Southeast Minnesota lawmakers listen as residents weigh regulations amid data center talk

ROCHESTER, Minn. (KTTC) — As talks for data centers continue to expand across Minnesota, communities in the southeast corner of the state are grappling with how to balance technological growth with local oversight.

On Thursday, DFL state lawmakers Sen. Liz Boldon and Rep. Tina Liebling hosted a virtual town hall to hear directly from Rochester-area constituents regarding potential policies and regulations surrounding large-scale data center facilities.

During the forum, residents raised concerns over data privacy, long-term environmental impacts, and skepticism regarding promised local economic benefits. Similar pushback has already placed a planned data center development in Pine Island on hold amid an ongoing lawsuit.

Lawmakers noted that the public’s unease is part of a broader national trend. A recent survey conducted by the Pew Research Center found that more than half of Americans believe data centers are mostly bad for the environment, while 6 in 10 respondents said they would not feel comfortable having a data center built in their own community.

“I think there are so many unknowns here,” Sen. Boldon said during the town hall. “There still are many unanswered questions for me, also in terms of noise pollution and light pollution.”

Over the past few legislative sessions, Minnesota lawmakers have taken steps to rein in industry incentives and impose stricter environmental guardrails. Recent legislation eliminated a $140 million state sales tax exemption on electricity for data centers and instituted requirements that facilities using more than 100 million gallons of water coordinate directly with the Minnesota Department of Natural Resources.

Sen. Boldon emphasized that establishing clear regulatory boundaries early is critical for host communities.

“It is easier to put regulations in place before something is happening versus, when the horse is out of the barn, so to speak, and then trying to rein it back in,” Boldon said.

Another major policy point under discussion is the prohibition of non-disclosure agreements (NDAs) in municipal negotiations with developers. Local governments are already moving in that direction; the city of Harmony included an NDA ban in the latest draft of its data center ordinance, which is currently before its planning and zoning committee.

“As governments, we should always be erring on the side of disclosure, not of secrecy,” Liebling said, adding that Minnesotans can expect further legislative discussions heading into upcoming sessions. “You’re going to see Minnesota doing a lot more.”

Republicans, however, emphasize the economic and geopolitical necessity of supporting technology infrastructure. State Sen. Carla Nelson, R-Rochester, stressed the need for balanced growth in a statement provided to KTTC:

“This issue is critically important to our future. We cannot afford to get it wrong. This state has an opportunity to be a leader in an important, innovative, and growing industry, but that leadership also means proceeding responsibly. The residents of communities that are considering welcoming these data centers must have a meaningful voice in the process, and their concerns must be taken seriously. They need to have clear, detailed information about everything a project entails before it moves forward.

We need to remain a global technology leader. We cannot cede that leadership to China or any other country. I believe we can welcome innovation, and that it can be done in a responsible way that respects residents and protects water and land.”

For now, local developments remain in varying stages of review. While the Pine Island project remains stalled due to pending litigation, the city of Harmony’s planning and zoning commission is scheduled to review its draft ordinance during a public hearing at its Oct. 14 meeting.

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