Updated

Updated · The New York Times · Jun 10

Abbott Seeks to Repeal Data Center Tax Breaks, Mandates Water-Efficient Systems in Texas

Updated

Updated · The New York Times · Jun 10

Abbott Seeks to Repeal Data Center Tax Breaks, Mandates Water-Efficient Systems in Texas

3 articles · Updated · The New York Times · Jun 10

Greg Abbott on Wednesday urged Texas regulators to immediately curb how data center costs are passed to local consumers and said he would push lawmakers to roll back sales-tax exemptions for developers.
The proposal would add new limits to one of the country’s fastest-growing data center markets, including water-efficiency requirements, as communities complain about heavy water use, noise and rising utility burdens.
Hundreds of data centers already operate in Texas, and Bloom Energy projects the state could become the nation’s largest market within three years.
Abbott, a Republican seeking a fourth term, moved before the Legislature reconvenes next year, leaving many final regulatory decisions to lawmakers while signaling a tougher stance in response to rural local opposition.

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The New York Times2h ago

Texas Governor Greg Abbott Proposes New Data Center Regulations, Tax Incentive Repeal

Chron22h ago

Abbott directs ERCOT, PUC to shield Texans from data center costs

KSAT San Antonio22h ago

Abbott recommends sweeping data center regulation, including eliminating sales tax exemption

9 Sources

While Texas regulates data center resources, why are local communities still powerless to stop them from being built next door?

AI's energy demand is five times the Texas grid's peak. Can technology and policy prevent a statewide power crisis?

Texas Data Center Surge Triggers Policy Overhaul: Grid Stability, Water Use, and Tax Incentives in the Spotlight

Overview

In June 2026, Governor Greg Abbott launched a major policy shift in Texas, moving away from the state’s usual pro-business stance to address the rapid growth of AI-driven data centers. This change comes as these facilities put increasing pressure on Texas’s power grid and water resources, sparking public and political concern as well as local opposition. The sheer scale of expansion has become a critical issue, with energy demand rising at an unprecedented pace. As a result, Texas is entering a new era of scrutiny for the tech industry, aiming to balance economic growth with resource management and community interests.

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