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 this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the 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 2004 Regular Session of the General Assembly.

    Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 4-2-6-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 1. As used in this chapter, and unless the context clearly denotes otherwise:
        (1) "Agency" means an authority, a board, a branch, a bureau, a commission, a committee, a council, a department, a division, an office, a service, or other instrumentality of the executive, including the administrative, department of state government. The term includes a body corporate and politic set up as an instrumentality of the state that chooses to be under the jurisdiction of the state ethics commission. and a private, nonprofit, government related corporation. The term does not include any of the following:
            (A) The judicial department of state government.
            (B) The legislative department of state government.
            (C) A state educational institution (as defined in

IC 20-12-0.5-1).
            (D) A political subdivision.
            (E) A private nonprofit government related corporation.
        (2) "Appointing authority" means the chief administrative officer of an agency. The term does not include a state officer.
        (3) "Assist" means to:
            (A) help;
            (B) aid;
            (C) advise; or
            (D) furnish information to;
        a person. The term includes an offer to do any of the actions in clauses (A) through (D).
        (4) "Business relationship" means dealings of a person with an agency seeking, obtaining, establishing, maintaining, or implementing:
            (A) a pecuniary interest in a contract or purchase with the agency; or
            (B) a license or permit requiring the exercise of judgment or discretion by the agency.
        (5) "Commission" refers to the state ethics commission created under section 2 of this chapter.
        (6) "Compensation" means any money, thing of value, or financial benefit conferred on, or received by, any person in return for services rendered, or for services to be rendered, whether by that person or another.
        (7) "Employee" means an individual, other than a state officer, who is employed by an agency on a full-time, a part-time, a temporary, an intermittent, or an hourly basis. The term includes an individual who contracts with an agency for personal services. for more than thirty (30) hours a week for more than twenty-six (26) weeks during any one (1) year period.
        (8) "Employer" means any person from whom a state officer or employee or the officer's or employee's spouse received compensation. For purposes of this chapter, a

customer or client of a self-employed individual in a sole proprietorship or a professional practice is not considered to be an employer.
        (9) "Financial interest" means an interest:
            (A) in a purchase, sale, lease, contract, option, or other transaction between an agency and any person; or
            (B) involving property or services.
        The term includes an interest arising from employment or prospective employment for which negotiations have begun. The term does not include an interest of a state officer or employee in the common stock of a corporation unless the combined holdings in the corporation of the state officer or the employee, that individual's spouse, and that individual's unemancipated children are more than one percent (1%) of the outstanding shares of the common stock of the corporation. The term does not include an interest that is not greater than the interest of the general public or any state officer or any state employee.
        (10) "Information of a confidential nature" means information:
            (A) obtained by reason of the position or office held; and
            (B) which:
                (i) a public agency is prohibited from disclosing under IC 5-14-3-4(a);
                (ii) a public agency has the discretion not to disclose under IC 5-14-3-4(b) and that the agency has not disclosed; or
                (iii) the information is not in a public record, but if it were, would be confidential.
        (11) "Person" means any individual, proprietorship, partnership, unincorporated association, trust, business trust, group, limited liability company, or corporation, whether or not operated for profit, or a governmental agency or political subdivision.

appointed by the governor.
    (c) No more than three (3) commission members shall be of the same political party. A person who:
        (1) holds an elected or appointed office of the state;
        (2) is employed by the state; or
        (3) is registered as a lobbyist under IC 2-7-2-1;
may not be a member of the commission. The governor shall designate one (1) member of the commission as the chairman. chairperson. Each appointment to the commission is for a period of four (4) years. A vacancy shall be filled by the governor for the unexpired term.
    (d) The governor and state budget agency inspector general shall provide such rooms and staff assistance as the commission may require. for the commission.
    SECTION 3. IC 4-2-6-2.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2.5. The commission has jurisdiction over the following persons:
        (1) A current or former state officer.
        (2) A current or former employee.
        (3) A person who has or had a business relationship with an agency.
        (4) A current or former special state appointee.
    SECTION 4. IC 4-2-6-4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 4. (a) The commission may do any of the following:
        (1) Upon a vote of four (4) members, or upon the written request of the governor, initiate and conduct an investigation. refer any matter within the inspector general's authority to the inspector general for investigation.
        (2) Receive and hear any complaint which filed with the commission by the inspector general that alleges a violation of this chapter, a rule adopted under this chapter, or any other statute or rule establishing standards of official conduct of state officers, employees, an executive branch lobbyist (as defined in

