Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, prior to applying to a city or a county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use. When applying to a city or county for an initial business license, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application that the person has provided its water supplier an estimate of the expected water use. When applying to a city or county for a renewal of a business license, equivalent instrument, or permit, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application, that they have provided the data centers water supplier with a report of the annual water use. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would authorize the Department of Water Resources, as part of any efficiency standard adopted under a specified provision of law, to identify different tiers of data centers, based on factors affecting water consumption, and appropriate standards for each data tier. The bill would define terms for purposes of these provisions.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, prior to applying to a city or a county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use. When applying to a city or county for an initial business license, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application that the person has provided its water supplier an estimate of the expected water use. When applying to a city or county for a renewal of a business license, equivalent instrument, or permit, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application, that they have provided the data centers water supplier with a report of the annual water use. By expanding the crime of perjury, the bill would impose a state-mandated local program. Beginning one year after the Department of Water Resources develops any efficiency guidelines or best management practices relevant to the data centers, the bill would require that a person who owns or operates a data center, as a condition for obtaining or renewing a business license, self-certify that the data center will meet guidelines and best practices to maximize the efficient use of natural resources. The bill would authorize the department, Department of Water Resources, as part of any efficiency standard adopted under a specified provision of law, to identify different tiers of data centers, based on factors affecting water consumption, and appropriate standards for each data tier. The bill would define terms for purposes of these provisions.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, prior to applying to a city or a county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use. When applying to a city or county for an initial business license, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application that the person has provided its water supplier an estimate of the expected water use. When applying to a city or county for a renewal of a business license, equivalent instrument, or permit, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application, that they have provided the data centers water supplier with a report of the annual water use. By expanding the crime of perjury, the bill would impose a state-mandated local program. Beginning one year after the Department of Water Resources develops any efficiency guidelines or best management practices relevant to the data centers, the bill would require that a person who owns or operates a data center, as a condition for obtaining or renewing a business license, self-certify that the data center will meet guidelines and best practices to maximize the efficient use of natural resources. The bill would authorize the department, as part of any efficiency standard adopted under a specified provision of law, to identify different tiers of data centers, based on factors affecting water consumption, and appropriate standards for each data tier. The bill would define terms for purposes of these provisions.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, as defined, prior to applying to a city or a county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use. When applying to a city or county for an initial business license, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application that the person has provided its water supplier an estimate of the expected water use. When applying to a city or county for a renewal of a business license, equivalent instrument, or permit, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application, that they have provided the data centers water supplier with a report of the annual water use. By expanding the crime of perjury, the bill would impose a state-mandated local program. Beginning one year after the Department of Water Resources develops any efficiency guidelines or best management practices relevant to the data centers, the bill would require that a person who owns or operates a data center, as a condition for obtaining or renewing a business license, self-certify that the data center will meet guidelines and best practices to maximize the efficient use of natural resources. The bill would define terms for purposes of these provisions.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, as defined, prior to applying to a city or a county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use. When applying to a city or county for an initial business license, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application that the person has provided its water supplier an estimate of the expected water use. When applying to a city or county for a renewal of a business license, equivalent instrument, or permit, the bill would require a person who owns or operates a data center to self-certify, under penalty of perjury, on the application, a report of the annual water use. As a condition for obtaining or renewing a business license, By expanding the crime of perjury, the bill would impose a state-mandated local program. Beginning one year after the Department of Water Resources develops any efficiency guidelines or best management practices relevant to the data centers, the bill would require that a person who owns or operates a data center self-certify, under penalty of perjury, center, as a condition for obtaining or renewing a business license, self-certify that the data center will meet the above-described efficiency guidelines and best practices. By expanding the crime of perjury, the bill would impose a state-mandated local program. practices to maximize the efficient use of natural resources.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons. a specified reason.

Existing law establishes the State Energy Resources Conservation and Development Commission with various responsibilities with respect to developing and implementing the states energy policies. Existing law establishes the Department of Water Resources within the Natural Resources Agency and prescribes the powers and responsibilities of the department.

This bill would require the department and the commission to develop guidelines and best practices practices, as specified, to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives, as provided, and specified federal law.

Existing law requires a public entity, as defined, to conduct a water usage demand analysis, as defined, prior to completing, or as part of, a cost-of-service analysis conducted to set fees and charges for water service that are consistent with applicable law. Existing law requires a public entity to identify, within the water usage demand analysis, the costs of water service for the highest users, as defined, incurred by the public entity, and the average annual volume of water delivered to high water users.

This bill would require a public entity to additionally identify, within the above-described water usage demand analysis, the average volume of water delivered to data centers. By requiring a higher level of service of public entities, the bill would impose a state-mandated local program.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees, as specified.

This bill would require a person who owns or operates a data center, as defined, to provide, when applying to a city or a county for an initial business license, equivalent instrument, or permit, under penalty of perjury, on the application, an estimate of the expected water use. The bill would require a person who owns or operates a data center to provide, when applying to a city or county for a renewal of a business license, equivalent instrument, or permit, under penalty of perjury, on the application, a report of the annual water use. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would require a city or county to require a data centers center operating within its jurisdiction, as a condition for obtaining or renewing a business license, to meet efficiency standards, as determined by a the local jurisdiction, as provided. By imposing additional duties on cities and counties, the bill would impose a state-mandated local program.

Existing law establishes the State Energy Resources Conservation and Development Commission with various responsibilities with respect to developing and implementing the states energy policies. Existing law establishes the State Water Resources Control Board and requires the board to, among other things, recommend best design and use practices for storm water and dry weather runoff capture practices that can generally be applied to all new, reconstructed, or altered public schools, including school grounds, as specified. Department of Water Resources within the Natural Resources Agency and prescribes the powers and responsibilities of the department.

This bill would require the board department and the commission to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives, as provided, and specified federal law.

Existing law requires a public entity, as defined, to conduct a water usage demand analysis, as defined, prior to completing, or as part of, a cost-of-service analysis conducted to set fees and charges for water service that are consistent with applicable law. Existing law requires a public entity to identify, within the water usage demand analysis, the costs of water service for the highest users, as defined, incurred by the public entity, and the average annual volume of water delivered to high water users.

This bill would require a public entity to additionally identify, within the above-described water usage demand analysis, the average volume of water delivered to data centers. By requiring a higher level of service of public entities, the bill would impose a state-mandated local program.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that with regard to certain mandates no reimbursement is required by this act for specified reasons.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

The California Constitution declares that the general welfare requires that the water resources of the state be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented.

This bill would express the intent of the Legislature to enact future legislation that would maintain water and energy efficiency to the extent that new technology, including, but not limited to, artificial intelligence, increases the demands on already limited resources.

GOVERNOR'S VETO

GV Bill Id:AB 93

Author:(Papan)

As Enrolled Ver:September 15, 2025

2/3 vote

SUMMARY

Requires a data center operator to provide its estimated or actual water use to its water supplier as a condition of obtaining or renewing a business license issued by a city or county.

1. Requires a person who owns or operates a data center to self-certify when applying for a business license that they are meeting efficiency standards and best practices once the Department of Water Resources (DWR) develops efficiency guidelines or best management practices relevant to data centers.
2. Requires a person who owns or operates a data center to provide a report of annual water use to the data center's water supplier when renewing a business license.
3. Defines "data center" as a room, or portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditioned floor area.
4. Authorizes DWR to identify different tiers of data centers based on water consumption and other factors when adopting efficiency standards for data centers pursuant to this bill.

Governor's Veto Message

This bill requires data centers, when applying for an initial business license, to provide to their water supplier an estimate of expected water use. It further requires data centers, when applying for a renewal of a business license, to provide their water supplier with a report on annual water use.

The widespread adoption of artificial intelligence technologies is driving an unprecedented demand for data center capacity throughout the nation. As the global epicenter of the technology sector, California is well positioned to support the development of this critically important digital infrastructure in the state.

While I appreciate the author's intent, I am reluctant to impose rigid reporting requirements about operational details on this sector without understanding the full impact on businesses and the consumers of their technology.

COMMENTS

Data centers are buildings or facilities that "support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances" (Bakar Siddik, Shehabi, and Marston, 2021). There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as artificial intelligence (AI) and other technologies are being deployed.

Water use by data centers falls under the commercial, industrial, and institutional (CII) classification, but is not calculated under the urban water use objective ("Making Conservation A Way of Life") intended to increase water use efficiency in California's urban areas. However, as required by the legislative package to enact "Making Conservation a Way of Life," DWR conducted a study (completed in 2022) on CII water use and recommended performance measures to the State Water Resources Control Board (State Water Board) that would improve water use efficiency in the CII sector. The State Water Board included some of the recommendations from the DWR study in the final urban water use regulation adopted in 2024, but none of the recommendations or regulatory provisions specifically address water use by data centers.

Existing statutes dating back to 1901 have empowered both counties and cities to license businesses for the purpose of regulation. The California Constitution allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws," known as police powers. It is from this fundamental police power that local governments derive their authority to regulate behaviors, business operations, and land uses. Under this authority, local governments are able to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. Local governments license businesses for a lot of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

According to the Author

"As technology has evolved into the new frontier of [AI], the demand for data centers has exploded, and with it, increased competition over our most precious natural resources.  Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California's needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood.  [This bill] is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion."

Arguments in Support

According to a coalition of supporters, including the California Coastkeeper Alliance, "As we witness the rapid growth of [AI] and other technologies that rely heavily on data storage and processing, the demand for data centers has exploded. This increase in demand has created heightened competition for our most valuable natural resources, such as energy and water. The average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to five million gallons per day – enough to supply water to hundreds of thousands of homes. [This bill] is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy."

Arguments in Opposition

The Data Center Coalition argues that "data centers fuel economic growth, supporting jobs in technology, construction, engineering, and maintenance. Data centers also attract investment from cloud providers, AI developers, and enterprise IT, strengthening California's digital economy. [This bill] risks stifling job creation and innovation by discouraging data center expansion."

FISCAL COMMENTS

According to the Senate Appropriations Committee, there are "unknown limited-term costs for [DWR], likely in the low millions of dollars over four years (General Fund) to implement the provisions of the bill."

VOTES

ASM WATER, PARKS, AND WILDLIFE: 10-1-2

YES: Papan, Alvarez, Ávila Farías, Bennett, Boerner, Caloza, Hart, Macedo, Celeste Rodriguez, Rogers

NO: Tangipa

ABS, ABST OR NV: Jeff Gonzalez, Bains

ASM LOCAL GOVERNMENT: 8-1-1

YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson

NO: Hoover

ABS, ABST OR NV: Ta

ASM APPROPRIATIONS: 11-2-2

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Tangipa

ABS, ABST OR NV: Sanchez, Ta

ASSEMBLY FLOOR: 51-14-14

YES: Addis, Aguiar-Curry, Ahrens, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Stefani, Valencia, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Lackey, Patterson, Sanchez, Wallis

ABS, ABST OR NV: Alvarez, Ávila Farías, Bains, Bryan, Chen, Gallagher, Nguyen, Patel, Sharp-Collins, Solache, Soria, Ta, Tangipa, Ward

SENATE FLOOR: 30-10-0

YES: Allen, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Durazo, Gonzalez, Grayson, Hurtado, Laird, Limón, McGuire, McNerney, Menjivar, Padilla, Pérez, Reyes, Richardson, Rubio, Smallwood-Cuevas, Stern, Umberg, Wahab, Weber Pierson, Wiener

NO: Alvarado-Gil, Choi, Dahle, Grove, Jones, Niello, Ochoa Bogh, Seyarto, Strickland, Valladares

ASSEMBLY FLOOR: 59-16-5

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Johnson, Lackey, Patterson, Sanchez, Ta, Wallis

ABS, ABST OR NV: Bains, Chen, Gallagher, Jackson, Tangipa

UPDATED

VERSION: September 15, 2025

CONSULTANT: Pablo Garza / W., P., & W. / (916) 319-2096 FN: 0002199

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 93

Author:(Papan)

As Amended Ver:September 5, 2025

Majority vote

SUMMARY

Requires a data center operator to provide its estimated or actual water use to its water supplier as a condition of obtaining or renewing a business license issued by a city or county.

