HF4888

Purpose

• Establishes a temporary halt on issuing permits for new data centers in Minnesota until a comprehensive state-led study is completed. The goal is to understand how data centers affect energy use, water use, materials, local and statewide economies, environmental resources, and community well-being, so policy decisions can be informed.

Key Provisions

• Moratorium on permits

  • The state or a local government may not issue a permit, including a conditional use permit, for a data center until one calendar year after the Public Utility Commission (PUC) submits its comprehensive report.
  • The report must be submitted to the Chairs and Ranking Members of the legislative energy and environment committees by July 1, 2027. If the report is not completed by then, the PUC may extend the deadline to January 1, 2028.

• Definition of data center

  • A data center is defined as the term used in Minnesota law, and includes a qualified large-scale data center as defined elsewhere in state statutes.

• Comprehensive report requirements

  • The report must assess multiple scenarios for data center development in Minnesota and address the following topics:
  • Energy usage by data centers
  • Water usage by data centers
  • Metals usage connected to data centers
  • Localized impacts created by data centers
  • Impacts on federal and state-listed species and species of special concern
  • Impacts on Tribal Nations, including treaty rights, resources, and cultural practices
  • How and for what purposes data centers in Minnesota are used
  • Economic impact at the local level (including employment, property taxes, and overall economic activity)
  • Economic impact at the state level (including income tax revenue from jobs, one-time or ongoing tax expenditures to data centers, and other potential economic effects)
  • Identification of suitable locations for data centers that minimize residential disruption, limit impacts on residential utility infrastructure, and avoid concentration in one region
    • When evaluating locations, consider existing infrastructure to reduce new construction, and assess cumulative impacts on water use, noise, and light
  • Identification of other data center–related risks, based on input from no fewer than two public comment periods

• Consultation and oversight

  • The PUC must consult with Minnesota Tribal governments during the development of the report.
  • A third-party contractor hired to prepare the report must undergo a conflict-of-interest evaluation to ensure the contractor does not work for, or receive funding from, a data center developer.

• Public input

  • The process must include at least two public comment periods to gather input on data center development and related risks.

What this bill changes in law

• Permit process change

  • Introduces a one-year moratorium on issuing data center permits (including conditional use permits) until the PUC completes and submits a comprehensive statewide analysis.

• New reporting obligation

  • Creates a mandatory, wide-ranging study by the PUC (with tribal consultation and contractor oversight) to evaluate environmental, economic, and social impacts of data centers, plus guidance on location and risk management.

• Focus on environmental and community impacts

  • Requires explicit consideration of energy, water, metals, local and state environmental resources (including species and tribal rights), as well as local and state economic effects and community disruption.

• Public participation and accountability

  • Mandates multiple public comment periods and a conflict-of-interest review for the contracting entity to ensure independent analysis.

Definitions and scope notes

• Data center
  • As defined in Minnesota statutes, including a qualified large-scale data center per applicable law.
• Data center impacts
  • Encompass energy and water use, material use (metals), local effects (noise, light, infrastructure), environmental resources (species, tribal rights), and economic factors (jobs, taxes, revenue).

Implementation timeline (summary)

• July 1, 2027: Deadline for PUC report submission (or potential extension to January 1, 2028 if not complete by July 1, 2027).
• Post-report: One-year moratorium on issuing data center permits begins, to allow policy decisions based on the report.

Potential implications for communities

• Local planning and infrastructure

  • Temporary halt on new data centers gives policymakers time to study impacts on local utilities, housing areas, and infrastructure before permitting further development.

• Economic considerations

  • The report analyzes local and state-level economic effects, including job creation, tax revenue, and the use of tax expenditures by data centers.

• Environmental and cultural considerations

  • The study examines energy and water demands, material use, ecological effects, and impacts on Tribal Nations’ rights and cultural practices.

Relevant Terms - data center - moratorium - permit (including conditional use permit) - Public Utility Commission (PUC) - comprehensive report - energy usage - water usage - metals usage - localized impacts - federal and state-listed species - species of special concern - Tribal Nations, treaty rights, resources, cultural practices - employment - property taxes - economic activity - income tax revenue - tax expenditures - existing infrastructure - residential disruption - noise - light - two public comment periods - third-party contractor - conflict of interest - data center developer - Minnesota statutes (definitions)