*EH1601.1*
April 2, 2025
ENGROSSED
HOUSE BILL No. 1601
_____
DIGEST OF HB 1601 (Updated April 1, 2025 11:57 am - DI 120)
Citations Affected: IC 6-1.1; IC 6-2.5.
Synopsis: Quantum research tax incentives. Amends the state sales
and use tax exemption for data centers to include projects for
investments in a quantum computing research, advanced computing,
and defense infrastructure network that result in a minimum qualified
investment within five years of at least $50,000,000.
Effective: Upon passage.
Soliday, Pressel, Jackson C, Hall
(SENATE SPONSORS — HOLDMAN, KOCH, BUCHANAN)
January 21, 2025, read first time and referred to Committee on Ways and Means.
February 13, 2025, amended, reported — Do Pass.
February 17, 2025, read second time, ordered engrossed.
February 18, 2025, engrossed. Read third time, passed. Yeas 76, nays 18.
SENATE ACTION
March 3, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
April 1, 2025, amended, reported favorably — Do Pass.
EH 1601—LS 7625/DI 129 April 2, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
ENGROSSED
HOUSE BILL No. 1601
A BILL FOR AN ACT to amend the Indiana Code concerning
economic development.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-1.1-10-54 IS ADDED TO THE INDIANA CODE
2 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
3 UPON PASSAGE]: Sec. 54. (a) As used in this section, "designating
4 body" means the fiscal body of:
5 (1) a county that does not contain a consolidated city; or
6 (2) a municipality.
7 (b) As used in this section, "eligible business" means an entity
8 that meets the following requirements:
9 (1) The entity is engaged in a business that:
10 (A) operates; or
11 (B) leases qualified property for use in;
12 one (1) or more facilities.
13 (2) The entity's qualified property is located at a facility in
14 Indiana.
15 (3) The entity, the lessor of qualified property (if the entity is
16 a lessee), and all lessees of qualified property invest in the
17 aggregate at least one hundred million dollars ($100,000,000)
EH 1601—LS 7625/DI 129 2
1 in real and personal property at one (1) or more facilities in
2 Indiana after May 1, 2025.
3 (4) The average wage of employees who are located in the
4 county or municipality and engaged in the operation of the
5 facility is at least one hundred twenty-five percent (125%) of
6 the county average wage for the county in which the facility
7 operates.
8 (c) As used in this section, "facility" has the meaning set forth
9 in IC 6-2.5-15-5.
10 (d) As used in this section, "fiscal body" has the meaning set
11 forth in IC 36-1-2-6.
12 (e) As used in this section, "municipality" has the meaning set
13 forth in IC 36-1-2-11.
14 (f) As used in this section, "qualified property" means quantum
15 safe fiber network equipment purchased after May 1, 2025, and
16 any additions to or replacements to such property.
17 (g) As used in this section, "quantum safe fiber network
18 equipment" has the meaning set forth in IC 6-2.5-15-13.3.
19 (h) A designating body may enter into an agreement with an
20 eligible business to grant the eligible business a property tax
21 exemption. In the case of a county, the exemption applies only to
22 qualified property that is located in unincorporated territory of the
23 county. In the case of a municipality, the exemption applies only to
24 qualified property that is located in the municipality. The property
25 tax exemption applies to the qualified property only if the
26 designating body and the eligible business enter into an agreement
27 concerning the property tax exemption. The agreement must
28 specify the duration of the property tax exemption. The agreement
29 may specify that if the ownership of qualified property is
30 transferred by an eligible business, the transferee is entitled to the
31 property tax exemption on the same terms as the transferor. If a
32 designating body enters into an agreement with an eligible
33 business, the qualified property owned by the eligible business is
34 exempt from property taxation as provided in the resolution and
35 the agreement.
36 (i) If a designating body enters into an agreement under
37 subsection (h) to provide a property tax exemption, the property
38 tax exemption continues for the period specified in the agreement.
39 SECTION 2. IC 6-2.5-15-0.5 IS ADDED TO THE INDIANA
40 CODE AS A NEW SECTION TO READ AS FOLLOWS
41 [EFFECTIVE UPON PASSAGE]: Sec. 0.5. As used in this chapter,
42 "advanced computing" means a computational method or
EH 1601—LS 7625/DI 129 3
1 technology, including hardware, software, and quantum safe fiber
2 network equipment, that is designed, engineered, and installed to
3 solve large, complex problems or process large data sets, including
4 quantum computing, artificial intelligence, edge computing, and
5 computational sets that use entanglement nodes that are beyond
6 the capability of classical digital computational computing.
7 SECTION 3. IC 6-2.5-15-3, AS ADDED BY P.L.256-2019,
8 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
9 UPON PASSAGE]: Sec. 3. As used in this chapter, "eligible data
10 center costs" means expenditures made:
11 (1) after December 31, 2018, for the development, acquisition,
12 construction, and operation of a facility to be used as a qualified
13 data center, including costs of land, buildings, site improvements,
14 modular data centers, computer data center equipment acquisition
15 and permitting, lease payments, site characterization and
16 assessment, engineering, and design used directly and exclusively
17 in a qualified data center; or
18 (2) after May 1, 2025, for the development, acquisition,
19 construction, and operation of a facility to be used as part of
20 a quantum computing research, advanced computing, and
21 defense infrastructure network that is connected by quantum
22 safe fiber network equipment and used for quantum research
23 or advanced computing at, or related to, a qualified military
24 installation in Indiana or the I-Light network, including costs
25 of all quantum safe fiber network equipment, rights-of-way,
26 conduit, other required access, land, buildings, site
27 improvements, modular data centers, computer data center
28 equipment acquisition and permitting, lease payments, site
29 characterization and assessment, engineering, and design used
30 directly and exclusively as part of a quantum computing
31 research, advanced computing, and defense infrastructure
32 network.