IC 4-2-7-1), or special state appointees.
        (3) Obtain information and, upon a vote of four (4) members, compel the attendance and testimony of witnesses and the production of pertinent books and papers by a subpoena enforceable by the circuit or superior court of the county where the subpoena is to be issued.
        (4) Recommend legislation to the general assembly relating to the conduct and ethics of state officers, employees, and special state appointees, including whether additional specific state officers or employees should be required to file a financial disclosure statement under section 8 of this chapter.
        (5) Adopt rules under IC 4-22-2 to implement this chapter.
        (6) Prescribe and provide forms for statements required to be filed under this chapter.
        (7) Accept and file information:
            (A) voluntarily supplied; and
            (B) that exceeds the requirements of this chapter.
        (8) Inspect financial disclosure forms.
        (9) Notify persons who fail to file forms required under this chapter.
        (10) Develop a filing, a coding, and an indexing system required by this chapter and IC 35-44-1-3(f).
        (11) Conduct research.
        (12) Prepare interpretive and educational materials and programs.
    (b) The commission shall do the following:
        (1) Act as an advisory body by issuing advisory opinions to interpret this chapter, the commission's rules, or any other statute or rule establishing standards of official conduct upon:
            (A) request of:
                (i) a state officer or a former state officer;
                (ii) an employee or a former employee;
                (iii) a person who has or had a business relationship

with an agency; or
                (iv) a special state appointee or former special state appointee; or
            (B) motion of the commission.
        (2) Conduct its proceedings in the following manner:
            (A) When a complaint is filed with the commission, the commission may:
                (i) reject, without further proceedings, a complaint that the commission considers frivolous or inconsequential;
                (ii) reject, without further proceedings, a complaint that the commission is satisfied has been dealt with appropriately by an agency;
                (iii) upon the vote of four (4) members, determine that the complaint does not allege facts sufficient to constitute a violation of this chapter or the code of ethics and dismiss the complaint; or
                (iv) forward a copy of the complaint to the attorney general, the prosecuting attorney of the county in which the alleged violation occurred, the state board of accounts, a state officer, the appointing authority, or other appropriate person for action, and stay the commission's proceedings pending the other action.
            (B) If a complaint is not disposed of under clause (A), a copy of the complaint shall be sent to the person alleged to have committed the violation.
            (C) If the complaint is not disposed of under clause (A), or when the commission initiates an investigation on its own motion or upon request of the governor, the commission shall may promptly investigate refer the alleged violation for additional investigation by the inspector general. If after the preliminary investigation, the commission finds by a majority vote that probable cause exists to support an alleged violation, it shall convene a public hearing on the matter within sixty (60) days after making the

determination. The respondent shall be notified within fifteen (15) days of the commission's determination. Except as provided in this section, the commission's evidence relating to an investigation is confidential. until the earlier of:
                (i) the time the respondent is notified of the hearing; or
                (ii) the time the respondent elects to have the records divulged.
             (D) A complaint filed with the commission is open for public inspection after the commission finds that probable cause exists. However, a complaint filed by the inspector general that contains confidential information under IC 4-2-7-8 may be redacted to exclude the confidential information. Every hearing and other proceeding in which evidence is received by the commission is open to the public. Investigative reports by the inspector general that are not filed with the commission may be kept confidential.
            (E) A:
                (i) complaint that is filed with; or
                (ii) proceeding that is held by;
            the commission before the commission has found probable cause is confidential unless the target of the investigation elects to have information disclosed, or the commission elects to respond to public statements by the person who filed the complaint.
            However, (F) The commission may acknowledge:
                 (i) the existence and scope of an investigation before the finding of probable cause; or
                 (ii) that the commission did not find probable cause to support an alleged violation.
            (D) (G) If a hearing is to be held, the respondent may examine and make copies of all evidence in the

commission's possession relating to the charges. At the hearing, the charged party shall be afforded appropriate due process protection consistent with IC 4-21.5, including the right to be represented by counsel, the right to call and examine witnesses, the right to introduce exhibits, and the right to cross-examine opposing witnesses.
            (E) (H) After the hearing, the commission shall state its findings of fact. If the commission, based on competent and substantial evidence, finds by a majority vote that the respondent has violated this chapter, a rule adopted under this chapter, or any other statute or rule establishing standards of official conduct of state officers, employees, or special state appointees, it shall state its findings in writing in a report, which shall be supported and signed by a majority of the commission members and shall be made public. The report may make a recommendation for the sanctions to be imposed by the appointing authority or state officer for the violation, including:
                (i) a letter of counseling;
                (ii) a reprimand;
                (iii) a suspension with or without pay; or
                (iv) the dismissal of an employee.
            (F) (I) If the commission, based on competent and substantial evidence, finds by a majority vote a violation of this chapter, a rule adopted under this chapter, or any other statute or rule establishing standards of official conduct of state officers, employees, or special state appointees, the commission may also take any of the actions provided in section 12 of this chapter.
            (G) (J) The report required under clause (E) (H) shall be presented to:
                (i) the respondent;
                (ii) the appointing authority or state officer of the employee, former employee, or special state

