HB 1270

                                                              Introduced Version
            HOUSE BILL No. 1270
                  _____
               DIGEST OF INTRODUCED BILL
Citations Affected: IC 4-12-1-13; IC 4-15-2.2; IC 31-25-2-2.
Synopsis: Department of child services employees. Provides that
salary and wage adjustments or personal service payments for the
department of child services (department) that are within established
salary classifications and schedules become effective when approved
by the director of the department (instead of the budget agency).
Specifies that the director of the department is responsible for certain
duties related to individuals who are employed in the state public
employee civil service in a position with the department (instead of the
state personnel department).
Effective: July 1, 2026.
                                 DeVon
January 6, 2026, read first time and referred to Committee on Family, Children and Human
Affairs.
2026  IN 1270—LS 6999/DI 125
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 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,
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 provision adopted), the text of the new provision will appear in this style type. Also, the
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 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   HOUSE BILL No. 1270
    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:
1     SECTION 1. IC 4-12-1-13, AS AMENDED BY P.L.9-2024,
2 SECTION 76, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 13. (a) During the interval between sessions of the
4 general assembly, the budget agency shall make regular or, at the
5 request of the governor, special inspections of the respective
6 institutions of the state supported by public funds. The budget agency
7 shall report regularly to the governor relative to the physical condition
8 of such institutions, and any contemplated action of the institution on
9 a new or important matter, and on any other subject which the budget
10 agency may deem pertinent or on which the governor may require
11 information. The budget agency shall likewise familiarize itself with
12 the best and approved practices in each of such institutions and supply
13 such information to other institutions to make their operation more
14 efficient and economical.
15     (b) Except as to officers and employees of state educational
16 institutions, the executive secretary of the governor, the administrative
17 assistants to the governor, the elected officials, and persons whose
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1 salaries or compensation are fixed by the governor pursuant to law, the
2 annual compensation of all persons employed by agencies of the state
3 shall be subject to the approval of the budget agency. Except as
4 otherwise provided by IC 4-15-2.2, the budget agency shall establish
5 classifications and schedules for fixing compensation, salaries, and
6 wages of all classes and types of employees of any state agency or state
7 agencies, and any and all other such classifications affecting
8 compensation as the budget agency shall deem necessary or desirable.
9 The classifications and schedules thus established shall be filed in the
10 office of the budget agency.
11    (c) This subsection does not apply to the department of child
12 services. Requests by an appointing authority for salary and wage
13 adjustments or personal service payments coming within such the
14 classifications and schedules established under subsection (b) shall
15 become effective when approved by, and upon the terms of approval
16 fixed by, the budget agency. All personnel requests pertaining to the
17 staffing of programs or agencies supported in whole or in part by
18 federal funds are subject to review and approval by the state personnel
19 department under IC 4-15-2.2.
20    (c) (d) The budget agency shall review and approve, for the
21 sufficiency of funds, all payments for personal services which are
22 submitted to the state comptroller for payment.
23    (d) (e) The budget agency shall review all contracts for personal
24 services or other services and no contract for personal services or other
25 services may be entered into by any agency of the state before the
26 written approval of the budget agency is given. Each demand for
27 payment submitted by an agency to the state comptroller under these
28 contracts must be accompanied by a copy of the budget agency
29 approval. No payment may be made by the state comptroller without
30 such approval. However, this subsection does not apply to a contract
31 entered into by:
32(1) a state educational institution; or
33(2) an agency of the state if the contract is not required to be
34approved by the budget agency under IC 4-13-2-14.1.
35    (e) (f) The budget agency shall review and approve the policy and
36 procedures governing travel prepared by the department of
37 administration under IC 4-13-1, before the travel policies and
38 procedures are distributed.
39    (f) (g) Except as provided in subsections (g), (h), and (i), (h), (i),
40 and (j), the budget agency may adopt such policies and procedures not
41 inconsistent with law as it may deem advisable to facilitate and carry
42 out the powers and duties of the agency, including the execution and
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1 administration of all appropriations made by law. IC 4-22-2 does not
2 apply to these policies and procedures.
3    (g) (h) The budget agency may not enforce or apply any policy or
4 procedure, unless specifically authorized by this chapter or an
5 applicable statute, against or in relation to the following officials or
6 agencies, unless the official or agency consents to comply with the
7 policy or procedure, or emergency circumstances justify extraordinary
8 measures to protect the state's budget or fiscal reserves:
9(1) The judicial department of the state.
