Full Text of SB3643 102nd General Assembly
SB3643 102ND GENERAL ASSEMBLY |
| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022 SB3643 Introduced 1/21/2022, by Sen. Sue Rezin SYNOPSIS AS INTRODUCED: |
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Amends the Civil Administrative Code of Illinois. Defines "cryptocurrency" and "cryptocurrency mining." Modifies "qualifying Illinois Data center" to include data centers engaged in cryptocurrency mining over a 60-month period that may begin no earlier than 60 months prior the effective date of this Act; or data centers engaged in cryptocurrency commencing before the effective date of this Act and ending after the effective date of this Act in the case of a data center. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning State government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Department of Commerce and Economic | 5 | | Opportunity Law of the
Civil Administrative Code of Illinois | 6 | | is 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 | 10 | | from the Retailers' Occupation Tax Act, the Use Tax Act, the | 11 | | Service Use Tax Act, and the Service Occupation Tax Act, all | 12 | | locally-imposed retailers' occupation taxes administered and | 13 | | collected by the Department, the Chicago non-titled Use Tax, | 14 | | and a credit certification against the taxes imposed under | 15 | | subsections (a) and (b) of Section 201 of the Illinois Income | 16 | | Tax Act to qualifying Illinois data centers. | 17 | | (b) For taxable years beginning on or after January 1, | 18 | | 2019, the Department shall award credits against the taxes | 19 | | imposed under subsections (a) and (b) of Section 201 of the | 20 | | Illinois Income Tax Act as provided in Section 229 of the | 21 | | Illinois Income Tax Act. | 22 | | (c) For purposes of this Section: | 23 | | "Cryptocurrency" means a type of virtual currency that |
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| 1 | | utilizes cryptography to secure transactions that are | 2 | | digitally recorded on a distributed ledger, such as a | 3 | | blockchain. | 4 | | "Cryptocurrency mining" means the process whereby | 5 | | computers, also known as nodes or mining rigs, validate | 6 | | blockchain transactions for a specific cryptocurrency and, in | 7 | | turn, receive a mining reward for their computational efforts. | 8 | | "Data center" means a facility: (1) whose primary | 9 | | services are the storage, management, and processing of | 10 | | digital data and cryptocurrency mining ; and (2) that is | 11 | | used to house (i) computer and network systems, including | 12 | | associated components such as servers, network equipment | 13 | | and appliances, telecommunications, and data storage | 14 | | systems, (ii) systems for monitoring and managing | 15 | | infrastructure performance, (iii) Internet-related | 16 | | equipment and services, (iv) data communications | 17 | | connections, (v) environmental controls, (vi) fire | 18 | | protection systems, and (vii) security systems and | 19 | | services. | 20 | | "Qualifying Illinois data center" means a new or | 21 | | existing data center that: | 22 | | (1) is located in the State of Illinois; | 23 | | (2) in the case of an existing data center, made a | 24 | | capital investment of at least $250,000,000 | 25 | | collectively by the data center operator and the | 26 | | tenants of the data center over the 60-month period |
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| 1 | | immediately prior to January 1, 2020 , or in the case of | 2 | | a data center engaged in cryptocurrency mining over a | 3 | | 60-month period that may begin no earlier than 60 | 4 | | months prior the effective date of this amendatory act | 5 | | of 2022, or committed to make a capital investment of | 6 | | at least $250,000,000 over a 60-month period | 7 | | commencing before January 1, 2020 and ending after | 8 | | January 1, 2020 , or commencing before the effective | 9 | | date of this amendatory Act of 2022 and ending after | 10 | | the effective date of this amendatory Act of 2022 in | 11 | | the case of a data center engaged in cryptocurrency ; | 12 | | or | 13 | | (3) in the case of a new data center, or an | 14 | | existing data center making an upgrade, makes a | 15 | | capital investment of at least $250,000,000 over a | 16 | | 60-month period beginning on or after January 1, 2020; | 17 | | and | 18 | | (4) in the case of both existing and new data | 19 | | centers, results in the creation of at least 20 | 20 | | full-time or full-time equivalent new jobs over a | 21 | | period of 60 months by the data center operator and the | 22 | | tenants of the data center, collectively, associated | 23 | | with the operation or maintenance of the data center; | 24 | | those jobs must have a total compensation equal to or | 25 | | greater than 120% of the average wage paid to | 26 | | full-time employees in the county where the data |
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| 1 | | center is located, as determined by the U.S. Bureau of | 2 | | Labor Statistics; and | 3 | | (5) within 2 years after being placed in service, | 4 | | certifies to the Department that it is carbon neutral | 5 | | or has attained certification under one or more of the | 6 | | following green building standards: | 7 | | (A) BREEAM for New Construction or BREEAM | 8 | | In-Use; | 9 | | (B) ENERGY STAR; | 10 | | (C) Envision; | 11 | | (D) ISO 50001-energy management; | 12 | | (E) LEED for Building Design and Construction | 13 | | or LEED for Operations and Maintenance; | 14 | | (F) Green Globes for New Construction or Green | 15 | | Globes for Existing Buildings; | 16 | | (G) UL 3223; or | 17 | | (H) an equivalent program approved by the | 18 | | Department of Commerce and Economic Opportunity. | 19 | | "Full-time equivalent job" means a job in which the | 20 | | new employee works for the owner, operator, contractor, or | 21 | | tenant of a data center or for a corporation under | 22 | | contract with the owner, operator or tenant of a data | 23 | | center at a rate of at least 35 hours per week. An owner, | 24 | | operator or tenant who employs labor or services at a | 25 | | specific site or facility under contract with another may | 26 | | declare one full-time, permanent job for every 1,820 man |
