Legislating for data centers — an interactive tour

As data centers proliferate around the country, communities are starting to take note — not without some alarm. The facilities require massive amounts of electricity and water while often providing few new jobs for the region. 

In response to growing concerns, government leaders are moving quickly to create new legislation and zoning rules to regulate data centers and ensure that they bring benefits to the surrounding communities. While some jurisdictions want to support and incentivize data centers with an eye to their potential economic benefits, others are creating rules to ensure tech companies pay their fair share for power and water — or banning them altogether. Planners have a key role in shaping these policies and guiding the role of data centers in the future of cities and regions.

Below is an overview of some of the most interesting legislation of the moment.

States

At the state level, legislatures are creating regulatory frameworks for data centers that address energy and water needs, environmental impacts, site considerations, labor and other concerns. Some cities have imposed temporary moratoriums until they develop more comprehensive legal structures for data centers, while others are building incentive structures that ensure tax revenue and jobs benefit the community.

According to a report by the WilmerHale law firm, in 2025, state lawmakers introduced 238 bills related to data centers. At least 40 passed, and more are being introduced.

The laws address several major themes:

• Tax exemptions and incentives with conditions on jobs and local investment (Arkansas, Colorado, Kansas, Indiana, Louisiana)
• Requirements for state utilities to conduct studies on the impact of data center proposals and any cost impacts to ratepayers, as well as requirements for data center operators to provide data about projected and actual water and power needs (Alabama, California, Florida, Iowa, Kentucky, Maine, Maryland, Nebraska, Texas, Utah, Virginia, West Virginia)
• Zoning restrictions on where data centers can be located (Florida)
• Requirements for data centers to pay for the cost of additional power infrastructure needed for their operation, or fees tied to utilities, water and other needs (Indiana, Kentucky, Minnesota, Missouri, New Jersey, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas)
• Requirements for data centers to provide or generate their own power (Pennsylvania, South Carolina, Virginia)
• Prevailing wage requirements (Minnesota, Pennsylvania)
• Temporary moratoriums on new permits or tax breaks (Michigan, Oregon) 

Explore a few key examples below. Note: Please open links in a new tab for easier navigation.

Cities and counties

At the local level, many cities are turning to zoning as a key regulatory tool. Because data centers have a unique purpose and significantly higher energy and water needs than typical commercial or industrial uses, they don’t fit well into existing zoning categories. In addition to their resource needs, data centers require huge footprints that can induce sprawl and produce emissions and noise that can harm public health and the environment. Cities are moving to create new zoning designations and overlays for data centers that acknowledge and plan for their real estate, energy, and water needs, as well as their potential impacts on the surrounding community and landscape.

Explore examples below. Note: Please open links in a new tab for easier navigation.

The impacts of data centers on the energy grid, water, landscapes and economies are just beginning to make themselves felt, and the industry is only growing. There are so many projects underway around the country that the sector is single-handedly propping up commercial construction: commercial planning, which increased by 28.5% since March 2025, would have dropped by 12.7% without data centers.

Click here to view a comprehensive list of legislation referenced in this piece.