Senator Charles Perry Files Legislation to Protect Texas Water Resources and Communities from Data Center Impacts

AUSTIN, TX — State Senator Charles Perry (R-Lubbock), Chairman of the Senate Committee on Water, Agriculture, and Rural Affairs, today filed Senate Bill 338, comprehensive legislation establishing new safeguards for water consumption, transparency, and the impact of data center development on Texas communities.

Perry was joined in filing the legislation by a bipartisan coalition of 15 Senate joint authors, namely Senator Donna Campbell (R-New Braunfels), Senator-Elect David Cook (R-Mansfield), Senator Pete Flores (R-Pleasanton), Senator Brent Hagenbuch (R-Denton), Senator Bob Hall (R-Edgewood), Senator Adam Hinojosa (R-Corpus Christi), Senator Juan “Chuy” Hinojosa (D-McAllen), Senator Joan Huffman (R-Houston), Senator Bryan Hughes (R-Mineola), Senator Lois Kolkhorst (R-Brenham), Senator Brett Ligon (R-Montgomery), Senator Tan Parker (R-Flower Mound), Senator-Elect Dennis Paul (R-Houston), Senator Angela Paxton (R-McKinney), and Senator Kevin Sparks (R-Midland).

The legislation follows a seven-hour Senate committee hearing chaired by Senator Perry in September, where lawmakers heard from state agencies, industry experts, local officials, and members of the public about the growing impact of data centers on Texas water resources and surrounding neighborhoods.

“At our hearing in September, we heard from Texans who are concerned about what these developments mean for their water, their property, and their quality of life,” said Perry. “These are legitimate concerns, and the people raising them deserve to be heard. Texans should not have to sacrifice their water resources or the peaceful enjoyment of their own homes to accommodate a new development.”

While acknowledging that some data center operators have failed to adequately communicate with local communities or address their concerns, Perry noted that many others are already implementing the very practices SB 338 would require. Responsible developers are investing in regional water supplies and infrastructure, generating new tax revenues, and creating opportunities for long-overdue improvements to local schools, water systems, and power infrastructure.

“Texas has always welcomed innovation, investment, and economic growth. That is not going to change,” Perry continued. “Fortunately, many in this industry are already demonstrating what it means to be good neighbors and responsible community partners. These companies can bring tremendous benefits to Texas communities for generations to come. But being open for business does not mean giving businesses a blank check. We have plenty of room for responsible development without making excuses for those who refuse to respect the people and communities around them.”

Protecting Texas Water Resources

One of the most significant findings from the September hearing concerned the differences in water consumption among data center cooling technologies.

According to testimony from the Public Utility Commission of Texas, data centers using traditional evaporative cooling systems consume approximately 3.8 times as much water for cooling as facilities using closed-loop systems.

SB 338 would establish new standards for future data center developments, requiring the use of closed-loop cooling technology, cooling technologies which are at least as water-efficient as closed-loop technology, or alternative water sources, including brackish water, seawater, and produced water.

The legislation would also require developers to disclose anticipated water needs and operators to report actual annual water consumption, ensuring state water planners have a clearer picture of the industry’s demands.

“Water is not an unlimited resource,” said Perry. “Our farmers, ranchers, families, and communities depend on it every single day. We cannot responsibly plan for Texas’ future if we do not even know how much water these facilities are using or where that water is coming from.”

During the September hearing, the PUC also reported that only 155 of the 377 data center facilities surveyed had provided timely responses to requests for water usage information.

Protecting Communities and Property Rights

Beyond water consumption, SB 338 addresses concerns raised by Texans living near existing or proposed data center developments, including excessive noise, light pollution, and the impact on neighboring properties.

The legislation would authorize the PUC to establish statewide standards addressing these issues, including potential buffer zones and dark-sky requirements for future facilities.

“People work their entire lives to buy a home and raise a family,” Perry said. “They should not have to worry about a massive industrial development moving in next door and disrupting their lives without reasonable protections in place. Property rights matter, and the rights of existing homeowners deserve consideration alongside the interests of new development.”

Establishing Accountability

SB 338 would make compliance with the legislation’s water conservation, reporting, and nuisance requirements a condition of certain state regulatory approvals, electrical grid interconnection, and local property tax abatements.

The legislation would also establish additional conditions for future local tax abatements, including restrictions on cooling technologies, environmental cleanup obligations, and a cap limiting abatements to 50 percent of a facility’s market value.

“These are reasonable expectations,” Perry said. “We are not asking companies to stop investing in Texas. We are asking them to use available technology to conserve water, be transparent about their operations, respect surrounding communities, and take responsibility for the impacts of their developments. Many companies are already doing these things, proving that responsible development and economic opportunity can go hand in hand.”

“Texans have made their concerns clear, and this legislation is a direct response to what we heard,” Perry concluded. “The companies willing to invest in our communities, strengthen our infrastructure, and respect our resources can be legitimate partners in building a better Texas for future generations. We can embrace the economic opportunities of tomorrow without compromising the water resources, property rights, and quality of life of the Texans who call this state home. That is the balance we intend to strike with Senate Bill 338.”