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| 1 | | hours worked per year under that contract. Vacations, paid | 2 | | holidays, and sick time are included in this computation. | 3 | | Overtime is not considered a part of regular hours. | 4 | | "Qualified tangible personal property" means: | 5 | | electrical systems and equipment; climate control and | 6 | | chilling equipment and systems; mechanical systems and | 7 | | equipment; monitoring and secure systems; emergency | 8 | | generators; hardware; computers; servers; data storage | 9 | | devices; network connectivity equipment; racks; cabinets; | 10 | | telecommunications cabling infrastructure; raised floor | 11 | | systems; peripheral components or systems; software; | 12 | | mechanical, electrical, or plumbing systems; battery | 13 | | systems; cooling systems and towers; temperature control | 14 | | systems; other cabling; and other data center | 15 | | infrastructure equipment and systems necessary to operate | 16 | | qualified tangible personal property, including fixtures; | 17 | | and component parts of any of the foregoing, including | 18 | | installation, maintenance, repair, refurbishment, and | 19 | | replacement of qualified tangible personal property to | 20 | | generate, transform, transmit, distribute, or manage | 21 | | electricity necessary to operate qualified tangible | 22 | | personal property; and all other tangible personal | 23 | | property that is essential to the operations of a computer | 24 | | data center. "Qualified tangible personal property" also | 25 | | includes building materials physically incorporated in to | 26 | | the qualifying data center. |
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| 1 | | To document the exemption allowed under this Section, the | 2 | | retailer must obtain from the purchaser a copy of the | 3 | | certificate of eligibility issued by the Department. | 4 | | (d) New and existing data centers seeking a certificate of | 5 | | exemption for new or existing facilities shall apply to the | 6 | | Department in the manner specified by the Department. The | 7 | | Department shall determine the duration of the certificate of | 8 | | exemption awarded under this Act. The duration of the | 9 | | certificate of exemption may not exceed 20 calendar years. The | 10 | | Department and any data center seeking the exemption, | 11 | | including a data center operator on behalf of itself and its | 12 | | tenants, must enter into a memorandum of understanding that at | 13 | | a minimum provides: | 14 | | (1) the details for determining the amount of capital | 15 | | investment to be made; | 16 | | (2) the number of new jobs created; | 17 | | (3) the timeline for achieving the capital investment | 18 | | and new job goals; | 19 | | (4) the repayment obligation should those goals not be | 20 | | achieved and any conditions under which repayment by the | 21 | | qualifying data center or data center tenant claiming the | 22 | | exemption will be required; | 23 | | (5) the duration of the exemption; and | 24 | | (6) other provisions as deemed necessary by the | 25 | | Department. | 26 | | (e) Beginning July 1, 2021, and each year thereafter, the |
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| 1 | | Department shall annually report to the Governor and the | 2 | | General Assembly on the outcomes and effectiveness of Public | 3 | | Act 101-31 that shall include the following: | 4 | | (1) the name of each recipient business; | 5 | | (2) the location of the project; | 6 | | (3) the estimated value of the credit; | 7 | | (4) the number of new jobs and, if applicable, | 8 | | retained jobs pledged as a result of the project; and | 9 | | (5) whether or not the project is located in an | 10 | | underserved area. | 11 | | (f) New and existing data centers seeking a certificate of | 12 | | exemption related to the rehabilitation or construction of | 13 | | data centers in the State shall require the contractor and all | 14 | | subcontractors to comply with the requirements of Section | 15 | | 30-22 of the Illinois Procurement Code as they apply to | 16 | | responsible bidders and to present satisfactory evidence of | 17 | | that compliance to the Department. | 18 | | (g) New and existing data centers seeking a certificate of | 19 | | exemption for the rehabilitation or construction of data | 20 | | centers in the State shall require the contractor to enter | 21 | | into a project labor agreement approved by the Department. | 22 | | (h) Any qualifying data center issued a certificate of | 23 | | exemption under this Section must annually report to the | 24 | | Department the total data center tax benefits that are | 25 | | received by the business. Reports are due no later than May 31 | 26 | | of each year and shall cover the previous calendar year. The |
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| 1 | | first report is for the 2019 calendar year and is due no later | 2 | | than May 31, 2020. | 3 | | To the extent that a business issued a certificate of | 4 | | exemption under this Section has obtained an Enterprise Zone | 5 | | Building Materials Exemption Certificate or a High Impact | 6 | | Business Building Materials Exemption Certificate, no | 7 | | additional reporting for those building materials exemption | 8 | | benefits is required under this Section. | 9 | | Failure to file a report under this subsection (h) may | 10 | | result in suspension or revocation of the certificate of | 11 | | exemption. Factors to be considered in determining whether a | 12 | | data center certificate of exemption shall be suspended or | 13 | | revoked include, but are not limited to, prior compliance with | 14 | | the reporting requirements, cooperation in discontinuing and | 15 | | correcting violations, the extent of the violation, and | 16 | | whether the violation was willful or inadvertent. | 17 | | (i) The Department shall not issue any new certificates of | 18 | | exemption under the provisions of this Section after July 1, | 19 | | 2029. This sunset shall not affect any existing certificates | 20 | | of exemption in effect on July 1, 2029.
| 21 | | (j) The Department shall adopt rules to implement and | 22 | | administer this Section. | 23 | | (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19; | 24 | | 102-427, eff. 8-20-21; 102-558, eff. 8-20-21.)
| 25 | | Section 99. Effective date. This Act takes effect upon | 26 | | becoming law.
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