US Lawmaker Proposes 'Data Center Bill of Rights' to Empower Communities Over AI Data Center Siting

California Congressman Ro Khanna has introduced a new bill in the US House of Representatives aimed at giving local communities greater control over the construction and operation of AI data centers. The proposed legislation, dubbed the Data Center Bill of Rights, is the latest in a growing wave of federal and state efforts to address the rapid expansion of data center infrastructure and its impact on surrounding neighborhoods.

The bill, if passed, would prohibit data centers from being built in residential areas and within 2,500 feet (762 meters) of homes, schools, childcare facilities, hospitals, and nursing homes. Khanna said the measure is designed to ensure that communities are not left to bear the negative externalities of the AI boom without proper oversight or benefit.

"Families should not face higher electricity bills, depleted water supplies, or increased pollution from data centers in their communities. Americans deserve the right to know what is being proposed, to decide what gets built in their neighborhoods, and to share in the economic benefits," Khanna said in a statement.

Beyond siting restrictions, the resolution would grant communities the power to reject proposed data center projects through a transparent community process. It would also preserve the right of counties and municipalities to prohibit or regulate data center development without being preempted or overruled by state authorities, and would allow for statewide pauses on new developments. The bill further mandates that all data centers use clean and reliable energy while complying with strict limits on noise and air pollution.

The legislation also introduces significant transparency requirements. Communities would receive a comprehensive impact report assessing a data center's effects on electricity demand, utility bills, public health, noise and air pollution, consumer goods prices, rents, and housing availability. Data center operators would be required to disclose projected water consumption to local water providers, obtain a written compatibility determination before project approval, and submit semiannual water usage reports for public review.

On the fiscal side, the bill requires data center owners to pay their fair share of state and local taxes. It also stipulates that any tax exemption or public subsidy must be tied to strong labor standards, full transparency, and clawback provisions if those conditions are not met.

The Data Center Bill of Rights arrives amid heightened legislative scrutiny of the data center market's impact on local communities. In June, Senators Bernie Sanders (I-Vt.) and Alexandria Ocasio-Cortez (D-NY) proposed a nationwide moratorium on new data center builds exceeding 20MW in capacity. Several states, including Oregon, Ohio, North Carolina, and Virginia, have introduced new rate classes for data centers, while New York became the first US state to enforce a full-scale moratorium on new developments late last month.

Industry observers note that the bill reflects a broader shift in how policymakers are weighing the economic benefits of AI infrastructure against the environmental and social costs borne by host communities. As data center demand continues to surge, the outcome of such legislative efforts could reshape where and how AI computing capacity is deployed across the United States.