Minnesota Session Laws - 2025, 1st Special Session

CHAPTER 12--H.F.No. 16

An act

relating to data centers; modifying various environmental and energy regulatory requirements governing data centers; authorizing a clean energy and capacity tariff; modifying sales and use tax exemptions; imposing a fee; classifying data; adding and modifying various definitions; appropriating money;

amending Minnesota Statutes 2024, sections 103G.265, by adding a subdivision; 103G.271, by adding a subdivision; 216B.02, by adding subdivisions; 216B.1691, subdivisions 2f, 2h, as amended; 216B.2402, subdivision 10; 216B.241, subdivisions 1a, 2a; 297A.68, subdivision 42; 297A.75, subdivision 1, as amended; proposing coding for new law in Minnesota Statutes, chapters 84; 103B; 116; 144; 216B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [84.0267] COORDINATION WITH MINNESOTA BUSINESS FIRST STOP. new text end

new text begin It is the policy of this state that inquiries related to the permitting of a data center are also referred to the Minnesota Business First Stop Program administered by the Department of Employment and Economic Development under section 116J.035, subdivision 8. The commissioner must take reasonable steps to ensure that agency permitting staff are aware of this policy and have the resources to efficiently refer those inquiries to Minnesota Business First Stop. new text end

Sec. 2.

new text begin [103B.107] COORDINATION WITH MINNESOTA BUSINESS FIRST STOP. new text end

new text begin It is the policy of this state that inquiries related to the permitting of a data center are also referred to the Minnesota Business First Stop Program administered by the Department of Employment and Economic Development under section 116J.035, subdivision 8. The executive director of the Board of Water and Soil Resources must take reasonable steps to ensure that agency permitting staff are aware of this policy and have the resources to efficiently refer those inquiries to Minnesota Business First Stop. new text end

Sec. 3.

Minnesota Statutes 2024, section 103G.265, is amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Preapplication evaluation of certain water appropriation projects. new text end

new text begin (a) This subdivision applies to a data center, as defined in section 216B.02, subdivision 11, whose proposed consumptive use exceeds 100,000,000 gallons per year and which requires a permit amendment or a new individual permit. new text end

new text begin (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: new text end

new text begin (1) a project description; new text end

new text begin (2) the project's estimated water use rates and volumes for the maximum day, maximum month, and average year; new text end

new text begin (3) the anticipated source of water; and new text end

new text begin (4) water quality or temperature requirements. new text end

new text begin (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. new text end

new text begin (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. new text end

new text begin (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. new text end

new text begin (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. new text end

new text begin (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 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 2024, section 103G.271, is amended by adding a subdivision to read:

new text begin Subd. 5b. new text end

new text begin Large water appropriation projects; permit conditions. new text end

new text begin (a) In issuing new or modified water use permits to applicants that meet the definition of a data center, as defined in section 216B.02, subdivision 11, whose proposed new or additional consumptive use exceeds 100,000,000 gallons per year, or for existing permits where the permittee intends to provide more than 100,000,000 gallons of water per year to a data center, the department shall ensure that: new text end

new text begin (1) public health, safety, and welfare are adequately protected; new text end

new text begin (2) technologies or measures that promote water conservation, the efficient use of water, and watershed health, are reasonably considered, including but not limited to using water efficient fixtures and practices, recycling water before discharging, partnering with local water utilities to use discharged water from the data center, using reclaimed water, installing closed-loop systems, and supporting water restoration and replenishment in local watersheds; and new text end

new text begin (3) water use conflicts are addressed as prescribed in Minnesota Rules, part 6115.0740. new text end

new text begin (b) The commissioner shall require an applicant to conduct an aquifer test as provided under section 103G.287, if the commissioner determines that the test results are necessary in order to ensure compliance with paragraph (a), clause (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. 5.

