As the Indiana Economic Development Corp. faces a steady stream of calls from critics for more transparency, state lawmakers from both political parties have filed legislation aimed at requiring the job-creation agency to disclose more about its activities.
While the most expansive bill targeting the Republican-led agency of Gov. Eric Holcomb’s administration comes from a Democratic critic, some GOP lawmakers also are calling for steps that would give the Legislature more influence in monitoring the IEDC.
The scrutiny comes after the agency quietly started buying up property two years ago to assemble a 10,000-acre advanced manufacturing site in Boone County known as the LEAP Research and Innovation District.
That process angered some area farmers and landowners, who called for more transparency. And opposition to the project spread to the Lafayette area once IBJ revealed the IEDC was considering tapping into Lafayette-area aquifers to pump water to service the LEAP district more than 30 miles away.
While many lawmakers acknowledge that the agency needs to be able to do some work out of public view—such as delicate negotiations with companies seeking to locate or expand in Indiana—the question increasingly has become when such information should become public and in what form the information should be presented.
“The IEDC is doing things to create jobs. I just wish we knew what their plan was,” said Senate Minority Leader Greg Taylor, an Indianapolis Democrat and a frequent critic of the quasi-public state entity. “Every taxpayer would like to know why we got into the land [acquisition] business.”
Taylor has filed Senate Bill 127, which would subject the IEDC to more stringent reporting requirements.
For one, the agency would be required to publish its annual economic incentives and compliance report on the Indiana transparency portal. That report is currently available only on the IEDC transparency portal.
The IEDC’s 2022 Economic Incentives and Compliance Report states that since 2005, the IEDC supported projects that created 147,141 jobs out of an expected 168,648 positions. It does not say which projects failed to meet their commitments.
The report also stops short of disclosing the value of the financial investments companies have actually made–it lists only the initial commitment.
Holcomb recently cited the agency’s annual stats in his State of the State address to boast that the IEDC had secured a record $28.7 billion in new capital investment commitments in 2023, a 29% increase over the $22.2 billion from the previous year.
However, the agency traditionally has not followed up that public report with a comprehensive public accounting of whether the companies met their investment targets. Taylor’s bill would require such an accounting.
The IEDC declined to say whether it would consider posting such information on its transparency portal.
“It would be premature for us to comment on legislation this early in the process,” spokeswoman Erin Sweitzer told IBJ.
A recent news story from State Affairs Indiana called into question how effective the agency is in getting companies to live up to the pledges they make in exchange for taxpayer-funded incentives.
The report found that at least one out of three projects in which a company committed to making a capital investment in exchange for a Hoosier Business Investment tax credit didn’t meet its investment targets.
The IEDC said the report doesn’t accurately reflect the agency’s record.
“To be clear, not a single tax credit or dollar goes to a company without the company delivering on a committed investment to earn that tax credit or dollar,” Secretary of Commerce David Rosenberg said in written remarks.
He also noted that Hoosier Business Investment tax credits were used in only 19% of IEDC deals in 2023.
Taylor’s bill would require other disclosures. It would mandate the IEDC and the Indiana Department of Revenue compile information on all job-creation incentives granted, including the total amount of uncollected or diverted state tax revenue resulting from each incentive, and include that information in its annual compliance report.
While that bill seems unlikely to receive a hearing in the Republican-dominated Legislature, some Republicans also are calling for more disclosure from the IEDC.
Taylor’s bill has been assigned to the Senate Committee on Commerce and Technology, which is chaired by Sen. Brian Buchanan, a Republican from Lebanon.
Buchanan filed his own proposal aimed at keeping state and local officials apprised of the IEDC’s moves, and that bill received committee approval this week and now awaits action by the full Senate.
Buchanan’s district includes parts of Boone County—where the state is amassing thousands of acres, primarily farmland, for the LEAP district.
His Senate Bill 295 would require the agency to inform local officials before purchasing more than 100 acres in one county. It also would allow House and Senate leadership to each appoint a nonvoting, advisory member to the IEDC board.
Buchanan said the bill is intended to “streamline the process of economic development in Indiana by making sure all stakeholders are involved.”
In the House, Rep. Robb Greene, a Republican from Shelbyville, filed House Bill 1157, which would prevent the IEDC from entering into nondisclosure agreements, which are seen as vital to landing large economic development deals.
Greene did not respond to IBJ’s request for an interview.
Rep. Doug Miller, a Republican from Elkhart who chairs the House Government and Regulatory Reform Committee, where the bill was assigned, also did not respond to IBJ’s request for comment.
House Speaker Todd Huston, R-Fishers, said he would be “happy to entertain information and suggestions” around increased transparency measures.
At the same time, Sweitzer said, the state also needs to protect the agency’s ability to exercise discretion when negotiating economic development deals, including entering into nondisclosure agreements.
“Nondisclosure agreements are a standard and necessary business practice and are required by most of the companies with which we negotiate,” Sweitzer told IBJ. “Without the IEDC’s ability to sign an NDA, Indiana would be eliminated from business negotiations, restricting our economic growth and impeding opportunities for Hoosiers.”
In defending the agency, Republican leaders point to its successes.
The LEAP district is viewed by economic development leaders as Indiana’s answer to North Carolina’s Research Triangle, potentially becoming a magnet for next-generation tech and manufacturing jobs. Indianapolis-based Eli Lilly and Co. already has committed to building a $3.7 billion research and manufacturing campus at the site, creating 700 jobs.
The IEDC says other projects of similar scale are in the pipeline. In June, legislators approved the agency’s request for $122 million to acquire roughly 1,000 acres of land in the district for a potential $50 billion semiconductor plant investment.
More recently, the State Budget Committee agreed to free up $180 million from the deal-closing fund to offer incentives for two advanced manufacturing projects valued at $7.2 billion, the details of which remain undisclosed.
In June, General Motors and South Korea-based Samsung SDI announced they would build a $3 billion electric vehicle battery cell plant near South Bend, creating 1,700 manufacturing jobs.
Samsung SDI also is part of a joint venture with global auto giant Stellantis that is building a more than $2.5 billion EV battery facility in Kokomo. That project is expected to create 1,400 jobs.
Huston also pointed to the initial $500 million allocated to the READI community grant program administered by the IEDC, which the agency says resulted in $12 billion worth of investment through local matches for projects such as recreational facilities, performance venues and housing projects.
But critics note that land acquisition for the ambitious LEAP district already has cost nearly $300 million, with the IEDC paying about $75,000 to $80,000 per acre for mostly farmland, according to public sales disclosure forms. On average, farmland in Indiana sells for $13,700 an acre, according to a Purdue University study.
In Tippecanoe County, some lawmakers and residents want the Legislature to require a more extensive review of the IEDC’s potential plans to withdraw as much as 100 million gallons of water a day from Lafayette-area aquifers and pump it more than 30 miles to meet possible future needs of the LEAP district.
Others just want a full accounting of the IEDC’s results.
“It’s a discussion that needs to be had,” said Stephanie Wells, executive director of the Indiana Fiscal Policy Institute, a not-for-profit that researches the impact of taxes and spending policies. “These are taxpayer dollars. This is a government program, so accountability and evaluation are critical. I understand proprietary information, but that’s not what outcome reporting is.”•