Senate Amendments

1. Delete a requirement that a public entity identify the average volume of water delivered to data centers when conducting a cost-of-service analysis to set fees and charges for water service.
2. Delay requirement that a person who owns or operates a data center shall self-certify when applying for a business license that they are meeting efficiency standards and best practices until one year after the Department of Water Resources (DWR) develops efficiency guidelines or best management practices relevant to data centers.
3. Clarify that a person who owns or operates a data center shall provide the report of annual water use to the data center′s water supplier when renewing a business license.
4. Narrow the definition of ″data center″ to mean a room, or portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditioned floor area. Eliminate differentiation of data centers into one of three tiers based on energy use and equipment weight per square meter.
5. Authorizes DWR to identify different tiers of data centers based on water consumption and other factors when adopting efficiency standards for data centers pursuant to this bill.

COMMENTS

Data centers are buildings or facilities that ″support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances″ (Bakar Siddik, Shehabi, and Marston, 2021). There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as artificial intelligence (AI) and other technologies are being deployed.

Water use by data centers falls under the commercial, industrial, and institutional (CII) classification, but is not calculated under the urban water use objective (″Making Conservation A Way of Life″) intended to increase water use efficiency in California′s urban areas. However, as required by the legislative package to enact ″Making Conservation a Way of Life,″ DWR conducted a study (completed in 2022) on CII water use and recommended performance measures to the State Water Resources Control Board (State Water Board) that would improve water use efficiency in the CII sector. The State Water Board included some of the recommendations from the DWR study in the final urban water use regulation adopted in 2024, but none of the recommendations or regulatory provisions specifically address water use by data centers.

Existing statutes dating back to 1901 have empowered both counties and cities to license businesses for the purpose of regulation. The California Constitution allows a city or county to ″make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws,″ known as police powers. It is from this fundamental police power that local governments derive their authority to regulate behaviors, business operations, and land uses. Under this authority, local governments are able to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. Local governments license businesses for a lot of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

According to the Author

″As technology has evolved into the new frontier of [AI], the demand for data centers has exploded, and with it, increased competition over our most precious natural resources.  Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California′s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood.  [This bill] is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.″

Arguments in Support

According to a coalition of supporters, including the California Coastkeeper Alliance, ″As we witness the rapid growth of [AI] and other technologies that rely heavily on data storage and processing, the demand for data centers has exploded. This increase in demand has created heightened competition for our most valuable natural resources, such as energy and water. The average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to five million gallons per day – enough to supply water to hundreds of thousands of homes. [This bill] is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy.″

Arguments in Opposition

The Data Center Coalition argues that ″data centers fuel economic growth, supporting jobs in technology, construction, engineering, and maintenance. Data centers also attract investment from cloud providers, AI developers, and enterprise IT, strengthening California′s digital economy. [This bill] risks stifling job creation and innovation by discouraging data center expansion.″

FISCAL COMMENTS

According to the Senate Appropriations Committee, there are ″unknown limited-term costs for [DWR], likely in the low millions of dollars over four years (General Fund) to implement the provisions of the bill.″

VOTES:

ASM WATER, PARKS, AND WILDLIFE: 10-1-2

YES: Papan, Alvarez, Ávila Farías, Bennett, Boerner, Caloza, Hart, Macedo, Celeste Rodriguez, Rogers

NO: Tangipa

ABS, ABST OR NV: Jeff Gonzalez, Bains

ASM LOCAL GOVERNMENT: 8-1-1

YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson

NO: Hoover

ABS, ABST OR NV: Ta

ASM APPROPRIATIONS: 11-2-2

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Tangipa

ABS, ABST OR NV: Sanchez, Ta

ASSEMBLY FLOOR: 51-14-14

YES: Addis, Aguiar-Curry, Ahrens, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Stefani, Valencia, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Lackey, Patterson, Sanchez, Wallis

ABS, ABST OR NV: Alvarez, Ávila Farías, Bains, Bryan, Chen, Gallagher, Nguyen, Patel, Sharp-Collins, Solache, Soria, Ta, Tangipa, Ward

UPDATED

VERSION: September 5, 2025

CONSULTANT: Pablo Garza / W., P., & W. / (916) 319-2096 FN: 0002047

 THIRD READING  

Bill No: AB 93

Author: Papan (D)

Amended: 9/5/25 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 5-2, 6/24/25

AYES: Limón, Allen, Hurtado, Laird, Stern

NOES: Seyarto, Grove

SENATE LOCAL GOVERNMENT COMMITTEE: 5-2, 7/16/25

AYES: Durazo, Arreguín, Cabaldon, Laird, Wiener

NOES: Choi, Seyarto

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 51-14, 5/29/25 - See last page for vote

SUBJECT: Water resources: data centers

SOURCE: Author

DIGEST:

This bill requires owners and operators of data centers, when applying for a business license, to report their estimated water use to their water supplier and to self-certify to such on their application; and, when renewing a license, to self-certify that they have provided their water supplier with a report of annual water use.

Senate Floor Amendments of 9/5/25 remove the bill’s requirement that a person who owns or operates a data center, as a condition for obtaining or renewing a business license, to self-certify that it will meet certain efficiency guidelines and best management practices.

ANALYSIS

Existing law:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions. (Business and Professions Code (BPC) §§16000, 16100)
   
2. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal. (Water Code (WAT) §§10608.16, 10608.20)
   
   1. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target. (WAT §10608.24(e))
      
   2. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities. (WAT §10608.12)
      
3. Requires Department of Water Resources (DWR), in coordination with the State Water Resources Control Board (State Water Board), to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board was required to adopt performance measures for CII water use based on these recommendations by June 30, 2022. (WAT §10609.10)

This bill:

1. Requires a person who owns or operates a data center, before applying to a city or county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use.
   
2. Requires, when applying to the city or county for an initial business license, equivalent instrument, or permit, the person to self-certify, under penalty of perjury, on the application, that they have provided their water supplier an estimate of the expected water use. Requires, when applying for a renewal, the person to self-certify, under penalty of perjury, that they have provided the data center’s water supplier with a report of annual water use.
   
3. Defines “data center” as a room, or portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditional floor area. Authorizes DWR to identify different tiers of data centers based on factors affecting water consumption and appropriate standards for each data center tier.
   
4. Makes various findings and declarations relating to the development of efficiency standards for data centers that balance operational reliability with resource conservation.

Background

Data centers. Data centers are buildings or facilities that support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances. There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.

CII Water Use Performance Measures. To support the CII sector’s progress towards improving water use efficiency, DWR has been directed to develop performance recommendations, or performance measures, for the CII sector. Performance measures means actions to be taken by urban retail water suppliers that will result in increased water use efficiency by CII water users.

DWR’s recommendations include, among others, the following:

• Require urban retail water suppliers to classify all CII water users into one of 19 categories within five years of the State Water Board’s adoption of the recommendation. According to the report, the 19 categories are sufficient to address major CII water uses and provide adequate differentiation among different CII sectors to facilitate data collection. In the recommendations, data centers were specifically identified in the “manufacturing” category.
  
• Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users. The BMPs should focus on those that can be implemented by urban retail water suppliers without explicit consent of CII water users or associated property owners, and BMPs that can be implemented with either voluntary actions from CII water users or their property owners, or in response to requests, incentives, or other programs. The report notes that “CII Water User BMPs considered in the CII-BMPs Performance Measure do not include process water BMPs because process water is categorically excluded from the CII water use performance measures (WAT §10608.12(n)). However, urban retail water suppliers are encouraged to collaborate with CII water users to implement process water BMPs, where feasible.”
  

See Senate Natural Resources and Water Committee analysis for additional background information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, there are “unknown limited-term costs for [DWR], likely in the low millions of dollars over four years (General Fund) to implement the provisions of the bill.”

SUPPORT: (Verified 9/9/25)

350 Bay Area Action

California Coastkeeper Alliance

Center for Environmental Health

Cleanearth4kids.org

Clean Water Action

Climate Reality Project Bay Area Chapter

Climate Reality Project San Diego

Climate Reality Project San Fernando Valley Chapter

Climate Reality Project, Los Angeles Chapter

Climate Reality Project, Orange County

Community Water Center

County of Los Angeles Board of Supervisors

Humboldt Waterkeeper

Inland Empire Waterkeeper

Leadership Counsel Action

Los Angeles Waterkeeper

Monterey Waterkeeper

Orange County Coastkeeper

Russian Riverkeeper

San Diego Coastkeeper

Santa Barbara Channelkeeper

Santa Barbara; City of

Shasta Waterkeeper

Solano County Democratic Central Committee

South Yuba River Citizens League

The Climate Reality Project, California State Coalition

The Otter Project

Water Climate Trust

Yuba River Waterkeeper

OPPOSITION: (Verified 9/9/25)

Data Center Coalition
Silicon Valley Leadership Group
Technet

ARGUMENTS IN SUPPORT: According to the author, “[a]s technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”

ARGUMENTS IN OPPOSITION: Data Center Coalition, Silicon Valley Leadership Group, and TechNet argue that “[t]he proposed water reporting requirements could force businesses to disclose sensitive trade secrets, harm their competitive edge, and risk creating safety and security vulnerabilities.” The group also writes that “[m]andating disclosure of detailed proprietary and sensitive operational details indicating computer workloads … can be used by business competitors to deduce trade secrets and inform competitive strategies. Sharing of this information may leave this critical infrastructure more exposed to cyber threats, industrial espionage, and potential exploitation by foreign adversaries.” Additionally, “AB 93 risks sifting job creation and innovation by discouraging data center expansion.”

ASSEMBLY FLOOR: 51-14, 5/29/25

AYES: Addis, Aguiar-Curry, Ahrens, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Stefani, Valencia, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Lackey, Patterson, Sanchez, Wallis

NO VOTE RECORDED: Alvarez, Ávila Farías, Bains, Bryan, Chen, Gallagher, Nguyen, Patel, Sharp-Collins, Solache, Soria, Ta, Tangipa, Ward

Prepared by: Genevieve Wong / N.R. & W. / (916) 651-4116

9/9/25 12:01:17

**** END ****

 THIRD READING  

Bill No: AB 93

Author: Papan (D)

Amended: 9/5/25 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 5-2, 6/24/25

AYES: Limón, Allen, Hurtado, Laird, Stern

NOES: Seyarto, Grove

SENATE LOCAL GOVERNMENT COMMITTEE: 5-2, 7/16/25

AYES: Durazo, Arreguín, Cabaldon, Laird, Wiener

NOES: Choi, Seyarto

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 51-14, 5/29/25 - See last page for vote

SUBJECT: Water resources: data centers

SOURCE: Author

DIGEST:

This bill requires owners and operators of data centers, when applying for a business license, to report their estimated water use to their water supplier and to self-certify to such on their application; and, when renewing a license, to self-certify that they have provided their water supplier with a report of annual water use.

Senate Floor Amendments of 9/5/25 remove the bill’s requirement that a person who owns or operates a data center, as a condition for obtaining or renewing a business license, to self-certify that it will meet certain efficiency guidelines and best management practices.

ANALYSIS

Existing law:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions. (Business and Professions Code (BPC) §§16000, 16100)
   
2. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal. (Water Code (WAT) §§10608.16, 10608.20)
   
   1. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target. (WAT §10608.24(e))
      
   2. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities. (WAT §10608.12)
      
3. Requires Department of Water Resources (DWR), in coordination with the State Water Resources Control Board (State Water Board), to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board was required to adopt performance measures for CII water use based on these recommendations by June 30, 2022. (WAT §10609.10)

This bill:

1. Requires a person who owns or operates a data center, before applying to a city or county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use.
   
2. Requires, when applying to the city or county for an initial business license, equivalent instrument, or permit, the person to self-certify, under penalty of perjury, on the application, that they have provided their water supplier an estimate of the expected water use. Requires, when applying for a renewal, the person to self-certify, under penalty of perjury, that they have provided the data center’s water supplier with a report of annual water use.
   
