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Data Center Tax Accountability and Disclosure Act of 2026
Introduced Jul 21, 2026 · Last action Jul 21, 2026 — Read twice and referred to the Committee on Finance.
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Summary
This legislation is called the Data Center Tax Accountability and Disclosure Act of 2026. It is being reviewed by a committee.
Full bill text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5054 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 5054
To exempt AI data centers from bonus depreciation and require data
center operators to submit certain information relating to electricity
and water use by data centers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 21, 2026
Mr. Warner introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To exempt AI data centers from bonus depreciation and require data
center operators to submit certain information relating to electricity
and water use by data centers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Data Center Tax Accountability and
Disclosure Act of 2026''.
SEC. 2. EXEMPTING AI DATA CENTERS FROM BONUS DEPRECIATION.
(a) In General.--Section 168(k) of the Internal Revenue Code of
1986 is amended--
(1) in paragraph (9)--
(A) in subparagraph (A), by striking ``or'' at the
end,
(B) in subparagraph (B), by striking the period at
the end and inserting ``, or'', and
(C) by adding at the end the following new
subparagraph:
``(C) any property used in an AI data center.'',
and
(2) by adding at the end the following new paragraph:
``(11) AI data center.--
``(A) In general.--For purposes of paragraph
(9)(C), the term `AI data center' means a permanent or
semipermanent structure, or group of such structures,
which--
``(i) is dedicated to--
``(I) the centralized
accommodation, interconnection, and
operation of information technology and
network telecommunications equipment
(including not less than 1 graphics
processing unit), and
``(II) providing data storage,
processing, and transport services, and
``(ii) at least 20 percent of which is used
for developing or operating artificial
intelligence.
``(B) Exclusion.--
``(i) In general.--For purposes of
paragraph (9)(C), the term `AI data center'
shall not include any structure or group of
structures described in subparagraph (A) which
has obtained the LEED Green Building Rating
System certification at the Platinum or Gold
level.
``(ii) Alternate standard.--The Secretary
of Energy and the Administrator of the
Environmental Protection Agency may jointly--
``(I) establish or identify an
alternate standard that is equivalent
to or exceeds the standard described in
clause (i), and
``(II) as an alternative to the
standard described in clause (i), allow
the use of such alternate standard for
purposes of the exclusion provided
under such clause.
``(C) Definitions.--For purposes of this
paragraph--
``(i) Artificial intelligence.--The term
`artificial intelligence' has the meaning given
such term in section 5002 of the National
Artificial Intelligence Initiative Act of 2020
(15 U.S.C. 9401).
``(ii) Graphics processing unit.--The term
`graphic processing unit' means a specialized
electronic circuit designed to accelerate image
rendering, graphics processing, and parallel
computation tasks.
``(iii) LEED green building rating
system.--The term `LEED Green Building Rating
System' means the most recent version of the
Leadership in Energy and Environmental Design
green building rating system for--
``(I) Building Design and
Construction, or
``(II) Operations and Maintenance,
as developed by the U.S. Green Building
Council.''.
(b) Application of Leased Property Rules to AI Data Centers.--
Section 168 of the Internal Revenue Code of 1986 is amended by adding
at the end the following new subsection:
``(o) Application of Leased Property Rules to AI Data Centers.--In
the case of any AI data center (as defined in subsection (k)(11)) which
is subject to a lease, the depreciation deduction provided by section
167(a) shall be determined pursuant to the rules under section
1.167(a)-11(e)(3)(iii) of title 26, Code of Federal Regulations (as in
effect on the date of enactment of this subsection).''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of enactment of this
Act.
SEC. 3. DATA CENTER DISCLOSURES.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Affected community.--The term ``affected community''
means a community that--
(A) is subject to the jurisdiction of the same unit
of local government as a covered data center; or
(B) is served by the same electric utility, water
authority, or drinking water utility as a covered data
center.
(3) Affected unit of local government.--The term ``affected
unit of local government'' means any unit of local government
within the jurisdiction of which a covered data center or
affected community is located.
(4) Applicable recipient.--The term ``applicable
recipient'', with respect to a disclosure under subsection (b)
or a report under subsection (c), means--
(A) if the applicable covered data center is
located in an electing State, the electing State; and
(B) if the applicable covered data center is not
located in an electing State, the Secretary and the
Administrator.
