The Little Calumet River Basin Development Commission was created in 1980 by the Indiana General Assembly to serve as the required local sponsor for the Little Calumet River, Indiana Flood Control and Recreation Project. The Federal project,  which was authorized for construction in the 1986 Water Resources Development Act, is designed to provide structural flood protection up to the 200-year level along the main channel of the Little Calumet River from the Illinois State Line to Martin Luther King Drive in Gary.

In March of 2012, Indiana Governor Mitch Daniels signed into law legislation changing the Commissions existing statute. The legislation: Modified the charge of the Commission from oversight over the LCR only to the entire LCR Watershed. Added four additional Commission members. Created a permanent funding source for the Commission. Created a project advisory board.