State policymakers looking at data centers focus on water use, reporting and disclosure requirements

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National Council of State Legislators reports...

Data center development is drawing increased attention in state legislatures as artificial intelligence and cloud computing expand. Alongside electricity demand and economic development considerations, lawmakers are examining how the facilities’ use of water to cool their many servers will affect local supplies and infrastructure.

NCSL’s review of 2025 and ’26 legislation, updated this week, identifies about 100 bills and resolutions in 39 states addressing data center water use and related planning.

The report notes two focal points:

  • This year’s legislation mainly covers reporting and disclosure requirements.
  • Water supply planning and permitting are another focus of this year’s legislation.

Minnesota gets a mention…

Minnesota’s data center law (HF 16; 2025) required consideration of conservation measures during permitting. For covered projects proposing more than 100 million gallons of new or additional annual consumptive water use, the state Department of Natural Resources must ensure that measures promoting conservation, efficient use and watershed health are reasonably considered. These may include reclaimed water, closed-loop cooling and partnerships with local utilities to reuse discharged water.

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