U.S. Rep. Kristen McDonald Rivet, D-Bay City, stood outside of the U.S. Capitol on Wednesday to announce she is helping spearhead legislation that would exclude data centers from tax exemptions.
“Tax cuts need to go to families, not data centers,” the congresswoman said.
Like other Democratic lawmakers, McDonald Rivet is targeting tax provisions with the Trump administration’s One Big Beautiful Bill that have helped accelerate the development of data centers through “opportunity zones.”
These zones are designed to help boost undeveloped areas by deferring taxes on capital gains invested into the businesses that qualify.
“Washington is giving handouts to big tech companies while American families are drowning,” McDonald Rivet said. “I hear that word in my district more than any other.”
Over the past few weeks, both Republican and Democratic lawmakers in Washington have been weighing in their thoughts on regulating data center development, with neither party opening their arms to policies what would be considered friendly to data centers and the companies who seek to build them.
U.S. Rep. Tom Barrett, R-Charlotte, introduced two bills in late August that would prohibit the federal government from overriding local and state control of data center development and signing non-disclosure agreements about data centers.
U.S. Rep. John Moolenaar, R-Caledonia, co-sponsored the bill on local control.
“If people don't want them in their local community, I'm opposed to it,” Moolenaar said during a telephone town hall on Sept. 1. “I think our local communities deserve accurate information on water usage as well as electricity rates.”
U.S. Senators voice support for regulation
Similar to Moolenaar, outgoing U.S. Sen. Gary Peters, D-Bloomfield Township, said that there needs to be more transparency on how data centers will affect communities.
“There's also issues about the cost of the energy that impacts already a time when energy costs are going up for people across Michigan,” Peters said.
“We shouldn’t be putting in data centers that people are going to pay for. It should be the companies that are profiting from them … There are a whole host of questions that need to be asked, and there needs to be regulation.”
Peters said that local governments should remain in control of approving or denying development and that it's “incumbent on the federal government to be thinking about some nationwide regulation.”
U.S. Elissa Slotkin, D-Holly, said that data centers are like “bulls in a China shop” and believes there is a need for restrictions.
“Telling communities what they can do, signing NDAs and keeping things under wraps, it's not healthy,” she said during a press conference in Bay City in late August.
“Communities have a right every single day to demand answers before they even entertain anything like a data center.”
State and local governments may act first
Both chambers of Congress have yet to take any legislative action on the development of data centers as states begin to try to implement their own regulations.
“There is no meaningful work coming out of Congress to be able to put some guidelines around AI,” McDonald Rivet said.
U.S. House Speaker Mike Johnson, R-Louisiana, canceled session on Wednesday as Democrats pushed for AI regulation. The speaker pushed back on the claims that Republicans aren’t working on this controversial issue.
"We must handle the advancing technology in a wise, balanced manner to harness its potential while ensuring its safety,” he posted on X earlier Wednesday morning. “We can and will do that correctly."
Central Michigan University Political Scientist Thomas Greitens says state lawmakers will most likely address data center regulation before federal action is taken.
Currently, there are two bills in the Michigan legislature, HB5594 and HB5596, that aim to implement moratoriums and regulations on data centers.
"As we go forward, you're going to see a lot of action in local government as they probably try to stop them because of citizen opposition," Greitens said. "And then at the state level, increasingly passing state regulations to make it a bit harder to do data centers."
There have been over 50 communities in the state that have implemented their own temporary moratoriums, including the city of Saginaw and Huron County.
