC 13-14-13-2; (09)IN1502.1.7. -->
SECTION 7. IC 13-14-13-2, AS ADDED BY P.L.114-2008,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 2. The department may accept the electronic
submission of information only if the submission meets the following:
(1) Standards established under IC 5-24 and corresponding rules.
(2) (1) Requirements of cross-media electronic reporting under 40
(3) (2) Procedures established by the department to accept
SOURCE: IC 13-14-13-4; (09)IN1502.1.8. -->
SECTION 8. IC 13-14-13-4, AS ADDED BY P.L.114-2008,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 4. (a) The department may adopt procedures that
are consistent with federal law for compliance with this chapter to
allow an applicant to submit an electronic document bearing the valid
electronic signature of a signatory if that signatory would otherwise be
required to sign the paper document for which the electronic document
(b) The procedures adopted under subsection (a) may provide for
electronic signature standards that are
(1) acceptable to the state board of accounts under IC 5-24; and
(2) consistent with 40 CFR 3.
SOURCE: IC 13-14-13-6; (09)IN1502.1.9. -->
SECTION 9. IC 13-14-13-6, AS ADDED BY P.L.114-2008,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 6. A person is subject to applicable state or federal
civil, criminal, or other penalties and remedies for failure to comply
with a reporting requirement if the person submits an electronic
(1) is in place of a paper document under this chapter; and
(2) fails to comply with the following:
(A) Standards established under IC 5-24 and supporting rules.
(B) (A) Requirements of cross-media electronic reporting
under 40 CFR 3.
(C) (B) Procedures established by the department to accept
SOURCE: IC 5-24; (09)IN1502.1.10. -->
SECTION 10. IC 5-24 IS REPEALED [EFFECTIVE JULY 1,