The proposed bill, known as the "data center community benefit agreement act," mandates that certain data centers in Michigan must enter into community benefit agreements (CBAs) with local governments and utility providers before commencing construction or operation. These agreements are binding legal contracts that require data center owners or operators to provide resources that benefit local community interests. The bill outlines the definitions of key terms, including "data center," "local unit of government," and "community benefit agreement," and establishes the Michigan Public Service Commission's role in approving these agreements.

To obtain approval for a CBA, data center operators must submit applications to both the local government and the commission, which must be reviewed and approved within 90 days. The bill specifies that the agreements must address at least 50% of certain topics, such as local hiring, water usage, and funding for community projects. Additionally, local governments are prohibited from issuing permits or approvals for data centers without an approved CBA, and the commission cannot approve utility interconnections without such agreements in place. The bill also allows the commission to create rules for its implementation.