WASHINGTON — As the debate over data centers deepens, bipartisan legislation aims to create a federal tax incentive for the massive facilities to invest in water recycling projects.
U.S. Sen. Katie Britt, R-Ala., and U.S. Sen. Ben Ray Luján, D-N.M., introduced the Advancing Water Reuse Act Wednesday. It would provide a 30% tax credit for projects within data centers or other industrial facilities that capture wastewater, stormwater, saltwater or graywater and clean it to make it suitable for freshwater use.
While data centers have become critical to online consumption and emerging technologies, they also consume a large amount of water and energy. Massive centers can consume up to 5 million gallons of water per day, according to an analysis by the Environmental and Energy Study Institute. That’s equivalent to the water use typically seen in a 10,000 to 50,000-person town.
“A safe, reliable supply of freshwater is crucial to facilitating economic development while ensuring Americans across the country have access to clean water,” Britt said in a statement.
Alabama’s junior senator added that water recycling technologies are currently being developed in the state to reduce demand on the “aging water infrastructure.”
“I’m proud to have worked on this legislation with Senator Luján that promotes responsible water management so residents have safe drinking water, farmers have the water they need to grow our food, and industries have the capacity to continue investing in our communities,” Britt said.
In Alabama, recent polling shows Republicans are split on whether data centers are good or bad for the state. About 22% of respondents in a statewide survey said the facilities were good and 25% deemed them as bad. While about a third of voters, or 37%, said the centers are a mixed bag.
Earlier this year, the Alabama Legislature also took action to address data centers. Lawmakers passed a bill to reduce tax abatements for large centers in the state and another to require the facilities, not neighbors, to pay for the energy they consume.
The senators argue that the measure to boost water recycling will “protect residential consumers from the increased utility bills, reduce demand on freshwater supplies, and spur business development and job growth.”
Last month, the Bessemer City Council approved the rezoning of nearly 900 acres for a proposed large data center, following heated debate, WBRC reported.
The bill proposes that the tax credits could also be used to replace freshwater with recycled water from a municipal water provider for the production of goods or services.
Several organizations are backing the bipartisan bill, including the American Water Works Association, National Water Resources Association and the U.S. Chamber of Commerce.