new text begin [116.037] COORDINATION WITH MINNESOTA BUSINESS FIRST STOP. new text end

new text begin It is the policy of this state that inquiries related to the permitting of a data center are also referred to the Minnesota Business First Stop Program administered by the Department of Employment and Economic Development under section 116J.035, subdivision 8. The commissioner of the Pollution Control Agency must take reasonable steps to ensure that agency permitting staff are aware of this policy and have the resources to efficiently refer those inquiries to Minnesota Business First Stop. new text end

Sec. 6.

new text begin [144.0507] COORDINATION WITH MINNESOTA BUSINESS FIRST STOP. new text end

new text begin It is the policy of this state that inquiries related to the permitting of a data center are also referred to the Minnesota Business First Stop Program administered by the Department of Employment and Economic Development under section 116J.035, subdivision 8. The commissioner of health must take reasonable steps to ensure that agency permitting staff are aware of this policy and have the resources to efficiently refer those inquiries to Minnesota Business First Stop. new text end

Sec. 7.

Minnesota Statutes 2024, section 216B.02, is amended by adding a subdivision to read:

new text begin Subd. 11. new text end

new text begin Data center. new text end

new text begin "Data center" means a facility that is designed to have a load of 100 megawatts or more and whose primary purpose is the storage, management, and processing of digital data via the interconnection and operation of information technology and network telecommunications equipment, including all related facilities and infrastructure for backup electricity generation, power distribution, environmental control, cooling, and security. 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. 8.

Minnesota Statutes 2024, section 216B.02, is amended by adding a subdivision to read:

new text begin Subd. 12. new text end

new text begin Qualified large-scale data center. new text end

new text begin "Qualified large-scale data center" has the meaning given in section 297A.68, subdivision 42, paragraph (f). 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. 9.

new text begin [216B.1622] SERVICE TO VERY LARGE CUSTOMERS. new text end

new text begin Subdivision 1. new text end

new text begin Very large customer class or subclass. new text end

new text begin By December 15, 2026, the commission shall establish by order the definition and appropriate characteristics of a very large customer class or subclass for each public utility providing electric service. The commission may do this in a rate case under section 216B.16 for that utility or in another proceeding. new text end

new text begin Subd. 2. new text end

new text begin Tariff or energy supply agreement. new text end

new text begin The commission may approve, modify or reject a tariff or electric service agreement proposed between a public utility and a very large customer establishing the terms and conditions under which the utility will provide electric service to the customer. As it evaluates a tariff or agreement under this section, the commission must consider how best to achieve the following required outcomes: new text end

new text begin (1) all costs attributable to the utility's very large customers not exempt under subdivision 3 are assigned to the very large customer class or subclass determined by the commission under paragraph (a); new text end

new text begin (2) the electricity to be provided by the utility to a very large customer achieves each quantitative benchmark of the state's electricity standards under section 216B.1691, as demonstrated by a plan submitted by the utility to serve the additional load without recourse to requesting a delay or modification of these standards; new text end

new text begin (3) the tariff or agreement contains protections necessary to ensure that other customers of the public utility are not placed at risk for paying stranded costs associated with the utility serving the very large customer; and new text end

new text begin (4) any other outcome deemed important by the commission to ensure the tariff or agreement is in the public interest. new text end

new text begin Subd. 3. new text end

new text begin Existing tariff or agreements. new text end

new text begin This section shall not apply to existing, renewed, or extended electric service agreements of public utility customers meeting the threshold of a very large customer, or to very large customers that have been actively taking electric service from the public utility prior to 2020. 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. 10.

new text begin [216B.1623] CLEAN ENERGY AND CAPACITY TARIFF. new text end

new text begin 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: new text end

new text begin (1) be optional for participating customers; new text end

new text begin (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; new text end

new text begin (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; new text end

new text begin (4) develop an appropriate energy and capacity credit; new text end

new text begin (5) prohibit cost shifting from the participating customers to other utility customers or vice versa; and new text end

new text begin (6) allow a utility with an applicable tariff on file to demonstrate their existing tariff's compliance with this section. 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. 11.

