Sec. 6. (a) This section applies whenever a child who was born out of wedlock is:
(1) or is alleged to be a child in need of services; and
(2) under the supervision of the department or a local office as a result of a court ordered out-of-home placement.
(b) The department or the local office may refer a child's case to the local prosecuting attorney's office for the filing of a paternity action if the:
(1) identity of the alleged father is known; and
(2) department or the local office reasonably believes that establishing the paternity of the child would be beneficial to the child.
The local prosecuting attorney's office shall file a paternity action regarding each case that is referred under this subsection.