Hill County, a rural stretch of North Texas between Waco and Dallas-Fort Worth, spent 23 days as the first county in the state to ban new data center construction. The ban ended after a developer sued for $100 million. The lawsuit that killed it outlived it, running 43 days from filing to dismissal.
On June 4, 2026, the Hill County Commissioners Court voted unanimously to rescind the one-year moratorium it had passed just two weeks earlier, replacing it with a checklist of requirements for data center developers, according to The Texas Tribune. The reversal came after RCM Hill, LLC filed suit on May 27 in the U.S. District Court for the Western District of Texas, arguing the county had exceeded its lawful powers and jeopardized $80 million in existing land contracts covering more than 800 acres. The company had spent 16 months and close to $1 million pursuing a 1,235-megawatt project called Aquila, KERA News reported.
What the county actually did, and undid
The original 3-2 vote on May 12 made Hill County the first jurisdiction in Texas to impose a temporary ban on new data center construction. It lasted 23 days. Rescinding it did not end the litigation: the case stayed live for another month before RCM Hill filed a stipulation of dismissal with prejudice on July 9, and in ending the lawsuit the county agreed to pay $100,000 in legal fees, according to KWTX’s review of commission meeting minutes.
County Judge Shane Brassell has continued to call the moratorium a success, telling the Tribune that the pause pushed out less desirable projects and gave commissioners time to draft the checklist. He said the checklist derives its authority from various state statutes rather than from the county’s general zoning power, which counties in Texas largely do not have outside city limits.
That legal asymmetry is the whole story here.
The zoning gap that gave the developer leverage
Texas cities can zone. Texas counties, in most cases, cannot. That gap matters because almost half of planned data centers in Texas are slated for unincorporated areas, up from 12 percent of the current fleet, according to Tribune reporting. Developers are following the path of least regulatory resistance, and rural county commissioners are discovering they have very few tools to slow anything down.
RCM Hill’s federal complaint argued that the moratorium threatened its ability to meet electricity interconnection standards set by state regulators. In other words: even a temporary local pause can knock a project out of the queue for grid access, and the damages calculation follows from there. Eighty million in land, contracts in motion, interconnection deadlines. A county without zoning authority signed the deal it could realistically defend.
The checklist that replaced the moratorium is not nothing. But it is not a ban either. It is the tool the county believes it can point to a state statute for.
Hood, Somervell, and a governor’s directive
Hill County is not the only Texas county trying to slow the pipeline. Hood County, just west of Fort Worth, asked the Texas Attorney General in February for a formal opinion on whether it has the authority to impose its own moratorium. That opinion is still pending on the AG’s website, six months later. In the meantime, Hood County commissioners approved another data center project, Comanche Circle, in June, after the developer threatened to sue, the Fort Worth Report noted.
The data center industry has donated at least $448,000 to Attorney General Ken Paxton’s U.S. Senate campaign as of June, according to KERA News citing NOTUS reporting. Paxton’s campaign told KERA he will release a data center policy plan soon and said his standard has not changed.
Somervell County, next door, went a different route, unanimously passing a resolution in May opposing new data centers until the legislature acts and sending a letter calling on state lawmakers to increase regulation, KERA reported.
Then the state itself intervened. Governor Greg Abbott issued a directive on August 3 blocking new data centers from connecting to the Texas power grid until state regulators complete an audit of their energy use, water use, and community impact, according to Texas Tribune reporting. That freeze applies at the grid interconnection level, which is precisely the pressure point RCM Hill invoked in its Hill County lawsuit.
What Hill County residents actually get
The checklist. That is the practical outcome for residents in Hillsboro and the surrounding county. Not a ban, not a permanent pause, not a moratorium that survives contact with a developer’s litigation budget. A review process.
Hood County residents are still waiting on an attorney general’s opinion. Somervell County residents have a resolution. Statewide, the Abbott directive adds a review layer at the grid connection stage but does not give counties new zoning powers.
The pattern is not confined to Texas. Mount Vernon, Washington, passed a six-month moratorium on August 12 in a preemptive regional lockout before a single project was proposed, as Cascadia Daily News reported. Jackson County, Florida, voted for a permanent ban on AI data centers in June 2026, according to WJHG, rescinding an earlier moratorium in the process. Pittsburg, California, residents are fighting a data center on a former golf course near schools, according to The Cool Down, after the city approved the first phase in 2024.
Different jurisdictions, different tools, similar underlying question. Who decides where the servers go, and who absorbs the water and grid load once they arrive.
What the record says, plainly
Hill County’s moratorium was legally exposed the moment a developer with signed land contracts decided to test it. The county did not lose in court. It folded, then paid. RCM Hill dropped the suit five weeks after the checklist replaced the ban, and the county paid $100,000 in legal fees.
Judge Brassell’s framing, that the pause bought time and pushed out weaker projects, is defensible on its own terms. It is also a description of what a Texas county can actually do to a data center developer with $80 million already committed, which turns out to be: delay, negotiate, adopt a checklist, and hope the state gives it stronger tools later.
The checklist is now the model other Texas counties will likely study. Not because it is what residents in Hill County originally asked for. Because it is what survived.