Minnesota Statutes 2024, 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 new text begin serving fewer than 200,000 retail electric customers new text end under this subdivision, there shall be excluded retail electric sales to customers that are:

(1) 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 or deleted text end

new text begin (2) a qualified large-scale data center; or new text end

deleted text begin (2) deleted text end new text begin (3) new text end a paper mill, wood products manufacturer, sawmill, or oriented strand board manufacturer.

Those customers may not have included in the rates charged to them by the public utility new text begin serving fewer than 200,000 retail electric customers new 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. 12.

Minnesota Statutes 2024, section 216B.1691, subdivision 2h, as amended by Laws 2025, chapter 20, section 183, is amended to read:

Subd. 2h.

Distributed solar energy standard.

(a) For the purposes of this subdivision, the following terms have the meanings given:

(1) "capacity" has the meaning given in section 216B.164, subdivision 2a;

(2) "industrial customer" means a retail electricity customer:

(i) whose numerical classification under the North American Industry Classification System begins with the numbers 31, 32, or 33;

(ii) that is a pipeline, as defined in section 216G.01, subdivision 3; deleted text begin or deleted text end

(iii) that is 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 and deleted text end new text begin or new text end

new text begin (iv) that is a qualified large-scale data center; and new text end

(3) "solar energy generating system" has the meaning given in Minnesota Statutes Supplement 2023, section 216E.01, subdivision 9a.

(b) In addition to the other requirements of this section, by the end of 2030, the following proportions of a public utility's total retail electric sales in Minnesota must be generated from solar energy generating systems:

(1) for a public utility with at least 200,000 retail electric customers in Minnesota, at least three percent;

(2) for a public utility with at least 100,000 but fewer than 200,000 retail electric customers in Minnesota, at least three percent; and

(3) for a public utility with fewer than 100,000 retail electric customers in Minnesota, at least one percent.

For a public utility subject to clause (2) or (3), sales to industrial customers in Minnesota must be subtracted from the utility's total retail electric sales for the purpose of calculating total retail electric sales in Minnesota.

(c) To be counted toward a public utility's standard established in paragraph (a), a solar energy generating system must:

(1) have a capacity of ten megawatts or less;

(2) be connected to the public utility's distribution system;

(3) be located in the Minnesota service territory of the public utility; and

(4) be constructed or procured after August 1, 2023.

(d) A solar energy generating system with a capacity of 100 kilowatts or more does not count toward compliance with the standard established in paragraph (a) unless the public utility verifies that construction trades workers who constructed the solar energy generating system were all paid no less than the prevailing wage rate, as defined in section 177.42, and whose employer participated in an apprenticeship program that is registered under chapter 178 or Code of Federal Regulations, title 29, part 29.

(e) A public utility shall select projects to satisfy the standard established under this subdivision through a competitive bidding process approved by the commission.

(f) The commission may modify or delay the implementation of the standard established under this subdivision in accordance with the provisions of subdivision 2b.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 13.

Minnesota Statutes 2024, section 216B.2402, subdivision 10, is amended to read:

Subd. 10.

Gross annual retail energy sales.

"Gross annual retail energy sales" means a utility's annual electric sales to all Minnesota retail customers, or natural gas throughput to all retail customers, including natural gas transportation customers, on a utility's distribution system in Minnesota. Gross annual retail energy sales does not include:

(1) gas sales to:

(i) a large energy facility;

(ii) a large customer facility whose natural gas utility has been exempted by the commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect to natural gas sales made to the large customer facility; and

(iii) a commercial gas customer facility whose natural gas utility has been exempted by the commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect to natural gas sales made to the commercial gas customer facility;

(2) electric sales to:

(i) a large customer facility whose electric utility has been exempted by the commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect to electric sales made to the large customer facility; deleted text begin and deleted text end

(ii) a data mining facility, if the facility:

(A) has provided a signed letter to the utility verifying the facility meets the definition of a data mining facility; and

(B) imposes a peak electrical demand on a consumer-owned utility's system equal to or greater than 40 percent of the peak electrical demand of the system, measured in the same manner as the utility that serves the customer facility measures electric demand for billing purposes; deleted text begin or deleted text end new text begin and new text end

new text begin (iii) a qualified large-scale data center; or new text end

(3) the amount of electric sales prior to December 31, 2032, that are associated with a utility's program, rate, or tariff for electric vehicle charging based on a methodology and assumptions developed by the department in consultation with interested stakeholders no later than December 31, 2021. After December 31, 2032, incremental sales to electric vehicles must be included in calculating a public utility's gross annual retail sales.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 14.

