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Data center tax incentives for Hammond lakeshore development headed to full House

State Rep. Ed Soliday, R-Valparaiso, right, listens Wednesday as the House Ways and Means Committee revises his proposal for tax incentives in support of the planned Digital Crossroads of America Data Center in Hammond. Following an amendment by state Rep. Todd Huston, R-Fishers, the committee co-chairman, 2nd row left, House Bill 1405 was approved 20-0.

INDIANAPOLIS — State and local tax incentives aimed at unlocking the full potential of the Digital Crossroads of America Data Center on Hammond's lakeshore won unanimous approval Wednesday following revisions by the House Ways and Means Committee.

House Bill 1405 is designed to enable the data center, currently planned as a $40 million, 105,000-square-foot project at the site of the former State Line Generating Plant, to grow into a $200 million campus with 400,000 square feet of lake-cooled data storage.

Under the amended plan, data center equipment, including computer servers, routers, wiring, software and other components, along with most electricity, would be exempt from business personal property tax as well as the state's 7 percent sales tax, provided that a Lake County data center developer invests up to $150 million in their project within five years.

Originally, the minimum investment was $100 million and all data center electricity was exempt from sales tax. The committee-approved measure only exempts electricity employed for data-related purposes, not administrative uses.

The committee also deleted a provision ending the tax incentives in seven years after data center developers last week told the panel such a short time horizon was incompatible with the long-term planning of technology companies and other likely data center users.

That pleased Peter Feldman, Digital Crossroads CEO, who said Hoosier lawmakers "took the first important step in making Indiana the most competitive state for data center advancements."

The latest version allows for 25-year tax incentives on data center investments of up to $750 million, and 50-year tax exemptions for projects larger than $750 million, with legislative review every 10 years.

"I'm not going tell you we landed on the perfect spot," said state Rep. Todd Huston, R-Fishers, the committee co-chairman. "We just tried to hit a spot that will make us competitive with other states to try to get the investment that we'd like to see."

The proposal, which is sponsored by state Reps. Ed Soliday, R-Valparaiso; Jim Pressel, R-Rolling Prairie; and Carolyn Jackson, D-Hammond; now goes to the full House for a decision on whether to advance it to the Senate.

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Statehouse Bureau Chief

Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.