New York State Legislature passes first-in-the-nation data center moratorium: Top points

The New York State Legislature has passed the Responsible Data Center Development Act (S10642/A11560), imposing a one-year moratorium on state permits for new large data centers with peak demand of 20 megawatts (MW) or more.

The bill cleared the Senate 44–16 and the Assembly 102-39 on June 4, 2026. If the bill is signed by Governor Kathy Hochul, who has not yet announced a position, New York would become the first state to enact a statewide data center moratorium.

As we discussed in our February 2026 alert, “New York proposes moratorium on data center permits,” the legislature originally introduced Senate Bill S.9144, which would have imposed a moratorium of at least three years and required a Generic Environmental Impact Statement with nine regional public hearings before the pause could be lifted.

The act that ultimately passed represents a compromise, shortened to one year, but retains and, in some cases, expands the earlier bill’s focus on environmental review, cost allocation, and ratepayer protection. It reflects a broader national movement in which communities and state governments are reassessing data center development in light of concerns over energy costs, water use, grid strain, and community impacts.

Key provisions of the act

Moratorium scope. For one year from the effective date, the Department of Environmental Conservation (DEC) may not issue any permit, certificate, license, or other approval for a large data center. The freeze does not apply to modifications or renewals of existing approvals, nor to projects that have commenced construction before the law takes effect. Unlike the original S.9144 proposal, which would have applied to additional permits for data centers already under construction but not yet operational, the act exempts any project that has commenced construction by the effective date.

Threshold structure. The act uses three thresholds: data centers with peak demand of 1 MW or more, covered data centers with peak demand of 5 MW or more, and large data centers with peak demand of 20 MW or more. Only large data centers are subject to the DEC permitting moratorium, but 5 MW facilities are subject to renewable energy and labor requirements, and data centers generally are subject to energy-efficiency goals.

Environmental review and public hearings. DEC must prepare a statewide environmental impact report within 18 months, examining energy use, water consumption, land use, pollution, and impacts on disadvantaged communities. Future large data center approvals would require at least one in-person public hearing in the host community, with 30 days’ advance notice and detailed disclosures regarding energy, water, wastewater, and public incentives. The report deadline does not appear to extend the moratorium automatically: The moratorium provision independently bars DEC approvals only until one year after the effective date, while the final report is due within 18 months after enactment.

Cost allocation and credit support. Utilities would be required to create separate service classifications for large data centers, assigning infrastructure upgrades, administrative and operational costs, rate-of-return costs, agency and municipal implementation costs, and commodity-price increases attributable to large data centers to that class rather than other ratepayers. The Public Service Commission (PSC) must ensure new or modified classifications and adjustment mechanisms are fully implemented by June 1, 2030, and the bill authorizes financial surety requirements such as insurance, guarantees, surety bonds, letters of credit, or self-insurance.

Renewable energy mandates. Data centers with peak load of 5 MW or more would need to demonstrate, through annual third-party independent verification that is acceptable to the PSC, that at least one-third of their electricity consumption is derived from renewable energy from 2030 through 2034, two-thirds from 2035 through 2039, and 90 percent in 2040 and thereafter. They also must demonstrate that they derive as much of their energy needs as is technologically, environmentally, and practically feasible from on-site renewable generation. The act does not address whether renewable energy credits (RECs) satisfy compliance.

Community benefits and labor standards. New large data centers – and expansions adding 20 MW or more – would fund host-community benefit programs and measures addressing water pollution, wastewater strain, water scarcity, and related water impacts. The PSC must begin a proceeding within 90 days to establish that program, including community engagement and host-community preference mechanisms. Separately, construction or expansion of a covered data center (5 MW or more) would be subject to prevailing-wage requirements, apprenticeship or workforce-training obligations, building-service prevailing wage, and domestic iron and steel requirements.

The national landscape

More than 300 data center-related bills have been filed across more than 30 states in 2026; at least 12 states have considered moratorium legislation; and more than 100 local moratoria have been adopted nationwide. An estimated $64 billion in projects have been blocked or delayed by community opposition.

In Virginia, 15 data center bills were enacted this session, and a court invalidated project approvals in Prince William County on procedural grounds. In Georgia, multiple counties adopted moratoria or zoning restrictions. Maine’s legislature passed a moratorium in April 2026, but Governor Janet Mills vetoed it. In Texas, Hill County briefly enacted a one-year moratorium in May 2026 but rescinded it on June 4, 2026 after a developer sued; the county replaced it with a project-review checklist. At the federal level, a moratorium bill has been introduced in the Senate, though passage remains uncertain.

Key takeaways for companies

Regulatory uniformity is gone. Data center siting now requires evaluating legislative stability, community sentiment, and regulatory readiness alongside power availability – a shift from a purely “energy-first” site selection model.

Community engagement may be outcome-determinative. Opposition has resulted in electoral consequences for local officials, ballot initiatives, lawsuits on procedural grounds, and project abandonments. Early, transparent engagement with host communities may help reduce project risk.

The New York bill may influence other states. Sponsors have framed the legislation as a national model. Companies with multi-state portfolios may wish to monitor legislative activity closely.

Pipeline projects in New York face uncertainty. The 28 large data centers currently in the New York Independent System Operator (NYISO) interconnection queue, totaling approximately 9,682 MW, could experience significant delays if the bill is signed. Projects already under construction would not be affected.

Cost-allocation requirements could reshape project economics. The act’s model of requiring data centers to internalize all system costs is consistent with measures enacted or proposed in Virginia, Texas, and North Carolina.

Companies navigating these developments may consider integrated legal strategies that address land use, energy regulatory, environmental, and public policy considerations from project inception. For more information, please contact the authors.