Michigan State Rep. Reggie Miller Proposes Data Center Bills to Close Tax Loopholes, Require Environmental Disclosure

State Representative Seeks to Stop Colleges and Universities From Double-Dipping on Tax Incentives

State Rep. Reggie Miller, a Democrat from Van Buren Township, has introduced two new bills aimed at bringing greater oversight to Michigan's booming data center industry. The legislation targets tax loopholes that allow colleges and universities to partner with data center developers while still receiving property tax breaks meant for educational facilities or economic development.

The first bill would prevent universities from accessing local property tax abatements if their data center is their primary function. Miller's Chief of Staff Jackson Pahle said the measure would help ensure these facilities remain on the tax rolls.

"Colleges are still able to build them," Pahle said. "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."

The second bill would require data centers to register with the state and disclose their operational impacts, including energy and water usage. It would also mandate financial safeguards to address potential environmental risks and decommissioning costs.

Data Center Controversy Grows Across Michigan

Michigan has seen a surge in data center development over the past two years, with projects worth billions in investment. The facilities have sparked intense debate across communities, with residents raising concerns about rising electricity costs, environmental impacts, and whether state tax breaks are delivering the promised benefits.

In Ypsilanti Township, local officials have taken direct action against a proposed data center partnership between the University of Michigan and Los Alamos National Laboratory. The township approved a resolution requesting the Ypsilanti Community Utilities Authority place a 12-month moratorium on providing water to hyperscale data centers and artificial intelligence computing facilities.

The University of Michigan is building a $1.25 billion data center in the township. The project would use up to 500,000 gallons of water daily and perform nuclear weapons research. Township officials have objected to the development on multiple grounds, citing environmental concerns and the risk of transforming the community into a potential military target.

"The stress that the state of Michigan has put on not only our residents, but on all residents in the state of Michigan, it's unforgivable," Ypsilanti Township Supervisor Brenda Stumbo said during a recent meeting.

Grand Rapids Community Sees Data Center Rallies

Opposition to data centers has also reached West Michigan's largest city. On April 11, organizers held a rally in Grand Rapids at Calder Plaza to push back against data center development. The event was part of a larger series of protests planned across six Michigan cities this weekend.

Attendees expressed frustration that data center developers benefit from state tax breaks while local utilities face rate increases. The rally aligned with the Michiganders for Money Out of Politics ballot initiative, which would ban political donations from regulated monopoly utilities.

State House candidate Chris Gilmer-Hill, running as a democratic socialist, spoke about the need to repeal tax exemptions for data centers. He argued the state should require these facilities to operate without special advantages that ordinary businesses cannot access.

Bipartisan Support for MMOP Initiative

The Michigan Monopolies and Political Spending initiative has garnered significant support across party lines. A November poll by Public Policy Polling found 81 percent of Michiganders support the measure, which would prevent regulated monopolies, companies with government contracts over $250,000, or businesses seeking such contracts from making political donations.

Christy McGillivray, executive director for the nonprofit Voters Not Politicians, said the data center backlash illustrates how elected leaders in both parties remain disconnected from their constituents.

"We have to have a feedback loop that actually holds politicians accountable for how their constituents feel," McGillivray said. "When DTE can buy them off, that accountability loop is broken and that means our democracy is really on the rocks."

Utility Responses and State Policy Debate

DTE Energy and Consumers Energy have defended their relationship with data center developers. DTE spokesperson Ryan Lowry said the company commits to being a responsible corporate citizen and complies with all applicable laws regarding corporate donations.

DTE also stated it will include additional protections in service agreements with new data center customers to ensure they cover required costs. Consumers spokesperson Brian Wheeler argued the MMOP ballot initiative would eliminate free speech rights for CMS Energy and its employees, the parent company of Consumers Energy.

The state legislature is considering multiple measures to address data center development. Lawmakers have proposed repealing state tax breaks for large data centers and instituting a one-year moratorium on new projects. A moratorium could establish better vetting processes and give municipalities time to update zoning ordinances.

Statewide Opposition to Data Center Development

Anti-data center protests have been scheduled for multiple locations across Michigan:

• Houghton: Friday, April 10, 6-8 p.m. at Veteran's Memorial Park
• Detroit: Saturday, April 11, 5-7 p.m. at Roosevelt Park
• Ann Arbor: Saturday, April 11, 11 a.m.-4 p.m. at University of Michigan Diag
• Lansing: Saturday, April 11, 11 a.m.-1 p.m. at 1300 Eureka St
• Grand Rapids: Saturday, April 11, 4-5 p.m. at Calder Plaza
• Traverse City: Saturday, April 11, 10 a.m.-11 a.m. at Open Space Park

The Augusta Township ballot question, which would rezoning land for a $1 billion data center project, will appear for voters in August.

Legislative Activity Intensifies

State Rep. James DeSana, a Monroe County Republican speaking at the Ann Arbor rally, said his constituents oppose data centers by a wide margin that crosses party lines. They're concerned about agricultural land use, electricity consumption, water usage, and noise and vibration.

DeSana supports the MMOP ballot initiative, arguing political spending drove the passage of Michigan's data center tax breaks in 2024.

"The reason that these big, gigantic corporations are getting tax breaks is because money in politics got the bills passed," he said.

WEMU-FM reported that State Rep. Reggie Miller's data center legislation will return to the Michigan House next week. The bills represent a shift from the incentive-focused policies that characterized earlier data center development to regulatory oversight as energy demands become clearer.

MultiState, a policy organization tracking state legislation, noted that in 2026, more than 300 state data center legislation bills have been filed across 30+ states in just six weeks. The legislation covers energy, water, zoning, and tax issues as states grapple with how to accommodate data center growth while protecting existing customers and preserving environmental resources.