Full Breakdown
San Marcos Bans Data Centers, Faces Legal Challenge
7/1/2026, 10:01:47 PM
San Marcos Bans Data Centers
On June 16, the San Marcos City Council voted 4-3 to define data centers in its zoning code and prohibit them citywide, citing water and energy concerns. No data-center projects are pending inside the city after a February rejection of a 200-acre annexation request.
Background: Texas Data-Center Boom
Texas is set to become the nation’s largest data-center market, driven by AI demand. County attempts in Hood and Hill to ban data centers failed in court. Gov. Greg Abbott recently urged regulators to require grid interconnection, water recycling, and removal of sales-tax exemptions for new facilities.
Key Figures
San Marcos City Council; State Sen. Paul Bettencourt; Gov. Greg Abbott; State Reps. Cody Vasut and Helen Kerwin.
Official Statements & Responses
Bettencourt will challenge the ban under House Bill 2559 and the 2023 “Death Star” law limiting moratoria. Abbott’s letter urges developers to fund grid connections, recycle water and drop exemptions. Vasut and Kerwin seek a pause to assess impacts. SB 2038, backed by Bettencourt, lets landowners shift oversight from cities to county regulators.
Criticism & Opposition
Critics say the ban exceeds authority and could hinder Texas’s data-center growth. Bettencourt argues fragmented local rules would stall construction. Council member Taylor Burdge notes the case tests home-rule powers, while opponents warn the ban may clash with statewide development goals.
Data & Statistics
Council vote: 4-3; Proposed 200-acre data center (annexation rejected); Existing data centers in Hays County: 2; dozens in Central Texas; Texas is nation’s largest data-center market; Hays County voted for Donald Trump under six points in 2024; Texas has 254 counties and roughly 1,000 cities.
Conflicting Reports & Gaps
All sources agree no data-center projects are pending within San Marcos, but they differ on the number of facilities in surrounding areas, describing them only as “dozens.” The outcome of Bettencourt’s challenge remains uncertain, and no lawsuit has been filed.
Verbatim Quotes
- “They should not use zoning to ban anything everywhere in the city, because that’s not lawful under the state of Texas guidelines,” — Paul Bettencourt, State Senator
- “When you develop in the county, it’s been viewed kind of as the Wild West, but I think as time has gone on, more and more projects are being developed near residences in the county, and that’s something we need to look at changing,” — Cody Vasut, State Representative
- “All I’m asking the governor to do is just, let’s just pause — not stop. I don’t want to halt,” — Helen Kerwin, State Representative
- “You can’t have 254 different counties and 1,000 cities all coming up with different answers. Stuff would never get built.” — Paul Bettencourt, State Senator
What’s Next
Bettencourt plans to file an appeal, which could result in a private lawsuit. The case will test House Bill 2559 and the “Death Star” law, while legislators consider steps to align local zoning with statewide data-center expansion.
