On Monday, the Senate voted 46-0 for House Bill 1405, putting the measure on track to advance to Republican Gov. Eric Holcomb to be signed into law in the weeks ahead, once the House consents to Senate changes in the proposal.
State Rep. Ed Soliday, R-Valparaiso, the sponsor, said he intends to submit the legislation for final approval by the House as soon as possible, and not open the door to further revision by sending it instead to a House-Senate conference committee.
It previously passed the House 95-1.
Currently, the measure exempts data center equipment and most electricity used at the facility from business personal property tax as well as the state's 7 percent sales tax, on the condition that the data center developer invest up to $150 million in the project within five years.
In addition, at least 75 percent of data center construction material and labor must be sourced through Indiana vendors, and the tax exemptions expire after 25 years unless the data center investment tops $750 million, which extends the tax exemptions to 50 years.
The 50-year option was added to the legislation last week in the Senate to make Indiana's tax incentives for large data centers more competitive with other states.
"The tax structure changes in this bill will put Indiana in the top five in the country on data center tax policy," said state Sen. Mark Messmer, R-Jasper.
"This bill could be the biggest economic development bill in this session."
A data center is a facility where technology companies and other businesses store massive amounts of data, either as a back-up to their on-site equipment or to better serve users accessing videos, games, cloud computing or other online services.
The Hammond data center is planned as a $40 million, 105,000-square-foot project at the site of the former State Line Generating Plant.
But Tom Dakich, the Merrillville native developing the Hammond data center, said the tax incentives could help the facility grow into a $200 million campus with 400,000 square feet of lake-cooled data storage.
Following construction, the data center itself isn't expected to employ much more than 40 or 50 people. But Messmer said it's the ancillary jobs that make the tax incentives a prudent state investment.
"These are very high-paying jobs," Messmer said. "The anchor created by the data center creates incredible growth in the support industries and customers that locate near the the vicinity of a data center."
The legislation also provides similar tax incentives to encourage other data centers to locate elsewhere in the state.
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