TN — State Policy Updated 2026-07-17

Tennessee

1) Incentive programs

2) Restrictions and moratoriums

  • Public Chapter 961 (HB1847/SB2128, enacted 2026): Tennessee enacted a statewide data-center cost-allocation law. It applies to a “data center” projected to have 50 MW or more of peak electric demand during its first three years, generally prohibits a municipality or electric utility from paying or absorbing the cost of electrical infrastructure incurred to serve it, and allows data centers to buy power from in-state independent power producers subject to federal law and TVA/electric-utility facility-access terms. The act took effect when signed on May 7, 2026, and its operative provisions apply to conduct and contracts entered, amended, or renewed on or after July 1, 2026. Tennessee Secretary of State Public Chapter 961, 2026-05-07; Tennessee General Assembly HB1847/SB2128, 2026-05-18
  • No statewide construction moratorium enacted: Tennessee did not enact a statewide data-center construction moratorium through July 17, 2026. Statewide measures that would have added clean-transition tariffs, registration/reporting, water-review permitting, site assessments, BYOG clean-energy rules, foreign-adversary equipment restrictions, or public-benefit compute and emissions reporting all failed or were deferred at adjournment. Tennessee General Assembly data-center bill index, accessed 2026-07-17; Tennessee General Assembly HB1461/SB1832, 2026-03-10
  • McMinnville moratorium: McMinnville approved an 18-month moratorium on new data centers and high-density computing systems after residents objected to a proposed 96,000-square-foot, 25 MW AI data center; the moratorium blocks acceptance, processing, and approval of land-use, zoning, building, site-plan, or conditional-use permits for covered facilities. WSMV, 2026-06-03
  • Cedar Hill moratorium: Cedar Hill in Robertson County passed a two-year moratorium on data centers; local officials described it as preemptive, citing nearby regional data-center activity and rural-preservation concerns. NewsChannel 5 Nashville, 2026-06-04
  • Washington County moratorium: Washington County commissioners approved a one-year moratorium on new data centers, including cryptocurrency mines, through June 30, 2027, by a 13-2 vote. SuperTalk 92.9, 2026-03-24
  • Additional local moratoriums adopted by July 17: A June-July wave added a one-year Coffee County moratorium, a 12-month Warren County moratorium, two-year moratoriums in Cumberland, Morgan, and Anderson counties, a six-month Clinton moratorium, a Knox County moratorium through June 30, 2027, a one-year Knoxville moratorium, a six-month Loudon County moratorium, and a one-year Hamblen County moratorium. Existing facilities or already-approved projects are generally exempt, but the precise scope differs by ordinance or resolution. Coffee County Resolution 2026-12 agenda, 2026-06-09; UC Now, 2026-06-23; Cumberland County Resolution 06-2026-31 report, 2026-06-15; WVLT, 2026-07-08; The Courier News, 2026-06-17; The Courier News, 2026-07-08; WVLT, 2026-06-23; City of Knoxville, 2026-07-08; WVLT, 2026-06-30; Hamblen County, 2026-07-07
  • Nashville/Davidson County legislation remained pending: Metro’s BL2026-1391 zoning bill passed second reading on July 7 and awaited third reading on July 21. Its substitute would bar facilities over 500,000 square feet, confine smaller data centers to industrial districts with Board of Zoning Appeals approval, require setbacks and closed-loop water systems, and prohibit emitting on-site generation. The companion moratorium, BL2026-1448, also passed second reading and would run until November 1, 2026 or the zoning bill’s effective date; neither measure was final by July 17. Mayor Freddie O’Connell also signed Executive Order 59 on June 15 directing an interdepartmental review of infrastructure, environmental, economic, and community impacts. Metro Nashville Legistar BL2026-1391, updated 2026-07-08; Metro Nashville Legistar BL2026-1448, updated 2026-07-08; Metropolitan Government of Nashville and Davidson County, 2026-06-15
  • Other local moratoriums remained proposed or preliminary: As of July 17, Wilson County had advanced but not finally adopted a six-month moratorium; Hamilton County’s mayor had proposed a one-year pause in unincorporated areas that would not affect the already-approved, smaller Jailhouse Studios data center inside Chattanooga; Gallatin’s council had directed staff to prepare a moratorium; Sevierville had published a proposed 18-month moratorium without a located final adoption; and Maury County had a vote scheduled for July 20. Roane County asked its planning commission to recommend a two-year pause, and Crossville passed only the first of three readings on a city ordinance aligned with Cumberland County’s moratorium. WSMV, 2026-06-23; WDEF, 2026-07-02; Hamilton County Commission, 2026-03-18; WSMV, 2026-07-15; City of Sevierville agenda, 2026-07-02; Maury County proposed resolution, posted 2026-06; WOKI, 2026-07-14; 3B Media News, 2026-07-15
  • New local zoning standards short of a moratorium: Bradley County unanimously restricted data centers to special-impact industrial zones, required 3,000-foot buffers from forestry, agricultural, residential, school, and church properties, and capped property-line noise at 60 dB; the only then-existing special-impact site was a landfill. Blount County adopted Resolution 26-06-022 limiting facilities to industrial zones with 5,000-foot buffers, a 60 dB noise limit, utility certifications that service will not raise other customers’ rates, and environmental safeguards. Rockwood amended its code on May 18 to permit data centers in its M-1 light-industrial district. La Vergne was considering a July amendment that would confine them to interchange districts and require 1,000-foot separation from specified sensitive uses; the search did not establish final adoption by July 17. Chattanooga Times Free Press, 2026-04-20; WVLT, 2026-07-08; WSMV, 2026-07-13
  • Earlier regional controls and Hawkins County litigation: WPLN counted at least nine Tennessee cities and counties with data-center blocks by June 11, including Cedar Hill, Washington County, Grundy County, Johnson City, Jonesborough, Bristol, Coffee County, and McMinnville. Hawkins County’s 2025 permanent ban became the subject of a federal civil-rights lawsuit in March 2026 alleging that the prohibition is unconstitutionally vague and strips a landowner of viable use. WPLN, 2026-06-11; Beacon Center of Tennessee complaint, filed 2026-03-27; WUOT, 2026-04-10
  • Local zoning control remains central: Tennessee’s 2026 model combines a statewide electrical-infrastructure cost rule with locally varied moratoriums, bans, project review, and zoning standards. By mid-July the local response extended well beyond the five jurisdictions identified in the June 10 snapshot, while several other measures were still pending. Tennessee Secretary of State Public Chapter 961, 2026-05-07; WPLN, 2026-06-11; City of Knoxville, 2026-07-08
  • Water withdrawal regulation: Tennessee continues to regulate significant water withdrawals through TDEC’s water resources framework, and the failed SB2653/HB2392 water-review bill shows that data-center water reporting and permitting became an active 2026 legislative issue even though it did not pass. TDEC Division of Water Resources, accessed 2026-06-10; Tennessee General Assembly HB2392/SB2653, 2026-04-07
  • Air permitting for on-site generation: TDEC and local air programs continue to regulate construction and operation of emission sources; xAI’s Memphis/Southaven turbine disputes show that data-center self-generation and backup generation are now a major air-permitting issue in the Tennessee market. TDEC Air Pollution Control, accessed 2026-06-10; SELC, 2026-04-14

