Data Center Bills Multiply as Lansing Debate Widens
Michigan lawmakers are proposing various bills to address concerns around data center development, moving beyond just moratoriums. These proposals aim to regulate tax incentives, water and energy use, and ensure community protections, spurred by projects like "The Barn" in Saline Township. The debate reflects a broader push to mitigate the impacts of rapidly expanding data centers across the state.
Michigan lawmakers are debating a range of new legislation concerning data center development, expanding beyond initial proposals for construction moratoriums. Several bills have been introduced, focusing on tax incentives, transparency, water usage, energy costs, and community protections. This legislative push is in response to growing scrutiny of large data center projects across the state, including "The Barn" in Saline Township, Washtenaw County, which has raised local concerns about infrastructure, water, and power demands.
State Senator Jim Runestad's office has indicated that proposed Senate moratorium bills could prevent "The Barn" from becoming operational. A similar House proposal suggests pausing certain state and local approvals until April 1, 2027. Beyond moratoriums, proposals include repealing Michigan's sales and use tax exemptions for data centers, limiting nondisclosure agreements, and imposing new regulations on large users. House Democrats have introduced a package emphasizing ratepayer protections, community benefit agreements, noise reporting, labor agreements, transparency, and decommissioning plans.
Washtenaw County lawmakers, including State Representative Morgan Foreman and State Senator Jeff Irwin, have publicly supported these measures, citing intentions to protect communities and ratepayers from the costs and impacts of rapid data center expansion. Senator Irwin noted that earlier data center tax-exemption laws lacked comprehensive protections, which the new bills aim to strengthen. State Senator Rosemary Bayer confirmed that some provisions, particularly those related to water, energy use, and ratepayer impacts, could apply to existing or nearly complete facilities if they meet specific thresholds. However, provisions concerning nondisclosure and community benefit agreements would not be retroactive as they pertain to earlier development stages.
Michigan's reconsideration of its approach mirrors actions in other states, such as Ohio and Illinois, which have paused data center tax exemption requests, and Minnesota, which altered its exemption program for electricity. The impact of Michigan's pending legislation on projects already in development, like "The Barn", remains uncertain, particularly regarding compliance with Michigan Strategic Fund certification requirements for tax incentives.