SB 281

                                               *ES0281.1*
                                                              February 12, 2026
              ENGROSSED
           SENATE BILL No. 281
                 _____
  DIGEST OF SB 281 (Updated February 11, 2026 5:45 pm - DI 125)
Citations Affected: IC 5-28; IC 6-3.1; IC 36-7; IC 36-7.6.
Synopsis: Income tax credits. Requires the Indiana economic
development corporation (IEDC) to commit $35,000,000 in
redevelopment tax credits each state fiscal year among development
authorities, qualified nonprofit organizations, and certain local
economic development organizations that may be granted to taxpayers
for qualified investments. Provides that the IEDC and an operating
partner shall administer the federal Unmanned Aircraft System Test
Site program in Indiana. Requires that $15,000,000 of the
$300,000,000 of the IEDC's annual certifiable tax credit amount must
be allocated to the small town opportunity initiative (initiative).
Establishes the initiative. Provides that initiative projects are not
subject to any statutory or administrative repayment obligation.
Amends the venture capital investment tax credit (tax credit) to specify:
(1) that certain investment policies of funds that qualify as a "qualified
                    (Continued next page)
Effective: Upon passage; July 1, 2026.
      Goode, Mishler, Niezgodski
                (HOUSE SPONSORS — LOPEZ, SNOW)
   January 12, 2026, read first time and referred to Committee on Tax and Fiscal Policy.
   January 20, 2026, amended, reported favorably — Do Pass.
   January 27, 2026, read second time, amended, ordered engrossed.
   January 28, 2026, engrossed.
   January 29, 2026, read third time, passed. Yeas 42, nays 6.
                                 HOUSE ACTION
   February 2, 2026, read first time and referred to Committee on Ways and Means.
   February 12, 2026, amended, reported — Do Pass.
ES 281—LS 6974/DI 120
Digest Continued
Indiana investment fund" apply only to investable capital, excluding
management fees, legal fees, and other expenses incurred in the
operation of the fund; (2) that a taxpayer is not prevented from
combining individual tax credits of less than $10,000 for assignment;
and (3) qualified business eligibility. Provides that if a Level 2 certified
technology park (park): (1) has reached the limit of deposits for a Level
2 park; (2) maintains its certification; and (3) is located within a
qualified military base enhancement area; the park shall become a
Level 3 park and may receive an additional annual incremental income
tax deposit of up to $250,000 until July 1, 2029.
ES 281—LS 6974/DI 120
                                                                           February 12, 2026
            Second Regular Session of the 124th General Assembly (2026)
 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 2025 Regular Session of the General Assembly.
                      ENGROSSED
                   SENATE BILL No. 281
    A BILL FOR AN ACT to amend the Indiana Code concerning
 taxation.
     Be it enacted by the General Assembly of the State of Indiana:
1    SECTION 1. IC 5-28-6-9, AS AMENDED BY P.L.213-2025,
2 SECTION 69, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 9. (a) Subject to subsection (c), the aggregate
4 amount of applicable tax credits that the corporation may certify:
5(1) for each state fiscal year ending on or before June 30, 2025,
6for all taxpayers is two hundred fifty million dollars
7($250,000,000); and
8(2) for each state fiscal year ending on or after July 1, 2025, for all
9taxpayers is three hundred million dollars ($300,000,000), fifteen
10million dollars ($15,000,000) of which must be allocated to
11fund qualified community projects within local government
12units under IC 6-3.1-34-24. Each certification under this
13subdivision is subject to budget committee review.
14    (b) For purposes of determining the amount of applicable tax credits
15 that have been certified for a state fiscal year, the following apply:
16(1) An applicable tax credit is considered awarded in the state
17fiscal year in which the taxpayer can first claim the credit,
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                                     2
1determined without regard to any carryforward period or
2carryback period.
3(2) An applicable tax credit awarded by the corporation before
4July 1, 2022, shall be counted toward the aggregate credit
5limitation under this section.
6(3) If an accelerated credit is awarded under IC 6-3.1-26-15, the
7amount counted toward the aggregate credit limitation under this
8section for a state fiscal year shall be the amount of the credit for
9the taxable year described in subdivision (1) prior to any discount.
10    (c) Notwithstanding subsection (a), if the corporation determines
11 that:
12(1) an applicable tax credit should be certified in a state fiscal
13year; and
14(2) certification of the applicable tax credit will result in an
15aggregate amount of applicable tax credits certified for that state
16fiscal year that exceeds the maximum amount provided in
17subsection (a);
18 the corporation may, after review by the budget committee, certify the
19 applicable tax credit to the taxpayer.
20    (d) This section expires December 31, 2032.
21    SECTION 2. IC 5-28-44 IS ADDED TO THE INDIANA CODE AS
22 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON
23 PASSAGE]:
24    Chapter 44. Unmanned Aircraft Systems Test Site
25    Sec. 1. In enacting this chapter, it is the intent of the general
26 assembly to advance the state's leadership position in technologies
27 related to unmanned aircraft systems to foster more opportunities
28 for citizens of the state with respect to unmanned aircraft system
29 technology and related industries and to support the federal
30 government in research, development, and testing in support of
31 commerce and national security. The general assembly finds the
32 following:
33(1) The FAA announced on January 8, 2026, that Indiana is
34designated as a test site for UAS.
35(2) The FAA notes that test sites help the United States assess
36emerging technologies to modernize methods for cargo
37delivery, Beyond Visual Line of Sight operations, and multiple
38UAS operations while informing safety and security, ushering
39in the safe commercialization of UAS technologies and fully
40integrating UAS into the national airspace system.
41(3) Indiana's designation as a test site was the result of a
42competitive process against other states and a joint
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1application between the corporation and the operating
2partner. The proposal was developed under a contract
3between the corporation and the operating partner to pursue
4similar federal programs.
5(4) The FAA test site will require substantial reporting and
6compliance activities to comply with federal laws and
7regulations governing the federal UAS Test Site Program and
8ancillary activities and is desirable for efficiency, clarity, and
9transparency to avoid duplicating regulatory schemes at the
10federal and state levels.
11     Sec. 2. As used in this chapter, "FAA" means the Federal
12 Aviation Administration.
13     Sec. 3. As used in this chapter, "operating partner" means the
14 Indiana based nonprofit corporation that partners with the
15 corporation to operate and maintain the UAS test site under
16 supervision of the corporation.
17     Sec. 4. As used in this chapter, "test site" means the Indiana
18 UAS test site awarded to the corporation by the FAA.
19     Sec. 5. As used in this chapter, "UAS" means an unmanned
20 aircraft system, including counter UAS and other related entities.
21     Sec. 6. Notwithstanding any other law, during the period that
22 the test site remains subject to federal requirements as part of the
23 UAS Test Site Program operated by the FAA, the corporation and
24 operating partner are not subject to any state law concerning the
25 following for purposes of operating the test site:
26(1) State procurement requirements.
27(2) State contracting requirements.
28(3) State fee setting requirements.
29     Sec. 7. (a) The operating partner shall establish a bank account
30 that is separate and segregated from any other bank account under
31 the operating partner's control and administer all funds for the test
32 site in the bank account.
33     (b) The operating partner may administer and deposit all
34 income, earnings, and other receipts accrued through operation of
35 the test site in the bank account, including any state or federal
36 funding received through a contract, or as a grant or loan.
37     (c) The operating partner may expend money from the bank
38 account for operations of the test site, including costs for
39 administration, staffing, equipment, test site activities,
40 communications, and marketing. The operating partner may
41 transfer revenue from the bank account to the corporation or any
42 other state agency to be used for the following purposes:
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1(1) To procure UAS technology for use by the state.
2(2) To pursue federal funding for activities related to UAS
3that benefit the state.
4(3) To support economic development activities related to
5UAS research or manufacturing.
6     (d) The operating partner shall keep a full and complete record
7 of funds received and disbursed by the operating partner. The
8 report is subject to audit and must be submitted to the corporation
9 board not later than July 1 of each year, or more often as required
10 by the corporation.