33 SECTION 4. IC 6-2.5-15-5, AS ADDED BY P.L.256-2019,
34 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
35 UPON PASSAGE]: Sec. 5. As used in this chapter, "facility" means
36 one (1) or more tracts of land in Indiana and:
37 (1) a structure or building contained on the land used
38 specifically for:
39 (A) quantum research or commercialization;
40 (B) quantum safe fiber network equipment;
41 (C) advanced computing;
42 (D) quantum research or advanced computing for the
EH 1601—LS 7625/DI 129 4
1 defense industry;
2 (E) the qualified equipment that is placed in the structure
3 or building; or
4 (F) one (1) or more quantum safe fiber networks;
5 including any structures and personal property contained on
6 the land that is required to operate a quantum safe fiber
7 network; and
8 (2) any structures and personal property contained on the land for
9 the operation of a data center;
10 in either a single location or multiple distributed locations.
11 SECTION 5. IC 6-2.5-15-5.7 IS ADDED TO THE INDIANA
12 CODE AS A NEW SECTION TO READ AS FOLLOWS
13 [EFFECTIVE UPON PASSAGE]: Sec. 5.7. As used in this chapter,
14 "I-Light" has the meaning set forth in IC 8-1-32.7-3.
15 SECTION 6. IC 6-2.5-15-6.5 IS ADDED TO THE INDIANA
16 CODE AS A NEW SECTION TO READ AS FOLLOWS
17 [EFFECTIVE UPON PASSAGE]: Sec. 6.5. As used in this chapter,
18 "interest in a quantum computing research, advanced computing,
19 and defense infrastructure network" means an entity that is the
20 owner of, the operator of, or a qualified colocation tenant in, any
21 element of a quantum safe fiber network or a quantum computing,
22 advanced computing, and defense infrastructure network.
23 (b) The term includes an interest in a portion of a quantum
24 computing research, advanced computing, and defense
25 infrastructure network.
26 SECTION 7. IC 6-2.5-15-7, AS ADDED BY P.L.256-2019,
27 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 UPON PASSAGE]: Sec. 7. As used in this chapter, "operator" means
29 an entity, other than an owner or a qualified colocation tenant,
30 operating a data center or a quantum computing research, advanced
31 computing, and defense infrastructure network pursuant to a lease
32 or other contract with the owner or a lessor. The term includes a
33 licensed property management company, a property lessor, or any other
34 individual or entity responsible for the control, oversight, or
35 maintenance of a facility. The term also includes an affiliate of an
36 operator.
37 SECTION 8. IC 6-2.5-15-9, AS ADDED BY P.L.256-2019,
38 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 UPON PASSAGE]: Sec. 9. As used in this chapter, "qualified
40 colocation tenant" means an entity that contracts with the owner or
41 operator of a:
42 (1) qualified data center; or
EH 1601—LS 7625/DI 129 5
1 (2) quantum computing, advanced computing, and defense
2 infrastructure network;
3 that is certified under this chapter to use or occupy all or part of the
4 data center or quantum computing, advanced computing, and
5 defense infrastructure network for a period of two (2) or more years.
6 SECTION 9. IC 6-2.5-15-11, AS ADDED BY P.L.256-2019,
7 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
8 UPON PASSAGE]: Sec. 11. As used in this chapter, "qualified data
9 center equipment" means data center equipment or quantum
10 computing research, advanced computing, and defense
11 infrastructure network equipment located at in a qualified data center
12 or a quantum computing research, advanced computing, and
13 defense infrastructure network.
14 SECTION 10. IC 6-2.5-15-13, AS ADDED BY P.L.256-2019,
15 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16 UPON PASSAGE]: Sec. 13. As used in this chapter, "qualified
17 investment" means, with respect to a:
18 (1) qualified data center, the aggregate nonduplicative eligible
19 data center costs expended by any entity with an interest in the
20 qualified data center; or
21 (2) quantum computing research, advanced computing, and
22 defense infrastructure network, the aggregate nonduplicative
23 eligible costs expended by any entity with an interest in the
24 quantum computing research, advanced computing, and
25 defense infrastructure network.
26 SECTION 11. IC 6-2.5-15-13.2 IS ADDED TO THE INDIANA
27 CODE AS A NEW SECTION TO READ AS FOLLOWS
28 [EFFECTIVE UPON PASSAGE]: Sec. 13.2. As used in this chapter,
29 "quantum safe fiber network" means a fiber network that includes
30 each of the following attributes:
31 (1) A deployed fiber infrastructure comprised of:
32 (A) standard single mode optical fibers (G.652.D) that are
33 compliant with the federal Trade Agreements Act of 1979
34 (Public Law 96-39, 93 Stat. 144, as amended);
35 (B) flexgrid reconfigurable photonic layer; and
36 (C) only coherent optical transponders with FIPS 140-3
37 certified L1 encryption (OTNsec) with support for external
38 key from quantum key distribution servers that are
39 compliant with the federal Trade Agreements Act of 1979
40 (Public Law 96-39, 93 Stat. 144, as amended);
41 on electronics and glass.
