Hill County drops data center moratorium after lawsuit, adopts new review requirements
Hill County, Texas, has rescinded its one-year moratorium on data center development following a federal lawsuit filed by developer RCM Hill LLC. Concurrently, county commissioners approved new review requirements for large industrial projects, mandating greater transparency and public notification. The lawsuit against the county remains active, seeking damages for the alleged unlawful moratorium.
Hill County commissioners have reversed their decision on a controversial one-year moratorium on new data center development, rescinding the ban after developer RCM Hill LLC filed a federal lawsuit. The Commissioners Court unanimously voted to lift the moratorium, which was originally approved in May, to protect taxpayers from potential liability.
RCM Hill, which is developing a 1,235-megawatt data center project known as Project Aquila near Hillsboro, argued in its lawsuit that the county lacked the legal authority to impose the temporary ban. The company stated it invested nearly $1 million over 16 months, securing over 800 acres for more than $80 million, and obtaining critical electrical planning approvals from the Electric Reliability Council of Texas (ERCOT).
County Attorney David Holmes had warned commissioners in May that Texas counties might not have the legal power to enact such moratoriums, a concern reportedly echoed by County Judge Shane Brassell and Commissioner Jim Holcomb. RCM Hill's lawsuit names Hill County, Judge Brassell, and Commissioners Holcomb and Larry Crumpton as defendants, claiming the moratorium jeopardized the project's eligibility for ERCOT's planning process and disrupted investor discussions.
Despite rescinding the moratorium, commissioners adopted new policies aimed at increasing oversight of major industrial developments. These policies require developers to provide detailed information on water use, traffic, noise, and economic impacts, alongside enhanced public notification requirements. The federal lawsuit remains active, with RCM Hill seeking declarations that the moratorium was unlawful, injunctive relief, and compensation for alleged economic harm.