In recent weeks, Texas Governor Greg Abbott and Attorney General Ken Paxton have adopted increasingly aggressive rhetoric against the rapidly expanding data center industry, promising to crack down on hundreds of facilities that have failed to disclose required information about their water consumption over the past five years. However, a closer examination of the laws that state political leaders are invoking reveals that the statutory penalties carry a maximum fine of just $500—a negligible financial penalty that amounts to little more than a minor accounting blip for multibillion-dollar technology companies.
Data centers, which power the modern digital economy and artificial intelligence infrastructure, consume millions of gallons of water annually to run their operations and cool their massive banks of servers. Under existing Texas state law, industrial facilities that fail to complete required annual water-use surveys can be charged with a Class C misdemeanor, which is punishable by a fine of up to $500. Additionally, noncompliant facilities can theoretically be barred from receiving certain state funding and environmental permits.
Yet, regulatory experts and legal authorities point out that these statutory consequences have significant limitations. This raises serious questions about whether the state actually possesses the legal and administrative tools necessary to force compliance from a booming industry that is rapidly expanding across the Lone Star State amid growing public scrutiny and environmental concerns.
State officials currently admit they do not even know whether misdemeanor penalties have ever been formally issued against data centers for these reporting violations. Furthermore, many of these private tech facilities are not eligible for state water funding in the first place, rendering that specific punitive threat toothless. Increasing fines for Class C misdemeanors embedded within the Texas Water Code would require dedicated state legislation, but Texas lawmakers do not convene in Austin for the next regular legislative session until January 2027.
The mismatch between the tough political rhetoric and the weak enforcement mechanisms has drawn criticism from environmental advocates. Kathryn Guerra, who leads a watchdog campaign at the environmental nonprofit Public Citizen, noted the glaring discrepancy during a recent review of state policies.
"The governor is like, ‘Let’s enforce the laws on the books that weren’t being enforced,’" Guerra said. "That’s not much in the way of incentive. If those are the laws that we already have and nobody’s enforcing them, the data centers know."
In response to these criticisms, Governor Abbott’s office has defended its enforcement crackdown by emphasizing a coordinated interagency approach. Andrew Mahaleris, Abbott’s press secretary, explained that the Texas Water Development Board will work closely with other powerful state agencies, including the Texas Commission on Environmental Quality, the Electric Reliability Council of Texas, and the Public Utility Commission of Texas, to hold operators accountable.
"No other state agency will approve data centers until the Public Utility Commission, ERCOT, and the Water Development Board have the information they need to make informed decisions," Mahaleris said. He added that the governor has also recommended that data centers pay for their own electrical infrastructure improvements, adopt less water-intensive cooling technologies, and contribute new power generation capacity to the state’s strained electric grid.
Cameron Poursoltan, director of energy policy for Texas at the Data Center Coalition, an organization representing many major data center operators, stated that the industry supports annual water reporting. According to Poursoltan, state and regional planners need accurate data to build comprehensive water plans that adequately meet the long-term needs of all Texans.
The state already maintains a legal requirement for large industrial water users, including data centers, to complete annual water-use surveys. The Texas Water Development Board, the state agency tasked with overseeing water planning and financing infrastructure projects across Texas, relies on these survey responses to assess current industrial demand and forecast water needs up to 50 years into the future.
However, data centers have largely ignored the surveys, while some industry representatives argue they never received the paperwork in the first place. Last year, the water board surveyed 329 data centers, but only about 30 percent bothered to respond. During a legislative hearing this summer, one state lawmaker bluntly described the abysmal response rate as "pretty pathetic," particularly given that the reporting requirement is firmly written into state law.
Some data center operators have defended the low response numbers, pointing to administrative confusion and outdated contact databases. Poursoltan emphasized that data centers take environmental stewardship extremely seriously. He noted that his organization has actively worked with the Texas Water Development Board to resolve significant contact information and data discrepancies that contributed to the initial lower response rates on the water surveys.
Tracking data centers in Texas
The annual water survey has long served as the state’s primary method for tracking how much water the rapidly expanding data center industry utilizes. Another recent collection effort launched by the Public Utility Commission this year has been entirely voluntary and similarly suffered from a low response rate.
Now, amid mounting public scrutiny over data centers and their massive demands on Texas’s increasingly strained and dwindling water supplies, Governor Abbott and Attorney General Paxton are demanding that state agencies vigorously enforce existing laws. This aggressive enforcement push arrives as both high-profile Republican leaders face competitive political environments and localized opposition to data center construction continues to surge across various communities.
A public opinion poll released in August by the University of Texas and the Texas Politics Project found that 57 percent of Texas voters opposed building a new data center in their local community. While registered Democrats expressed overwhelming opposition at 75 percent, Republican voters remained closely and evenly divided, with 45 percent expressing support and 43 percent voicing opposition to local data center developments.
The Texas Water Development Board, which collects the surveys to help forecast the state’s future water needs, has historically possessed very little administrative leverage or enforcement authority to compel compliance. In response, Governor Abbott directed the agency to formally notify local county and district attorneys regarding noncompliant facilities, while Attorney General Paxton launched a broad state investigation. Nevertheless, water board officials have clarified that the agency has no independent authority to prosecute violations itself, and state officials remain uncertain whether any fines have actually been issued against noncompliant data centers.
The upcoming weeks could reveal how much actual leverage state officials hold. The water board was instructed to provide an update to the governor’s office regarding the progress of its enforcement efforts.
What enforcement looks like
Governor Abbott’s directive instructs the water board to notify county and district attorneys about facilities that fail to comply with the survey mandates, effectively shifting the burden to local prosecutors to determine whether to pursue criminal misdemeanor cases. Historically, the board relied on local law enforcement to request lists of noncompliant water users—a process experts note places an unrealistic onus on local police departments and sheriff’s offices to identify regulatory infractions without prior knowledge of the law being broken.
