Tennessee House Bill HB2392

Tennessee 2025-2026 Regular Session

• Introduced: 2/3/26
• Refer: 2/5/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 5; Title 6; Title 7; Title 10; Title 62; Title 65; Title 68 and Title 69, relative to the Tennessee Data Center Impact Review Act.

Impact

The bill sets forth various requirements for applicants, including documentation of the data center's physical address, power capacity, projected water usage, and impact assessments on local water supplies. By requiring detailed evaluations and public hearings as part of the permitting process, HB2392 aims to establish a balance between the expansion of data centers — which are vital for technological development — and the preservation of local water resources and environmental integrity. This regulation may necessitate modifications to the operational strategies of large-scale data centers, compelling them to adopt more sustainable practices.

Summary

House Bill 2392, also known as the Tennessee Data Center Impact Review Act, introduces a comprehensive framework for regulating the operation of data centers within Tennessee. This bill mandates that starting January 1, 2027, all data centers that exceed a power capacity of 20 megawatts must obtain a permit from the appropriate board before commencing operations. The intent is to ensure that the water usage and environmental impacts of these facilities are thoroughly assessed and managed, given their significant resource demands in terms of water and energy.

Contention

The primary points of contention surrounding HB2392 stem from concerns about its regulatory scope. Proponents argue that the requirements are essential for protecting Tennessee’s water resources and ensuring responsible growth of the data center industry. Critics, however, may view this as overly burdensome and potentially stifling to technological innovation and investment, especially for new entrants into the market. The focus on intensive scrutiny of water use and environmental impacts suggests that there will be considerable dialogue about how best to implement these regulations without impeding progress in the tech sector.