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Regbase

The Data Center Divide

Shelby County

This restriction takes precedence while in effect. The rating below excludes temporary restrictions.

Mixed Data Center Policies

Shelby County’s enacted rules make data centers difficult, but not impossible, to build in unincorporated areas, with rezoning, extensive review, strict siting limits, and costly requirements.

Rating from Indiana statewide as there are no scored current or future laws outside temporary restrictions for Shelby County.

Specific to Shelby County only.

current law · Unincorporated areas
Restricts data centers in unincorporated Shelby County to designated industrial zones and requires county approval plus strict siting, setback, noise, water-use, power, and decommissioning safeguards.Shelby County, Indiana Ordinance O-2026-17A Unified Development Amendment (2026)

What this means

The proposal would make data centers very difficult to site and operate in unincorporated Shelby County: they would face large separation distances, strict noise limits, a 200-acre site cap, and substantial financial guarantees (setbacks and site limit). It is not an outright ban, but narrow zoning eligibility and extensive approval requirements create severe barriers (base zoning and development plan).

Timing

Ends
The day before 2026-08-24

The six-month moratorium on data center proposals in unincorporated Shelby County expired before the Commissioners approved the ordinance. The sources do not state any extension conditions.

People behind it

  • Prepared the Plan Commission staff memo on the proposed amendment and its review and adoption process.

  • Reviewed the draft and made a recommendation to the County Commissioners.

  • Passed the Unified Development Ordinance revision containing the Data Center Overlay amendment.

Restrictions & requirementsHide restrictions & requirements20
  • For unincorporated Shelby County, a six-month moratorium on data-center proposals was in effect and expired the day before the ordinance passed. the 6-month moratorium

  • A data center may be allowed only in the overlay district, and the property’s base zoning must be High Intensity Industrial (I2) or High Impact (HI). limited to only the High Intensity Industrial (I2) District or the High Impact (HI) District

  • The approval sequence requires overlay rezoning, any needed development-standards variances, review of any setback-reduction agreement, development-plan and stormwater/erosion-control approvals, and then an Improvement Location Permit and construction permits. The order of the approval process

  • Development-plan approval requires public notice and an opportunity to be heard; the applicant must show compliance with the ordinance and consistency with public health, safety, and welfare. after public notice and opportunity to be heard

  • Data centers are barred from specified locations, including land with slopes over 20% or instability/flood risks; wetlands or within 50 feet of them; within 2 miles of protected wildlife; prime farmland or farmland of statewide importance; and locations where releases could affect karst or the project could harm protected species or habitat. No Data Center shall be located

  • Principal, accessory, and energy-system structures generally must be at least 1,300 feet from a sensitive use or residential zoning boundary and 500 feet from the site’s outer property lines; emission points have separate 1,000-foot and 2,000-foot distances, and structures must be 2,640 feet from a private natural-gas well. The administrator may require greater setbacks for noise compliance. A setback may be reduced by up to 50% only with specified nearby-owner agreement, buffering, and a recorded written agreement. At least 1,300 feet from a Sensitive Use

  • The DCO site may not exceed 200 acres, and a data-center principal structure may not exceed 40,000 square feet. maximum lot area for a DCO District shall be 200 acres maximum area of a Data Center Principal Structure shall be 40,000 square feet

  • The application must include extensive plans, studies, and reports, including utility and infrastructure, water and wastewater, noise, lighting, landscaping, waste management, decommissioning, fire/emergency response, emissions, traffic, and nearby property-value assessments. Reports, Studies, Evaluations, and Assessments Required

  • The county may hire consultants or attorneys for application review or enforcement, and the applicant or data center/property owner must pay the associated costs. expenses incurred by the hiring of a consultant shall be borne by the applicant

  • Developers must pay for required utility infrastructure and improvements, and demonstrate that utility capacity will serve the project without adverse effects or added costs to existing customers; required enhancements must be in place before operations. Private water and wastewater facilities are not allowed. The cost of all needed infrastructure is borne by the Data Center developer

  • Any energy-generation system intended to supply the data center during normal operations is treated as a separate use and must obtain approval under the zoning rules applicable to that use. shall be considered a separate use

  • Backup power may use natural gas or accessory battery storage, but diesel fuel and nuclear power are prohibited. Backup generators are restricted to outages or emergencies, apart from testing or commissioning; each unit may be tested no more than once weekly, Monday through Friday from noon to 5 p.m., for no more than one hour. Use of diesel fuel or nuclear power is not permitted

