AUSTIN, TEXAS – The Texas Association of Business (TAB) today provided written testimony to the Texas House State Affairs Committee for its interim hearing on data centers.
"Data centers are critical infrastructure in Texas’ modern economy. They support everyday business operations across every sector – from banking and healthcare to energy, logistics, and communications – and enable the digital services Texans rely on daily. They also play an important role in advancing emerging technologies, including artificial intelligence, and support Texas’ role in enhancing our national security capabilities," TAB's Senior Vice President and Chief Policy Officer Gabriela von zur Muehlen wrote in a letter to the Committee.
"Texas remains a leader in innovation and industry growth, and data centers are a key part of the infrastructure that makes that leadership possible. As our economy grows, so does the need for reliable, scalable digital infrastructure to support businesses, communities, and public services across the state."
TAB also addressed several key misconceptions about data center growth in Texas, and urged legislators to take a balanced, forward-looking approach that supports continued data center investment in our state:
"While some reporting has focused on the cost of state incentives, it often overlooks the full picture. Data centers generate more than $3 billion annually in state and local tax revenue, far outweighing the cost of current incentives and delivering a strong net benefit to Texas communities.
"Data center growth is also driving significant new investment in power generation, increasing available capacity and supporting grid reliability. In many cases, this added supply helps stabilize and even lower electricity costs. A recent study from Lawrence Berkeley National Laboratory found that states, including Texas, that added large data center loads saw lower overall electricity prices between 2019 and 2024.
"Similarly, concerns about water use are often overstated. Data centers accounted for less than 0.5% of all water use Texas last year, according to the Houston Advanced Research Center. As Texas makes historic investments in water infrastructure through the Texas Water Fund, policy should remain focused on long-term, statewide solutions rather than targeting a relatively small user."
To read TAB's full letter to the Texas House State Affairs Committee today, click here.
### | 
