CA — State Policy Updated 2026-07-17

California

Statewide, generally applicable programs Data-center-specific incentive proposals Zoning and entitlement requirements Environmental constraints Moratoriums, bans, and local standards

1) Incentive programs

Statewide, generally applicable programs (not data-center-specific)

  • Partial Sales & Use Tax Exemption (PSTE) for manufacturing/R&D equipment: California provides a partial sales/use tax exemption for qualified manufacturing and R&D equipment purchases by qualified persons in specified NAICS sectors; the program is scheduled to sunset on June 30, 2030. Eligibility is activity- and use-based, not data-center-specific. CDTFA, accessed 2026-07-17; CDTFA Regulation 1525.4, accessed 2026-06-10
  • California Competes Tax Credit: GO-Biz awards negotiated income/franchise tax credits through competitive application rounds tied to job creation, investment, and other project commitments; there is no data-center-specific minimum investment or jobs threshold. On July 13, 2026, the Governor signed SB 180, extending annual allocations at the existing $180 million level for five fiscal years through 2032-33; this is a generally available business incentive, not a data-center program. GO-Biz, accessed 2026-07-17; Governor of California, 2026-07-13
  • California R&D Tax Credit: California’s qualified research credit applies generally to qualified research expenses and is not data-center-specific. California Legislative Information, accessed 2026-06-10

Data-center-specific incentive proposals (2024–2026)

  • No enacted statewide data-center-specific tax incentive was identified as of July 17, 2026. The active 2026 data-center bills reviewed below focus on reporting, water, CEQA/permitting, and electricity cost allocation rather than a new data-center tax exemption or credit. The enacted California Competes extension remains sector-neutral. Governor of California, 2026-07-13
  • SB 58 (2025) — data-center sales/use tax cap proposal removed: As introduced on January 8, 2025, SB 58 proposed a sales/use tax cap for qualified data center property with a $200 million investment threshold, 20 full-time jobs paid at least 120% of county average weekly wage, and 70% renewable/carbon-free energy procurement conditions. The bill was amended on January 5, 2026 to a non-data-center air-quality topic, so the data-center incentive language is no longer in the bill. LegiScan, 2025-01-08; California Legislative Information, 2026-01-05

2) Restrictions and moratoriums

Zoning and entitlement requirements (local control)

  • California’s Planning & Zoning Law delegates land-use regulation to cities and counties; local zoning ordinances determine whether a data center is by-right, conditional, or prohibited in a given district. California Legislative Information, accessed 2026-06-10
  • Local zoning remains jurisdiction-specific. Santa Clara’s zoning framework is an example of a use-by-zone and conditional-use system that would need to be checked project by project. City of Santa Clara, accessed 2026-06-10

Environmental constraints (statewide frameworks with local implementation)

