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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB4203

Introduced 5/13/2026, by Sen. Sue Rezin

SYNOPSIS AS INTRODUCED:

20 ILCS 605/605-1025

Amends the Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois. In provisions concerning data
center incentives, provides that, as a condition of receiving and
maintaining a data center certificate of exemption, the Department of
Commerce and Economic Opportunity shall require that the qualified data
center operator execute and comply with a community benefit agreement with
the host community in which the qualified data center is located. Provides
that the community benefit agreement shall require the qualified data
center operator to make annual minimum payments to the host community.
Provides that the amount of the minimum host community payments may exceed
but shall be at least 10% of the property tax that would have been levied
against the qualified data center property, irrespective of any
exemptions, abatements, or exclusions applicable to the property, for the
year immediately preceding the year in which the community benefit
agreement is entered into. Provides that not less than 50% of the amounts
received from the special payments shall be used to provide payments,
credits, rebates, or other financial benefits to eligible homestead
property owners for the purpose of offsetting residential tax burdens.
Effective immediately.
LRB104 21817 HLH 37562 b

A BILL FOR

SB4203
LRB104 21817 HLH 37562 b
1

AN ACT concerning revenue.

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

"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

"Eligible homestead property" means residential
12

property that receives the general homestead exemption
13

under Section 15-175 of the Property Tax Code for the
14

applicable tax year.

15

"Host community" means the municipality or county that
16

exercises zoning, land use, or primary permitting
17

authority over the location of a qualified data center
18

project. If the project is located within a municipality,
19

then the host community is the municipality in which the
20

project is located. If the project is located within an
21

unincorporated area of a county, then the host community
22

is the county in which the project is located.

23

"Qualifying Illinois data center" means a new or
24

existing data center that:
25

(1) is located in the State of Illinois;
26

(2) in the case of an existing data center, made a

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1

capital investment of at least $250,000,000
2

collectively by the data center operator and the
3

tenants of the data center over the 60-month period
4

immediately prior to January 1, 2020 or committed to
5

make a capital investment of at least $250,000,000
6

over a 60-month period commencing before January 1,
7

2020 and ending after January 1, 2020; or
8

(3) in the case of a new data center, or an
9

existing data center making an upgrade, makes a
10

capital investment of at least $250,000,000 over a
11

60-month period beginning on or after January 1, 2020;
12

and
13

(4) in the case of both existing and new data
14

centers, results in the creation of at least 20
15

full-time or full-time equivalent new jobs over a
16

period of 60 months by the data center operator and the
17

tenants of the data center, collectively, associated
18

with the operation or maintenance of the data center;
19

those jobs must have a total compensation equal to or
20

greater than 120% of the average wage paid to
21

full-time employees in the county where the data
22

center is located, as determined by the U.S. Bureau of
23

Labor Statistics; and
24

(5) within 2 years after being placed in service,
25

certifies to the Department that it is carbon neutral
26

or has attained certification under one or more of the

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1

following green building standards:
2

(A) BREEAM for New Construction or BREEAM
3

In-Use;
4

(B) ENERGY STAR;
5

(C) Envision;
6

(D) ISO 50001-energy management;
7

(E) LEED for Building Design and Construction
8

or LEED for Operations and Maintenance;
9

(F) Green Globes for New Construction or Green
10

Globes for Existing Buildings;
11

(G) UL 3223; or
12

(H) an equivalent program approved by the
13

Department of Commerce and Economic Opportunity.
14

"Full-time equivalent job" means a job in which the
15

new employee works for the owner, operator, contractor, or
16

tenant of a data center or for a corporation under
17

contract with the owner, operator or tenant of a data
18

center at a rate of at least 35 hours per week. An owner,
19

operator or tenant who employs labor or services at a
20

specific site or facility under contract with another may
21

declare one full-time, permanent job for every 1,820 man
22

hours worked per year under that contract. Vacations, paid
23

holidays, and sick time are included in this computation.
24

Overtime is not considered a part of regular hours.
25

"Qualified tangible personal property" means:
26

electrical systems and equipment; climate control and

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LRB104 21817 HLH 37562 b
1

chilling equipment and systems; mechanical systems and
2

equipment; monitoring and secure systems; emergency
3

generators; hardware; computers; servers; data storage
4

devices; network connectivity equipment; racks; cabinets;
5

telecommunications cabling infrastructure; raised floor
6

systems; peripheral components or systems; software;
7

mechanical, electrical, or plumbing systems; battery
8

systems; cooling systems and towers; temperature control
9

systems; other cabling; and other data center
10

infrastructure equipment and systems necessary to operate
11

qualified tangible personal property, including fixtures;
12

and component parts of any of the foregoing, including
13

installation, maintenance, repair, refurbishment, and
14

replacement of qualified tangible personal property to
15

generate, transform, transmit, distribute, or manage
16

electricity necessary to operate qualified tangible
17

personal property; and all other tangible personal
18

property that is essential to the operations of a computer
19

data center. "Qualified tangible personal property" also
20

includes building materials physically incorporated in to
21

the qualifying data center.
22

To document the exemption allowed under this Section, the
23
retailer must obtain from the purchaser a copy of the
24
certificate of eligibility issued by the Department.
25

