Illinois Administrative Code › Title 14 - COMMERCE › Part 521 - DATA CENTER INVESTMENT PROGRAM › Section 521.20 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following definitions are applicable to this Part.
"Applicant" means a taxpayer that is an owner or operator of a
				data center located in Illinois that seeks certification of that data center in
				order to claim the exemptions or credits created by Section 605-1025(a) of the
				Statute.
"Application" means the data center owner or operator's
				application for approval of the data centers investment tax exemption.
"Capital Investment" means the purchase, renovation,
				rehabilitation, or construction of permanent land, buildings, structures,
				equipment and furnishings used directly for or in the project, and any goods or
				services for the project that are purchased and capitalized under GAAP or an
				equivalent accounting principles system approved by the Department, including
				any organizational costs and research and development costs incurred in
				Illinois. Capitalized lease costs for land, buildings, structures or equipment
				shall be included in "Capital Investment" only if the lease term, including any
				extensions or options to extend, equals or exceeds the term of the memorandum
				of understanding, and provided that the lease costs are valued at their present
				value using the corporate interest rate prevailing at the time the data center
				owner or operator filed its application with the Department.
"Certificate of Exemption" means the certificate issued by the
				Department pursuant to the Memorandum of Understanding entered into between the
				Department and the data center owner, operator, or tenant that authorizes the
				data center owner, operator, or tenant to receive the tax exemptions set forth
				in Section 605-1025(a) and (b) of the Statute.
"Credit"
means
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
an underserved area.
				[35 ILCS
				5/229(a) ]
"Data Center" means a facility:
whose primary services
include, but are not
				limited to
the storage, management, and processing of digital data;
				and
that is used to house:
computer and network systems, including associated
				components such as servers, network equipment and appliances,
				telecommunications, and data storage systems;
systems for monitoring and managing infrastructure
				performance;
internet-related equipment and
				services;
data communications connections;
environmental controls;
fire protection systems; and
security systems and services.
[20 ILCS
				605/605-1025(c) ]
A data center may consist of a building or a series of
				buildings that is rehabilitated or constructed to house working servers in one
				physical location, several adjacent sites, or multiple locations within a
				municipality or county.
"Department"
or "DCEO"
means the
				Department of Commerce and Economic Opportunity.
[20 ILCS
				605/605-5 ]
"Director" means the Director
of the
				Department
of Commerce and Economic Opportunity
.
				[20 ILCS
				605/605-5 ]
"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 specified site or facility under
				contract with another may declare one full-time, permanent job for every 1,820
				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.
[20 ILCS
				605/605-1025(c) ]
"Illinois Procurement Code"
means
				30 ILCS
				500
.
"Illinois State Income Taxes" means all of the taxes imposed
				against the data center owner or operator or a tenant of the data center under
				Section 201(a) and (b) of the Illinois Income Tax Act
.
"Incremental Income Tax" means the total amount withheld during
				the taxable year from the compensation of new full-time and full-time
				equivalent employees under Article 7 of the Illinois Income Tax Act arising
				from employment at the project during the taxable year, as reflected on the IRS
				forms W-2 for each such employee.
"Memorandum of Understanding" or "MOU" means the memorandum of
				understanding entered between a taxpayer and the Department under Section
				605-1025(d) of the Statute and Section
				521.90 of this Part.
"New Employee" means a full-time employee in a qualifying
				full-time equivalent job or employee first employed by the data center owner or
				operator or a tenant of the data center in the project and who is hired on or
				after the effective date of the MOU entered into between the Department and the
				data center owner or operator.
The term "New Employee" does not include:
an employee of the data center owner or operator or a tenant of
				the data center who was previously employed in Illinois by a related member (as
				that term is defined in Section
				5.5 of the Economic Development
				for a Growing Economy Act [35 ILCS 10 ]) of the data center
				owner or operator or a tenant of the data center and whose employment was
				shifted to the data center after the data center owner or operator entered into
				the MOU;
an employee of the data center owner or operator or a tenant of
				the data center who was previously employed in Illinois by the data center
				owner or operator or a tenant of the data center and whose employment was
				shifted to the project after the data center owner or operator entered into the
				MOU; or
any individual who has a direct or an indirect ownership
				interest of at least 5% in the profits, equity, capital, or value of the
				taxpayer or a child, grandchild, parent, or spouse, other than a spouse who is
				legally separated from the individual, of any individual who has a direct or an
				indirect ownership interest of at least 5% in the profits, equity, capital, or
				value of the data center owner or operator or a tenant of the data
				center.
However, an employee shall be considered a new employee under
				the MOU if:
the employee performs a job that was previously performed by an
				employee who was treated under the MOU as a new employee and promoted by the
				data center owner or operator or a tenant of the data center to another job;
				or
the employee fills a job vacancy that had been continuously
				vacant for the 184-day period immediately preceding the date of the MOU. A job
				vacancy whose incumbent is on approved leave, is locked out, or is on strike is
				not a vacancy.
