South Dakota’s SB 135 “Data Center Bill of Rights” would block tax breaks for data centers and shift full power and water costs onto operators, signaling a tougher stance on subsidizing AI infrastructure.
The sponsors frame it as protecting citizens and finite resources, while relying on the state’s already-low tax burden instead of targeted incentives to attract data center and GPU buildouts.
The bill hardens local control by preventing the state from overruling communities on siting decisions, which could slow large AI campuses where land, water, and transmission are contested.
This directly clashes with HB 1005, which would add sales and use tax exemptions for data center services to compete with 41 other states aggressively courting AI and cloud investments.
Supporters of HB 1005 argue SB 135 would lock South Dakota out of AI infrastructure growth, leaving it last in the national race for GPU farms, jobs, and property tax expansion.
For operators, the signal is policy risk: no state subsidies, full exposure to utility costs, and strong community veto power versus more incentive-rich states.
The article is worth a read to understand how a single state’s policy fight encapsulates the broader tension between AI growth, public resources, and who pays for the power and water.
Source: Legislative Leadership files ‘Data Center Bill of Rights’ for Citizens