42 (2) A fiber infrastructure that is connected to:
EH 1601—LS 7625/DI 129 6
1 (A) a military installation of the United States of America;
2 (B) the Indiana National Guard;
3 (C) another military outlet or I-Light; or
4 (D) an institution of higher learning conducting quantum
5 computing research or advanced computing research.
6 (3) A network engineered with physical intermediate access
7 points (nodes) not more than sixty (60) miles apart.
8 (4) A network with physical intermediate access points
9 (nodes) equipped with physical access control and remote
10 monitoring.
11 (5) A network with quantum key distribution (QKD) servers
12 deployed on every fiber span.
13 (6) A network that is not used for residential broadband and
14 limited in use to less fifteen percent (15%) for commercial
15 broadband (ISP) applications.
16 (7) A network that complies with the federal Trade
17 Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144) as
18 amended.
19 SECTION 12. IC 6-2.5-15-13.3 IS ADDED TO THE INDIANA
20 CODE AS A NEW SECTION TO READ AS FOLLOWS
21 [EFFECTIVE UPON PASSAGE]: Sec. 13.3. (a) As used in this
22 chapter, "quantum safe fiber network equipment" means optical
23 gear, transmission equipment, fiber, computer equipment,
24 software, or any other equipment or software of any type
25 purchased or leased for the processing, storage, retrieval,
26 communication, or transmission of data over a quantum safe fiber
27 network that:
28 (1) is preapproved by the corporation;
29 (2) adheres to all compliance standards of the federal Trade
30 Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144, as
31 amended) throughout the entire network, including all access
32 physical intermediate access points (nodes);
33 (3) has a manufacturing origin point in North America;
34 (4) uses only coherent optics with FIPS 140-3 certified
35 encryption technology; and
36 (5) supports quantum safe algorithms that are compliant with
37 National Institute of Standards and Technology of the United
38 States Department of Commerce requirements, including
39 post-quantum cryptography and other post quantum resistant
40 cryptography implementations.
41 (b) The term includes the following:
42 (1) Installed quantum-safe optical gear and federal Trade
EH 1601—LS 7625/DI 129 7
1 Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144, as
2 amended) compliant American-made fiber optic cable.
3 (2) Servers, routers, connections, monitoring and security
4 systems, and other enabling machinery, equipment, and
5 hardware, regardless of whether the property is affixed to or
6 incorporated into real property.
7 (3) Equipment used in the operation of computer equipment
8 or software or for the benefit of a quantum computing
9 research, advanced computing, and defense infrastructure
10 network, including component parts, installations,
11 refreshments, replacements, and upgrades, regardless of
12 whether the property is affixed to or incorporated into real
13 property.
14 (4) All equipment necessary for the transformation,
15 generation, distribution, or management of electricity that is
16 required to operate advanced computer or quantum
17 computer server equipment, including substations,
18 generators, uninterruptible energy equipment, supplies,
19 conduit, fuel piping and storage, cabling, duct banks, switches,
20 switchboards, batteries, testing equipment, and backup
21 generators.
22 (5) All equipment necessary to cool and maintain a controlled
23 environment for the operation of the computer servers and
24 other components of a quantum fiber network, including
25 chillers, mechanical equipment, refrigerant piping, fuel piping
26 and storage, adiabatic and free cooling systems, cooling
27 towers, water softeners, air handling units, indoor direct
28 exchange units, fans, ducting, and filters.
29 (6) All water conservation systems, including facilities or
30 mechanisms that are designed to collect, conserve, and reuse
31 water required for the infrastructure of a quantum fiber
32 network.
33 (7) All computer server equipment, chassis, networking
34 equipment, switches, racks, fiber optic and copper cabling,
35 trays, and conduit required for a quantum fiber network.
36 (8) All conduit, ducting, and fiber optic and copper cabling
37 required for a quantum fiber network.
38 (9) All monitoring equipment and security systems.
39 (10) All software required for the operation, development,
40 and maintenance of a quantum fiber network.
41 (11) All intangible rights to use conduit or existing fibers
42 directly related to a quantum fiber network.
EH 1601—LS 7625/DI 129 8
1 (12) All tangible and intangible personal property that is
2 required for operation of each intermediate access point
3 (node) connected to a quantum fiber network, excluding
4 property used in the administration of the facility.
5 (13) Other tangible and intangible personal property that is
6 essential to the operations of a quantum fiber network,
7 excluding property used in the administration of the facility.
8 (14) All electricity used by qualified quantum fiber network
9 equipment, excluding electricity used in the administration of
10 the facility.
11 SECTION 13. IC 6-2.5-15-13.4 IS ADDED TO THE INDIANA
12 CODE AS A NEW SECTION TO READ AS FOLLOWS
13 [EFFECTIVE UPON PASSAGE]: Sec. 13.4. As used in this chapter,
14 "quantum computing research, advanced computing, and defense
15 infrastructure network" means the quantum safe fiber network
16 between two (2) or more facilities using qualified equipment to
17 create and connect qualified facilities to a quantum safe fiber
18 network that create a minimum qualified investment of at least
19 fifty million dollars ($50,000,000) on or before the fifth anniversary
20 of the issuance of the specific transaction award certificate by the
21 corporation. The term includes the land, buildings, site
22 improvements, permitting, lease payments, site characterization
23 and assessment, engineering and design, quantum safe fiber
24 network equipment, rights-of-way, and any other required access,
25 used directly to be a part of:
26 (1) a qualified advanced computing or a qualified quantum
27 computing research initiative within Indiana;
28 (2) the deployment or expansion of advanced computing,
29 within Indiana;
30 (3) the expansion of the defense industry within Indiana; or
31 (4) the quantum computing research, advanced computing
32 and defense infrastructure network connected to and used
33 for:
34 (A) quantum research (including computing,
35 communication, and networking);
36 (B) advanced computing; or
37 (C) defense infrastructure network;
38 at or related to the federal or state of Indiana military
39 installations, research universities, I-Light, or any other
40 Department of Defense or Indiana National Guard
41 installation within Indiana.
