DES MOINES - State senators took a positive but cautious approach Wednesday to plans by the Branstad administration to shift the state's business recruitment effort to a public-private partnership.

Economic development activities would be conducted through a newly configured public authority and a separate non-profit entity that would be funded by private sources.

Debi Durham, a former Sioux City development executive who is Gov. Terry Branstad's choice to guide the new economic development approach, told Senate Economic Growth Committee members that the new partnership will "create something unique for Iowa." It will provide more flexibility in management staffing issues and allow the state to better use tools like incentives and industrial revenue bonds to build a package tailored to the needs of business prospects looking to create jobs in Iowa, she said.

"I'm not going to say there won't be changes, because there will be changes," she said.

Durham said she has been working with the Iowa Attorney General's Office to make certain the new private-public arrangement that she envisions complies with state laws for governmental entities. She also wants to assure the transparency needed to provide oversight and accountability for taxpayer funds for an agency that increasingly will be a one-stop shop for development programs.

"I want this to be something we're proud of," she said.

Sens. Bill Dotzler and Jeff Danielson, two Black Hawk County Democrats, pointed to problems associated with quasi-governmental entities like the former Central Iowa Employment & Training Consortium, or CIETC, and the Iowa Association of School Boards in expressing concerns that public-private models have not always worked well in Iowa.

Sen. Mark Chelgren, R-Ottumwa, expressed concern the new state entity might hurt local or regional development efforts, while Sen. Jack Hatch, D-Des Moines, said he liked that Durham was "thinking differently."

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But Hatch said he had a problem with a model that would solicit contributions to the nonprofit entity from large corporations that could "demand a seat at the table" and pose potential conflicts down the road.

"This is not a case where people are going to be buying places on the board," she said.

Durham acknowledged that the transformation of the state Department of Economic Development into a combination state authority and nonprofit entity is a "pretty sweeping change," and she likely faces a major task in selling the concept to lawmakers who must approve the new structure.

"Maybe we don't have to complete the whole vision in one year," Dotzler said. "Sometimes it's good to stick your toe in the water and check the temperature."

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