Texas Republicans disagree over prohibiting AI data centers in rural neighborhoods

Walking on her farm near Sherman in Grayson County, Republican State Rep. Shelley Luther said she wants to protect rural landscapes like hers across the state. 

"There's just not a lot of this left." In an interview with CBS News Texas, Luther applauded Gov. Greg Abbott's recent comments calling for the state to prohibit the construction of AI data centers in rural Texas neighborhoods. 

"Green land, rolling hills. I don't think we should tear that up for data centers," she said. "Steaks don't come from H-E-B, as I like to say. They've got to come from somewhere. Rural Texas. You got to preserve this land and not put a big industrial footprint on it."

Republicans debate economic benefits and impact of data centers in Texas

During a campaign event in Bullard, in East Texas, on June 30, Abbott told supporters that the state needs to press the brakes on data center developers. 

"We must prohibit them from building AI data centers in rural Texas neighborhoods, and we must eliminate the tax break they are getting," Abbott said. "They must be responsible for funding their own projects in Texas."  

He previously directed the Public Utilities Commission of Texas and ERCOT to make sure that data centers operate in ways that reduce costs for residential electricity customers and don't drain water that communities depend on. 

But Republican Texas Railroad Commissioner Wayne Christian told CBS News Texas that he doesn't want the state to impose a blanket ban on data centers in rural neighborhoods. 

"No, I definitely do not. Rural Texas is dying. We, right now, understand, in the United States of America, rural America is decaying, going away," Christian said. "These billions of dollars from data centers could be one answer to rebuilding that decay of rural Texas."

A company called Baxtel, which connects buyers and sellers of data centers, estimates there are 721 of these facilities in Texas. That includes 276 in the Dallas area. 

Both Christian and Luther said, going forward, AI data centers can be regulated.   

AI data centers spark fight over jobs, land and property rights

Luther said private property rights should remain strong in Texas, but may need some small adjustments.  

"The reason why we have these private property rights is because we don't want these counties to tell us what to do," said Luther. "So, liberty. But now, we're like we need to scale that back just a little bit. Give them a little bit of authority, some sort of zoning, or saying not that you can't do that here, but if you do that here, these are the things that you need to follow."

Christian said the state should come up with solutions to any problems caused by data centers. 

"We didn't look at a problem when it comes to Texas and say, 'Just don't do it.' We say, 'What are some answers?' Let's invent a Texas plan and say, 'Okay, if you're going to bring those things here, don't do it this way, don't do it that way, but here's how we want it done,'" said Christian.

Both Republicans and Democrats also want to eliminate sales tax incentives that go to data center developers. 

Records with the Texas Comptroller's Office show those incentives have cost state taxpayers $2.8 billion between 2014 and this year. During the Democratic state convention in Corpus Christi last month, the Democratic candidate for governor, Gina Hinojosa, criticized Abbott. 

"Greg Abbott built the biggest data center giveaway in the whole country," said Hinojsa. "The richest men in the world, his donors, are running up your electric bill, guzzling up your water while you pay for it. Now that I'm running against him, he wants us all to forget that he sold the farm for cheap in a fire sale. Nobody believes the arsonist will put out the fire."

Lawmakers look ahead to data center debate at Texas capitol  

Texas Agriculture Commissioner Sid Miller called on Abbott to call lawmakers back for a special session on data centers. The Democratic candidate for Agriculture Commissioner, Clayton Tucker, agreed. 

Luther said that is unlikely to happen because the governor and lawmakers are campaigning for the November election. But she said this issue will be thoroughly debated during the next legislative session at the Texas Capitol starting in January. 

"Data centers are definitely on top of the list," Luther said.

Watch Eye On Politics at 7:30 Sunday morning on CBS News Texas on air and streaming