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Data centers and digital infrastructure form the backbone of Illinois’s digital economy. These facilities safely store, process, and transmit vast amounts of data for businesses, government entities, and individuals. Data center and digital infrastructure law addresses a diverse range of legal issues affecting the construction, operation, and governance of these facilities. This includes land use, zoning, tax incentives, cybersecurity compliance, contract negotiation, and privacy law obligations. Given Illinois’s strategic location and power grid reliability, the state is a leading hub for data center development in the Midwest.
The increasing complexity of data center operations requires experienced legal guidance. Common situations where legal assistance may be necessary include:
A lawyer specializing in this niche can help clients protect their investments, minimize operational risks, and navigate the rapidly evolving legal landscape.
Illinois has taken significant steps to encourage the expansion of data centers and digital infrastructure. The most notable example is the Data Centers Investment Program, established under the Illinois Data Centers Tax Incentive Act. This law provides sales tax exemptions and other financial benefits to qualifying data center projects that meet specific investment and job creation criteria.
Local building codes and zoning laws may also impose specific requirements, such as restrictions on facility locations, building heights, or energy use. Environmental laws, including those focused on power consumption and emissions, can affect site selection and operation. Additionally, data centers must comply with a wide range of cybersecurity, data protection, and consumer privacy laws at the state and federal level, including the Illinois Personal Information Protection Act (PIPA) and relevant parts of the Illinois Biometric Information Privacy Act (BIPA).
Contracts in this sector often have unique aspects, such as service level agreements (SLAs), uptime requirements, and provisions for redundancy and security.
Illinois provides significant sales tax exemptions for qualifying data centers through the Data Centers Investment Program. This can include exemptions on building materials, equipment, and electricity, provided certain investment and job creation goals are met.
Many municipalities have zoning ordinances that specifically address where data centers can be located, as well as requirements for infrastructure, noise mitigation, and security. Consulting local ordinances is essential before starting a project.
Illinois data centers must comply with the Illinois Personal Information Protection Act (PIPA), which governs breach notification and data security requirements. The Biometric Information Privacy Act (BIPA) also impacts data centers handling biometric data as part of their operations.
Depending on their size and location, data centers might need environmental permits related to air emissions, water usage, or emergency backup power systems. Energy usage can be scrutinized, especially for large power draws.
These contracts are highly detailed and often include specific terms regarding uptime requirements, data security, options for redundancy, liability limitations, and procedures for handling outages or breaches.
Data centers are required to notify affected parties and regulatory authorities in accordance with PIPA. Legal liability can extend to both the data center operator and their clients, depending on contractual terms.
Foreign ownership and operation are generally allowed, but foreign companies must comply with all local, state, and federal laws, including data privacy regulations as they pertain to US-based data storage.
Employment matters can range from occupational safety compliance to wage and hour laws, as well as specialized training for technical staff. Legal support may be needed to address employment disputes or union negotiations.
There are no statewide limits on data center power usage, but operators often partner with utilities to ensure grid reliability. Energy efficiency programs and incentives may be available through utility providers or state agencies.
Renovations or expansions often trigger the need for updated permits, compliance reviews, contract renegotiations, and possibly, requalification for tax incentives.
For further assistance or official guidelines, consider the following organizations and agencies:
If you need legal support in data center and digital infrastructure matters in Illinois, start by defining your goals and gathering all relevant documentation. This might include business plans, contracts, site plans, compliance records, and correspondence with government agencies. Consult with an Illinois attorney who has experience in data center law and digital infrastructure projects.
Ask targeted questions about your specific situation, including compliance risks, available incentives, and the best legal strategies to protect your investment and operations. Many lawyers offer initial consultations to help you assess your needs before committing to ongoing representation.
To find local attorneys with relevant experience, consider reaching out to state bar associations, business networks, or referrals from other industry professionals. Staying proactive and informed will help you navigate the complex landscape of Illinois data center and digital infrastructure law.