3. Defines “data center” as a room, or portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditional floor area. Authorizes DWR to identify different tiers of data centers based on factors affecting water consumption and appropriate standards for each data center tier.
   
4. Makes various findings and declarations relating to the development of efficiency standards for data centers that balance operational reliability with resource conservation.

Background

Data centers. Data centers are buildings or facilities that support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances. There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.

CII Water Use Performance Measures. To support the CII sector’s progress towards improving water use efficiency, DWR has been directed to develop performance recommendations, or performance measures, for the CII sector. Performance measures means actions to be taken by urban retail water suppliers that will result in increased water use efficiency by CII water users.

DWR’s recommendations include, among others, the following:

• Require urban retail water suppliers to classify all CII water users into one of 19 categories within five years of the State Water Board’s adoption of the recommendation. According to the report, the 19 categories are sufficient to address major CII water uses and provide adequate differentiation among different CII sectors to facilitate data collection. In the recommendations, data centers were specifically identified in the “manufacturing” category.
  
• Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users. The BMPs should focus on those that can be implemented by urban retail water suppliers without explicit consent of CII water users or associated property owners, and BMPs that can be implemented with either voluntary actions from CII water users or their property owners, or in response to requests, incentives, or other programs. The report notes that “CII Water User BMPs considered in the CII-BMPs Performance Measure do not include process water BMPs because process water is categorically excluded from the CII water use performance measures (WAT §10608.12(n)). However, urban retail water suppliers are encouraged to collaborate with CII water users to implement process water BMPs, where feasible.”
  

See Senate Natural Resources and Water Committee analysis for additional background information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, there are “unknown limited-term costs for [DWR], likely in the low millions of dollars over four years (General Fund) to implement the provisions of the bill.”

SUPPORT: (Verified 9/5/25)

350 Bay Area Action
California Coastkeeper Alliance
Center for Environmental Health
Clean Water Action
Climate Reality Project Bay Area Chapter
Climate Reality Project San Diego
Climate Reality Project San Fernando Valley Chapter
Climate Reality Project, Los Angeles Chapter
Climate Reality Project, Orange County
Community Water Center
County of Los Angeles Board of Supervisors
Humboldt Waterkeeper
Inland Empire Waterkeeper
Leadership Counsel Action
Los Angeles Waterkeeper
Monterey Waterkeeper
Orange County Coastkeeper
Russian Riverkeeper
San Diego Coastkeeper
Santa Barbara Channelkeeper
Santa Barbara; City of
Shasta Waterkeeper
Solano County Democratic Central Committee
South Yuba River Citizens League
The Climate Reality Project, California State Coalition
The Otter Project
Water Climate Trust
Yuba River Waterkeeper

OPPOSITION: (Verified 9/5/25)

Data Center Coalition
Silicon Valley Leadership Group
Technet

ARGUMENTS IN SUPPORT: According to the author, “[a]s technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”

ARGUMENTS IN OPPOSITION: Data Center Coalition, Silicon Valley Leadership Group, and TechNet argue that “[t]he proposed water reporting requirements could force businesses to disclose sensitive trade secrets, harm their competitive edge, and risk creating safety and security vulnerabilities.” The group also writes that “[m]andating disclosure of detailed proprietary and sensitive operational details indicating computer workloads … can be used by business competitors to deduce trade secrets and inform competitive strategies. Sharing of this information may leave this critical infrastructure more exposed to cyber threats, industrial espionage, and potential exploitation by foreign adversaries.” Additionally, “AB 93 risks sifting job creation and innovation by discouraging data center expansion.”

ASSEMBLY FLOOR: 51-14, 5/29/25

AYES: Addis, Aguiar-Curry, Ahrens, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Stefani, Valencia, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Lackey, Patterson, Sanchez, Wallis

NO VOTE RECORDED: Alvarez, Ávila Farías, Bains, Bryan, Chen, Gallagher, Nguyen, Patel, Sharp-Collins, Solache, Soria, Ta, Tangipa, Ward

Prepared by: Genevieve Wong / N.R. & W. / (916) 651-4116

9/8/25 21:05:58

**** END ****

 THIRD READING  

Bill No: AB 93

Author: Papan (D)

Amended: 8/29/25 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 5-2, 6/24/25

AYES: Limón, Allen, Hurtado, Laird, Stern

NOES: Seyarto, Grove

SENATE LOCAL GOVERNMENT COMMITTEE: 5-2, 7/16/25

AYES: Durazo, Arreguín, Cabaldon, Laird, Wiener

NOES: Choi, Seyarto

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/29/25

AYES: Caballero, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 51-14, 5/29/25 - See last page for vote

SUBJECT: Water resources: data centers

SOURCE: Author

DIGEST:

This bill requires data centers, when applying for a business license, to report their expected water use to their water supplier; when renewing a license, to report their water use to the appropriate city or county; and to self-certify that they will meet certain efficiency guidelines and best practices developed by the Department of Water Resources (DWR) and State Energy Resources Conservation and Development Commission (Energy Commission or CEC).

ANALYSIS:

Existing law:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions. (Business and Professions Code (BPC) §§16000, 16100)
   
2. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal. (Water Code (WAT) §§10608.16, 10608.20)
   
   1. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target. (WAT §10608.24(e))
      
   2. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities. (WAT §10608.12)
      
3. Requires DWR, in coordination with the State Water Resources Control Board (State Water Board), to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board was required to adopt performance measures for CII water use based on these recommendations by June 30, 2022. (WAT §10609.10)

This bill:

1. Requires a person who owns or operates a data center, before applying to a city or county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use.
   
2. Requires, when applying to the city or county for an initial business license, equivalent instrument, or permit, the person to self-certify, under penalty of perjury, on the application, that they have provided their water supplier an estimate of the expected water use. Requires, when applying for a renewal, the person to self-certify, under penalty of perjury, that they have provided the data center’s water supplier with a report of annual water use.
   
3. Requires a person who owns or operates a data center, as a condition for obtaining or renewing a business license, to self-certify that it will meet efficiency guidelines and best practices developed by DWR.
   
4. Defines “data center” as a room, or portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditional floor area. Authorizes DWR to identify different tiers of data centers based on factors affecting water consumption and appropriate standards for each data center tier.
   
5. Declares that it is the intent of the Legislature that data centers are considered commercial, industrial, and institutional users under the state’s “Making Conservation a California Way of Life” regulation, consistent with urban water use objectives.

Background

Data centers. Data centers are buildings or facilities that support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances. There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.

Commercial, Industrial, and Institutional (CII) Water Use Performance Measures. To support the CII sector’s progress towards improving water use efficiency, DWR has been directed to develop performance recommendations, or performance measures, for the CII sector. Performance measures means actions to be taken by urban retail water suppliers that will result in increased water use efficiency by CII water users.

DWR’s recommendations include, among others, the following:

• Require urban retail water suppliers to classify all CII water users into one of 19 categories within five years of the State Water Board’s adoption of the recommendation. According to the report, the 19 categories are sufficient to address major CII water uses and provide adequate differentiation among different CII sectors to facilitate data collection. In the recommendations, data centers were specifically identified in the “manufacturing” category.
  
• Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users. The BMPs should focus on those that can be implemented by urban retail water suppliers without explicit consent of CII water users or associated property owners, and BMPs that can be implemented with either voluntary actions from CII water users or their property owners, or in response to requests, incentives, or other programs. The report notes that “CII Water User BMPs considered in the CII-BMPs Performance Measure do not include process water BMPs because process water is categorically excluded from the CII water use performance measures (WAT §10608.12(n)). However, urban retail water suppliers are encouraged to collaborate with CII water users to implement process water BMPs, where feasible.”
  

See Senate Natural Resources and Water Committee analysis for additional background information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, there are “unknown limited-term costs for [DWR], likely in the low millions of dollars over four years (General Fund) to implement the provisions of the bill.”

SUPPORT: (Verified 8/29/25)

350 Bay Area Action
California Coastkeeper Alliance
Center for Environmental Health
Clean Water Action
Climate Reality Project Bay Area Chapter
Climate Reality Project San Diego
Climate Reality Project San Fernando Valley Chapter
Climate Reality Project, Los Angeles Chapter
Climate Reality Project, Orange County
Community Water Center
County of Los Angeles Board of Supervisors
Humboldt Waterkeeper
Inland Empire Waterkeeper
Leadership Counsel Action
Los Angeles Waterkeeper
Monterey Waterkeeper
Orange County Coastkeeper
Russian Riverkeeper
San Diego Coastkeeper
Santa Barbara Channelkeeper
Santa Barbara; City of
Shasta Waterkeeper
Solano County Democratic Central Committee
South Yuba River Citizens League
The Climate Reality Project, California State Coalition
The Otter Project
Water Climate Trust
Yuba River Waterkeeper

OPPOSITION: (Verified 8/29/25)

Data Center Coalition
Silicon Valley Leadership Group
Technet

ARGUMENTS IN SUPPORT: According to the author, “[a]s technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”

ARGUMENTS IN OPPOSITION: Data Center Coalition, Silicon Valley Leadership Group, and TechNet argue that “[t]he proposed water reporting requirements could force businesses to disclose sensitive trade secrets, harm their competitive edge, and risk creating safety and security vulnerabilities.” The group also writes that “[m]andating disclosure of detailed proprietary and sensitive operational details indicating computer workloads … can be used by business competitors to deduce trade secrets and inform competitive strategies. Sharing of this information may leave this critical infrastructure more exposed to cyber threats, industrial espionage, and potential exploitation by foreign adversaries.” Additionally, “AB 93 risks sifting job creation and innovation by discouraging data center expansion.”

ASSEMBLY FLOOR: 51-14, 5/29/25

AYES: Addis, Aguiar-Curry, Ahrens, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Stefani, Valencia, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Flora, Jeff Gonzalez, Hadwick, Hoover, Lackey, Patterson, Sanchez, Wallis

NO VOTE RECORDED: Alvarez, Ávila Farías, Bains, Bryan, Chen, Gallagher, Nguyen, Patel, Sharp-Collins, Solache, Soria, Ta, Tangipa, Ward

Prepared by: Genevieve Wong / N.R. & W. / (916) 651-4116

9/2/25 17:50:00

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 93 (Papan) - Water resources: data centers

Bill Summary:

This bill would require data center owners to submit specified information on water use when they apply for a local business license or renew an existing one.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 29, 2025

Fiscal Impact:

• Unknown limited-term costs for the Department of Water Resources (DWR), likely in the low millions of dollars over four years (General Fund) to implement the provisions of this bill.

Committee Amendments:

These amendments would:

1. Define “data center” as a room, or a portion of a room, in a building used primarily to house information technology equipment that serves a total information technology equipment load greater than 10 kilowatts and 20 watts per square foot of conditioned floor area.
2. Allow DWR, as part of any efficiency guidelines adopted by the department, to identify different tiers of data centers based on factors affecting water consumption and appropriate standards for each data center tier.

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 93 (Papan) - Water resources: data centers

Bill Summary:

This bill would require data center owners to submit specified information on water use when they apply for a local business license or renew an existing one.

Fiscal Impact:

• The Department of Water Resources (DWR) estimates limited-term costs of $1.7 million over four years (General Fund) to implement the provisions of this bill.

Background:

Data centers are buildings or facilities that “support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances.” Data centers use a lot of water. This is because, “Like cooling systems in large office buildings, water often is evaporated in data center cooling towers, leaving behind salty wastewater known as blowdown that has to be treated by local utilities.” A mid-sized data center uses 300,000 gallons of water a day, enough for 1,000 households, and data centers rank among the top ten industrial and commercial water users.

To better understand data center water usage in California, the author wants to collect more information on data center water usage.

Local business licensing. The California Constitution allows a city or county to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities.” It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this police power to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law lets local governments require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction. Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

While most cities and counties require businesses to operate under a business license, some counties do not require business licenses for businesses operating in unincorporated areas. For example, both Sonoma and San Diego counties do not require business licenses for businesses operating in these areas.