42 SECTION 14. IC 6-2.5-15-14, AS ADDED BY P.L.256-2019,
EH 1601—LS 7625/DI 129 9
1 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 UPON PASSAGE]: Sec. 14. (a) A qualified data center user or a
3 quantum computing research, advanced computing, and defense
4 infrastructure network operator that holds an interest in a qualified
5 data center or an interest in a quantum computing research,
6 advanced computing, and defense infrastructure network may
7 apply to the corporation for a specific transaction award certificate to
8 make purchases, other than the purchase of utilities described in
9 IC 6-2.5-4-5, that are exempt under this chapter. The request must be
10 on a form prescribed by the corporation.
11 (b) The corporation has exclusive authority over issues related to
12 issuing a specific transaction award certificate.
13 (c) If the corporation issues a specific transaction award certificate
14 under this chapter, the certificate must state that the facility is a
15 qualified data center or a quantum computing research, advanced
16 computing, and defense infrastructure network, as applicable.
17 (d) A specific transaction award certificate issued by the corporation
18 shall expire not later than:
19 (A) (1) twenty-five (25) years after the date of issuance; or
20 (B) (2) in the case of a qualified data center user, fifty (50)
21 years after the date of issuance if the qualified investment is seven
22 hundred fifty million dollars ($750,000,000) or greater; or
23 (3) in the case of a quantum computing research, advanced
24 computing, and defense infrastructure network operator, fifty
25 (50) years after the date of issuance if the qualified investment
26 is fifty million dollars ($50,000,000) or greater within three (3)
27 years of the issuance of the transaction award certificate.
28 SECTION 15. IC 6-2.5-15-15, AS ADDED BY P.L.256-2019,
29 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30 UPON PASSAGE]: Sec. 15. The following apply if the corporation
31 approves an application for a specific transaction award certificate:
32 (1) The corporation shall require the qualified data center user or
33 quantum computing research, advanced computing, and
34 defense infrastructure network operator, as applicable, to
35 enter into an agreement with the corporation as a condition of
36 receiving a specific transaction award certificate under this
37 chapter.
38 (2) The agreement with the corporation must include:
39 (A) a detailed description of the project that is the subject of
40 the agreement that includes documentation of compliance
41 with the requirement that the investment be specific to
42 infrastructure for the Indiana defense industry or
EH 1601—LS 7625/DI 129 10
1 quantum computing research or advanced computing;
2 (B) the duration of the specific transaction award certificate
3 and the first taxable year for which the award provided by this
4 chapter may be used; and
5 (C) a requirement that the qualified data center user or
6 quantum computing research, advanced computing, and
7 defense infrastructure network operator, as applicable,
8 annually report to the corporation on the amount of taxes that
9 were not paid by the qualified data center user or quantum
10 computing research, advanced computing, and defense
11 infrastructure network operator in connection with the
12 purchase of data center equipment or quantum computing
13 research, advanced computing, and defense infrastructure
14 network equipment, as applicable.
15 SECTION 16. IC 6-2.5-15-16, AS ADDED BY P.L.256-2019,
16 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 UPON PASSAGE]: Sec. 16. The sale of qualified data center or
18 quantum computing research, advanced computing, and defense
19 infrastructure network equipment is exempt from the state gross
20 retail tax if the qualified data center equipment or quantum
21 computing research, advanced computing, and defense
22 infrastructure network equipment, as applicable:
23 (1) is sold to a qualified data center user or a quantum
24 computing research, advanced computing, and defense
25 infrastructure network approved by the corporation under this
26 chapter; and
27 (2) will be located in a qualified data center, or is a part of a
28 quantum safe fiber network or is a part of a quantum
29 computing research, advanced computing, and defense
30 infrastructure network.
31 SECTION 17. IC 6-2.5-15-17, AS ADDED BY P.L.256-2019,
32 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 UPON PASSAGE]: Sec. 17. A qualified data center user or a
34 quantum computing research, advanced computing, and defense
35 infrastructure network operator is not entitled to the exemption
36 provided by section 16 of this chapter unless the qualified data center
37 user or the quantum computing research, advanced computing, and
38 defense infrastructure network operator provides the seller with an
39 exemption certificate on a form prescribed by the department and a
40 copy of the specific transaction award certificate issued by the
41 corporation. In the case of utilities described in IC 6-2.5-4-5, the
42 qualified data center user may issue an exemption certificate on a form
EH 1601—LS 7625/DI 129 11
1 prescribed by the department and a copy of the specific transaction
2 award certificate issued by the corporation to cover all utility purchases
3 from that seller. However, for the corporation to issue a specific
4 transaction award certificate for utilities described in IC 6-2.5-4-5, the
5 qualified data center user must agree to report and remit use tax under
6 this article to the department on the part of the utility purchases used
7 for administration of the facility.