(d) New and existing data centers seeking a certificate of
26
exemption for new or existing facilities shall apply to the

SB4203
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1
Department in the manner specified by the Department. The
2
Department shall determine the duration of the certificate of
3
exemption awarded under this Act. The duration of the
4
certificate of exemption may not exceed 20 calendar years. The
5
Department and any data center seeking the exemption,
6
including a data center operator on behalf of itself and its
7
tenants, must enter into a memorandum of understanding that at
8
a minimum provides:
9

(1) the details for determining the amount of capital
10

investment to be made;
11

(2) the number of new jobs created;
12

(3) the timeline for achieving the capital investment
13

and new job goals;
14

(4) the repayment obligation should those goals not be
15

achieved and any conditions under which repayment by the
16

qualifying data center or data center tenant claiming the
17

exemption will be required;
18

(5) the duration of the exemption; and
19

(6) other provisions as deemed necessary by the
20

Department.
21

(d-5) As a condition of receiving and maintaining a
22
certificate of exemption under this Section, the Department
23
shall require, through a memorandum of understanding entered
24
into under this Section, that the qualified data center
25
operator execute and comply with a community benefit agreement
26
with the host community in which the qualified data center is

SB4203
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LRB104 21817 HLH 37562 b
1
located.

2

The host community shall administer any benefit program
3
established under this subsection and shall coordinate, as
4
necessary, with affected taxing districts; provided, however,
5
that the host community shall retain sole authority to
6
establish the structure, methodology, and distribution of the
7
program to the extent permitted by law.

8

The community benefit agreement shall require the
9
qualified data center operator to make annual minimum payments
10
to the host community in each taxable year in which the
11
certificate of exemption under this Section is in effect.
12
Those payments shall be in addition to, and shall not be
13
credited against, any property taxes or other taxes or fees
14
otherwise owed by the qualified data center or its operator.

15

Subject to the limitations set forth in this subsection,
16
the amount of the community benefit payment shall be
17
established in the community benefit agreement. It may be a
18
fixed amount for the duration of the incentive period or it may
19
be subject to adjustment based on factors memorialized in the
20
community benefit agreement, including an annual rate
21
adjustment equal to the annual percentage change in the
22
Consumer Price Index, if negotiated.

23

The amount of the minimum host community payments may
24
exceed but shall be at least 10% of the property tax that would
25
have been levied against the qualified data center property,
26
irrespective of any exemptions, abatements, or exclusions

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1
applicable to the property, for the year immediately preceding
2
the year in which the community benefit agreement is entered
3
into.

4

The memorandum of understanding shall require the
5
qualified data center operator to provide documentation
6
sufficient to demonstrate compliance with this subsection.
7
Failure to comply with the requirements of this subsection or
8
the applicable community benefit agreement shall constitute a
9
violation of the memorandum of understanding.

10

All host community payments received pursuant to this
11
subsection shall be deposited into a segregated fund
12
maintained by the host community and shall not be commingled
13
with general corporate funds except as expressly authorized.
14
Any host community payments negotiated in addition to those
15
required under this subsection shall be similarly deposited
16
into the segregated fund.

17

Not less than 50% of the amounts deposited into the fund in
18
each fiscal year, and any greater percentage specified in the
19
community benefit agreement, shall be used exclusively to
20
provide payments, credits, rebates, or other financial
21
benefits to eligible homestead property owners, funded from
22
revenues other than property taxes, for the purpose of
23
offsetting residential tax burdens.

24

The benefits to eligible homestead property owners under
25
this subsection shall be provided pursuant to a program
26
established and administered by the host community. Those

SB4203
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LRB104 21817 HLH 37562 b
1
benefits may take the form of rebates, credits, direct
2
payments, or other mechanisms authorized by law that are
3
funded from revenues other than property taxes and that do not
4
alter assessed valuation, tax rates, or equalization factors
5
under the Property Tax Code.

6

Benefits shall be distributed in a uniform and
7
nondiscriminatory manner among all owners of eligible
8
homestead property within the jurisdiction on a consistent
9
basis. The host community shall adopt an ordinance or
10
resolution establishing the program no later than 180 days
11
after the first host community payment is received under this
12
subsection.

13

Nothing in this subsection shall be construed to impose,
14
authorize, or modify any property tax, classification of
15
property for taxation, or the levy, extension, or collection
16
of property taxes under the Property Tax Code.

17

Failure to comply with this subsection or the applicable
18
community benefit agreement shall be grounds for suspension,
19
revocation, or recapture of the certificate of exemption, in
20
whole or in part, consistent with this Section and the
21
memorandum of understanding.

22

Each host community that receives payments under this
23
subsection shall prepare and make publicly available an annual
24
report and shall file those reports with the Department in the
25
form and manner prescribed by the Department by rule.

26

(e) Beginning July 1, 2021, and each year thereafter, the

SB4203
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LRB104 21817 HLH 37562 b
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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