Water resources: data centers.

Data centers no longer must report 'indirect water use' (the volume of water withdrawn to generate electricity consumed by the data center) when applying for a business license renewal with a city or county. The reporting requirement now covers only total water use and direct water use.

The statutory definitions of 'indirect water use' and 'total water use' were removed from both Section 16000.4 (cities) and Section 16100.4 (counties). 'Total water use' is still referenced in the reporting requirement but is no longer defined in the bill.

Sections of the bill were renumbered (old Sections 5, 6, and 7 became Sections 4, 5, and 6 respectively), and a grammatical error in the act description was corrected ('to, the Water Code' changed to 'to, of the Water Code').

Multiple instances of the typo 'an a good faith estimate' were corrected to 'a good faith estimate' throughout the digest and statutory text.

Water use estimates that data centers must provide to water suppliers and include on business license applications are now qualified as 'good faith' estimates rather than plain estimates. This lowers the standard from what could be read as requiring accurate projections to one that only requires honest effort, potentially reducing legal exposure for data center operators if actual usage differs from projections.

The amendment to Water Code Section 10632.1 is entirely removed. The previous version required urban water suppliers to submit an annual water shortage assessment report to the state by July 1 that included data center demand information. This state-level reporting requirement no longer exists in the bill.

Redundant language in Water Code Section 10632 is cleaned up. The old text said 'including data center demand, including, but not limited to, the unconstrained demand of data centers, irrigation, and other large users' (mentioning data centers twice). The new text reads 'including, but not limited to, the unconstrained demand of data centers, irrigation, and other large users.'

Sections are renumbered due to the removal of former Section 6 (the 10632.1 amendment). The statewide concern finding moves from Section 7 to Section 6, and the no-reimbursement clause moves from Section 8 to Section 7.

Data center type definitions (Type I, II, III) were simplified by removing all kilograms-per-square-meter thresholds. Type I is now defined solely as more than 10,000 servers or more than 25 megawatts of power consumption. Type II is now just power consumption between 2 and 25 megawatts. Type III is now just power consumption under 2 megawatts. This makes the classification easier to apply in practice.

In the water shortage contingency plan requirements (Water Code Section 10632), the separate line item '(vi) Data center demand' was removed. Instead, data center demand is now folded into the existing 'current year unconstrained demand' category, which is expanded to explicitly include 'the unconstrained demand of data centers, irrigation, and other large users.' This treats data centers as one component of overall demand rather than a standalone tracking category.

The statewide concern finding (which overrides local charter city autonomy) was narrowed. The Assembly version applied it to both Section 2 (cities, Business and Professions Code 16000.4) and Section 3 (counties, Business and Professions Code 16100.4). The Senate version limits it to only Section 2 (the city provision), removing the explicit charter city override for the county reporting requirement.

Type I data center definition changed from requiring more than 10,000 servers AND more than 25 megawatts of power consumption to requiring more than 10,000 servers OR more than 25 megawatts. This broadens the category to capture facilities that meet only one of those two thresholds (in addition to the density requirement), subjecting more data centers to the highest level of reporting and efficiency requirements.

Section 10632(a)(2)(B)(i) now explicitly requires urban water suppliers to include 'data center demand' when assessing current year unconstrained demand in their annual water supply and demand assessments, making data centers a named factor rather than something that might be captured under general 'growth' considerations.

Best practices item (5) now explicitly states that scalable water-efficient practices apply to Type I and Type II data centers as defined in subdivision (d), adding specificity about which facility types must meet the scalability requirement.

Section 10609.1(a) changed from 'maximize the use of natural resources' to 'maximize the efficient use of natural resources,' adding the word 'efficient' to clarify the intent of the guidelines.

Section 7 (preemption clause) corrected grammatical errors: 'Sections apply' changed to 'Sections apply applies' and added 'Section' before section numbers for clarity. No substantive change to the preemption scope.