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Lawmakers over the last few sessions have largely opted to leave policy decisions at the Indiana Economic Development Corp., or IEDC, up to the agency.
But Gov. Mike Braun has been signaling a different direction for the IEDC, starting with a forensic audit of the agency last year. In broad terms, Braun has said he wants the IEDC to be more focused on “Main Street” businesses and to adopt a more regional approach.
Braun’s stance on the IEDC coincides with criticism in recent years over whether the agency, which receives hundreds of millions in tax dollars a year to spend on business expansion and retention efforts, has been transparent and fiscally responsible enough.
Those factors have led to a number of bills this session focused on the IEDC. The proposals call for codifying a regional approach and stipulating how the IEDC administers tax credits, while others would add transparency and oversight mechanisms.
However, like last year, few have been given committee hearings with the deadline for committee reports just a week away. When asked about his feelings about IEDC legislation, House Speaker Todd Huston told reporters he wants to “find the right balance” of attracting large corporations while also helping grow small businesses.
“I think you can do both effectively,” Huston said. “I think you can grow Main Street, invest in Main Street, but also attract new businesses and new investments. I think we have to do both.”
Here are bills to watch regarding the IEDC.
House Bill 1101
Authored by Rep. Dave Heine, R-Fort Wayne, HB 1101 creates a regional framework for the IEDC. The bill establishes 15 economic regions and sets each region up with a commission to lead economic planning for that area.
The regional commissions would be in charge of creating strategic plans and would be the primary point of contact for the IEDC’s central office on development items.
Heine said he worked closely with Secretary of Commerce David Adams on the bill’s language and hopes to build on the success of regional development boards like the Northeast Indiana Strategic Development Commission.
“Most economic development is done at the local level,” Heine told the IBJ. “That’s what makes this regionalization, in my mind, it takes us from good to great.”
Heine said regions could appoint existing economic groups to fulfill the bill’s requirements.
A spokesman for the governor’s office did not answer if Braun has a stance on HB 1101, or any of the bills dealing with the IEDC. Braun’s legislative agenda includes a line saying “Indiana has realigned its economic development efforts around regional collaboration.”
Heine’s bill has not yet been scheduled for a committee hearing.
House Bill 1397
Another bill that turns the IEDC’s focus to more local projects is HB 1397, brought by Rep. Danny Lopez, R-Carmel.
The bill requires $50 million worth of IEDC tax credits (of the agency’s total allotment of $300 million) to go toward a new Small Town Opportunity Initiative. The new initiative would fund projects within local units of government that advance historic preservation and rehabilitate distressed buildings or sites. Projects would need a budget of $15 million or more to be eligible for the credits under the provisions of the bill.
Lopez said he’s supportive of the IEDC’s work since it’s inception, but wants to increase resources to smaller local communities
“I look at it as how you prime the pump for investment,” Lopez said. “You’ve got a mechanism there through redevelopment tax credits that if you carve out some, you can take some of the work that’s being done by community trusts and local leaders to rehab some of the properties in their own communities.”
Lopez’s bill is not currently set for a committee hearing.
Senate Bill 264
The only IEDC bill that is scheduled for a committee hearing is SB 264, which increases the limit for Economic Development for a Growing Economy, or EDGE, tax credits.
EDGE credits are designed to incentivize companies that create jobs in Indiana. Under current law, EDGE credits are equal to the incremental income tax withholdings attributable to a new position. But the bill would allow the credit to go as high as $10,000, while also expanding eligibility to companies who give employees raises of 25% or more in order to keep them in Indiana.
The measure is authored by Sen. Brian Buchanan, R-Lebanan, and Sen. Linda Rogers, R-Granger, and is set to be heard in the Senate Tax and Fiscal Policy Committee on Tuesday.
Transparency measures
Other bills dealing with the IEDC include transparency measures filed by Sen. Spencer Deery, R-West Lafayette, and Rep. Rob Greene, R-Shelbyville.
Deery has been a staunch advocate for more water withdrawal regulations and IEDC oversight after his district would have been impacted by a proposed pipeline funneling water to the LEAP Lebanon Research and Innovation District in Boone County.
Last year, Deery brought a large transparency bill that would have set up an ombudsman to investigate complaints against the IEDC, inform the legislature about IEDC projects and recommend policy for the agency.
Deery has filed similar language again this session in Senate Bill 203. The proposed legislation mandates the IEDC maintain a new transparency and compliance portal and appoint two nonvoting members to its board from the General Assembly.
“At the end of the day, we need economic development to be a priority of the state,” said Deery. “And we need the public to trust that the entities and the players involved in bringing that have their best interests and are working for them. Right now, I don’t think we can say that.”
The bill also requires the IEDC to analyze the potential impact of water, gas and electric utilities for a proposed economic development investment and requires the agency to mitigate any adverse impacts on local communities.
Deery said Braun’s administration has “corrected” some of the IEDC’s past issues, but worries that last year’s momentum for reforms could be waning.
“I think the real test would be when the time comes to do the next budget,” Deery said. “You saw in the last budget, there was a lot of decline in the IEDC’s budget, and I think that’s reflective of [shifting sentiment for transparency in the IEDC].”
Meanwhile, Rep. Rob Greene has also dusted off previous language of his with a bill that would prevent the IEDC, or any state board, from entering into nondisclosure agreements.
Such agreements are widespread in the economic development landscape, but have come under scrutiny in the past year as they often are used in early discussions about data centers.
Neither transparency bill has gotten a committee hearing.
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