  • Accessory battery storage is subject to a separate building permit and additional standards; it is limited to 7 feet in height, must meet setback rules, and must be screened by an opaque, locked enclosure at least 7 feet tall. The ordinance also requires at least 10 hours of storage for long-duration systems and prohibits lithium-ion batteries that create a fire hazard. A separate building permit is required

  • Construction and operations may not exceed 40 dBA or 60 dBC at an external perimeter property line; additional vibration limits apply. Applications must include detailed noise and, where applicable, vibration studies and a monitoring and mitigation plan. Post-construction compliance testing is required within six months of starting operations, with quarterly noise testing; exceedances can require mitigation and may lead to suspension or revocation of the development plan. shall not exceed 40 dBA or 60 dBC

  • Lighting must be shielded and directed to prevent spillover, with perimeter illumination capped at 0.1 footcandle. Parking and traffic-way lighting must generally shut off within 30 minutes after closing; permitted after-hours safety/security lighting is limited to 25% of regular-hours fixtures, subject to stated alternatives for ongoing overnight activity. shall at no time exceed 0.1 footcandle

  • A data center that has stopped commercial operation for at least six consecutive months must be removed at its expense under an approved decommissioning plan. A repurposing plan may be submitted within six months of the shutdown and requires Plan Commission approval. discontinued commercial operation for at least 6 consecutive months

  • Applicants must provide a decommissioning bond or surety before an Improvement Location Permit is issued, in an amount covering estimated removal costs but no less than $25 million; it must be updated every three years, and salvage value cannot be deducted from the cost estimate. shall be no less than $25,000,000.00

  • A separate surety bond of at least $25 million must be posted to cover impacts on residential wells, livestock damage or health, and health ramifications associated with the data center. Surety bonding payable to the County Commissioners

  • Cooling water must come from a public or semi-public water system, liquid cooling must use a closed loop, and cooling-water discharge is restricted to treated discharge into a public or semi-public sewage system; discharge to streams, creeks, or ditches leading to creeks or rivers is prohibited. Quarterly water-quality testing is required. All liquid cooled equipment must be designed to utilize a closed-loop system

  • If a data center increases its maximum requested power, its approved development plan becomes void; the administrator may refer the replacement plan to the Plan Commission for public-meeting review. shall render an approved Development Plan void

Benefits & exceptionsHide benefits & exceptions4
  • The overlay adds data centers as a permitted use, but it may be applied only to High Intensity Industrial (I2) or High Impact (HI) zoning, and a data center still requires Development Plan approval. “Data Center”

  • A defined administrative route is available for Development Plan approval: the Administrator may approve an application after public notice and an opportunity to be heard if the applicant demonstrates compliance with the ordinance and the Administrator finds approval consistent with public health, safety, and welfare. “Approval of the Development Plan”

  • The application process requires documentation of utility capacity and delivery plans, and that necessary service improvements be completed before operation. The developer must pay for needed infrastructure, so this is not a subsidy. “The cost of all needed infrastructure”

  • Natural-gas backup generation and accessory battery energy storage systems are allowed. Generators are limited to backup or emergency use, apart from testing or commissioning; diesel and nuclear power are prohibited. Battery systems have additional requirements, including a separate building permit and screening. “Backup power generation using natural gas”

Sources

current law · Unincorporated areas
Would establish a Data Center Overlay District for future data-center projects in unincorporated Shelby County, intended to protect community health, safety, welfare, and surrounding properties; the draft was under Plan Commission review, with a proposed sequence of Plan Commission and County Commissioners action.Shelby County proposed data-center regulatory ordinance (2026)

What this means

The draft would still allow data centers, but only after rezoning and extensive review, with major siting limits such as 1,300-foot setbacks and a 200-acre maximum site. Required studies, utility upgrades, noise controls, and financial bonds of at least $25 million would make projects significantly harder and more costly, though not impossible.

Timing

The source states that the County Commissioners adopted a moratorium on filing, processing, reviewing, and accepting new data center applications while the County develops a regulating ordinance, but it does not specify an expiration date or definite ending condition.

People behind it

  • Adopted the data-center moratorium, commissioned the ordinance draft, and will make the final decision on adopting the measure.

  • Consultant contracted by the Shelby County Commissioners to draft the ordinance.

  • Planning Director who prepared the staff memo and will revise the draft based on Plan Commission feedback.

Show 1 more peopleShow fewer people
  • Reviews the proposed text amendment, conducts the public hearing, and recommends approval, denial, or approval with conditions to the County Commissioners.

Restrictions & requirementsHide restrictions & requirements39
  • A moratorium has been imposed on filing, processing, reviewing, and accepting new data center applications while the County develops data center regulations; the document does not specify an end date.

