Committee advances SR668 to let local governments create a separate property-tax class for data centers

The Senate Rules Committee voted Feb. 25 to advance SR668, a resolution authorizing local governments to establish a separate ad valorem property class for data centers.

Sponsor Senator Dolezal told the committee the substitute removes manufacturing and narrows the proposal to property ‘‘primarily for housing electronic transmit digital information and data.’’ He said the change addresses concerns raised in Senate Finance and narrows the measure to data centers only. “So, essentially, mister chairman, we this passed, pretty overwhelmingly out of senate finance, but, the members I talked to who did have pause that voted against it, this change alleviates their expressed concern, pulls manufacturing completely out of the bill, and has the only applicable class of property be, data centers,” Dolezal said.

Senator Ginn and Senator Jackson questioned whether separating data centers into their own class could produce tax-shifting or be used to incentivize data centers at the expense of other taxpayers. Ginn warned that a jurisdiction could lower data-center millage to attract investment; Jackson pressed whether the bill guarantees residential tax relief. Dolezal responded the measure is optional for local governments and provides a tool, not a mandatory tax change, noting that existing abatement options remain available.

The committee noted the measure would require a constitutional amendment and therefore a two-thirds vote to be enacted. Senator Steele moved to give SR668 a favorable report; Senator Anderson seconded. The committee approved the measure and sent it to the Senate calendar for floor consideration.

Next steps: SR668 advances to the Senate calendar; because the measure contemplates a constitutional amendment, further floor votes and constitutional procedures will be required.