The Blanco-Pedernales Groundwater Conservation District submitted a formal resolution to Texas lawmakers on May 13 requesting explicit legal authority to deny industrial water permits to data centers.
The resolution marks the first time a Texas groundwater district has formally lobbied the Legislature on data center water consumption ahead of the 2027 legislative session, warning that the state’s artificial intelligence building boom is outpacing existing aquifer protections.
Under Chapter 36 of the Texas Water Code, the state’s roughly 100 groundwater conservation districts are the only entities holding day-to-day authority over groundwater pumping, but local officials state they lack the legal cover to turn away projects backed by Fortune 500 corporations.
Fearing they could be sued into insolvency by industrial users over what they say are vague statutory thresholds, the district’s resolution asks the Legislature for “legislative clarity on industrial water rights.” Specifically, it requests the power to deny permits when projected demand exceeds sustainable yield, mandatory water-use disclosures from data center applicants, and required evaluations of low-water cooling alternatives.
The push for regulation comes as the state’s data center footprint expands. A May 2026 report from the Houston Advanced Research Center revealed that Texas data centers consumed an estimated 25 billion gallons of water in 2025 for cooling and power generation.
The center projects that consumption could skyrocket to 161 billion gallons annually by 2030, accounting for roughly 2.7 percent of all statewide water use. Data center developers have targeted the Texas Hill Country due to available land, proximity to Austin’s tech workforce, and fiber routes along Interstate 35.
However, local well-drillers report that the underlying Edwards-Trinity, Trinity, and Ellenburger-San Saba aquifers have already dropped sharply due to ongoing drought, prompting the Blanco-Pedernales district to pause new non-exempt drilling permits earlier this year under Resolution 2026-001. According to the resolution, Texas counties possess no zoning authority over unincorporated land where most data centers are being built.
The state comptroller’s office estimates that a 2013 state sales-tax exemption for qualifying data centers will cost Texas roughly $3.2 billion over the next two years, yet the state does not require these facilities to disclose their actual or projected water usage. While the 2025 passage of Senate Bill 6 addressed grid interconnection frameworks for large electrical loads, it left water regulations entirely to local authorities.
Recognizing the mounting pressure, House Speaker Dustin Burrows and Lieutenant Governor Dan Patrick have included data center water demand within the 2026 interim charges assigned to five separate legislative panels, including the House Natural Resources Committee and the Senate Committee on Water, Agriculture and Rural Affairs. These committees are scheduled to hold their first data center hearings later this summer to draft recommendations ahead of the 90th Legislative Session.
According to the Blanco-Pedernales Groundwater Conservation District, immediate legislative intervention is required to ensure that multi-billion dollar AI infrastructure developments do not permanently compromise the foundational water resources that rural Texas communities depend on for survival.