What You Need to Know About House Bill 2151

A single piece of state legislation can rarely move markets, but House Bill 2151 might be the exception.

Introduced by Representative Kyle Donahue, HB 2151 proposes something deceptively simple: an optional model data center zoning ordinance that municipalities can adopt as a framework when navigating the increasingly complex world of data center development. Simple in concept, significant in consequence.

Here's why that matters more than it might first appear.

The Problem This Bill Is Actually Solving

Most municipal governments weren't built to handle the permitting and zoning demands of a modern hyperscale data center. A 300MW campus draws more power than many small cities consume. It generates intense local debate around noise from cooling systems, water consumption, traffic during construction, and strain on electrical infrastructure — all before a single server goes live.

Without clear zoning guidance, localities default to improvisation. Developers face wildly inconsistent regulatory environments from one jurisdiction to the next. One county might welcome a data center with streamlined permitting; the next might bury the project in ambiguity for two years. That inconsistency is one of the quiet killers of data center investment at the regional level.

HB 2151 attempts to solve this by giving municipalities a ready-made starting point — a model ordinance they can adopt, adapt, or simply reference when crafting their own local data center zoning rules.

What the Bill Actually Does

The core mechanism is an *optional* model ordinance. That word — optional — is doing a lot of work here.

Donahue's bill doesn't mandate anything. It doesn't override local authority or impose state-level zoning dictates on municipalities. Instead, it creates a standardized template that local governments can use as a foundation. Think of it as a zoning playbook written by people who understand the specific demands of data center infrastructure, made available to the thousands of planning departments across the state that may be encountering these projects for the first time.

For municipalities, this is less about restriction and more about capacity-building — giving smaller or less-resourced local governments the tools to engage meaningfully with developers rather than being caught flat-footed.

Key areas a model ordinance framework typically addresses include:

• Use classifications — distinguishing between small edge computing facilities and large-scale hyperscale campuses, which have fundamentally different infrastructure footprints
• Setback and buffer requirements — particularly relevant given noise and visual impact concerns from cooling towers and generators
• Power and utility coordination — addressing how data centers integrate with local grid infrastructure
• Environmental considerations — water usage, stormwater management, and backup generator emissions
• Permitting timelines — establishing predictable review processes that serve both developers and neighboring communities

The flexibility built into an optional model ordinance is intentional. A rural county courting its first data center tenant has different priorities than a suburban municipality managing its third. The framework accommodates both.

What This Means for Site Selection and Development

For developers and investors, regulatory clarity is worth real money. Site selection teams spend enormous resources evaluating not just land cost and power availability, but the *regulatory risk profile* of a given jurisdiction. A municipality with no established data center zoning framework is a risk. A jurisdiction that has adopted a coherent, predictable ordinance — even a model one — signals that it's open for business and has done the homework.

HB 2151 could meaningfully shift how developers evaluate municipalities previously off their radar. When a locality can point to a structured zoning framework, it compresses the early-stage due diligence timeline and reduces the likelihood of project delays from mid-process regulatory surprises.

This matters particularly in secondary and tertiary markets, where land costs are lower, power is more accessible, and fiber routes are increasingly competitive — but where zoning unpredictability has historically made developers cautious. If HB 2151 gains traction and municipalities adopt its model ordinance widely, it could unlock a wave of data center development in markets that haven't traditionally competed for this asset class.

From a compliance standpoint, developers operating in states with similar model ordinance frameworks report that having a clear baseline — even one that's adapted locally — significantly smooths the permitting process. It creates a shared vocabulary between developers and planning departments, reducing the friction that comes from each side speaking a different regulatory language.

The Investment Angle

Infrastructure investors pay close attention to legislation like HB 2151, and for good reason.

Zoning clarity is a fundamental precondition for bankable projects. Lenders and equity investors require confidence that a project can move through permitting without existential regulatory risk. A data center in a municipality that has adopted a clear zoning framework — derived from or consistent with a model ordinance — carries a materially different risk profile than one navigating uncharted local regulatory territory.

For land investors and developers, the passage of HB 2151 creates a window of strategic advantage. Municipalities that move quickly to adopt the model ordinance become more attractive siting destinations before the broader market catches on. Early-mover jurisdictions will likely see increased developer interest, rising land values in designated industrial or utility corridors, and stronger negotiating positions when structuring economic development agreements.

There's also a downstream infrastructure play. Data centers don't arrive alone. They catalyze investment in fiber connectivity, electrical transmission upgrades, water infrastructure, and workforce development. A municipality that positions itself effectively — using the model ordinance as a signal of readiness — can attract not just the data center, but the broader infrastructure ecosystem that follows.

What Stakeholders Should Do Now

The bill's optional nature means its real-world impact will be determined almost entirely by adoption — and that adoption won't happen automatically.

For developers and site selectors, the immediate action is engagement. Identify target municipalities in the relevant state, assess which have existing data center zoning frameworks (or lack any at all), and begin conversations with local planning departments now. In jurisdictions without clear frameworks, advocate for the adoption of the model ordinance. Developers who help shape local understanding of what a workable data center ordinance looks like will have natural advantages when projects move to permitting.

For municipal officials and planning departments, HB 2151 is worth a serious look even before it formally passes. The due diligence process of reviewing the model ordinance — understanding its provisions, consulting with neighboring jurisdictions, engaging with the development community — takes time. Municipalities that wait until after passage to begin that process will lag behind those that have already done the groundwork.

For infrastructure investors, the passage of HB 2151 is a signal to map the legislative landscape carefully. Which municipalities are likely early adopters? Which markets in the relevant state are currently underserved by data center capacity but have the power and fiber infrastructure to support development? Those are the jurisdictions worth watching — and potentially positioning in — ahead of broader market awareness.

The Bigger Picture

HB 2151 is a relatively modest piece of legislation. It doesn't guarantee a single data center gets built. It doesn't mandate anything of anyone. But that modesty is precisely what makes it durable and potentially impactful.

Model ordinances work when they're designed well and adopted widely. The success of similar frameworks in other infrastructure contexts — from solar development to telecommunications tower siting — demonstrates that giving local governments good tools produces better outcomes than leaving them to improvise.

Data center demand isn't slowing. AI workloads, cloud migration, and the digitization of critical infrastructure are all driving sustained growth in compute capacity requirements. The bottleneck increasingly isn't capital or technology — it's the ability of local regulatory systems to accommodate development at the pace the market demands.

HB 2151 is one state's attempt to close that gap. Whether it succeeds depends on how seriously stakeholders across the development, investment, and municipal government ecosystem take it — starting now, not after the ribbon-cutting.

Call to Action: Ready to explore how House Bill 2151 could impact your data center investments? Visit InfraSale Marketplace for more insights and opportunities.

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