11     Sec. 8. The state examiner, or deputy examiners, field
12 examiners, or private examiners, shall make a full and complete
13 report of the records and receipts of the test site.
14     Sec. 9. The operating partner shall do the following:
15(1) Respond to requests from local, regional, or state
16economic development organizations for assistance with
17economic activities intended to attract companies, or to
18develop clusters of activity, within the UAS sector.
19(2) Respond to requests from state agencies for expertise
20related to the procurement of UAS technology.
21(3) Respond to requests from state agencies for assistance
22with the development of new UAS test activities within
23particular economic sectors.
24     Sec. 10. The operating partner is responsible for carrying out
25 the FAA's requirements and obligations for the safe operation and
26 maintenance of the test site and for managing the day to day
27 operations of the test site under supervision of the corporation.
28     Sec. 11. (a) Notwithstanding any other law, the corporation may
29 enter into an agreement with the operating partner to fulfill the
30 requirements of this chapter and any other applicable requirement
31 from the FAA or another federal agency.
32     (b) The corporation may dedicate resources as determined
33 necessary and appropriate by the corporation to support the
34 implementation and ongoing operation of the test site, including
35 staff support, administrative support, and direct financial support.
36     SECTION 3. IC 6-3.1-24-7, AS AMENDED BY P.L.172-2011,
37 SECTION 66, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
38 JULY 1, 2026]: Sec. 7. (a) The Indiana economic development
39 corporation shall certify that a business is a qualified Indiana business
40 if the corporation determines that the business:
41(1) has its headquarters in Indiana;
42(2) is primarily focused on professional motor vehicle racing,
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1      commercialization of research and development, technology
2      transfers, or the application of new technology, or is determined
3      by the Indiana economic development corporation to have
4      significant potential to:
5(A) bring substantial capital into Indiana;
6(B) create jobs;
7(C) diversify the business base of Indiana; or
8(D) significantly promote the purposes of this chapter in any
9other way;
10      (3) has had average annual revenues of less than ten million
11      dollars ($10,000,000) in the two (2) years preceding the year in
12      which the business received qualified investment capital from a
13      taxpayer claiming a credit under this chapter;
14      (4) has:
15(A) at least fifty percent (50%) of its employees residing in
16Indiana; or
17(B) at least seventy-five percent (75%) of its assets located in
18Indiana; and
19      (5) is not engaged in a business involving:
20(A) real estate;
21(B) real estate development;
22(C) insurance;
23(D) professional services provided by an accountant, a lawyer,
24or a physician;
25(E) retail sales, except when:
26(i) the primary purpose of the business is the development
27or support of electronic commerce using the Internet; or
28(ii) the business is engaged in retail sales as a method to
29sell a unique product that the business developed, for
30which the business holds patents, or of which the
31business otherwise has ownership; or
32(F) oil and gas exploration.
33    (b) A business shall apply to be certified as a qualified Indiana
34 business on a form prescribed by the Indiana economic development
35 corporation.
36    (c) If a business is certified as a qualified Indiana business under
37 this section, the Indiana economic development corporation shall
38 provide a copy of the certification to the investors in the qualified
39 Indiana business for inclusion in tax filings.
40    (d) Except as provided in subsection (e), the Indiana economic
41 development corporation may impose an application fee of not more
42 than two hundred dollars ($200).
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1    (e) The Indiana economic development corporation may not impose
2 the application fee authorized by subsection (d) for applications
3 submitted during the period beginning July 1, 2011, and ending June
4 30, 2013.
5    SECTION 4. IC 6-3.1-24-7.5, AS ADDED BY P.L.165-2021,
6 SECTION 80, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2026]: Sec. 7.5. (a) The Indiana economic development
8 corporation may certify that an investment fund is a qualified Indiana
9 investment fund if the corporation determines that the fund meets the
10 definition in section 2.5 of this chapter and the requirements in
11 subsection (b).
12    (b) The Indiana economic development corporation may only certify
13 a fund as a qualified Indiana investment fund if the fund makes
14 investments according to a policy that:
15(1) requires eligible companies to be primarily focused on the
16commercialization of research and development, technology
17transfer, or application of new technology; and
18(2) prioritizes investments in companies that:
19(A) have received a grant, loan, or other investment funds
20provided by the Indiana twenty-first century research and
21technology fund established by IC 5-28-16-2; or
22(B) maintain a substantial presence in Indiana.
23 The policy referred to in this subsection shall apply only to
24 investable capital in the fund, excluding management fees, legal
25 fees, and other expenses incurred in the operation of the fund.
26    (c) An investment fund must apply to be certified as a qualified
27 Indiana investment fund on a form prescribed by the Indiana economic
28 development corporation.
29    (d) If an investment fund is certified as a qualified Indiana
30 investment fund under this section, the Indiana economic development
31 corporation shall provide a copy of the certification to the investors in
32 the qualified Indiana investment fund for inclusion in tax filings.
33    SECTION 5. IC 6-3.1-24-12, AS AMENDED BY P.L.165-2021,
34 SECTION 85, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
35 JULY 1, 2026]: Sec. 12. (a) If the amount of the credit determined
36 under section 8 or 8.5 of this chapter for a taxpayer in a taxable year
37 exceeds the taxpayer's state tax liability for that taxable year, the
38 taxpayer may carry the excess credit over for a period not to exceed the
39 taxpayer's following five (5) taxable years. The amount of the credit
40 carryover from a taxable year shall be reduced to the extent that the
41 carryover is used by the taxpayer to obtain a credit under this chapter
42 for any subsequent taxable year. A taxpayer is not entitled to a
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1 carryback or a refund of any unused credit amount.
2     (b) If the corporation certifies a credit for an investment that is made
3 after June 30, 2020, and before July 1, 2029, the taxpayer may assign
4 all or part of the credit to which the taxpayer is entitled under this
5 chapter, subject to the limitations set forth in subsection (c).
6     (c) The following apply to the assignment of a credit under this
7 chapter:
8(1) A taxpayer may not assign all or part of a credit or credits to
9a particular person in amounts that are less than ten thousand
10dollars ($10,000).
11(2) Before a credit may be assigned, the taxpayer must notify the
12corporation of the assignment of the credit in the manner
13prescribed by the corporation.
14(3) An assignment of a credit must be in writing, and both the
15taxpayer and assignee shall report the assignment on the
16taxpayer's and assignee's state tax returns for the year in which the
17assignment is made, in the manner prescribed by the department.
18(4) Once a particular credit or credits are assigned, the assignee
19may not assign all or part of the credit or credits to another
20person.
21(5) A taxpayer may not receive value in connection with an
22assignment under this section that exceeds the value of that part
23of the credit assigned.
24 Nothing in this subsection shall prevent a taxpayer from combining
25 individual credits of less than ten thousand dollars ($10,000) for
26 assignment.
27     (d) The corporation shall collect and compile data on the
28 assignments of tax credits under this chapter and determine the
29 effectiveness of each assignment in getting projects completed. The
30 corporation shall report its findings under this subsection to the
31 legislative council in an electronic format under IC 5-14-6 before
32 November 1, 2022. This subsection expires January 1, 2023.
33     SECTION 6. IC 6-3.1-34-0.5 IS ADDED TO THE INDIANA
34 CODE AS A NEW SECTION TO READ AS FOLLOWS
35 [EFFECTIVE JULY 1, 2026]: Sec. 0.5. (a) In order to facilitate the
36 redevelopment and rehabilitation of property in Indiana that
37 promotes regional collaboration and long term strategic planning,
38 the corporation shall commit thirty-five million dollars
39 ($35,000,000) in tax credits under this chapter each state fiscal year
40 among:
41(1) development authorities;
42(2) qualified nonprofit organizations; and
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1(3) local economic development organizations that:
2(A) represent a single unit or multiple units; and
3(B) have an economically significant impact, as determined
4by the corporation;
5 which may subsequently be awarded by the corporation at the
6 request of an entity described in subdivisions (1) through (3) to a
7 taxpayer proposing a qualified investment in a qualified
8 redevelopment site. The corporation shall consider the regional
9 significance of a project when awarding the tax credits under this
10 subsection.