10(2) The general assembly, the legislative services agency, or any
11other entity of the legislative department of the state.
12(3) The attorney general.
13(4) The state comptroller.
14(5) The secretary of state.
15(6) The treasurer of state.
16    (h) (i) The budget agency may not enforce a policy or procedure
17 against an official or an agency specified in subsection (g)(1) (h)(1)
18 through (g)(6) (h)(6) by refusing to allot money from the state agency
19 contingency fund to the official or agency without review by the budget
20 committee.
21    (i) (j) The budget agency may not withhold or refuse to allot
22 appropriations for a state educational institution without review by the
23 budget committee.
24    (k) Salary and wage adjustments or personal service payments
25 coming within the classifications and schedules established by the
26 budget agency under subsection (b) for the department of child
27 services shall become effective when approved by the appointing
28 authority of the department of child services.
29    SECTION 2. IC 4-15-2.2-15, AS AMENDED BY P.L.205-2019,
30 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31 JULY 1, 2026]: Sec. 15. The director shall do the following:
32(1) Direct and supervise all administrative and technical activities
33of the department.
34(2) Survey the administrative organization and procedures,
35including personnel procedures, of all state agencies, and submit
36to the governor measures to do the following among state
37agencies:
38(A) Secure greater efficiency and economy.
39(B) Minimize the duplication of activities.
40(C) Effect better organization and procedures.
41(3) Develop personnel policies, methods, procedures, and
42standards for all state agencies.
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1(4) Establish and maintain a roster of all employees in the state
2civil service.
3(5) Prepare, or cause to be prepared, a classification and pay plan
4for the state civil service. The director shall annually review
5the:
6(A) classification plan for the state civil service for
7department of child services employees with the director
8of the department of child services to ensure employees are
9properly classified; and
10(B) pay plan for the state civil service for department of
11child services employees with the director of the
12department of child services.
13(6) Administer the classification and pay plan prepared under
14subdivision (5).
15(7) In the case of:
16(A) the department of child services, facilitate the
17allocation of each position in the state civil service with the
18department of child services to its proper class, as
19determined by the director of the department of child
20services or the designee of the director of the department
21of child services; and
22(B) a state agency not described in clause (A), allocate each
23position in the state civil service to its proper class.
24(8) In the case of:
25(A) the department of child services, facilitate the
26onboarding of individuals for appointment to positions in
27the state civil service with the department of child services,
28at the request of the director of the department of child
29services or the designee of the director of the department
30of child services; and
31(B) a state agency not described in clause (A), approve
32individuals for appointment to positions in the state civil
33service.
34(9) In the case of:
35(A) the department of child services, facilitate the transfer,
36demotion, or promotion of employees within the state civil
37service in positions with the department of child services at
38the request of the director of the department of child
39services or the designee of the director of the department
40of child services; and
41(B) a state agency not described in clause (A), approve
42employees for transfer, demotion, or promotion within the
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1state civil service.
2(10) In the case of:
3(A) the department of child services, facilitate the
4suspension, layoff, or dismissal of employees within the
5state civil service in positions with the department of child
6services at the request of the director of the department of
7child services or the designee of the director of the
8department of child services; and
9(B) a state agency not described in clause (A), approve
10employees for suspension, layoff, or dismissal from the state
11civil service.
12(11) In the case of:
13(A) the department of child services, facilitate the process
14of rating the service of department of child services
15employees, to be carried out by the department of child
16services; and
17(B) a state agency not described in clause (A), rate the
18service of employees.
19(12) Arrange, in cooperation with the directors of the divisions of
20the service, for employee training.
21(13) Make available employee relations specialists to help
22employees:
23(A) resolve employment related problems; and
24(B) understand the procedures that are available for redress of
25grievances that the employee relations specialists do not
26resolve; and
27(14) (C) investigate systems of appointment and promotion in
28operation in various departments or divisions of the state
29government.
30(15) (14) This subdivision does not apply to positions in the
31state civil service with the department of child services.
32Investigate and approve the need for existing and new positions
33in the state civil service.
34(16) (15) Investigate periodically the operation and effectiveness
35of this chapter and rules adopted under this chapter.