Minnesota Statutes 2024, section 216B.241, subdivision 1a, is amended to read:

Subd. 1a.

Large customer facility.

(a) The owner of a large customer facility may petition the commissioner to exempt both electric and gas utilities serving the large customer facility from contributing to investments and expenditures made under an energy and conservation optimization plan filed under subdivision 2 or section 216B.2403, subdivision 3, with respect to retail revenues attributable to the large customer facility. The filing must include a discussion of the competitive or economic pressures facing the owner of the facility and the efforts taken by the owner to identify, evaluate, and implement energy conservation and efficiency improvements. A filing submitted on or before October 1 of any year must be approved within 90 days and become effective January 1 of the year following the filing, unless the commissioner finds that the owner of the large customer facility has failed to take reasonable measures to identify, evaluate, and implement energy conservation and efficiency improvements. If a facility qualifies as a large customer facility solely due to its peak electrical demand or annual natural gas usage, the exemption may be limited to the qualifying utility if the commissioner finds that the owner of the large customer facility has failed to take reasonable measures to identify, evaluate, and implement energy conservation and efficiency improvements with respect to the nonqualifying utility. Once an exemption is approved, the commissioner may request the owner of a large customer facility to submit, not more often than once every five years, a report demonstrating the large customer facility's ongoing commitment to energy conservation and efficiency improvement after the exemption filing. The commissioner may request such reports for up to ten years after the effective date of the exemption, unless the majority ownership of the large customer facility changes, in which case the commissioner may request additional reports for up to ten years after the change in ownership occurs. The commissioner may, within 180 days of receiving a report submitted under this paragraph, rescind any exemption granted under this paragraph upon a determination that the large customer facility is not continuing to make reasonable efforts to identify, evaluate, and implement energy conservation improvements. A large customer facility that is, under an order from the commissioner, exempt from the investment and expenditure requirements of paragraph (a) as of December 31, 2010, is not required to submit a report to retain its exempt status, except as otherwise provided in this paragraph with respect to ownership changes. No exempt large customer facility may participate in a utility conservation improvement program unless the owner of the facility submits a filing with the commissioner to withdraw its exemption. new text begin A qualified large-scale data center that pays the required fee under section 216B.72 is exempt from the requirement to contribute to investments and expenditures made under an energy conservation optimization plan for electric service filed under subdivision 2, or section 216B.2403, subdivision 3, and is not required to comply with the provisions of this paragraph. new text end

(b) A commercial gas customer that is not a large customer facility and that purchases or acquires natural gas from a public utility having fewer than 600,000 natural gas customers in Minnesota may petition the commissioner to exempt gas utilities serving the commercial gas customer from contributing to investments and expenditures made under an energy and conservation optimization plan filed under subdivision 2 or section 216B.2403, subdivision 3, with respect to retail revenues attributable to the commercial gas customer. The petition must be supported by evidence demonstrating that the commercial gas customer has acquired or can reasonably acquire the capability to bypass use of the utility's gas distribution system by obtaining natural gas directly from a supplier not regulated by the commission. The commissioner shall grant the exemption if the commissioner finds that the petitioner has made the demonstration required by this paragraph.

(c) A public utility, consumer-owned utility, or owner of a large customer facility may appeal a decision of the commissioner under paragraph (a) or (b) to the commission under subdivision 2. In reviewing a decision of the commissioner under paragraph (a) or (b), the commission shall rescind the decision if it finds the decision is not in the public interest.