8 SECTION 18. IC 6-2.5-15-18, AS ADDED BY P.L.256-2019,
9 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10 UPON PASSAGE]: Sec. 18. (a) This section does not apply to a
11 qualified data center user that is a qualified colocation tenant.
12 (b) (a) If the corporation determines that a qualified data center user
13 or a quantum computing research, advanced computing, and
14 defense infrastructure network operator that did not pay taxes as a
15 result of the award provided under this chapter, and is not entitled to
16 the award because of the qualified data center user's noncompliance
17 with the requirements of the sales tax award certificate agreement or
18 this chapter, the corporation shall, after giving the qualified data center
19 user or the operator an opportunity to explain the noncompliance:
20 (1) notify the department of the noncompliance; and
21 (2) request the department to impose an assessment on the
22 qualified data center user or the quantum computing research,
23 advanced computing, and defense infrastructure network
24 operator in an amount that may not exceed the sum of the taxes
25 not paid as a result of the exemption provided under this chapter
26 together with interest and penalties required or permitted by law.
27 (c) (b) Notwithstanding the provisions of IC 6-8.1-5-2, an
28 assessment under subsection (b) (a) is considered timely if the
29 department issues a proposed assessment:
30 (1) not later than one hundred eighty (180) days from the date the
31 department is notified of the noncompliance; or
32 (2) the date on which a proposed assessment could otherwise be
33 issued in a timely manner under IC 6-8.1-5-2;
34 whichever is later.
35 SECTION 19. IC 6-2.5-15-19, AS ADDED BY P.L.256-2019,
36 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
37 UPON PASSAGE]: Sec. 19. Except as provided in section 18 of this
38 chapter, if the corporation approves a qualified data center user's or a
39 quantum computing research, advanced computing, and defense
40 infrastructure network operator's application to receive a specific
41 transaction award certificate and enters into an agreement with the
42 qualified data center user or the quantum computing research,
EH 1601—LS 7625/DI 129 12
1 advanced computing, and defense infrastructure network operator
2 for a specific transaction award certificate, the corporation's
3 certification of the qualified data center or the quantum computing
4 research, advanced computing, and defense infrastructure network
5 remains in effect, even if there is a future transfer, sale, or disposition,
6 directly or indirectly, of the qualified data center or the quantum
7 computing research, advanced computing, and defense
8 infrastructure network. A subsequent owner shall enter into an
9 agreement with the corporation before the subsequent owner is entitled
10 to receive a specific transaction award certificate for the remainder of
11 the eligibility period.
12 SECTION 20. IC 6-2.5-15-20, AS ADDED BY P.L.256-2019,
13 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
14 UPON PASSAGE]: Sec. 20. Beginning in 2030, and every ten (10)
15 years thereafter, the corporation shall submit to the legislative council
16 in an electronic format under IC 5-14-6 an economic and fiscal impact
17 study evaluating the statewide impact of data center investments and
18 quantum computing research, advanced computing, and defense
19 infrastructure network investments in Indiana.
20 SECTION 21. An emergency is declared for this act.
EH 1601—LS 7625/DI 129 13
COMMITTEE REPORT
Mr. Speaker: Your Committee on Ways and Means, to which was
referred House Bill 1601, has had the same under consideration and
begs leave to report the same back to the House with the
recommendation that said bill be amended as follows:
Page 1, delete lines 1 through 17.
Delete pages 2 through 3.
Page 4, delete lines 1 through 17, begin a new paragraph and insert:
"SECTION 1. IC 6-1.1-10-54 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2026]: Sec. 54. (a) As used in this
section, "designating body" means the fiscal body of:
(1) a county that does not contain a consolidated city; or
(2) a municipality.
(b) As used in this section, "eligible business" means an entity
that meets the following requirements:
(1) The entity is engaged in a business that:
(A) operates; or
(B) leases qualified property for use in;
one (1) or more facilities.
(2) The entity's qualified property is located at a facility in
Indiana.
(3) The entity, the lessor of qualified property (if the entity is
a lessee), and all lessees of qualified property invest in the
aggregate at least one hundred million dollars ($100,000,000)
in real and personal property at one (1) or more facilities in
Indiana after June 30, 2022.
(4) The average wage of employees who are located in the
county or municipality and engaged in the operation of the
facility is at least one hundred twenty-five percent (125%) of
the county average wage for the county in which the facility
operates.
(c) As used in this section, "facility" has the meaning set forth
in IC 6-2.5-15-5.
(d) As used in this section, "fiscal body" has the meaning set
forth in IC 36-1-2-6.
(e) As used in this section, "municipality" has the meaning set
forth in IC 36-1-2-11.
(f) As used in this section, "qualified property" means quantum
safe fiber network equipment purchased after December 31, 2022,
and any additions to or replacements to such property.
(g) As used in this section, "quantum safe fiber network
EH 1601—LS 7625/DI 129 14
equipment" has the meaning set forth in IC 6-2.5-15-13.3.
(h) A designating body may enter into an agreement with an
eligible business to grant the eligible business a property tax
exemption. In the case of a county, the exemption applies only to
qualified property that is located in unincorporated territory of the
county. In the case of a municipality, the exemption applies only to
qualified property that is located in the municipality. The property
tax exemption applies to the qualified property only if the
designating body and the eligible business enter into an agreement
concerning the property tax exemption. The agreement must
specify the duration of the property tax exemption. The agreement
may specify that if the ownership of qualified property is
transferred by an eligible business, the transferee is entitled to the
property tax exemption on the same terms as the transferor. If a
designating body enters into an agreement with an eligible
business, the qualified property owned by the eligible business is
exempt from property taxation as provided in the resolution and
the agreement.
