A first in Texas.
The city of San Marcos, located about 30 miles south of Austin, became the first city in the state of Texas to ban data centers.
The ban is within the city limits and is considered a precedent that other cities across the state could, and might, follow. The question remains whether it will stand up in the courts.
The recent vote was 4-3 and according to a report by the Texas Tribune, was on a resolution to define data centers and declare them ineligible for any part of the city in its zoning laws. The council expressed concerns how such data center projects might affect the city’s water supplies.
So far, no data center projects have been proposed within San Marcos city limits but two have been proposed in surrounding unincorporated parts of Hays County, which is where San Marcos is located and also is the county seat. The Hays County Commission recently adopted a pause in data center development because of water shortages.
Hundreds of data centers have been proposed across Texas. Some of the larger cities in the state might face certain legal restrictions should they consider a data center ban. But of what San Marcos did, it could open the door for towns and cities its size should they take up possible consideration of bans. Some land law experts say the smaller municipalities have expanded powers and would stand a better chance of surviving legal challenges.
However, Houston State Sen. Paul Bettencourt plans a challenge of the San Marcos ban. He did the same when Hill County banned data centers and forced the county commission to reverse its ban after it had been sued for $100 million by a data center developer.
Bettencourt told The Texas Tribune he plans to challenge San Marcos’ ban, arguing that it violates 2025’s House Bill 2559, which restricts the ability of municipalities to issue indefinite moratoriums on certain types of property developments and the state’s 2023 Death Star Law, which restricts municipalities from enacting local law that contradicts state law.