36(17) (16) Implement, administer, and enforce this chapter and
37rules and policies adopted under this chapter.
38(18) (17) Appoint employees, experts, and special assistants, as
39necessary, to effectively carry out this chapter.
40(19) (18) Perform any other lawful acts that the director considers
41necessary or desirable to carry out this chapter.
42(20) (19) Perform any other duties imposed by this chapter or
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1assigned by the governor.
2(21) (20) Provide offices, rooms, and staff assistance to the office
3of administrative law proceedings established by IC 4-15-10.5-7.
4     SECTION 3. IC 4-15-2.2-24, AS ADDED BY P.L.229-2011,
5 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
6 JULY 1, 2026]: Sec. 24. (a) An employee in the unclassified service is
7 an employee at will and serves at the pleasure of the employee's
8 appointing authority.
9     (b) Except as provided in subsection (c), an employee in the
10 unclassified service may be dismissed, demoted, disciplined, or
11 transferred for any reason that does not contravene public policy.
12     (c) This subsection applies only to the department of child
13 services. An employee in the unclassified service in a position with
14 the department of child services may be dismissed, demoted,
15 disciplined, or transferred by the director of the department of
16 child services or by the designee of the director of the department
17 of child services for any reason that does not contravene public
18 policy.
19     SECTION 4. IC 4-15-2.2-26, AS AMENDED BY P.L.182-2025,
20 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
21 JULY 1, 2026]: Sec. 26. (a) This subsection does not apply for
22 purposes of positions in the state civil service with the department
23 of child services. The director, after consulting with appointing
24 authorities and other qualified authorities, shall determine, or cause to
25 be determined, the authority, duties, and responsibilities of all positions
26 in the state civil service.
27     (b) The director shall prepare a classification plan that groups all
28 positions in the state civil service in classes, based on the authority,
29 duties, and responsibilities of each position. However, positions with
30 the department of child services shall be grouped in the
31 classification plan as determined by the director of the department
32 of child services. The classification plan must set forth, for each class
33 of positions, the class title and a statement of the authority, duties, and
34 responsibilities of the class. Each class of positions may be subdivided,
35 and classes may be grouped and ranked in such manner as the director
36 considers appropriate.
37     (c) The director periodically shall:
38(1) review the positions in state civil service; and
39(2) except as provided in subsection (e), reallocate the positions
40to the proper classes based on the duties and responsibilities of
41the positions at the time of the review under subdivision (1).
42     (d) Upon request by the budget director under IC 4-13-2-18(k), the
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1 director shall:
2      (1) review permanent full-time positions which have been vacant
3      for, in the case of the department of child services, one
4      hundred twenty (120) days, and, in the case of any other state
5      agency, ninety (90) days; and
6      (2) either:
7(A) reallocate a vacant position to the proper class based on
8the duties and responsibilities of the position at the time of the
9review under subdivision (1); or
10(B) eliminate the position from state civil service.
11    (e) The director may carry out the reallocation of positions with
12 the department of child services under subsection (c)(2) only after
13 receiving a final proposal for the reallocation of positions from the
14 director of the department of child services.
15    SECTION 5. IC 4-15-2.2-30, AS ADDED BY P.L.229-2011,
16 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2026]: Sec. 30. (a) Except as provided in subsection (b), an
18 application for employment may be rejected if the department
19 determines that the applicant:
20      (1) lacks any of the required qualifications;
21      (2) is incapable of performing the essential functions of the
22      position that the applicant is seeking;
23      (3) (1) has been convicted of a crime;
24      (4) (2) has been dismissed from the public service;
25      (5) (3) has made a false statement of a material fact; or
26      (6) (4) committed or attempted to commit a fraud or deception in
27      connection with submitting an application or attempting to secure
28      an appointment to the state civil service.
29    (b) An appointing authority may waive application of this
30 section in writing if the written waiver is signed by the appointing
31 authority and submitted to the department.
32    SECTION 6. IC 4-15-2.2-36, AS ADDED BY P.L.229-2011,
33 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
34 JULY 1, 2026]: Sec. 36. (a) In cooperation with appointing authorities,
35 the director shall establish, and may periodically amend:
36      (1) the standards of performance for employees;
37      (2) in the case of employees of any state agency except for the
38      department of child services, the expected outcomes for
39      employees; and
40      (3) a system of service ratings based upon the standards described
41      in subdivisions (1) and (2).
