Water resources: data centers.

Removed subsection (d) from both Section 16000.4 (cities) and Section 16100.4 (counties), which had required data centers to self-certify, as a condition of obtaining or renewing a business license, that they would meet DWR efficiency guidelines or best management practices once developed. This eliminated an ongoing compliance obligation tied to future regulatory action.

The bill was reformatted from a line-numbered amendment tracking format to a clean enrolled version with updated headers showing passage dates (Assembly September 11, 2025; Senate September 10, 2025) and the Governor's approval block.

The legislative counsel's digest was updated to remove references to the deleted efficiency guidelines requirement and to drop the 'as amended' designation from the bill title line.

The bill text was reformatted from a formal enrolled document (with page numbers, clerk/governor signature blocks, and traditional legislative layout) into a web page presentation with navigation menus, search tools, version history, and status metadata. No changes to the actual statutory language were made.

Removed Section 10609.1 of the Water Code, which would have required DWR and SERC to develop guidelines and best practices for data center water efficiency by January 1, 2028, including closed-loop systems, nonpotable water use, rainwater capture, and scalable water-efficient practices.

Removed the amendment to Water Code Section 390.1, which would have required public entities to identify the average volume of water delivered to data centers within their water usage demand analyses.

The statewide concern finding now references only Sections 2 and 3 (the Business and Professions Code additions) instead of also referencing the removed Water Code sections.

Added a definition of 'water supplier' in both new Business and Professions Code sections, specifying it means either an 'urban water supplier' (Water Code Section 10617) or a 'community water system' (Health and Safety Code Section 116275).

Removed the definition of 'local jurisdiction' (city, county, or other political subdivision that issues business licenses) from both new code sections.

Changed the renewal self-certification language from certifying 'a report of annual water use' to certifying 'that they have provided the data center's water supplier with a report of annual water use,' making the certification specifically about having delivered the report to the supplier.

Simplified the data center type definitions by removing nested sub-paragraph structure (old format used (A)(1), (B)(2), (C)(3); new format uses flat (1), (2), (3) numbering).

Simplified the no-reimbursement provision from two separate grounds (crime-related changes AND authority to levy fees) to a single ground based solely on the act creating or changing a crime or infraction.

The requirement for data centers to meet efficiency standards was changed from 'efficiency standards as determined by the local jurisdiction' to a self-certification that the data center will meet state guidelines developed under Section 10609.1 of the Water Code, beginning one year after those guidelines are published. This removes local discretion over what standards apply.

The Water Code section requiring the Department of Water Resources and Energy Commission to develop guidelines was moved from Section 147.4 to Section 10609.1, placing it within Chapter 9 on urban water use objectives rather than in a general part of the Water Code.

The data center type definitions were changed from 'Types of data centers include the following' (open-ended) to 'For purposes of this section, data center includes only the following types of data centers' (exclusive), potentially limiting which facilities are covered by the bill's requirements.

The timing for providing water use estimates to water suppliers was changed from 'when applying' for an initial business license to 'prior to applying,' meaning data centers must notify their water supplier before submitting the license application.

The state mandate reimbursement section was simplified. The Assembly version included a provision that if the Commission on State Mandates determined other costs were mandated by the state, reimbursement would be made. The Senate version removes this 'notwithstanding' clause, leaving only the two standard exceptions (crime-related and fee-authority).

Section numbering was reorganized throughout the bill to reflect the removal of the old Section 147.4 and its replacement with Section 10609.1, updating cross-references in the findings section accordingly.

New Section 1 declares legislative intent that data centers are considered commercial, industrial, and institutional users under the state's 'Making Conservation a California Way of Life' regulation, tying them into existing urban water use objectives.

Data center owners/operators must now provide their water supplier, under penalty of perjury, an estimate of expected water use prior to applying for an initial business license. This is a new pre-application step separate from the self-certification on the license application itself.

Language throughout Sections 16000.4 and 16100.4 changed from 'provide' to 'self-certify,' making it explicit that data center operators are personally certifying their compliance under penalty of perjury rather than merely submitting information.

