A rural Texas county, which appeared to be the first in the Lone Star State to approve a temporary moratorium on the construction of new data centers, rescinded the measure after a developer sued for $100 million in damages.
County In Red State Approves One-Year Moratorium On Construction Of New Data Centers
“The Hill County Commissioners on Thursday voted unanimously to end the moratorium and adopt a checklist it will require of data center developers, just two weeks after initially instating the temporary pause of up to one year,” The Texas Tribune reports.
The Hill County Commissioners on Thursday voted unanimously to end the moratorium and adopt a checklist it will require of data center developers, just two weeks after initially instating the temporary pause of up to one year. https://t.co/UQEo8fmOB4
— Texas Tribune (@TexasTribune) June 5, 2026
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County Judge Shane Brassell said he still considers the moratorium a success and said he believes the checklist is on firmer legal ground.
“Ultimately, we would have loved to have just been able to stop every project and everything, and that’s not what the moratorium did,” Brassell said. “But what it did do was — some projects that were less desirable, as far as maybe not the most honest — they left the county.”
He added that it bought them extra time to put together the checklist and learn more about other projects that they didn’t previously know about.
The move comes as similar battles are popping up all across the state, especially in unincorporated areas where The Texas Tribune reported this week that almost half of planned data centers in Texas are planned to be built, up from 12% now. Whereas Texas cities have zoning authority, counties typically don’t have the power to block development.
RCM Hill, LLC, filed a lawsuit against the county last week in which it said it has existing contracts to buy more than 800 acres of land for more than $80 million of development on a data center project. Attorneys did not immediately respond to a request for comment.
Their suit, filed May 27 in federal court in Austin, argues that the county “exceeded its lawful powers” in passing the moratorium, which threatened their ability to meet standards set by state electricity regulators needed to petition for interconnection.
The commissioners approved the moratorium by a 3-2 vote in mid-May, temporarily halting the construction of large-scale data center developments in unincorporated areas.
“Hill County Attorney David Holmes warned commissioners the moratorium could land them in court,” KVUE stated.
“If you vote to enact this, I believe we will very quickly be in litigation,” Holmes said, according to the outlet.
The Hill County Commissioners Court has rescinded a one-year moratorium on data centers, while passing new policy relating to future development. https://t.co/Zk1AvmYqwf
— KCENNews (@6NewsCTX) June 5, 2026
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This week, commissioners voted to rescind the moratorium, citing the need to protect county residents from further legal liability. In a statement, commissioners acknowledged that “not all of our goals have been achieved.”
Commissioner Jim Holcomb of Precinct 1 explained his vote to rescind the moratorium.
“In order to protect the citizens of Hill County going forward for further liability, which there is significant amount, I vote yes,” Holcomb said.
Commissioner Scotty Hawkins of Precinct 3 also announced his resignation this week. Hawkins had voted against the original moratorium but did not give a reason for stepping down. He will remain in his position until a replacement is appointed, with Precinct 3 voters set to weigh in on the seat in November.
While the moratorium is gone, commissioners did not walk away empty-handed. They approved two new policies aimed at regulating large-scale industrial development in the county.
The first is a Major Industrial Development Review Policy and checklist, which establishes a consistent review process for projects, like data centers, that have significant impacts on county infrastructure. Developers must now submit documentation covering traffic impact analysis, bridge capacity analysis, total projected water demand and more before moving forward.
The second policy is a proclamation requiring all large-scale industrial development projects in unincorporated parts of the county to comply with federal, state and local laws.
Julie Waters, an attorney who runs the group Texans United Against Data Centers, has been closely tracking Hill County’s situation. Her group has grown from zero to more than 21,000 members on Facebook in just three to four weeks.
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