Proposed Law:

This bill would require a data center owner, prior to applying for an in initial business license, to provide its water supplier an estimate of the expected water use. When the owner applies for a business license from a city or county, the bill would require that they must self-certify, under penalty of perjury, on the application, that they have provided the data center’s water supplier with an estimate of the expected water use. When it renews the business license, it must self-certify a report on its annual water use.

Related Legislation:

AB 222 (Bauer-Kahan), of the current legislative session, would require publication of energy use associated with the development and use of artificial intelligence, requires the CEC to track energy usage of data centers in the state, and tasks the California Public Utilities Commission to minimize utility costs related to data center development.

AB 755 (Papan, Chapter 542, Statutes of 2023) requires a public entity to conduct a water usage demand analysis, before completing, or as part of, a cost-of-service analysis conducted to set fees and charges for water service.

Staff Comments:

The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 93 imposes new duties on local governments, Legislative Counsel says it imposes a new state mandate. AB 93 disclaims the state’s responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill’s provisions and because the bill creates a new crime.

-- END --

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2025 - 2026 Regular

Water resources: data centers

Requires data center owners to submit specified information on water use when they apply for a local business license or renew an existing one.

Background

Local business licensing. The California Constitution allows a city or county to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities.” It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this police power to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law lets local governments require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction. Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

While most cities and counties require businesses to operate under a business license, some counties do not require business licenses for businesses operating in unincorporated areas. For example, both Sonoma and San Diego counties do not require business licenses for businesses operating in these areas.

Data centers. Data centers are buildings or facilities that “support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances.”^[1] Data centers use a lot of water. This is because, “Like cooling systems in large office buildings, water often is evaporated in data center cooling towers, leaving behind salty wastewater known as blowdown that has to be treated by local utilities.”^[2] A mid-sized data center uses 300,000 gallons of water a day, enough for 1,000 households, and data centers rank among the top ten industrial and commercial water users.^[3]

To better understand data center water usage in California, the author wants to collect more information on data center water usage.

Proposed Law

Assembly Bill 93 requires a data center owner, prior to applying for an in initial business license, to provide its water supplier an estimate of the expected water use. When the owner applies for a business license from a city or county, they must self-certify, under penalty of perjury, on the application, that they have provided its water supplier an estimate of the expected water use. When it renews the business license, it must self-certify a report on its annual water use.

Comments

1. Purpose of the bill. According to the author, “[a]s technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”

2. Costs versus benefits. AB 93 requires cities and counties to ask for new information in their business license applications to ascertain if data center owners sent water usage information to their water suppliers. This requires them to update their application processes. Local agencies may have to increase business license costs to comply with this new requirement. However, the measure does not require local agencies to do anything with this information: they just have to collect it. While interested parties could request this information, unless they do, it will collect dust in local agencies’ file cabinets. While data centers’ water usage is worthy of scrutiny, it is unclear how the benefits of incorporating a self-certification process in the local government business license process outweigh the costs to local agencies and businesses to implement it.

3. Sure, but will it work? Since local agencies manage business licenses at the local level, jurisdictions vary in the requirements that they impose and even whether or not a particular business is required to obtain a license. For example, businesses in unincorporated areas that do not require a business license would not be subject to this new requirement, which means AB 93 may not successfully ensure that all data centers report to their water suppliers.

4. Let’s be clear. The Committee may wish to consider the following clarifying and technical amendments to AB 93:

• AB 93 requires businesses renewing their business license to self-certify a report of annual water use on their application, but it does not specify what they must do with the report. The Committee may wish to consider amending the bill to clarify that the business must self-certify that they sent a copy of the report to their water supplier.
• AB 93 requires businesses to send information to water providers, but does not define “water providers.” The Committee may wish to consider amending the bill to define the term.

5. Charter city. AB 93 says that its statutory provisions apply to charter cities. To support this assertion, the bill includes a legislative finding and declaration that water conservation is a matter of statewide concern, not a municipal affair. Because the Constitution does not define “municipal affairs,” the courts determine whether a topic is a municipal affair or whether it is an issue of statewide concern.

6. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 93 imposes new duties on local governments, Legislative Counsel says it imposes a new state mandate. AB 93 disclaims the state’s responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill’s provisions and because the bill creates a new crime.

7. Incoming! The Senate Rules Committee has ordered a double referral of AB 93: first to the Committee on Natural Resources and Water, which approved AB 93 at its June 24^th hearing on a vote of 5-2, and second to the Committee on Local Government.

Assembly Actions

Assembly Water, Parks, and Wildlife Committee: 10-1
Assembly Local Government Committee: 8-1
Assembly Appropriations Committee: 11-2
Assembly Floor: 51-14

Support and Opposition

(7/11/25)

Support: 350 Bay Area Action
City of Santa Barbara
County of Los Angeles Board of Supervisors
The Climate Reality Project Orange County Chapter
The Climate Reality Project San Diego Chapter
The Climate Reality Project, Bay Area Chapter
The Climate Reality Project, California State Coalition
The Climate Reality Project, Los Angeles Chapter
The Climate Reality Project, San Fernando Valley CA Chapter

Opposition: Data Center Coalition
Silicon Valley Leadership Group
Technet

-- END --

1. Md Abu Bakar Siddik, Arman Shehabi, and Landon Marston, “The Environmental Footprint of Data Centers in the United States,” Environmental Research Letters, 16 (2021). ↑

2. https://www.npr.org/2022/08/30/1119938708/data-centers-backbone-of-the-digital-economy-face-water-scarcity-and-climate-ris ↑

3. Ibid. ↑

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Monique Limón, Chair

2025 - 2026 Regular

Bill No: AB Hearing Date: June 24, 2025

Subject: Water resources: demands: data centers

SUMMARY

This bill would require data centers, when applying for a business license, to report their expected water use to their water supplier; when renewing a license, to report their water use to the appropriate city or county; and to self-certify that they will meet certain efficiency guidelines and best practices developed by the Department of Water Resources (DWR) and State Energy Resources Conservation and Development Commission (Energy Commission or CEC).

BACKGROUND AND EXISTING LAW

Data centers. Data centers are buildings or facilities that “support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances.”^[1] There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.

Water Conservation in California. The Water Conservation Act of 2009 required a 20% statewide per capita urban water use reduction by 2020 (SBx7-7, Steinberg, Chapter 5, Statutes of 2009/10 7^th Extraordinary Session). According to the DWR, the state has surpassed the 20% reduction and reduced per capita urban water use by 32%. About 97% (374 of 386) of urban retail water suppliers (urban suppliers) achieved their targeted 2020 water use reduction.

In 2016, then-Governor Brown issued Executive Order B-37-16, which established the goal of “making [water] conservation a California way of life” and directed his administration to develop water use targets as part of a permanent long-term water conservation framework. Including environmental water, urban water use is about 11% of the state’s annual water use. Of that 11%, over half (6%) is residential use, 3% is commercial, industrial, and institutional (CII) use, and 1% is “other.”

In 2018, the Legislature passed and Governor Brown signed SB 606 (Hertzberg, Chapter 14, Statutes of 2018) and AB 1668 (Friedman, Chapter 15, Statutes of 2018). These two bills, known as “Making Conservation a California Way of Life,” established the long-term water conservation framework in law. This framework required DWR and the State Water Resources Control Board (State Water Board) to work together to develop urban water use conservation or efficiency goals (the objectives) for the roughly 400 urban suppliers that supply water to about 95% of Californians. A major aspect of “Making Conservation a Way of Life” are requirements for urban water agencies to improve water use efficiency via the urban water use objective. The urban water use objective is the sum of: (1) indoor residential water use; (2) outdoor residential water use; (3) outdoor CII use associated with dedicated irrigation meters (DIM); (4) water losses; (5) variances, if applicable; and (6) bonus incentives for recycled water, if applicable.

In general, DWR was directed to perform studies and investigations and provide recommendations to the State Water Board, who would then promulgate regulations. The State Water Board was required to adopt implementing regulations by June 30, 2022. The regulations to Make Conservation a California Way of Life became effective January 1 of this year.

CII Water Use Performance Measures. Under the Making Conservation a Way of Life bill package, with the exception of outdoor landscape water use associated with CII water uses, CII water use is not a part of the urban water use objective. Instead, to support the CII sector’s progress towards improve water use efficiency, the bills directed DWR to develop performance recommendations, or performance measures, for the CII sector. Performance measures means actions to be taken by urban retail water suppliers that will result in increased water use efficiency by CII water users.

DWR published the recommendations in September 2022 which include, among others, the following:

• Require urban retail water suppliers to classify all CII water users into one of 19 categories within five years of the State Water Board’s adoption of the recommendation. According to the report, the 19 categories are sufficient to address major CII water uses and provide adequate differentiation among different CII sectors to facilitate data collection. In the recommendations, data centers were specifically identified in the “manufacturing” category.
  

The final regulations require urban retail water suppliers to classify CII users by June 30, 2027, in accordance with Energy Star Portfolio Manager’s broad categories.

• Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users. The BMPs should focus on those that can be implemented by urban retail water suppliers without explicit consent of CII water users or associated property owners, and BMPs that can be implemented with either voluntary actions from CII water users or their property owners, or in response to requests, incentives, or other programs. The report notes that “CII Water User BMPs considered in the CII-BMPs Performance Measure do not include process water BMPs because process water is categorically excluded from the CII water use performance measures (Water Code (WAT) §10608.12(n)). However, urban retail water suppliers are encouraged to collaborate with CII water users to implement process water BMPs, where feasible.”
  

The final regulations require urban retail water suppliers to design a conservation program by June 30, 2029 that targets inefficient CII users and incorporates at least two of the recommended BMPs.

• Adopt a conversion threshold of one area of landscape area irrigated by a mixed use meter on a per-parcel basis for converting to dedicated irrigation meters, allowing for suppliers to better estimate outdoor landscape use in the CII sector.

The final regulations require urban retail water suppliers to identify CII water users with large landscape areas and, either install dedicated irrigation meters, or calculate a water budget for such users, and the provide BMPs to those users.

Business licenses. Almost every city and county in California requires that businesses have a general license to operate within their respective jurisdictions. The requirements to obtain a business license vary by jurisdiction, but typically require payment of a fee and registration of the business’s name [i.e., “doing business as”].

Energy Star Program. Administered by the US Environmental Protection Agency (EPA), the Energy Star Program is a voluntary labeling program. The US EPA sets energy efficiency specifications and those that meet those specifications can choose to display the “Energy Star” logo. The program helps create a market for energy efficient products, homes, and buildings and helps to increase the production and adoption of energy-efficient technologies and practices.

Existing law:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions. (Business and Professions Code (BPC) §§16000, 16100)
   
2. Establishes the Energy Commission with various responsibilities with respect to developing and implementing the state’s energy policies. (Public Resources Code §25000 et seq.)
   
3. Establishes the State Water Board to provide for the orderly and efficient administration of the state’s water resources. (WAT §174 et seq.)
   
4. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal. (WAT §§10608.16, 10608.20)
   
   1. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target. (WAT §10608.24(e))
      
   2. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities. (WAT §10608.12)
      
5. Requires DWR, in coordination with the State Water Board, to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board was required to adopt performance measures for CII water use based on these recommendations by June 30, 2022. (WAT §10609.10)
   
6. Requires a public entity to conduct a water usage demand analysis before completing, or as a part of, a cost-of-service analysis conducted to set fees and charges for water service that is consistent with Proposition 218 and other applicable law. Requires the public entity, within the water usage demand analysis, to identify the costs of water service for the highest users incurred by the public entity and the average annual volume of water delivered to high water users. (WAT §390)

PROPOSED LAW

This bill would:

1. Require a person who owns or operates a data center, before applying to a city or county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use.
   
2. Require, when applying to the city or county for an initial business license, equivalent instrument, or permit, the person to self-certify, under penalty of perjury, on the application, that they have provided their water supplier an estimate of the expected water use. Require, when applying for a renewal, the person to self-certify, under penalty of perjury, a report of annual water use.
   
3. Require a person who owns or operates a data center, as a condition for obtaining or renewing a business license, to self-certify that it will meet specified efficiency guidelines and best practices developed by DWR and the CEC, the development of which would be required by the bill.
   
