HF 2001 (LSB 5151YH (3) 91)

HOUSE FILE 2001

BY  GEARHART

A BILL FOR

An Act relating to water efficiency of data centers, including requirements for water-efficient cooling technologies and encouragement for the use of nonpotable and recycled water sources, providing civil penalties, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  455L.1  Purpose.
   Water is Iowa’s most valuable natural resource. It is the intent of the general assembly to protect Iowa’s water by requiring data centers to adopt cooling technologies that significantly reduce water consumption and by promoting the use of nonpotable, recycled, and treated wastewater in cooling systems. The general assembly encourages innovation in water reuse and treatment to reduce strain on municipal water supplies and safeguard Iowa’s rivers and streams.
    Sec. 2.  NEW SECTION.  455L.2  Definitions.
   For purposes of this section:
   1.  “Cooling technology” means any system or process used to regulate the temperature and humidity of data center equipment.
   2.  “Data center” means a facility used to house computer systems and associated components that consume at least one megawatt of electricity annually.
   3.  “Department” means the department of natural resources.
   4.  “Expansion or renovation” means any material upgrade to an existing data center’s infrastructure that increases its cooling capacity or floor space.
   5.  “New data center” means any facility applying for a building permit for a data center on or after January 1, 2026.
   6.  “Nonpotable water” means water not suitable for human consumption without treatment, including surface water, river water, graywater, or treated wastewater.
   7.  “Treated wastewater” means effluent that has undergone chemical, physical, or biological treatment and meets all regulatory standards for noncontact industrial reuse.
   8.  “Water-efficient cooling technology” means any cooling technology that achieves a water usage effectiveness rating of two-tenths or lower.
   9.  “Water usage effectiveness rating” means a metric that measures how efficiently water is used for cooling. The rating is calculated by dividing annual water usage in liters by the energy consumption of information technology equipment in kilowatt hours.
    Sec. 3.  NEW SECTION.  455L.3  Cooling and water sourcing requirements.
   1.  All new data centers, and any data center permitted but not yet under construction as of January 1, 2026, must utilize water-efficient cooling technology.
   2.  Any expansion or renovation of an existing data center on or after January 1, 2026, must bring the entire facility into compliance with a water usage effectiveness rating of two-tenths liter per kilowatt hour.
   3.  To reduce potable water demand and protect the state’s freshwater resources, data centers are encouraged to do the following:
   a.  Utilize air-based or hybrid cooling systems.
   b.  Source water for cooling from nonpotable supplies, including the following:
   (1)  Surface or river water.
   (2)  Storm water, graywater, or other recycled sources.
   (3)  Treated wastewater, especially where it would otherwise be discharged directly to rivers or streams.
   c.  Install on-site or off-site water treatment systems that bring such water described in paragraph “b” to the appropriate quality for cooling system use.
   4.  Data centers utilizing treated wastewater shall coordinate with local utilities to ensure that water is used prior to discharge, and that all thermal and chemical discharge complies with applicable environmental standards.
   5.  Facilities subject to this section must submit a cooling and water sourcing plan to the department prior to construction or expansion or renovation, and also annual compliance reports for five years following commissioning or expansion or renovation.
    Sec. 4.  NEW SECTION.  455L.4  Enforcement and penalties.
   1.  The department shall adopt rules establishing procedures for monitoring, enforcement, and verification under this chapter.
   2.  The department may conduct inspections and audits, order the submission of water usage and sourcing documentation, and review treatment and cooling system operations.
   3.  A data center found in violation of a rule or order issued pursuant to this section or in violation of section 455L.3 is subject to the following:
   a.  A civil penalty of up to ten thousand dollars per day of noncompliance.
   b.  A corrective action order with a compliance timeline.
   c.  Suspension or revocation of construction or operating permits, if applicable.
    Sec. 5.  NEW SECTION.  455L.5  Exemptions.
   1.  Temporary exemptions of no greater than twelve months may be granted by the department to new data centers or data centers undergoing an expansion or renovation that are required to meet the requirements of section 455L.3 for demonstrated lack of feasible technology or water source access or conditions that pose a risk to public health or safety.
   2.  Exemption requests must be supported by technical documentation and include a proposed path to compliance.
    Sec. 6.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 7.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2026, for all new data center projects permitted on or after that date, any previously permitted project that has not broken ground by that date, and any data center expansion or renovation undertaken on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the water efficiency of data centers, including requirements to implement water-efficient cooling technologies and encouragement for the use of nonpotable and recycled water sources.
   The bill defines “water usage effectiveness rating” as a metric that measures how efficiently water is used for cooling. The bill explains the rating is calculated by dividing annual water usage in liters by the energy consumption of information technology equipment in kilowatt hours.
   The bill requires all new data centers not under construction as of January 1, 2026, to utilize water-cooling technologies to meet a water usage effectiveness rating of 0.2 liters per kilowatt hour or less. The bill also requires any current data center undergoing expansion or renovation to bring the entire data center into compliance with the 0.2 liters per kilowatt hour requirement.
   The bill encourages data centers to utilize air-based or hybrid cooling systems, source water from nonpotable supplies, and install water treatment systems that bring nonpotable water to the appropriate quality for cooling system use.
   The bill directs data centers using treated wastewater to coordinate with utilities to ensure the water is used prior to discharge and that all discharge is in compliance with environmental standards.
   The bill directs data centers subject to the requirements of the bill to submit a cooling and water sourcing plan to the department of natural resources (DNR) prior to construction, expansion, or renovation and an annual compliance report for five years following commissioning, expansion, or renovation.
   The bill directs DNR to adopt rules establishing monitoring, enforcement, and verification for provisions in the bill.
   The bill allows DNR to conduct inspections and audits, order the submission of water usage and sourcing documentation, and review treatment and cooling center operations.
   A data center found in violation of the bill is subject to a civil penalty of up to $10,000 per day of noncompliance, a corrective action order with a compliance timeline, or the suspension or revocation of construction or operating permits.
   The bill allows temporary exemptions of the bill’s requirements to be granted to data centers for demonstrated lack of feasible technology, water source access, or conditions that pose a risk to public safety. The exemptions may be granted for no longer than 12 months and must be supported by technical documentation and a proposed path to compliance.
   The bill takes effect upon enactment. The bill applies retroactively to January 1, 2026, for all new data center projects permitted on or after that date, any previously permitted project that has not broken ground by that date, and any data center expansion or renovation undertaken on or after that date.