3) Local governance

  • State does not broadly preempt local zoning: Public Chapter 961 governs electrical-infrastructure cost absorption and independent power options, but local siting, use definitions, moratoriums, and development review remain active local-government tools. Tennessee Secretary of State Public Chapter 961, 2026-05-07; Metro Nashville Legistar BL2026-1391, 2026-05-26
  • Nashville Zoo / DC BLOX conflict: DC BLOX’s plan grew from one 69,220-square-foot, 10 MW building to a two-building campus reported at 50 MW. The Nashville Zoo reported more than 520,000 petition signatures by June 24. DC BLOX closed on 23.49 acres for $23 million on July 16 and filed another building permit, while two zoning appeals and Metro legislation remained unresolved as of July 17. WSMV, 2026-06-09; Nashville Zoo, updated 2026-06-24; Axios Nashville, 2026-07-17
  • Gallatin annexation near Meta remained non-project-specific: Gallatin annexed roughly 125 acres immediately north of Meta’s campus in July, but the resolutions stated no use and Meta announced no expansion on the tract. The annexation should not be counted as a data-center project despite local speculation; nearby residents separately reported construction noise and runoff concerns. WSMV, 2026-07-09
  • Community opposition pattern (xAI): The xAI Colossus projects remain the state’s most visible environmental-justice conflict, with local and regional opposition focusing on methane gas turbines, air pollution, utility demand, and procedural transparency. SELC, 2026-04-14; Earthjustice, 2026-05-06

