Senate Bill 563 – Economic Development
Authored by Sen. Travis Holdman (R-Markle) and Sen. Erin Houchin (R-Salem)

Makes a variety of positive changes to tax policy and incentive programs intended to promote and enhance economic development. Of note, the bill allows a taxpayer to assign all or part of a venture capital investment tax credit (VCI), subject to certain limitations. Full details.

Chamber Position: Support

The Latest: Heard in conference committee on Thursday.

Indiana Chamber Action/Commentary: The Chamber testified in support of SB 563 during the conference committee hearing. While we expressed support for the legislation as a whole, we particularly emphasized support for the provision that makes the VCI tax credit transferable as it will make early stage companies more attractive for out-of-state investment. The Chamber also noted that, through its tech policy committee, it will continue efforts to develop policies that make Indiana more attractive for venture capital investment. While this bill appears on track for passage, the Chamber will be paying close attention to it during the session’s final week so the long-sought VCI transferability will become a reality.

Senate Bill 460 (Broadband Development), authored by Sen. Mark Messmer (R-Jasper), unanimously passed the House 91-0 on Monday and the Senate concurred on it Thursday 46-0. The Chamber has been a steadfast supporter of this legislation, which will promote a higher level of broadband deployment in unserved and underserved portions of the state. The expansion of broadband is critical to long-term economic development. We are very pleased that SB 460 made it across the finish line in the form it’s in and it now heads to the Governor for signature.

House Bill 1405 (Taxation of Data Centers), authored by Rep. Ed Soliday (R-Valparaiso), is headed to Gov. Holcomb’s desk after the House and Senate respectively passed the conference committee report 82-8 and 44-0. The measure provides for a state sales and use tax exemption for the purchase of certain data center equipment that is located in a data center.

The final bill is the same as the Senate-passed version of HB 1405 (reprinted March 22, 2019), except for the following changes: (1) excludes property used in the administration of a facility from the definition of “data center equipment”; (2) changes the phrase “specific transaction exemption certificate” to “specific transaction award certificate”; (3) adds a requirement that a qualified data center user must furnish a seller with an exemption certificate and a copy of the specific transaction award certificate in order to be entitled to the exemption; and (4) deletes the provision that would have required a person who is constructing or rehabilitating a facility to purchase at least 75% of the materials, services and labor from Indiana vendors in order to qualify for the exemption.

The Chamber was very supportive of the legislation. While data centers are not high-volume employers themselves, they make huge capital investments that entice their customers and affiliated service providers to locate nearby. The very presence of a data center often attracts high technology companies in need of its services. Indiana should be competing for these developments.

Resource: Adam H. Berry at (317) 264-6892 or email: [email protected]