Hill County being sued over data center moratorium

Hill County, Texas, is facing a lawsuit after its Commissioners Court voted in mid-May to approve a one-year moratorium on new data center construction. The vote, which ended in a tie, was decided by Hill County Judge Shane Brassell in favor of the ban. County leaders, including Commissioner Jim Holcomb, stated the pause was necessary to study the potential impacts of data centers on local resources such as water usage, electricity demand, and infrastructure.

The moratorium decision was praised by some residents and state leaders concerned about rapid data center expansion in rural Texas. However, RCM Hill, LLC, which claims to have spent over 16 months and nearly $1 million planning an 800-acre data center project near Hillsboro, has filed a lawsuit against Hill County, Judge Brassell, Commissioner Holcomb, and Commissioner Larry Crumpton. The company argues the moratorium is illegal and unconstitutional, violating its property, contract, development, and due process rights under both the U.S. and Texas constitutions.

The lawsuit asserts that county officials were warned about the moratorium's potential illegality during the public meeting. County Attorney David Holmes reportedly advised that the county lacked a legal basis for such a moratorium, noting that Texas law typically grants this authority to municipalities, not counties. RCM Hill is seeking a judge to declare the moratorium null and void, prevent its enforcement, and prohibit related official actions, citing potential major financial harm and delays to ERCOT approval deadlines. Hill County Attorney David Holmes has declined to comment on the ongoing litigation.