SF 4681
Introduction - 94th Legislature (2025 - 2026)
Posted on 03/24/2026 10:38 a.m.
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10.6
A bill for an act
relating to data centers; modifying the criteria for preapplication evaluations of
water appropriations for certain data centers; exempting certain data centers'
electricity sales in calculating a utility's solar energy standard; exempting certain
data centers from paying a fee; exempting certain data centers from paying sales
tax on electricity purchases; amending Minnesota Statutes 2025 Supplement,
sections 103G.265, subdivision 5; 216B.02, subdivision 12; 216B.1623; 216B.1691,
subdivision 2f; 216B.72; 297A.68, subdivision 42.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2025 Supplement, section 103G.265, subdivision 5, is
amended to read:
Subd. 5.
Preapplication evaluation of certain water appropriation projects.
(a) This
subdivision applies to a data center, as defined in section 216B.02, subdivision 11, whose
proposed new text begin net increase in new text end consumptive use exceeds 100,000,000 gallons per year and which
requires a permit amendment or a new individual permit.
(b) In response to a contact from a data center regarding a project that is likely to be
subject to this subdivision, the department may request preapplication information from the
data center that is helpful in assisting the department to assess the factors affecting the ability
of a water source to meet a project's water use needs at a proposed location, including:
(1) a project description;
(2) the project's estimated water use rates and volumes for the maximum day, maximum
month, and average year;
(3) the anticipated source of water; and
(4) water quality or temperature requirements.
(c) The department may request any additional information necessary from the data
center to assist it to assess the ability of a water source to meet a project's water use needs.
(d) The commissioner shall evaluate the information supplied under this subdivision
and shall respond in writing, which may be electronically transmitted, describing potential
water availability constraints at each proposed project site.
(e) In determining the impact of a potential project on water quality and quantity, the
commissioner may consult with the commissioners of health, agriculture, and the Pollution
Control Agency, and other state agencies.
(f) Any communication made or information exchanged under this subdivision between
a data center and a government agency, or between government agencies, is nonpublic data,
as defined in section 13.02, subdivision 9.
(g) None of the discussions, filings, or evaluations made under this subdivision preclude
or supplant environment review, preliminary well-construction approval, appropriation
permit review, or any other requirements under federal, state, or local law.
new text begin
(h) For the purposes of this subdivision, "net increase in consumptive use" means the
estimated net increase in annual water consumption by a data center after subtracting
documented reductions in consumption from the same water source by other entities that
occurred within the previous ... years or that are scheduled to occur within ... years of the
date the data center initiated operations.
new text end
new text begin
(i) This section does not apply to a qualified large-scale data center, as defined in section
297A.68, subdivision 42, that:
new text end
new text begin
(1) has filed an application on or before January 1, 2025, with a county, town, or
municipality for a permit or approval that is necessary to authorize construction; or
new text end
new text begin
(2) is located in an eligible community, as defined in section 116J.55, subdivision 1.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 2.
Minnesota Statutes 2025 Supplement, section 216B.02, subdivision 12, is amended
to read:
Subd. 12.
Qualified large-scale data center.
"Qualified large-scale data center" has the
meaning given in section 297A.68, subdivision 42deleted text begin , paragraph (e)deleted text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2025 Supplement, section 216B.1623, is amended to read:
216B.1623 CLEAN ENERGY AND CAPACITY TARIFF.
new text begin Subdivision 1. new text end
new text begin Tariff offer. new text end
The commission shall require each public utility to offer a
clean energy and capacity tariff for commercial and industrial customers. The clean energy
and capacity tariff shall require a special contract between the utility and one or more
customers that shall:
(1) be optional for participating customers;
(2) permit participating customers to elect to serve some or all of their energy or capacity
usage from new clean energy or capacity resources as long as reliability is maintained;
(3) require the participating customers to pay all proportional costs associated with the
addition of the new clean energy or capacity resources, including any utility costs caused
by the addition of the new clean energy or capacity resources to the grid;
(4) develop an appropriate energy and capacity credit;
(5) prohibit cost shifting from the participating customers to other utility customers or
vice versa; and
(6) allow a utility with an applicable tariff on file to demonstrate their existing tariff's
compliance with this section.
new text begin Subd. 2. new text end
new text begin Exemptions. new text end
new text begin
This subdivision does not apply to a qualified large-scale data
center that:
new text end
new text begin
(1) has filed an application on or before January 1, 2025, with a county, town, or
municipality for a permit or approval that is necessary to authorize construction; or
new text end
new text begin
(2) is located in an eligible community, as defined in section 116J.55, subdivision 1.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
Minnesota Statutes 2025 Supplement, section 216B.1691, subdivision 2f, is amended
to read:
Subd. 2f.
