County, city, town and township governments across Indiana are racing to adopt new rules against nepotism ahead of a July 1 deadline.

Gov. Mitch Daniels signed a new law in March that prohibits local officeholders from hiring their relatives or from having public contracts with them without making certain disclosures. The law also prohibits public employees from holding any office that controls money or policies that might benefit them. Under that provision, those employees couldn't run for re-election, though they wouldn't be kicked out of office.

The Anderson City Council will review a proposed anti-nepotism ordinance next week, and Madison County commissioners will vote on a county ordinance June 19.

Alexandria has had a policy in place since 2009, and officials there plan to amend it to conform to the state law at a meeting June 18.

Mayor Jack Woods said the only major difference between Alexandria's ordinance and the state law is that the state law prohibits elected officials from hiring family members.

"When you don't have a nepotism law or policy, it can get out of hand," Woods told The Herald Bulletin. "You can have a city full of family members, and that creates a lot of problems."

During his campaign last year for mayor of Anderson, Kevin Smith criticized the former administration for hiring and promoting too many relatives.

City Attorney Jason Childers began work on a new nepotism policy earlier this year and incorporated language from the new state law when it was passed.

The law means that "individuals are placed in their positions based on their merits, rather than as a favor," Childers said.

Childers said that the statute defines the term "relative" as spouse, parent, stepparent, natural or adopted child, stepchild, brother, half brother, sister, half sister, stepbrother, stepsister, niece, nephew, aunt, uncle, daughter-in-law or son-in-law. The Anderson proposal would also cover grandchildren and first and second cousins.

The Elwood City Council adopted the law Monday, Mayor Ron Arnold said. He said he understands the law's intent, but thinks some of its provisions could be difficult for small communities.

"I would much rather have seen local municipalities have more control," he said. "Our federal government and state government sometimes uses an anvil to kill an ant, and if you don't seriously think through the ramifications, you'll hamper a small community in ways you were never intending to."