LANSING, MI (WOWO) Bipartisan Michigan lawmakers have introduced legislation that would repeal tax incentives approved last year to attract large-scale data centers to the state.

State Reps. Jim DeSana, R-Carleton, and Dylan Wegela, D-Garden City, announced a three-bill package Tuesday aimed at eliminating sales and use tax exemptions for hyperscale data center projects. The incentives were narrowly approved in 2024 as part of an effort to compete with other states for major technology investments.

Since the incentives passed, at least 14 hyperscale data center proposals have emerged across Michigan, drawing support from business groups but opposition from residents concerned about energy consumption, water usage, land preservation and transparency in utility agreements according to Bridge Michigan.

The announcement came during a rally at the State Capitol, where protesters called for a moratorium on new data center development and criticized what they describe as secret negotiations between utilities and developers.

Utilities including DTE Energy and Consumers Energy have warned that repealing the incentives could make Michigan less competitive. Consumer Energy officials said the tax breaks help support long-term growth, while DTE said it is reviewing the proposed legislation.

One of the largest proposed projects is a $7 billion data center in Saline Township, south of Ann Arbor. State utility regulators are expected to decide soon whether to approve a long-term power contract tied to that project.

Supporters of repeal argue data centers require significant public resources while creating relatively few jobs. Industry advocates counter that large power users can help stabilize utility costs and improve infrastructure funding.

The bills face a challenging path in the Legislature, but sponsors say increasing public opposition could influence the outcome as Michigan reassesses its approach to data center development.