North Dakota Legislators Draft New Data Center Rules

Proposed legislation seeks to regulate electricity costs, water usage, and facility decommissioning across the state.

Updated on Oct. 21, 2026 in Data Centers

Isometric editorial illustration of an industrial server building and cooling infrastructure set against a sparse, open landscape. — North Dakota lawmakers are drafting new legislation to regulate data center electricity consumption, water usage, and long-term facility decommissioning requirements. AI Illustration. Upload story photo >

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Should states pass specific laws to regulate the electricity and water use of local data centers?

Representative Anna Novak is spearheading new legislation aimed at regulating the operational impact of data centers in North Dakota. The proposed bill addresses concerns regarding rising electricity costs for residents, water usage, and long-term facility abandonment.

Why it matters

Lawmakers are responding to public anxiety over the strain large-scale data facilities place on local infrastructure and resources. The bill aims to establish clearer state-level oversight before the upcoming legislative session.

The proposed regulations mandate closed-loop water cooling systems for all facilities and establish a mechanism to prevent shifting data center electricity costs onto residential ratepayers.

The players

Anna Novak

Representative Anna Novak is a North Dakota state legislator representing Hazen who is leading the push for data center regulation.

Dean Rummel

Senator Dean Rummel is a North Dakota state legislator who proposed restricting sales tax exemptions exclusively to computing equipment.

Jose Castaneda

Senator Jose Castaneda is a North Dakota state legislator who advocated for counties to draft local ordinances for data center development.

David Hogue

Senator David Hogue is the Senate Majority Leader in North Dakota who emphasized the role of county-level decision-making in zoning.

The details

Representative Anna Novak briefed colleagues on the framework in Bismarck, which includes narrowing sales tax exemptions to exclude non-computing equipment. Additional proposals from Senator Jose Castaneda and Senator Dean Rummel suggest delegating zoning authority to counties to better manage the physical placement of these facilities.

October 20, 2026: Representative Anna Novak briefed legislative colleagues on the proposal.
January 2027: The legislative session is scheduled to begin.

The Tech Race

This move represents a shift toward more restrictive state-level governance compared to the current lack of direct regulation for industrial data center development. It mirrors a broader trend where states are re-evaluating the infrastructure costs associated with the rapid expansion of digital computing hubs.

The legislation aims to protect residential ratepayers from absorbing the high electricity costs associated with large data center operations. Residents in areas targeted for new facilities may see increased local oversight regarding water usage and infrastructure planning.

The takeaway

The proposed North Dakota legislation highlights the growing tension between rapid digital infrastructure expansion and the protection of local public resources. State residents and business stakeholders should monitor the legislative session in early 2027 to see how these potential shifts in zoning and tax policy might impact regional economic growth.