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Regbase

The Data Center Divide

Montgomery County

Slightly Pro-Data Center Policies

Tennessee rules can limit how much utilities and municipalities absorb data-center-specific infrastructure costs, while allowing certain cost allocations and independent power. Qualifying large projects that meet investment and job requirements can receive equipment tax breaks and a reduced electricity tax.

Rating and summary from Tennessee statewide as there are no scored current or future laws outside temporary restrictions for Montgomery County.

Specific to Montgomery County only.

pending · County measure
Would establish zoning protections for data centers by defining covered server and supporting infrastructure and treating dedicated primary power generation as a separate “Power Plant” use.Montgomery County Zoning Resolution Amendment: As It Pertains to Data Centers and Power Plants (CZO-1-2026)

What this means

The proposal would make new data centers and expansions meaningfully harder: it sets acreage limits, increases the setback from homes to 500 feet, requires noise and utility information, and makes operators pay for needed infrastructure. It does not ban data centers, but these siting and cost requirements are substantial barriers to approval.

People behind it

  • Initiated the zoning-resolution amendment and provided the recommendation to the County Commission.

  • Introduced and approved the zoning-resolution amendment concerning data centers and power plants.

  • Proposed the amendment increasing the minimum setback from residential properties to 500 feet.

Restrictions & requirementsHide restrictions & requirements9
  • A data center site must contain at least 10 acres and no more than 100 acres.

  • A data center must be set back at least 100 feet from all zoning districts except M-1 and M-2; the approved amendment increases the minimum setback from residential properties to 500 feet.

  • An applicant must submit a noise plan showing that noise leaving the property will not exceed 3 dBA above existing ambient levels or 55 dBA at an adjoining property boundary not zoned M-1 or M-2.

  • The applicant must identify all proposed water sources and demonstrate the facility's ability to be served by phase.

  • Any direct withdrawal from a river, stream, or other surface water requires applicable state and federal permits, documentation of the approved withdrawal rate, and anticipated average and peak daily consumption.

  • The applicant must provide written confirmation from each applicable electric utility and natural-gas provider that adequate capacity is available or planned, including anticipated peak electrical demand by phase and at full build-out.

  • The owner or operator must pay the costs of infrastructure improvements necessary to provide utility services to the facility.

  • Any electrical generating facility intended to provide the data center's primary power for normal operations is treated as a separate power-plant use and is subject to separate zoning treatment.

  • Data centers require approval through the Board of Zoning Appeals under the specified data-center approval checklist.

Benefits & exceptionsHide benefits & exceptions5
  • Data centers are added to the zoning-use table as a PR use in the listed zoning districts, creating a defined zoning pathway for approval rather than leaving the use unaddressed.

  • The definition of a data center includes associated electrical, mechanical, cooling, security, communications, backup-power, energy-storage, water-treatment, and other infrastructure needed to operate the facility.

  • Applicants may identify multiple water sources, including public water, groundwater, and surface water, and may document the ability to serve the facility in phases, supporting phased construction or expansion. Direct surface-water withdrawals remain subject to applicable state and federal permits.

  • Electric utilities and natural-gas providers may confirm that adequate capacity is available or planned, including capacity by phase and at full build-out, allowing facilities to proceed based on planned utility capacity.

  • The resolution expressly applies the utility-infrastructure cost requirement to proposed or expanding data centers, allowing expansion when the owner or operator pays for necessary improvements in accordance with Tennessee law.

Sources

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