‘Labor peace’ mandate for data center credit possible

(The Center Square) – A measure could come up in the state Senate next week that critics say will hurt the state’s attractiveness for new data center investment.

In the final days of the spring session last month, state Rep. Mark Walker, D-Arlington Heights, passed a bill that modifies the popular data center tax credit. The credit came about two years ago with bipartisan agreement and is touted by the governor for bringing investment to the state.

Senate Bill 2182 clarifies what is considered a data center, including opening it to facilities that operate within five miles of each other and requires green building certificates for the entities seeking the credit, among other changes. It also requires data centers getting a state tax credit to have a “labor peace agreement.”

Walker said that won’t be a unionization mandate.

“I will fully admit that if all these parties act completely appropriately, both the employer and the employees, but especially the employees, might well vote to belong to a union, but that’s not required in this bills,” Walker said.

State Rep. Tom Demmer, R-Dixon, argued against the bill, saying the tax credit is attracting investment as is.

“If you’re an applicant, you may reconsider your application,” Demmer said. “You may reconsider participating in a program if the rules change midstream.”

State Rep. Charlie Meier, R-Okawville, said Missouri is setting up a data center tax credit without such a provision and fears Senate Bill 2182 will lead to Illinoisans driving to Missouri for jobs.

“This bill will cost us jobs and businesses and something that we’re finally No. 1 or No. 2 in the country,” Meier said.

State Rep. Mike Zalewski, D-Riverside, said they want to ensure anyone benefiting from the incentive uses union labor.

“It should come as no surprise to any data center developer that this is a pro-union state that wants to use union workers,” Zalewski said during the debate. “That is not an earth-shattering revelation to anybody, nor should it be.”

The measure passed the House last month and was sent back to the Senate for concurrence.

Because it’s beyond the May 31 deadline, any legislation with an immediate effective date requires a three-fifths majority for approval.

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