Solar energy standard.
(a) In addition to the requirements of subdivisions 2a
and 2g, each public utility shall generate or procure sufficient electricity generated by solar
energy to serve its retail electricity customers in Minnesota so that by the end of 2020, at
least 1.5 percent of the utility's total retail electric sales to retail customers in Minnesota is
generated by solar energy.
(b) For a public utility with more than 200,000 retail electric customers, at least ten
percent of the 1.5 percent goal must be met by solar energy generated by or procured from
solar photovoltaic devices with a nameplate capacity of 40 kilowatts or less.
(c) A public utility with between 50,000 and 200,000 retail electric customers:
(1) must meet at least ten percent of the 1.5 percent goal with solar energy generated by
or procured from solar photovoltaic devices with a nameplate capacity of 40 kilowatts or
less; and
(2) may apply toward the ten percent goal in clause (1) individual customer subscriptions
of 40 kilowatts or less to a community solar garden program operated by the public utility
that has been approved by the commission.
(d) The solar energy standard established in this subdivision is subject to all the provisions
of this section governing a utility's standard obligation under subdivision 2a.
(e) It is an energy goal of the state of Minnesota that, by 2030, ten percent of the retail
electric sales in Minnesota be generated by solar energy.
(f) For the purposes of calculating the total retail electric sales of a public utility deleted text begin serving
fewer than 200,000 retail electric customersdeleted text end under this subdivision, there shall be excluded
retail electric sales to customers that are:
new text begin
(1) served by a public utility with fewer than 200,000 retail electric customers and are:
new text end
deleted text begin (1)deleted text end new text begin (i)new text end an iron mining extraction and processing facility, including a scram mining facility
as defined in Minnesota Rules, part 6130.0100, subpart 16;
deleted text begin (2)deleted text end new text begin (ii)new text end a qualified large-scale data center; or
deleted text begin (3)deleted text end new text begin (iii)new text end a paper mill, wood products manufacturer, sawmill, or oriented strand board
manufacturerdeleted text begin .deleted text end new text begin ; or
new text end
new text begin
(2) a qualified large-scale data center that:
new text end
new text begin
(i) has filed an application on or before January 1, 2025, with a county, town, or
municipality for a permit or approval that is necessary to authorize construction; or
new text end
new text begin
(ii) is located in an eligible community, as defined in section 116J.55, subdivision 1.
new text end
deleted text begin Thosedeleted text end Customers new text begin identified in clause (1) or (2) new text end may not have included in the rates charged
to them by the public utility deleted text begin serving fewer than 200,000 retail electric customersdeleted text end any costs
of satisfying the solar standard specified by this subdivision.
(g) A public utility may not use energy used to satisfy the solar energy standard under
this subdivision to satisfy its standard obligation under subdivision 2a. A public utility may
not use energy used to satisfy the standard obligation under subdivision 2a to satisfy the
solar standard under this subdivision.
(h) Notwithstanding any law to the contrary, a solar renewable energy credit associated
with a solar photovoltaic device installed and generating electricity in Minnesota after
August 1, 2013, but before 2020 may be used to meet the solar energy standard established
under this subdivision.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 5.
Minnesota Statutes 2025 Supplement, section 216B.72, is amended to read:
216B.72 QUALIFIED LARGE-SCALE DATA CENTER FEE.
(a) new text begin Except as provided in paragraph (d), new text end the commissioner must collect an annual fee
from deleted text begin thedeleted text end new text begin anew text end qualified large-scale data center, on a schedule prescribed by the commissioner
and deposited in the energy and conservation account established in section 216B.241,
subdivision 2a.
(b) The fee is based on deleted text begin thedeleted text end new text begin anew text end qualified large-scale data center's peak demand the utility
arranges to serve, reflecting the qualified large-scale data center's peak demand forecast
provided to the utility, expressed in megawatts (MW), as follows:
| Peak Demand |
Fee |
| (1) 100 to 250 MW |
$2,000,000 |
| (2) above 250 MW but below 500 MW |
$3,000,000 |
| (3) 500 MW but below 750 MW |
$4,000,000 |
| (4) 750 MW or greater |
$5,000,000 |
(c) The fee data collected under this section must be treated as nonpublic data, as defined
under section 13.02, subdivision 9.
new text begin
(d) This section does not apply to a qualified large-scale data center that:
new text end
new text begin
(1) has filed an application on or before January 1, 2025, with a county, town, or
municipality for a permit or approval that is necessary to authorize construction; or
new text end
new text begin
(2) is located in an eligible community, as defined in section 116J.55, subdivision 1.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 6.
