Bring on the fight that will surely follow.
San Marcos has become the first Texas city to ban data centers within city limits, banking on its local authority to stop the data center boom and setting a precedent for other municipalities to follow.
San Marcos City Council voted 4-3 on June 16 to define data centers and make them ineligible for any part of the city in its zoning laws, citing concerns that these developments would funnel water and energy resources from the local community.
The city has no data center projects proposed within its limits, although the threat has reached its borders where at least two data centers have been proposed in surrounding unincorporated parts of Hays County, according to Data Center Map, an industry research tool. Powerless to leverage any of their laws to outright ban data centers, Hays County commissioners recently passed a mostly symbolic resolution to pause data center development over severe water scarcity but the resolution isn’t legally binding.
San Marcos is testing a novel approach to outright ban data centers by exerting its home rule powers, which gives certain bigger cities — 352 of them across the state — the right to create their own zoning codes and control development, land law experts say. Compared to counties and cities without home rule powers or zoning authority, municipalities like San Marcos have a better chance at surviving legal challenges to their data center bans because of their expanded powers, experts say.
Some counties have tried testing their authority to restrict data centers but have failed. Early June, Hill County rescinded its data center moratorium after a developer sued the county for $100 million. Hood County commissioners also tried to pass a moratorium, but pulled it after state Sen. Paul Bettencourt, a Houston Republican who leads the Senate Committee on Local Government, asked for an attorney general opinion on whether counties have the right to enact such restrictions.
Similar to what he did with Hood County, 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.
“They should not use zoning to ban anything everywhere in the city, because that’s not lawful under the state of Texas guidelines,” Bettencourt said. “[A ban] doesn’t work here, and this will get challenged.”
[…]
Multiple cities interested in passing their own bans have reached out to San Marcos to see how the city will survive legal challenges from state lawmakers and private citizens who can also sue the city over its ban.
“All cities are watching what happens to San Marcos,” said Taylor Burge, a council member for Lockhart.
[…]
Although land use bans are uncommon, “theoretically, I think the courts could uphold it,” said Robert Paterson, a University of Texas at Austin professor who specializes in land use and environmental planning. As long as the ban aligns with a city’s comprehensive plan — a long-range policy document which governs the protection of public health, safety, and general welfare — it falls within the city’s power.
But the 2023 Death Star law complicates city authority. The Death Star law “theoretically pulled back home rule authority,” said Paterson, adding that it bars cities from exercising powers more stringent than those the state itself uses. Republicans and business groups argued that the Death Star was needed to undo a “patchwork” of progressive local policies that made it difficult to do business in cities and it remains unclear what local regulations are out-of-bounds under the law.
Paterson said the law has “a chilling effect on our ability to do our police power, protect the public health and safety,” which is one reason cities are being cautious now.
Bettencourt said a ban on any development has never been upheld in court and he is confident that the state will make San Marcos reverse its ban if a developer doesn’t file a private lawsuit first.
“If you overuse existing legal principles, eventually they get challenged, and/or … laws are changed to make it clear that this can’t happen,” Bettencourt said.
He also says San Marcos is violating HB 2559 that states that property development moratoriums can last no longer than 180 days, and according to Bettencourt, this would apply to San Marcos’ “de facto ban.” However, land experts said that this law would not apply to San Marcos because the city changed its zoning laws to ban data centers, and did not issue a moratorium.
While Bettencourt is among the Republican camp that support data centers, San Marcos’ state senator Judith Zaffirini, a Democrat, says the city’s decision reflects concerns that many communities across Texas share and that the City Council acted “decisively and appropriately” to ensure the safety of the community.
The story notes that cities do have other ways to restrict data centers, in ways that would be less contentious and likely to draw this kind of response from the anti-local control zealots. Those tools include zoning laws, special use permits, and incentive programs that include additional development standards. Whatever you think of San Marcos’ aggressive and provocative approach, there were other options that might have better odds of success, and certainly a lower level of risk.
I for one am glad that at least one city is taking the maximal route, because I want to see the Bettencourt zombies swarm in and make it as clear as possible to everyone out there that no matter what weasel words Greg Abbott may utter, it’s the Republicans that are on the wrong and unpopular side of this debate. Get Bettencourt and his whiny voice on every local news broadcast, and dare Abbott to rein him in (spoiler: he won’t). I love this as the backdrop for the 2026 campaign.