Bill Amendment: IL SB1608 | 2019-2020 | 101st General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: SMALL BUSINESS INNOVATION

Status: 2021-01-14 - Added as Chief Co-Sponsor Sen. Kimberly A. Lightford [SB1608 Detail]

Download: Illinois-2019-SB1608-House_Amendment_001.html

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Rep. Justin Slaughter

Filed: 11/1/2019

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AMENDMENT TO SENATE BILL 1608
AMENDMENT NO. ______. Amend Senate Bill 1608 on page 1,
immediately below line 3, by inserting the following:
"Section 5. The New Markets Development Program Act is
amended by changing Section 25 as follows:
(20 ILCS 663/25)
Sec. 25. Certification of qualified equity investments.
(a) A qualified community development entity that seeks to
have an equity investment or long-term debt security designated
as a qualified equity investment and eligible for tax credits
under this Section shall apply to the Department. The qualified
community development entity must submit an application on a
form that the Department provides that includes:
(1) The name, address, tax identification number of the
entity, and evidence of the entity's certification as a
qualified community development entity.

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(2) A copy of the allocation agreement executed by the
entity, or its controlling entity, and the Community
Development Financial Institutions Fund.
(3) A certificate executed by an executive officer of
the entity attesting that the allocation agreement remains
in effect and has not been revoked or cancelled by the
Community Development Financial Institutions Fund.
(4) A description of the proposed amount, structure,
and purchaser of the equity investment or long-term debt
security.
(5) The name and tax identification number of any
taxpayer eligible to utilize tax credits earned as a result
of the issuance of the qualified equity investment.
(6) Information regarding the proposed use of proceeds
from the issuance of the qualified equity investment.
(7) A nonrefundable application fee of $5,000. This fee
shall be paid to the Department and shall be required of
each application submitted.
(8) With respect to qualified equity investments made
on or after January 1, 2017, the amount of qualified equity
investment authority the applicant agrees to designate as a
federal qualified equity investment under Section 45D of
the Internal Revenue Code, including a copy of the screen
shot from the Community Development Financial Institutions
Fund's Allocation Tracking System of the applicant's
remaining federal qualified equity investment authority.

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(b) Within 30 days after receipt of a completed application
containing the information necessary for the Department to
certify a potential qualified equity investment, including the
payment of the application fee, the Department shall grant or
deny the application in full or in part. If the Department
denies any part of the application, it shall inform the
qualified community development entity of the grounds for the
denial. If the qualified community development entity provides
any additional information required by the Department or
otherwise completes its application within 15 days of the
notice of denial, the application shall be considered completed
as of the original date of submission. If the qualified
community development entity fails to provide the information
or complete its application within the 15-day period, the
application remains denied and must be resubmitted in full with
a new submission date.
(c) If the application is deemed complete, the Department
shall certify the proposed equity investment or long-term debt
security as a qualified equity investment that is eligible for
tax credits under this Section, subject to the limitations
contained in Section 20. The Department shall provide written
notice of the certification to the qualified community
development entity. The notice shall include the names of those
taxpayers who are eligible to utilize the credits and their
respective credit amounts. If the names of the taxpayers who
are eligible to utilize the credits change due to a transfer of

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a qualified equity investment or a change in an allocation
pursuant to Section 15, the qualified community development
entity shall notify the Department of such change.
(d) With respect to applications received before January 1,
2017, the Department shall certify qualified equity
investments in the order applications are received by the
Department. Applications received on the same day shall be
deemed to have been received simultaneously. For applications
received on the same day and deemed complete, the Department
shall certify, consistent with remaining tax credit capacity,
qualified equity investments in proportionate percentages
based upon the ratio of the amount of qualified equity
investment requested in an application to the total amount of
qualified equity investments requested in all applications
received on the same day.
(d-5) With respect to applications received on or after
January 1, 2017, the Department shall certify applications by
applicants that agree to designate qualified equity
investments as federal qualified equity investments in
accordance with item (8) of subsection (a) of this Section in
proportionate percentages based upon the ratio of the amount of
qualified equity investments requested in an application to be
designated as federal qualified equity investments to the total
amount of qualified equity investments to be designated as
federal qualified equity investments requested in all
applications received on the same day.