   1. Require DWR and CEC, by January 1, 2028, to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology that are consistent with urban water use objectives and the US EPA’s Energy Star Program.
      
   2. Require the best practices to include the use of closed-loop systems, the use of nonpotable water, the installation of rainwater and stormwater capture infrastructure, water efficient practices for indoor and outdoor water use, and water efficient practices.
      
4. Require a public entity, as part of its water usage demand analysis, to also identify the average volume of water delivered to data centers.
   
5. Define “data center” as a facility that houses computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems, for the primary purpose of processing, storing, or distributing electronic data. Further define the following types of data centers:
   
   1. “Type I data center” or “hyperscale data center” as a data center with more than 10,000 kilograms per square meter and more than 10,000 servers with a power consumption of more than 25 megawatts.
      
   2. “Type II data center” as a data center with at least 2,000 and no more than 50,000 kilograms per square meter and a power consumption of at least 2 megawatts and no more than 25 megawatts.
      
   3. “Type III data center” as a data center with at least 500 and no more than 5,000 kilograms per square meter and a power consumption of less than 2 megawatts.
      
6. Declare that it is the intent of the Legislature that data centers are considered commercial, industrial, and institutional users under the state’s “Making Conservation a California Way of Life” regulation, consistent with urban water use objectives.

ARGUMENTS IN SUPPORT

According to the author, “[a]s technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”

A coalition letter representing, among others, California Coastkeeper Alliance, Los Angeles Water Keeper, Inland Empire Waterkeeper, and Shasta Waterkeeper writes that the “average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to 5 million gallons per day – enough to supply water to hundreds of thousands of homes. AB 93 is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy.” The group also argues that the bill “ensures that public utilities have the tools to accurately assess the broader impact of data centers on the overall system, promoting greater sustainability and accountability within the sector” and that “[w]ithout strategic oversight, unchecked expansion of data centers could place unsustainable pressure of local resources and infrastructure.”

The Los Angeles County Board of Supervisors writes that “[r]equiring data centers to implement water best practices and provide estimates will help reduce the dependence and strain placed on water resources.”

ARGUMENTS IN OPPOSITION

The Association of California Water Agencies (ACWA), who writes with an oppose unless amended position, argue that in requiring retail water suppliers to identify the average volume of water delivered to data centers, the bill “call(s) out data centers as a unique user under the cost-of-service analysis requirements” and that by “singling these users out, this proposed provision raises liability concerns for public water agencies.” ACWA further points out that “some water agencies may not know which of its customers are data centers. […] It seems that the goal of this provision is to have some way of reporting the water use of data centers, but there are other ways to achieve this goal.” Finally, ACWA thinks the definition of “data center” may be “unintentionally broad” and has proposed clarifying language.

Data Center Coalition, Silicon Valley Leadership Group, and TechNet, writing in opposition, suggests that “guidelines and best practices [that would be developed under the bill] not only align with urban water use objectives but also take into consideration the state’s energy efficiency goals. The group writes that “[m]andating disclosure of detailed proprietary and sensitive operational details indicating computer workloads … can be used by business competitors to deduce trade secrets and inform competitive strategies. Sharing of this information may leave this critical infrastructure more exposed to cyber threats, industrial espionage, and potential exploitation by foreign adversaries.” The group also argues that “AB 93 risks sifting job creation and innovation by discouraging data center expansion.”

COMMENTS

This bill is double referred. This bill is double referred with the Senate Local Government Committee, with this committee being the committee of first referral. Elements of this bill under the jurisdiction of the Senate Local Government Committee are included here for context and completeness only and will be discussed before that Committee.

Having a full picture of water usage is essential to understanding water availability. This bill requires data centers, when applying for a business license, to provide its water supplier and the appropriate city or county with an estimate of its expected water use, and when renewing a business license to report its annual water use. As acknowledged in the letter from Data Center Coalition, Silicon Valley Leadership Group, and TechNet, the “servers, IT equipment and other hardware housed in a data center generate a significant amount of heat;” and that heat needs to be dissipated. As such data centers have the potential to use tremendous amounts of water in order to keep its equipment cool. During a time when water supply is limited, it is important for water suppliers and local jurisdictions to know how this finite resource is being used.

Definitions for types of data centers could use more clarity. AB 93 defines three types of data centers based on the amount of kilograms per square meter and power consumption. However, it is unclear to what “kilograms per square meter” is referencing. Is it the weight of the data center? The weight of the servers within the data center? An output metric based on size of the facility? A consumption metric based on size of the facility? Additionally, for “type II data centers,” is the intent that it is a data center that is between 2,000 and 50,000 kilograms per square meter? Or does the “2,000” refer to another measurement metric, such as the number of servers? A similar question is raised for “type III data centers.” According to the author, the “kilograms per square meter” is the weight of the data center and it is intended that, for type II data centers, the data center is between 2,000 and 50,000 kilograms per square meter. The author may wish to amend these definitions to provide more clarity and the metrics used to define the different types should be consistent across them.

Anticipated author’s amendments. The author’s office has indicated that she intends to further amend the bill to address some of the concerns held by the opposition. The amendments would include removing the requirement to include certain data center information in the cost-of-service analysis (Section 4 of the bill) and amending the definition of “data center” (Sections 2 and 3 of the bill). The committee may wish to require the author to work with committee staff when developing these amendments and reserve the right to bring the bill back to committee for another hearing should those amendments raise any concerns within the committee’s jurisdiction.

Related legislation

AB 222 (Bauer-Kahan), of the current legislative session, requires publication of energy use associated with the development and use of artificial intelligence, requires the CEC to track energy usage of data centers in the state, and tasks the California Public Utilities Commission to minimize utility costs related to data center development. This bill is pending before the Senate Energy, Utilities, and Communications Committee.

AB 755 (Papan, Chapter 542, Statutes of 2023) requires a public entity to conduct a water usage demand analysis, before completing, or as part of, a cost-of-service analysis conducted to set fees and charges for water service.

SUPPORT

350 Bay Area Action
California Coastkeeper Alliance
Center for Environmental Health
Clean Water Action
Climate Reality Project Bay Area Chapter
Climate Reality Project San Diego
Climate Reality Project San Fernando Valley Chapter
Climate Reality Project, Los Angeles Chapter
Climate Reality Project, Orange County
Community Water Center
County of Los Angeles Board of Supervisors
Humboldt Waterkeeper
Inland Empire Waterkeeper
Leadership Counsel Action
Los Angeles Waterkeeper
Monterey Waterkeeper
Orange County Coastkeeper
Russian Riverkeeper
San Diego Coastkeeper
Santa Barbara Channelkeeper
Shasta Waterkeeper
South Yuba River Citizens League (SYRCL)
The Otter Project
Water Climate Trust
Yuba River Waterkeeper

OPPOSITION

Association of California Water Agencies (unless amended)

Data Center Coalition
Silicon Valley Leadership Group
TechNet

-- END --

1. Md Abu Bakar Siddik, Arman Shehabi, and Landon Marston, “The Environmental Footprint of Data Centers in the United States,” Environmental Research Letters, 16 (2021). ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 93

Author:(Papan)

As Amended Ver:May 5, 2025

Majority vote

SUMMARY

Establishes requirements for data centers, cities and counties, state agencies, and urban water suppliers to report water use by data centers and require data centers to use water efficiently.

Major Provisions

1. Requires a person who owns or operates a data center to provide, under penalty of perjury, their water supplier with an estimate of the data center's expected water use prior to applying to a city or county for an initial business license or permit.
2. Requires a person who owns or operates a data center to self-certify, under penalty of perjury, that they have provided their water supplier with an estimate of the data center's expected water use when applying to a city or county for an initial business license or permit.
3. Requires a person who owns or operates a data center to self-certify, under penalty of perjury, a report of annual water use on a renewal application when applying to a city or county for a renewal of a business license or permit.
4. Requires, by January 1, 2028, the Department of Water Resources (DWR) and the State Energy Resources Conservation and Development Commission (Energy Commission) to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives, as specified, and the Energy Star Program of the United States Environmental Protection Agency, as that program existed on January 1, 2025, to the extent that the Energy Star Program is applicable to water usage.
5. Requires a public entity to identify the average volume of water delivered to data centers when conducting a cost-of-service analysis to set fees and charges for water service.

COMMENTS

Data centers are buildings or facilities that "support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances" (Bakar Siddik, Shehabi, and Marston, 2021). There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as artificial intelligence (AI) and other technologies are being deployed.

Water use by data centers falls under the commercial, industrial, and institutional (CII) classification, but is not calculated under the urban water use objective ("Making Conservation A Way of Life") intended to increase water use efficiency in California's urban areas. However, as required by the legislative package to enact "Making Conservation a Way of Life," DWR conducted a study (completed in 2022) on CII use and recommended performance measures to the State Water Resources Control Board (State Water Board) that would improve water use efficiency in the CII sector. The State Water Board included some of the recommendations from the DWR report in the final urban water use regulation adopted in 2024, but none of the recommendations or regulatory provisions specifically address water use by data centers.

Existing statutes dating back to 1901 have empowered both counties and cities to license businesses for the purpose of regulation. The California Constitution allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws," known as police powers. It is from this fundamental police power that local governments derive their authority to regulate behaviors, business operations, and land uses. Under this authority, local governments are able to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. Local governments license businesses for a lot of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

This bill requires a cost-of-service analysis to identify the water use of data centers. Retail water agencies conduct a cost-of-service analysis to establish or raise water rates and comply with Proposition 218. Proposition 218 added Article XIII D to the California Constitution, which imposed voter approval requirements for most "property-related fees:" any levy other than an ad valorem tax, a special tax, or an assessment imposed by an agency on a parcel or on a person as an incident of property ownership, including a user fee or charge for a property-related service. Proposition 218 prescribes a procedure that local agencies must follow before imposing new or raising existing property-related fees, provides that fees or charges for property related services cannot exceed the proportional cost of providing service to the parcel, and requires that fees be used only for the purposes for which they were collected.

According to the Author

"As technology has evolved into the new frontier of [AI], the demand for data centers has exploded, and with it, increased competition over our most precious natural resources.  Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California's needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood.  [This bill] is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion."

Arguments in Support

According to a coalition of supporters, including the California Coastkeeper Alliance, "As we witness the rapid growth of [AI] and other technologies that rely heavily on data storage and processing, the demand for data centers has exploded. This increase in demand has created heightened competition for our most valuable natural resources, such as energy and water. The average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to five million gallons per day – enough to supply water to hundreds of thousands of homes. [This bill] is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy.

Arguments in Opposition

According to the Data Center Coalition, "Given the nuance required in selecting an appropriate cooling solution, we are concerned about proposed requirements as a condition for obtaining or renewing a business license that may be overly restrictive or impossible to achieve. Such requirements could be prohibitive given the complexity involved in retrofitting existing infrastructure and substantial modifications required for existing plumbing, piping, and rack configurations.... Data centers fuel economic growth, supporting jobs in technology, construction, engineering, and maintenance. Data centers also attract investment from cloud providers, AI developers, and enterprise [information technology], strengthening California's digital economy. [This bill] risks stifling job creation and innovation by discouraging data center expansion."

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1) DWR estimates one-time consulting costs of approximately $1.3 million followed by $400,000 in ongoing annual costs to hire one environmental scientist specialist. Tasks include consulting with technical experts, public engagement, research, and reporting (General Fund).

2) The Energy Commission estimates costs of at least $226,000 annually for the three years (to hire two civil or mechanical engineers to develop the guidelines and best practices) and $113,000 ongoing annually thereafter (for one position to maintain and update the published materials). The Energy Commission notes its estimate is based on comparable workload associated with the promulgation of building or appliance energy or water efficiency standards. Costs would likely be borne by the Energy Resources Programs Account, which is in a structural deficit.