(5) Covered data center.--
(A) In general.--The term ``covered data center''
means a data center, including a dual-use data center
and a data center that is co-located or otherwise
shares commercial space with a dedicated Federal data
center, the power demand of which is 25 megawatts or
more.
(B) Exclusion.--The term ``covered data center''
does not include a dedicated Federal data center.
(6) Data center.--The term ``data center'' has the meaning
given the term in section 453(a) of the Energy Independence and
Security Act of 2007 (42 U.S.C. 17112(a)).
(7) Data center operator.--The term ``data center
operator'' means any person that operates a covered data
center.
(8) Dedicated federal data center.--The term ``dedicated
Federal data center'' means a data center that is owned and
operated exclusively by or for the Federal Government
(including any element of the intelligence community (as
defined in section 3 of the National Security Act of 1947 (50
U.S.C. 3003))).
(9) Dual-use data center.--The term ``dual-use data
center'' means a data center that provides services to both the
Federal Government and 1 or more non-Federal interests.
(10) Director.--The term ``Director'' means the Director of
the Office of Management and Budget.
(11) Electing state.--The term ``electing State'' means a
State that--
(A) has elected to receive disclosures and reports
under this section;
(B) has established a system for receiving those
disclosures and reports; and
(C) has notified the Secretary and the
Administrator that the State will--
(i) receive those disclosures and reports;
and
(ii) submit to the Secretary and the
Administrator an annual compilation of those
disclosures and reports under subsection
(d)(1).
(12) Power usage effectiveness.--The term ``power usage
effectiveness'' has the meaning given the term in the document
published in 2026 by the International Organization for
Standardization and the International Electrotechnical
Commission entitled ``Information technology -- Data centres
key performance indicators -- Part 2: Power usage effectiveness
(PUE)'' and numbered ISO/IEC 30134-2:2026 (or a successor
document).
(13) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(14) State.--The term ``State'' means--
(A) each of the several States of the United
States;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico;
(D) the United States Virgin Islands;
(E) Guam;
(F) American Samoa;
(G) the Commonwealth of the Northern Mariana
Islands;
(H) an Indian tribe included on the list published
by the Secretary of the Interior under section 104 of
the Federally Recognized Indian Tribe List Act of 1994
(25 U.S.C. 5131);
(I) the Federated States of Micronesia;
(J) the Republic of the Marshall Islands; and
(K) the Republic of Palau.
(15) Water usage effectiveness.--The term ``water usage
effectiveness'' has the meaning given the term in the document
published in 2022 by the International Organization for
Standardization and the International Electrotechnical
Commission entitled ``Information technology -- Data centres
key performance indicators -- Part 9: Water usage effectiveness
(WUE)'' and numbered ISO/IEC 30134-9:2022 (or a successor
document).
(b) Initial Disclosures.--
(1) In general.--Not later than 180 days before the date on
which a covered data center commences operations, the data
center operator shall submit to the applicable recipient an
initial disclosure that includes an estimate of the information
described in paragraphs (1) through (4) of subsection (c) for
the 1-year period beginning on the date on which the covered
data center is expected to commence operations.
(2) Existing data centers.--Not later than 180 days after
the date of enactment of this Act, each covered data center
operating as of that date of enactment shall submit to the
applicable recipient an initial disclosure that includes the
information required to be included in an annual mandatory
report under subsection (c) for the most recent calendar year
ending before that date of enactment.
(3) Federal data centers.--
(A) Dual-use data centers.--With respect to a dual-
use data center--
(i) this subsection and subsection (c)
shall only apply to the extent prescribed by
the Director under subsection (e)(1)(D); and
(ii) in providing initial disclosures under
this subsection or submitting an annual report
under subsection (c) as so prescribed, the data
center operator shall comply with all
applicable requirements established under
subsection (e), including the standards
established under paragraph (1)(D) of that
subsection and any exemptions from disclosure
established under paragraph (2)(C) of that
subsection.
(B) Dedicated federal data centers.--This
subsection and subsection (c) shall not apply to a
dedicated Federal data center.
(c) Annual Mandatory Report.--Not later than December 31 of each
year, each data center operator shall submit to the applicable
recipient an annual report that describes, for the most recent
preceding calendar year, the following information for each applicable
covered data center operated by the data center operator:
(1) Water access and usage.--
(A) The total number of gallons of water withdrawn
or consumed each month by the covered data center
during the year covered by the report.
