PHOENIX — The Arizona State Senate voted 19 to 11 on Friday to require every data center using more than 10 million gallons of water a year to publish monthly consumption figures and to purchase offsetting supplies in groundwater basins the state classifies as overdrawn. The measure now goes to the governor, who has 10 days to sign or veto it.
The bill is the first attempt by a Western state to attach a direct water price to the artificial-intelligence building boom that has turned the desert west of Phoenix into one of the largest concentrations of computing capacity in the world. Roughly 60 campuses are operating or permitted in Maricopa and Pinal Counties, according to the Arizona Department of Water Resources, and the department estimates their combined cooling demand at 28,000 acre-feet a year, about what a city of 90,000 people consumes.
“For three years we have been told the numbers are proprietary,” said Lorena Castellanos, a hydrologist at Arizona State University who advised the bill’s drafters. “You cannot manage an aquifer when the biggest new straw in it is a trade secret.”
Under the measure, operators in basins designated as having a 100-year supply shortfall, which includes much of the Buckeye and Queen Creek areas, would have to buy and retire agricultural water rights equal to 110 percent of their use, or pay into a state recharge fund at a rate the department would set annually. The industry’s trade group estimated the cost at $40 million to $70 million a year across the sector and warned that some planned projects would move to Texas or New Mexico.
Those warnings did not sway the rural Republican senators whose votes carried the bill. Their districts have watched household wells go dry as deep industrial pumping drew down the water table. In La Paz County, where a cluster of three campuses opened last year, 140 residential wells have been deepened or abandoned since 2024, county records show.
“I have constituents hauling water in the back of a pickup while a company a mile away runs a cooling tower all night,” one senator told the chamber during the debate, in remarks greeted with applause from the gallery.
Developers say the picture is more nuanced. Newer campuses use closed-loop and air cooling that cut water use by as much as 80 percent compared with evaporative systems built five years ago. Pieter van Houten, chief sustainability officer at a Scottsdale company that designs cooling plants, said the bill’s reporting requirement was “entirely reasonable” but argued that the offset ratio punished operators who had already invested in efficient equipment. “We should be rewarding the people who got the water use down, not pricing them like the worst actor,” he said.
The bill also requires the water department to publish a consolidated annual report on industrial groundwater use by sector, something farmers have been obliged to do since 1980 while data centers, classified as commercial users, have not.
Outside the Capitol on Friday, Marisol Reyes, a 61-year-old retiree from Buckeye who drove in to watch the vote, said she did not oppose the industry. “I just want to know what they are taking,” she said. “It is our water. We should at least get to see the bill.”
A version of this article appears in print on Oct. 12, 2026, Section A, Page 17 of the European edition with the headline: Arizona Legislature Moves to Make Data Centers Report, and Pay for, Every Gallon.