appointee; and
                (iii) the governor.
            (H) (K) The commission may also forward the report to any of the following:
                (i) The prosecuting attorney of each county in which the violation occurred.
                (ii) The state board of accounts.
                (iii) The state personnel director.
                (iv) The attorney general.
                (v) A state officer.
                (vi) The appointing authority.
                (vii) Any other appropriate person.
            (I) (L) If the commission finds the respondent has not violated a code or statutory provision, it shall dismiss the charges.
        (3) Review all conflict of interest disclosures received by the commission under IC 35-44-1-3, maintain an index of conflict of interest those disclosures, received by the commission under IC 35-44-1-3. and issue advisory opinions and screening procedures as set forth in section 9 of this chapter.
    (c) Notwithstanding IC 5-14-3-4(b)(8)(C), the records of the commission concerning the case of a respondent that are not confidential under subsection (b)(2)(C) IC 5-14-3-4(b)(2)(C) shall be available for inspection and copying in accordance with IC 5-14-3.
    SECTION 5. IC 4-2-6-5.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 5.5. (a) A current state officer, employee, or special state appointee shall not knowingly:
        (1) accept other employment involving compensation of substantial value if the responsibilities of that employment are inherently incompatible with the responsibilities of public office or require the individual's recusal from matters so central or

critical to the performance of the individual's official duties that the individual's ability to perform those duties would be materially impaired;
        (2) accept employment or engage in business or professional activity that would require the individual to disclose confidential information that was gained in the course of state employment; or
        (3) use or attempt to use the individual's official position to secure unwarranted privileges or exemptions that are:
            (A) of substantial value; and
            (B) not properly available to similarly situated individuals.
    (b) A written advisory opinion issued by the inspector general or the individual's supervisor granting approval of outside employment is conclusive proof that an individual is not in violation of subsection (a)(1) or (a)(2).
    SECTION 6. IC 4-2-6-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 8. (a) The following persons shall file a written financial disclosure statement:
        (1) The governor, lieutenant governor, secretary of state, auditor of state, treasurer of state, attorney general, and state superintendent of public instruction.
        (2) Any candidate for one (1) of the offices in subdivision (1) who is not the holder of one (1) of those offices.
        (3) Any person who is the appointing authority of an agency.
        (4) The director of each division of the department of administration.
        (5) Any purchasing agent within the procurement division of the department of administration.
        (6) An employee required to do so by rule adopted by the commission.
    (b) The statement shall be filed with the commission as follows:

spouse or unemancipated children has an equitable or legal interest either amounting to five thousand dollars ($5,000) or more or comprising ten percent (10%) of the state officer's, candidate's, or the employee's net worth or the net worth of that individual's spouse or unemancipated children. An individual's primary personal residence need not be listed, unless it also serves as income property.
        (3) The names and the nature of the business of the employers of the state officer, candidate, or the employee and that individual's spouse.
        (4) The following information about any sole proprietorship owned or professional practice operated by the state officer, candidate, or the employee or that individual's spouse:
            (A) The name of the sole proprietorship or professional practice.
            (B) The nature of the business.
            (C) Whether any clients are known to have had a business relationship with the agency of the state officer or employee or the office sought by the candidate.
            (D) The name of any client or customer from whom the state officer, candidate, employee, or that individual's spouse received more than thirty-three percent (33%) of the state officer's, candidate's, employee's, or that individual's spouse's nonstate income in a year.
        (5) The name of any partnership of which the state officer, candidate, or the employee or that individual's spouse is a member and the nature of the partnership's business.
        (6) The name of any corporation (other than a church) of which the state officer, candidate, or the employee or that individual's spouse is an officer or a director and the nature of the corporation's business.
        (7) The name of any corporation in which the state