11    (b) Not later than January 1, 2031, the corporation shall present
12 a report to the budget committee concerning the tax credits
13 awarded under this section, including the status of the projects for
14 which tax credits were awarded under this section and the regional
15 impact of the projects.
16    SECTION 7. IC 6-3.1-34-2.1 IS ADDED TO THE INDIANA
17 CODE AS A NEW SECTION TO READ AS FOLLOWS
18 [EFFECTIVE JULY 1, 2026]: Sec. 2.1. As used in this chapter,
19 "development authority" refers to a regional development
20 authority established under IC 36-7.5-2-1, IC 36-7.6-2-3, or
21 IC 36-7.7-3-1.
22    SECTION 8. IC 6-3.1-34-5.5 IS ADDED TO THE INDIANA
23 CODE AS A NEW SECTION TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2026]: Sec. 5.5. As used in this chapter,
25 "qualified nonprofit organization" means a nonprofit organization
26 that:
27(1) was established and obtained tax exempt status under
28Section 501 of the Internal Revenue Code before January 1,
292016, and has since maintained tax exempt status under
30Section 501 of the Internal Revenue Code;
31(2) was formed to support economic development across the
32region; and
33(3) does not represent a single interest group or local unit or
34units within a single county.
35    SECTION 9. IC 6-3.1-34-24 IS ADDED TO THE INDIANA CODE
36 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
37 1, 2026]: Sec. 24. (a) As used in this section, "downtown area"
38 means:
39(1) the central business district of a city or town; or
40(2) any commercial or mixed use area within a neighborhood
41of a city or town that has traditionally served, since the
42founding of the community, as the retail service and
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1      communal focal point within the community.
2    (b) As used in this section, "initiative" means the small town
3 opportunity initiative established by subsection (f).
4    (c) As used in this section, "nonprofit taxpayer" means a
5 taxpayer:
6      (1) that is tax exempt under Section 501 of the Internal
7      Revenue Code;
8      (2) for which some or all of its mission is to revitalize the
9      community it serves; and
10      (3) whose leadership includes primarily members of the
11      community it serves.
12    (d) As used in this section, "qualified community project"
13 means a project that:
14      (1) is located in the:
15(A) downtown area of a city or a town with a population of
16less than thirty thousand (30,000);
17(B) downtown area of a city or a town that is located in a
18county with a population of less than seventy-five thousand
19(75,000); or
20(C) unincorporated territory of a county with a population
21of less than seventy-five thousand (75,000) if the site of the
22project is an area of the unincorporated territory that
23serves as the retail service and communal focal point
24within the unincorporated territory;
25      (2) involves the:
26(A) historic preservation;
27(B) redevelopment; or
28(C) rehabilitation;
29      of real property; and
30      (3) has a total project budget of at least fifteen million dollars
31      ($15,000,000).
32    (e) As used in this section, "qualified investment" means the
33 amount of the taxpayer's expenditures that are:
34      (1) for the redevelopment or rehabilitation of real property as
35      part of a qualified community project; and
36      (2) approved by the corporation before the expenditure is
37      made.
38    (f) The small town opportunity initiative is established.
39    (g) The corporation shall administer the initiative.
40    (h) The purpose of the initiative is to undertake qualified
41 community projects within local government units to do the
42 following:
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1(1) Advance historic preservation.
2(2) Redevelop or rehabilitate distressed buildings or
3underutilized property.
4(3) Redevelop or rehabilitate sites where distressed buildings
5once stood.
6    (i) A for-profit taxpayer undertaking a qualified community
7 project under the initiative is entitled to a redevelopment tax credit
8 under this chapter equal to twenty percent (20%) of the taxpayer's
9 cost of the project.
10    (j) A nonprofit taxpayer undertaking a qualified community
11 project under the initiative is entitled to a redevelopment tax credit
12 under this chapter equal to thirty percent (30%) of the taxpayer's
13 cost of the project.
14    (k) Qualified community projects undertaken under this section
15 are not subject to any statutory or administrative repayment
16 obligation.
17    (l) Notwithstanding any other provision of this section, for a
18 nonprofit taxpayer undertaking a qualified community project
19 under this section, expenditures incurred to acquire, hold, or
20 prepare real property for redevelopment or rehabilitation before
21 the date the taxpayer's initial application or application for
22 certification is approved by the corporation shall be included in the
23 taxpayer's qualified investment if:
24(1) the expenditures were incurred for the primary purpose
25of future redevelopment consistent with subsection (h);
26(2) the nonprofit taxpayer obtained site control in furtherance
27of a locally supported redevelopment effort; and
28(3) the corporation determines, as part of the application or
29certification process, that inclusion of such expenditures is in
30the public interest and supportive of early stage community
31redevelopment efforts.
32    (m) For purposes of determining whether an expenditure is
33 included as part of a qualified investment under subsection (l), an
34 expenditure shall be treated as if it were approved by the
35 corporation as of the date the expenditure was originally incurred.
36    SECTION 10. IC 36-7-32-8.5, AS AMENDED BY P.L.154-2020,
37 SECTION 50, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
38 JULY 1, 2026]: Sec. 8.5. As used in this chapter, "income tax
39 incremental amount" means the following:
40(1) Except as provided in subdivision (2), the remainder of:
41(A) the total amount of state adjusted gross income taxes and
42local income taxes paid by employees employed in the
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1territory comprising the certified technology park with respect
2to wages and salary earned for work in the territory comprising
3the certified technology park for a particular state fiscal year;
4minus
5(B) the sum of the:
6(i) income tax base period amount as defined in section 8 of
7this chapter; and
8(ii) tax credits awarded by the Indiana economic
9development corporation under IC 6-3.1-13 to businesses
10operating in a certified technology park as the result of
11wages earned for work in the certified technology park for
12the state fiscal year;
13      as determined by the department of state revenue.
14      (2) In the case of a certified technology park for which the amount
15      limit under section 22(c), or 22(d), or 22(e) of this chapter has
16      been exceeded, the remainder of:
17(A) the total amount of state adjusted gross income taxes and
18local income taxes paid by employees employed in the
19territory comprising the certified technology park with respect
20to wages and salary earned for work in the territory comprising
21the certified technology park for a particular state fiscal year;
22minus
23(B) the sum of the:
24(i) income tax base period amount as defined in section 8 of
25this chapter; and
26(ii) tax credits awarded by the Indiana economic
27development corporation under IC 6-3.1-13 to businesses
28operating in a certified technology park as the result of
29wages earned for work in the certified technology park for
30the state fiscal year;
31      as determined by the department of state revenue.
32    SECTION 11. IC 36-7-32-22, AS AMENDED BY P.L.145-2025,
33 SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
34 JULY 1, 2026]: Sec. 22. (a) The treasurer of state shall establish an
35 incremental tax financing fund for each certified technology park
36 designated under this chapter. The fund shall be administered by the
37 treasurer of state. Money in the fund does not revert to the state general
38 fund at the end of a state fiscal year.
39    (b) Subject to subsection (c), the following amounts shall be
40 deposited during each state fiscal year in the incremental tax financing
41 fund established for a certified technology park under subsection (a):
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1(1) The aggregate amount of state gross retail and use taxes that
2are remitted under IC 6-2.5 by businesses operating in the
3certified technology park, until the amount of state gross retail
4and use taxes deposited equals the gross retail incremental
5amount for the certified technology park.
6(2) Except as provided in subdivision (3), the aggregate amount
7of the following taxes paid by employees employed in the
8certified technology park with respect to wages earned for work
9in the certified technology park, until the amount deposited equals
10the income tax incremental amount as defined in section 8.5(1) of
11this chapter:
12(A) The adjusted gross income tax.
