Overview
- The San Marcos City Council voted 4-3 on June 16 to change zoning and bar data centers inside city limits, making San Marcos the first Texas city to do so.
- State Sen. Paul Bettencourt has vowed a legal challenge, saying the ban conflicts with recent state laws that limit municipal restrictions and could be struck down in court.
- Gov. Greg Abbott has pushed regulators and lawmakers to require developers to fund grid upgrades, use closed-loop cooling, report annual water and power use, end some tax breaks and has publicly endorsed banning centers in rural neighborhoods.
- Several counties that tried moratoriums have reversed course after legal pressure, including Hill County rescinding its pause after a developer filed a $100 million lawsuit.
- A Texas Tribune analysis shows nearly half of planned data centers are slated for unincorporated areas outside city control, a shift that experts say will move disputes from local zoning fights to state regulators, courts and the 2027 Legislature while residents worry about water, electricity costs and neighborhood impacts.