A rare source of bipartisanship has broken out in state capitols across the country: tackling data centers. <\/p>\n
Legislators from both major parties in red, blue and battleground states alike are rushing to figure out how to regulate the construction and energy consumption of the data centers fueling the AI boom. <\/p>\n
This year alone, state lawmakers have proposed more than 300 bills designed to tackle the emerging challenges presented by data centers, according to Multistate, a state and local government relations firm that tracks state legislation across the country.<\/p>\n
The flurry of activity comes as voters express wariness<\/a> about the technology that industry leaders say will transform the American workforce, as well as long-standing concerns about high costs.<\/p>\n The proposals span various categories. Some legislators have sought to implement moratoriums on data center construction \u2014 accusing their emergence as a big driver in the increase in utility costs for communities. Many who are pushing for moratoriums say they\u2019re a tool to buy time to study and better understand their impact on communities. <\/p>\n Other state lawmakers have attempted to put in place requirements that put restrictions or reporting requirements on the amount of electricity and water that such centers need to function. And others have pitched cutting the tax incentives that were initially intended to attract fresh construction of the centers.<\/p>\n At the moment, most proposals from both Democrats and Republicans have seized on rising utility costs by framing the issue as one related to affordability, particularly heading into this fall\u2019s midterm elections. And the debate has not fallen along the typical partisan lines. <\/p>\n \u201cThere just are not very many issues these days that you can\u2019t predict what a state is going to do based on their partisan makeup,\u201d said Morgan Scarboro, a vice president and economist at MultiState who leads the teams monitoring data center legislation. \u201cIt\u2019s been really interesting to see this play out in a way that doesn\u2019t make clear sense on a partisan basis.\u201d<\/p>\n \u201cThe perception among legislators and the general public varies widely, state to state, even locality to locality and the legislation is reflecting that,\u201d she said.<\/p>\n In part, that has been a product of the fact that state legislators \u201care definitely playing from behind\u201d on the issue of data center construction, due to the breathtaking speed with which the artificial intelligence boom has happened, added Daniel King, a research fellow who specializes in AI and data centers at the Foundation for American Innovation, a tech policy think tank.<\/p>\n \u201cThat\u2019s not to say that now that the issue is center stage, they should be cracking down extra hard, but there\u2019s certainly been a lag in how fast the technology has moved and how and when state legislators have decided to react,\u201d he said.<\/p>\n It\u2019s an issue that has connected political polar opposites on the national level as well, such as Sen. Bernie Sanders, I-Vt., who has called for a national moratorium<\/a>, and Florida Republican Gov. Ron DeSantis, who has warned of significant job displacement<\/a> for white-collar workers from the AI boom.<\/p>\n A new NBC News poll<\/a> helps to underscore the uncertain political terrain politicians at the state and national levels are facing on the issue. The survey found that a majority of voters nationally said the risks of AI outweigh the benefits, while a plurality viewed AI negatively and said they don\u2019t believe either party is doing a good job handling the technology.<\/p>\n For some lawmakers, that has translated into proposing temporary moratoriums on new data center construction. Democratic legislators in New York<\/a>, Maine<\/a> and Vermont, Republican legislators in Oklahoma<\/a> and lawmakers from both parties in Georgia<\/a> have proposed temporary moratorium bills that would also require studies of the environmental and energy effects of data centers on their states. In Georgia, Republicans have also proposed bills intended to limit utility bill increases.<\/a><\/p>\n Meanwhile, many states that already have a large presence of data centers are now looking at legislation that aims to curb further development. In Virginia, which has the most data centers in the United States,<\/a> state senators from both parties have supported a proposal in the chamber that would end about $1.6 billion in annual tax breaks <\/a>in the state for companies constructing data centers. Democrats in Arizona, Michigan and Maryland have proposed similar legislation. And Republicans in Georgia, which is also among the states with the highest number of data centers, advanced a bill this week to end tax incentives for new data center<\/a> development.<\/p>\n Florida Republicans, with the backing of DeSantis, have proposed<\/a> bills that effectively increase data center regulations.<\/p>\n In South Dakota, Republican legislators have advanced<\/a> a so-called Data Center Bill of Rights <\/a>that would effectively eliminate state tax exemptions for data center operators and would require them to pay for most electric and water costs.<\/p>\n Meanwhile, Democrats in Washington<\/a> and Colorado have proposed legislation built around staving off the perceived environmental impacts of data centers. Washington legislators were among the many who have proposed requiring data centers to report energy and water usage levels \u2014 though the bill died last week<\/a> after mounting industry opposition \u2014 while Colorado legislators have proposed a bill that would require data center operators to<\/a> provide their own renewable energy sources to power their centers.<\/p>\n Elsewhere, data centers have created intraparty rifts. In Oregon, for example, Democratic Gov. Tina Kotek has proposed expanding tax breaks<\/a> for new data centers, even as members of her party passed a bill<\/a> temporarily ending such breaks.<\/p>\n The same dynamic is in play in Georgia, where Republicans have been divided about whether to curb data center development. The latest bill advanced by the GOP-led state Senate<\/a> has been labeled by critics <\/a>as a \u201cwindow-dressing<\/a>\u201d measure. At least 10 municipalities or counties in the state have enacted their own<\/a> temporary moratoriums on new data center construction. More broadly, approximately $98 billion in projects were blocked or stalled across the country over three months last year, according to Data Center Watch<\/a>, underscoring the growing state and local opposition to the facilities.<\/p>\n After the issue played a big role in last year\u2019s gubernatorial races in Virginia and New Jersey<\/a>, it\u2019s poised to do the same again in 2026, with 36 governor\u2019s elections on the ballot<\/a> across the country.<\/p>\n \u201cI get asked the question about data centers or AI everywhere I go,\u201d said Georgia Attorney General Chris Carr, who is running in his state\u2019s crowded Republican gubernatorial primary. \u201cAI is here now and we can either lead or we can get run over.” He said he wanted his state to be in \u201ca position to be able to take best advantage of the positives of AI and be able to put the appropriate guardrails around it.\u201d<\/p>\n Experts monitoring AI and data centers note that it\u2019s a topic that ties in several kitchen-table economic issues, making it an ideal target for politicians in both parties.<\/p>\n \u201cThis has become a part of a very broad national conversation that wraps in topics like energy costs and utility rates, environmental concerns and water consumption,\u201d said Miquel Vila, lead analyst at Data Center Watch, a project of AI intelligence firm 10a Labs that tracks local data center activity. \u201cIt\u2019s a discussion about costs and benefits: Who benefits? Who pays the cost? Many states are still figuring this out.\u201d<\/p>\n \u201cIt\u2019s important to point out,\u201d he added. \u201cIf no one likes them, why are they bringing them? Well, it\u2019s a stream of tax income for areas \u2026 where maybe they don\u2019t have that many other options.\u201d<\/p>\n Experts said that legislating the issue on a statewide basis \u2014 let alone a national one \u2014 is tricky for political leaders trying to balance the perceived economic gains the construction of new centers could bring to certain areas against the rising utility rates and other consequences that could be felt by constituents.<\/p>\n \u201cIt is revolving around the issue of affordability, which is a shared priority among Democrats and Republicans alike,\u201d the Foundation for American Innovation\u2019s King said. \u201cThe story that\u2019s being told is that AI-driven demand for data centers is raising electric bills. And for many people, this is quite a persuasive reason to be cracking down legislatively on data center development.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A rare source of bipartisanship has broken out in state capitols across the country: tackling data centers. 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