SPRINGFIELD — Gov. J.B. Pritzker’s drive to make Illinois a quantum computing hub made a leap forward this week as a massive tax incentive package aimed at luring companies in the emerging industry advanced in the state legislature.

The bill, sponsored by state Rep. Dave Vella, D-Rockford, sailed through the House on a bipartisan 98-14 vote on Wednesday. It heads to the Senate, where it could be considered later this week.

In addition to quantum, the package bolsters a menu of existing economic development initiatives, such as the state’s Economic Development for a Growing Economy (EDGE) tax credit, its program targeting electric vehicle manufacturers and suppliers and its research and development tax credit.

River towns such as the Quad Cities would also see a boost through the expansion of the state’s River Edge Redevelopment Zone program, which authorizes tax breaks and incentives meant to spur the redevelopment of environmentally-challenged riverfront properties.

The wide-ranging legislation continues the aggressive push by Pritzker and state economic development officials to position Illinois as a national leader in industries of the future, such as quantum and electric vehicles. And it reflects the fierce state-by-state competition to lure these companies.

The various programs would cost nearly $300 million over the next 30 years, but state officials estimate billions in new tax payments could be generated by the economic activity the incentives spur. 

“It is believed that these measures focused on creating and retaining more good paying jobs and making Illinois a better place to do business will bring in projects that will generate an estimated $21 billion in new state revenue over the next 30 years,” Vella said.

Negotiations took place behind the scenes for months as stakeholders fine-tuned the proposal, with legislative language only emerging earlier this week. But some aspects of the bill have long been expected. 

Pritzker included a $500 million capital request in his fiscal year 2025 budget proposal for the establishment of a quantum campus. The spending plan is still being negotiated between the governor’s office and state lawmakers.

This legislation would create an enterprise zone around that proposed campus, which is likely to be located somewhere in the Chicago region. Companies within the zone would be eligible for sales, utility and building material tax exemptions for up to 40 years.

Crain’s Chicago Business reported last month Illinois was a finalist to land PsiQuantum, a Silicon Valley startup seeking to build the world’s first commercially useful quantum computer.

The startup would anchor the proposed campus and, aided by the proposed incentives, be used as a magnet to lure other businesses and institutions.

Campus tenants, under the proposal, may include universities, research facilities, data centers, manufacturers of quantum computers and component parts and cryogenic facilities, among others. 

"What we’re trying to do with this legislation to build on the other capital stack for the quantum campus is to make sure that we can incentivize many different companies to come in and take part in that campus," said Lisa Clemmons Stott, electric mobility director for the Illinois Department of Commerce and Economic Opportunity, in a House committee earlier this week. "Not just one, not just two, but lots of different companies."

According to industrial research firm IBM, quantum computing is a rapidly-emerging technology that harnesses the laws of quantum mechanics to solve complex problems. It could be used to speed up the research and development of everything from drugs that treat diseases like cancer to new green energy production that tackles climate change. 

With incentives to sweeten the pot, Pritzker and state economic development officials believe Illinois, already home to top research facilities such as Fermilab and Argonne National Laboratory, could be uniquely positioned to take advantage of coming private and federal government investment in quantum.

The intertwined capital request includes $200 million for a shared cryogenic facility, $100 million for campus site development and $200 million to match up to $11 billion in federal funding expected to be made available over the next decade. 

Industry-specific economic incentives have been deployed by the state in recent years in other areas as well.

In 2021, for example, Pritzker signed the Reimagining Energy and Vehicles in Illinois (REV) Act, which targeted the burgeoning electric vehicle industry with income tax credits for jobs created and retained along with other sweeteners.

Thus far, 10 REV agreements, both small and large, have been inked with more in the pipeline.

In addition to quantum, the omnibus package makes changes to REV, adding green steel manufacturers, which produce steel without the use of fossil fuels, to the types of companies eligible for incentives.

It also extends the REV utility tax exemption offered to large companies from 10 years to 30 years, which state economic development officials said was in direct response to competition from other states. 

Illinois’ original economic development incentive program, EDGE, is also getting a boost, with benefits being extended from 10 to 15 years for companies investing $50 million and creating 100 or more new jobs.

A tax credit that allows businesses to write off some research and development costs, currently scheduled to sunset in 2027, would be extended another five years. 

The River Edge Redevelopment Zone program, currently in Aurora, East St. Louis, Elgin, Peoria and Rockford, would be extended to Moline, East Moline, Ottawa, LaSalle, Peru, Rock Island and Quincy under the legislation.

The program, created as a five-year pilot in 2012 and later extended, allows for a 25% state income tax credit for qualifying projects creating jobs and revitalizing vacant and blighted properties along riverfronts. 

Opposition to the package was minimal. Republicans, often critical of supermajority Democrats’ policies relating to the state’s business climate, said they welcomed the measures though wished it were part of a more holistic pro-business platform. 

"What I don’t understand is why year after year, we will come here and put together incentive packages, but we refuse to address underlying problems of just creating natural business growth in Illinois by addressing some of the issues that business wants us to take care of, such as high taxes," said state Rep. Dan Ugaste, R-Geneva. 

Other concerns, especially in relation to quantum, is the amount of electricity needed and whether the state’s grid could support it. Vella suggested the emergence of clean energy and nuclear energy from small modular reactors, could eventually address any concerns. 

The bill awaits consideration in the Illinois Senate.