Minnesota lawmakers debate environmental review processes for data centers

The House Environment and Natural Resources Finance and Policy Committee convened on February 27, 2025, to discuss key environmental review processes and proposed legislation regarding data centers in Minnesota. The meeting began with Representative Jordan questioning the differences between the Alternative Urban Areawide Review (AUAR) and the Environmental Assessment Worksheet (EAW) processes. Representative Mecklen provided insights into the AUAR, noting it is limited to residential, commercial, warehousing, and light industrial projects, and can only be conducted by local governments.

Katherine Neuschler, Executive Director of the Environmental Quality Board (EQB), elaborated on the AUAR's scope, emphasizing that it requires an Environmental Impact Statement (EIS) level of analysis for typical local development impacts. She clarified that projects triggering other mandatory environmental reviews, such as large industrial facilities, cannot be included in an AUAR.

The discussion shifted to the public comment process associated with AUARs, with Neuschler indicating that local governments manage these periods, which are generally open to the public. Representative Jordan raised concerns about the environmental review exemptions for large projects like data centers, questioning the adequacy of existing permitting processes.

Representative Hansen inquired whether the proposed bill would apply statewide or be limited to specific locations, to which Mecklen confirmed its statewide applicability. The conversation also touched on the potential implications of data centers for cryptocurrency mining, though no definitive answers were provided.

A significant portion of the meeting focused on water usage by data centers. Representative Fisher expressed concerns about the lack of clarity regarding water reuse and treatment processes, emphasizing the importance of understanding these issues before advancing the bill. He moved to table the bill until further information could be gathered, but the motion did not prevail.

Ultimately, the committee voted to re-refer the bill to the general register for further consideration. The meeting concluded with Representative Schultz introducing House File 819, which aims to clarify additional details related to environmental reviews, indicating a bipartisan effort to address these pressing issues. The committee's discussions highlighted the ongoing challenges and complexities surrounding environmental regulations and the growing impact of data centers in Minnesota.