MN — State Policy Updated 2026-07-17

Minnesota

State-level incentives 2026 incentive changes Local incentives Statewide restrictions and utility guardrails Statewide moratorium proposals Local moratoriums and interim ordinances Zoning authority Utility Regulation

1) Incentive programs and exemption structure

State-level incentives

2026 incentive changes

Local incentives

  • Pine Island / Project Skyway. The Pine Island City Council approved project approvals on January 20, 2026, and approved a tax-abatement agreement on February 4, 2026, for the Project Skyway/Google data center development area (City of Pine Island, 2026-05-18).
  • Hermantown / Google. Hermantown scheduled a May 4, 2026 public hearing on proposed development and tax-abatement agreements for the Google data center project, then tabled the development-agreement resolution for further consideration (City of Hermantown, 2026-05-15).
  • Hermantown reimbursement agreements. On July 6, the City Council approved agreements under which Mortenson would reimburse up to $200,000 of additional city planning and consulting costs, on top of a previously approved $225,000 reimbursement, and Minnesota Power would reimburse up to $20,000 for the city’s administration of environmental review for a transmission line serving the project. These are cost-reimbursement arrangements, not approval of the still-tabled development and tax-abatement agreements (Northern News Now, 2026-07-06; City of Hermantown, 2026-07-14).

2) Restrictions, moratoriums, and regulatory guardrails

Statewide restrictions and utility guardrails

Statewide moratorium proposals

Local moratoriums and interim ordinances

  • Carver. The Carver City Council unanimously approved a one-year moratorium on data center development in April 2026 (FOX 9, 2026-04-11).
  • Eagan. The Eagan City Council approved a one-year interim ordinance/moratorium on new data center development on February 17, 2026, after a January workshop on data centers and cryptocurrency mining (City of Eagan agenda memo, 2026-02-17; MPR News, 2026-02-18).
  • Eagan litigation. On July 7, the owner of a site affected by Eagan’s moratorium sued the city, alleging that the pause unlawfully blocked a proposed data center redevelopment; the moratorium remained in force while the suit began (MPR News, 2026-07-07).
  • Inver Grove Heights. After three readings, the City Council adopted a one-year moratorium on June 26 by a 3-2 vote. It covers the proposed roughly 54,000-square-foot, 5 MW QLevr project at 5842 Carmen Avenue East despite the developer’s threatened $150 million damages claim (FOX 9, 2026-06-26).
  • Minneapolis. The City Council adopted the final moratorium on June 25, pausing new or expanded data centers through November 21, 2026, while exempting downtown projects of no more than 350,000 square feet (FOX 9, 2026-06-25).
  • Waite Park. The City Council adopted a one-year interim ordinance on May 4 prohibiting new data center development while the city studies zoning controls (City of Waite Park, 2026-05-04).
  • Rosemount. Ordinance 2026-03, adopted April 21, imposed a one-year moratorium on new data centers while exempting Meta’s previously approved and under-construction campus (City of Rosemount, 2026-04-21).
  • Elko New Market. The City Council adopted a one-year data center moratorium on May 14 while it studies comprehensive-plan and zoning changes (New Prague Times, 2026-06-04).
  • Wright County. On May 19, 2026, the Wright County Board unanimously approved an emergency moratorium, Ordinance 26-2, pausing applications for data centers in county townships for up to one year while the county studies time, place, and manner regulation; county officials emphasized that the action was not a countywide ban (Wright County, 2026-05-21).
  • Le Sueur County. On May 26, the County Board adopted a 12-month moratorium on new data center development in unincorporated areas while the county studies land-use regulation (Le Sueur County, 2026-06-03).
  • Mankato. The City Council adopted a one-year moratorium on July 13 covering data centers and other high-impact utility consumers while it studies regulatory standards (KEYC, 2026-07-13).
  • Blue Earth County proposal. County staff recommended a one-year moratorium and an August public hearing, but the June 23 record was a proposal rather than an enacted pause as of July 17 (Blue Earth County, 2026-06-23).
  • Carlton County proposal. On July 7, the County Board advanced an interim ordinance with one dissenting vote, but a final vote was not expected until August; no county moratorium was yet in effect as of July 17 (Northern News Now, 2026-07-07).