13(B) The local income tax (IC 6-3.6).
14(3) In the case of a certified technology park to which subsection
15(e) or (f) applies, the amount determined under subsection (e) or
16(f), if any and as applicable.
17    (c) Except as provided in subsections (d), and (e), and (f), not more
18 than a total of five million dollars ($5,000,000) may be deposited in a
19 particular incremental tax financing fund for a certified technology
20 park over the life of the certified technology park.
21    (d) Except as provided in subsection (e), subsections (e) and (f), in
22 the case of a certified technology park that is operating under a written
23 agreement entered into by two (2) or more redevelopment
24 commissions, and subject to section 26(b)(4) of this chapter:
25(1) not more than a total of five million dollars ($5,000,000) may
26be deposited over the life of the certified technology park in the
27incremental tax financing fund of each redevelopment
28commission participating in the operation of the certified
29technology park; and
30(2) the total amount that may be deposited in all incremental tax
31financing funds, over the life of the certified technology park, in
32aggregate, may not exceed the result of:
33(A) five million dollars ($5,000,000); multiplied by
34(B) the number of redevelopment commissions that have
35entered into a written agreement for the operation of the
36certified technology park.
37    (e) If a certified technology park has reached the limit on deposits
38 under subsection (c) or (d) and maintains its certification under section
39 11(c) of this chapter, the certified technology park shall become a
40 Level 2 certified technology park and an additional annual deposit
41 amount shall be deposited in the incremental tax financing fund for the
42 certified technology park equal to the following:
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1     (1) For a certified technology park to which subsection (c)
2     applies, the lesser of:
3(A) the income tax incremental amount as defined in section
48.5(2) of this chapter; or
5(B) two hundred fifty thousand dollars ($250,000).
6     (2) For a certified technology park to which subsection (d)
7     applies, the lesser of:
8(A) the aggregate income tax incremental amounts as defined
9in section 8.5(2) of this chapter attributable to each
10redevelopment commission that has entered into a written
11agreement for the operation of the certified technology park;
12or
13(B) two hundred fifty thousand dollars ($250,000) multiplied
14by the number of redevelopment commissions that have
15entered into a written agreement for the operation of the
16certified technology park.
17     (3) The following apply to deposits under this subsection:
18(A) If a certified technology park reached its limit on deposits
19based on a state fiscal year ending before July 1, 2020, the
20certified technology park shall receive deposits based on the
21income tax incremental amount as defined in section 8.5(2) of
22this chapter for each state fiscal year ending after June 30,
232019.
24(B) If a certified technology park reached its limit on deposits
25based on a state fiscal year ending after June 30, 2020, the
26certified technology park shall receive deposits based on the
27income tax incremental amount as defined in section 8.5(2) of
28this chapter for the state fiscal year in which it reached its limit
29on deposits under subsection (c) or (d) and each state fiscal
30year thereafter.
31(C) If a certified technology park is permitted to receive
32deposits under this subsection during the state fiscal year in
33which it reached its limit on deposits under subsection (c) or
34(d), the income tax incremental amount for purposes of
35subdivision (1)(A) or (1)(B) for that state fiscal year shall be
36reduced by an amount equal to:
37(i) the deposit amount for the state fiscal year under
38subsection (b) required to reach the limit on deposits under
39subsection (c) or (d); minus
40(ii) the gross retail incremental amount determined under
41section 6.5 of this chapter;
42but not less than zero (0).
 ES 281—LS 6974/DI 120
                                  14
1     (f) This subsection applies to a certified technology park that is
2 located within a qualified military base enhancement area under
3 IC 36-7-34. Subject to subsection (g), if a certified technology park
4 has reached the limit on deposits under subsection (e) and
5 maintains its certification under section 11(c) of this chapter, the
6 certified technology park shall become a Level 3 certified
7 technology park and an additional annual deposit amount shall be
8 deposited in the incremental tax financing fund for the certified
9 technology park equal to the lesser of:
10(1) the aggregate income tax incremental amounts as defined
11in section 8.5(2) of this chapter attributable to each
12redevelopment commission that has entered into a written
13agreement for the operation of the certified technology park;
14or
15(2) two hundred fifty thousand dollars ($250,000) multiplied
16by the number of redevelopment commissions that have
17entered into a written agreement for the operation of the
18certified technology park.
19 However, no amount of state gross retail and use taxes that are
20 remitted under IC 6-2.5 for transactions occurring after June 30,
21 2029, by businesses operating in the certified technology park and
22 no amount of adjusted gross income tax or local income tax paid by
23 employees employed in the certified technology park with respect
24 to wages and salary earned for work in the certified technology
25 park after June 30, 2029, may be deposited in the incremental tax
26 financing fund for the certified technology park, regardless of
27 whether the maximum annual amount under subdivision (1) or (2)
28 has been met.
29     (g) For purposes of calculating the income tax incremental
30 amount for the additional annual deposit amount under subsection
31 (f), only wages attributable to new employees hired on or after the
32 date the certified technology park becomes a Level 3 certified
33 technology park shall be included in the calculation. The
34 department of state revenue shall determine the incremental
35 amount based only on the net payroll increase over the base payroll
36 determined at the time of the Level 3 designation.
37     (h) Once a certified technology park meets the requirements of
38 designation as a Level 3 certified technology park, the department
39 of state revenue shall, not later than ninety (90) days after receipt
40 of all information necessary to make the determination, issue a
41 written determination establishing:
 ES 281—LS 6974/DI 120
                                    15
1(1) the date on which the certified technology park became a
2Level 3 certified technology park; and
3(2) the base payroll amount to be used for purposes of
4calculating the income tax incremental amount under section
58.5 of this chapter.
6 The department of state revenue may require the submission of
7 documentation reasonably necessary to make the determination
8 under this subsection.
9     (f) (i) This subsection applies to a Level 2 or Level 3 certified
10 technology park designated in subsection (e) or (f). When the office
11 recertifies a certified technology park as required under section 11 of
12 this chapter, the office shall make a determination of whether the
13 certified technology park shall continue to be designated as a Level 2
14 or Level 3 certified technology park.
15     (g) (j) On or before the twentieth day of each month, all amounts
16 held in the incremental tax financing fund established for a certified
17 technology park shall be distributed to the redevelopment commission
18 for deposit in the certified technology park fund established under
19 section 23 of this chapter.
20     SECTION 12. IC 36-7.6-2-3, AS AMENDED BY P.L.178-2015,
21 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2026]: Sec. 3. (a) A development authority may be established
23 by any of the following:
24(1) One (1) or more counties and one (1) or more adjacent
25counties.
26(2) One (1) or more counties and one (1) or more qualified cities
27in adjacent counties.
28(3) One (1) or more qualified cities and one (1) or more qualified
29cities in adjacent counties.
30     (b) A county or qualified city may participate in the establishment
31 of a development authority under this section and become a member of
32 the development authority only if the fiscal body of the county or
33 qualified city adopts an ordinance authorizing the county or qualified
34 city to participate in the establishment of the development authority.
35 For a county or city that is currently participating in a
36 development authority, the fiscal body of the county or qualified
37 city may adopt a subsequent ordinance authorizing the county or
38 qualified city to change membership and instead participate in a
39 new or different development authority.
40     (c) When a county establishes a development authority with another
41 unit as provided in this chapter, each qualified city and third class city
42 in the county also becomes a member of the development authority,
 ES 281—LS 6974/DI 120
                                    16
1 without further action by the qualified city, the third class city, or the
2 development authority.
3    (d) Notwithstanding any other provision of this article, a county or
4 municipality may be a member of only one (1) development authority.
5    (e) Notwithstanding any other provision of this article, a county or
6 municipality that is a member of the northwest Indiana regional
7 development authority under IC 36-7.5 may not be a member of a
8 development authority under this article.
