An ordinance requiring Chicago’s data be stored within the United States and adding incentives to encourage data be stored locally is moving forward in the City Council. The measure passed the Economic, Capital and Technology Development Committee on Wednesday and is set to face a full council vote next week.
The ordinance broadly defines data, suggesting the information generated by the city in the many tasks it and its employees complete — such as issuing tickets, collecting fees, sending emails and more — would be affected. No rules govern where Chicago’s data is stored now and it is likely scattered at many locations, said Ald. Gilbert Villegas, 36th, sponsor of the measure and chair of the committee.
The bid to leverage the millions Chicago spends on data storage to spur storage center development is another step toward turning Chicago into the “Silicon Prairie,” Villegas said. State incentives for data centers have already sparked $3 billion in economic development, he added.
“How much of that has come to Chicago? I’ll tell you: less than 15%,” Villegas said. “We have to demonstrate that Chicago is open for business.”
The ordinance sweetens the deal for vendors bidding on city data storage contracts by giving them a 2% credit if they store the data in Illinois and a 4% credit if they store the data in Chicago.
Villegas pointed to the July announcement that a sprawling quantum computer commercial development will be built on the Southeast Side as a reason to continue the push to bring more technology business to Chicago. The development luring in the nascent, but promising quantum computing industry could spark a $20 billion economic impact, Mayor Brandon Johnson said at the time.
The data storage incentives advanced Wednesday are lower than those proposed in a first draft of the ordinance Villegas initially shared. That version faced opposition from the Johnson administration, but the mayor’s team is now “neutral” on the ordinance after a series of changes, Villegas said.
While he did not endorse the tweaked proposal, city Chief Information Officer Nick Lucius shared measured praise with aldermen for the idea as an economic development policy.
“Making STEM careers more viable to Chicagoans as a whole is a huge opportunity,” Lucius said.
The rule requiring city data be stored in the country aims to enhance security, Villegas said
After suggesting Chicago should explore how to monetize the data it collects, Ald. Raymond Lopez, 15th, said the city must make sure its data is safe.
“We have centers popping up on the other side of the world that we have no control over,” Lopez said. “That cannot be something that this body allows.”
But the policy also faces strong opposition. Iyana Simba, an Illinois Environmental Council representative, argued during public comment that additional data centers could pose threats to sustainability, a concern several aldermen said they hope will be addressed before more data center business comes to the city.
Chicagoland Chamber of Commerce spokesperson Brad Tietz argued the policy would only make data less secure and will not bring significant business to the city. Data storage providers oppose the ordinance, he added.
“Enacting this ordinance will mean increased costs on city vendors and thus the city,” Tietz said. “It will lead to decreased cybersecurity protections as most cloud breaches target the weakest link which is often the on-site link.”
However, only Ald. Daniel La Spata, 1st, voted against the ordinance, citing concerns that the policy would not result in the city earning more revenue.
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