A House bill currently being deliberated on the Senate floor related to a transit authority in northwest Indiana just took a major detour and ended up in Indianapolis.

On Thursday afternoon, senators heatedly debated and eventually voted 35-12 to pass an amendment to HB 1279. The amendment 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.

Amendment author Sen. Aaron Freeman, R-Indianapolis, said the move is in response to a requirement attached to a 2014 law to allow Marion County to conduct a voter referendum on the expansion of mass transit. He said he met with IndyGo President and CEO Inez Evans about the issue, and the amendment is important to hold IndyGo accountable in following the law. He believes the amendment is "reasonable" and "narrowly tailored."

"This is not an amendment to torpedo IndyGo," Freeman said on Thursday during the session. "It is not an amendment to take away the referendum that taxpayers voted for in 2016. This is not the doomsday scenario you all are portraying it to be."

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Critics of the amendment fear that the Purple Line, which would connect Lawrence to Indianapolis and is set to begin construction next year, and the Blue Line that would service the airport, scheduled to start construction in 2023, would be in jeopardy.

"The amendment, as it’s written today, would jeopardize IndyGo’s ability to implement the plan voters supported, and the additional service IndyGo has already introduced," IndyGo said in an emailed statement.

HB 1279 would allow the Northwest Indiana Regional Development Authority to establish a non-profit organization to assist in projects within a transit development district.

What is this non-profit?

In 2016, the IndyStar reported on an unusual requirement that IndyGo establish a non-profit foundation to raise 10% of its operating funds through private donations. If that goal is not reached, the cost is passed on to IndyGo and taxpayers.

The clause was added last minute to a 2014 state law that allowed six counties, including Marion County, to hold voter referendums for mass transit projects. Originally, a 10% corporate income tax was proposed but after objections from the business community, the non-profit idea was substituted.

In 2015, nearly 60% of Marion County voters approved the 0.25% income tax hike, and it passed the City-County Council 17-8. This paved the way for IndyGo to begin building the Red Line and future Purple and Blue lines.

According to IndyGo, the Indianapolis Public Transportation Foundation was established in Aug. 2018 and received its non-profit status in June 2019.

"At the time of the legislation, IndyGo’s limited resources were focused on constructing, implementing, and launching the Red Line," a statement from IndyGo said.

The foundation board confirmed its board officers at its first meeting on Feb. 11. On Thursday, the IndyGo board approved the board members. The foundation has not yet raised any private funds.

“The idea that the Foundation would have been able to raise these funds in advance of the opening of the Red Line is not aligned with the reality of the challenges and time constraints of making a brand new non-profit operational," foundation board Chair Rick Wilson said in a statement. "The Indianapolis Public Library Foundation took in around $2 million in contributions and grants in 2017, and it was founded 51 years ago."

IndyGo said the foundation is "committed to working with community partners towards the benchmarks established in the legislation."

What happened in the Senate?

Discussion on the floor was tense at times and exasperated at others.

Sen. Timothy Lanane, D-Anderson, said the amendment should be its own bill instead, offering IndyGo and bus riders a chance to speak on the matter.

"It's not fair to the people of Marion County, it's not fair to the people that ride on those buses, it's not fair to the people that are driving those buses, it's not fair to the whole city of Indianapolis and to Indiana," he said.

Sen. Victoria Spartz, R-Noblesville, voted in favor of the amendment, arguing that this would improve Indiana's track record of legislative and fiscal oversight compared to other states.

For Sen. Michael Young, R-Indianapolis, the issue is personal for some of his constituents in Wayne Township, who he said voted against the transit referendum. He said with the future Blue Line, IndyGo will take lanes away from motorists making itmore difficult to get to the airport.

"It's nearly impossible to get through on five lanes already," he said. "Let them raise the 10%. We don't have an issue."

Sen. J.D. Ford, D-Indianapolis, said he was "strongly opposed" to the amendment and said it would have "severe, negative consequences" to Marion County's public transportation.

"This is why we can't have nice things," he said.

Sen. Eddie Melton, D-Merrillville, is one of the bill sponsors. He said the original bill would be economically beneficial for northwest Indiana.

"Let's put this in a summer study committee," he said. "I would like for us to keep this bill clean and move this forward."

What is the reaction so far?

IndyGo released this statement on Thursday:

"Over 60 percent of Marion County voters supported a 0.25% tax increase dedicated to expanding public transit including bus rapid transit and a more frequent and connected network, that was not dependent on private funds. IndyGo has already made changes to the network to increase service and plans for future capital projects with a goal of a 70% increase in service."

City-County Council president Vop Osili issued this statement:

"Today’s amendment threatens to silence their voice and deny Indianapolis residents the right to make their own decisions about transit in their city. Even more concerning, it threatens to disrupt connectivity to food, health care, education and employment for our city’s most vulnerable residents. Public transit is not only critical to economic development in Indianapolis, it is key to addressing the racial and social disparities in our community that our Council just this week unanimously pledged to end."

Councillor Ali Brown tweeted this reaction to the passage of the amendment:

What is next for the bill?

Thursday's session was the second reading in the Senate. It will get a third reading before it goes for a vote. If it passes the Senate, it will return to the House who will decide on whether to approve the Senate's amendments.

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