  • A data center requires rezoning to the Data Center Overlay District, including a public hearing before the Plan Commission and final approval by the County Commissioners.

  • The Data Center Overlay District may be applied only to property whose underlying base zoning is High Intensity Industrial (I2) or High Impact (HI).

  • A data center may not be developed until the County approves a development plan, followed by an improvement location permit and associated construction permits.

  • Any deviation from the Data Center Overlay District requirements requires public hearing, review, and approval by the Board of Zoning Appeals.

  • Development plan approval requires public notice and an opportunity for the public to be heard, and the Administrator must find that all applicable requirements will be met and that the project is consistent with public health, safety, and welfare.

  • The County may impose additional conditions on a development plan, including stricter noise limits, operating-hour limits, additional screening, traffic mitigation, setbacks, and infrastructure upgrades.

  • Data centers are prohibited on slopes over 20 percent, land prone to flooding or instability, areas where releases could affect karst terrain, specified floodplain areas, wetlands or land within 50 feet of wetlands, areas within 2 miles of Protected Wildlife, Prime Farmland, Farmland of Statewide Importance, areas affecting threatened or endangered species or critical habitat, and sites without access to public utilities.

  • A data center may not be located on a lot larger than 200 acres.

  • Data center principal structures, accessory structures, and energy systems generally must be at least 1,300 feet from Sensitive Uses or residential zoning districts and at least 500 feet from the site's outer perimeter property lines.

  • Power-generation emission points and exhaust stacks must be at least 1,000 feet from an adjacent property boundary and 2,000 feet from Sensitive Uses or Residential, Commercial, or Agricultural zoning districts; the Administrator may require greater setbacks to meet noise limits.

  • Setbacks may be reduced by up to 50 percent only if all property owners within 500 feet agree, required buffering is installed, and a recorded agreement containing specified property and setback information runs with the property.

  • Data center structures and energy systems must generally be at least twice the distance from any existing power-line right-of-way line.

  • Required setback and landscape-buffer areas restrict construction, generally prohibit impervious surfaces, require berming and vegetation for parking or roads, and require continuing maintenance of screening and landscaping.

  • Data center accessory structures and energy systems must be screened from public roads and adjoining properties, generally using screening that blocks at least 80 percent of visibility year-round, with a landscape buffer at least 25 feet wide.

  • The maximum area of a data center principal structure is 40,000 square feet.

  • Data center buildings must meet detailed architectural standards, including façade changes at least every 150 feet, fenestration covering at least 30 percent of road- or residential-facing façades, differentiated entrances, landscaping, and restrictions on the orientation of loading areas.

  • Lighting must be fully shielded or otherwise controlled, may not exceed 0.1 footcandle at any external perimeter property line, generally may not be mounted more than 20 feet above grade, and after-hours lighting is subject to automatic shutdown or substantial reduction requirements.

  • Noise may not exceed 40 dBA or 60 dBC from 6:00 p.m. to 8:00 a.m., or 45 dBA or 65 dBC at other times, at any external perimeter property line; vibration, oscillation, or infrasound causing specified adverse effects is also prohibited.

  • Applicants must submit baseline and projected noise studies, acoustical and possibly vibration studies, mitigation plans, continuous monitoring designs, and post-construction compliance testing; exceedances can require corrective measures and may lead to suspension or revocation of the development plan.

  • Liquid cooling must use a closed-loop system, water for liquid cooling must come from a public or semi-public system rather than a private well, and cooling-system discharge must be treated and sent only to a public or semi-public sewage system.

  • Private water and wastewater facilities are prohibited, and applicants must provide utility-provider verification that electric, water, wastewater, and related infrastructure can serve the project without adverse effects on existing customers.

  • The data center developer must pay for all required utility and infrastructure improvements, including improvements needed to protect continued service to existing customers.

  • Backup generation may use natural gas or battery energy storage, but diesel fuel is prohibited; gas turbines must use selective catalytic reduction with ammonia, and generators may be used only for backup or emergency purposes except during testing or commissioning.

  • Generators may be tested no more than once per week per unit and only from noon to 5:00 p.m. Monday through Friday.

  • Energy-storage systems must comply with NFPA 855 or similar standards, include specialized fire suppression, provide at least 10 hours of storage, and may not use lithium-ion batteries that create a fire hazard.

  • A data center that stops commercial operation for six consecutive months must be removed at the owner's expense unless an approved repurposing plan is submitted within six months of discontinuation.

  • Applicants must submit a decommissioning plan, obtain County-selected professional-engineer cost estimates, update those estimates every three years, and provide financial assurance for decommissioning before an improvement location permit is issued.

