Illinois General Assembly - Full Text of SB2182
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Full Text of SB2182  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 2/26/2021, by Sen. Elgie R. Sims, Jr.


20 ILCS 605/605-1025

    Amends Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Makes changes concerning data center investment. Modifies the criteria for determining qualifying Illinois data centers. Provides that the Department of Commerce and Economic Opportunity and any tenant of a qualifying data center seeking a specified exemption for new or existing facilities must enter into a memorandum of understanding. Defines "tenant". Effective immediately.

LRB102 16377 RJF 21766 b






SB2182LRB102 16377 RJF 21766 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois
6is amended by changing Section 605-1025 as follows:
7    (20 ILCS 605/605-1025)
8    Sec. 605-1025. Data center investment.
9    (a) The Department shall issue certificates of exemption
10from the Retailers' Occupation Tax Act, the Use Tax Act, the
11Service Use Tax Act, and the Service Occupation Tax Act, all
12locally-imposed retailers' occupation taxes administered and
13collected by the Department, the Chicago non-titled Use Tax,
14and a credit certification against the taxes imposed under
15subsections (a) and (b) of Section 201 of the Illinois Income
16Tax Act to qualifying Illinois data centers.
17    (b) For taxable years beginning on or after January 1,
182019, the Department shall award credits against the taxes
19imposed under subsections (a) and (b) of Section 201 of the
20Illinois Income Tax Act as provided in Section 229 of the
21Illinois Income Tax Act.
22    (c) For purposes of this Section:
23        "Data center" means a facility: (1) whose primary



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1    services are the storage, management, and processing of
2    digital data; and (2) that is used to house (i) computer
3    and network systems, including associated components such
4    as servers, network equipment and appliances,
5    telecommunications, and data storage systems, (ii) systems
6    for monitoring and managing infrastructure performance,
7    (iii) Internet-related equipment and services, (iv) data
8    communications connections, (v) environmental controls,
9    (vi) fire protection systems, and (vii) security systems
10    and services.
11        "Qualifying Illinois data center" means a new or
12    existing data center that:
13            (1) is located in a municipality, or in an
14        unincorporated area of a county that is adjacent to a
15        municipality in the State of Illinois;
16            (2) in the case of an existing data center, made a
17        capital investment of at least $250,000,000
18        collectively by the data center operator and the
19        tenants of the data center over the 60-month period
20        immediately prior to January 1, 2020 or committed to
21        make a capital investment of at least $250,000,000
22        over a 60-month period commencing before January 1,
23        2020 and ending after January 1, 2020; or
24            (3) in the case of a new data center, or an
25        existing data center making an upgrade, makes a
26        capital investment of at least $250,000,000 over a



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1        60-month period beginning on or after January 1, 2020;
2        and
3            (4) in the case of both existing and new data
4        centers, results in the creation of at least 20
5        full-time or full-time equivalent new jobs over a
6        period of 60 months by the data center operator and the
7        tenants of the data center, collectively, associated
8        with the operation or maintenance of the data center;
9        all jobs associated with a qualifying data center
10        meeting its job creation requirements those jobs must
11        have a total compensation equal to or greater than
12        120% of the average wage paid to full-time employees
13        in the county where the data center is located, as
14        determined by the U.S. Bureau of Labor Statistics; and
15            (5) within 2 years 90 days after being placed in
16        service, certifies to the Department that it is carbon
17        neutral or has attained certification under one or
18        more of the following green building standards:
19                (A) BREEAM for New Construction or BREEAM
20            In-Use;
21                (B) ENERGY STAR;
22                (C) Envision;
23                (D) ISO 50001-energy management;
24                (E) LEED for Building Design and Construction
25            or LEED for Operations and Maintenance;
26                (F) Green Globes for New Construction or Green