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(d-10) With respect to applications received on or after
January 1, 2017, after complying with subsection (d-5), the
Department shall certify the qualified equity investments of
all other applicants, including the remaining qualified equity
investment authority requested by applicants not designated as
federal qualified equity investments in accordance with item
(8) of subsection (a) of this Section, in proportionate
percentages based upon the ratio of the amount of qualified
equity investments requested in the applications to the total
amount of qualified equity investments requested in all
applications received on the same day.
(e) Once the Department has certified qualified equity
investments that, on a cumulative basis, are eligible for
$20,000,000 in tax credits, the Department may not certify any
more qualified equity investments. If a pending request cannot
be fully certified, the Department shall certify the portion
that may be certified unless the qualified community
development entity elects to withdraw its request rather than
receive partial credit.
(f) Within 30 days after receiving notice of certification,
the qualified community development entity shall (i) issue the
qualified equity investment and receive cash in the amount of
the certified amount and (ii) with respect to qualified equity
investments made on or after January 1, 2017, if applicable,
designate the required amount of qualified equity investment
authority as a federal qualified equity investment. The

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qualified community development entity must provide the
Department with evidence of the receipt of the cash investment
within 10 business days after receipt and, with respect to
qualified equity investments made on or after January 1, 2017,
if applicable, provide evidence that the required amount of
qualified equity investment authority was designated as a
federal qualified equity investment. If the qualified
community development entity does not receive the cash
investment and issue the qualified equity investment within 30
days following receipt of the certification notice, the
certification shall lapse and the entity may not issue the
qualified equity investment without reapplying to the
Department for certification. A certification that lapses
reverts back to the Department and may be reissued only in
accordance with the application process outline in this Section
25.
(g) Allocation rounds enabled by this Act shall be applied
for according to the following schedule:
(1) on January 2, 2019, $125,000,000 of qualified
equity investments; and
(2) beginning no sooner than 45 days after the
Community Development Financial Institutions Fund of the
United States Department of the Treasury announces
allocation awards under a Notice of Funding Availability
that is published in the Federal Register after September
6, 2019, on January 2, 2020, $125,000,000 of qualified

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equity investments.
(Source: P.A. 100-408, eff. 8-25-17.)
Section 10. The Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois is
amended by changing Section 605-1025 and by adding Section
605-1045 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,
the Electricity Excise Tax Act, 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 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, 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 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) within 90 days after being placed in service,
certifies to the Department that it is carbon neutral
or has attained 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

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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 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

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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.
(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 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. The Department shall adopt rules governing
suspension or revocation of the certificate of exemption,
including the length of suspension. 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

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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
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; revised 10-18-19.)
(20 ILCS 605/605-1045 new)
Sec. 605-1045. Illinois SBIR/STTR Matching Funds Program.
(a) There is established the Illinois Small Business
Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) Matching Funds Program to be administered by
the Department. In order to foster job creation and economic
development in the State, the Department may make grants to
eligible businesses to match funds received by the business as
an SBIR or STTR Phase I award and to encourage businesses to
apply for Phase II awards.
(b) In order to be eligible for a grant under this Section,
a business must satisfy all of the following conditions:
(1) The business must be a for-profit, Illinois-based
business. For the purposes of this Section, an
Illinois-based business is one that has its principal place

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of business in this State.
(2) The business must have received an SBIR/STTR Phase
I award from a participating federal agency in response to
a specific federal solicitation. To receive the full match,
the business must also have submitted a final Phase I
report, demonstrated that the sponsoring agency has
interest in the Phase II proposal, and submitted a Phase II
proposal to the agency.
(3) The business must satisfy all federal SBIR/STTR
requirements.
(4) The business shall not receive concurrent funding
support from other sources that duplicates the purpose of
this Section.
(5) The business must certify that at least 51% of the
research described in the federal SBIR/STTR Phase II
proposal will be conducted in this State and that the
business will remain an Illinois-based business for the
duration of the SBIR/STTR Phase II project.
(6) The business must demonstrate its ability to
conduct research in its SBIR/STTR Phase II proposal.
(c) The Department may award grants to match the funds
received by a business through an SBIR/STTR Phase I proposal up
to a maximum of $50,000. Seventy-five percent of the total
grant shall be remitted to the business upon receipt of the
SBIR/STTR Phase I award and application for funds under this
Section. Twenty-five percent of the total grant shall be

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remitted to the business upon submission by the business of the
Phase II application to the funding agency and acceptance of
the Phase I report by the funding agency. A business may
receive only one grant under this Section per year. A business
may receive only one grant under this Section with respect to
each federal proposal submission. Over its lifetime, a business
may receive a maximum of 5 awards under this Section.
(d) A business shall apply, under oath, to the Department
for a grant under this Section on a form prescribed by the
Department that includes at least all of the following:
(1) the name of the business, the form of business
organization under which it is operated, and the names and
addresses of the principals or management of the business;
(2) an acknowledgment of receipt of the Phase I report
and Phase II proposal by the relevant federal agency; and
(3) any other information necessary for the Department
to evaluate the application.
Section 15. The Illinois Income Tax Act is amended by
changing Section 229 as follows:
(35 ILCS 5/229)
Sec. 229. Data center construction employment tax credit.
(a) 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

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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 U.S. Census Bureau American Community
Survey 5-Year Estimates latest federal decennial census;
(2) (Blank); 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
assistance under the Supplemental Nutrition Assistance
Program (SNAP), according to data from the U.S. Census
Bureau American Community Survey 5-year Estimates; 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

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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
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

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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.
(Source: P.A. 101-31, eff. 6-28-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.".