posted on February 23, 2026 by Kathy Beckett
State legislatures across the country are wrangling with how to manage development of data centers. A myriad of stakeholders have many messages to deliver to thought leaders, but sorting those inputs into correct knowledge of the world (“world state”) is the problem looking for a solution. In the parlance of artificial intelligence as a computer science discipline, the task at hand is to design an algorithm for the “agent” legislative body to achieve its goal. So, what is the current knowledge of the world and goal?
Popular media statements suggest that the Commonwealth of Virginia has achieved first place for data center geographic density, but that oversimplifies the goal. The following assessment looks at proposed changes in data center relevant law in Virginia and, for comparison purposes, assesses the status of data center policy development in Indiana.
In fact and in law, management of the environmental impacts of data centers within states in the U.S. is already part of existing laws that define how data center goals can be achieved with reduced uncertainty. Looking at two discreet examples of proposed state legislation provides a quick overview of the inputs. The proposals for change highlight the risks identified thus far concerning perceived environmental impacts.
The 2026 Virginia General Assembly Session reveals the introduction of over 60 bills designed to supplement or modify laws involving data centers, some of which address topics relevant to environmental policy.
- Land protection and preservation, including tribal lands, funded by land preservation tax
- Reclaimed water for cooling processes requirement for data center grant recipients
- Energy efficiency, carbon-free renewable energy and grid reliability impact assessment on data centers
- Siting of data center transmission lines
- Rainwater harvesting systems for data centers
- Stakeholder engagement: a data center workgroup of the State Corporation Commission comprised of state agencies, utilities, data centers, business associations, environmental advocates, and consumer advocates
- Site assessments of data centers for noise impacts, light pollution and illumination at night, water usage and source impacts, air emissions, traffic and other construction-phase impacts, and other impacts of proximity to residential units and schools combined with 60 day non-compliance enforcement authority by the Department of Environmental Quality
- Water use consumption reporting for data centers
- Backup generator carbon-dioxide monitoring and minimum requirement for utilization of energy storage and development of emissions standards for data centers
- Air pollution study by the Department of Environmental Quality: a three-year study to research and model a variety of scenarios regarding aggregate air pollution in areas with a large volume of data centers, and to provide recommendations for future handling of minor air permits for data center generators and the need for increased air quality monitoring in the Commonwealth
- Geothermal energy study and data center utilization of geothermal electric generating resources and heating/cooling systems
The 2026 Indiana General Assembly is assessing the following amendments to existing law, with far fewer introduced bills to date:
- Stakeholder engagement: establish a working group to assess data center development comprised of the Commission, Secretary of Commerce, electric suppliers, the data center industry, regional transmission agencies; and electric utilities; conduct a study of costs and rates effects of data centers in consultation with these and other stakeholders.
- Water usage disclosure in permitting
- Site assessment of water usage, carbon emissions, agricultural, historic and cultural resources to determine possible effects
- Water consumption permit from the Department of Natural Resources based on water use rates, volumes (daily and monthly max and annual average), source, demonstration of protection of public health, safety, and welfare, and utilization of technologies to promote water conservation and watershed health
- Technologies or measures for water conservation and watershed health may include: water-efficient fixtures and practices; recycling water before discharge; partnering with local water utilities; using reclaimed water; installing closed-loop systems; and supporting water restoration and replenishment in local watersheds.
The computer science definition of a rational agent provides that, for each possible percept sequence, a rational agent should select an action that is expected to maximize its performance measure, given the evidence provided by the percept sequence and whatever built-in knowledge the agent has. In the world of artificial intelligence, search algorithms in complex environments require optimization under uncertainty. Data centers present all stakeholders with a complex environment that will require human judgment and not simply machine thinking. As environmental lawyers, we have the opportunity to lend professional perspective on this problem-solving exercise.