State senator plans to challenge San Marcos' data center ban, says city lacks legal authority

San Marcos, Texas, which recently became the first city in the state to implement a citywide ban on data centers, is now facing a potential legal challenge. State Senator Paul Bettencourt has announced his intention to contest the ordinance, arguing that the city overstepped its legal authority by using zoning to enact a complete ban on data centers across the city, stating it is "not lawful under the State of Texas guidelines" and will be challenged. Local residents who supported the ban, citing concerns over water resources and environmental impacts, expressed that pushback was expected.

The City of San Marcos has defended its decision, detailing a thorough process that included initial authorization to update the development code in August 2025, public hearings, meetings with the development community, and an open house to gather input. The draft code was reviewed and amended by the City Council before its adoption, driven by concerns including the impact on the city's water resources.

This situation unfolds against a backdrop of similar local government actions and their legal repercussions in Texas. Hays County, where San Marcos is located, currently has an emergency pause on data center reviews and approvals in unincorporated areas, slated to last until the end of the year. Furthermore, the report references Hill County, which passed a moratorium on data centers in May but rescinded it a month later after a developer filed a $100 million lawsuit. The Data Center Coalition asserts that technological advancements are reducing water needs in these facilities, while Texas continues to be a leading state for data center operations.