Minnesota Statutes 2025 Supplement, section 297A.68, subdivision 42, is amended
to read:
Subd. 42.
Data centers.
(a) Purchases of enterprise information technology equipment
and computer software for use in a qualified data center, a qualified refurbished data center,
or a qualified large-scale data center are exempt, except that computer software maintenance
agreements are exempt for purchases made after June 30, 2013. The tax on purchases exempt
under this paragraph must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied, and then refunded after June 30, 2013, in the manner provided in
section 297A.75. This exemption includes enterprise information technology equipment
and computer software purchased to replace or upgrade enterprise information technology
equipment and computer software in a qualified data center, a qualified refurbished data
center, or a qualified large-scale data center.
new text begin
(b) A purchase of electricity used or consumed to operate a qualified large-scale data
center located in an eligible community, as defined in section 116J.55, subdivision 1, is
exempt.
new text end
deleted text begin (b)deleted text end new text begin (c)new text end For purposes of this subdivision, "qualified data center" means a facility in
Minnesota:
(1) that is comprised of one or more buildings that consist in the aggregate of at least
25,000 square feet, and that are located on a single parcel or on contiguous parcels, where
the total cost of construction or refurbishment, investment in enterprise information
technology equipment, and computer software is at least $30,000,000 within a 48-month
period. The 48-month period begins no sooner than July 1, 2012, except that costs for
computer software maintenance agreements purchased before July 1, 2013, are not included
in determining if the $30,000,000 threshold has been met;
(2) that is constructed or substantially refurbished after June 30, 2012, where
"substantially refurbished" means that at least 25,000 square feet have been rebuilt or
modified, including:
(i) installation of enterprise information technology equipment; environmental control,
computer software, and energy efficiency improvements; and
(ii) building improvements; and
(3) that is used to house enterprise information technology equipment, where the facility
has the following characteristics:
(i) uninterruptible power supplies, generator backup power, or both;
(ii) sophisticated fire suppression and prevention systems; and
(iii) enhanced security. A facility will be considered to have enhanced security if it has
restricted access to the facility to selected personnel; permanent security guards; video
camera surveillance; an electronic system requiring pass codes, keycards, or biometric scans,
such as hand scans and retinal or fingerprint recognition; or similar security features.
In determining whether the facility has the required square footage, the square footage
of the following spaces shall be included if the spaces support the operation of enterprise
information technology equipment: office space, meeting space, and mechanical and other
support facilities. For purposes of this subdivision, "computer software" includes, but is not
limited to, software utilized or loaded at a qualified data center, qualified refurbished data
center, or qualified large-scale data center, including maintenance, licensing, and software
customization.
deleted text begin (c)deleted text end new text begin (d)new text end For purposes of this subdivision, a "qualified refurbished data center" means an
existing facility that qualifies as a data center under paragraph deleted text begin (b)deleted text end new text begin (c)new text end , clauses (2) and (3),
but that is comprised of one or more buildings that consist in the aggregate of at least 25,000
square feet, and that are located on a single parcel or contiguous parcels, where the total
cost of construction or refurbishment, investment in enterprise information technology
equipment, and computer software is at least $50,000,000 within a 24-month period.
deleted text begin (d)deleted text end new text begin (e)new text end For purposes of this subdivision, "enterprise information technology equipment"
means computers and equipment supporting computing, networking, or data storage,
including servers and routers. It includes, but is not limited to: cooling systems, cooling
towers, and other temperature control infrastructure; power infrastructure for transformation,
distribution, or management of electricity used for the maintenance and operation of a
qualified data center or qualified refurbished data center, including but not limited to exterior
dedicated business-owned substations, backup power generation systems, battery systems,
and related infrastructure; and racking systems, cabling, and trays, which are necessary for
the maintenance and operation of the qualified data center, qualified refurbished data center,
or qualified large-scale data center.
deleted text begin (e)deleted text end new text begin (f)new text end For purposes of this subdivision, "qualified large-scale data center" means a
facility in Minnesota:
(1) that is comprised of one or more buildings connected to each other by fiber and
associated equipment that consist in the aggregate of at least 25,000 square feet, and that
are located in one physical location or multiple locations; and
(2) for which the total cost of construction or refurbishment, investment in enterprise
information technology equipment, and computer software is at least $250,000,000
collectively by the facility and its tenants within a 60-month period beginning after June
30, 2025.
deleted text begin (f)deleted text end new text begin (g)new text end A qualified data center, qualified large-scale data center, or qualified refurbished
data center may claim the exemptions in this subdivision for purchases made within 35
years of the date of its first purchase qualifying for the exemption under paragraph (a).
