South Bend and Bethlehem Pass Data Center Regulations

Municipal governments in Indiana and Pennsylvania introduced strict new regulations for data center development on October 6, 2026, to prioritize resident protections over corporate interests.

Mayor James Mueller and South Bend city leaders announced a draft neighborhood first framework targeting projects exceeding 15 acres or 70 megawatts of power. The proposal bans tax abatements, subsidies, and nondisclosure agreements with city officials, while requiring operators to cover all utility infrastructure costs. The plan mandates community labor agreements for local hiring and allocates tax revenue toward affordable housing, climate action, and utility relief. Public feedback on the proposal is open through October 31.

Simultaneously, the Bethlehem City Council unanimously approved a zoning text amendment requiring developers to submit environmental impact assessments and energy management plans. The ordinance establishes a 1,000-foot setback from residential zones and sensitive receptors, such as schools and hospitals, and sets maximum noise and vibration limits. While state law prevents a total ban, city officials noted these rules allow for case-by-case reviews of projects within Industrial zoning districts. A project currently under review on Industrial Drive is exempt because its application predates the ordinance.