Data Centers Meet Their Skeptics
Activists in Texas held a "Data Center Week of Action" at the Capitol, demanding Governor Greg Abbott address concerns about data centers' impact on water and electricity resources. The Governor has declined to call a special session but has directed state agencies and called for legislative priorities including repealing sales tax exemptions and barring construction in rural areas. A Senate Finance committee hearing discussed the sales tax exemption, revealing a $3.2 billion revenue cost to the state.
Activists in Texas participated in a "Data Center Week of Action," converging at the Capitol to urge Governor Greg Abbott to call a special session. Their primary concern revolves around the impact of data centers on the state's natural resources, particularly water and electricity.
While Governor Abbott has not agreed to a special session, he has instructed state agencies to prevent the burden of new electrical infrastructure costs from being passed to ratepayers. He also outlined key legislative priorities for the upcoming session in January, including the repeal of sales tax exemptions for data centers and a prohibition on their construction in rural areas.
Simultaneously, the powerful Senate Finance committee held a hearing to review the sales tax exemption, initially passed in 2013 and strengthened in 2015 to attract data centers. A representative from the Comptroller of Public Accounts office testified that the exemption has grown significantly, costing the state up to $3.2 billion in revenue. Dan Diorio, vice president of state policy for the Data Center Coalition, defended the industry, highlighting job creation, environmental investments, and property tax benefits, while acknowledging the need for improved community outreach.
Among the opponents who testified was Donna Howard, who leads Matagorda County Against Data Centers. She called for a development pause, citing a lack of communication and understanding of rural communities by the industry. Committee chair Joan Huffman, a Republican from Houston, and Senator Lois Kolkhorst, a Republican from Brenham, expressed their disappointment when Mr. Diorio left the hearing before listening to opposing testimony.