Zoning authority

3) Local governance, environmental review, and community opposition

  • Pine Island. Pine Island’s Project Skyway page reports that the city approved rezoning, annexation, a final plat, a final development plan, and a conditional-use permit on January 20, 2026, then approved a tax-abatement agreement on February 4, 2026; the city also states that the proposed development would use air cooling rather than water-cooling towers and would not exceed the city’s annual DNR water appropriation limit (City of Pine Island, 2026-05-18).
  • Pine Island construction pause. A judge issued a temporary restraining order on May 22 halting construction and preconstruction while environmental-review litigation proceeds. The order does not decide the merits, and Xcel’s related ESA remains separately pending at the PUC (MPR News, 2026-05-26; Minnesota Public Utilities Commission, accessed 2026-07-17).
  • Hermantown. The city released an updated draft AUAR and mitigation plan on June 11 and accepted comments through July 16. The development and tax-abatement agreements remained tabled; two opposition lawsuits were active, including an April zoning challenge. The city describes an eight-to-ten-year buildout, no cooling-water use, municipal water demand of no more than 50,000 gallons per day, at least 40 initial permanent jobs, and potentially 100 at full buildout (MPR News, 2026-06-24; City of Hermantown, 2026-07-14).
  • Faribault. On June 8, the Court of Appeals reversed and remanded the city’s negative EIS declaration because the record lacked sufficient information on air pollution, noise, greenhouse-gas emissions, and cumulative effects. The city then extended Archer’s development-review period to March 31, 2027 while preparing a supplemental EAW (Minnesota Court of Appeals, 2026-06-08; City of Faribault, 2026-07-08).
  • Farmington. Residents continued litigation and organized opposition to Tract’s proposed 2.5-million-square-foot, 708 MW technology park, citing a projected more-than-doubling of current municipal water demand. The city released employees from project nondisclosure agreements on April 6 and on April 20 approved splitting the final plat into two additions and updating the development contracts, but its project page still distinguishes those planning actions from a specific data center development application (CBS Minnesota, 2026-02-11; City of Farmington, accessed 2026-07-17).
  • Nobles County. On April 21, county commissioners blocked the zoning change needed for Geronimo Power’s proposed $4 billion data center on agricultural land after public opposition (MPR News, 2026-04-21; MPR News, 2026-04-21).
  • Elk River. On July 6, the City Council rejected the ordinance amendment needed to allow a roughly 60,000-square-foot data center in the light-industrial district; the related conditional-use permit had not yet received its expected denial, and the mayor proposed studying a one-year moratorium (CBS Minnesota, 2026-07-06).
  • Mountain Lake. C-MN Data Centers/AAIM received local approvals for a project at 2203 Third Avenue, with groundbreaking expected in September 2026, but residents raised concerns in July about notice, environmental review, noise, and transparency and organized a further public meeting (KEYC, 2026-07-16).
  • Recurring community concerns. Public objections in 2026 centered on water demand, electricity demand and cost allocation, backup generation and air emissions, noise and light, aquifer effects, property values, nondisclosure agreements, public notice, and the sufficiency of environmental review (Wright County, 2026-05-21; Minnesota Court of Appeals, 2026-06-08; KEYC, 2026-07-16).

