Indiana lawmakers recently funneled $1B to the IEDC, but now debate its powers

Update Jan. 25, 2024: The Senate Committee on Commerce and Technology unanimously passed Senate Bill 295, which now heads to the Senate floor. Senate Bill 295 would add legislative members to the IEDC and require written notice prior to the organization purchasing land for development projects.

Indiana lawmakers this year are debating what kind of powers to give the Indiana Economic Development Corporation, a public-private partnership that has been behind major business announcements across the state but also the subject of scrutiny regarding the water pipeline to the LEAP development district in Boone County.

The debate has transferred into a few bills in the statehouse this year, including one led by a Republican lawmaker hoping to make Indiana a more welcome place to start a business. Other legislation from both parties aims to address concerns about the IEDC’s accountability on the often multi-million dollar incentives the organization provides businesses.

House Bill 1165, authored by Rep. Jake Teshka, R-North Liberty, would create an office focused on regulatory relief to help ease government requirements for new businesses. It passed on a vote of 8-3 out of the House Committee on Government and Regulatory Reform Tuesday morning.

Senate Bill 295, from Sen. Brian Buchanan, R-Lebanon, would add two nonvoting members from the Indiana General Assembly to the IEDC's board and require the organization to give public notice before purchasing land for business development. That bill is scheduled for a hearing before the Senate Committee on Commerce and Technology on Thursday.

Here is what you need to know:

What is the IEDC?

The Indiana Economic Development Corporation focuses on business growth and economic development. Set up as a public-private partnership, the organization is run by a board of directors that includes private business leaders. Leaders of the IEDC include Gov. Eric Holcomb and David Rosenberg, the state’s Secretary of Commerce.

The IEDC gets money from the state, but it also has a non-profit component, where private donations can support Indiana’s business efforts. The Indiana Economic Development Foundation, for example, paid for Holcomb’s 2023 trip to Japan.

The IEDC oversees a number of business and workforce related programs across the state including the Regional Economic Acceleration and Development Initiative, known as READI, which provides grants to groups around the state for projects to boost quality of life.

Gov candidates on LEAP: What Indiana governor candidates have to say about water pipeline plan to Boone County

The IEDC is also leading development of the LEAP district, a multi-billion dollar manufacturing park planned in Boone County. The project has been the subject of intense public scrutiny from protests over the annexation of property in Lebanon to discussions over whether the state has enough water to build a pipeline from the Wabash River to the LEAP district.

How much state money does the IEDC get?

The Indiana General Assembly allocated $1 billion to the IEDC for the 2024 fiscal year and $361 million for 2025 for operational, program and incentive funding, according to Erin Sweitzer, an IEDC spokesperson. Those dollars go to the IEDC from the state’s general fund.

What would House Bill 1165 do for the IEDC?

House Bill 1165 sets up a Regulatory Relief Office under the IEDC and creates an advisory council tied to the office with representatives from state agencies that follow new businesses. The purpose of the office would be to ease requirements for new businesses trying to launch in Indiana.

The Indiana Secretary of Commerce would be the executive director of the Regulatory Relief Office and be expected to prepare annual reports on its activities.

From 2023: IEDC wants to offer $120M for $3.2B manufacturing facility. For whom is unclear.

Teshka said government agencies will still have a say on what regulations are OK to let through, but he is aware of concern about the IEDC’s transparency. He considered housing the regulatory office in another agency, but ended on the IEDC because it is focused on economic development.

“The IEDC does great work,” Teshka said. “As a duly elected legislator, we need to be critical of that work, though, too and take a deeper look. Sometimes we’re not able to and so I would love to have a little bit more transparency, at least for us, so we can go back to our districts and say ‘Hey, we know what’s going on.’”

But Rep. Ed DeLaney, D-Indianapolis, told IndyStar last week the IEDC should not be in charge of an office on easing government regulations.

“It has far more freedom and discretion and it's the last place you should send such a proposal,” DeLaney said of the IEDC.

What does Senate Bill 295 do?

Senate Bill 295, allows state lawmakers to appoint two nonvoting members to the IEDC to advise the organization's board.

It also requires the IEDC to give a 30-day notice to local governments if the organization plans to purchase 100 acres or more in that community.

A Boone County Circuit Court judge last year dismissed a lawsuit from landowners who sued Lebanon and the IEDC challenging the annexation of 5,000-plus acres for the LEAP project.

What bills have Democrats written?

A Senate and a House bill, both written by Democrats, were referred to committees, but have not been heard as of Jan. 23.

Senate Bill 127, authored by Senate minority leader Greg Taylor, D-Indianapolis, would require the IEDC to disclose all records related to taxpayer-funded economic development incentives and to pursue job creation incentives from businesses that do not meet stipulations in their agreements with the state, such as capital investment levels, job numbers or promised wages.

House Bill 1331, authored by DeLaney, creates a commission to oversee Indiana’s economic development policy that can review and make suggestions about how the IEDC and local economic organizations spend dollars for development.

What does the IEDC think about these bills?

Sweitzer said it would be premature for the agency to comment on the bills under consideration during the legislative session.

IndyStar archives contributed to this story.Contact IndyStar's state government and politics reporter Brittany Carloni at brittany.carloni@indystar.com or 317-779-4468. Follow her on Twitter/X @CarloniBrittany.

This article originally appeared on Indianapolis Star: Indiana gave this economic group $1B. Now lawmakers debate its power.