9    (f) A development authority shall notify the Indiana economic
10 development corporation in writing promptly after the development
11 authority is established or if membership of the development
12 authority changes.
13    SECTION 13. An emergency is declared for this act.
 ES 281—LS 6974/DI 120
                              17
                  COMMITTEE REPORT
   Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred Senate Bill No. 281, 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:
   Page 1, delete lines 1 through 17.
   Delete pages 2 through 5.
   Page 6, delete lines 1 through 2.
   Page 6, line 15, delete "two" and insert "three".
   Page 6, line 16, delete "($250,000,000)" and insert
"($350,000,000)".
   Delete pages 7 through 18.
   Page 19, delete lines 1 through 16, begin a new paragraph and
insert:
   "SECTION 2. IC 6-3.1-34-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 0.5. (a) In order to facilitate the
redevelopment and rehabilitation of property in Indiana that
promotes regional collaboration and long term strategic planning,
the corporation may commit a tax credit to a development
authority pursuant to a development plan approved by the
corporation, which may subsequently be awarded by the
corporation at the request of a development authority to a
taxpayer proposing a qualified investment in a qualified
redevelopment site that is included in the development authority's
development plan.
   (b) The corporation shall award fifty million dollars
($50,000,000) to development authorities each fiscal year that may
be granted to taxpayers proposing qualified investment in a
qualified redevelopment site pursuant to a development plan
approved by the corporation.
   SECTION 3. IC 6-3.1-34-2.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 2.1. As used in this chapter,
"development authority" refers to a regional development
authority established under IC 36-7.5-2-1, IC 36-7.6-2-3, or
IC 36-7.7-3-1. The term includes a qualified nonprofit organization
formed to support economic development across the region and
which does not represent a single interest group or local unit or
units within a single county.
   SECTION 4. IC 6-3.1-34-2.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
ES 281—LS 6974/DI 120
                              18
[EFFECTIVE JULY 1, 2026]: Sec. 2.2. (a) As used in this chapter,
"development plan" refers to a comprehensive strategic
development plan approved by the development authority for its
jurisdiction and which outlines its economic development strategy,
the anticipated local resource commitments, the proposed
regionally significant projects, the return on investment analysis
reflecting a positive state return for such projects, the requirement
that an equal or greater level of local public financial participation
in the aggregate across all projects, the requirement that projects
are reasonably expected to spur a total investment across all
projects that is four (4) times greater than the level of the state
resources provided on a present value basis, and that each project
supported would not occur but for the provision of the requested
state resources.
(b) The development plan shall also include specific, measurable
five (5) and ten (10) year objectives, and plans for achieving the
objectives, for the region, including targets for:
  (1) per capita income;
  (2) population;
  (3) employment; and
  (4) credential attainment among residents;
in the region.
SECTION 5. IC 36-7.6-2-3, AS AMENDED BY P.L.178-2015,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 3. (a) A development authority may be established
by any of the following:
  (1) One (1) or more counties and one (1) or more adjacent
  counties.
  (2) One (1) or more counties and one (1) or more qualified cities
  in adjacent counties.
  (3) One (1) or more qualified cities and one (1) or more qualified
  cities in adjacent counties.
(b) A county or qualified city may participate in the establishment
of a development authority under this section and become a member of
the development authority only if the fiscal body of the county or
qualified city adopts an ordinance authorizing the county or qualified
city to participate in the establishment of the development authority.
For a county or city that is currently participating in a
development authority, the fiscal body of the county or qualified
city may adopt a subsequent ordinance authorizing the county or
qualified city to change membership and instead participate in a
new or different development authority.
ES 281—LS 6974/DI 120
                               19
(c) When a county establishes a development authority with another
unit as provided in this chapter, each qualified city and third class city
in the county also becomes a member of the development authority,
without further action by the qualified city, the third class city, or the
development authority.
(d) Notwithstanding any other provision of this article, a county or
municipality may be a member of only one (1) development authority.
(e) Notwithstanding any other provision of this article, a county or
municipality that is a member of the northwest Indiana regional
development authority under IC 36-7.5 may not be a member of a
development authority under this article.
(f) A development authority shall notify the Indiana economic
development corporation in writing promptly after the development
authority is established or if membership of the development
authority changes.".
Page 20, delete lines 25 through 29, begin a new paragraph and
insert:
"SECTION 7. [EFFECTIVE JULY 1, 2026] (a) Notwithstanding
any other provision, after review by the budget committee, the
appropriation for the deal closing fund in P.L.213-2025 (HEA
1001-2025) may be augmented by the budget agency. The terms in
P.L.213-2025 (HEA 1001-2025) for the deal closing fund limiting
augmentation by the budget agency to any economic development
project located within an innovation development district are
repealed.
(b) This SECTION expires July 1, 2027.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
   (Reference is to SB 281 as introduced.)
                                          HOLDMAN, Chairperson
Committee Vote: Yeas 12, Nays 1.
                           _____
                      SENATE MOTION
Mr. President: I move that Senate Bill 281 be amended to read as
follows:
Page 1, delete lines 1 through 17.
Page 2, delete lines 1 through 23.
ES 281—LS 6974/DI 120
                                20
   Page 2, delete lines 41 through 42.
   Page 3, delete lines 1 through 7, begin a new paragraph and insert:
   "SECTION 3. IC 6-3.1-34-2.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 2.1. (a) As used in this chapter,
"development authority" refers to a regional development
authority established under IC 36-7.5-2-1, IC 36-7.6-2-3, or
IC 36-7.7-3-1.
   (b) For the period beginning July 1, 2026, and ending June 30,
2028, the term "development authority" includes a qualified
nonprofit organization formed to support economic development
across the region and which does not represent a single interest
group or local unit or units within a single county. This subsection
expires July 1, 2028.".
   Page 5, delete lines 33 through 41.
   Renumber all SECTIONS consecutively.
   (Reference is to SB 281 as printed January 21, 2026.)
                                                            MISHLER
                            _____
                    COMMITTEE REPORT
   Mr. Speaker: Your Committee on Ways and Means, to which was
referred Senate Bill 281, 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, between the enacting clause and line 1, begin a new
paragraph and insert:
   "SECTION 1. IC 5-28-6-9, AS AMENDED BY P.L.213-2025,
SECTION 69, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 9. (a) Subject to subsection (c), the aggregate
amount of applicable tax credits that the corporation may certify:
 (1) for each state fiscal year ending on or before June 30, 2025,
 for all taxpayers is two hundred fifty million dollars
 ($250,000,000); and
 (2) for each state fiscal year ending on or after July 1, 2025, for all
 taxpayers is three hundred million dollars ($300,000,000), fifteen
 million dollars ($15,000,000) of which must be allocated to
 fund qualified community projects within local government
ES 281—LS 6974/DI 120
                               21
  units under IC 6-3.1-34-24. Each certification under this
  subdivision is subject to budget committee review.
   (b) For purposes of determining the amount of applicable tax credits
that have been certified for a state fiscal year, the following apply:
  (1) An applicable tax credit is considered awarded in the state
  fiscal year in which the taxpayer can first claim the credit,
  determined without regard to any carryforward period or
  carryback period.
  (2) An applicable tax credit awarded by the corporation before
  July 1, 2022, shall be counted toward the aggregate credit
  limitation under this section.
  (3) If an accelerated credit is awarded under IC 6-3.1-26-15, the
  amount counted toward the aggregate credit limitation under this
  section for a state fiscal year shall be the amount of the credit for
  the taxable year described in subdivision (1) prior to any discount.
   (c) Notwithstanding subsection (a), if the corporation determines
that:
  (1) an applicable tax credit should be certified in a state fiscal
  year; and
  (2) certification of the applicable tax credit will result in an
  aggregate amount of applicable tax credits certified for that state
  fiscal year that exceeds the maximum amount provided in
  subsection (a);
the corporation may, after review by the budget committee, certify the
applicable tax credit to the taxpayer.
