Yellowstone County Takes Proposed Data Center Ordinance to Court

Yellowstone County is asking a district court to determine whether a proposed ordinance regulating data centers is valid under Montana law.

The Yellowstone County Board of County Commissioners approved the action on Tuesday, October 6. The county says its legal action does not take a position on whether data center development is good or bad. Instead, it is asking the court to review the legality of Proposed Ordinance 2026-02 before the initiative process moves forward.

The Yellowstone County Board of County Commissioners is made up of Chair Mark Morse and commissioners Chris White and Mike Waters.

What the Proposed Yellowstone County Data Center Ordinance Would Require

If approved, the proposed ordinance would require countywide voter approval before Yellowstone County could authorize, license, permit, or otherwise approve a new data center, an expansion of an existing data center, or the continued operation of a data center.

The proposal calls for two thirds approval from voters participating in the election. It would also require existing data centers to receive voter approval to continue operating under current authorizations, licenses, or permits.

The petition says the measure could appear on the May 4, 2027, ballot if enough valid signatures are gathered.

Why Yellowstone County Is Asking a Court to Review the Ordinance

Yellowstone County says the proposed measure would implement zoning through a countywide vote, including mandatory elections involving data centers.

The county pointed to the Montana Supreme Court’s June 2026 decision in Treasure County v. Edlund. That case involved a proposed countywide ordinance regulating wind energy conversion systems.

In its decision, the Montana Supreme Court upheld a ruling that the proposed ordinance was invalid as written because it created a detailed land use permitting and enforcement system outside the county’s authority. The court said its decision was narrow and did not prevent all local initiatives involving land use.

Yellowstone County says the decision indicates creating zoning through a countywide vote may not be permissible for a general powers county.

Existing Yellowstone County Data Centers Could Be Affected

Another concern raised by the county is the proposed ordinance’s treatment of data centers already operating before its effective date.

The county says the proposal would require existing data centers to win approval in a countywide election to continue operating. Yellowstone County says that may conflict with Montana law involving legal nonconforming uses, which generally allow a lawful existing use to continue after a change in zoning.

County Raises Questions About Data Center Disclosure Requirements

The proposed ordinance would also require automatic disclosure of contact between county employees and people associated with the data center industry.

Yellowstone County says it believes those requirements are overbroad and vague. The county also says the proposal appears to shift the process for public records disclosures.

According to the county, communications may be subject to disclosure if they are responsive to a public records request. The proposed ordinance would instead require the county to affirmatively disclose those communications.

Proposed Ordinance Comes Amid Big Sky Campus Discussion

The legal question comes as data center development remains a major topic in Yellowstone County, including the planned Big Sky Campus near Broadview.

Big Sky Digital Infrastructure has outlined its planned water use and cooling approach for the proposed campus. The company has said it plans to use a closed-loop cooling system and draw water from the Madison Group Aquifer. Those are the company’s plans and projections, not findings made by Yellowstone County in this legal action.

Yellowstone County’s release says its lawsuit concerns the validity of the proposed ordinance under Montana law and does not take a position on the merits of data center development.