Dallas – Texas Attorney General and Republican U.S. Senate nominee Ken Paxton announced a four‑point strategy designed to reduce the financial burden and safety risks of the state’s fast‑growing data‑center industry while preserving the power needed for artificial intelligence development.
Federal actions Paxton would pursue if elected
Paxton’s first three proposals require action by Congress. He would sponsor legislation that bars technology linked to China from powering American data centers or being installed in other critical infrastructure. The bill would task Congress with identifying prohibited companies, products and foreign connections.
Second, Paxton wants to create criminal liability for data‑center operators whose facilities power AI chatbots that harm children. Specific conduct, responsible parties and penalties have not yet been detailed.
Third, Paxton pledged to co‑sponsor Sen. Tom Cotton’s DATA Act, which would create a federal regulatory category allowing qualifying data centers to generate electricity independently of existing utility grids. The approach mirrors former President Donald Trump’s national AI framework, which calls for streamlined permitting so data centers can produce power on‑site without shifting costs to residential ratepayers.
State‑level measures aligned with Gov. Abbott
At the state level, Paxton supports repealing Texas’ sales‑tax exemption for qualifying data centers and endorses Governor Greg Abbott’s new data‑center standards. Those standards require developers to disclose electricity consumption, on‑site generation, water use, public incentives, project ownership and impacts on neighboring communities.
Paxton voted for the exemption while serving in the Texas Senate in 2013. Under current Texas Comptroller rules, a qualifying data center must commit to at least $200 million in investment over five years and create a minimum of 20 qualifying jobs in the county where it is located.
In early August, Governor Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to audit data‑center projects advancing through ERCOT’s interconnection process. Developers that fail the audit will be denied grid interconnection. Abbott also called for eliminating data‑center tax incentives and restricting new facilities in rural neighborhoods.
Several companies, including Google, Rowan and CleanSpark, have agreed to follow Abbott’s standards. Diode Ventures withdrew an East Texas project after determining it did not meet the governor’s directives or community expectations.
Local impact and ongoing disputes
Communities across North Texas are watching the debate closely. In Westlake, a judge issued a temporary restraining order on a resolution concerning the proposed Circle T Data Center after plaintiffs claimed insufficient public notice. The order does not resolve the underlying claims but highlights local concerns about transparency and noise.
ERCOT reported in June that it was tracking more than 438,000 megawatts of large‑load interconnection requests, with roughly 89 % tied to data centers. Updated June 2026 data placed the total at about 474,000 megawatts, about 90 % from data centers. These figures represent requested capacity, not guaranteed construction.
Local opposition often centers on whether developers should receive public incentives while requiring new transmission lines, water infrastructure and other public services. Abbott has ordered regulators to ensure residential customers do not absorb data‑center infrastructure costs.
What comes next?
Paxton’s federal proposals will only move forward if he wins the Senate race and Congress passes the legislation. Repealing the state sales‑tax exemption requires action by the Texas Legislature, and the child‑safety liability proposal would need specific statutory language.
For now, the most immediate changes for Texans stem from Abbott’s audit directives and administrative orders, not Paxton’s campaign plan. The ultimate shape of Texas data‑center policy will depend on congressional action, state legislative decisions, regulator reviews and the outcome of pending local disputes.
Original reporting: The Dallas Express — read the source article.
