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HB 5776

Property tax: exemptions; exemption of certain facilities of a public university; prohibit if used solely to operate a data center. Amends sec. 7n of 1893 PA 206 (MCL 211.7n).

2025-2026 Regular Session Introduced by Erin Byrnes and 8 co-sponsors

Public universities would lose property tax exemptions for facilities used solely to operate data centers, while other nonprofits’ exemptions remain unchanged.

bill electronically reproduced 04/14/2026
#propertytax:exemptions
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Bill Summary · HB 5776

Summary of Michigan House Bill HB 5776 (2025-2026)

Purpose and Intent

HB 5776 proposes an amendment to the General Property Tax Act (1893 PA 206) to modify which properties qualify for certain tax exemptions. Specifically, it narrows the exemption for the real and personal property of a public university by excluding property that is used solely to operate a data center. The bill otherwise preserves existing exemptions for other nonprofit institutions and organizations as described below.

Key Provisions and Changes

  • Exemption modification for public universities (MCL 211.7n(1))
    • The bill retains the general exemption for real and personal property owned and occupied by a public university to the extent the property is used for purposes consistent with the university’s mission.
    • New limitation: The exemption does not apply to property of a public university if that property is used solely to operate a data center.
    • Definitions introduced:
    • Data center: A facility (one or more buildings) designed and intended to house computing, storage, networking, cooling, or power infrastructure for third-party commercial data processing.
    • Public university: A university that receives an appropriation under specific sections of the State School Aid Act of 1979 (as defined in the bill).
  • Exemption for certain cultural/arts organizations (MCL 211.7n(2))
    • The bill continues to provide an exemption for real or personal property owned and occupied by a nonprofit organization organized in Michigan that is devoted exclusively to fostering development in literature, music, painting, or sculpture, which substantially enhances the cultural environment of a community, is available to the general public on a regular basis, and is occupied by the organization solely for its stated purposes.

Who is Affected

  • Public universities
    • Properties used solely to operate data centers would no longer qualify for the property tax exemption under the general provision of the act.
  • Other nonprofit institutions and cultural organizations
    • Exemptions remain in place for:
    • Theaters, libraries, educational and scientific institutions (nonprofit, incorporated in Michigan) to the extent property is used for the institution’s purposes.
    • Cultural/arts organizations devoted to literature, music, painting, or sculpture meeting the described criteria.
  • Data center operators and third-party data processing entities
    • Indirectly affected because public university facilities used for data center operations would not receive the same exemption, potentially increasing local property tax obligations for those facilities.

Procedural and Timeline Aspects

  • Introduced and referred: HB 5776 was introduced on April 14, 2026, by Rep. Reggie Miller and referred to the Committee on Government Operations.
  • Legislative process: As with other Michigan House bills, it would proceed through committee hearings, potential amendments, floor votes in the House, and then consideration by the Senate, before any possible enactment and potential gubernatorial action.
  • Effective date: The text provided does not specify an effective date; if enacted, the effective date would typically be specified in the final bill or enacted into law with a prospective date.

Practical Impact

  • For public universities, property used exclusively for operating data centers would lose the statewide property tax exemption, shifting local tax responsibilities to those facilities.
  • For other nonprofit cultural and educational institutions, the exemptions remain unchanged, preserving tax relief where properties are used primarily for their mission and public access.

If you’d like, I can compare this bill to current law (MCL 211.7n) to highlight exact statutory language changes or provide a brief impact assessment for specific universities or data center projects.

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

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