Indiana Lawmakers Tackle Local Finance Issues in Final Bill

Legislation addresses data center payments, rental caps, and IEDC credits

Published on Feb. 28, 2026

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Indiana lawmakers passed a comprehensive local finance bill on the final day of the legislative session, addressing a range of thorny topics including local income tax allocations, rental property caps, and incentives for data centers.

Why it matters

These legislative decisions will have significant impacts on Indiana's business climate, real estate market, and economic development efforts, particularly in the technology sector which relies heavily on data centers.

The details

The bill includes provisions that allow local governments to negotiate payments in lieu of taxes (PILOT) with data center operators, set limits on rental property caps, and modify the state's economic development tax credit program (IEDC) to be more attractive to data center investments.

  • The legislative session ended on February 28, 2026.
  • The new local finance law will go into effect on July 1, 2026.

The players

Gov. Mike Braun

The Governor of Indiana who will sign the local finance bill into law.

Indiana General Assembly

The state legislature that passed the comprehensive local finance bill on the final day of the 2026 session.

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What they’re saying

“This bill strikes an important balance, supporting economic growth while also ensuring local governments have the resources they need to provide critical services.”

— Sen. Liz Brown, Chair, Senate Tax and Fiscal Policy Committee (ibj.com)

“Data centers are a key part of Indiana's tech future, and these new incentives will help us attract more of these high-impact investments.”

— Rep. Todd Huston, Speaker of the Indiana House of Representatives (ibj.com)

What’s next

The local finance bill will now go to Gov. Braun's desk for his signature, and the new law will take effect on July 1, 2026.

The takeaway

This comprehensive local finance legislation demonstrates Indiana's commitment to fostering a business-friendly environment that supports economic growth, particularly in the technology sector, while also ensuring local governments have the resources they need.