Bill Amendment: IL SB1591 | 2019-2020 | 101st General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: USE/OCC TAX-DATA CENTERS

Status: 2019-08-02 - Public Act . . . . . . . . . 101-0207 [SB1591 Detail]

Download: Illinois-2019-SB1591-Senate_Amendment_001.html

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Sen. Elgie R. Sims, Jr.

Filed: 4/5/2019

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AMENDMENT TO SENATE BILL 1591
AMENDMENT NO. ______. Amend Senate Bill 1591 by replacing
everything from line 4 on page 1 through line 24 on page 5 with
the following:
"Section 3. The Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois is
amended by adding Section 605-1025 as follows:
(20 ILCS 605/605-1025 new)
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,
the Electricity Excise Tax Act, and a credit certification
against the taxes imposed under subsections (a) and (b) of

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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 building or a series of buildings
that is rehabilitated or constructed to house working
servers in one physical location or several sites.
"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 all of its data centers 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, makes a
capital investment of at least $250,000,000 over a
60-month period; and
(4) in the case of both existing and new data

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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 median 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) is carbon neutral or attains 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
Department of Commerce and Economic Opportunity.
"Full-time equivalent job" means a job in which the new

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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
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to

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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 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
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; and

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(5) 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 this
amendatory Act of the 101st General Assembly 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.
(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."; and

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on page 5, immediately below line 24, by inserting the
following:
"Section 4. The Illinois Income Tax Act is amended by
adding Section 229 as follows:
(35 ILCS 5/229 new)
Sec. 229. Data center construction employment tax credit.
(a) For tax years beginning on or after January 1, 2019, a
taxpayer who has been awarded a credit by the Department of
Commerce and Economic Opportunity under Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois is entitled to a credit
against the taxes imposed under subsections (a) and (b) of
Section 201 of this Act. The amount of the credit shall be 20%
of the wages paid during the taxable year to a full-time or
part-time employee of a construction contractor employed by a
certified data center if those wages are paid for the
construction of a new data center in a geographic area that
meets any one of the following criteria:
(1) the area has a poverty rate of at least 20%,
according to the latest federal decennial census;
(2) 75% or more of the children in the area participate
in the federal free lunch program, according to reported
statistics from the State Board of Education;
(3) 20% or more of the households in the area receive

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assistance under the Supplemental Nutrition Assistance
Program (SNAP); or
(4) the area has an average unemployment rate, as
determined by the Department of Employment Security, that
is more than 120% of the national unemployment average, as
determined by the U.S. Department of Labor, for a period of
at least 2 consecutive calendar years preceding the date of
the application.
If the taxpayer is a partnership, a Subchapter S
corporation, or a limited liability company that has elected
partnership tax treatment, the credit shall be allowed to the
partners, shareholders, or members in accordance with the
determination of income and distributive share of income under
Sections 702 and 704 and subchapter S of the Internal Revenue
Code, as applicable. The Department, in cooperation with the
Department of Commerce and Economic Opportunity, shall adopt
rules to enforce and administer this Section. This Section is
exempt from the provisions of Section 250 of this Act.
(b) In no event shall a credit under this Section reduce
the taxpayer's liability to less than zero. If the amount of
the credit exceeds the tax liability for the year, the excess
may be carried forward and applied to the tax liability of the
5 taxable years following the excess credit year. The tax
credit shall be applied to the earliest year for which there is
a tax liability. If there are credits for more than one year
that are available to offset a liability, the earlier credit

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shall be applied first.
(c) No credit shall be allowed with respect to any
certification for any taxable year ending after the revocation
of the certification by the Department of Commerce and Economic
Opportunity. Upon receiving notification by the Department of
Commerce and Economic Opportunity of the revocation of
certification, the Department shall notify the taxpayer that no
credit is allowed for any taxable year ending after the
revocation date, as stated in such notification. If any credit
has been allowed with respect to a certification for a taxable
year ending after the revocation date, any refund paid to the
taxpayer for that taxable year shall, to the extent of that
credit allowed, be an erroneous refund within the meaning of
Section 912 of this Act."; and
on page 23, line 16, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 24, line 1, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 24, by replacing lines 3 and 4 with the following:
"Section 605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.";
and

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on page 25, line 9, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 40, line 9, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 40, line 20, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 40, by replacing lines 22 and 23 with the following:
"Section 605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.";
and
on page 42, line 2, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 55, line 15, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 55, line 26, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 56, by replacing lines 2 and 3 with the following:
"Section 605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.";

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and
on page 57, line 8, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 78, line 17, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 79, line 3, by replacing "Department" with "Department
of Commerce and Economic Opportunity"; and
on page 79, by replacing lines 5 and 6 with the following:
"Section 605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.";
and
on page 80, line 12, by replacing "Department" with "Department
of Commerce and Economic Opportunity".