1. (a) This section applies to the following:

   1. (1) A unit that:

      1. (A) has an eligible police department or fire department; and

      2. (B) does not have a merit system established under:

         1. (i) this chapter;
         2. (ii) IC 36-1-4-14 ; or

         3. (iii) a prior statute and retained by ordinance as provided in section 1(c) of this chapter;

            for an eligible police department, fire department, or both.

   2. (2) A district or a territory that is an eligible fire department.

2. (b) For purposes of this section, a police department is eligible if the police department:

   1. (1) has at least twelve (12) active full-time, paid members; and
   2. (2) provides service to a geographic area that has a resident population of at least twenty thousand (20,000), excluding the resident population of any geographic area that the department provides service to under a mutual aid agreement.

3. (c) For purposes of this section, a fire department is eligible if the fire department:

   1. (1) has at least twelve (12) active full-time, paid members; and

   2. (2) provides service to a geographic area that has a resident population of at least twenty thousand (20,000):

      1. (A) excluding the resident population of any geographic area that the department provides service to under a mutual aid agreement; and
      2. (B) including the resident population of any geographic area within a district or territory.

4. (d) Effective January 1, 2025, a merit system is established for each eligible department that does not have a merit system unless, not later than December 31, 2024, the unit, territory, or district:

   1. (1) establishes a merit system:

      1. (A) under section 3 of this chapter, in the case of a unit; or
      2. (B) section 1.1 of this chapter, in the case of a district or territory; or
   2. (2) adopts a resolution rejecting establishment of a merit system in accordance with subsection (e).

5. (e) For each eligible department that does not have a merit system, the unit's legislative body or the governing board of the district or territory may adopt a resolution not later than December 31, 2024, that rejects the establishment of a merit system. The resolution rejecting establishment of a merit system must be adopted by an affirmative vote of at least a majority of the members of each of the following:

   1. (1) In the case of a:

      1. (A) unit, the unit's legislative body; or
      2. (B) district or territory, the governing board.

   2. (2) The active full-time, paid members of the department.

      The legislative body or governing board shall vote on the resolution first. If the legislative body or governing body votes "yes" on the resolution (thereby rejecting a merit system), the resolution shall be voted on by the active full-time, paid members of the department in accordance with the procedure set forth in section 4 of this chapter. If a majority of the active full-time, paid members of the department vote "yes" on the resolution (thereby rejecting a merit system), a merit system is not established for the department on January 1, 2025.

6. (f) If a unit, district, or territory does not reject the establishment of a merit system under subsection (e), a merit system is established on January 1, 2025, without complying with section 3 of this chapter (in the case of a unit), section 1.1 of this chapter (in the case of a district or territory), or any other law. The following apply to the merit system:

   1. (1) The merit system shall be considered to be established by the ordinance or resolution, whichever is appropriate, that adopts all of the provisions applicable to the establishing unit, district, or territory.
   2. (2) Not later than March 1, 2025, a merit commission shall be appointed that establishes or administers policies based on merit for the appointment, promotion, demotion, and dismissal of members of the department as set forth in this chapter.

7. (g) Except as provided in subsection (i), after January 1, 2025, a merit system established under this section may be amended or dissolved as follows:

   1. (1) The merit system may be amended by the:

      1. (A) unit's legislative body adopting an ordinance or resolution as provided in section 3 of this chapter; or

      2. (B) governing body adopting a resolution under section 1.1 of this chapter;

         that has the effect of amending or deleting provisions of the merit system that are left to the discretion of the unit, district, or territory under this chapter.

   2. (2) A merit system may be dissolved by following the procedure for establishing or rejecting a merit system under section 4 or 5 of this chapter. The dissolution takes effect on January 1 following the vote of at least a majority of the:

      1. (A) active full-time paid members of the department to approve the ordinance or resolution dissolving the merit system under section 4 of this chapter; or
      2. (B) members of the unit's legislative body or governing board to adopt the ordinance or resolution to dissolve the merit system under section 5 of this chapter, whichever is appropriate.

8. (h) A unit, district, or territory that rejects the establishment of a merit system under subsection (e) may adopt or attempt to adopt an ordinance or resolution that establishes a merit system for the department:

   1. (1) under this chapter or IC 36-1-4-14 , in the case of a unit; or

   2. (2) under this chapter, in the case of a district or territory;

      after December 31, 2024, and at least one (1) year after the date of the vote rejecting the merit system under subsection (e).

9. (i) After January 1, 2029, and before January 31, 2029, a unit, district, or territory that establishes a merit system under this section shall vote to either retain or dissolve the merit system. If at least a majority of the:

   1. (1) members of the legislative body or governing board; or

   2. (2) active full-time paid members of the department;

      vote to dissolve the merit system, the merit system is dissolved.

As added by P.L.207-2023, SEC.13.