officer, candidate, or the employee or that individual's spouse or unemancipated children own stock or stock options having a fair market value in excess of ten thousand dollars ($10,000). However, if the stock is held in a blind trust, the name of the administrator of the trust must be disclosed on the statement instead of the name of the corporation. A time or demand deposit in a financial institution or insurance policy need not be listed.
        (8) The name and address of the most recent former employer.
        (9) Additional information that the person making the disclosure chooses to include.
Any such state officer, candidate, or employee may file an amended statement upon discovery of additional information required to be reported.
    (d) A person who:
        (1) fails to file a statement required by rule or this section in a timely manner; or
        (2) files a deficient statement;
upon a majority vote of the commission, is subject to a civil penalty at a rate of not more than ten dollars ($10) for each day the statement remains delinquent or deficient. The maximum penalty under this subsection is one thousand dollars ($1,000).
    (e) A person who intentionally or knowingly files a false statement commits a Class A infraction.
    SECTION 7. IC 4-2-6-9 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 9. (a) A state officer, or an employee, or a special state appointee may not participate in any decision or vote of any kind in which the state officer or the employee, or that individual's spouse or unemancipated children has a financial interest. if the state officer, employee, or special state appointee has knowledge that any of the following has a financial interest in the outcome of the matter:

the appointing authority.
    SECTION 8. IC 4-2-6-10.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 10.5. (a) Subject to subsection (b), a state officer, an employee, or a special state appointee may not knowingly have a financial interest in a contract made by an agency.
    (b) The prohibition in subsection (a) does not apply to:
        (1) a state officer, an employee, or a special state appointee who does not participate in or have official responsibility for any of the activities of the contracting agency, if:
            (A) the contract is made after public notice or, where applicable, through competitive bidding;
            (B) the state officer, employee, or special state appointee files with the commission a statement making full disclosure of all related financial interests in the contract;
            (C) the contract can be performed without compromising the performance of the official duties and responsibilities of the state officer, employee, or special state appointee; and
            (D) in the case of a contract for professional services, the appointing authority of the contracting agency makes and files a written certification with the commission that no other state officer, employee, or special state appointee of that agency is available to perform those services as part of the regular duties of the state officer, employee, or special state appointee; or
        (2) a state officer, an employee, or a special state appointee who, acting in good faith, learns of an actual or prospective violation of the prohibition in subsection (a), if, not later than thirty (30) days after learning of the actual or prospective violation, the state officer, employee, or special state appointee:
            (A) makes a full written disclosure of any financial

interests to the contracting agency and the commission; and
            (B) terminates or disposes of the financial interest.
    SECTION 9. IC 4-2-6-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 11. (a) This section applies only:
        (1) to a former state officer or former employee; and
        (2) during the period that is twelve (12) months after the date the former state officer or former employee had responsibility for the particular matter.
    (b) As used in this section, "legislative matter" has the meaning set forth in IC 2-2.1-3-1.
    (c) (a) As used in this section, "particular matter" means:
        (1) an application;
        (2) a business transaction;
        (3) a claim;
        (4) a contract;
        (5) a determination;
        (6) an enforcement proceeding;
        (7) an investigation;
        (8) a judicial proceeding;
        (9) a lawsuit;
        (10) a license;
        (11) an economic development project; or
        (12) a public works project.
The term does not include the proposal or consideration of a legislative matter or the proposal, consideration, adoption, or implementation of a rule or an administrative policy or practice of general application.
    (d) A former state officer or former employee may not represent or assist a person regarding a particular matter involving a specific party or parties:
        (1) that was under consideration by the agency that was served by the state officer or employee; and
        (2) in which the officer or employee participated personally and substantially through:
            (A) a decision;

to the employer or to a parent or subsidiary of the employer;
before the elapse of at least three hundred sixty-five (365) days after the date on which the former state officer, employee, or special state appointee ceases to be a state officer, employee, or special state appointee.
    (c) A former state officer, employee, or special state appointee may not represent or assist a person in a particular matter involving the state if the former state officer, employee, or special state appointee personally and substantially participated in the matter as a state officer, employee, or special state appointee, even if the former state officer, employee, or special state appointee receives no compensation for the representation or assistance.
    (d) A former state officer, employee, or special state appointee may not accept employment or compensation from an employer if the circumstances surrounding the employment or compensation would lead a reasonable person to believe that:
        (1) employment; or
        (2) compensation;
is given or had been offered for the purpose of influencing the former state officer, employee, or special state appointee in the performance of his or her duties or responsibilities while a state officer, an employee, or a special state appointee.
    (e) A written advisory opinion issued by the inspector general certifying that:
        (1) employment of;
        (2) representation by; or
        (3) assistance from;
the former state officer, employee, or special state appointee does not violate this section is conclusive proof that a former state officer, employee, or special state appointee is not in violation of this section.
    SECTION 10. IC 4-2-6-11.5 IS ADDED TO THE

INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 11.5. (a) This section applies only to a person appointed after January 10, 2005.
    (b) As used in this section, "advisory body" means a board, a commission, a committee, an authority, or a task force of the executive department that is authorized only to make nonbinding recommendations.
    (c) Except as provided in subsection (d), a lobbyist (as defined in IC 4-2-7-1) may not serve as a member of a board, a commission, a committee, an authority, or a task force of the executive department.
    (d) A lobbyist (as defined in IC 4-2-7-1) may serve as a member of an advisory body.
    SECTION 11. IC 4-2-6-12 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 12. If the commission finds a violation of this chapter, a rule adopted under this chapter, or any other statute or rule governing official conduct of state officers, employees, or special state appointees in a proceeding under section 4 of this chapter, the commission may take any of the following actions:
        (1) Impose a civil penalty upon a respondent not to exceed the greater of:
            (A) three (3) times the value of any benefit received from the violation. or
            (B) ten thousand dollars ($10,000).
        (2) Cancel a contract.
        (3) Bar a person from entering into a contract with any agency for a period specified by the commission. The period specified by the commission may not exceed two (2) years from the date the action of the commission is effective.
         (4) Order restitution or disgorgement.
        (5) Reprimand, suspend, or terminate an employee or a special state appointee.
        (6) Reprimand or recommend the impeachment of a state officer.

general to do any of the following:
            (A) Withhold or unreasonably delay the production of any testimony, information, document, or thing.
            (B) Avoid legal process summoning the person to testify or supply evidence.
            (C) Fail to appear at a proceeding or investigation to which the person has been summoned.
            (D) Make, present, or use a false record, document, or thing with the intent that the record, document, or thing appear in a commission proceeding or investigation to mislead a commissioner or commission employee.
        (2) Alter, damage, or remove a record, document, or thing except as permitted or required by law, with the intent to prevent the record, document, or thing from being produced or used in a commission proceeding or investigation conducted by the inspector general.
        (3) Make, present, or use a false record, document, or thing with the intent that the record, document, or thing appear in a commission proceeding or investigation to mislead a commissioner or commission employee.
     (b) A person who knowingly or intentionally violates subsection (a) commits a Class A misdemeanor.
    SECTION 14. IC 4-2-7 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 7. The Inspector General
    Sec. 1. The following definitions apply throughout this chapter:
        (1) "Agency" means an authority, a board, a branch, a commission, a committee, a department, a division, or other instrumentality of the executive, including the administrative, department of state government. The term includes a body corporate and politic established as an instrumentality of the state. The term does not include the following:
            (A) The judicial department of state government.

prosecution of all civil actions that are brought in the name of the state of Indiana or any state agency.
    (b) In no instance under this section shall the state or a state agency be required to file a bond.
    (c) This section does not affect the authority of prosecuting attorneys to prosecute civil actions.
    (d) This section does not affect the authority of the inspector general to prosecute a civil action under IC 4-2-7-6 for the recovery of funds misappropriated, diverted, missing, or unlawfully gained.
    SECTION 16. IC 4-13-1-4.2 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 4.2. In consultation with the inspector general and the state ethics commission, the department shall, subject to this chapter, adopt rules under IC 4-22-2 requiring a person who lobbies the executive branch to register as an executive branch lobbyist.
    SECTION 17. IC 4-15-2-33 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 33. An appointing authority, or his the appointing authority's designee, or the ethics commission may, for disciplinary purposes, suspend without pay a regular employee in his division of the service for such a length of time as he considers the appointing authority, the appointing authority's designee, or the ethics commission considers appropriate, not exceeding thirty (30) days in any twelve (12) month period. With the approval of the director a regular employee may be suspended for a longer period pending the administrative investigation or trial of any charges against him. the employee. If the outcome of the charges or trial of any charges is favorable to the employee, the appointing authority shall reimburse the employee any lost wages and benefits for the suspension period less any wages the employee might have earned during the suspension period from other employment.