Moratoriums, bans, and local standards

  • No statewide California data-center moratorium had been enacted as of July 17, 2026. California’s measures remained local, while the state bills in Section 4 addressed reporting, water, CEQA, and rates. National Conference of State Legislatures, 2026-07-01
  • Monterey Park: On March 4, 2026, the City Council voted to place a measure on the June 2, 2026 ballot to permanently prohibit data centers citywide and extended its moratorium so the city would not accept, process, or consider data-center applications through January 21, 2027. City of Monterey Park, 2026-03-05
  • Monterey Park Measure NDC — approved and certified: Voters approved the permanent citywide prohibition on June 2; Los Angeles County certified the election on June 26, replacing the prior preliminary-result status. City of Monterey Park, accessed 2026-07-17; Los Angeles County Registrar-Recorder/County Clerk, 2026-06-26
  • Coachella: On June 4, 2026, the City Council approved a 45-day moratorium, directed staff to draft a permanent-ban ordinance, and terminated the Stronghold Power Systems development agreement. On July 8, it unanimously extended the moratorium by 10 months and 15 days while the permanent-ban proposal is developed. KVCR, 2026-06-06; KVCR, 2026-07-09
  • Oakley: The City Council adopted an immediate 45-day moratorium on new data-center applications on April 14, after the developer of the 164-acre Bridgehead Industrial Project removed data-center use from that proposal. On May 12, the council extended the moratorium through April 14, 2027 while it develops permanent zoning rules. KQED, 2026-03-11; Contra Costa Pulse, 2026-05-15
  • Indio: The City Council unanimously adopted a 45-day moratorium on June 3, when the city had no active data-center applications, and unanimously extended the pause on July 15 while considering strict regulations or a permanent ban. City of Indio, 2026-06-04; NBC Palm Springs, 2026-07-15
  • Desert Hot Springs: The City Council adopted a 45-day moratorium on June 16 and on July 7 extended it for 22 months and 15 days to study water, power, land-use, and community impacts. KESQ, 2026-06-17; City of Desert Hot Springs, 2026-07-07
  • Imperial County and Imperial Valley cities: Imperial County unanimously imposed a 45-day moratorium on pending and new data-center approvals in unincorporated areas on June 16, then created a 19-member advisory committee to recommend zoning and land-use policy. The City of Imperial adopted its own pause in early June. Brawley rejected a moratorium on June 22 and instead adopted stricter infrastructure and land-use requirements, illustrating that regional responses were not uniform. Imperial County Board of Supervisors, 2026-06-16; Imperial County, 2026-06-24; KESQ, 2026-06-17; KYMA, 2026-06-22
  • Regional Los Angeles County trend: Reporting after the Monterey Park vote noted temporary data-center moratoriums in Montebello, El Monte, and Baldwin Park, and an Alhambra zoning-code update banning data centers. Governing/Los Angeles Times, 2026-06-04
  • Los Angeles County unincorporated areas: On April 14, 2026, the Board of Supervisors adopted a motion directing staff to study health, environmental, safety, water, electricity, land-use, labor, and community-benefit issues and report back within 120 days with recommendations for unincorporated-county data-center regulation. Los Angeles County Department of Regional Planning, 2026-04-14
  • Pending local ordinances: Calipatria voted unanimously on May 12 to draft and hold hearings on a possible five-year moratorium, not to enact the five-year pause immediately. Perris unanimously directed staff on June 9 to draft a citywide prohibition, and Mendocino County’s Board of Supervisors on July 7 directed staff to prepare an urgency moratorium for future consideration. None of those directions was itself a final ban as of July 17. inewsource, 2026-05-14; KVCR, 2026-06-10; Mendocino County, 2026-07-07

3) Local governance and community dynamics

  • Local control remains central: California generally leaves data-center siting and entitlement decisions to local governments unless a specific state law preempts local discretion. California Legislative Information, accessed 2026-06-10
  • Community opposition intensified in early 2026: Monterey Park and Coachella both moved toward bans or moratoriums after residents raised concerns about energy demand, water demand, utility-rate impacts, air pollution, noise, and proximity to neighborhoods. Guardian, 2026-06-03; KVCR, 2026-06-06
  • Water transparency became a larger policy issue: A May 2026 Next 10/Santa Clara University report found limited publicly accessible environmental-planning documents, cooling-system information, and water-source information for most mapped California data centers, and flagged higher water-scarcity and social-vulnerability risks for planned projects in regions such as Imperial County and Gilroy. Next 10, 2026-05-15
  • Imperial Valley opposition moved into court: The Sierra Club’s San Diego chapter sued Imperial County in May, alleging that the April parcel merger for the proposed 330 MW IVCM campus violated CEQA; the City of Imperial separately challenged the county’s review. These cases, the June moratorium, and a later water-service suit by the developer left the project contested rather than fully entitled. KPBS, 2026-05-27; CalMatters, 2026-06-24
  • San Jose began developing uniform standards: On June 10, 2026, the Rules and Open Government Committee directed the City Manager to develop citywide standards addressing energy sourcing, potable-water reduction and recycled/closed-loop cooling, backup-generator air pollution, greenhouse gases, noise, water quality, and community notification. The standards remained under development on July 17. City of San Jose, 2026-06-10

4) Legislative activity (2024–2026)

2025 carryover and enacted bills

  • SB 57 (2025) — Chaptered October 11, 2025: Requires the CPUC to assess whether data-center-related costs are shifting to other customers and to report by January 1, 2027; the data-center reporting requirement sunsets in 2031. California Legislative Information, 2025-10-11
  • AB 222 (2025) — held under submission in Senate Appropriations: Would have required data-center power usage effectiveness reporting to the CEC, a data-center load assessment in the 2027 IEPR, and CPUC review of cost shifts from data-center construction or alteration. CalMatters Digital Democracy, accessed 2026-06-10
  • AB 93 (2025) — vetoed; veto consideration closed: The bill would have required expected water-use and source disclosures at initial business licensing and annual direct-water-use reporting at renewal. The Governor vetoed it on October 11, 2025, and the Assembly struck consideration of the veto from its file on January 22, 2026; it was inactive as of July 17. California Legislative Information, 2026-01-22
  • AB 1095 (2025) — died: After amendments converted the proposal from renewable-energy credits for captured data-center waste heat to climate-financing eligibility for waste-heat projects, the bill was held in Assembly Appropriations in 2025, died on January 31, 2026, and was formally filed with the Chief Clerk on February 2. California Legislative Information, 2026-02-02
  • SB 58 (2025) — data-center incentive proposal removed: See Section 1 above. LegiScan, 2025-01-08; California Legislative Information, 2026-01-05