New Water Code Section 10609.1 requires the Department of Water Resources and the State Energy Resources Conservation and Development Commission to develop guidelines and best practices by January 1, 2028. Best practices must include: closed-loop systems, nonpotable water use, rainwater and stormwater capture infrastructure, water-efficient indoor and outdoor practices, and scalable practices that increase for higher-demand data centers.

Local efficiency standards in Sections 16000.4 and 16100.4 now explicitly reference Section 10609.1 of the Water Code as the source of the guidelines, creating a direct statutory link between state-level best practices and local licensing conditions.

The state reimbursement provision was simplified. The old version included language about the Commission on State Mandates potentially determining that the bill contains costs requiring reimbursement; the new version simply states no reimbursement is required for specified reasons without that conditional language.

New Water Code Section 10609.35 added, authorizing the Department of Water Resources to identify different tiers of data centers based on factors affecting water consumption and set appropriate efficiency standards for each tier as part of adopting any efficiency standard under the relevant chapter.

The bill title was expanded to reflect the addition of Water Code Section 10609.35, broadening the bill from solely Business and Professions Code provisions to also include a Water Code provision.

The definition of 'data center' in both Business and Professions Code sections 16000.4 and 16100.4 now includes a minimum size threshold: only rooms or portions of rooms housing IT equipment with a total load greater than 10 kilowatts and 20 watts per square foot of conditioned floor area qualify. This excludes smaller data center installations from the bill's water reporting and certification requirements.

Removed 'artificial intelligence' from the bill digest and deleted the final section expressing legislative intent to enact future legislation maintaining water and energy efficiency as new technology including AI increases demands on limited resources.

The state-mandated local program designation changed from 'no' to 'yes,' formally acknowledging that the bill imposes costs on local governments that may trigger reimbursement obligations under the California Constitution.

The duty to develop guidelines and best practices for maximizing natural resource use for technology needs was reassigned from 'the board' (State Water Resources Control Board) to 'the department' (Department of Water Resources within the Natural Resources Agency), with the Water Code section renumbered from 189.4 to 147.4.

The fiscal committee designation changed from 'no' to 'yes,' meaning the bill now requires review by the Legislative Fiscal Committee for its budgetary impact on local agencies.

In Section 390.1 of the Water Code, the phrase 'both all of the following' was corrected to 'all of the following.'

The Type III data center power consumption threshold was changed from 'less than 2 megawatts' to 'less than two megawatts' (spelling out the number).

The bill now applies specifically to data centers (defined as facilities housing computing infrastructure for processing, storing, or distributing electronic data) and requires compliance as a condition of obtaining or renewing a business license in any city or county.

A charter city preemption finding declares that water conservation is a matter of statewide concern, not a municipal affair, so the new licensing requirements apply to all cities including charter cities.

Three tiers of data centers are defined: Type I (hyperscale) with more than 10,000 kg/sq m, more than 10,000 servers, and more than 25 MW power; Type II with 2,000-50,000 kg/sq m and 2-25 MW; Type III with 500-5,000 kg/sq m and less than 2 MW.

Data center owners/operators must provide an estimate of expected water use under penalty of perjury when applying for an initial business license, and a report of annual water use under penalty of perjury when renewing.

Cities and counties must require data centers to meet efficiency standards as a condition of licensing. Standards may include closed-loop systems, nonpotable water use, and rainwater/stormwater capture infrastructure, and may be more stringent for larger data center types.

Public entities conducting water usage demand analyses must now additionally identify the average volume of water delivered to data centers, making this information publicly available in their cost-of-service analysis.

The State Water Resources Control Board and Energy Commission must develop guidelines and best practices to maximize natural resource use for technology needs by January 1, 2028, consistent with urban water use objectives and the EPA Energy Star program as it existed on January 1, 2025.

The perjury penalty for false water use estimates and reports creates a state-mandated local program, changing the bill's fiscal analysis from 'no' to 'yes' for both fiscal committee review and state-mandated local program status.