How Texas should handle the data center boom is shaping up as a big question for state lawmakers when the legislative session begins in January, and North Texas leaders don't agree on the answer. That split was on display Thursday at a panel hosted by the Fort Worth Report as part of its 2026 Growth Summit. The Report organized the event and also covered it.
The panel included Tarrant County Commissioner Matt Krause, Fort Worth City Council member Elizabeth Beck and Adrian Shelley, Texas director of Public Citizen.
Wait for the state, or act now?
Krause said the state will need to address data centers but should leave much of the regulation to local governments. "We understand the state's going to have to speak to the data center issue," he said. "But leave a lot of regulation — of what it looks like, how it functions in each and every one of our localities — to the local government."
Still, Krause said local governments should take a "wait and see" approach while urging lawmakers in Austin to act. He pointed to the fracking ban Denton enacted in 2014, which led to a clash with the state. He said it takes a lot of time and resources to write rules for specific developments like data centers. "You don't want to put a lot of time … into constructing this entire framework on how to deal with data centers only for the state government to come in and say, 'You can't do that,'" he said.
Beck disagreed. She said Fort Worth is a home-rule city, which means it can adopt any regulation the state hasn't explicitly barred. "I trust the state government like I trust gas station sushi," she said, drawing laughter.
Shelley sided with acting locally. "Cities should be working up to the limits of their authority because, as I am seeing it, that's what their constituents want," he said. He said dozens of Texas counties have passed resolutions urging lawmakers to act, and some county officials have proposed moratoriums and outright bans.
Incentives
Beck said business incentives for data centers in Fort Worth should be taken off the table. "(Data centers) are not hurting for funds," she said.
Tarrant County has already asked the Legislature to do away with data center tax abatements, the Fort Worth Report says. Krause cautioned that incentives for other industries shouldn't be eliminated entirely.
The state alone has authority over several areas tied to data centers, including water supply and planning, air quality, energy and state sales taxes, according to the Report.
Notice for neighbors
Panelists also discussed the proposed Circle T data center in Westlake, bordering Keller, which has drawn criticism from residents and leaders of both cities.
Beck said Fort Worth code requires mailed notice to residents within 300 feet of a development seeking a zoning change, but those rules don't cover residents in neighboring cities. "That's something that needs to change in state law to make sure that we're notifying all impacted residents, regardless of what municipality they live in," she said.
Krause said he'd support a regional approach, similar to the Regional Transportation Council, when multiple cities are involved. Shelley said developers should be open with neighbors about things like whether a data center has its own power source. "Transparency is of the utmost importance," he said.
Why it matters for contractors
Data centers are among the largest construction projects a community can see, and as Shelley noted, they're spreading across the state fast enough that dozens of counties have asked lawmakers to act. What the Legislature does in January could shape how much of that work gets built, where it goes and how quickly it moves.
If incentives like tax abatements go away, as Tarrant County has asked, some projects may look less attractive to developers. If cities gain more power to regulate, contractors could face a patchwork of local rules on design, noise, notification and siting from one city to the next. If the state takes the lead, the rules could be more uniform but slower to arrive.
The Circle T fight in Westlake shows how a project that crosses city lines can stir up opposition. Beck's call to expand notice to residents in neighboring cities could add steps to future zoning cases, which affects schedules for builders waiting on approvals.
For North Texas electrical, mechanical, concrete and site contractors who've been banking on data center work, the 2027 session is worth watching closely. Changes to incentives, local authority and notice rules could all affect the project pipeline.