discussion of the complaint by the employee and his the employee's immediate supervisor and, if a mutually satisfactory settlement has not been made within two (2) consecutive working days, such the complaint may be referred to Step II.
    Step II: The complaint shall be reduced to writing and presented to the intermediate supervisor. If a mutually satisfactory settlement has not been reached within four (4) consecutive working days, such complaint may then be referred to the appointing authority.
    Step III: The appointing authority or his designated representative the appointing authority's designee shall hold such hearings a hearing, if necessary, and conduct such investigations as he deems whatever investigation the appointing authority or the appointing authority's designee considers necessary to render a decision. and shall make such The appointing authority or the appointing authority's designee must render a decision in writing within not later than ten (10) consecutive working business days from the date of the hearing, if applicable, or close of the investigation, whichever occurs later.
    Should If the appointing authority or his designated representative the appointing authority's designee does not find in favor of the employee, the complaint may be submitted within fifteen (15) calendar days to the state personnel director. The director or his the director's designee shall review the complaint and render a decision within not later than fifteen (15) calendar days after the director or the director's designee receives the complaint. If the decision is not agreeable to the employee, an appeal may be submitted by the employee in writing to the commission no not later than fifteen (15) calendar days from the date the employee has been given notice of the action taken by the personnel director or his the director's designee. After submission of the appeal, the commission shall, prior to rendering its decision, grant the appealing

employee and the appointing authority a public hearing, with the right to be represented and to present evidence. With respect to all appeals, the commission shall render its decision within thirty (30) days after the date of the hearing on the appeal. If the commission finds that the action against the employee was taken on the basis of politics, religion, sex, age, race, or because of membership in an employee organization, the employee shall be reinstated to his position without loss of pay. In all other cases the appointing authority shall follow the recommendation of the commission, which may include reinstatement and payment of salary or wages lost by the employee, which may be mitigated by any wages the employee earned from other employment during a dismissed or suspended period.
    If the recommendation of the commission is not agreeable to the employee, the employee, within fifteen (15) calendar days from receipt of the commission recommendation, may elect to submit the complaint to arbitration. The cost of arbitration shall be shared equally by the employee and the state of Indiana. The commissioner of labor shall prepare a list of three (3) impartial individuals trained in labor relations, and from this list each party shall strike one (1) name. The remaining arbitrator shall consider the issues which were presented to the commission and shall afford the parties a public hearing with the right to be represented and to present evidence. The arbitrator's findings and recommendations shall be binding on both parties and shall immediately be instituted by the commission.
    SECTION 20. IC 4-15-2-35.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 35.5. (a) This section applies only to an employee who has been suspended or terminated by the ethics commission.
    (b) An employee who has been suspended or terminated by the ethics commission may request that the ethics commission reconsider its decision by filing a written petition for reconsideration with the ethics

commission not later than fifteen (15) days after the date on which the employee was suspended or terminated. The employee must include in the petition for reconsideration a concise statement of the reasons that the employee believes that the termination or suspension was erroneous.
    (c) After receipt of the petition for reconsideration, the ethics commission shall set the matter for hearing. At the hearing, the employee is entitled to the due process protections of IC 4-21.5, including the right to:
        (1) be represented by counsel;
        (2) present relevant evidence; and
        (3) cross-examine opposing witnesses.
    (d) The ethics commission shall rule on the petition for reconsideration not later than thirty (30) days from the date of the hearing. The ethics commission may:
        (1) affirm its decision to suspend or terminate the employee;
        (2) modify its decision to suspend or terminate the employee by:
            (A) reducing the term of suspension; or
            (B) vacating its order for termination and imposing a term of suspension; or
        (3) vacate its order to suspend or terminate the employee.
    (e) If the ethics commission vacates its order to suspend or terminate the employee under subsection (d)(3), the ethics commission may order the payment of all or part of the wages lost by the employee during the period of suspension or termination.
    (f) Unless the ethics commission orders otherwise, the pendency of a petition for reinstatement does not stay the order for termination or suspension.
    (g) An employee who has filed a petition for reconsideration may not file a second or subsequent petition for reconsideration.
    (h) If the ruling by the ethics commission on the