VOTES

ASM WATER, PARKS, AND WILDLIFE: 10-1-2

YES: Papan, Alvarez, Ávila Farías, Bennett, Boerner, Caloza, Hart, Macedo, Celeste Rodriguez, Rogers

NO: Tangipa

ABS, ABST OR NV: Jeff Gonzalez, Bains

ASM LOCAL GOVERNMENT: 8-1-1

YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson

NO: Hoover

ABS, ABST OR NV: Ta

ASM APPROPRIATIONS: 11-2-2

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Tangipa

ABS, ABST OR NV: Sanchez, Ta

UPDATED

VERSION: May 5, 2025

CONSULTANT: Pablo Garza / W., P., & W. / (916) 319-2096 FN: 0000659

Date of Hearing: May 14, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 93

Author:(Papan) – As Amended Ver:May 5, 2025

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires a data center owner or operator to report on water use as a condition for obtaining or renewing a business license, requires the Department of Water Resources (DWR) and the California Energy Commission (CEC) to develop specified guidelines and best practices, and requires a public entity, within its water usage demand analysis, to identify the average volume of water delivered to data centers.

Specifically, this bill, among other things:

1) Requires a person who owns or operates a data center, prior to applying to a city or county for an initial business license, equivalent instrument, or permit, to provide its water supplier, under penalty of perjury, an estimate of the expected water use.

2) Requires a person who owns or operates a data center, when applying to a city or county for an initial business license, equivalent instrument, or permit, a to self-certify, under penalty of perjury, on the application, that they have provided its water supplier an estimate of the expected water use.

3) Requires a person who owns or operates a data center, when applying to a city or county for a renewal of a business license, equivalent instrument, or permit, to self-certify, under penalty of perjury, on the renewal application, a report of annual water use.

4) Requires a person who owns or operates a data center, as a condition for obtaining or renewing a business license, to self-certify that it will meet efficiency guidelines and best practices, as specified.

5) Requires a public entity, within its water usage demand analysis, to additionally identify the average volume of water delivered to data centers, as specified.

6) Requires DWR and CEC, by January 1, 2028, to develop guidelines and best practices, as specified, to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives and the Energy Star Program of the United States Environmental Protection Agency, as that program existed on January 1, 2025, to the extent that the Energy Star Program is applicable to water usage.

7) Declares it is the intent of the Legislature that data centers are considered commercial, industrial, and institutional (CII) users under the state’s “Making Conservation a California Way of Life” regulation, as specified.

FISCAL EFFECT:

DWR and CEC will incur costs for at least three years (until January 1, 2028), likely in the hundreds of thousands of dollars each, to develop the required guidelines and best practices. It is possible DWR and CEC will incur some ongoing annual costs after 2028 to maintain and update the guidelines given the rapid growth of data centers, increasing demand for cloud computing and artificial intelligence (AI), and related emerging and evolving issues.

1) DWR estimates one-time consulting costs of approximately $1.3 million followed by $400,000 in ongoing annual costs to hire one environmental scientist specialist. Tasks include consulting with technical experts, public engagement, research, and reporting (General Fund).

2) CEC estimates costs of at least $226,000 annually for the three years (to hire two civil or mechanical engineers to develop the guidelines and best practices) and $113,000 ongoing annually thereafter (for one position to maintain and update the published materials). CEC notes its estimate is based on comparable workload associated with the promulgation of building or appliance energy or water efficiency standards. Costs would likely be borne by the Energy Resources Programs Account, which is in a structural deficit.

COMMENTS:

1) Purpose. According to the author:

As technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it, increased competition over our most precious natural resources. Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood. [This bill] is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.

2) Background. Data Centers. This bill defines a “data center” as a facility that houses computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems, for the primary purpose of processing, storing, or distributing electronic data. There is growing awareness of the energy and water demands associated with data centers as AI and other technologies are increasingly deployed across the world. According to a coalition of organizations in support of this bill, the average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to five million gallons per day – enough to supply water to hundreds of thousands of homes. The coalition writes: “Without strategic oversight, unchecked expansion of data centers could place unsustainable pressure on local resources and infrastructure.”

Business Licenses. Almost every city and county in California requires that a business have a general license to operate within its jurisdiction. This bill requires a data center to provide information regarding its water use when applying for or renewing a business license with a city or county.

Proposition 218. Enacted in November 1996, Proposition 218 amended the California Constitution by placing restrictions on how a local agency use fees, charges, or special assessments (“property-related services”) to cover the cost of providing services, including for water service. In order to assess a fee, a water agency must ensure it meets specific standards under Proposition 218. To comply with Proposition 218, a water agency must undertake a detailed cost study to establish the basis upon which the amount of a proposed fee or charge is calculated, and notify customers of and hold a public hearing on the proposed fee or charge. If a majority of the property owners that will be subject to the proposed fee or charge protest the fee or charge, a local agency may not impose the fee or charge. This bill requires a cost-of-service analysis to identify the water use of data centers.

Writing in opposition to this bill, the Data Center Coalition (DCC) argues this bill imposes “additional and disparate reporting and efficiency requirements on data centers.” DCC contends data centers “fuel economic growth, supporting jobs in technology, construction, engineering, and maintenance…AB 93 risks stifling job creation and innovation by discouraging data center expansion.”

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 30, 2025

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 93 (

Author:Papan) – As Amended Ver:April 10, 2025

SUBJECT: Water resources: demands: data centers.

SUMMARY: Establishes requirements for data centers, cities and counties, state agencies, and urban water suppliers to report water use by data centers and require data centers to use water efficiently. Specifically, this bill:

1. Defines the following terms:
   1. “Data center” to mean a facility that houses computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems, for the primary purpose of processing, storing, or distributing electronic data. Types of data centers include the following:
      1. “Type I data center,” also commonly known as a “hyperscale data center,” means a data center with more than 10,000 kilograms per square meter and more than 10,000 servers with a power consumption of more than 25 megawatts.
      2. “Type II data center,” means a data center with at least 2,000 and no more than 50,000 kilograms per square meter and a power consumption of a least two megawatts and no more than 25 megawatts.
      3. “Type III data center,” means a data center with at least 500 and no more than 5,000 kilograms per square meter and a power consumption of less than two megawatts.
   2. “Local jurisdiction” to mean a city, county, or other political subdivision within the state that issues business licenses.
2. Requires a person who owns or operates a data center, when applying to a city or county for an initial business license, equivalent instrument, or permit, to provide, under penalty of perjury, on the application, an estimate of the expected water use.
3. Specifies that when applying to a city or county for a renewal of a business license, equivalent instrument, or permit, a person who owns or operates a data center shall provide, under penalty of perjury, on the renewal application, a report of annual water use.
4. Provides that a city or county shall require a data center operating within its jurisdiction, as a condition for obtaining or renewing a business license, to meet efficiency standards as determined by the local jurisdiction. These efficiency standards may include, but not be limited to, the use of closed-loop systems, the use of nonpotable water, and the installation of rainwater and stormwater capture infrastructure. These efficiency standards may also be more stringent for a hyperscale data center than a Type II data center, whose applicable standards may be more stringent than a Type III data center.
5. Requires, on or before January 1, 2028, the Department of Water Resources (DWR) and the State Energy Resources Conservation and Development Commission to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives, as specified, and the Energy Star Program of the United State Environmental Protection Agency, as that program existed on January 1, 2025, to the extent that the Energy Star Program is applicable to water usage.
6. Specifies that, as part of a water usage demand analysis, a public entity shall identify the average volume of water delivered to data centers, as defined.
7. Finds and declares that water conservation is a matter of statewide concern and is not a municipal affair. Therefore, this bill applies to all cities, including charter cities.
8. Provides that no reimbursement is required by this bill for certain costs that may be incurred by a local agency or school district to the extent that:
   1. This bill creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, or changes the definition of a crime.
   2. A local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for a program or level of service mandated by this bill.
9. Specifies that if the Commission on State Mandates determines that this bill contains other costs mandated by the state, reimbursement to local agencies and school district for those costs shall be made.

EXISTING LAW:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions and to set license fees, as specified (Business and Professions Code §§ 16000, 16100).
2. Establishes the California Energy Commission with various responsibilities with respect to developing and implementing the state’s energy policies (Public Resources Code § 25000 et seq.).
3. Establishes the State Water Board to provide for the orderly and efficient administration of the state’s water resources (Water Code § 174 et seq.).
4. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal (Water Code §§ 10608.16, 10608.20).
5. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities (Water Code § 10608.12).
6. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target [Water Code § 10608.24(e)].
7. Requires the DWR, in coordination with the State Water Board, to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board shall adopt performance measures for CII water use based on these recommendations by June 30, 2022 (Water Code § 10609.10).
8. Requires urban water suppliers to identify the costs of water service for the highest users and the average annual volume of water delivered to high water users when conducting a cost-of-service analysis used to set fees and charges for water service (Water Code § 390).

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Bill Summary. This bill requires a person who owns or operates a data center, when applying to a city or county for an initial business license, equivalent instrument, or permit, to provide, under penalty of perjury, on the application, an estimate of the expected water use. If the data center is applying for a renewal of a business license, equivalent instrument, or permit, the data center must provide, under penalty of perjury, a report of annual water use. This bill also requires a city or county to require a data center, as a condition of obtaining or renewing a business license, to meet certain efficiency standards determined by the local jurisdiction.

This bill requires, on or before January 1, 2028, DWR and the State Energy Resources Conservation and Development Commission to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology that are consistent with urban water use objectives and the Energy Star Program, as that program existed on January 1, 2025, as applicable. Lastly, this bill requires certain public entities to identify the average volume of water delivered to data centers in their water usage demand analysis required by existing law.

The author is the sponsor of this bill.

1. Author’s Statement. According to the author, “As technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it, increased competition over our most precious natural resources.  Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood.  AB 93 is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”
2. Data Centers. Data centers are buildings or facilities that “support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances.”^[1] There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.
3. Business Licenses. Existing statutes dating back to 1901 have empowered both counties and cities to license businesses for the purpose of regulation. The California Constitution allows a city or county to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws,” known as police powers. It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this “police power” to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law allows local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. Local governments license businesses for a lot of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

Business license application and renewal processes vary throughout the state. Some cities use an “over-the-counter” ministerial process when issuing business licenses. While most cities and counties require businesses to operate under a business license, some cities and counties do not issue business licenses at all, including San Diego County. Some cities, like San Diego, issue business tax certificates rather than business licenses. In these jurisdictions, once businesses pay an annual tax for the benefit of operating in the city, the city issues the certificate.

1. Urban Water Use Objective. Following the 2012-16 drought, the Governor and Legislature negotiated a two-bill package known as “Making Conservation a Way of Life” [SB 606 (Hertzberg), Chapter 14, Statutes of 2018 and AB 1668 (Friedman), Chapter 15, Statutes of 2018] to establish a new foundation for long-term improvements in water conservation and drought planning to adapt to climate change. These two bills provided expanded and new authorities and requirements to enable permanent changes and actions to drive more efficient water use and better prepare the state for future droughts. A major aspect of “Making Conservation a Way of Life” are requirements for urban water agencies to improve water use efficiency via the urban water use objective. The urban water use objective is the sum of: (1) indoor residential water use; (2) outdoor residential water use; (3) outdoor CII use associated with dedicated irrigation meters (DIM); (4) water losses; (5) variances, if applicable; and (6) bonus incentives for recycled water, if applicable.
2. CII study. According to the Water, Parks and Wildlife Committee analysis of this bill, water use by data centers falls under the CII classification; however, except for a portion of outdoor landscape water use associated with CII water users, CII water use is not part of the urban water use objective. Instead, the Making Conservation a Way of Life package tasked DWR to conduct a study on CII use and recommend performance measures to the State Water Board that would improve water use efficiency in the CII sector. DWR completed this study in September 2022. The study’s recommendations for CII water use include, among others, the following:
   1. Require urban retail water suppliers to classify all CII water users into one of 19 categories (data centers are explicitly identified as belonging to the “manufacturing” category) within five years. The final regulation requires urban retail water suppliers to classify CII users by June 30, 2027 in accordance with ENERGY STAR Portfolio Manager’s broad categories;
   2. Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users (top 20% by volume) that focuses on: (1) outreach, technical assistance, and education; (2) incentives; (3) landscape irrigation and management practices; (4) operational practice updates; and (5) collaboration and coordination. Interestingly, the report specifically excludes “process water” (and, therefore, data centers) from the CII-BMP implementation program recommendation because “process water” was exempted from the 20x2020 target. The final regulation requires urban retail water suppliers to design a conservation program by June 30, 2029 that targets inefficient CII users and incorporates at least two of the recommended BMPs.
   3. Provide an alternative pathway for urban retail water suppliers that already have long-standing CII-BMP implementation programs. The final regulation does not appear to address this recommendation; however, presumably an urban retail water supplier with an existing program will already be in compliance with requirements to develop a conservation program by June 30, 2029; and
   4. Adopt a conversion threshold of one acre of landscape area irrigated by a mixed use meter on a per-parcel basis for converting to a DIM (this allows for suppliers to better estimate outdoor landscape use in the CII sector). The final regulation requires urban retail water suppliers to identify CII water users with large landscape areas and, either install DIMs, or calculate a water budget for such users, and then provide BMPs to these users.
3. Proposition 218. The California Constitution requires voter approval for taxes and many other fees and charges. Proposition 218 (1996) added Article XIIID to the California Constitution, which imposed voter approval requirements for most “property-related fees”—any levy other than an ad valorem tax, a special tax, or an assessment imposed by an agency on a parcel or on a person as an incident of property ownership, including a user fee or charge for a property-related service.

