ARTICLE · 06 SEPTEMBER 2026

Texas Senate Scrutinizes Data Center Water Usage

Holland & Knight

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Industry stakeholders should anticipate multiple data center-related bills addressing water, power, local regulatory authority and tax incentives, with increased scrutiny of development practices and community engagement.

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Highlights

Texas lawmakers are considering new requirements for data center water usage, cooling technology, reporting and local community impacts as they prepare for the 90th legislative session.
Industry stakeholders should anticipate multiple data center-related bills addressing water, power, local regulatory authority and tax incentives, with increased scrutiny of development practices and community engagement.

The Texas Senate Committee on Water, Agriculture, and Rural Affairs met September 1, 2026, for an interim hearing centered on data center water usage. This hearing was the latest and strongest signal that water consumption, local community impacts and grid-related infrastructure demands will remain central issues for the industry in the 90th legislative session.

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