   (d) This section expires December 31, 2032.
   SECTION 2. IC 5-28-44 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON
PASSAGE]:
   Chapter 44. Unmanned Aircraft Systems Test Site
   Sec. 1. In enacting this chapter, it is the intent of the general
assembly to advance the state's leadership position in technologies
related to unmanned aircraft systems to foster more opportunities
for citizens of the state with respect to unmanned aircraft system
technology and related industries and to support the federal
government in research, development, and testing in support of
commerce and national security. The general assembly finds the
following:
  (1) The FAA announced on January 8, 2026, that Indiana is
  designated as a test site for UAS.
  (2) The FAA notes that test sites help the United States assess
  emerging technologies to modernize methods for cargo
ES 281—LS 6974/DI 120
                              22
  delivery, Beyond Visual Line of Sight operations, and multiple
  UAS operations while informing safety and security, ushering
  in the safe commercialization of UAS technologies and fully
  integrating UAS into the national airspace system.
  (3) Indiana's designation as a test site was the result of a
  competitive process against other states and a joint
  application between the corporation and the operating
  partner. The proposal was developed under a contract
  between the corporation and the operating partner to pursue
  similar federal programs.
  (4) The FAA test site will require substantial reporting and
  compliance activities to comply with federal laws and
  regulations governing the federal UAS Test Site Program and
  ancillary activities and is desirable for efficiency, clarity, and
  transparency to avoid duplicating regulatory schemes at the
  federal and state levels.
Sec. 2. As used in this chapter, "FAA" means the Federal
Aviation Administration.
Sec. 3. As used in this chapter, "operating partner" means the
Indiana based nonprofit corporation that partners with the
corporation to operate and maintain the UAS test site under
supervision of the corporation.
Sec. 4. As used in this chapter, "test site" means the Indiana
UAS test site awarded to the corporation by the FAA.
Sec. 5. As used in this chapter, "UAS" means an unmanned
aircraft system, including counter UAS and other related entities.
Sec. 6. Notwithstanding any other law, during the period that
the test site remains subject to federal requirements as part of the
UAS Test Site Program operated by the FAA, the corporation and
operating partner are not subject to any state law concerning the
following for purposes of operating the test site:
  (1) State procurement requirements.
  (2) State contracting requirements.
  (3) State fee setting requirements.
Sec. 7. (a) The operating partner shall establish a bank account
that is separate and segregated from any other bank account under
the operating partner's control and administer all funds for the test
site in the bank account.
(b) The operating partner may administer and deposit all
income, earnings, and other receipts accrued through operation of
the test site in the bank account, including any state or federal
funding received through a contract, or as a grant or loan.
ES 281—LS 6974/DI 120
                            23
   (c) The operating partner may expend money from the bank
account for operations of the test site, including costs for
administration, staffing, equipment, test site activities,
communications, and marketing. The operating partner may
transfer revenue from the bank account to the corporation or any
other state agency to be used for the following purposes:
  (1) To procure UAS technology for use by the state.
  (2) To pursue federal funding for activities related to UAS
  that benefit the state.
  (3) To support economic development activities related to
  UAS research or manufacturing.
   (d) The operating partner shall keep a full and complete record
of funds received and disbursed by the operating partner. The
report is subject to audit and must be submitted to the corporation
board not later than July 1 of each year, or more often as required
by the corporation.
   Sec. 8. The state examiner, or deputy examiners, field
examiners, or private examiners, shall make a full and complete
report of the records and receipts of the test site.
   Sec. 9. The operating partner shall do the following:
  (1) Respond to requests from local, regional, or state
  economic development organizations for assistance with
  economic activities intended to attract companies, or to
  develop clusters of activity, within the UAS sector.
  (2) Respond to requests from state agencies for expertise
  related to the procurement of UAS technology.
  (3) Respond to requests from state agencies for assistance
  with the development of new UAS test activities within
  particular economic sectors.
   Sec. 10. The operating partner is responsible for carrying out
the FAA's requirements and obligations for the safe operation and
maintenance of the test site and for managing the day to day
operations of the test site under supervision of the corporation.
   Sec. 11. (a) Notwithstanding any other law, the corporation may
enter into an agreement with the operating partner to fulfill the
requirements of this chapter and any other applicable requirement
from the FAA or another federal agency.
   (b) The corporation may dedicate resources as determined
necessary and appropriate by the corporation to support the
implementation and ongoing operation of the test site, including
staff support, administrative support, and direct financial support.
ES 281—LS 6974/DI 120
                               24
SECTION 3. IC 6-3.1-24-7, AS AMENDED BY P.L.172-2011,
SECTION 66, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 7. (a) The Indiana economic development
corporation shall certify that a business is a qualified Indiana business
if the corporation determines that the business:
  (1) has its headquarters in Indiana;
  (2) is primarily focused on professional motor vehicle racing,
  commercialization of research and development, technology
  transfers, or the application of new technology, or is determined
  by the Indiana economic development corporation to have
  significant potential to:
     (A) bring substantial capital into Indiana;
     (B) create jobs;
     (C) diversify the business base of Indiana; or
     (D) significantly promote the purposes of this chapter in any
     other way;
  (3) has had average annual revenues of less than ten million
  dollars ($10,000,000) in the two (2) years preceding the year in
  which the business received qualified investment capital from a
  taxpayer claiming a credit under this chapter;
  (4) has:
     (A) at least fifty percent (50%) of its employees residing in
     Indiana; or
     (B) at least seventy-five percent (75%) of its assets located in
     Indiana; and
  (5) is not engaged in a business involving:
     (A) real estate;
     (B) real estate development;
     (C) insurance;
     (D) professional services provided by an accountant, a lawyer,
     or a physician;
     (E) retail sales, except when:
        (i) the primary purpose of the business is the development
        or support of electronic commerce using the Internet; or
        (ii) the business is engaged in retail sales as a method to
        sell a unique product that the business developed, for
        which the business holds patents, or of which the
        business otherwise has ownership; or
     (F) oil and gas exploration.
(b) A business shall apply to be certified as a qualified Indiana
business on a form prescribed by the Indiana economic development
corporation.
ES 281—LS 6974/DI 120
                              25
   (c) If a business is certified as a qualified Indiana business under
this section, the Indiana economic development corporation shall
provide a copy of the certification to the investors in the qualified
Indiana business for inclusion in tax filings.
   (d) Except as provided in subsection (e), the Indiana economic
development corporation may impose an application fee of not more
than two hundred dollars ($200).
   (e) The Indiana economic development corporation may not impose
the application fee authorized by subsection (d) for applications
submitted during the period beginning July 1, 2011, and ending June
30, 2013.
   SECTION 4. IC 6-3.1-24-7.5, AS ADDED BY P.L.165-2021,
SECTION 80, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 7.5. (a) The Indiana economic development
corporation may certify that an investment fund is a qualified Indiana
investment fund if the corporation determines that the fund meets the
definition in section 2.5 of this chapter and the requirements in
subsection (b).
   (b) The Indiana economic development corporation may only certify
a fund as a qualified Indiana investment fund if the fund makes
investments according to a policy that:
  (1) requires eligible companies to be primarily focused on the
  commercialization of research and development, technology
  transfer, or application of new technology; and
  (2) prioritizes investments in companies that:
     (A) have received a grant, loan, or other investment funds
     provided by the Indiana twenty-first century research and
     technology fund established by IC 5-28-16-2; or
     (B) maintain a substantial presence in Indiana.
The policy referred to in this subsection shall apply only to
investable capital in the fund, excluding management fees, legal
fees, and other expenses incurred in the operation of the fund.
   (c) An investment fund must apply to be certified as a qualified
Indiana investment fund on a form prescribed by the Indiana economic
development corporation.
   (d) If an investment fund is certified as a qualified Indiana
investment fund under this section, the Indiana economic development
corporation shall provide a copy of the certification to the investors in
the qualified Indiana investment fund for inclusion in tax filings.