(i) If a designating body enters into an agreement under
subsection (h) to provide a property tax exemption, the property
tax exemption continues for the period specified in the agreement.
SECTION 2. IC 6-2.5-15-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 0.5. As used in this chapter,
"advanced computing" means a computational method or
technology, including hardware, software, and quantum safe fiber
network equipment, that is designed, engineered, and installed to
solve large, complex problems or process large data sets, including
quantum computing, artificial intelligence, edge computing, and
computational sets that use entanglement nodes that are beyond
the capability of classical digital computational computing.
SECTION 3. IC 6-2.5-15-3, AS ADDED BY P.L.256-2019,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 3. As used in this chapter, "eligible data center
costs" means expenditures made after December 31, 2018, 2024, for
the development, acquisition, construction, and operation of a facility
to be used:
(1) as a qualified data center; or
(2) as part of a quantum computing research, advanced
computing, and defense infrastructure network that is
connected by quantum safe fiber network equipment and used
for quantum research or advanced computing at, or related
EH 1601—LS 7625/DI 129 15
to, a qualified military installation in Indiana or the I-Light
network;
including costs of all quantum safe fiber network equipment,
rights-of-way, conduit, other required access, land, buildings, site
improvements, modular data centers, computer data center equipment
acquisition and permitting, lease payments, site characterization and
assessment, engineering, and design used directly and exclusively in a
qualified data center or as part of a quantum computing research,
advanced computing, and defense infrastructure network
described in subdivision (2).
SECTION 4. IC 6-2.5-15-5, AS ADDED BY P.L.256-2019,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 5. As used in this chapter, "facility" means one (1)
or more tracts of land in Indiana and:
(1) a structure or building contained on the land used
specifically for:
(1) quantum research or commercialization;
(2) quantum safe fiber network equipment;
(3) advanced computing;
(4) quantum research or advanced computing for the
defense industry;
(5) the qualified equipment that is placed in the structure
or building; or
(6) one (1) or more quantum safe fiber networks;
including any structures and personal property contained on
the land that is required to operate a quantum safe fiber
network; and
(2) any structures and personal property contained on the land for
the operation of a data center;
in either a single location or multiple distributed locations.".
Page 4, delete lines 22 through 33, begin a new paragraph and
insert:
"SECTION 6. IC 6-2.5-15-6.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 6.5. As used in this chapter,
"interest in a quantum computing research, advanced computing,
and defense infrastructure network" means an entity that is the
owner of, the operator of, or a qualified colocation tenant in, any
element of a quantum safe fiber network or a quantum computing,
advanced computing, and defense infrastructure network.
(b) The term includes an interest in a portion of a quantum
computing research, advanced computing, and defense
EH 1601—LS 7625/DI 129 16
infrastructure network.".
Page 4, line 37, after "owner" delete ",".
Page 4, line 37, reset in roman "or a qualified colocation tenant,".
Page 4, line 38, reset in roman "data center".
Page 4, line 38, after "data center" insert "or a".
Page 5, delete lines 3 through 28, begin a new paragraph and insert:
"SECTION 8. IC 6-2.5-15-9, AS ADDED BY P.L.256-2019,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 9. As used in this chapter, "qualified colocation
tenant" means an entity that contracts with the owner or operator of a:
(1) qualified data center; or
(2) quantum computing, advanced computing, and defense
infrastructure network;
that is certified under this chapter to use or occupy all or part of the
data center or quantum computing, advanced computing, and
defense infrastructure network for a period of two (2) or more
years.".
Page 5, line 32, reset in roman "data center".
Page 5, line 32, after "data center" insert "equipment or".
Page 5, line 34, reset in roman "data center.".
Page 5, line 34, after "center" delete "." and insert "or a".
Page 5, delete lines 37 through 39.
Page 6, line 1, reset in roman "qualified data center,".
Page 6, line 1, after "center" delete "," and insert "or a".
Page 6, line 3, reset in roman "data center".
Page 6, line 3, after "center" insert "costs or the eligible".
Page 6, line 5, after "costs" insert ", as applicable,".
Page 6, line 6, reset in roman "the qualified data center.".
Page 6, line 6, after "center." delete "." and insert "or".
Page 6, line 11, delete "capable" and insert "safe".
Page 6, line 13, delete "standard single mode" and insert ":
(A) standard single mode optical fibers (G.652.D) with
wavelengths that are between one thousand three hundred
ten (1,310) nanometers and one thousand five hundred fifty
(1,550) nanometers;
(B) quantum safe coherent routing reconfigurable line
system flexgrid optics; and
(C) wave servers that are compliant with the federal Trade
Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144, as
amended);
on electronics and glass that are deployed after December 31,
2021, with minimal splicing, that will achieve a signal loss of
EH 1601—LS 7625/DI 129 17
not more than fifteen (15) decibels. Each fiber splice may
account for not more than two-tenths (0.2) decibels per
kilometer at a wavelength of one thousand five hundred fifty
(1,550) nanometers.".
Page 6, delete lines 14 through 15.
Page 6, line 23, after "points" insert "(nodes)".
Page 6, line 24, after "with" delete "a".