2026 bills affecting data center development

  • AB 1577 — reporting (active; Senate Appropriations): The Senate amended the bill on July 2 and referred it to Appropriations, with a hearing set for August 3. The current version applies the principal reporting regime to facilities with at least 10 MW of power capacity (up from 500 kW in the earlier draft), requires at-least-annual CEC reporting and aggregated public data, and requires permit applicants to disclose expected annual energy use and operational sound. The July amendments removed the earlier local-permit water-consumption disclosure. California Legislative Information, 2026-07-02
  • AB 2469 — water-supply assessment and scarcity planning (active; Senate Appropriations): Amended July 2 and referred to Appropriations, the bill would condition local approval on a water-supply assessment, require a water-use assessment on request, require large-use applicants to pay infrastructure costs, and require a water-scarcity plan beginning in 2028. The current version also directs DWR by June 30, 2028 to define and estimate annual consumption for large commercial/industrial facilities including data centers; it no longer contains the earlier mandate for the State Water Board to adopt a separate customer classification. California Legislative Information, 2026-07-02
  • AB 2619 — water reporting and planning (active; Senate Appropriations): Amended July 2 and referred to Appropriations, the bill would require good-faith expected direct water use and source before an initial business license, actual direct use and cooling information at renewal, DWR/CEC guidelines by January 1, 2029, and inclusion of data-center demand in urban water-shortage assessments. The July version removed the earlier indirect-water reporting requirement. California Legislative Information, 2026-07-02
  • AB 2170 — CEQA in overburdened communities: Held under submission in Assembly Appropriations on May 14, 2026. The April 22 amended bill would require CEQA review and additional notice, hearing, and translation procedures for industrial-use projects on industrially zoned land in or within one-half mile of an overburdened community; the bill is broader than data centers but would apply to covered industrial data-center projects. CalMatters Digital Democracy, 2026-04-22
  • SB 886 — California Technology Innovation and Ratepayer Protection Act (active; Assembly Appropriations): After a 14-0 Assembly Utilities and Energy vote, the bill was amended July 2 and referred to Appropriations. It would require CPUC tariffs by July 1, 2027 for qualifying large customers, with upfront responsibility for triggered transmission/distribution facilities, protections against failed ramp-up and early termination, duplicate-application disclosure, demand-response participation, and a prefunded zero-carbon-resource contract. The contract floor is now 10 years, not the earlier 15 years, and the CPUC would set the customer threshold at no more than 25 MW. California Legislative Information, 2026-07-02
  • SB 887 — CEQA and environmental leadership projects (active; Assembly Appropriations): Following passage by Assembly Natural Resources and Utilities and Energy, the bill was amended June 29 and referred to Appropriations. It would bar categorical exemptions for data-center development and operation while allowing qualifying projects to seek environmental-leadership certification under statewide standards; specified research, public-safety, national-security, public, and telecommunications facilities are excluded. California Legislative Information, 2026-06-29
  • SB 978 — labor and electricity-rate structures: Held under submission on May 14, 2026. The March 23 amended bill would require a CPUC special rate structure for data centers taking transmission-level service with estimated peak demand of at least 75 MW, including protection against cost shifts and upfront payment for transmission or distribution upgrades, plus labor requirements and clean-energy-policy reporting. CalMatters Digital Democracy, 2026-03-23
  • SB 1168 — data-center rate structures (active; Assembly Appropriations): After an 18-0 Assembly Utilities and Energy vote, the bill was amended June 15 and referred to Appropriations. The amendment deleted the proposed natural-gas/electricity surcharges and surcharge fund. The current bill instead requires the CPUC to assess rate structures so data centers pay a reasonable share of transmission, distribution, and procurement costs in proportion to load and consistent with integrated-resource planning. California Legislative Information, 2026-06-15

