Indiana House advances data center tax-sharing bill and township consolidation proposal as session reaches midpoint

Two major measures clear the House, with Senate deliberations expected to shape final outcomes

The Indiana House of Representatives advanced two high-impact proposals in early February: a bill reshaping incentives and siting rules tied to large-scale data centers, and a separate measure aimed at consolidating certain township governments. Both now move to the Senate, where lawmakers are also weighing alternative approaches to township reorganization and changes to the data center proposal’s most controversial provisions.

Data center measure: revenue sharing tied to a contested land-use change

House Bill 1333 passed the House on Feb. 3, 2026, on a 56-43 vote. As approved, the bill would require certain data centers benefiting from Indiana’s sales tax exemption on qualifying purchases to share a portion of that savings with local government.

The House-passed version also included language that would broaden where some large industrial projects could be built by allowing development on certain agricultural land without the rezoning process typically used to trigger local public hearings. The provision drew attention from local officials and residents concerned about reduced opportunities for community input, particularly in areas experiencing pressure from large, energy-intensive developments.

Within days of House passage, Senate leaders signaled that the land-use language was not expected to move forward as written. That creates a likely fork in the bill’s path: the Senate could proceed with the revenue-sharing framework while stripping or narrowing the provisions affecting local zoning procedures.

• House vote: 56-43 on Feb. 3, 2026
• Key concept: local revenue tied to the value of sales tax exemptions used by eligible data centers
• Major dispute: whether agricultural land can be used for certain large projects without rezoning and related public process

Data center growth has intensified debate in Indiana over how to balance statewide economic development goals with local planning authority, infrastructure demands and public participation.

Township consolidation: House sends HB 1315 to the Senate

On Feb. 2, 2026, the House passed House Bill 1315 on a 55-44 vote and referred it to the Senate on Feb. 3. The proposal would require consolidation of certain townships based on factors including population, service structure and other operating conditions. Under the bill framework discussed during House consideration, smaller townships that do not operate fire departments and meet specified thresholds would be subject to reorganization into larger units of government.

The House action comes amid broader legislative activity on township governance this session. The Senate has already advanced a separate reorganization approach (Senate Bill 270) that relies on performance and reporting metrics, including measures related to public assistance activity, fire/EMS responsibilities and financial reporting compliance. With two competing structures in play, final negotiations are expected to focus on which criteria should trigger consolidation and how to preserve core services during transitions.

• HB 1315 House passage: 55-44 on Feb. 2, 2026
• Next step: Senate committee review and potential amendments
• Parallel track: SB 270, a metrics-based consolidation framework already approved by the Senate

With the session’s midpoint accelerating deadlines, both measures illustrate a central theme at the Statehouse: how Indiana allocates costs, benefits and decision-making authority as communities confront large-scale development pressures and long-standing questions about the structure of local government.