  • Decommissioning financial assurance must be at least $25,000,000, must generally be provided through an approved performance or surety bond, and must be updated every three years.

  • A separate surety bond of at least $25,000,000 must be posted to cover potential residential-well depletion, livestock damage or health impacts, and health ramifications associated with the data center.

  • Emissions, fugitive dust, smoke, glare, exhaust, heat, and humidity must not be perceptible at or beyond the external perimeter property line or exceed applicable legal standards.

  • Waste heat may not raise ambient temperatures beyond naturally occurring conditions at the perimeter, and outdoor equipment and exhaust systems must use shielding, insulation, baffling, or dispersion controls.

  • Development plan applications must include extensive site plans, utility and water plans, lighting and noise plans, waste-management and decommissioning plans, architectural elevations, environmental and emissions assessments, fire and emergency-response certifications, traffic studies, property-value appraisals, and required permit information.

  • The County may hire attorneys, engineers, or other qualified consultants to review applications or assist with enforcement, and the data center applicant or property owner must pay those third-party fees and costs.

  • Any increase in the maximum power requested by an approved data center voids the development plan, and the Administrator may require a new plan to be reviewed by the Plan Commission.

  • Ground-mounted equipment, including generators, fuel tanks, and substations, is prohibited in front yards and may not be placed adjacent to property allowing residential use, existing residential development, or residentially used property.

  • Data centers must provide parking for at least one space per employee on the largest shift plus three visitor spaces, and must provide on-site queuing, loading, unloading, and staging areas.

  • Perimeter fencing is limited to 10 feet in height, certain fencing types are prohibited along public streets and external property lines, and surveillance must remain within the property's external perimeter or adjacent public right-of-way.

  • Each data center must maintain 24-hour emergency contact signage at every access entrance identifying responsible parties and the local power company.

Benefits & exceptionsHide benefits & exceptions9
  • The ordinance creates a Data Center Overlay District in which data centers are expressly permitted, while retaining the uses already allowed in the underlying zoning district. The overlay may be applied only to property with High Intensity Industrial (I2) or High Impact (HI) base zoning.

  • The measure establishes a defined approval pathway: rezoning to the Data Center Overlay District, followed by any required variances, development-plan approval, and construction permits.

  • Development-plan approval is issued administratively when the applicant demonstrates that the ordinance’s requirements will be met and that the project is consistent with public health, safety, and welfare. The process includes public notice and an opportunity to be heard.

  • Utility and infrastructure provisions support service connection by requiring utilities to verify adequate electric, water, wastewater, and stormwater capacity, while allowing the developer to fund needed infrastructure improvements so the project can proceed without adverse effects on existing customers.

  • Required data-center setbacks may be reduced by up to 50% if all property owners within 500 feet of the applicable perimeter agree, required buffering and noise protections are installed, and the agreement is recorded and runs with the property.

  • Backup power using natural gas or battery energy storage systems is expressly allowed, subject to the ordinance’s operating, emissions, noise, and testing requirements. Generators may be used during power interruptions and tested no more than once per week per unit between noon and 5:00 p.m. Monday through Friday.

  • A data center that stops commercial operation may seek approval of a repurposing plan within six months. If approved, the repurposing plan replaces the otherwise applicable decommissioning plan.

  • The county may hire qualified consultants to review development-plan materials, allowing applicants to obtain a formal technical review process for compliance with siting, construction, operation, and decommissioning standards, although the applicant must pay the review costs.

  • The county ordinance applies only to future data-center projects in unincorporated Shelby County and does not restrict a municipality’s ability to annex property for a data center under its own zoning code.

Sources

Specific to Shelby County only.

expired · Unincorporated areas
Restricts where and under what conditions data centers may be built in unincorporated Shelby County through a new zoning overlay.Shelby County, Indiana Resolution R-2026-02 Data Center Moratorium (2026)

What this means

The county adopted a data-center zoning overlay described as fairly restrictive, so it appears to create significant hurdles for new projects. The separate six-month moratorium had expired the day before, and the sources do not give the overlay’s detailed requirements.

People behind it

  • Approved the Unified Development Ordinance revision containing the Data Center Overlay Text Amendment.

  • Reviewed the ordinance during its development and issued a recommendation.

  • Reviewed multiple iterations of the data center ordinance.

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  • The county plan director involved in the ordinance process; she also found a firm to help draft ordinances, including data-center ordinances.

  • Contracted to help write ordinances and resolutions, including for data centers.

  • Helped draft the data center ordinance based on public input.

Sources

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