Section 519.10  Definitions

 

The following definitions are applicable to this Part.

 

"Act" means Section 605-1115 of the Department of Commerce and Economic Opportunity Law [20 ILCS 605/1115].

 

"Applicant" means a government entity, non-profit, taxpayer, educational institution or research and development entity that seeks to establish a quantum computing campus located in Illinois, or a taxpayer, educational institution or research and development entity that seeks to be a tenant on a quantum computing campus.

 

"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 applicant 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 tenant that authorizes the tenant to receive the tax exemptions set forth in Section 605-1115(b) of the Act.

 

"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 605/605-1115(a)]

 

"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 an employee works for a tenant of the quantum campus at a rate of at least 35 hours per week. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours. [20 ILCS 605/605-1115(a)]

 

"Memorandum of Understanding" or "MOU" means the memorandum of understanding entered between a taxpayer establishing or joining a quantum computing campus as a tenant and the Department under Section 605-1115(d) of the Act and Section 519.120 of this Part.

 

"New Employee" means a full-time employee in a qualifying full-time equivalent job or employee first employed by the tenant on the quantum computing campus and who is hired on or after the effective date of the MOU entered into between the tenant and the Department.

 

The term "New Employee" does not include:

 

an employee of the tenant of a certified quantum computing campus 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 tenant and whose employment was shifted to the quantum computing campus after the tenant entered into the MOU;

 

an employee of the tenant located on the quantum computing campus who was previously employed in Illinois by the tenant of the quantum computing campus and whose employment was shifted to the project after the tenant 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 tenant on the quantum computing campus.

 

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 tenant of the quantum computing campus 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.

 

"Placed in Service" means the earlier of:

 

when the project identified in the application or MOU 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 application or MOU.

 

"Quantum Computing Activities" means the research, development, and use of computing methods that generate and manipulate quantum bits in a controlled quantum state in order to support the demand for quantum computing research, development, and implementation for practical use. This includes the use of photons, semiconductors, superconductors, trapped ions, and other industry and academically regarded methods for simulating quantum bits.

 

"Quantum Computing Campus" or "Campus" is a contiguous area located in the State of Illinois that is designated by the Department as a quantum computing campus in order to support the demand for quantum computing research, development, and implementation for practical use. A quantum computing campus may include educational institutions, nonprofit research and development organizations, and for-profit research and development organization serving as anchor tenants and joining tenants that, with approval from the Department, may change.

 

"Tenant" is an entity located or that intends to be located on a quantum computing campus that has a direct or supporting role in quantum computing activities. Tenants include quantum computer operators and research facilities, data centers, manufacturers and assemblers of quantum computers and component parts, cryogenic or refrigeration facilities, and other facilities determined, by industry and academic leaders, to be fundamental to the research and development of quantum computing for practical solutions.

 

"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)]

 

Section 519.20  Eligible Applicants

 

a)         A government entity, non-profit, educational institution, research entity or for-profit entity located in Illinois may apply to the Department for certification of a quantum computing campus.

 

b)         Eligible applicants seeking to establish a quantum computing campus shall apply to the Department for designation. The campus shall meet the following criteria:

 

1)         Must comprise a contiguous area of at least 100 acres and not more than 640 acres;

 

2)         Must contain tenants that demonstrate a substantial plan for using the campus to encourage participation by organizations owned by minorities, women, and persons with disabilities, as those terms are defined in Section 2 of the Business Enterprise Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/2]; and

 

3)         Must contain tenants that, within 60 months after the tenants' project is placed in service, certify to the Department that the project is carbon neutral or attains certification under one or more of the green building standards as set forth in Section 519.70(a)(3).

 

Section 519.30  Form of Application

 

a)         The Department will provide applications to parties interested in establishing a quantum computing campus upon request. Submission of an application does not commit the Department to award assistance or pay any costs, including any application fee, incurred by the applicant in the preparation of an application.

 

b)         Applications shall be submitted to the Department office location or electronic mail address identified in the application. The application shall include:

 

1)         Legal Applicant:

 

A)        name, address, telephone number of each applicant;

 

B)        key contact, title, telephone number and electronic mail address;

 

C)        each applicant Federal Employer Identification Numbers (FEIN) or the Illinois Business Tax (IBT) numbers, if applicable;

 

D)        applicant related organizations, applicant background and whether the proposed quantum computing campus is in an underserved area, an energy transition zone, or an opportunity zone; and

 

E)        unless the applicant is a government entity, the application shall be accompanied by a Certificate of Good Standing from the Office of the Illinois Secretary of State for each applicant or other proof of authority to transact business in the State.

 

2)         Campus Summary:  a detailed description of the contiguous area of land in Illinois, and a substantial plan for using the designation to encourage participation by minorities, women and persons with disabilities.

