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On July 1, 2026, Florida’s new SB 484 came into effect, which is one of Florida’s first laws regulating the construction of large-scale data centers being built across the state to facilitate cloud computing and the maintenance of artificial intelligence. SB 484 affects the development of these data center projects as well as the relationship between data center users and the communities hosting these hyperscale projects. SB 484 primarily addresses the role of local governments in the development of regulations for data center projects, placing the onus primarily on local government entities to decide how these projects are to be regulated. Owners and contractors involved or seeking to be involved in this buzzing enterprise should be aware of SB 484’s changes, the implications they carry, and the context from which these changes arise. Data center projects will now potentially be subject to additional regulations imposed by counties and towns hosting the project(s), which ought to be on the radar of anybody participating or considering participating in a data center-related project.
Data center development is a polarizing topic in the state of Florida, and SB 484 reflects the divide. A central issue to this debate relates to water usage, as hyperscale data centers often require a large amount of water to function effectively. Additionally, while many Floridians are concerned about both water usage and potential pollution, the development of additional electrical infrastructure which these data centers may demand raises additional concerns. Many Floridians have voiced concerns about these additional costs being shifted to them, rather than being imposed on the data center owners.
On June 23, 2026, the Lake County Commission unanimously agreed to a one-year moratorium on data centers, citing “the enormous drain on water resources and utilities in our county when it comes to electricity and water.” However, cities like Orlando have welcomed these promising projects and the benefits they may bring, hosting hyperscale projects such as HostDime’s $100 million data center which is currently under construction.
Many data center projects, including HostDime’s, are built (or are being built) with what is known as a closed-loop cooling system. This should ease concerns about data center water usage, as the closed-loop cooling system uses much less water than a traditional data center—instead of using fresh water once and then discharging it, a closed-loop cooling system recycles the evaporated water for continuous re-use. Advancements like this are likely to continue to take form as water usage continues to spur debate.
SB 484’s primary focus is to ensure that data center users bear their own cost of service, rather than residential and small-business utility customers. The development of hyperscale data centers is often facilitated by utility companies, as these projects commonly require supplemental electrical infrastructure. SB 484 recognizes this risk, authorizing legislatures to develop and enforce policies and regulations which ensure that the costs of this supplemental infrastructure are not shifted to anybody but the data center owners.
SB 484 also signals that Florida’s legislature intends to continue to allow local governments to regulate data centers as they see fit. The new Section 163.326 expressly allows for local governments to enact “comprehensive planning and land development regulation[s]” to address any issues caused by data center development. Permitting, zoning, and other issues related to land use (as well as the usage of local water) are issues commonly faced by owners and contractors on data center projects, and the new Section 373.262(1) specifically addresses land-use issues common to data center development. Under this new law created by SB 484, local governments are granted the authority to regulate both the permitting and zoning process as they see fit, so long as any such regulation “ensures this state’s water resources are used in the public interest, in a manner that is not harmful to the water resources of this state.”
SB 484 also includes broad language delegating regulation of data center water usage to local governments. The new Section 373.262(2) explicitly permits local water management districts to deny permits for large-scale data center applicants seeking an allocation of water if the district finds that the applicant’s proposed use “is harmful to the water resources of the area.”
Delegating these regulations to local governments may present issues for those involved in the development of these projects. Owners and contractors should be mindful not only that certain counties or localities may have significantly different guidelines and rules relating to the development of data centers, but that these differences may directly affect the planning of the project. As a result of SB 484, data center projects in some Florida locales may now require a much longer and more involved permitting or approval process than others.
Smith Currie Oles LLP provides comprehensive legal services to all parts of the construction industry across the nation. Smith Currie lawyers have decades of demonstrated success representing construction and federal government contracting clients “From the Ground Up,” including procurement matters, contract formation and negotiation, project administration, claims prosecution and, when necessary, in litigation and other forms of dispute resolution.
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