Water resources: demands: data centers.

Assembly Member Papan's water conservation legislation establishes new oversight requirements for data centers' water usage while directing state agencies to develop comprehensive efficiency standards. The bill requires data center operators to provide water usage estimates to suppliers before obtaining business licenses and submit annual water consumption reports when renewing permits. These self-certified submissions must be made under penalty of perjury.

The Department of Water Resources and State Energy Resources Conservation and Development Commission must create guidelines by January 2028 for maximizing natural resource use in data centers. These standards will align with urban water objectives and federal Energy Star Program requirements, incorporating practices like closed-loop systems, non-potable water use, and stormwater capture infrastructure. The bill categorizes data centers into three tiers based on infrastructure weight and power consumption, with Type I "hyperscale" facilities exceeding 25 megawatts, Type II ranging from 2-25 megawatts, and Type III below 2 megawatts.

Public water agencies must now include data center consumption volumes in their water usage demand analyses, which inform rate-setting decisions. The bill's provisions apply uniformly across all California jurisdictions, including charter cities, reflecting the Legislature's determination that water conservation constitutes a matter of statewide concern rather than a municipal affair. Local agencies retain authority to levy fees covering implementation costs, as the bill does not require state reimbursement for the new mandates.