   SECTION 5. IC 6-3.1-24-12, AS AMENDED BY P.L.165-2021,
SECTION 85, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 12. (a) If the amount of the credit determined
ES 281—LS 6974/DI 120
                                26
under section 8 or 8.5 of this chapter for a taxpayer in a taxable year
exceeds the taxpayer's state tax liability for that taxable year, the
taxpayer may carry the excess credit over for a period not to exceed the
taxpayer's following five (5) taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for any subsequent taxable year. A taxpayer is not entitled to a
carryback or a refund of any unused credit amount.
(b) If the corporation certifies a credit for an investment that is made
after June 30, 2020, and before July 1, 2029, the taxpayer may assign
all or part of the credit to which the taxpayer is entitled under this
chapter, subject to the limitations set forth in subsection (c).
(c) The following apply to the assignment of a credit under this
chapter:
  (1) A taxpayer may not assign all or part of a credit or credits to
  a particular person in amounts that are less than ten thousand
  dollars ($10,000).
  (2) Before a credit may be assigned, the taxpayer must notify the
  corporation of the assignment of the credit in the manner
  prescribed by the corporation.
  (3) An assignment of a credit must be in writing, and both the
  taxpayer and assignee shall report the assignment on the
  taxpayer's and assignee's state tax returns for the year in which the
  assignment is made, in the manner prescribed by the department.
  (4) Once a particular credit or credits are assigned, the assignee
  may not assign all or part of the credit or credits to another
  person.
  (5) A taxpayer may not receive value in connection with an
  assignment under this section that exceeds the value of that part
  of the credit assigned.
Nothing in this subsection shall prevent a taxpayer from combining
individual credits of less than ten thousand dollars ($10,000) for
assignment.
(d) The corporation shall collect and compile data on the
assignments of tax credits under this chapter and determine the
effectiveness of each assignment in getting projects completed. The
corporation shall report its findings under this subsection to the
legislative council in an electronic format under IC 5-14-6 before
November 1, 2022. This subsection expires January 1, 2023.".
Page 1, line 5, after "planning," insert "the corporation shall
commit thirty-five million dollars ($35,000,000) in tax credits
under this chapter each state fiscal year among:
ES 281—LS 6974/DI 120
                              27
  (1) development authorities;
  (2) qualified nonprofit organizations; and
  (3) local economic development organizations that:
     (A) represent a single unit or multiple units; and
     (B) have an economically significant impact, as determined
     by the corporation;
which may subsequently be awarded by the corporation at the
request of an entity described in subdivisions (1) through (3) to a
taxpayer proposing a qualified investment in a qualified
redevelopment site. The corporation shall consider the regional
significance of a project when awarding the tax credits under this
subsection.
   (b) Not later than January 1, 2031, the corporation shall present
a report to the budget committee concerning the tax credits
awarded under this section, including the status of the projects for
which tax credits were awarded under this section and the regional
impact of the projects.".
   Page 1, delete lines 6 through 17.
   Page 2, line 3, delete "(a)".
   Page 2, delete lines 7 through 36, begin a new paragraph and insert:
   "SECTION 8. IC 6-3.1-34-5.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 5.5. As used in this chapter,
"qualified nonprofit organization" means a nonprofit organization
that:
  (1) was established and obtained tax exempt status under
  Section 501 of the Internal Revenue Code before January 1,
  2016, and has since maintained tax exempt status under
  Section 501 of the Internal Revenue Code;
  (2) was formed to support economic development across the
  region; and
  (3) does not represent a single interest group or local unit or
  units within a single county.
   SECTION 9. IC 6-3.1-34-24 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2026]: Sec. 24. (a) As used in this section, "downtown area"
means:
  (1) the central business district of a city or town; or
  (2) any commercial or mixed use area within a neighborhood
  of a city or town that has traditionally served, since the
  founding of the community, as the retail service and
  communal focal point within the community.
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   (b) As used in this section, "initiative" means the small town
opportunity initiative established by subsection (f).
   (c) As used in this section, "nonprofit taxpayer" means a
taxpayer:
 (1) that is tax exempt under Section 501 of the Internal
 Revenue Code;
 (2) for which some or all of its mission is to revitalize the
 community it serves; and
 (3) whose leadership includes primarily members of the
 community it serves.
   (d) As used in this section, "qualified community project"
means a project that:
 (1) is located in the:
    (A) downtown area of a city or a town with a population of
    less than thirty thousand (30,000);
    (B) downtown area of a city or a town that is located in a
    county with a population of less than seventy-five thousand
    (75,000); or
    (C) unincorporated territory of a county with a population
    of less than seventy-five thousand (75,000) if the site of the
    project is an area of the unincorporated territory that
    serves as the retail service and communal focal point
    within the unincorporated territory;
 (2) involves the:
    (A) historic preservation;
    (B) redevelopment; or
    (C) rehabilitation;
 of real property; and
 (3) has a total project budget of at least fifteen million dollars
 ($15,000,000).
   (e) As used in this section, "qualified investment" means the
amount of the taxpayer's expenditures that are:
 (1) for the redevelopment or rehabilitation of real property as
 part of a qualified community project; and
 (2) approved by the corporation before the expenditure is
 made.
   (f) The small town opportunity initiative is established.
   (g) The corporation shall administer the initiative.
   (h) The purpose of the initiative is to undertake qualified
community projects within local government units to do the
following:
 (1) Advance historic preservation.
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                               29
  (2) Redevelop or rehabilitate distressed buildings or
  underutilized property.
  (3) Redevelop or rehabilitate sites where distressed buildings
  once stood.
   (i) A for-profit taxpayer undertaking a qualified community
project under the initiative is entitled to a redevelopment tax credit
under this chapter equal to twenty percent (20%) of the taxpayer's
cost of the project.
   (j) A nonprofit taxpayer undertaking a qualified community
project under the initiative is entitled to a redevelopment tax credit
under this chapter equal to thirty percent (30%) of the taxpayer's
cost of the project.
   (k) Qualified community projects undertaken under this section
are not subject to any statutory or administrative repayment
obligation.
   (l) Notwithstanding any other provision of this section, for a
nonprofit taxpayer undertaking a qualified community project
under this section, expenditures incurred to acquire, hold, or
prepare real property for redevelopment or rehabilitation before
the date the taxpayer's initial application or application for
certification is approved by the corporation shall be included in the
taxpayer's qualified investment if:
  (1) the expenditures were incurred for the primary purpose
  of future redevelopment consistent with subsection (h);
  (2) the nonprofit taxpayer obtained site control in furtherance
  of a locally supported redevelopment effort; and
  (3) the corporation determines, as part of the application or
  certification process, that inclusion of such expenditures is in
  the public interest and supportive of early stage community
  redevelopment efforts.
   (m) For purposes of determining whether an expenditure is
included as part of a qualified investment under subsection (l), an
expenditure shall be treated as if it were approved by the
corporation as of the date the expenditure was originally incurred.
   SECTION 10. IC 36-7-32-8.5, AS AMENDED BY P.L.154-2020,
SECTION 50, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 8.5. As used in this chapter, "income tax
incremental amount" means the following:
  (1) Except as provided in subdivision (2), the remainder of:
      (A) the total amount of state adjusted gross income taxes and
      local income taxes paid by employees employed in the
      territory comprising the certified technology park with respect
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                               30
     to wages and salary earned for work in the territory comprising
     the certified technology park for a particular state fiscal year;
     minus
     (B) the sum of the:
       (i) income tax base period amount as defined in section 8 of
       this chapter; and
       (ii) tax credits awarded by the Indiana economic
       development corporation under IC 6-3.1-13 to businesses
       operating in a certified technology park as the result of
       wages earned for work in the certified technology park for
       the state fiscal year;
 as determined by the department of state revenue.