employee's petition for reconsideration is not agreeable to the employee, the employee may submit an appeal in writing to the commission not later than fifteen (15) calendar days after the date of the ruling by the ethics commission on the petition for reconsideration. After submission of the appeal, the commission shall, before rendering its decision, grant the appealing employee and the ethics commission a public hearing, with the right to be represented and to present evidence. With respect to all appeals, the commission shall render its decision within thirty (30) days after the date of the hearing on the appeal. If the commission finds that the action against the employee was taken on the basis of politics, religion, sex, age, race, or because of membership in an employee organization, the employee shall be reinstated without loss of pay. In all other cases the ethics commission shall follow the recommendation of the commission, which may include reinstatement and payment of salary or wages lost by the employee, which may be mitigated by any wages the employee earned from other employment during a period when the employee was dismissed or suspended.
    (i) If the recommendation of the commission under subsection (h) is not agreeable to the employee, not later than fifteen (15) calendar days after receipt of commission's recommendation, the employee may elect to submit the complaint to arbitration. The cost of arbitration shall be shared equally by the employee and the state of Indiana. The commissioner of labor shall prepare a list of three (3) impartial individuals trained in labor relations, and from this list each party shall strike one (1) name. The remaining arbitrator shall consider the issues that were presented to the commission and shall afford the parties a public hearing with the right to be represented and to present evidence. The arbitrator's findings and recommendations shall be binding on both parties and shall immediately be instituted by the

commission.
    SECTION 21. IC 4-15-10-4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Any employee may report in writing the existence of:
        (1) a violation of a federal law or regulation;
        (2) a violation of a state law or rule;
        (3) a violation of an ordinance of a political subdivision (as defined in IC 36-1-2-13); or
        (4) the misuse of public resources;
first to a supervisor or appointing authority, unless the supervisor or appointing authority is the person whom the employee believes is committing the violation or misuse of public resources. In that case, the employee may report the violation or misuse of public resources in writing to either the supervisor or appointing authority or to the state ethics commission and any official or agency entitled to receive a report from the state ethics commission under IC 4-2-6-4(b)(2)(G) or IC 4-2-6-4(b)(2)(H). If a good faith effort is not made to correct the problem within a reasonable time, the employee may submit a written report of the incident to any person, agency, or organization. to a supervisor or to the inspector general.
    (b) For having made a report under subsection (a), the employee making the report may not:
        (1) be dismissed from employment;
        (2) have salary increases or employment related benefits withheld;
        (3) be transferred or reassigned;
        (4) be denied a promotion the employee otherwise would have received; or
        (5) be demoted.
    (c) Notwithstanding subsections (a) and (b), an employee must make a reasonable attempt to ascertain the correctness of any information to be furnished and may be subject to disciplinary actions for knowingly furnishing false information, including suspension or dismissal, as determined by the employee's appointing authority, or the

appointing authority's designee, or the ethics commission. However, any state employee disciplined under this subsection is entitled to process an appeal of the disciplinary action under the procedure as set forth in IC 4-15-2-34 and IC 4-15-2-35 through IC 4-15-2-35.5.
    (d) An employer who knowingly or intentionally violates this section commits a Class A infraction. misdemeanor.
    SECTION 22. IC 4-21.5-3-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 7. (a) To qualify for review of a personnel action to which IC 4-15-2 applies, a person must comply with IC 4-15-2-35 or IC 4-15-2-35.5. To qualify for review of any other order described in section 4, 5, or 6 of this chapter, a person must petition for review in a writing that does the following:
        (1) States facts demonstrating that:
            (A) the petitioner is a person to whom the order is specifically directed;
            (B) the petitioner is aggrieved or adversely affected by the order; or
            (C) the petitioner is entitled to review under any law.
        (2) Includes, with respect to determinations of notice of program reimbursement and audit findings described in section 6(a)(3) and 6(a)(4) of this chapter, a statement of issues that includes:
            (A) the specific findings, action, or determination of the office of Medicaid policy and planning or of a contractor of the office of Medicaid policy and planning from which the provider is appealing;
            (B) the reason the provider believes that the finding, action, or determination of the office of Medicaid policy and planning or of a contractor of the office of Medicaid policy and planning was in error; and
            (C) with respect to each finding, action, or determination of the office of Medicaid policy and planning or of a contractor of the office of Medicaid policy and planning, the statutes or rules that support

the provider's contentions of error.
        Not more than thirty (30) days after filing a petition for review under this section, and upon a finding of good cause by the administrative law judge, a person may amend the statement of issues contained in a petition for review to add one (1) or more additional issues.
        (3) Is filed:
            (A) if an order described in section 4, 5, 6(a)(1), or 6(a)(2) of this chapter, with the ultimate authority for the agency issuing the order within fifteen (15) days after the person is given notice of the order or any longer period set by statute; or
            (B) if a determination described in section 6(a)(3) or 6(a)(4) of this chapter, with the office of Medicaid policy and planning not more than one hundred eighty (180) days after the hospital is provided notice of the determination.
        The issuance of an amended notice of program reimbursement by the office of Medicaid policy and planning does not extend the time within which a hospital must file a petition for review from the original notice of program reimbursement under clause (B), except for matters that are the subject of the amended notice of program reimbursement.
If the petition for review is denied, the petition shall be treated as a petition for intervention in any review initiated under subsection (d).
    (b) If an agency denies a petition for review under subsection (a) and the petitioner is not allowed to intervene as a party in a proceeding resulting from the grant of the petition for review of another person, the agency shall serve a written notice on the petitioner that includes the following:
        (1) A statement that the petition for review is denied.
        (2) A brief explanation of the available procedures and the time limit for seeking administrative review of the denial under subsection (c).
    (c) An agency shall assign an administrative law judge to