Session outcome as of July 17, 2026: no newly introduced 2026 data-center bill above had reached the Governor. AB 1577, AB 2469, AB 2619, SB 886, SB 887, and SB 1168 remained active in fiscal committees; AB 2170 and SB 978 remained held under submission, AB 222 remained held in Senate Appropriations, SB 58 remained active only on its repurposed air-quality subject, and AB 1095 was the carryover measure that died. Because the regular session was still underway, describing any other active measure as passed, vetoed, or dead would be premature. California Legislative Information, accessed 2026-07-17

5) Notable projects and operators

  • Equinix (San Jose, SV12x): Equinix and PGIM Real Estate formed a $600 million joint venture for more than 28 MW at full buildout; the first phase was energized and opened in January 2026, replacing the earlier development-only status. Equinix, 2024-04-15; PG&E, 2026-01-22
  • Vantage Data Centers (Santa Clara, CA3 campus): Vantage currently describes CA3 as a planned one-building, 486,000-square-foot, 64 MW campus and no longer publishes the former late-2025 availability target on the current project page. This file therefore treats the prior target as stale rather than assuming full delivery. Vantage Data Centers, accessed 2026-07-17
  • QTS (Santa Clara data center campus): QTS operates and markets a Santa Clara campus as a major California colocation facility. QTS, accessed 2026-06-10
  • Prime Data Centers (Sacramento SMF02): Prime broke ground on May 7 on the second facility at its Sacramento campus: 150,000 square feet and 18 MW of critical IT load, using closed-loop cooling. Prime projected approximately 250 construction jobs and 30 permanent positions; it did not disclose a project investment amount. Prime Data Centers, 2026-05-07
  • DataBank/Goodman (Vernon): A 50/50 joint venture announced a 32 MW facility at 3094 E. Vernon Avenue, with the first 6 MW expected in December 2026 and the balance staged through September 2027. The release did not disclose project-specific investment. DataBank, 2026-04-07
  • Amazon Web Services (Gilroy): The city issued a building permit on March 19, 2026 and lists the two-building, approximately 438,500-square-foot campus as under construction. Phase I requires 49 MW of PG&E service and includes 25 diesel emergency generators; Phase II would use battery or fuel-cell backup. The city source does not disclose AWS’s investment amount. City of Gilroy, accessed 2026-07-17
  • Microsoft (San Jose/Alviso): Microsoft broke ground on June 10 on its first purpose-built, company-owned San Jose data-center campus, reported at 48.5 MW. The cited source did not disclose project investment. Bay City News/Local News Matters, 2026-06-12
  • CoreSite (Santa Clara): A CoreSite affiliate paid $100 million in February for three technology buildings at 2805 and 2855 Bowers Avenue and 2710 Walsh Avenue. Santa Clara had approved a 244,100-square-foot data-center redevelopment at 2805 Bowers in 2024, but CoreSite had not disclosed whether it would carry out that plan or convert the other buildings; the transaction is therefore a site acquisition, not a confirmed new-capacity announcement. The Real Deal, 2026-02-10
  • ECL (Santa Clara CSC-1): ECL announced a 35 MW Santa Clara facility using a mix of grid electricity, natural gas, storage, and behind-the-meter hydrogen power blocks, with a first phase of 2.5 MW of IT capacity. On July 13, ECL and PowerCell disclosed a firm fuel-cell-system order with first deployments planned for CSC-1; the accompanying nonbinding 300 MW memorandum concerns ECL’s wider U.S. portfolio, not 300 MW of additional Santa Clara capacity. Reported investment amount was not disclosed. Data Center Dynamics, 2026-04-22; Data Center Dynamics, 2026-07-13
  • Golden Valley Technology Hub (Kern County): Beacon Data Centers and California Resources Corporation announced a proposed 275 MW, approximately 400,000-square-foot campus on 100 acres at the Elk Hills oil field, supplied behind the meter by CRC’s existing power plant with grid and diesel backup. No construction schedule or project investment was disclosed. Data Center Dynamics, 2026-06-24
  • RB Inyokern Data Center (Kern County): R&L Capital’s 238,000-square-foot proposal entered CEC review in docket 26-SPPE-01. It would connect through a dedicated SCE substation and use forty diesel generators for up to 99 MW of emergency generation. As of July 17 the small-power-plant-exemption application was under review, and the docket contained numerous public comments raising water, air-quality, noise, health, and land-use concerns; no investment amount was disclosed. California Energy Commission, accessed 2026-07-17; California Energy Commission docket 26-SPPE-01, accessed 2026-07-17
