Bill Text: IL HB4659 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that certain reports concerning data centers are due no later than June 15 (currently, May 31) of each year. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-02-06 - Referred to Rules Committee [HB4659 Detail]

Download: Illinois-2023-HB4659-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4659 Introduced , by Rep. Lawrence "Larry" Walsh, Jr. SYNOPSIS AS INTRODUCED:
20 ILCS 605/605-1025
Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Provides that certain reports concerning data centers are due no later than June 15 (currently, May 31) of each year. Effective immediately.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois
is amended by changing Section 605-1025 as follows:
(20 ILCS 605/605-1025)
Sec. 605-1025. Data center investment.
(a) The Department shall issue certificates of exemption
from the Retailers' Occupation Tax Act, the Use Tax Act, the
Service Use Tax Act, and the Service Occupation Tax Act, all
locally-imposed retailers' occupation taxes administered and
collected by the Department, the Chicago non-titled Use Tax,
and a credit certification against the taxes imposed under
subsections (a) and (b) of Section 201 of the Illinois Income
Tax Act to qualifying Illinois data centers.
(b) For taxable years beginning on or after January 1,
2019, the Department shall award credits against the taxes
imposed under subsections (a) and (b) of Section 201 of the
Illinois Income Tax Act as provided in Section 229 of the
Illinois Income Tax Act.
(c) For purposes of this Section:
"Data center" means a facility: (1) whose primary

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services are the storage, management, and processing of
digital data; and (2) that is used to house (i) computer
and network systems, including associated components such
as servers, network equipment and appliances,
telecommunications, and data storage systems, (ii) systems
for monitoring and managing infrastructure performance,
(iii) Internet-related equipment and services, (iv) data
communications connections, (v) environmental controls,
(vi) fire protection systems, and (vii) security systems
and services.
"Qualifying Illinois data center" means a new or
existing data center that:
(1) is located in the State of Illinois;
(2) in the case of an existing data center, made a
capital investment of at least $250,000,000
collectively by the data center operator and the
tenants of the data center over the 60-month period
immediately prior to January 1, 2020 or committed to
make a capital investment of at least $250,000,000
over a 60-month period commencing before January 1,
2020 and ending after January 1, 2020; or
(3) in the case of a new data center, or an
existing data center making an upgrade, makes a
capital investment of at least $250,000,000 over a
60-month period beginning on or after January 1, 2020;
and

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(4) in the case of both existing and new data
centers, results in the creation of at least 20
full-time or full-time equivalent new jobs over a
period of 60 months by the data center operator and the
tenants of the data center, collectively, associated
with the operation or maintenance of the data center;
those jobs must have a total compensation equal to or
greater than 120% of the average wage paid to
full-time employees in the county where the data
center is located, as determined by the U.S. Bureau of
Labor Statistics; and
(5) within 2 years after being placed in service,
certifies to the Department that it is carbon neutral
or has attained certification under one or more of the
following green building standards:
(A) BREEAM for New Construction or BREEAM
In-Use;
(B) ENERGY STAR;
(C) Envision;
(D) ISO 50001-energy management;
(E) LEED for Building Design and Construction
or LEED for Operations and Maintenance;
(F) Green Globes for New Construction or Green
Globes for Existing Buildings;
(G) UL 3223; or
(H) an equivalent program approved by the

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Department of Commerce and Economic Opportunity.
"Full-time equivalent job" means a job in which the
new employee works for the owner, operator, contractor, or
tenant of a data center or for a corporation under
contract with the owner, operator or tenant of a data
center at a rate of at least 35 hours per week. An owner,
operator or tenant who employs labor or services at a
specific site or facility under contract with another may
declare one full-time, permanent job for every 1,820 man
hours worked per year under that contract. Vacations, paid
holidays, and sick time are included in this computation.
Overtime is not considered a part of regular hours.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including

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installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. "Qualified tangible personal property" also
includes building materials physically incorporated in to
the qualifying data center.
To document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department.
(d) New and existing data centers seeking a certificate of
exemption for new or existing facilities shall apply to the
Department in the manner specified by the Department. The
Department shall determine the duration of the certificate of
exemption awarded under this Act. The duration of the
certificate of exemption may not exceed 20 calendar years. The
Department and any data center seeking the exemption,
including a data center operator on behalf of itself and its
tenants, must enter into a memorandum of understanding that at
a minimum provides:
(1) the details for determining the amount of capital
investment to be made;
(2) the number of new jobs created;
(3) the timeline for achieving the capital investment

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and new job goals;
(4) the repayment obligation should those goals not be
achieved and any conditions under which repayment by the
qualifying data center or data center tenant claiming the
exemption will be required;
(5) the duration of the exemption; and
(6) other provisions as deemed necessary by the
Department.
(e) Beginning July 1, 2021, and each year thereafter, the
Department shall annually report to the Governor and the
General Assembly on the outcomes and effectiveness of Public
Act 101-31 that shall include the following:
(1) the name of each recipient business;
(2) the location of the project;
(3) the estimated value of the credit;
(4) the number of new jobs and, if applicable,
retained jobs pledged as a result of the project; and
(5) whether or not the project is located in an
underserved area.
(f) New and existing data centers seeking a certificate of
exemption related to the rehabilitation or construction of
data centers in the State shall require the contractor and all
subcontractors to comply with the requirements of Section
30-22 of the Illinois Procurement Code as they apply to
responsible bidders and to present satisfactory evidence of
that compliance to the Department.

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(g) New and existing data centers seeking a certificate of
exemption for the rehabilitation or construction of data
centers in the State shall require the contractor to enter
into a project labor agreement approved by the Department.
(h) Any qualifying data center issued a certificate of
exemption under this Section must annually report to the
Department the total data center tax benefits that are
received by the business. Reports are due no later than June 15
May 31 of each year and shall cover the previous calendar year.
The first report is for the 2019 calendar year and is due no
later than May 31, 2020.
To the extent that a business issued a certificate of
exemption under this Section has obtained an Enterprise Zone
Building Materials Exemption Certificate or a High Impact
Business Building Materials Exemption Certificate, no
additional reporting for those building materials exemption
benefits is required under this Section.
Failure to file a report under this subsection (h) may
result in suspension or revocation of the certificate of
exemption. Factors to be considered in determining whether a
data center certificate of exemption shall be suspended or
revoked include, but are not limited to, prior compliance with
the reporting requirements, cooperation in discontinuing and
correcting violations, the extent of the violation, and
whether the violation was willful or inadvertent.
(i) The Department shall not issue any new certificates of

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exemption under the provisions of this Section after July 1,
2029. This sunset shall not affect any existing certificates
of exemption in effect on July 1, 2029.
(j) The Department shall adopt rules to implement and
administer this Section.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19;
102-427, eff. 8-20-21; 102-558, eff. 8-20-21.)