Federal legislation ties data center tax incentives to LEED certification

A new federal bill would tie tax breaks for data centers to green building standards. Senator Mark Warner of Virginia introduced the Data Center Tax Accountability and Disclosure Act, which would require data centers to earn LEED Gold or Platinum certification (a widely used green building rating) to qualify for federal bonus depreciation, a tax break that lets owners immediately write off certain investments. The bill would also require all large data centers, those with 25 megawatts or more of power demand, to report their energy and water use each year, including where that energy and water comes from and how much backup power systems are used.

This is part of a broader push by lawmakers to deal with the strain that fast-growing data centers, driven largely by AI, are putting on local power grids and water supplies. Other states have tried different approaches, including a recent pause on new data center construction in New York and rules requiring developers to cover the cost of grid upgrades their projects need.

For homeowners, this bill does not create any new rebate or program you can apply for. It targets data center developers and their tax treatment, not household energy upgrades. The relevance is more indirect: data centers are a growing driver of electricity and water demand in many regions, and how that demand is managed can affect local utility costs and grid capacity over time.