Legislative Update – July 7, 2026

The Legislative & Regulatory Affairs Committee continues to monitor emerging legislation that may significantly influence the future of our industry.

As artificial intelligence, cloud computing, and hyperscale data centers continue to expand, policymakers are increasingly focused on the water and energy demands associated with these facilities. Several recently enacted and proposed bills are establishing new reporting requirements, transparency measures, and planning obligations that could directly impact water treatment professionals, facility operators, utilities, and data center developers.

Virginia HB 496 (Recently Enacted)

Virginia recently enacted HB 496, which increases transparency surrounding data center water consumption. The legislation requires disclosure of water use associated with data centers and establishes reporting requirements for water providers supplying these facilities. Water withdrawal reports will now distinguish potable and reclaimed water supplied to data centers, providing policymakers and local communities with greater visibility into the industry’s water demand. The law becomes effective January 1, 2027. legiscan.com | lis.virginia.gov

Potential Industry Impact

• Increased public scrutiny of data center water consumption.
• Greater emphasis on water efficiency, reuse, and non-potable water strategies.
• Expanded opportunities for water treatment professionals to support conservation initiatives, recycled water programs, and optimization of cooling system performance.
• Increased demand for documented water management practices and performance benchmarking.

legiscan.com | lis.virginia.gov

Virginia recently enacted HB 496, which increases transparency surrounding data center water consumption. The legislation requires disclosure of water use associated with data centers and establishes reporting requirements for water providers supplying these facilities. Water withdrawal reports will now distinguish potable and reclaimed water supplied to data centers, providing policymakers and local communities with greater visibility into the industry’s water demand. The law becomes effective January 1, 2027.

njleg.state.nj.us | pub.njleg.gov

Potential Industry Impact

• Increased focus on measurable water and energy performance metrics.
• Greater utilization of water treatment programs designed to reduce water intensity and improve cooling efficiency.
• Growing demand for treatment partners capable of supporting sustainability, compliance, and reporting objectives.
• Enhanced value of technologies that maximize cycles of concentration, reduce blowdown, and utilize alternative water sources.

njleg.state.nj.us | pub.njleg.gov

California’s AB 2619 proposes one of the most comprehensive water planning frameworks for data centers currently under consideration. The bill would require developers to estimate and disclose expected water use before receiving local approvals and to report annual water use as part of business license renewals. The legislation would also direct state agencies to develop best practices for resource-efficient data center operation, including considerations for closed-loop cooling systems and use of non-potable water sources. Additionally, urban water suppliers would be required to consider data center demand in long-term water planning and shortage preparedness efforts.

legiscan.com | trackbill.com | alcl.assembly.ca.gov

Potential Industry Impact

• Greater evaluation of water consumption during facility planning and permitting.
• Increased consideration of reclaimed water, recycled water, and closed-loop cooling designs.
• Opportunities for water treatment professionals to participate earlier in project development.
• Expanded need for expertise regarding water conservation, Legionella risk management, and sustainable system operation.

trackbill.com | alcl.assembly.ca.gov

AB 1577 would require qualifying data centers to submit recurring operational data to the California Energy Commission, including metrics such as power usage effectiveness, water usage effectiveness, total water consumption, and other operational performance indicators. The bill would also require information to be provided during local permitting and land-use approval processes, supporting infrastructure planning and environmental review activities. Aggregated data would be published annually to improve transparency regarding industry resource consumption trends.

legiscan.com | legiscan.com

Potential Industry Impact

• Continued movement toward benchmarking and reporting of water efficiency metrics.
• Increased reliance on water treatment programs that can demonstrate measurable performance improvements.
• Growing demand for monitoring technologies, water analytics, and documented conservation outcomes.
• Additional opportunities for AWT members to provide technical expertise supporting sustainable data center operations.

legiscan.com | legiscan.com | dlapiper.com

Taken together, these legislative efforts reflect a growing national trend toward scrutiny of the water and energy demands associated with data centers. As AI adoption accelerates and new facilities are developed across the country, policymakers are increasingly focused on transparency, sustainability, water efficiency, and environmental stewardship.

For AWT members, these developments present both challenges and opportunities. Water treatment professionals are uniquely positioned to help facility owners reduce water consumption, improve cooling system efficiency, implement alternative water strategies, manage regulatory compliance, and demonstrate measurable sustainability outcomes.