An act to add Section 65964.7 to the Government Code, and to add Section 10609.13 to the Water Code, relating to water.
AB 2469 would create new water-related permitting requirements for data centers in California. Before a city, county, or city and county could approve a discretionary or ministerial permit, or other entitlement, for a new data center or an expansion that increases peak water use, the applicant would have to provide specified disclosures and studies, including a water supply assessment, a water use assessment, and, beginning in 2028, a water scarcity plan. The bill defines the water use assessment in detail, requiring information on expected water demand, direct and indirect water uses, cooling alternatives, reuse opportunities, and a cost-of-service study from the water provider or funded by the applicant if none exists.
The bill also bars approval of data center construction or expansion in a groundwater basin designated as critically overdrafted by the Department of Water Resources, unless the department waives that prohibition after a comprehensive assessment showing no disproportionate risk to an environmental justice community or equity investment eligible community. In addition, the applicant would have to pay the full cost of any needed water conveyance, treatment, storage, or distribution infrastructure improvements required to serve the project. The bill separately directs the Department of Water Resources and the State Water Resources Control Board to develop and adopt a new CII water-use classification for large consumptive use facilities, including data centers, and requires urban retail water suppliers to implement it.
AB 2469 would amend the Government Code and Water Code and would impose a state-mandated local program by expanding local agencies’ duties in reviewing data center entitlements. It also declares that the measure addresses a matter of statewide concern, making the permitting restrictions applicable to charter cities as well as other cities. The bill states that no state reimbursement is required for the local costs associated with implementation.
The overall sentiment reflected in the bill’s committee path appears generally supportive but cautious. It advanced out of committee with solid majority votes, including 9-2 and 8-2 margins, suggesting broad agreement that data center water use warrants additional oversight. The absence of recorded committee transcript debate limits insight into specific arguments, but the bill’s repeated amendments and referral to Appropriations indicate ongoing refinement and attention to fiscal and implementation issues.
The main points of contention are likely to center on the bill’s impact on local permitting authority, the cost and feasibility of the required studies and infrastructure obligations, and the restriction on projects in critically overdrafted basins. Supporters are likely to view the measure as a necessary water-conservation and transparency tool for a fast-growing industry with significant water demand, while critics may argue it creates new barriers for data center development and adds administrative burdens for local governments and applicants.
AB 2469 would add new pre-approval conditions for data center projects under local land use and water-related permitting laws, effectively requiring more detailed water planning and disclosure before construction or expansion can proceed. It would also create a new statewide water-use classification for large consumptive use facilities in the CII water-use framework, which would affect Department of Water Resources and State Water Resources Control Board rulemaking, as well as implementation by urban retail water suppliers. The bill expands local agency review duties and applies statewide, including to charter cities, while specifying that no state reimbursement is required for the mandated local program.
The bill appears to have received generally favorable treatment in committee, with majority votes advancing it through the process and no recorded opposition beyond a small minority. The pattern of amendments suggests legislators were working to balance water-conservation goals with implementation details and fiscal concerns. Overall, the discussion history points to support for stronger oversight of data center water use, especially given California’s drought and groundwater conditions.
The most notable contention is likely between water-conservation advocates and data center developers or local governments concerned about project delays and added compliance costs. The bill’s prohibition on approvals in critically overdrafted groundwater basins, unless waived after an environmental justice assessment, is a significant restriction and could be controversial in areas seeking economic development. Another likely point of dispute is the requirement that applicants fund any necessary water infrastructure improvements and provide extensive operational, workforce, and water-use disclosures, which may be viewed as burdensome by industry but necessary by supporters to ensure accountability and protect scarce water supplies.