(d) Notwithstanding paragraph (a), a large customer facility or commercial gas customer that is exempt from the investment and expenditure requirements of this section pursuant to an order from the commissioner as of December 31, 2020, is not required to submit additional documentation to maintain the exemption and must not be assessed any costs related to any energy conservation and optimization plan filed under this section or section 216B.2403, including but not limited to costs, incentives, or rates of return associated with investments in programs for efficient fuel-switching improvements.

(e) A deleted text begin public deleted text end utility is prohibited from spending for or investing in energy conservation improvements that directly benefit a large energy facility or a large electric customer facility the commissioner has issued an exemption to new text begin or that is otherwise exempted new text end under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 15.

Minnesota Statutes 2024, section 216B.241, subdivision 2a, is amended to read:

Subd. 2a.

Energy and conservation account.

new text begin (a) new text end The energy and conservation account is established in the special revenue fund in the state treasury.

new text begin (b) new text end The commissioner must deposit money assessed or contributed under subdivisions 1d, 1e, 1f, and 7 in the state treasury and credit it to the energy and conservation account in the special revenue fund. Money in the account new text begin assessed or contributed under subdivisions 1d, 1e, 1f, and 7 new text end is appropriated to the commissioner for the purposes of subdivisions 1d, 1e, 1f, and 7.

new text begin (c) The commissioner must deposit money transferred from the fee on qualified large-scale data centers established in section 216B.72 in the state treasury and credit it to the account. Money transferred from the fee on qualified large-scale data centers is appropriated to the commissioner to conduct energy conservation, weatherization, and associated activities allowed under sections 216B.2403 and 216B.241, and the rules applicable to those sections. The commissioner may spend money appropriated under this paragraph anywhere in the state, but only: new text end

new text begin (1) on low-income programs; and new text end

new text begin (2) as the result of a request for proposals process administered by the department. new text end

new text begin (d) new text end Interest on money in the account accrues to the account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 16.

new text begin [216B.72] QUALIFIED LARGE-SCALE DATA CENTER FEE. new text end

new text begin (a) The commissioner must collect an annual fee from the 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. new text end

new text begin (b) The fee is based on the 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: new text end

new text begin Peak Demand new text end	new text begin Fee new text end
new text begin (1) 100 to 250 MW new text end	new text begin $2,000,000 new text end
new text begin (2) above 250 MW but below 500 MW new text end	new text begin $3,000,000 new text end
new text begin (3) 500 MW but below 750 MW new text end	new text begin $4,000,000 new text end
new text begin (4) 750 MW or greater new text end	new text begin $5,000,000 new text end

new text begin (c) The fee data collected under this section must be treated as nonpublic data, as defined under section 13.02, subdivision 9. 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. 17.

Minnesota Statutes 2024, section 297A.68, subdivision 42, is amended to read:

Subd. 42.

deleted text begin Qualified deleted text end Data centers.

(a) Purchases of enterprise information technology equipment and computer software for use in a qualified data center, deleted text begin or deleted text end a qualified refurbished data center, new text begin or a qualified large-scale data center new text end 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, deleted text begin or deleted text end a qualified refurbished data center new text begin , or a qualified large-scale data center new text end .

(b) Electricity used or consumed in the operation of a qualified data center or qualified refurbished data center is exempt.

(c) 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 deleted text begin or deleted text end new text begin , new text end qualified refurbished data center, new text begin or qualified large-scale data center, new text end including maintenance, licensing, and software customization.

(d) For purposes of this subdivision, a "qualified refurbished data center" means an existing facility that qualifies as a data center under paragraph (c), 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.

(e) 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 deleted text begin or deleted text end new text begin , new text end qualified refurbished data center new text begin , or qualified large-scale data center new text end .