4) Legislative activity (2024–2026)

  • Public Chapter 886 (2024): Tennessee amended the qualified data center definition to preserve sales/use tax exemption eligibility for a data center transferred to an affiliate through an Internal Revenue Code corporate reorganization after already meeting the $100 million investment and 15-job thresholds. Tennessee General Assembly SB2583/HB2182, 2024-04-19; Tennessee Fiscal Review Committee, 2024-02-24
  • HB1847 / SB2128 (2026, enacted as Public Chapter 961): Signed by Governor Bill Lee on May 7, 2026 and assigned Public Chapter 961 on May 18, 2026; final law defines covered data centers at 50 MW+ projected peak demand and bars municipalities/electric utilities from paying or absorbing covered electrical-infrastructure costs. Tennessee General Assembly SB2128/HB1847, 2026-05-18; Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • SB1999 / HB2054 (2026, died in committee): The proposed Data Center, Artificial Intelligence, and Clean Transition Tariff Accountability Act would have authorized clean-transition tariffs and TPUC reporting for large energy-intensive users, but HB2054 was taken off notice on March 4 and SB1999 was assigned to the Senate Commerce and Labor General Subcommittee on March 10. Tennessee General Assembly HB2054/SB1999, 2026-03-10; Tennessee Fiscal Review Committee, 2026-02-26
  • HB2047 / SB2584 (2026, did not pass): This bill would have allowed electronic certification for qualified data centers applying for job tax credits that they had not recently violated WARN Act, FLSA, or federal immigration laws; the House bill was taken off notice in Finance Ways and Means Subcommittee on April 15, and the Senate bill remained on the Senate Finance calendar. Tennessee General Assembly HB2047/SB2584, 2026-04-21
  • HB2392 / SB2653 (2026, did not pass): The Tennessee Data Center Impact Review Act would have required data centers over 20 MW to obtain a water/wastewater-related permit and publish water-use reporting, but HB2392 was taken off notice on March 18 and SB2653 was assigned to General Subcommittee on April 7. Tennessee General Assembly HB2392/SB2653, 2026-04-07; Tennessee Fiscal Review Committee, 2026-02-15
  • HB2061 / SB1682 and SB2112 / HB2456 (2026, did not pass): These related registration/reporting bills would have required certain data centers over 20 MW to register with TPUC or DOR and trigger utility reporting of electricity, water, fuel, and rates; both vehicles failed or were sent to general subcommittee/taken off notice. Tennessee General Assembly HB2061/SB1682, 2026-03-11; Tennessee General Assembly SB2112/HB2456, 2026-03-24
  • HB0946 / SB0962 (2026 carryover, did not pass): This high-energy-use facility site-assessment proposal would have required local site assessments before rezoning/special-use approval for projects needing 100 MW+, including data centers, but it was deferred to the January 2027 House calendar and assigned to Senate General Subcommittee. Tennessee General Assembly HB0946/SB0962, 2026-03-24
  • SB2681 / HB2463 (2026, did not pass): The Bring Your Own Generation Act would have imposed clean-energy transition surcharges and onsite/direct carbon-free energy requirements for data centers or AI facilities over 100 MW, but it did not advance beyond House no-action/Senate General Subcommittee status. Tennessee General Assembly SB2681/HB2463, 2026-04-07
  • SB2680 / HB2464 (2026, did not pass): This foreign-adversary equipment bill would have applied to electric utilities and high-performance computing facilities averaging over 50 MW per month; HB2464 failed in House Business and Utilities Subcommittee and SB2680 went to General Subcommittee. Tennessee General Assembly SB2680/HB2464, 2026-03-10
  • HB1461 / SB1832 (2026, failed): This proposal would have required high-performance computing facilities over 50 MW to devote at least half their computing capacity to defined public-benefit uses and file annual energy-consumption, carbon-emissions, and third-party audit reports. HB1461 failed in House subcommittee on March 4 and SB1832 was sent to Senate General Subcommittee on March 10. Its fiscal note nevertheless provides useful state evidence: Fiscal Review listed 61 Tennessee data centers and cited xAI Memphis 280 MW, Meta Gallatin 300 MW, Evoque Sumner 100 MW, and a second xAI Memphis data center expected in 2026 with 1,563 MW planned capacity. Tennessee General Assembly HB1461/SB1832, 2026-03-10; Tennessee Fiscal Review Committee, 2026-02-26

