Is the State Sovereign? The Hood County Data Center Dispute

Estimated Time to Read: 6 minutes

In Texas, counties do not govern by inherent right. They govern by delegation.

That structural principle sits at the center of the recent Hood County dispute over a proposed data center moratorium. What began as a local vote quickly became a statewide debate involving senators, representatives, and the Attorney General.

At issue is not simply data centers. It is whether a county may impose a development moratorium without clear legislative authorization.

What Happened

In a 3 to 2 vote, the Hood County Commissioners Court rejected a proposed six-month moratorium on data center development.

At least four data center projects are under consideration in the county. Residents testified for hours in favor of a temporary pause to study impacts on water supply, environmental conditions, infrastructure strain, and tax abatements.

Shortly before the vote, commissioners were notified of a public letter from State Sen. Paul Bettencourt (R-Houston) and State Rep. Jared Patterson (R-Frisco) requesting that Attorney General Ken Paxton (R) investigate any counties attempting to impose such a moratorium and explore potential legal remedies.

The proposed moratorium cited Texas’s Local Government Code Chapter 231 Subchapter K as its legal basis, asserting that Hood County may adopt development regulations to protect the watershed draining into Lake Granbury and the Brazos River.

Despite significant public testimony, the majority of commissioners voted against adopting the moratorium.

Constitutional Limits

Bettencourt and Patterson argue that counties lack constitutional authority to impose development moratoriums.

In their letter to the Attorney General, they emphasized that counties are political subdivisions of the State of Texas and may exercise only those powers expressly granted by the Texas Constitution or statute. They referenced prior Attorney General guidance suggesting that a broad industrial development moratorium would likely exceed a commissioners court’s authority.

He characterized such action as potentially ultra vires, meaning beyond legal authority.

They also cited House Bill 2559 (HB 2559), authored by Patterson. The law, effective in September 2025, regulates municipalities’ ability to impose rolling building moratoriums.

In the letter, Bettencourt and Patterson wrote that if counties had authority to impose similar moratoriums, they would have been included in HB 2559. They said, “Counties were not included in this legislation because they lack the legal authority to directly or indirectly impose development moratoria in the first place.” Bettencourt further stated that the Senate Committee on Local Government would closely monitor such situations and consider clarifying legislation if needed.

Texas Policy Research recommended that lawmakers vote in favor of HB 2559 as it was being considered in the 89th Legislative Session (2025), noting that it strengthened transparency and accountability when municipalities impose moratoriums on private property development. That prior analysis emphasized the importance of predictable rules and limits on local government intervention.

Varying Opinions on County Authority

State Rep. Shelby Slawson (R-Stephenville), who represents all of Hood County, responded by arguing that the county’s authority must be evaluated under Local Government Code Chapter 231 Subchapter K.

Enacted in 1999, Subchapter K granted Hood County specific development regulatory authority due to the importance of protecting the watershed draining into Lake Granbury and the Brazos River. Slawson contends that this statutory framework provides Hood County with targeted authority distinct from general county powers and that any analysis must begin with that legislative grant.

Slawson also solicited an Attorney General opinion and referenced the letter by both Bettencourt and Patterson, arguing that it addressed a different statutory scenario and did not evaluate Hood County’s authority under Subchapter K.

State Rep. Wes Virdell (R-Brady) addressed the broader principle in the comments.

His comment did not directly interpret HB 2559 or Subchapter K but highlighted the possibility of legislative action to clarify or expand local authority in a future session.

Citizen Concerns

Public testimony reflected rising concern about large-scale data center development. Residents raised questions about water consumption, grid capacity, environmental impact, corporate tax abatements, and the experience of companies proposing projects. Some urged a temporary moratorium to allow further study.

Commissioners acknowledged the intensity of public sentiment. However, the majority concluded that the moratorium should not be adopted.

Political Implications

Data centers are rapidly becoming a statewide policy issue.

As more projects are proposed across Texas, debates over water use, grid reliability, and local infrastructure impacts are becoming more common. Lawmakers will likely face increasing pressure in the next legislative session to clarify regulatory authority or establish broader policy standards.

At the same time, the broader debate continues to evolve. Questions remain about whether public concern reflects systemic risk or whether existing market mechanisms already provide sufficient incentives for responsible development.

Texas has historically relied on competitive energy markets, transparent pricing signals, and private negotiation to manage industrial growth. Large users typically face pricing that reflects scarcity and reliability conditions. Water and infrastructure impacts are subject to existing permitting and regulatory frameworks.

The challenge for policymakers may not be whether to halt development, but how to ensure transparency and cost accountability without expanding government control beyond its proper scope.

TPR’s Framework

Texas Policy Research approaches this issue through the lens of state sovereignty and delegated authority.

Under the Texas Constitution, counties are political subdivisions of the state and possess only those powers delegated to them by the Legislature. They do not possess inherent regulatory authority.

The key question in Hood County is therefore whether the Legislature clearly delegated authority broad enough to support the type of regulatory action proposed under Subchapter K.

Texas Policy Research has previously noted that the broader data center debate should center on transparency, cost accountability, and market discipline rather than reactionary policy tools. Concerns about water usage and grid strain deserve serious evaluation, but durable solutions are more likely to emerge from predictable rules and competitive markets than from sweeping development pauses.

If Subchapter K constitutes a sufficiently broad delegation, then county action must be evaluated within those statutory limits. If it does not, a moratorium could exceed delegated authority.

Conclusion

The Hood County vote resolved the immediate moratorium proposal, but it did not resolve the structural question.

Both State Sen. Paul Bettencourt and State Rep. Jared Patterson emphasize strict constitutional limits on county authority. State Rep. Shelby Slawson emphasizes targeted legislative delegation. State Rep. Wes Virdell highlights local governance and potential future legislative clarification.

As data center development expands across Texas, similar disputes are likely to arise. Whether the state clarifies, constrains, or expands county authority in response will shape the next chapter of this debate.

And at its core, the question will remain the same: Is the state sovereign, and how clearly has it chosen to delegate its power?

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