42    (b) Employee performance standards and expected outcomes must
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1 be specific, measurable, achievable, relevant to the strategic objective
2 of the employee's state agency or state institution, and time sensitive.
3 Performance standards and expected outcomes must be approved
4 by an agency's appointing authority.
5     (c) Each employee at all levels of the state civil service shall be held
6 accountable for participating in the process of establishing the
7 standards, outcomes, and ratings described in this section.
8     (d) Each appointing authority shall, at periodic intervals (but at least
9 annually), make, and report to the director, service ratings for the
10 employees in the appointing authority's division of the service. As
11 requested by the director, the appointing authority shall provide the
12 information on which the appointing authority relied in determining a
13 service rating.
14     (e) Service ratings may be used as follows:
15(1) To determine salary increases and decreases within the limits
16established by law and by the pay plan developed under section
1727 of this chapter.
18(2) As a factor in making promotions.
19(3) As a means of discovering employees:
20(A) who are candidates for promotion or transfer; or
21(B) who, because of a low service rating, are candidates for
22demotion or dismissal.
23     SECTION 7. IC 4-15-2.2-40, AS ADDED BY P.L.229-2011,
24 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
25 JULY 1, 2026]: Sec. 40. (a) An The appointing authority of each state
26 agency has the authority to lay off or furlough employees or to reduce
27 hours of employment for any of the following reasons:
28(1) Lack of funds.
29(2) A reduction in spending authorization.
30(3) Lack of work.
31(4) Efficiency.
32     (b) The appointing authority of each state agency has the authority
33 to determine the extent, effective dates, and length of a layoff, furlough,
34 or reduction in hours taken under subsection (a).
35     (c) The appointing authority shall determine the classifications
36 affected and the number of employees laid off in each classification
37 and county to which a layoff applies.
38     (d) (c) In determining a layoff, the appointing authority must
39 consider all employees under the same appointing authority, within the
40 classification affected, and within the county affected, and consider
41 service ratings first. Thereafter, consideration may be given to may
42 consider, in no particular order, the following relevant factors:
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1(1) Disciplinary record.
2(2) Knowledge, skill, and ability.
3(3) Seniority.
4(4) Service ratings.
5     SECTION 8. IC 4-15-2.2-41, AS ADDED BY P.L.229-2011,
6 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2026]: Sec. 41. (a) This section does not apply to a former
8 employee of the department of child services.
9     (b) As used in this section, "state seniority" means the length of an
10 employee's unbroken, continuous state employment.
11     (b) (c) A former employee in the state civil service system has a
12 right of recall to the classification from which the employee was laid
13 off. Recall rights under this section are to positions under the same
14 appointing authority and in the same or a contiguous county from
15 which a former employee was laid off.
16     (c) (d) A former employee must assert in a timely manner the claim
17 of entitlement to recall in response to the official posting of a vacancy.
18     (d) (e) A recall under this section is contingent upon the former
19 employee having the knowledge, skill, and ability to perform the duties
20 of the position for which the former employee is applying.
21     (e) (f) The appointing authority shall recall former employees in the
22 order of the employees' service ratings. In the event of a tie in service
23 ratings, the right to recall is determined by state seniority. If there is a
24 tie in state seniority, the former employee with the highest number
25 comprised of the last four (4) digits of the employee's Social Security
26 number is the employee recalled.
27     (f) (g) The right to recall under this section expires on the earlier of:
28(1) one (1) year after date the employee is laid off; or
29(2) the date the employee is reemployed in a permanent position.
30     (g) (h) For state seniority purposes, an employee who becomes
31 reemployed within one (1) year after the date the employee is laid off
32 is considered to have unbroken, continuous state employment, except
33 that the time that the employee spent in out-of-pay status as a result of
34 the layoff must be deducted from the employee's total seniority.
35     SECTION 9. IC 31-25-2-2 IS REPEALED [EFFECTIVE JULY 1,
36 2026]. Sec. 2. The director may employ necessary personnel to carry
37 out the department's responsibilities subject to:
38(1) the budget agency's approval under IC 4-12-1-13; and
39(2) IC 4-15-2.2.
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