(f) new text begin For purposes of this subdivision, "qualified large-scale data center" means a facility in Minnesota: new text end

new text begin (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 new text end

new text begin (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. new text end

new text begin (g) new text end A qualified data center new text begin , qualified large-scale data center, new text end or qualified refurbished data center may claim the exemptions in this subdivision for purchases made deleted text begin either deleted text end within deleted text begin 20 deleted text end new text begin 35 new text end years of the date of its first purchase qualifying for the exemption under paragraph (a) deleted text begin , or by June 30, 2042, whichever is earlier deleted text end .

deleted text begin (g) The purpose of this exemption is to create jobs in the construction and data center industries. deleted text end

(h) new text begin The exemption in new text end this subdivision is deleted text begin effective for sales and purchases made deleted text end new text begin allowed for qualified data centers, qualified large-scale data centers, and qualified refurbished data centers that were certified under paragraph (i) new text end before July 1, 2042.

(i) 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 (c) deleted text begin or deleted text end new text begin , new text end a qualified refurbished data center has met the requirements under paragraph (d) new text begin , or a qualified large-scale data center has met the requirements under paragraph (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 deleted text begin either deleted text end paragraph (c) deleted text begin or deleted text end new text begin , new text end (d) new text begin , 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 (c) deleted text begin or deleted text end new text begin , new text end a qualified refurbished data center first met the requirements under paragraph (d) new text begin , or a qualified large-scale data center first met the requirements under paragraph (f) new text end .

(j) 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 (i) issued by the commissioner of employment and economic development.

(k) 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 (c) deleted text begin and deleted text end new text begin , new text end the qualified refurbished data centers that are projected to meet the requirements under paragraph (d) new text begin , and the qualified large-scale data centers that are projected to meet the requirements under paragraph (f), new text end in each of the next four years. The notification must provide the information required under paragraph (i), clauses (1) to (4), for each qualified data center deleted text begin or deleted text end new text begin , new text end qualified refurbished data center new text begin , or qualified large-scale data center new text end .

new text begin (l) 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 (i) 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. new text end

new text begin (m) 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: new text end

new text begin (1) BREEAM for new construction or BREEAM in-use; new text end

new text begin (2) Energy Star; new text end

new text begin (3) Envision; new text end

new text begin (4) ISO 50001-energy management; new text end

new text begin (5) LEED for building design and construction or LEED for operations and maintenance; new text end

new text begin (6) green globes for new construction or green globes for existing buildings; new text end

new text begin (7) UL 3223; or new text end

new text begin (8) other reasonable standards approved by the commissioner of employment and economic development. new text end

new text begin (n) 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 (m). 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 end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June 30, 2025. new text end

Sec. 18.

Minnesota Statutes 2024, section 297A.75, subdivision 1, as amended by Laws 2025, chapter 20, section 233, is amended to read:

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the following exempt items must be imposed and collected as if the sale were taxable and the rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section 297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71, subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for veterans with a disability exempt under section 297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71, subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under section 297A.71, subdivision 35;

(8) equipment and materials used for the generation, transmission, and distribution of electrical energy and an aerial camera package exempt under section 297A.68, subdivision 37;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph (a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and facilities under section 297A.71, subdivision 40;

(11) enterprise information technology equipment and computer software for use in a qualified data center new text begin , qualified large-scale data center, or qualified refurbished data center new text end exempt under section 297A.68, subdivision 42;

(12) materials, supplies, and equipment for qualifying capital projects under section 297A.71, subdivision 44, paragraphs (a) and (b);

(13) items purchased for use in providing critical access dental services exempt under section 297A.70, subdivision 7, paragraph (c);

(14) items and services purchased under a business subsidy agreement for use or consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 44;

(15) building materials, equipment, and supplies for constructing or replacing real property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;

(16) building materials, equipment, and supplies for qualifying capital projects under section 297A.71, subdivision 52; and

(17) building materials, equipment, and supplies for constructing, remodeling, expanding, or improving a fire station, police station, or related facilities exempt under section 297A.71, subdivision 53.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June 30, 2025. new text end

Presented to the governor June 12, 2025

Signed by the governor June 14, 2025, 10:30 a.m.