deleted text begin (g)deleted text end new text begin (h)new text end The exemption in this subdivision is allowed for qualified data centers, qualified
large-scale data centers, and qualified refurbished data centers that were certified under
paragraph deleted text begin (h)deleted text end new text begin (i)new text end before July 1, 2042.
deleted text begin (h)deleted text end new text begin (i)new text end The commissioner of employment and economic development must certify to the
commissioner of revenue, in a format approved by the commissioner of revenue, when a
qualified data center has met the requirements under paragraph deleted text begin (b)deleted text end new text begin (c)new text end , a qualified refurbished
data center has met the requirements under paragraph deleted text begin (c)deleted text end new text begin (d)new text end , or a qualified large-scale data
center has met the requirements under paragraph deleted text begin (e)deleted text end new text begin (f)new text end . The certification must provide the
following information regarding each qualified data center or qualified refurbished data
center:
(1) the total square footage amount;
(2) the total amount of construction or refurbishment costs and the total amount of
qualifying investments in enterprise information technology equipment and computer
software;
(3) the beginning and ending of the applicable period under paragraph deleted text begin (b), (c), or (e)deleted text end new text begin
(c), (d), or (f)new text end in which the qualifying expenditures and purchases under clause (2) were
made, but in no case shall the period begin before July 1, 2012; and
(4) the date upon which the qualified data center first met the requirements under
paragraph deleted text begin (b)deleted text end new text begin (c)new text end , a qualified refurbished data center first met the requirements under
paragraph deleted text begin (c)deleted text end new text begin (d)new text end , or a qualified large-scale data center first met the requirements under
paragraph deleted text begin (e)deleted text end new text begin (f)new text end .
deleted text begin (i)deleted text end new text begin (j)new text end Any refund for sales tax paid on qualifying purchases under this subdivision must
not be issued unless the commissioner of revenue has received the certification required
under paragraph deleted text begin (h)deleted text end new text begin (i)new text end issued by the commissioner of employment and economic
development.
deleted text begin (j)deleted text end new text begin (k)new text end The commissioner of employment and economic development must annually
notify the commissioner of revenue of the qualified data centers that are projected to meet
the requirements under paragraph deleted text begin (b)deleted text end new text begin (c)new text end , the qualified refurbished data centers that are
projected to meet the requirements under paragraph deleted text begin (c)deleted text end new text begin (d)new text end , and the qualified large-scale
data centers that are projected to meet the requirements under paragraph deleted text begin (e)deleted text end new text begin (f)new text end , in each of
the next four years. The notification must provide the information required under paragraph
deleted text begin (h)deleted text end new text begin (i)new text end , clauses (1) to (4), for each qualified data center, qualified refurbished data center,
or qualified large-scale data center.
deleted text begin (k)deleted text end new text begin (l)new text end Laborers and mechanics performing work to construct or refurbish qualified
large-scale data centers must be paid the prevailing wage rate for the work as defined in
section 177.42, subdivision 6. Work performed to construct or refurbish qualified large-scale
data centers is subject to the requirements and enforcement provisions of sections 177.27,
177.30, 177.32, and 177.41 to 177.45. For purposes of this paragraph, "refurbish" does not
include maintenance or equipment refreshment or replacement. The commissioner of
employment and economic development must not certify a qualified large-scale data center
under paragraph deleted text begin (h)deleted text end new text begin (i)new text end unless the entity seeking an exemption certifies to the commissioner
of employment and economic development that it has complied with this paragraph for all
covered work after June 30, 2025.
deleted text begin (l)deleted text end new text begin (m)new text end Within three years after being placed in service, a qualified large-scale data center
must certify to the commissioner of commerce that the facility has attained certification
under one or more of the following sustainable design or green building standards:
(1) BREEAM for new construction or BREEAM in-use;
(2) Energy Star;
(3) Envision;
(4) ISO 50001-energy management;
(5) LEED for building design and construction or LEED for operations and maintenance;
(6) green globes for new construction or green globes for existing buildings;
(7) UL 3223; or
(8) other reasonable standards approved by the commissioner of employment and
economic development.
deleted text begin (m)deleted text end new text begin (n)new text end Notwithstanding section 289A.38, subdivision 1, the amount of the exemption
allowed to a qualified large-scale data center must be repaid to the commissioner of revenue
if the commissioner of commerce determines that a qualified large-scale data center has not
met the requirements under paragraph deleted text begin (l)deleted text end new text begin (m)new text end . Nothing in this paragraph prohibits the
commissioner of revenue from making an assessment of tax, interest, or penalties if the
commissioner of revenue determines that sales to and purchases made by a qualified
large-scale data center do not qualify for the exemption under this subdivision.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end