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Senate committee backs constitutional amendment letting localities create data center and manufacturing tax subclasses
Summary
The Senate Finance Committee voted 8–4 to advance SR 668 (LC501290), a constitutional amendment proposal to allow municipalities to create a separate property class for manufacturing and data centers that could be taxed at a different millage rate to reduce taxes on other classes.
Senator Dolezal told the committee SR 668 would let local governments create a separate property class for manufacturing property and data centers and apply a separate millage rate, with the goal of reducing the ad valorem tax burden on other tangible property. He said the proposal is intended to be followed by enabling legislation spelling out mechanics and guardrails.
"The vision here is to put us in a posture where localities are allowed to charge their residents less property taxes, because you are able to charge other industries," the sponsor said.
Committee members probed whether the change could be used to "gouge" industry or to shift tax burdens, whether it would be county-by-county, and whether it would undermine recruitment. Senator Harbor asked whether enabling legislation could force revenues to be used to reduce property taxes rather than be spent, and the sponsor said enabling bills could set those requirements and that the constitutional amendment would be permissive, not mandatory.
Concerns surfaced about uniformity and homeowner protections. One member said bifurcating the tax digest could breach the constitution's uniformity clause and could send mixed signals to industry. Others pointed to local tools such as increasing homestead exemptions as an alternative path to relieve homeowners.
Senator Dolezal moved passage of SR 668; after discussion the committee voted 8 in favor and 4 opposed, and the resolution will proceed to the rules committee.
Next steps: If advanced by the legislature, the constitutional amendment would require follow-up enabling legislation to define how localities create subclasses and what mandatory protections, if any, ensure revenues reduce other property taxes.
