Sponsor
Mark R. Warner
Senator · D-VA
Senator · D-VA
The bill trades a targeted tax incentive and clearer rules to accelerate AI data center investment and improve local and federal visibility into resource and emissions impacts against near-term federal revenue loss, new compliance costs and fines, potential market distortions, risks to confidentiality and security, and weaker incentives for greener buildings.
Owners and operators of AI data centers can immediately expense qualifying AI data center property (100% bonus depreciation), lowering taxable income in the year of investment and improving after-tax returns for investors.
Communities near large data centers (especially rural and local governments) gain regular transparency on local water and electricity use, helping local planning, resource allocation, and resilience to high-demand facilities.
State and federal agencies receive standardized data on data center energy and water use, enabling better assessment of grid and water system stress and more informed infrastructure and reliability decisions.
Accelerating full expensing for AI data center property reduces near-term federal revenue, which could increase deficits or crowd out other federal spending priorities.
Public disclosure mandates and preemption of nondisclosure provisions could reveal operational and siting details, removing contractual confidentiality and raising national-security risks for sensitive or dual-use facilities.
Large data center operators face significant new compliance costs and the risk of heavy sanctions (including daily fines up to $100,000 for violations), increasing operating costs and potential passthrough to customers or taxpayers.
Based on analysis of 3 sections of legislative text.
Disallows 100% bonus depreciation for defined AI data centers and requires large (≥25 MW) non‑Federal data centers to disclose energy, water, and operational data to electing States or federal agencies.
Official title: 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.
Introduced July 21, 2026 by Mark R. Warner · Last progress July 21, 2026
Removes the special 100% bonus depreciation benefit for newly defined "AI data centers," narrows accelerated tax write-offs for facilities that are primarily used for artificial intelligence, and creates leasing rules for such facilities. It also creates a federal-state reporting and disclosure regime for large non‑Federal data centers (25 MW+), requiring operators to submit energy, water, and other operational and community-impact data to an electing State or federal agencies. The bill defines key terms (AI data center, AI, GPU, PUE/WUE standards, covered data center), sets deadlines for initial disclosures (existing centers within 180 days after enactment; new centers 180 days before operations), and delegates standards-setting authority to DOE and EPA for alternative green-building equivalency. The tax changes apply to property placed in service after enactment; the reporting rules apply to covered data centers meeting the power threshold and to the States or federal recipients that receive disclosures.