Before a local government can charge a new property-related fee, or increase an existing one, Proposition 218 requires local officials to:

• 1. Identify the parcels to be charged.
  2. Calculate the fee for each parcel.
  3. Notify the parcels’ owners in writing about the fees and the hearing.
  4. Hold a public hearing to consider and count protests.
  5. Abandon the fees if a majority of the parcels’ owners protest.

New, increased, or extended property-related fees generally require voter approval by one of the following: a majority-vote of the affected property owners; two-thirds registered voter approval; or weighted ballot approval by the affected property owners.

Fees or charges for property related services cannot exceed the proportional cost of providing service to the parcel and must be used only for the purposes for which they were collected. Property-related fees must also only fund services actually used by or immediately available to the property owner, not based on potential or future use. Finally, Proposition 218 prohibits local governments from imposing property-related fees or charges for general governmental services—including fire, police, ambulance, or library services—if the service is available to the public at large in substantially the same manner as it is to property owners.

Water, sewer, and refuse collection services are exempt from Proposition 218’s voter approval requirements, but must meet all other procedural and substantive requirements in Proposition 218, including the requirement to hold a protest hearing not less than 45 days after mailing a notice of new or increased rates to affected property owners. If a majority protest the fee, based on the proportional obligation of the affected property, then the local agency cannot impose the fee.

1. AB 755 of 2023. AB 755 (Papan), Chapter 542, Statutes of 2023, required a public entity to conduct a "water usage demand analysis" before completing, or as part of, a cost-of-service analysis used to set fees and charges for water service pursuant to Proposition 218. The analysis must identify the following:
   1. The costs of water service for the highest water users.
   2. The average annual volume of water delivered to high water users.

The costs of water service and the average annual volume identified in the analysis must also be made publicly available by posting the information in the public entity’s cost-of-service analysis.

1. Policy Considerations. The Committee may wish to consider the following:
   1. Efficiency Standards. This bill requires a local jurisdiction to determine efficiency standards for data centers to meet. First, it is not clear what local jurisdiction would create the efficiency standards as “local jurisdiction” is defined in this bill as a city, county, or other political subdivision. Would it be the city or county issuing a business license or some other jurisdiction like a water provider that is a special district? Many cities and counties do not provide retail water service to their residents. Often, water service is provided by a separate special district, like a water district, or a private or mutual water company.

Second, if the intent is to have the city or county that issues the business license create the efficiency standards, would that city or county be equipped to determine those standards if they are not in the business of providing water?

Third, requiring each city or county to create their own efficiency standards could lead to differing criteria in each city or county, possibly making it difficult for data centers to comply with the requirements. Also, could this create a race-to-the-bottom scenario where standards are purposefully lessened in order to attract data centers to a given area? Given these questions, the Committee may wish to consider if consistent, statewide standards are more appropriate.

• 1. Determinations. Most cities and counties issue business licenses or an equivalent instrument; however, not all cities and counties are water providers. Presumably, in order to determine if a data center is meeting the established efficiency standards, the city or county would be required to conduct some type of inspection. If a business license is issued in a ministerial manner, does that process allow for the type of inspection that may be needed to determine if a data center has met the required standards? In addition, are those cities and counties that do not provide water service in the best position to determine if the efficiency standards are being met? The Committee may wish to consider if the process of issuing business licenses is the best opportunity to conclude whether or not data centers are complying with the requirements in this bill.

1. Committee Amendments. In order to respond to the policy considerations above, the Committee may wish to consider the following amendments:
   1. Add intent language that states: It is the intent of the Legislature that data centers are considered commercial, industrial and institutional users under the state’s Making Conservation a Way of Life legislation, consistent with the urban water use objectives under Chapter 9 (commencing with Section 10609) of Part 2.55 of Division 6.
   2. Specify that a data center must provide its water supplier, under penalty of perjury, information related to estimated water use prior to applying to a city or county for an initial business license.
   3. Provide that, when applying to a city or county for an initial business license, a data center shall self-certify, under penalty of perjury, on the application, that they have provided its water supplier an estimate of the expected water use.
   4. Specify that, when applying to a city or county for a renewal of a business license, a data center shall self-certify, under penalty of perjury, on the renewal application, a report of annual water use for the prior period.
   5. Specify that, as a condition for obtaining or renewing a business license, a data center must self-certify that they will meet the efficiency guidelines and best practices as determined by the State.
   6. Remove requirement for cities and counties to require a data center to meet efficiency standards that are determined by a local jurisdiction.
   7. Add clarity to what information must be included in the guidelines and best practices developed by the State.
2. Arguments in Support. According to a coalition of supporters, including the California Coastkeeper Alliance, “As we witness the rapid growth of Artificial Intelligence and other technologies that rely heavily on data storage and processing, the demand for data centers has exploded. This increase in demand has created heightened competition for our most valuable natural resources, such as energy and water. The average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to 5 million gallons per day – enough to supply water to hundreds of thousands of homes. AB 93 is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy.

“The bill appropriately empowers local authorities to impose efficiency standards, enabling regions to tailor regulations based on their unique needs and circumstances. At the same time, it ensures that public utilities have the tools to accurately assess the broader impact of data centers on the overall system, promoting greater sustainability and accountability within the sector.

“Without strategic oversight, unchecked expansion of data centers could place unsustainable pressure on local resources and infrastructure. AB 93 strikes the right balance between facilitating growth and ensuring responsible resource management.”

1. Arguments in Opposition. According to the Data Center Coalition, “Given the nuance required in selecting an appropriate cooling solution, we are concerned about proposed requirements as a condition for obtaining or renewing a business license that may be overly restrictive or impossible to achieve. Such requirements could be prohibitive given the complexity involved in retrofitting existing infrastructure and substantial modifications required for existing plumbing, piping, and rack configurations.
   
   “Rather than imposing disparate reporting and efficiency requirements solely on data centers, a more equitable approach would acknowledge the significant water consumption across diverse industries, including agriculture, manufacturing, mining, and construction. Data center operators are actively prioritizing water efficiency through operational best practices and innovative development strategies, often collaborating with local authorities and conservation organizations on water restoration and reclamation projects. A December 2024 report by Virginia’s Joint Legislative Audit & Review Commission (JLARC) substantiates this commitment. The report confirmed that in Virginia, home to the world’s largest data center market, data center water usage is currently sustainable, and the state ensures future sustainability through regulation. The report also noted that in 2023, 83% of data centers in Virginia used the same amount of water (or less) than the average large office building.”

“...Data centers fuel economic growth, supporting jobs in technology, construction, engineering, and maintenance. Data centers also attract investment from cloud providers, AI developers, and enterprise IT, strengthening California’s digital economy. AB 93 risks stifling job creation and innovation by discouraging data center expansion.

1. Related legislation. AB 222 (Bauer-Kahan) requires developers of artificial intelligence (AI) models to estimate energy use associated with using the AI model, requires data centers to report energy use to the California Energy Commission, and requires the California Energy Commission to adopt efficiency standards for data centers. AB 222 is pending in the Assembly Privacy and Consumer Protections Committee.
   
   SB 57 (Padilla) requires the Public Utilities Commission to establish a tariff on the transmission and distribution of electricity to data centers and require that data centers use 100% zero-carbon energy by January 1, 2030. SB 57 is currently pending in the Senate Appropriations Committee.
   
   SB 58 (Padilla) provides a partial state sales tax exemption on the purchase of “data center equipment” for data centers that meet specified certification requirements including using 70% carbon free energy, using a skilled and trained workforce, and creating at least 20 jobs. SB 58 is currently pending in the Senate Revenue and Taxation Committee.
   
   SB 327 (McNerney) requires the California Energy Commission to initiate and agreement with the U.S. Department of Energy to establish a fusion energy data center in California that meets specified requirements. SB 327 is currently pending in the Senate Energy, Utilities, and Communications Committee.
2. Previous Legislation. AB 755 (Papan), Chapter 542, Statutes of 2023, required an urban water supplier to conduct a “water usage demand analysis” before completing, or as part of, a cost-of-service analysis used to set fees and charges for water service pursuant to Proposition 218. Requires the water usage demand analysis to identify the costs of water service for the highest users incurred by the urban water supplier and the average annual volume of water delivered to high water users.
3. Double-Referral. This bill was double-referred to the Assembly Water, Parks, and Wildlife Committee, where it passed on 10-1 vote on April 8, 2025.

REGISTERED SUPPORT / OPPOSITION:

Support

California Coastkeeper Alliance

Center for Environmental Health

Clean Water Action

Climate Reality Project, Bay Area Chapter

Climate Reality Project, San Diego

Climate Reality Project, San Fernando Valley Chapter

Climate Reality Project, Los Angeles Chapter

Climate Reality Project, Orange County

Community Water Center

Humboldt Waterkeeper

Inland Empire Waterkeeper

Leadership Counsel Action

Los Angeles Waterkeeper

Monterey Waterkeeper

Orange County Waterkeeper

Russian Riverkeeper

San Diego Coastkeeper

Santa Barbara Channelkeeper

Shasta Waterkeeper

South Yuba River Citizens League

The Otter Project

Water Climate rust

Yuba River Waterkeeper

Opposition

Data Center Coalition

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958

1. Md Abu Bakar Siddik, Arman Shehabi, and Landon Marston, “The Environmental Footprint of Data Centers in the United States,” Environmental Research Letters, 16 (2021). ↑

Date of Hearing: April 8, 2025

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Diane Papan, Chair

ABPCA Bill Id:AB 93 (

Author:Papan) – As Amended Ver:March 24, 2025

SUBJECT: Water resources: demands: data centers

SUMMARY: Establishes requirements for business licenses, cities and counties, state agencies, and urban water suppliers to report water use by data centers and require data centers to use water efficiently. Specifically, this bill:

1. Requires an owner or operator of a data center to estimate its expected water use, under penalty of perjury, on the initial application for a business license from a city or county.
2. Requires an owner or operator of a data center to provide, under penalty of perjury, a report of its annual water use on the application for a business license renewal from a city or county.
3. Provides that cities and counties shall require data centers operating within their respective jurisdictions to meet efficiency standards as a condition of obtaining or renewing a business license. The efficiency standards may include specified requirements and be more stringent for a hyperscale data center than a Type II data center, whose efficiency standards may be more stringent that a Type III data center.
4. Requires the State Water Resources Control Board (State Water Board) and State Energy Resources Conservation and Development Commission (California Energy Commission) to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with the Urban Water Use Objective and U.S. Environmental Protection Agency’s Energy Star program, as it existed on January 1, 2025.
5. Requires a public entity to identify the average volume of water delivered to data centers when conducting a cost-of-service analysis to set fees and charges for water service.
6. Defines “data center” as a facility that houses computing infrastructure for the primary purpose of processing, storing, or distributing electronic data. Further defines the following types of data centers:
   1. “Type I data center” or “hyperscale data center” as a data center with more than 10,000 kilograms per square meter and more than 10,000 servers with a power consumption of more than 25 megawatts;
   2. “Type II data center” as a data center with at least 2,000 and no more than 50,000 kilograms per square meter and a power consumption between 2 megawatts and 25 megawatts; and
   3. “Type III data center” as a data center with at least 500 and no more than 5,000 kilograms per square meter and a power consumption of less than 2 megawatts.
7. Defines “local jurisdiction” as a city, county, or other political division in California that issues business licenses.
8. Finds that water conservation is a matter of statewide importance and not a municipal affair for purposes of consistency with the State Constitution.
9. Finds that this bill does not require the state to reimburse local agencies for implementing this bill as local agencies have funding mechanisms available to them.

