A formal opinion request asking whether Texas counties have the legal authority to pause data center construction has been under review at the Office of the Attorney General (OAG) for more than three months.
While Attorney General Ken Paxton has not yet issued a formal opinion on the matter, local governments have moved ahead to impose their own moratoriums, turning the open state-level legal question into a direct policy test case across a fast-expanding technology sector.
Hood County Attorney Matthew Mills submitted the opinion request, RQ-0633-KP, on February 23, 2026, after local county commissioners voted down a proposed AI-development pause. The filing asks the OAG to determine whether the county can legally declare an industrial development moratorium under Chapter 231, Subchapter K of the Texas Local Government Code—a unique 1999 environmental statute that granted Hood County specific regulatory authority to protect Lake Granbury and the Brazos River.
While a formal decision is still pending from the state, Hill County and the City of Harlingen have enacted independent data center freezes to study local water, grid power, and land-use strains.
The escalating zoning battles clash directly with a perceived aggressive statewide strategy to court the digital infrastructure sector. Brokerage firm JLL forecasts that Texas will overtake Virginia as the largest data center market in the world by 2030, and the Texas Comptroller’s office projects roughly $3 billion in foregone sales taxes over the next two years due to existing data-center tax exemptions.
Further, state grid operator ERCOT projects that total power demand could nearly quadruple by 2032, driven largely by artificial intelligence data centers and crytpocurrency mining facilities.
The Hill County Commissioners Court voted 3–2 on May 12, 2026, to implement a one-year moratorium on data center construction in unincorporated areas, with County Judge Shane Brassell casting the tie-breaking vote.
Before the vote was finalized, Hill County Attorney David Holmes explicitly warned commissioners that they risked drawing immediate litigation, an assessment Brassell echoed to residents by stating he expected lawsuits to follow the local restriction.
Nine days later, on May 21, 2026, the Harlingen City Commission approved a separate 120-day moratorium on accepting new data center applications, passing the measure with one commissioner dissenting.
Cameron County Judge Eddie Treviño Jr. noted that the county remains in pre-permitting discussions with at least two separate data-center developers.
The state-level legal debate has also drawn sharp pushback from Capitol lawmakers. State Senator Paul Bettencourt (R-Houston) sent a formal letter to the OAG asserting that Texas counties possess no constitutional or statutory authority to halt development, demanding that the state actively investigate any county that implements a moratorium.
Som local activists view the review period as a policy advantage for the industry. Matt Long, a member of the Hood County development commission, asserted to Bloomberg News that the time taken by the state to weigh the issue functions as an opportunity to maximize project entries before state lawmakers are forced to establish a firm regulatory position.
While Hood County Judge-elect Mark Lowery has expressed plans to push for a new local moratorium vote of six months to a year once seated, current commissioners have urged residents to pressure state lawmakers for clearer statutory guidance when the full Texas Legislature formally reconvenes in January 2027.