By: Sam Carpenter

HEC recently testified before the House Utilities Committee on HB 1333, which contains a provision that would bypass local zoning authority for any development, including large‑scale data centers, on Class IV–VIII agricultural land. Meaning, essentially, the bill would allow industrial‑scale developments on this class of land to proceed unchecked, without the need for rezoning, variances, or other forms of local government approval — or input from nearby residents.  

HEC’s testimony voiced concerns about this provision, emphasizing how dissimilar AI data centers are from typical commercial developments. Their electricity and water demands can match or exceed entire Indiana cities, driving up energy costs, straining infrastructure, and producing noise and diesel‑generator pollution that negatively impact quality of life for the surrounding community. 

Given the unique impacts of AI data centers, HEC stressed to legislators that local transparency and community participation must be essential to their development, not optional. 

HEC’s opposition is focused on these key concerns: 

1. Bypassing Local Zoning for Class IV–VIII Agricultural Land 

2. Extending Government Style Immunity to Private Brownfield Operators 

3. Reduced Transparency in State Led Economic Development 

After the lessons of the LEAP district, HEC stressed the need for more transparency and community voice, not less, especially for developments with major environmental and infrastructure impacts.  

What HEC Supports in HB 1333

Despite strong concerns, HEC also highlighted several positive provisions that align with Indiana’s long-term environmental and economic health: 

1. Ending the Sales Tax Exemption for Data Center Electricity (removed from the bill by amendment)

HEC supports ending this costly subsidy, which HEC estimates could cost Hoosiers up to $400 million per year by 2035, under projected load growth estimated Purdue University’s State Utility Forecasting Group. Although an amendment added a minimal 1% community benefit based on forfeited sales tax, HEC remains committed to a full repeal of the sales tax exemption which includes electricity sales.

2. Including Battery Energy Storage Systems (BESS) in Energy Production Zones

HEC supports expanding cleaner and more flexible grid options by allowing BESS within existing energy production zones (while also advocating for solar and wind to be included).

3. Requiring Emergency Response Plans

HEC supports stronger emergency-preparedness requirements for energy-intensive facilities.

AI’s explosive growth is driving a rapid expansion of hyperscale data center projects nationwide. As Indiana navigates this new landscape, Hoosiers face a lot of uncertainty about how to protect their local communities from unchecked development that threatens to increase electricity bills, affect water quality and supply, and degrade quality of life. One thing is certain: simply bypassing local governments and blocking out Hoosiers’ voices is not a solution. 


Categories: HEC News