State Rep. Reggie Miller Introduces Bills to Close Data Center Loopholes for Colleges and Mandate Transparency

When the Michigan State House returns next week, two bills regarding data centers will be on the lawmakers' agenda. The legislation was introduced by Van Buren Township Democrat State Rep. Reggie Miller, who represents District 89.

The first bill would close loopholes for colleges and universities when building or partnering on data centers. Currently, institutions can access local property tax abatements meant for education facilities or economic development projects. Miller's bill would prevent colleges from accessing these tax incentives if their data centers are the primary function of the building.

"Colleges are still able to build them. This is not a moratorium or a ban or anything, but it's just so that colleges and these data centers aren't double dipping on tax incentives."

Jackson Pahle, Miller's Chief of Staff, explained the measure would help keep data centers on the tax rolls if that's their primary function. The bill aims to ensure public property tax abatements go to public education facilities, not commercial data centers masquerading as academic projects.

The second bill would require data centers to register with the state and disclose operational impacts, including energy and water use. The legislation would mandate financial safeguards for possible environmental risks or decommissioning costs. This measure would bring transparency to facilities that consume enormous amounts of Michigan's electricity and water resources.

Data centers have become a major political issue across Michigan as communities grapple with the rapid influx of hyperscale facilities. The controversial Stargate project for OpenAI and Oracle in Saline Township has drawn objections from local residents concerned about traffic, noise, and environmental impacts.

Multiple communities across Washtenaw County have enacted moratoriums on data center approvals, including Ypsilanti City Council which passed an emergency measure to pause zoning permits for 60 days and enact a yearlong pause on permitting, approval and construction of new data centers.

Other townships including Dexter, Bridgewater, Sharon, Superior, and Manchester have also adopted moratoriums to give local officials time to evaluate their ordinances and master plans regarding data centers.

State Senator Aric Nesbitt, the Democratic minority leader, has advocated for guardrails to protect Michigan ratepayers from bearing the costs of powering massive data center operations. Meanwhile, Governor Gretchen Whitmer has maintained that Michigan should not put restrictions on data centers but wants to ensure communities have a voice in the process.

Miller's legislation comes as the state considers the growing number of data center proposals, including a 1.4-gigawatt facility planned for Van Buren Township where Google has expressed interest in joining the project.

The bills would not halt data center construction. Instead, they aim to ensure public resources and tax incentives are appropriately allocated and that facilities operating in Michigan are transparent about their environmental and operational impacts.

If passed, Miller's measures would add another layer of oversight to the already complex regulatory landscape surrounding Michigan's booming data center industry, which is expected to consume a significant portion of the state's electricity generation and water resources in coming years.