Ryan Kellus Turner, executive director of the Texas Municipal Courts Education Center, which provides legal training and professional resources for municipal judges, noted that these specific regulatory violations have not generated significant discussion or preparation among local court officials.
While Attorney General Paxton has initiated an investigation, legal experts point out that the attorney general does not possess independent authority to prosecute local criminal cases unless formally requested or appointed by a local district or county attorney, according to the Texas Government Code. Paxton’s office did not respond to inquiries regarding the legal limits of the statute or what specific penalties it believes it can successfully pursue. Shortly after Abbott’s directive, Paxton announced an investigation into hundreds of data center developments across several Texas counties to ensure transparency and compliance.
"Texas law contains well over a thousand state-law fine-only offenses, many enacted over time to address particular regulatory or public policy concerns," Turner said, adding that the Legislature has the power to increase penalties to thousands of dollars if lawmakers choose to act.
Financial threats directed against data centers by state leaders may also prove practically limited. Perry Fowler, executive director of the Texas Water Infrastructure Network, which advocates for water infrastructure policies, explained that data centers generally do not qualify for or receive the state funding that officials are threatening to withhold.
The water board functions essentially as a state financial bank for water infrastructure, providing low-interest loans and grants primarily to cities, counties, river authorities, water districts, and rural utility districts.
"There’s nothing the board can withhold from them," Fowler said, noting that the threat of losing state financing is far less meaningful for a private corporation than it would be for a municipal utility seeking funds for a public water supply project.
Permitting restrictions carry their own structural limitations. While the state can withhold certain new permits or permit renewals, existing state law does not permit agencies to revoke or suspend environmental permits that have already been issued to operating or planned data centers simply for failing to submit an administrative survey, according to Ryan Vise, director of external relations at the Texas Commission on Environmental Quality.
That legal reality could leave many currently operating data facilities facing virtually no immediate regulatory consequences for failing to report their water use.
"Because permits are needed before operation and TWDB survey applies to sites that are already operating, barring permits might not adequately penalize a site for survey noncompliance until the site comes up for permit renewal or amendment," explained Margaret Cook, vice president of Water and Community Resilience and Sustainability at the Houston Advanced Research Center.
Adrian Shelley, executive director of Public Citizen, argued that the governor’s directive will only prove meaningful if it genuinely leads to a facility being prevented from opening its doors or being legally shut down if it is already operating without compliance.
Hundreds of facilities haven’t reported water usage
The Texas Water Development Board’s surveys currently offer a restricted picture of the industry’s true water footprint, largely because so few data center operators have complied. The survey document is mailed to thousands of municipal public water systems and industrial facilities, including active data centers.
The survey captures annual water volumes used and basic operational details, such as whether a facility self-supplies or purchases water, the primary source of that water, and whether it features on-site power generation. However, the survey does not collect detailed technical information regarding the specific cooling technology utilized by the facilities—methods that traditionally account for the vast majority of water consumption in data centers.
The survey specifically targets operating facilities that consume more than 10 million gallons of water per year, a threshold the state classifies as a significant industrial user. Entities that receive the survey are legally mandated to complete and return it. Failure to do so exposes operators to ineligibility for state water funding, potential criminal misdemeanor charges with a maximum penalty of $500, and the withholding of certain environmental permits.
Accurate data collection remains vital, according to the water board, because it assists planners in assessing current supplies and ensuring adequate water availability in fast-growing regions with limited natural resources.
Records obtained covering the period from 2020 through 2025 identified 334 unique data center facilities operating across Texas. Of that total, only 101 facilities—roughly one-third—submitted a survey at least once, while 233 facilities never submitted a requested survey during the period.
Although the absolute number of data centers being surveyed has increased each year, overall compliance remains exceptionally low, driven primarily by a surge in new facilities. Of the 329 facilities surveyed by the board recently, 267 are entirely new to the agency’s tracking system, and only 22.5 percent of those new entities responded.
State water board officials have previously acknowledged that they lacked sufficient, reliable data to accurately incorporate data center water consumption projections into the upcoming 2027 state water plan.
Nevertheless, the survey responses that have trickled in illustrate the immense scale of the industry’s reported water consumption. In 2023, just seven reporting data center facilities consumed a combined total of more than 144 million gallons—roughly equivalent to the annual municipal water consumption of a small Texas town of 4,000 to 5,000 residents. In 2024, the number of reporting facilities nearly tripled, and reported water usage surged to more than four times that amount, with 19 facilities consuming more than 660 million gallons annually.
By last year, 97 reporting facilities completed the survey, logging a collective total of 1.4 billion gallons of water consumed in a single year. These figures reflect only the fraction of facilities that actually submitted surveys, leaving total industry consumption largely unaccounted for.
Meta, a major data center operator, has consistently submitted water surveys for its North Texas facility in Fort Worth over the past two years.
"Transparency is a key pillar of Meta’s water stewardship program and we completed the TWDB survey as required," a Meta spokesperson said in an email, noting that the North Texas facility consumes an average of 72 million gallons per year.
"We commend Gov. Abbott’s leadership on protecting water resources and promoting responsible data center development in Texas," the spokesperson added. "Our Texas data centers use water-efficient cooling that minimizes consumption, and we fund projects across the state that restore hundreds of millions of gallons annually as we work toward restoring more water than we consume by 2030."
As the state approaches the January legislative session, Guerra emphasized that state agencies should use the intervening months to fully understand the technology sector’s water use and evaluate the clear structural limits of the current reporting system.
"If we don’t have a full picture, then how are we supposed to go into the legislative session and make meaningful laws to protect folks?" she asked.
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