(B) The source of the water so withdrawn or
consumed by the covered data center, such as a
municipal drinking water system, groundwater, surface
water, or reclaimed water.
(C) The annual average water usage effectiveness of
the covered data center.
(D) Any water rights, permits, or long-term supply
agreements held by a data center operator for a covered
data center, including the term and quantity of water
subject to those rights, that permit, or that
agreement.
(2) Electricity access and usage.--
(A) The total electricity contracted for or
consumed by the covered data center each month during
the year covered by the report, measured in megawatt-
hours, and the peak electricity demand of the covered
data center during that year, measured in megawatts.
(B) If the covered data center uses behind-the-
meter power generation, the method used to generate
that power, including the percentage of total
electricity consumed by the covered data center from
each behind-the-meter generation source type,
calculated on an actual-dispatch basis.
(C) The total greenhouse gas emissions of the
covered data center in carbon dioxide-equivalent metric
tons (calculated on the basis of energy consumption).
(D) The annual average power usage effectiveness of
the covered data center.
(E) Any long-term power purchase agreements or
utility service agreements to which the covered data
center operator was a party during the year covered by
the report, including--
(i) the term of the power purchase
agreement; and
(ii) the quantity of power covered by the
power purchase agreement.
(3) Backup power.--
(A) The types of backup power maintained for the
covered data center, including generators, batteries,
and all other sources of backup power.
(B) The total backup capacity maintained for the
covered data center.
(C) The quantity of fuel stored on-site for backup
power.
(D) The total hours that the covered data center
operated using backup power during the year covered by
the report.
(E) The annual emissions of carbon dioxide, and
criteria pollutants for which there are national
ambient air quality standards under section 109 of the
Clean Air Act (42 U.S.C. 7409), from backup power
during the year covered by the report.
(4) Property setback.--The setback requirements for data
center facilities in the State in which the covered data center
is located, including any zoning variances, special use
permits, or conditional approvals relating to the use of a
facility or setback by the data center operator.
(d) Reports to EPA and DOE.--
(1) In general.--Each electing State shall annually submit
to the Secretary and the Administrator a compilation of--
(A) the disclosures submitted to the electing State
under subsection (b); and
(B) the reports submitted to the electing State
under subsection (c).
(2) Publication.--The Secretary and the Administrator shall
make publicly available on the website of the Department of
Energy and the Environmental Protection Agency, respectively,
an annual report that includes each of--
(A) the disclosures submitted directly to the
Secretary and the Administrator under subsection (b);
(B) the reports submitted directly to the Secretary
and the Administrator under subsection (c);
(C) the compilations submitted to the Secretary and
the Administrator under paragraph (1); and
(D) any information submitted to the Secretary and
the Administrator under subsection (e)(3), in
accordance with any standards established under
subsection (e)(1)(C).
(e) Disclosures for Federal Data Centers.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Director shall establish standards
for--
(A) the compilation by appropriate Federal
officials, as determined by the Director, of
information relating to each dedicated Federal data
center and dual-use data center utilized by the Federal
Government;
(B) the submission of that information to the
committees of Congress with jurisdiction over those
Federal officials;
(C) the publication of that information pursuant to
subsection (d)(2)(D), if applicable; and
(D) with respect to dual-use data centers,
disclosure and reporting by the applicable data center
operator under subsections (b) and (c).
(2) Requirements.--The standards established under
paragraph (1) shall--
(A) to the maximum extent practicable, require the
disclosure of information consistent with the
information required to be disclosed under subsection
(c) with respect to covered data centers;
(B) simultaneously--
(i) promote data center accountability and
transparency; and
(ii) protect national security; and
(C) include exemptions from disclosure to protect
national security, as appropriate.
(3) Submission of information for publication.--If the
Director determines appropriate, the standards established
under paragraph (1) may require appropriate Federal officials,
as determined by the Director, to submit to the Secretary and
the Administrator for publication under subsection (d)(2)(D)
such information as is appropriate for publication under that
subsection.
