Texas lawmakers look at data center tax exemption effects; group calls for more protections

AUSTIN, Texas - A group of advocates is calling for more environmental protections from the effects of data centers. 

This comes as a Senate committee is looking at how much revenue the state may have lost by giving tax exemptions to data centers. 

What they're saying:

The Alliance for a Clean Texas kicked off "Data Center Week of Action" Monday morning at the State Capitol. They're calling on Gov. Greg Abbott to call a special session to protect water, air, and land from the effects of data centers. 

"We're not asking any longer. We're down on our knees and we are begging. We are asking you to have an emergency legislative session or at least pass a moratorium to put a break on these green energy projects and on these data centers until we see what it is doing to our environment, to human life, to our precious wildlife," said Linda Pauley, who spoke at their press conference.

"We don't have the water for these things. Texas is already running out of water," said Clayton Tucker with the Texas Farmers Union.

The group also says they're worried about the strain on the electric grid, plus other major projects like 765 kv transmission lines. They say there needs to be more public input and oversight for major projects. 

Dig deeper:

In a Senate Finance Committee meeting, members looked at the consequences of providing a sales tax exemption to qualifying data centers. The law, passed in 2013, was supposed to bring infrastructure investments to Texas. The state says the cost of providing that exemption has grown from $14.6 million for 2014-15 to a projected $3.3 billion for 2028-29.

Committee Chair Joan Huffman says the law was implemented before the growth of data centers, and a lot of information has changed. She plans to file legislation in the next legislative session.

"These facilities have brought significant investment, construction, and high-tech infrastructure to communities across the state, yet many Texans are growing increasingly concerned about the impact of this rapid expansion. I too share these concerns," she said. "It's time for the legislature to reexamine whether this exemption still delivers a return that justifies rapidly mounting forgone tax exemption revenue. No tax exemption should operate on autopilot."

"You choose not to tax a lot of things. This is just one category that the legislature chose not to impose a tax on," Brad Reynolds, of the Comptroller's Office, said during the meeting. 

Ag Commissioner Sid Miller also spoke at the protest. 

"It's not a Democrat or Republican issue. This truly is a Texas issue," Miller said. "The governor has authority to bring the legislature back tomorrow. He could have them in session tomorrow, so we're calling on him to do just that. Short of that, a one-year moratorium. The first thing you can do is return the money that you've taken from the data centers."

In response to the protest, Abbott’s Press Secretary, Andrew Mahaleris, released the following statement:

"Governor Abbott has been clear that data centers cannot come before Texas families. That is why he directed the PUC and ERCOT to require data centers to pay for their own infrastructure, bring their own power, reuse their own water, and lower residential electric bills. These steps protect Texans from higher costs and negative impacts on their communities. Governor Abbott will continue to work with the Legislature to protect Texans and ensure their voices are heard."

What's next:

On Wednesday, the Senate Business and Commerce Committee is scheduled to meet.

They will discuss the state of the electric grid, as well as the impact of 765 kv lines on private property. 

Texas PoliticsTechnologyAustin