5) Notable projects and operators

  • Meta (Facebook) — Gallatin (Sumner County): Meta’s Gallatin campus is operating; state fiscal-review materials cite the Gallatin/Meta site at 300 MW, and earlier Meta/Tennessee announcements described more than $1.5 billion of eventual investment and 100+ operational jobs once built out. Tennessee Fiscal Review Committee, 2026-02-26; Meta Data Centers, 2024-11-14
  • Google — Clarksville (Montgomery County): Google’s Montgomery County data center remains operational; Google’s current Tennessee data-center page reports $6 billion+ invested in Tennessee since the data center was built in 2018. Google Data Centers, accessed 2026-06-10
  • xAI — Memphis / Colossus 1 and Colossus 2: Tennessee fiscal notes cite xAI’s Memphis data center at 280 MW and a second xAI Memphis data center expected in 2026 with 1,563 MW planned capacity; market-intelligence listings now identify Colossus 1 as operating and Colossus 2 as the largest planned Tennessee facility. Tennessee Fiscal Review Committee, 2026-02-26; Cleanview, updated June 2026
  • Cielo Digital Infrastructure — Clarksville (unconfirmed market listing): Cleanview lists a 350 MW, 107-acre Cielo Clarksville project, but the earlier Data Center Dynamics link in this file concerned a South Carolina project and did not substantiate the Tennessee claim. On June 19, a Clarksville council member said the planning commission had repeatedly confirmed that no data-center proposal was under discussion. Cielo should therefore be treated as an unverified market listing, not an approved or utility-confirmed Tennessee project. Cleanview, updated June 2026; WSMV, 2026-06-19
  • Hixson Data Center — McMinnville/Warren County (proposed): The proposed McMinnville project was reported as a 96,000-square-foot, 25 MW AI/GPU campus and triggered the city’s 18-month moratorium. WSMV, 2026-06-03
  • DC BLOX — Nashville Zoo-adjacent proposal (Davidson County): DC BLOX signed for 15 MW of Nashville Electric Service capacity for an initial building and describes a 50 MW two-building plan; an earlier NES study examined as much as 100 MW over eight years, which DC BLOX says is obsolete. The developer bought the 23.49-acre site for $23 million on July 16, but zoning appeals and pending Metro restrictions still make final buildout contingent. WPLN, 2026-07-16; Axios Nashville, 2026-07-17
  • Fisk University Quantum Leap campus — Nashville (announced): Fisk announced a broader $1 billion campus transformation that includes a $400 million Innovation Center. The planned center is 100,000 square feet, with about 70,000 square feet for technology/data-center uses and 30,000 for academic space. The $1 billion figure is the university-wide master plan, not a data-center-only investment, and no MW figure had been announced by July 17. Fisk University, 2026-05-14; WSMV, 2026-06-10
  • Jailhouse Studios / Urban Story Ventures — Chattanooga (approved lease): On March 18, Hamilton County approved a 35-year lease to redevelop its former downtown jail as film and music studios with a data-center component capped at 12,000 square feet. The developer estimated $60 million to $80 million for the overall rehabilitation; no MW figure or data-center-only investment was disclosed. Hamilton County Commission minutes, 2026-03-18; Chattanoogan.com, 2026-03-18

Notes and source hierarchy