 

3)         Green Building Certification:  detailed information demonstrating that the campus will contain tenants that, within 60 months after the tenants' project is placed in service, will certify to the Department that property related to the tenant's project is carbon neutral or attains certification under one or more of the green building standards as set forth in Section 519.70(a)(3).

 

4)         Tax Clearance, as follows:

 

A)        to the Department of Revenue, a Form ITR-1; and

 

B)        to DCEO, proof of tax clearance from the Department of Revenue.

 

5)         Other provisions – any other provisions or information that the Department determines is necessary to facilitate the Department's evaluation of the application.

 

c)         The applicant is responsible for the accuracy of all data, information and documentation required by subsection (b). Once submitted, applications shall become the property of the Department.

 

d)         Any materials or data made available or received by any agent or employee of the Department from an applicant for, or a recipient of a tax exemption, that is exempt from disclosure under Section 7 of the Freedom of Information Act [5 ILCS 140/7] shall not be disclosed.

 

Section 519.40  Application Review and Approval

 

a)         Applicants shall be notified in writing as to the Department's evaluation of all completed applications. If the Department denies an application, it will specify the reasons for the denial in writing and allow the applicant 30 days to amend and resubmit its application for evaluation.

 

b)         The Department shall issue a certificate of designation as a quantum computing campus to each applicant notified for approval.

 

c)         The Department shall, within 10 days after the designation, send a letter of notification to each member of the General Assembly whose legislative district or representative district contains all or part of the designated area.  [20 ILCS 605/605-1115(d)]

 

Section 519.50  Eligibility Determination

 

a)         Tenants must be involved in quantum computing activities located or to be located on a quantum computing campus.

 

b)         Tenants must have either a direct or supporting role in quantum computing activities as defined in this Section. Tenants include quantum computer operators and research facilities, data centers, manufacturers and assemblers of quantum computers and component parts, cryogenic or refrigeration facilities, and related business that are fundamental to the research and development of quantum computing for practical solutions.

 

c)         A taxpayer may not execute more than one application with respect to a single address or location for the same period of time.

 

d)         This provision does not preclude the tenant from entering into an additional MOU after the expiration of an earlier MOU to the extent the taxpayer's application otherwise satisfies the terms and conditions of the Act and is approved by the Department.

 

Section 519.60  Form of Application

 

a)         The Department will provide interested applicants with a tenant application package upon request. Submission of an application does not commit the Department to award assistance or pay any costs, including any application fee, incurred by the applicant in the preparation of an application.

 

b)         Written applications are required and must be submitted on the standard application form provided by the Department. Applications shall be submitted to the Department office location or electronic mail address identified in the application.

 

Section 519.70  Application Review and Approval

 

a)         Written applications must be submitted on the standard application form provided by the Department. The application shall include:

 

1)         Legal Applicant:

 

A)        name, address, telephone number of each applicant;

 

B)        key contact, title, telephone number and electronic mail address;

 

C)        applicant related companies;

 

D)        applicant Federal Employer Identification Numbers (FEIN) or the Illinois Business Tax (IBT) numbers;

 

E)        address in which the applicant's project will be located; and

 

F)         a Certificate of Good Standing from the Office of the Illinois Secretary of State for each applicant or other proof of authority to transact business in the State. 

 

2)         Project Summary:

 

A)        a detailed description of the project, including the quantum computing activities to be performed at the project;

 

B)        general location of the project on a designated quantum computing campus;

 

C)        amounts of capital investment, new jobs created and retained;

 

D)        a timeline to achieve the capital investment and new jobs creation goals;

 

E)        whether the project will require the construction of new facilities; and

 

F)         a substantial plan for encouraging participation by minorities, women and persons with disabilities at or in constructing the project.

 

3)         Green Building Certification:  supporting documentation that the buildings associated with applicant's project meets or will meet the green building standards under one or more of the following designations:

 

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. [20 ILCS 605/605-1115(a)].  In the event the applicant seeks to demonstrate an alternative certification, an explanation and supporting documentation as to how the program is "equivalent" to those programs and categories specifically enumerated in the Act.

 

4)         Other provisions:  any other provisions or information that the Department determines is necessary to facilitate the Department's evaluation of the application.

 

5)         Tax Clearance, as follows:

 

A)        to the Department of Revenue, a Form ITR-1; and

 

B)        to DCEO, proof of tax clearance from the Department of Revenue.

 

b)         The applicant is responsible for the accuracy of all data, information and documentation required by subsection (a). Once submitted, applications shall become the property of the Department.

 

c)         Any materials or data made available or received by any agent or employee of the Department from an applicant for, or a recipient of a tax exemption or credit under this Part, that is exempt from disclosure under Section 7 of the Freedom of Information Act [5 ILCS 140/7], shall not be disclosed.