  • Prologis (San Jose): San Jose received special-use application SP26-016 on July 13 for an approximately 516,000-square-foot, three-story data center at 5977 Silver Creek Valley Road with a 99 MW maximum electrical load, backup generators, and an onsite substation. Environmental review was pending and no investment amount was disclosed. City of San Jose, 2026-07-13
  • Google (San Jose, Disk Drive): A CPUC draft resolution identifies Google’s proposed facilities at 5079 Disk Drive as a transmission-served data-center load forecast at 250 MW at full build, with construction planned for January 2027 and service in December 2028. Draft Resolution E-5455 was placed on the CPUC’s July 16 consent agenda, but the reviewed resolution still had blank adoption fields; this file therefore treats the utility agreement as awaiting a posted final disposition at the July 17 cutoff. The cited sources did not disclose project investment. CPUC draft Resolution E-5455, 2026-07-02; CPUC Public Agenda 3584, 2026-07-14
  • Imperial Valley Data Center Campus: Imperial Valley Computer Manufacturing describes a proposed 950,000-square-foot, 330 MW campus with 862 MWh of battery storage. Imperial County’s April lot-merger action advanced the site, but the June county moratorium, unresolved utility/water service, litigation, and local opposition left the project materially uncertain as of July 17. The developer has described the project as a $10 billion investment, but that figure is a developer claim, not an audited public estimate. City of Imperial, accessed 2026-07-17; KPBS, 2026-04-07; CalMatters, 2026-06-24
  • Coachella proposals/status change: An April concept described up to 600 MW of data-center capacity, but the city subsequently terminated the separate Stronghold Power Systems agreement and extended its moratorium while drafting a possible permanent ban. Neither reviewed source disclosed an investment amount. Data Center Dynamics, 2026-04-10; KVCR, 2026-07-09
  • Global Stack fairgrounds concept—statewide pitch, not eight approved projects: Global Stack discussed a model combining an 8-10 MW data center, parking garage, and helipad on about five acres with at least eight fairgrounds: Cow Palace, San Mateo, Calistoga, Solano, Tulare, Kings, Antelope Valley/Lancaster, and Perris. The company pitched a goal of 70 fairgrounds by 2030, but Cow Palace and San Mateo described their contacts as exploratory or preliminary and Calistoga rejected the concept. No reviewed source documented permits, utility commitments, investment, or jobs for the remaining sites, so they should not be counted as committed projects. San Francisco Chronicle, 2026-07-08
  • Mount Shasta inquiry—not an application: An unnamed party expressed interest in the former Crystal Geyser site at 210 Ski Village Drive, but no formal application, capacity, investment, or operator identity had been disclosed by June 26. A petition opposing the concept had more than 7,500 signatures, so this should be tracked as an early inquiry and community response rather than pipeline capacity. Data Center Dynamics, 2026-06-26
  • Monterey Park, Oakley, Calistoga, and El Segundo withdrawals: Monterey Park’s roughly 247,000-square-foot proposal was withdrawn before voters approved the permanent ban. In Oakley, the Bridgehead developer removed data-center use before the council approved the larger industrial project on March 10. After a June 25 advisory-committee presentation and resident opposition, Calistoga said it would not pursue Global Stack’s fairgrounds concept. On July 9, Eight Form withdrew its proposed 230,780-square-foot, 50 MW El Segundo project during a Planning Commission meeting after public objections concerning noise, water, power use, and siting. These were project or scope withdrawals, not completed builds. Governing/Los Angeles Times, 2026-06-04; KQED, 2026-03-11; San Francisco Chronicle, 2026-07-01; Data Center Dynamics, 2026-07-15

Key operators and developers with significant California operations or active proposals include Equinix, Vantage, QTS, Prime, STACK Infrastructure, Microsoft, AWS, Google, CoreSite, DataBank/Goodman, ECL, Beacon/CRC, R&L Capital, Prologis, and Global Stack, based on the project and permitting sources cited in this file and the energy file.

Research notes / gaps

  • California still lacks a statewide, data-center-specific tax incentive program; the 2026 activity is mainly regulatory, water, reporting, ratepayer-protection, and CEQA/permitting legislation.
  • Local restrictions, including by-right versus conditional use, moratoriums, and bans, are jurisdiction-specific and can change quickly; verify the target city/county zoning code, emergency ordinances, and general-plan amendments before relying on a site-specific conclusion.
  • Project announcements often omit either investment amount or MW. Where the reviewed source omitted investment or MW, this file explicitly says the figure was not disclosed rather than inferring it.