4) Legislative activity, 2024-2026

2025 enacted changes

2026 regular session outcome

5) Notable projects and operators

  • Project Skyway / Google / Pine Island. Local approvals and the February tax abatement remain in place, but construction and preconstruction have been restrained since May 22 while litigation proceeds, and the 15-year Xcel ESA in docket E-002/M-26-170 remains pending. Xcel associates the agreement with 1,900 MW of clean resources, including 300 MW/30 GWh of long-duration storage, and a $50 million Google investment in Capacity*Connect (MPR News, 2026-05-26; Minnesota Public Utilities Commission, accessed 2026-07-17; Xcel Energy, 2026-02-24).
  • Google / Hermantown. Public reporting now values the approximately 200-acre project at $1.2 billion-$1.5 billion. The updated draft AUAR was in comment through July 16, the development and tax-abatement agreements remained tabled, and the 15-year Minnesota Power ESA in docket E-015/M-26-159 remained pending. Minnesota Power associates the contract with 300 MW of wind, 400 MW of storage, and a $5 million Google affordability/efficiency contribution (MPR News, 2026-06-24; City of Hermantown, 2026-07-14; Minnesota Public Utilities Commission, accessed 2026-07-17).
  • Archer Datacenters / Faribault. The proposal covers roughly 87 acres and up to 500,000 square feet; after the June Court of Appeals remand, the city extended project review to March 31, 2027 while preparing a supplemental EAW (Minnesota Court of Appeals, 2026-06-08; City of Faribault, 2026-07-08).
  • Tract / Farmington Technology Park. The proposed buildout is approximately 2.5 million square feet and 708 MW. Litigation and community opposition continued, while the city approved a final-plat split and updated development contracts on April 20; those master-development actions should not be conflated with a specific building approval (CBS Minnesota, 2026-02-11; City of Farmington, accessed 2026-07-17).
  • Amazon Data Services / Becker. Amazon’s proposed Becker data center remains important historical precedent because the PUC required certificate-of-need review for up to 250 emergency diesel backup generators rather than allowing the project to bypass that review (Minnesota PUC Legistar, 2025-02-27; E&E News, 2025-03-04).
  • Inver Grove Heights. The roughly 54,000-square-foot, 5 MW QLevr proposal at 5842 Carmen Avenue East is paused by the final one-year moratorium adopted June 26 (FOX 9, 2026-06-26).
  • Nobles County / Geronimo Power. The County Board blocked the zoning change for the proposed $4 billion project on April 21, changing it from an active local approval path to a denied request (MPR News, 2026-04-21; MPR News, 2026-04-21).
  • Elk River proposal. The City Council rejected the zoning-text amendment needed for a roughly 60,000-square-foot facility on July 6; the CUP remained formally unresolved but was expected to be denied, and a possible one-year moratorium was only a proposal (CBS Minnesota, 2026-07-06).
  • Monticello Tech / Monticello. The city received formal applications on July 6 for an approximately 1.3-million-square-foot campus on about 106 acres. The applications were still under completeness review and had not yet reached public hearings, Planning Commission review, or City Council action (City of Monticello, 2026-07-08).
  • C-MN Data Centers / AAIM / Mountain Lake. Local approvals were complete and groundbreaking was expected in September, but July opposition placed public notice, noise, and environmental review back before the community (KEYC, 2026-07-16).
  • Existing Minneapolis facility expansion. RealVantage invested $7 million in the operating 21 MW facility at 1001 Third Avenue South; the owners plan to expand it to 31 MW, making this a February-July 2026 expansion of existing inventory rather than a greenfield proposal (Data Center Dynamics, 2026-03-25).

Source checklist

  • Minnesota Revisor and statutes for tax, water, energy, zoning, and 2026 bill status.
  • Minnesota PUC notices and docket pages for the Xcel framework, Google ESAs, Minnesota Power withdrawal request, cooperative/utility tariff filings, and resource planning.
  • City and county primary sources for Pine Island, Hermantown, Farmington, Monticello, Faribault, Eagan, Waite Park, Rosemount, Wright County, Le Sueur County, and Blue Earth County.
  • Minnesota House Session Daily for adjournment and 2025 tax-law context.
  • MPR News, CBS Minnesota, FOX 9, Northern News Now, Data Center Dynamics, KEYC, New Prague Times, and Minnesota Center for Environmental Advocacy for court, moratorium, project, and community developments where primary government records were unavailable or lacked equivalent detail.