Opinion

Texas Needs A Stronger Legal Framework For Data Center Regulation

Significant developments have occurred over the last two weeks regarding concerns over data center development. On September 14, Governor Greg Abbott issued a directive requiring the Texas Water Development Board (TWDB) to pursue legal measures against major water users, including data centers, that are non-compliant with state law and water use reporting requirements. On September 21, the Texas Tribune reported that Abbott broadened the moratorium by halting the issuing of new permits for data centers, which will last until ERCOT and the TWDB complete their audit.

I covered the issue of water usage for data centers earlier this month, focusing on concerns raised by residents and officials in Cameron and Hays counties, in addition to who has authority to reject or delay these projects. MyRGV reported that on September 1, the Brownsville City Commission decided to move forward with establishing a moratorium on new rezoning or permit applications for data centers. Several voiced their concerns, with Brownsville attorney Jaqueline Morales, who was in attendance, expressing the need for a moratorium on data centers, and resident Veronique Medrano requesting that the city match the 120-day moratorium imposed by Harlingen in a commission meeting held on August 18.

FOX 7 Austin reported that during a meeting of the Hays County Commissioners Court presided over by Hays County Judge Ruben Becerra on June 23, 2026, multiple residents expressed their frustration regarding the development of data centers in their region. According to the official meeting transcript, one resident decried data centers as “not compatible with life,” and another resident pleaded with the Commissioners Court to fight for their community.

Ultimately, Community Impact reported that the Commissioners Court unanimously passed a resolution establishing a 180-day emergency review period for high-usage development applications, including applications for data centers. Discretionary approvals, such as development agreements and variance requests, will also be deferred during this period. Separately, incentives will not be offered until December 31, 2026.

While analyzing my findings, I noticed a pattern. All of these measures had to be taken within the legal boundaries that both counties and cities have when dealing with development projects, especially with data centers. My proposal is that the Texas Legislature establish a baseline for counties and cities to work with so they can know what development projects they can review, approve, or deny, especially those that use significant resources, especially water.

The issue of water usage was highlighted by UT News in May 2026 after UT researchers published a white paper in December 2025, written by the COMPASS Research Consortium. UT News reported that Texas data centers currently account for less than 1% of the state’s water usage, with the paper estimating that by 2040, they could account for 3% to 9% of its total use.

Due to rising concerns over the impact data centers could have on communities, especially those where water is scarce, the baseline should consist of the following:

• Clear statewide legislation outlining the scope and limits that counties and cities must operate within
• Required water usage reviews and reports for development projects that exceed a state-required threshold, with clear penalties if they fail to comply with state and local regulations
• A process allowing cities and counties to review what development projects can be approved, denied, or deferred while allowing them to set their own policies using the framework the state has provided for them

Communities are being impacted by this, and residents and officials need action. With this proposed framework, Texas cities and counties have a real chance to protect their water supplies.