UPDATE: After returning to the House, a motion of dissent was filed on Wednesday for HB 1279, which means the chamber refused to consent to changes to the bill. A conference committee will form with representatives from both houses to work out a version of the bill they can agree upon. That version must then be voted on in both houses. If approved, it will go to the governor for signature.

ORIGINAL STORY:

A controversial amendment attached to a northwest Indiana transit bill has passed through the Senate.

House Bill 1279 passed 43-7 and will now return to the House, where lawmakers will decide whether to approve the amendments.

The amendment in question would allow the state to withhold 10% from IndyGo's annual local income tax distribution if the agency doesn't raise those funds privately in a year. It would also prohibit IndyGo from expanding its mass transit until they are compliant with the law. It was tacked onto the legislation during the second reading of the bill in the Senate.

This was done in response to a law passed in 2014 allowing Indianapolis to hold a referendum on mass-transit projects. An unusual clause was added to the law requiring IndyGo to establish a nonprofit foundation and raise 10% in operating costs privately.

The Indianapolis Public Transportation Foundation was established in August 2018 and received its nonprofit status in June 2019. The foundation board confirmed the board officers at its first meeting on Feb. 11 and on Feb. 23, it approved the board members.

Before the bill passed, IndyGo and Transit Drives Indy gathered with other community leaders at the Julia M. Carson Transit Center in Downtown Indianapolis to speak about how passage of the bill would affect the community.

IndyGo president and CEO Inez Evans said this impacts the launch of the new and frequent grid system in June, and possibly the future Purple and Blue bus rapid transit lines.

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"All of those things get rolled back," she said. "Individuals need to understand and know the investment that they asked us for, that we promised to do, these are the things voters have said they wanted. More frequent, reliable service."

She said IndyGo might not be able to afford to roll out the June service, which has been delayed twice already. The approximately $180 million in Federal Transit Administration grants could be jeopardized as well, Evans said, if the federal government sees IndyGo doesn't have a steady income stream to maintain costs.

Evans estimates they would need to raise about $5 to $6 million. IndyGo's revenue budget is $58 million and the proposed 2020 budget is $111 million.

Greg Hahn, chair of the IndyGo board, said this will have a "devastating impact on public transportation," including reducing service and cutting lines.

Sen. Aaron Freeman, R-Indianapolis, authored the amendment and said it's "reasonable" and necessary to hold IndyGo accountable in following the law.

Hahn said he sits on a number of nonprofit boards and disagrees.

"The amount that they’re asking to be raised is beyond comprehension," he said. "We have started. We got the not-for-profit status finally. That took a while. We hired a full-time director."

Hahn said IndyGo is going to its corporate partners and other companies for help but said that amount of money cannot be raised overnight. He said they were always under the assumption there was no timeline to get the foundation up and running.

"Once the Red Line got up and going, then we would go ahead and start the foundation," he said. "That’s exactly what we did."

Blake Johnson, president and CEO of IndyHub and a city-county councilor, said with this bill the Statehouse is "choosing to ignore the will of the voters." He said there's frustration that proposals can be dropped into bills without a public hearing.

"You have a handful of senators that think they know better than the voters, and I think that's not something any of us are interested in seeing come to pass," he said.

On the Senate floor, many rose to speak in favor of the bill as it would benefit northwest Indiana, even if they didn't agree with the amendment.

Sen. David Niezgodski, D-South Bend, does not agree with the amendment but said the bill would benefit the entire state of Indiana.

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"This is about jobs, this is about economic development," he said. "I don’t like what got put in here, also. I hope that does get removed, because this project is too huge to jeopardize it."

Sen. John Ruckelshaus, R-Indianapolis, said the Red Line goes straight through his district and he spent a lot of time in 2016 and 2019 knocking on thousands of doors in the city. He voted against the second reading of the bill but said he won't get in the middle of the bill moving forward.

"I’m going to vote for this bill today, because when I knocked on all those doors, I knocked as state senator," he said. "This is a state issue."

Evans, the IndyGo CEO, is concerned for the many people this could affect if the bill becomes law.

"It would break my heart if we’re not able to complete the promise that was made," she said. "The dedicated team of men and women from our office staff to our workforce, our operators, our mechanics. … This affects everyone."

Contact IndyStar reporter Kellie Hwang at 317-444-6032 or kellie.hwang@indystar.com. Follow her on Twitter: @KellieHwang.