Page 6, line 24, delete "point" and insert "points (nodes)".
Page 6, line 38, after "13.3." insert "(a)".
Page 6, line 39, delete "capable" and insert "safe".
Page 6, line 40, after "transmission equipment" insert ", fiber,".
Page 7, line 1, delete "capable" and insert "safe".
Page 7, line 1, delete "that is preapproved" and insert "that:
(1) is preapproved by the corporation;
(2) adheres to all compliance standards of the federal Trade
Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144, as
amended) throughout the entire network, including all access
physical intermediate access points (nodes);
(3) has a manufacturing origin point in North America;
(4) uses coherent optics or technology from D-Wave Quantum
Systems, Inc., or its successor entity, and reconfigurable line
system technology; and
(5) supports quantum safe algorithms that are compliant with
National Institute of Standards and Technology of the United
States Department of Commerce requirements, including
post-quantum cryptography and other post quantum resistant
cryptography implementations.".
Page 7, line 2, delete "by the corporation. The term includes the
following:", begin a new paragraph and insert:
"(b) The term includes the following:".
Page 7, line 3, delete "Quantum-enabled" and insert
"Quantum-safe".
Page 7, line 5, delete "cable." and insert "cable, installed after
December 31, 2021.".
Page 8, line 5, after "point" insert "(node)".
Page 8, line 18, delete "capable" and insert "safe".
Page 8, line 19, delete "quantum capable".
Page 8, line 20, after "equipment to" insert "create and".
Page 8, line 20, delete "capable" and insert "safe".
Page 8, line 27, delete "capable" and insert "safe".
Page 8, line 37, delete "research;" and insert "research (including
computing, communication, and networking);".
EH 1601—LS 7625/DI 129 18
Page 8, line 39, delete "infrastructure;" and insert "infrastructure
network;".
Page 9, line 4, reset in roman "data center user".
Page 9, line 4, after "user" insert "or a".
Page 9, line 6, reset in roman "qualified".
Page 9, line 7, reset in roman "data center".
Page 9, line 7, delete "portion of" and insert "or an interest in".
Page 9, line 10, after "purchases" insert ",".
Page 9, line 10, reset in roman "other than the purchase of utilities
described in IC 6-2.5-4-5,".
Page 9, line 17, reset in roman "data center.".
Page 9, line 17, after "center" delete "." and insert "or a".
Page 9, line 18, delete "network." and insert "network, as
applicable.".
Page 9, line 20, after "than" insert ":".
Page 9, line 21, reset in roman "(A) twenty-five (25) years after the
date of issuance; or".
Page 9, line 22, reset in roman "(B)".
Page 9, line 30, reset in roman "data center user".
Page 9, line 30, after "user" insert "or".
Page 9, line 32, after "operator" insert ", as applicable,".
Page 10, line 2, reset in roman "data center user".
Page 10, line 2, after "user" insert "or".
Page 10, line 4, after "operator" insert ", as applicable,".
Page 10, line 6, reset in roman "qualified data center user".
Page 10, line 6, after "user" insert "or".
Page 10, line 8, reset in roman "data center".
Page 10, line 8, after "center" insert "equipment or".
Page 10, line 10, after "equipment" delete "." and insert ", as
applicable.".
Page 10, line 13, reset in roman "qualified data center".
Page 10, line 13, after "center" insert "or".
Page 10, line 16, reset in roman "qualified data center".
Page 10, line 16, after "center" insert "equipment or".
Page 10, line 18, after "equipment" delete ":" and insert ", as
applicable:".
Page 10, line 19, reset in roman "qualified data center user".
Page 10, line 19, after "user" insert "or a".
Page 10, line 22, reset in roman "will be located in a qualified data".
Page 10, line 22, after "data" delete "center." and insert "center, or
is a part of a quantum safe fiber network or".
Page 10, line 27, reset in roman "qualified data center user".
EH 1601—LS 7625/DI 129 19
Page 10, line 27, after "user" insert "or a".
Page 10, line 30, reset in roman "qualified data center".
Page 10, line 31, reset in roman "user".
Page 10, line 31, after "user" insert "or the".
Page 10, line 35, reset in roman "In the case of utilities described in
IC 6-2.5-4-5, the".
Page 10, reset in roman lines 36 through 42.
Page 11, reset in roman line 1.
Page 11, line 6, reset in roman "qualified data center user".
Page 11, line 6, after "user" insert "or a".
Page 11, line 9, after "chapter," insert "and".
Page 11, line 9, reset in roman "is not entitled to the award".
Page 11, reset in roman lines 10 through 11.
Page 11, line 12, reset in roman "chapter,".
Page 11, line 12, reset in roman "qualified data center user".
Page 11, line 12, after "user" insert "or the".
Page 11, line 16, reset in roman "qualified data center user".
Page 11, line 16, after "user" insert "or the".
Page 11, line 32, reset in roman "qualified data center user's".
Page 11, line 32, after "user's" insert "or a".
Page 11, line 36, reset in roman "qualified data center user".
Page 11, line 36, after "user" insert "or the".
Page 11, line 39, reset in roman "qualified data center".
Page 11, line 39, after "center" insert "or the".
Page 11, line 42, reset in roman "qualified data center".
Page 11, line 42, after "center" delete "." and insert "or the".
Page 12, line 10, reset in roman "data center".
Page 12, line 10, after "center" insert "investments and".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to HB 1601 as introduced.)