conduct a preliminary hearing on the issue of whether a person is qualified under subsection (a) to obtain review of an order when a person requests reconsideration of the denial of review in a writing that:
        (1) states facts demonstrating that the person filed a petition for review of an order described in section 4, 5, or 6 of this chapter;
        (2) states facts demonstrating that the person was denied review without an evidentiary hearing; and
        (3) is filed with the ultimate authority for the agency denying the review within fifteen (15) days after the notice required by subsection (b) was served on the petitioner.
Notice of the preliminary hearing shall be given to the parties, each person who has a pending petition for intervention in the proceeding, and any other person described by section 5(d) of this chapter. The resulting order must be served on the persons to whom notice of the preliminary hearing must be given and include a statement of the facts and law on which it is based.
    (d) If a petition for review is granted, the petitioner becomes a party to the proceeding and the agency shall assign the matter to an administrative law judge or certify the matter to another agency for the assignment of an administrative law judge (if a statute transfers responsibility for a hearing on the matter to another agency). The agency granting the administrative review or the agency to which the matter is transferred may conduct informal proceedings to settle the matter to the extent allowed by law.
    SECTION 23. IC 5-11-5.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]:
     Chapter 5.5. False Claims and Whistleblower Protection
    Sec. 1. The following definitions apply throughout this chapter:
        (1) "Claim" means a request or demand for money

or property that is made to a contractor, grantee, or other recipient if the state:
            (A) provides any part of the money or property that is requested or demanded; or
            (B) will reimburse the contractor, grantee, or other recipient for any part of the money or property that is requested or demanded.
        (2) "Documentary material" means:
            (A) the original or a copy of a book, record, report, memorandum, paper, communication, tabulation, chart, or other document;
            (B) a data compilation stored in or accessible through computer or other information retrieval systems, together with instructions and all other materials necessary to use or interpret the data compilations; and
            (C) a product of discovery.
        (3) "Investigation" means an inquiry conducted by an investigator to ascertain whether a person is or has been engaged in a violation of this chapter.
        (4) "Person" includes a natural person, a corporation, a firm, an association, an organization, a partnership, a limited liability company, a business, or a trust.
        (5) "Product of discovery" means the original or duplicate of:
            (A) a deposition;
            (B) an interrogatory;
            (C) a document;
            (D) a thing;
            (E) a result of the inspection of land or other property; or
            (F) an examination or admission;
        that is obtained by any method of discovery in a judicial or an administrative proceeding of an adversarial nature. The term includes a digest, an analysis, a selection, a compilation, a derivation, an

index, or another method of accessing an item listed in this subdivision.
        (6) "State" means Indiana or any agency of state government. The term does not include a political subdivision.
    Sec. 2. (a) This section does not apply to a claim, record, or statement concerning income tax (IC 6-3).
    (b) A person who knowingly or intentionally:
        (1) presents a false claim to the state for payment or approval;
        (2) makes or uses a false record or statement to obtain payment or approval of a false claim from the state;
        (3) with intent to defraud the state, delivers less money or property to the state than the amount recorded on the certificate or receipt the person receives from the state;
        (4) with intent to defraud the state, authorizes issuance of a receipt without knowing that the information on the receipt is true;
        (5) receives public property as a pledge of an obligation on a debt from an employee who is not lawfully authorized to sell or pledge the property;
        (6) makes or uses a false record or statement to avoid an obligation to pay or transmit property to the state;
        (7) conspires with another person to perform an act described in subdivisions (1) through (6); or
        (8) causes or induces another person to perform an act described in subdivisions (1) through (6);
is, except as provided in subsection (c), liable to the state for a civil penalty of at least five thousand dollars ($5,000) and for up to three (3) times the amount of damages sustained by the state. In addition, a person who violates this section is liable to the state for the costs of a civil action brought to recover a penalty or damages.
    (c) If the factfinder determines that the person who violated this section: