{"id":1514713,"date":"2026-06-10T21:36:28","date_gmt":"2026-06-11T02:36:28","guid":{"rendered":"https:\/\/ktbb.com\/post\/?p=1514713"},"modified":"2026-06-10T21:46:25","modified_gmt":"2026-06-11T02:46:25","slug":"abbott-recommends-sweeping-data-center-regulation-including-eliminating-sales-tax-exemption","status":"publish","type":"post","link":"https:\/\/ktbb.com\/post\/?p=1514713","title":{"rendered":"Abbott recommends sweeping data center regulation, including eliminating sales tax exemption"},"content":{"rendered":"

Gov. Greg Abbott on Tuesday released sweeping regulatory recommendations on data centers for the Legislature to pass in the 2027 session, as Texas grapples with an explosion of artificial intelligence-driven development and soaring power demands, according to The Texas Tribune.<\/em><\/p>\n

In a letter to state regulators, Abbott outlined a series of proposals designed to ensure data centers shoulder the costs of their growth rather than Texas ratepayers.
\n Among his legislative priorities: requiring new facilities to add power generation to the state\u2019s power grid;
\n\u2022 requiring data centers pay for their own grid interconnection and infrastructure costs
\n\u2022 mandating the use of \u201cclosed-loop\u201d water systems, which draw a large amount of water at the start but reuse it over some period of years
\n\u2022 require annual reporting by all data centers on electricity and water use
\n\u2022 establishing best-practice standards to address community concerns like noise
\n\u2022 repealing data center sales tax exemptions and \u201cother outdated or unnecessary incentives for data centers\u201d<\/p>\n

The Texas Tribune<\/em> reported earlier this year that the state is poised to lose $3.2 billion in sales tax revenue over the next two years because of a sales tax exemption.<\/p>\n

\u201cThe rapid scale of data center development requires oversight to ensure everyday Texans are not burdened with the costs of infrastructure driven by data center expansion, and to ensure that as data centers interconnect to the Electric Reliability Council of Texas (ERCOT) grid, residential electric bills are not negatively affected,\u201d Abbott wrote in the letter first obtained by the Texas Bullpen.<\/p>\n

It\u2019s a striking call for industry regulation by the Republican governor in a state that has long prided itself on being a favorable environment for business. In recent months, Abbott has toed the line of championing the industry, declaring Texas the \u201cepicenter\u201d of AI development, and issuing statements about how his office was sensitive to the concerns about strain on resources and quality of life.<\/p>\n

The Data Center Coalition welcomed the governor\u2019s proposals saying the industry already follows many of the recommended practices and is committed to working with agencies to support \u201cresponsible infrastructure growth.\u201d <\/p>\n

\u201cIt\u2019s important to recognize that data centers are a diverse industry serving a wide range of needs, and there is no one-size-fits-all solution when it comes to facility design, cooling technology, or regulation. The right approach in one community may not be the right approach in another, which is why siting and operational decisions are made in close coordination with local utilities, water providers, and management districts,\u201d said Dan Diorio, the organization\u2019s vice president of state policy.<\/p>\n

At the Texas GOP convention in Houston, early reactions to the governor\u2019s recommendations from a handful of members from his own party were that it was a good start \u2014 but more is required.<\/p>\n

Rep. Cody Vasut of Angleton agreed with repealing the sales tax exemptions, and floated the idea of expanding counties\u2019 authorities to address some of the concerns.<\/p>\n

Speaking at the same panel focused on data centers, Hood County GOP Chair Greg Harrell said he wanted Abbott to call a special session to tackle the issues immediately. There are eight proposed data centers for the north central Texas county<\/p>\n

\u201cNow\u2019s the time,\u201d he said.<\/p>\n

In the immediate, the governor directed the Public Utility Commission of Texas to \u201cinitiate action to reduce residential transmission costs\u201d by July 31 and start requiring data centers to pay for all of their costs associated with building power infrastructure for their operations, to ensure residential ratepayers bear none of it.<\/p>\n

He has also asked the PUC and the Electric Reliability Council of Texas, the state\u2019s main grid operator, to submit a joint memorandum by July 17 summarizing what they\u2019ve done to prevent that data center development have caused risks and added costs onto Texans.<\/p>\n

The move comes as opposition to large-scale data center projects grows across Texas. Community groups have organized against proposed developments over concerns about water use, noise, land impacts, and strain on local infrastructure. A March Quinnipiac poll found that 65% of Americans oppose the building of an AI data center in their community.<\/p>\n","protected":false},"excerpt":{"rendered":"

Gov. Greg Abbott on Tuesday released sweeping regulatory recommendations on data centers for the Legislature to pass in the 2027 session, as Texas grapples with an explosion of artificial intelligence-driven development and soaring power demands, according to The Texas Tribune. In a letter to state regulators, Abbott outlined a series of proposals designed to ensure … Continue reading Abbott recommends sweeping data center regulation, including eliminating sales tax exemption<\/span><\/a><\/p>\n","protected":false},"author":8661,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[164],"tags":[],"class_list":["post-1514713","post","type-post","status-publish","format-standard","hentry","category-state-news"],"publishpress_future_action":{"enabled":false,"date":"2026-06-13 00:12:23","action":"change-status","newStatus":"trash","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1514713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/users\/8661"}],"replies":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1514713"}],"version-history":[{"count":9,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1514713\/revisions"}],"predecessor-version":[{"id":1514722,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1514713\/revisions\/1514722"}],"wp:attachment":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1514713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1514713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1514713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}