THOMPSON
Committee Vote: yeas 20, nays 3.
EH 1601—LS 7625/DI 129 20
COMMITTEE REPORT
Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred House Bill No. 1601, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
Replace the effective dates in SECTIONS 1 through 20 with
"[EFFECTIVE UPON PASSAGE]".
Page 2, line 2, delete "June 30, 2022." and insert "May 1, 2025.".
Page 2, line 15, delete "December 31, 2022," and insert "May 1,
2025,".
Page 3, delete lines 7 through 27, begin a new paragraph and insert:
"SECTION 3. IC 6-2.5-15-3, AS ADDED BY P.L.256-2019,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3. As used in this chapter, "eligible data
center costs" means expenditures made:
(1) after December 31, 2018, for the development, acquisition,
construction, and operation of a facility to be used as a qualified
data center, including costs of land, buildings, site improvements,
modular data centers, computer data center equipment acquisition
and permitting, lease payments, site characterization and
assessment, engineering, and design used directly and exclusively
in a qualified data center; or
(2) after May 1, 2025, for the development, acquisition,
construction, and operation of a facility to be used as part of
a quantum computing research, advanced computing, and
defense infrastructure network that is connected by quantum
safe fiber network equipment and used for quantum research
or advanced computing at, or related to, a qualified military
installation in Indiana or the I-Light network, including costs
of all quantum safe fiber network equipment, rights-of-way,
conduit, other required access, land, buildings, site
improvements, modular data centers, computer data center
equipment acquisition and permitting, lease payments, site
characterization and assessment, engineering, and design used
directly and exclusively as part of a quantum computing
research, advanced computing, and defense infrastructure
network.".
Page 3, line 34, delete "(1)" and insert "(A)".
Page 3, line 35, delete "(2)" and insert "(B)".
Page 3, line 36, delete "(3)" and insert "(C)".
Page 3, line 37, delete "(4)" and insert "(D)".
EH 1601—LS 7625/DI 129 21
Page 3, line 39, delete "(5)" and insert "(E)".
Page 3, line 41, delete "(6)" and insert "(F)".
Page 5, delete lines 8 through 18, begin a new paragraph and insert:
"SECTION 10. IC 6-2.5-15-13, AS ADDED BY P.L.256-2019,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 13. As used in this chapter, "qualified
investment" means, with respect to a:
(1) qualified data center, the aggregate nonduplicative eligible
data center costs expended by any entity with an interest in the
qualified data center; or
(2) quantum computing research, advanced computing, and
defense infrastructure network, the aggregate nonduplicative
eligible costs expended by any entity with an interest in the
quantum computing research, advanced computing, and
defense infrastructure network.".
Page 5, delete lines 24 through 42, begin a new line block indented
and insert:
"(1) A deployed fiber infrastructure comprised of:
(A) standard single mode optical fibers (G.652.D) that are
compliant with the federal Trade Agreements Act of 1979
(Public Law 96-39, 93 Stat. 144, as amended);
(B) flexgrid reconfigurable photonic layer; and
(C) only coherent optical transponders with FIPS 140-3
certified L1 encryption (OTNsec) with support for external
key from quantum key distribution servers that are
compliant with the federal Trade Agreements Act of 1979
(Public Law 96-39, 93 Stat. 144, as amended);
on electronics and glass.
(2) A fiber infrastructure that is connected to:
(A) a military installation of the United States of America;
(B) the Indiana National Guard;
(C) another military outlet or I-Light; or
(D) an institution of higher learning conducting quantum
computing research or advanced computing research.
(3) A network engineered with physical intermediate access
points (nodes) not more than sixty (60) miles apart.
(4) A network with physical intermediate access points
(nodes) equipped with physical access control and remote
monitoring.
(5) A network with quantum key distribution (QKD) servers
deployed on every fiber span.
(6) A network that is not used for residential broadband and
EH 1601—LS 7625/DI 129 22
limited in use to less fifteen percent (15%) for commercial
broadband (ISP) applications.
(7) A network that complies with the federal Trade
Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144) as
amended.".
Page 6, delete lines 1 through 18.
Page 6, delete lines 33 through 35, begin a new line block indented
and insert:
"(4) uses only coherent optics with FIPS 140-3 certified
encryption technology; and".
Page 6, delete line 42, begin a new line block indented and insert:
"(1) Installed quantum-safe optical gear and federal Trade
Agreements Act of 1979 (Public Law 96-39, 93 Stat. 144, as
amended) compliant American-made fiber optic cable.".
Page 7, delete lines 1 through 3.
Page 9, delete lines 18 through 24, begin a new paragraph and
insert:
"(d) A specific transaction award certificate issued by the
corporation shall expire not later than:
(A) (1) twenty-five (25) years after the date of issuance; or
(B) (2) in the case of a qualified data center user, fifty (50)
years after the date of issuance if the qualified investment is seven
hundred fifty million dollars ($750,000,000) or greater; or
(3) in the case of a quantum computing research, advanced
computing, and defense infrastructure network operator, fifty
(50) years after the date of issuance if the qualified investment
is fifty million dollars ($50,000,000) or greater within three (3)
years of the issuance of the transaction award certificate.".
Page 12, after line 16, begin a new paragraph and insert:
"SECTION 21. An emergency is declared for this act.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to HB 1601 as printed February 13, 2025.)
HOLDMAN, Chairperson
Committee Vote: Yeas 9, Nays 3.
EH 1601—LS 7625/DI 129