Indiana’s government is considering providing a $35 million loan to Cummins Inc., a supplier of diesel engines and Onan power generators to the RV industry, according to the Indianapolis Star newspaper.

The loan or loan guarantee would help Cummins pay for developing a new generation of diesel engine. The development project was jeopardized when Paccar pulled out of the effort, according to the Indiana politicians who support the loan initiative.

Navistar remains as Cummins’ partner in the new engine development effort.

The loan to Cummins is supported by Indiana’s governor, a Democrat, and by Democratic leaders in the State Legislature. They support the loan as a way to keep R&D jobs in Indiana.

Republicans generally oppose the loan because there is no guarantee that the loan would preserve jobs in Indiana over the long-term. They cite that fact that the new engine would be built in New York state, if the development effort is successful.

The Indiana House approved the loan to Cummins but the proposal has to go before a House-Senate conference committee for possible changes.