 (2) In the case of a certified technology park for which the amount
 limit under section 22(c), or 22(d), or 22(e) of this chapter has
 been exceeded, the remainder of:
     (A) the total amount of state adjusted gross income taxes and
     local income taxes paid by employees employed in the
     territory comprising the certified technology park with respect
     to wages and salary earned for work in the territory comprising
     the certified technology park for a particular state fiscal year;
     minus
     (B) the sum of the:
       (i) income tax base period amount as defined in section 8 of
       this chapter; and
       (ii) tax credits awarded by the Indiana economic
       development corporation under IC 6-3.1-13 to businesses
       operating in a certified technology park as the result of
       wages earned for work in the certified technology park for
       the state fiscal year;
 as determined by the department of state revenue.
   SECTION 11. IC 36-7-32-22, AS AMENDED BY P.L.145-2025,
SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 22. (a) The treasurer of state shall establish an
incremental tax financing fund for each certified technology park
designated under this chapter. The fund shall be administered by the
treasurer of state. Money in the fund does not revert to the state general
fund at the end of a state fiscal year.
   (b) Subject to subsection (c), the following amounts shall be
deposited during each state fiscal year in the incremental tax financing
fund established for a certified technology park under subsection (a):
 (1) The aggregate amount of state gross retail and use taxes that
 are remitted under IC 6-2.5 by businesses operating in the
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                               31
  certified technology park, until the amount of state gross retail
  and use taxes deposited equals the gross retail incremental
  amount for the certified technology park.
  (2) Except as provided in subdivision (3), the aggregate amount
  of the following taxes paid by employees employed in the
  certified technology park with respect to wages earned for work
  in the certified technology park, until the amount deposited equals
  the income tax incremental amount as defined in section 8.5(1) of
  this chapter:
      (A) The adjusted gross income tax.
      (B) The local income tax (IC 6-3.6).
  (3) In the case of a certified technology park to which subsection
  (e) or (f) applies, the amount determined under subsection (e) or
  (f), if any and as applicable.
   (c) Except as provided in subsections (d), and (e), and (f), not more
than a total of five million dollars ($5,000,000) may be deposited in a
particular incremental tax financing fund for a certified technology
park over the life of the certified technology park.
   (d) Except as provided in subsection (e), subsections (e) and (f), in
the case of a certified technology park that is operating under a written
agreement entered into by two (2) or more redevelopment
commissions, and subject to section 26(b)(4) of this chapter:
  (1) not more than a total of five million dollars ($5,000,000) may
  be deposited over the life of the certified technology park in the
  incremental tax financing fund of each redevelopment
  commission participating in the operation of the certified
  technology park; and
  (2) the total amount that may be deposited in all incremental tax
  financing funds, over the life of the certified technology park, in
  aggregate, may not exceed the result of:
      (A) five million dollars ($5,000,000); multiplied by
      (B) the number of redevelopment commissions that have
      entered into a written agreement for the operation of the
      certified technology park.
   (e) If a certified technology park has reached the limit on deposits
under subsection (c) or (d) and maintains its certification under section
11(c) of this chapter, the certified technology park shall become a
Level 2 certified technology park and an additional annual deposit
amount shall be deposited in the incremental tax financing fund for the
certified technology park equal to the following:
  (1) For a certified technology park to which subsection (c)
  applies, the lesser of:
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                                32
    (A) the income tax incremental amount as defined in section
    8.5(2) of this chapter; or
    (B) two hundred fifty thousand dollars ($250,000).
 (2) For a certified technology park to which subsection (d)
 applies, the lesser of:
    (A) the aggregate income tax incremental amounts as defined
    in section 8.5(2) of this chapter attributable to each
    redevelopment commission that has entered into a written
    agreement for the operation of the certified technology park;
    or
    (B) two hundred fifty thousand dollars ($250,000) multiplied
    by the number of redevelopment commissions that have
    entered into a written agreement for the operation of the
    certified technology park.
 (3) The following apply to deposits under this subsection:
    (A) If a certified technology park reached its limit on deposits
    based on a state fiscal year ending before July 1, 2020, the
    certified technology park shall receive deposits based on the
    income tax incremental amount as defined in section 8.5(2) of
    this chapter for each state fiscal year ending after June 30,
    2019.
    (B) If a certified technology park reached its limit on deposits
    based on a state fiscal year ending after June 30, 2020, the
    certified technology park shall receive deposits based on the
    income tax incremental amount as defined in section 8.5(2) of
    this chapter for the state fiscal year in which it reached its limit
    on deposits under subsection (c) or (d) and each state fiscal
    year thereafter.
    (C) If a certified technology park is permitted to receive
    deposits under this subsection during the state fiscal year in
    which it reached its limit on deposits under subsection (c) or
    (d), the income tax incremental amount for purposes of
    subdivision (1)(A) or (1)(B) for that state fiscal year shall be
    reduced by an amount equal to:
       (i) the deposit amount for the state fiscal year under
       subsection (b) required to reach the limit on deposits under
       subsection (c) or (d); minus
       (ii) the gross retail incremental amount determined under
       section 6.5 of this chapter;
    but not less than zero (0).
   (f) This subsection applies to a certified technology park that is
located within a qualified military base enhancement area under
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                             33
IC 36-7-34. Subject to subsection (g), if a certified technology park
has reached the limit on deposits under subsection (e) and
maintains its certification under section 11(c) of this chapter, the
certified technology park shall become a Level 3 certified
technology park and an additional annual deposit amount shall be
deposited in the incremental tax financing fund for the certified
technology park equal to the lesser of:
  (1) the aggregate income tax incremental amounts as defined
  in section 8.5(2) of this chapter attributable to each
  redevelopment commission that has entered into a written
  agreement for the operation of the certified technology park;
  or
  (2) two hundred fifty thousand dollars ($250,000) multiplied
  by the number of redevelopment commissions that have
  entered into a written agreement for the operation of the
  certified technology park.
However, no amount of state gross retail and use taxes that are
remitted under IC 6-2.5 for transactions occurring after June 30,
2029, by businesses operating in the certified technology park and
no amount of adjusted gross income tax or local income tax paid by
employees employed in the certified technology park with respect
to wages and salary earned for work in the certified technology
park after June 30, 2029, may be deposited in the incremental tax
financing fund for the certified technology park, regardless of
whether the maximum annual amount under subdivision (1) or (2)
has been met.
(g) For purposes of calculating the income tax incremental
amount for the additional annual deposit amount under subsection
(f), only wages attributable to new employees hired on or after the
date the certified technology park becomes a Level 3 certified
technology park shall be included in the calculation. The
department of state revenue shall determine the incremental
amount based only on the net payroll increase over the base payroll
determined at the time of the Level 3 designation.
(h) Once a certified technology park meets the requirements of
designation as a Level 3 certified technology park, the department
of state revenue shall, not later than ninety (90) days after receipt
of all information necessary to make the determination, issue a
written determination establishing:
  (1) the date on which the certified technology park became a
  Level 3 certified technology park; and
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                              34
  (2) the base payroll amount to be used for purposes of
  calculating the income tax incremental amount under section
  8.5 of this chapter.
The department of state revenue may require the submission of
documentation reasonably necessary to make the determination
under this subsection.
   (f) (i) This subsection applies to a Level 2 or Level 3 certified
technology park designated in subsection (e) or (f). When the office
recertifies a certified technology park as required under section 11 of
this chapter, the office shall make a determination of whether the
certified technology park shall continue to be designated as a Level 2
or Level 3 certified technology park.
   (g) (j) On or before the twentieth day of each month, all amounts
held in the incremental tax financing fund established for a certified
technology park shall be distributed to the redevelopment commission
for deposit in the certified technology park fund established under
section 23 of this chapter.".
   Page 3, delete lines 30 through 42, begin a new paragraph and
insert:
   "SECTION 13. An emergency is declared for this act.".
   Delete page 4.
   Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
   (Reference is to SB 281 as reprinted January 28, 2026.)
                                                     THOMPSON
Committee Vote: yeas 20, nays 0.
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