 

Section 519.80  Approval or Denial

 

Applicants shall be notified in writing as to the Department's evaluation of all completed applications. If the Department denies an application, it will specify the reasons for the denial in writing and allow the applicant 30 days to amend and resubmit its application for evaluation. If the applicant disagrees with the Department's decision, it may seek relief through the process afforded in the Department's Administrative Hearing Rules (56 Ill. Adm. Code 2605).

 

Section 519.90  Memorandum of Understanding

 

a)         Upon approval of an application, the Department and tenant located, or to be located, in a quantum computing campus seeking a certificate of exemption shall enter into an MOU. The MOU shall specify the terms and conditions of the exemptions and shall define the rights and responsibilities of the Department and tenant. Provisions with which the tenant will be contractually bound to comply include, but are not limited to, the following:

 

1)         the details for determining the amount of capital investment to be made;

 

2)         the number of new jobs to be created, including a specific method for determining the number of new employees and any relevant baseline headcount numbers;

 

3)         the timeline for achieving the capital investment and new job goals;

 

4)         repayment obligation should those goals not be achieved and any conditions under which repayment by the tenant claiming the exemption will be required;

 

5)         the duration of the exemptions; and

 

6)         other provisions as deemed necessary by the Department. [20 ILCS 605/605-1115(d)]

 

b)         Tenants seeking a certificate of exemption and credits related to the construction of required facilities shall require the contractor and all subcontractors to:

 

1)         comply with the requirements of Section 30-22 of the Illinois Procurement Code [30 ILCS 500/30-22] and to present satisfactory evidence of that compliance to the Department; and

 

2)         enter into a project labor agreement submitted to the Department.

 

Section 519.100  Determination of Term of Exemptions

 

a)         Tenants shall receive an initial 5-year designation certificate. At the expiration of this initial 5-year period, tenants may apply to the Department for renewals of certificates of exemption for additional 5-year periods not to exceed the 20-year period running from the effective date of the MOU.  Applications for renewal of certificates of exemption will be provided by the Department 90 days prior to the expiration.

 

b)         This provision does not preclude the applicant from entering into an additional MOU after the expiration of an earlier MOU to the extent the taxpayer's application otherwise satisfies the terms and conditions of the Act and is approved by the Department.

 

Section 519.110  Designation Certificate

 

a)         Upon completion of a fully executed MOU between the tenant and the Department, the Department will issue a designation certificate certifying the tenant as eligible to receive the exemptions listed in Section (b) of the Act.

 

b)         Upon designation by the Department under this Section, the Department shall notify the Department of Revenue of the designation, and the Department of Revenue shall issue and administer the exemptions listed in Section (b) of the Act.

 

Section 519.120  Noncompliance with Designation, Memorandum of Understanding

 

a)         If the Department determines that a tenant is not complying with the requirements of the designation certificate, MOU or all of the provisions of the Act, the Director shall:

 

1)         Notify the tenant, in writing, that its designation certificate is temporarily revoked, the date of revocation, the reason for the revocation, and the option to cure or seek a hearing contesting the revocation.

 

2)         Temporarily suspend the designation certificate, except in instances of noncompliance where the use of certified quantum computing campus no longer supports tenants or quantum computing activities.

 

3)         Notify the Department of Revenue of the temporary suspension and the starting date.

 

b)         Upon notice of noncompliance, the tenant will have 30 days to either:

 

1)         Cure the cause of the noncompliance and provide documentation sufficient to demonstrate the tenant has cured the noncompliance; or

 

2)         Request a hearing under Article 10 of the Illinois Administrative Procedure Act [5 ILCS 100].

 

c)         If within the 30 days after receipt of the notice described in subsection (a)(1), the certified tenant provides documentation sufficient to demonstrate cure of the noncompliance, then the Director will inform the Department of Revenue of the date the temporary suspension is lifted.

 

d)         If, after notice and any hearing, the Director determines that a noncompliance event exists, the Director shall issue to the Department of Revenue notice to that effect, stating the noncompliance date and requesting proceedings be initiated to recover wrongfully exempted State taxes or an erroneous refund, within the meaning of the Illinois Income Tax Act [35 ILCS 5].

 

e)         If a tenant neither cures the cause of noncompliance nor requests a hearing within the prescribed period, the temporary suspension shall become permanent and the Director shall notify the Department of Revenue of the permanent revocation and request proceedings be initiated to recover wrongfully exempted State taxes or an erroneous refund, within the meaning of the Illinois Income Tax Act.

 

f)         Alleged noncompliance shall include, but is not limited to, the following:

 

1)         a demonstration that the tenant failed materially to comply with the terms and conditions of the MOU;

 

2)         determination, upon investigation, that the tenant, or any of their agents or representatives, provided false or misleading information to the Department; or

 

3)         a failure to submit any reports as required by the MOU.