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SB 1050

Businesses: other; community benefit agreements; require certain data centers to be subject to. Creates new act.

2025-2026 Regular Session Introduced by Rosemary Bayer and 7 co-sponsors

The bill requires data centers to secure and implement a community benefit agreement with local government before construction or operation.

SENATE CO-SPONSOR(S) NAMED: SEAN MCCANN
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Bill Summary · SB 1050

Overview

SB 1050, introduced in the Michigan Senate for the 2025-2026 session, would create the Data Center Community Benefit Act. The bill requires certain data centers to secure and implement a community benefit agreement (CBA) with a local unit of government or other community stakeholders as a condition for construction or operation. It also authorizes state and local authorities to review, approve, and enforce CBAs and to promulgate related rules.

Main purpose and intent

  • Establish a formal process for data centers to obtain local approval through a community benefit agreement.
  • Ensure data centers contribute to public health, safety, welfare, and local land/resources before beginning construction or operation.
  • Provide a clear framework for local governments to review, approve, or deny CBAs and associated development permissions (permits, site plans, etc.).

Key provisions and changes

  1. Definitions (Sec. 3)

    • Commission: Michigan Public Service Commission.
    • Community Benefit Agreement (CBA): Binding agreements between data center owners/operators and local governments or community stakeholders, detailing resources or benefits provided to local interests.
    • Data center: Facility (one or more buildings) housing data center equipment for data storage/processing.
    • Local unit of government: County, township, city, or village.
    • Person: Broadly defined to include individuals and various entities.

  2. Preconditions for data centers (Sec. 5)

    • No construction or operation may begin unless:
      • The owner/operator files an application with the local unit of government for review of a CBA (subsection 2).
      • The local unit approves the CBA (subsection 2).
      • The owner/operator enters into the approved CBA.

  3. CBA review and approval process (Sec. 5)

    • The owner/operator must submit a CBA review application on forms prescribed by the local unit.
    • The local unit of government has up to 90 days to approve or deny the application.
    • Approval conditions (Sec. 5(2)):
      • The CBA must involve the owner/operator and the local government or its agency/instrumentality.
      • The CBA must reasonably accommodate and benefit public health, safety, general welfare, lands, and resources of the locality.

  4. Development approvals contingent on CBA (Sec. 7)

    • A local government may deny or withhold site plan, permits, land use approvals, variances, easements, certificates, or other authorizations for a data center if a CBA has not been approved.

  5. Rulemaking authority (Sec. 9)

    • The Michigan Public Service Commission may promulgate rules to implement the act under the Administrative Procedures Act.

Who is affected

  • Data center owners and operators seeking to build or operate facilities in Michigan.
  • Local units of government (counties, townships, cities, villages) responsible for evaluating and approving CBAs and related permits.
  • Local communities and stakeholders who would be party to CBAs or benefit from the commitments contained in CBAs.
  • State agencies (notably the Commission) that may adopt implementing rules.

Procedural and timeline aspects

  • Application window: Data center applicants must submit a CBA review application to the relevant local unit before initiating construction or operation.
  • Review timeline: Local units have up to 90 days to approve or deny the CBA application.
  • Conditional approvals: All major development approvals for a data center are contingent on CBA approval.
  • Enforceability: Without an approved CBA, local governments can withhold various authorizations for the data center.

Potential implications

  • Strengthened local community input and potential benefits from data center projects (e.g., infrastructure, services, employment opportunities, environmental considerations).
  • Increased regulatory steps and potential delays before data center development can proceed.
  • Clear linkage between data center siting and community-benefit commitments, potentially influencing project scope, cost, or location decisions.

Note: The act establishes key definitions, a mandatory CBA process, and rulemaking authority, but specific CBA contents and financial or performance metrics would be determined in the agreements and subsequent local rules.

Compiled from official sources — confirm details with the bill’s official record.

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