EXISTING LAW:

1. Authorizes the legislative body of an incorporated city or a county board of supervisors to license businesses within their respective jurisdictions and to set license fees, as specified (Business and Professions Code §§ 16000, 16100).
2. Establishes the California Energy Commission with various responsibilities with respect to developing and implementing the state’s energy policies (Public Resources Code § 25000 et seq.).
3. Establishes the State Water Board to provide for the orderly and efficient administration of the state’s water resources (Water Code § 174 et seq.).
4. Requires the state to achieve a 20% reduction in urban per capita water use by December 31, 2020 (20x2020 target) and requires each urban retail water supplier to establish their own target to contribute towards achieving the statewide 20% reduction goal (Water Code §§ 10608.16, 10608.20).
5. Defines “process water” as water used by industrial users to produce a product or product content or water used for research and development. Includes water used for cooling in buildings used in the manufacturing process, control rooms, data centers, laboratories, clean rooms, and other industrial facilities (Water Code § 10608.12).
6. Permits an urban retail water supplier that has a substantial percentage of industrial water use in its service territory to exclude “process water” from its calculation of its urban water use target to meet the 20x2020 target [Water Code § 10608.24(e)].
7. Requires the Department of Water Resources (DWR), in coordination with the State Water Board, to conduct studies and investigations to develop recommendations for efficient water use by commercial, industrial, and institutional (CII) water users by October 1, 2021. The State Water Board shall adopt performance measures for CII water use based on these recommendations by June 30, 2022 (Water Code § 10609.10).
8. Requires urban water suppliers to identify the costs of water service for the highest users and the average annual volume of water delivered to high water users when conducting a cost-of-service analysis used to set fees and charges for water service (Water Code § 390).

FISCAL EFFECT: Unknown. This bill is keyed fiscal.

COMMENTS:

1. Purpose of this bill. According to the author, “As technology has evolved into the new frontier of Artificial Intelligence, the demand for data centers has exploded, and with it,increased competition over our most precious natural resources.  Even with recent developments in water efficiency, data centers use a considerable amount of water. Since data centers prioritize cheap energy sources and proximity to customers, many data centers are being developed in water stressed areas. As California’s needs for data processing grows, a better understanding of the ratepayer impacts and environmental tradeoffs must be understood.  [This bill] is a pragmatic solution that carefully considers a delicate balance of resource demand, local resources constraints, and revenue benefits of data center expansion.”
2. Background. Data centers are buildings or facilities that “support servers, digital storage equipment, and network infrastructure for the purpose of large-scale data processing and data storage. Increasing demand for data creation, processing, and storage from existing and emerging technologies, such as online platforms/social media, video streaming, smart and connected infrastructure, autonomous vehicles, and artificial intelligence, has led to exponential growth in data center workloads and compute instances.”^[1] There is increasing awareness of the energy and water demands (primarily related to cooling) associated with data centers as AI and other technologies are being deployed.
   
   Business licenses. Almost every city and county in California requires that businesses have a general license to operate within their respective jurisdictions. The requirements to obtain a business license vary by jurisdiction, but typically require payment of a fee and registration of the business’s name [i.e., “doing business as” ]. This bill requires data centers to provide information regarding their water use when applying for or renewing a business license with a city or county.
   
   Urban water use objective. Following the 2012-16 drought, the Governor and Legislature negotiated a two-bill package known as “Making Conservation a Way of Life” [SB 606 (Hertzberg) and AB 1668 (Friedman)] to establish a new foundation for long-term improvements in water conservation and drought planning to adapt to climate change. These two bills provided expanded and new authorities and requirements to enable permanent changes and actions to drive more efficient water use and better prepare the state for future droughts. A major aspect of “Making Conservation a Way of Life” are requirements for urban water agencies to improve water use efficiency via the urban water use objective. The urban water use objective is the sum of: (1) indoor residential water use; (2) outdoor residential water use; (3) outdoor CII use associated with dedicated irrigation meters (DIM); (4) water losses; (5) variances, if applicable; and (6) bonus incentives for recycled water, if applicable.
   
   CII study. Water use by data centers falls under the CII classification; however, except for a portion of outdoor landscape water use associated with CII water users, CII water use is not part of the urban water use objective. Instead, the Making Conservation a Way of Life package tasked DWR conduct a study on CII use and recommend performance measures to the State Water Board that would improve water use efficiency in the CII sector. DWR completed this study in September 2022. The study’s recommendations for CII water use include, among others, the following:

• Require urban retail water suppliers to classify all CII water users into one of 19 categories (data centers are explicitly identified as belonging to the “manufacturing” category) within five years. The final regulation requires urban retail water suppliers to classify CII users by June 30, 2027 in accordance with ENERGY STAR Portfolio Manager’s broad categories;
• Require urban retail water suppliers to develop a CII-Best Management Practices (BMP) implementation program targeting the highest CII water users (top 20% by volume) that focuses on: (1) outreach, technical assistance, and education; (2) incentives; (3) landscape irrigation and management practices; (4) operational practice updates; and (5) collaboration and coordination. Interestingly, the report specifically excludes “process water” (and, therefore, data centers) from the CII-BMP implementation program recommendation because “process water” was exempted from the 20x2020 target. The final regulation requires urban retail water suppliers to design a conservation program by June 30, 2029 that targets inefficient CII users and incorporates at least two of the recommended BMPs.
• Provide an alternative pathway for urban retail water suppliers that already have long-standing CII-BMP implementation programs. The final regulation does not appear to address this recommendation; however, presumably an urban retail water supplier with an existing program will already be in compliance with requirements to develop a conservation program by June 30, 2029; and
• Adopt a conversion threshold of one acre of landscape area irrigated by a mixed use meter on a per-parcel basis for converting to a DIM (this allows for suppliers to better estimate outdoor landscape use in the CII sector). The final regulation requires urban retail water suppliers to identify CII water users with large landscape areas and, either install DIMs, or calculate a water budget for such users, and then provide BMPs to these users.

Proposition 218. This bill requires a cost-of-service analysis to identify the water use of data centers. Retail water agencies conduct a cost-of-service analysis to establish or raise water rates and comply with Proposition 218. Enacted in November 1996, Proposition 218 amended the California Constitution by placing restrictions on how local agencies use fees, charges, or special assessments (“property-related services”) to cover the cost of providing services, including for water service. In order to assess a fee, water agencies must ensure it meets five standards under Proposition 218: that a fee or charge (1) not exceed the cost of providing the service for which it is charged or (2) be used for any purpose other than that for which it is charged; (3) that a fee not exceed the proportional cost of providing a service to an individual property; (4) that no fee be imposed for a service unless that service is actually used by or available to a property owner; and (5) that no fee or charge may be imposed for general governmental services that are available to the public in the same manner as it is to property owners. To comply with Proposition 218, water agencies have to undertake a detailed cost study to establish the basis upon which the amount of a proposed fee or charge is calculated, notify customers of a proposed fee or charge, and hold a public hearing on the proposed fee or charge. If a majority of the property owners that will be subject to the proposed fee or charge protest the fee or charge, a local agency may not impose the fee or charge.

1. Arguments in support. The California Coastkeeper Alliance and other environmental organizations write in support of this bill stating “As we witness the rapid growth of Artificial Intelligence and other technologies that rely heavily on data storage and processing, the demand for data centers has exploded. This increase in demand has created heightened competition for our most valuable natural resources, such as energy and water. The average data center uses 300,000 gallons of water per day for cooling, with large data centers using up to 5 million gallons per day – enough to supply water to hundreds of thousands of homes. [This bill] is a practical, well-balanced solution that recognizes the need for progress while carefully considering the impact on our local communities, resources, and economy.”
2. Technical amendment. This bill requires the California Energy Commission and State Water Board to develop guidelines and best practices for energy and water use related to California’s emerging technology needs. Given that DWR has done previous studies and reports on CII water use, DWR is a more appropriate entity for this task. The following amendment will address this:

Proposed Water Code, Section 189.4.  On or before January 1, 2028, the board department and the State Energy Resources Conservation and Development Commission shall develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California that are consistent with urban water use objectives under Chapter 9 (commencing with Section 10609) of Part 2.55 of Division 6 and the Energy Star program of the United States Environmental Protection Agency, as that program existed on January 1, 2025, to the extent that the Energy Star program is applicable to water usage.

1. Dual referral. This bill is also referred to the Assembly Committee on Local Government.
2. Related legislation. AB 222 (Bauer-Kahan) of the current legislative session requires developers of artificial intelligence (AI) models to estimate energy use associated with using the AI model, requires data centers to report energy use to the California Energy Commission, and requires the California Energy Commission to adopt efficiency standards for data centers. AB 222 is pending in the Assembly Privacy and Consumer Protections Committee after passing the Assembly Utilities and Energy Committee (13–5) on April 2, 2025.
   
   SB 57 (Padilla) of the current legislative session requires the Public Utilities Commission to establish a tariff on the transmission and distribution of electricity to data centers and require that data centers use 100% zero-carbon energy by January 1, 2030. SB 57 is set for hearing in the Senate Energy, Utilities, and Communications Committee.
   
   SB 58 (Padilla) of the current legislative session provides a partial state sales tax exemption on the purchase of “data center equipment” for data centers that meet specified certification requirements including using 70% carbon free energy, using a skilled and trained workforce, and creating at least 20 jobs. SB 58 is set for hearing in the Senate Revenue and Taxation Committee.
   
   SB 327 (McNerney) of the current legislative session requires the California Energy Commission to initiate and agreement with the U.S. Department of Energy to establish a fusion energy data center in California that meets specified requirements. SB 327 is pending in the Senate Energy, Utilities, and Communications Committee.
   
   SB 1298 (Cortese) of 2024 would have authorized the California Energy Commission to exempt from certification a thermal power plant with generating capacity of up to 150 megawatts that is to be used solely as a backup generation facility for a data center, if certain conditions are met. SB 1298 was held on the Assembly Floor.
   
   AB 755 (Papan), Chapter 542, Statutes of 2023, requires an urban water supplier to conduct a “water usage demand analysis” before completing, or as part of, a cost-of-service analysis used to set fees and charges for water service pursuant to Proposition 218. Requires the water usage demand analysis to identify the costs of water service for the highest users incurred by the urban water supplier and the average annual volume of water delivered to high water users.

REGISTERED SUPPORT / OPPOSITION:

Support

California Coastkeeper Alliance
Center for Environmental Health
Clean Water Action
Climate Reality Project Bay Area Chapter
Climate Reality Project San Diego
Climate Reality Project San Fernando Valley Chapter
Climate Reality Project, Los Angeles Chapter
Climate Reality Project, Orange County
Community Water Center
Humboldt Waterkeeper
Inland Empire Waterkeeper
Leadership Counsel Action
Los Angeles Waterkeeper
Monterey Waterkeeper
Orange County Coastkeeper
Russian Riverkeeper
San Diego Coastkeeper
Santa Barbara Channelkeeper
Shasta Waterkeeper
South Yuba River Citizens League
The Otter Project
Water Climate Trust
Yuba River Waterkeeper

Opposition

None on file

Analysis Prepared by: Pablo Garza / W., P., & W. / (916) 319-2096

1. Md Abu Bakar Siddik, Arman Shehabi, and Landon Marston, “The Environmental Footprint of Data Centers in the United States,” Environmental Research Letters, 16 (2021). ↑