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1            Globes for Existing Buildings;
2                (G) UL 3223; or
3                (H) an equivalent program approved by the
4            Department of Commerce and Economic Opportunity,
5            except that entering into an agreement with an
6            independent business or entity unrelated to the
7            data center for the purchase, sale, or transfer of
8            carbon credits that would not result in carbon
9            neutral outcomes at the actual site of the data
10            center shall not qualify as an eligible program
11            for the purposes of this Section.
12        "Full-time equivalent job" means a job in which the
13    new employee works for the owner, operator, contractor, or
14    tenant of a data center or for a corporation under
15    contract with the owner, operator or tenant of a data
16    center at a rate of at least 35 hours per week. An owner,
17    operator or tenant who employs labor or services at a
18    specific site or facility under contract with another may
19    declare one full-time, permanent job for every 1,820 man
20    hours worked per year under that contract. Vacations, paid
21    holidays, and sick time are included in this computation.
22    Overtime is not considered a part of regular hours.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency



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1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. "Qualified tangible personal property" also
18    includes building materials physically incorporated in to
19    the qualifying data center.
20        "Tenant" means an entity that leases or subleases,
21    licenses, or contracts with the owner or operator of a
22    qualified data center that is certified under this Section
23    to use or occupy all or part of the data center for a
24    period of at least of one year.
25    To document the exemption allowed under this Section, the
26retailer must obtain from the purchaser a copy of the



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1certificate of eligibility issued by the Department.
2    (d) New and existing data centers seeking a certificate of
3exemption for new or existing facilities shall apply to the
4Department in the manner specified by the Department. The
5Department shall determine the duration of the certificate of
6exemption awarded under this Act. The duration of the
7certificate of exemption may not exceed 20 calendar years. The
8Department and any data center seeking the exemption,
9including a tenant or a data center operator on behalf of
10itself and its tenants, must enter into a memorandum of
11understanding that at a minimum provides:
12        (1) the details for determining the amount of capital
13    investment to be made;
14        (2) the number of new jobs created;
15        (3) the timeline for achieving the capital investment
16    and new job goals;
17        (4) the repayment obligation should those goals not be
18    achieved and any conditions under which repayment by the
19    qualifying data center or data center tenant claiming the
20    exemption will be required;
21        (5) the duration of the exemption; and
22        (6) other provisions as deemed necessary by the
23    Department.
24    (e) Beginning July 1, 2021, and each year thereafter, the
25Department shall annually report to the Governor and the
26General Assembly on the outcomes and effectiveness of Public



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1Act 101-31 that shall include the following:
2        (1) the name of each recipient business;
3        (2) the location of the project;
4        (3) the estimated value of the credit;
5        (4) the number of new jobs and, if applicable,
6    retained jobs pledged as a result of the project; and
7        (5) whether or not the project is located in an
8    underserved area.
9    (f) New and existing data centers seeking a certificate of
10exemption related to the rehabilitation or construction of
11data centers in the State shall require the contractor and all
12subcontractors to comply with the requirements of Section
1330-22 of the Illinois Procurement Code as they apply to
14responsible bidders and to present satisfactory evidence of
15that compliance to the Department.
16    (g) New and existing data centers seeking a certificate of
17exemption for the rehabilitation or construction of data
18centers in the State shall require the contractor to enter
19into a project labor agreement approved by the Department.
20    (h) Any qualifying data center issued a certificate of
21exemption under this Section must annually report to the
22Department the total data center tax benefits that are
23received by the business. Reports are due no later than May 31
24of each year and shall cover the previous calendar year. The
25first report is for the 2019 calendar year and is due no later
26than May 31, 2020.



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1    To the extent that a business issued a certificate of
2exemption under this Section has obtained an Enterprise Zone
3Building Materials Exemption Certificate or a High Impact
4Business Building Materials Exemption Certificate, no
5additional reporting for those building materials exemption
6benefits is required under this Section.
7    Failure to file a report under this subsection (h) may
8result in suspension or revocation of the certificate of
9exemption. Factors to be considered in determining whether a
10data center certificate of exemption shall be suspended or
11revoked include, but are not limited to, prior compliance with
12the reporting requirements, cooperation in discontinuing and
13correcting violations, the extent of the violation, and
14whether the violation was willful or inadvertent.
15    (i) The Department shall not issue any new certificates of
16exemption under the provisions of this Section after July 1,
172029. This sunset shall not affect any existing certificates
18of exemption in effect on July 1, 2029.
19    (j) The Department shall adopt rules to implement and
20administer this Section.
21(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19.)
22    Section 99. Effective date. This Act takes effect upon
23becoming law.