A5482

An Act establishing a temporary moratorium on certain data center approvals and construction, and expansion, and creating a commission to study the impacts of artificial intelligence data centers.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “Artificial Intelligence Data Center Moratorium and Impact Study Act.”

2. The Legislature finds and declares that:

a. Artificial intelligence data centers consume extraordinary amounts of electricity, water, land, and telecommunications infrastructure.

b. The long-term impacts of large-scale artificial intelligence data centers on utility rates, energy reliability, environmental quality, water resources, labor markets, public health, municipal services, and local tax structures are not fully understood.

c. New Jersey has a compelling interest in protecting residents from increased utility costs and ensuring that future technological development occurs in a responsible and transparent manner.

d. A temporary moratorium on the construction of artificial intelligence data centers is necessary to allow the State to conduct a comprehensive study and develop appropriate regulatory standards.

3. As used in this act:

“Artificial intelligence data center” means a data center that is designed, developed, constructed, operated, or expanded primarily to support artificial intelligence training, artificial intelligence inference, machine learning, large language models, generative artificial intelligence, or other artificial intelligence systems, and that has an electrical demand exceeding 10 megawatts.

“Commission” means the New Jersey Artificial Intelligence Data Center Impact Commission established pursuant to section 5 of this act.

“Construction or expansion” means the construction of a new artificial intelligence data center or any physical expansion, increase in electrical demand, increase in generating capacity dedicated to an artificial intelligence data center, or other modification of an existing facility that would increase the capacity of the facility to store, manage, process, or transmit digital data.

“Data center” means a facility whose primary services are the storage, management, and processing of digital data and that is used to house computer and network systems, including associated components such as servers, network equipment and appliances, telecommunications and data storage systems, systems for monitoring and managing infrastructure performance, Internet-related equipment and services, data communications connections, environmental controls, fire protection systems, and security systems and services.

4. a. Beginning on the effective date of this act, no State agency, authority, municipality, county, utility, or redevelopment entity shall approve, permit, subsidize, or provide tax incentives for the construction or expansion of any artificial intelligence data center.

b. The moratorium established pursuant to subsection a. of this section shall remain in effect for six months.

c. An existing artificial intelligence data center operating prior to the effective date of this act may continue operations, but shall be subject to any data reporting requirements established by the Legislature based on the commission’s recommendations.

5. a. There is established the New Jersey Artificial Intelligence Data Center Impact Commission. The purpose of the commission shall be to study and report on the impact of artificial intelligence data centers on the following:

(1) the electrical grid;

(2) water consumption;

(3) sewer and wastewater infrastructure;

(4) the environment and climate;

(5) public health;

(6) cybersecurity and homeland security risks;

(7) labor and workforce;

(8) property tax and municipal fiscal health;

(9) residential and commercial utility rates;

(10) emergency response requirements;

(11) economic development benefits; and

(12) appropriate permitting and regulatory standards.

b. (1) The commission shall consist of 12 members as follows:

(a) four members appointed by the Governor, including one representative of the Board of Public Utilities, one representative of the Department of Environmental Protection, one representative of the Office of Homeland Security and Preparedness, and one expert in artificial intelligence or data center operations;

(b) four members appointed by the President of the Senate, including one representative of organized labor with experience in construction, utility, telecommunications, or energy-sector employment, one representative of the academic community with expertise in artificial intelligence, one environmental or sustainability expert, and one representative of the public utility industry; and

(c) four members appointed by the Speaker of the General Assembly, including one municipal government official from a host community, one county government representative, one consumer advocate representing residential ratepayers, and one cybersecurity or critical infrastructure expert.

(2) Appointments to the commission shall reflect geographic, racial, ethnic, and gender diversity.

d. The commission shall conduct no fewer than 10 public hearings throughout New Jersey, including hearings in the northern, central, and southern regions of the State.

e. No later than 24 months after organization, the commission shall issue a report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), containing findings and recommendations, including, but not limited to:

(1) proposed regulatory standards; and

(2) recommendations for:

(a) tax and incentive policies;

(b) consumer protection measures;

(d) labor and workforce standards.

f. The commission shall expire six months after the issuance of its report.

6. This act shall take effect immediately.

STATEMENT

This bill, to be known as the “Artificial Intelligence Data Center Moratorium and Impact Study Act,” establishes a six month moratorium on certain approvals, permits, subsidies, and tax incentives for the construction or expansion of artificial intelligence data centers with an electrical demand exceeding 10 megawatts.

The bill establishes the New Jersey Artificial Intelligence Data Center Impact Commission. The commission is to consist of 12 members appointed by the Governor, the President of the Senate, and the Speaker of the General Assembly. Appointments are required to reflect geographic, racial, ethnic, and gender diversity.

The commission is required to study and report on electrical grid impacts, water consumption, sewer and wastewater impacts, environmental and climate impacts, public health concerns, cybersecurity and homeland security risks, labor and workforce impacts, property tax and municipal fiscal impacts, effects on residential and commercial utility rates, emergency response requirements, economic development benefits, and appropriate permitting and regulatory standards.

Within 24 months of organization, the commission is required to issue a report to the Governor and the Legislature containing findings and recommendations, proposed regulatory standards, recommended tax and incentive policies, consumer protection measures, energy and water usage standards, and labor and workforce standards.