(4) Coordination.--In carrying out this subsection,
including the development of exemptions under paragraph (2)(C),
the Director shall coordinate with appropriate officials of--
(A) the Office of the Director of National
Intelligence;
(B) the Central Intelligence Agency;
(C) the Department of Defense;
(D) the Department of Homeland Security;
(E) the Department of Justice;
(F) the Department of Energy;
(G) the Department of Commerce;
(H) the Department of the Treasury; and
(I) any other relevant Federal agency, as
determined by the Director, including any Federal
agency utilizing a data center for purposes relating to
national security.
(f) Prohibition on Use of Nondisclosure Agreements or
Confidentiality Agreements To Conceal Information or Avoid Required
Disclosures.--
(1) In general.--Notwithstanding any provision of State
contract law or any agreement to the contrary, no nondisclosure
agreement, confidentiality agreement, or similar contract or
agreement shall operate--
(A) to prevent, limit, delay, or penalize
disclosure by any party to the contract or agreement to
the Secretary, the Administrator, or an electing State
of any information required to be disclosed to the
Secretary, the Administrator, or the electing State
under this section;
(B) to prevent, limit, delay, or penalize
disclosure by an electing State to--
(i) the Secretary or the Administrator of
any information required to be disclosed to the
Secretary or the Administrator under this
section; or
(ii) an affected unit of local government
of any information provided to the electing
State under this section; or
(C) to require any party to the contract or
agreement to seek approval from a data center operator
before responding to a request for information from the
Secretary, the Administrator, or an electing State made
pursuant to subsection (g)(4).
(2) Voidability.--Any provision of a nondisclosure
agreement, confidentiality agreement, or similar contract or
agreement that purports to restrict disclosure in a manner
prohibited under paragraph (1) is void as against public policy
and unenforceable to the extent of such restriction.
(3) No liability for compliance.--No electric utility,
water authority, drinking water utility, unit of local
government, or State agency shall be liable to a data center
operator under any nondisclosure agreement, confidentiality
agreement, or similar contract or agreement for any disclosure
made in compliance with the requirements of this section.
(4) Federal preemption.--To the extent that any provision
of State contract law would render enforceable a provision of a
nondisclosure agreement, confidentiality agreement, or similar
contract or agreement prohibited or rendered unenforceable
under this subsection, such provision of State law is preempted
by this Act.
(5) Rule of construction.--Nothing in this section
prohibits a data center operator from entering into a
nondisclosure agreement, confidentiality agreement, or similar
contract or agreement covering information that is not required
to be disclosed to the Secretary, the Administrator, or an
electing State under this section.
(g) Enforcement.--
(1) Negligent violations.--Any data center operator that
negligently fails to submit a disclosure required under
subsection (b) or a report required under subsection (c) shall
be subject to a civil penalty of not more than $50,000 for each
day of noncompliance.
(2) Knowing violations.--Any data center operator that
knowingly fails to submit a disclosure required under
subsection (b) or a report required under subsection (c), or
that knowingly submits a false or materially misleading
disclosure or report, shall be subject to a civil penalty of
not more than $100,000 for each day of noncompliance.
(3) State enforcement.--An electing State may impose fines
and engage in other enforcement activities consistent with this
section and applicable State law.
(4) Requests for information.--The Secretary and the
Administrator, acting jointly, or an electing State may issue
to an electric utility, water authority, or drinking water
utility a request for information relating to matters required
to be disclosed by a data center operator under subsection (b)
or (c).
(h) Rulemaking.--Not later than 180 days after the date of
enactment of this Act, the Secretary and the Administrator shall
jointly promulgate such regulations as are necessary to carry out this
section, including regulations establishing--
(1) standardized formatting for the disclosures under
subsection (b) and the reports under subsection (c); and
(2) procedures for submission to, and review by, the
Secretary and the Administrator of disclosures under subsection
(b), reports under subsection (c), and compilations under
subsection (d)(1).
<all>Official legislative text sourced from the public record (cached on CivicsHQ).
Official source
View the original bill, actions, and full legislative record on Congress.gov.
Status
In Committee
- 1Introduced
- 2Committee
- 3Floor
- 4Passed
- 5Signed
Timeline reflects current normalized status only. Full action history is not yet stored in the API.
Sponsors
- Sen. Warner, Mark R. [D-VA]DSenateVA
Cosponsors
No cosponsors on record.
Votes
Voting records are not yet available for this bill.