"Operation and Maintenance" means the day-to-day activities
				related to systems and workflows within a data center, including, but not
				limited to, installing and maintaining network resources, ensuring data center
				security, monitoring power and cooling systems, upkeep, customer environment
				support, system and component upgrades and refreshes, and incident
				resolution.
"Payroll" shall mean
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.
[35 ILCS
				5/229(a) ]
"Placed in Service" means the earlier of:
when the project is in a state or condition of readiness and
				availability for specifically assigned functions; or
the end of the 60-month period identified in the MOU.
"Project" means the development at the location set forth in
				the MOU.
"Project Labor Agreement" means an agreement with a bona fide
				labor organization that satisfies the provisions of the Illinois Project Labor
				Agreements Act [30 ILCS 571 ] and that is
				approved by the Department. For an existing data center for which construction
				took place prior to June 28, 2019 (the effective date of the Statute) and for
				which no project labor agreement was entered into simultaneously, the applicant
				may provide evidence as required by the Department in the form of affidavits
				and other supporting documentation from the contractor and the applicant
				demonstrating compliance with the standard provisions of a project labor
				agreement. Proof of the project labor agreements must be accompanied by
				evidentiary materials from the labor organization affirming participation in
				the project. Data centers that use multiple contractors during the course of
				the 60-month period specified in the MOU must enter into a project labor
				agreement approved by the Department for the labor component of any
				construction used to achieve the minimum required capital investment.
"Project Costs" include all costs incurred or to be incurred by
				the data center owner or operator or a tenant of the data center directly
				related to the project, including, but not limited to, all:
capital investment;
infrastructure development costs;
debt service, except refinancing of current debt; and
non-capitalized research and development, job training and
				education, lease, and relocation costs.
The value of State or other governmental incentives, including
				discretionary tax credits, discretionary job training grants, or the interest
				savings of below market rate loans, shall not be included as project
				costs.
"Qualified Tangible Personal Property"
				means:
electrical systems and equipment; climate control and
				chilling equipment and systems; mechanical systems and equipment; monitoring
				and security systems; emergency
and back-up power
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;
other data center infrastructure equipment and systems
				necessary to operate qualified tangible personal property, including
				fixtures;
component parts of any of the foregoing, including
				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 into the qualifying Illinois data
				center and any described tangible personal property detailed in Illinois
				Department of Revenue rules (see 86 Ill. Adm. Code
				130.1957).
[20 ILCS
				605/605-1025(c) ]
"Qualifying Illinois Data Center" means a new or
				existing data center that:
is located in the State of Illinois;
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
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;
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
within
2 years
after being placed in
				service, certifies to the Department that it is carbon neutral or attains
				certification under one or more of the following green building
				standards:
BREEAM for New Construction or BREEAM
				In-Use;
ENERGY STAR;
Envision;
ISO 50001-energy management;
LEED for Building Design and Construction or LEED for
				Operations and Maintenance;
Green Globes for New Construction or Green Globes for
				Existing Buildings;
UL 3223; or
an equivalent program approved by the
				Department.
[20 ILCS
				605/605-1025(c) ]
"Responsible Bidder" means a person who has the capability in
				all respects to perform fully the contract requirements and the integrity and
				reliability that will assure good faith performance. A responsible bidder or
				offeror shall not include a business or other entity that does not exist as a
				legal entity at the time a bid or offer is submitted for a State
				contract.
"Statute" means Section 605-1025 of the Department of Commerce
				and Economic Opportunity Law [20 ILCS 605 ] (Data Center
				Investment).
"Taxable Year" means any 12 month consecutive accounting period
				for keeping records and reporting income and expenses. This does not preclude
				the data center owner or operator or a tenant of the data center from seeking a
				credit for a short or stub taxable year in the event that either:
the data center owner or operator or a tenant of the data
				center was not in existence for an entire taxable year; or
the data center owner or operator or a tenant of the data
				center changed its accounting period.
"Tenant" means a tenant of the data center owner or operator at
				the project.
"Underserved Area" means
a geographic area that meets
				any one of the following criteria:
the area has a poverty rate of at least 20%, according
				to
the latest federal decennial
census
, the most
				recent
American Community Survey
released by the
U.S.
				Census Bureau
, or other appropriate data source produced by the U.S.
				Census Bureau;
75% or more of the children in the area
are
				eligible to
participate in the federal free lunch
or
				reduced-price meals
program, according to reported statistics from the
				State Board of Education;
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; or
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.
[35 ILCS 5/229(a)(1) through
				(4) ]
"Wages" means wages, salaries, commissions, tips and other
				compensation subject to Medicare tax as indicated in Box 5 of an employee's
				Internal Revenue Service Form W-2.