Thursday, October 1, 2026
The tension between individual property rights and the rights of a broader community has long been a defining feature of Texas real estate law.
In a state which deeply values private ownership and economic liberty, the protection of individual property rights is often seen as foundational to prosperity and personal freedom. At the same time, Texas law recognizes real property does not exist in isolation. Land use decisions affect neighbors, infrastructure, environmental resources and economic development. The result is a contentious balance between autonomy and collective welfare.
The Texas Constitution contains explicit protections against the taking of private property without adequate compensation. Article 1, Section 17, requires that no person’s property be taken, damaged or destroyed for public use without adequate compensation. Texas Courts have interpreted the constitutional provisions broadly in favor of property owners, reflecting the state’s historical emphasis on land ownership.
While every inch of Texas is included in one of its 254 counties, not all of Texas falls inside the limits of a city. Cities are created by its citizens in two basic ways, depending on their size. Cities with a population of less than 5,000 people can only exist as general-law cities and must adhere to the Texas Local Government Code and can only enact laws that align with state statutes. Cities such as Granbury which have a population of more than 5,000 citizens may elect “home rules” status, which allows them to do virtually anything they want that is not prohibited by the legislature.
The city of Granbury made this election Jan. 21, 1989, (as amended) meaning since that date it can pass ordinances and regulations to limit noise, water usage, electrical usage and pollution among other ordinances. In other words, the legislature has delegated Granbury the legal authority to pass ordinances to regulate the behavior of individual property owners as well as industry which is located within its city limits.
On the other hand, Texas counties are considered administrative arms of the state, not independent governments. Their authority comes from the Texas Constitution, and the statutes enacted by the legislature granting them authority. Counties cannot simply decide to regulate something because they believe it is good public policy or because there is political pressure for them to act. The law is well established that a county is acting unlawfully if they act without authority being granted to them by the legislature.
The framers of the Texas Constitution created a decentralized but tightly controlled system. It allows counties to carry out state functions, such as courts-of-law, records, law enforcement and elections. Texas counties were designed to administer justice, maintain roads and infrastructure, collect taxes, conduct elections and provide basic public services. They were never intended to be broad policy-making bodies.
Texas counties operate within what is known as “Dillon’s rule. The term “Dillon’s Rule” originates from an opinion of Judge John F. Dillon in the case of city of Clinton v Cedar Rapids & Missouri River Railroad. This case established the principle that local governments have only the powers specifically granted to them by the state. Within this rule, local governments must seek explicit permission from the state for any powers they wish to utilize that are not clearly outlined in their charters. They also have powers necessarily implied by those expressly granted. If a power is not specifically granted or clearly implied, it is not granted.
The definition of an “implied power” can be somewhat vague, but often is viewed as a necessary and indispensable part of the express power. For example, if the legislature granted authority for a county to provide transportation for inmates to a state facility, it is implied the county would need some sort of motorized vehicle to complete the express power and thus it would be lawful for them to purchase and operate motorized vehicles. Without implied authority, express power could not be fulfilled.
Interestingly, there is a statute which does give Hood County authority which other counties in the state have not been delegated. In 1999, many property owners along the Brazos and Lake Granbury either were installing or utilizing ineffective septic tanks and the fear of pollution to the Hood County watershed caused the state legislature to pass Section 231, Subchapter K, of the Texas Government code.
This section grants Hood County the authority to create development regulations and applies only to unincorporated areas of the county. These regulations may include the percentage of a lot that may be developed, the population density of a development, the size of buildings in a development, the location design, extension and size of streets, roads, water and wastewater facilities and similar regulations related to drainage facilities and other required public facilities. As previously reported in the HCN, Dan Sefko, the co-author of Section 231, has said “It was originally drafted to manage transportation issues, water quality and water quantity.
It only is recently that some have attempted to use Section 231 to control the development of data centers and whether that statute grants authority to do so is a large issue facing Hood County.
Legal maneuvering
and conflict
In the Feb. 10 Hood County Commissioners Court meeting, Precinct 4 Commissioner Dave Eagle placed on the agenda a discussion to establish a moratorium on all applications for concept plans, site development plans and permits and on the issuance of any site permits for industrial development.
During the meeting, County Attorney Matt Mills advised the commissioners that in his legal opinion Section 231 did not give the county legal authority to pass a moratorium as such powers are not expressly detailed in the legislation. Additionally, Jim Allison, the senior general counsel for the Texas Association of Counties, also weighed in and said in his legal opinion the county had no authority within Section 231 or any other section, to issue a moratorium.
At the request of Precinct 2 Commissioner Nanette Samuelson, a third attorney was retained by the court, seeking legal advice as to whether the court had the legal authority to issue a moratorium within Section 231.
Debra Mergel of the Bojorquez Law Firm, the firm retained by the commissioners, issued an opinion Feb. 23 and said, “No, the commissioners of Hood County, Texas, is not authorized to institute a moratorium on a development in the county as the Texas State Legislature has not granted such authority.
Despite the same legal conclusion from three different authorities, Commissioners Eagle and Samuelson brought the issue of a moratorium to a vote.
While Commissioners Eagle and Samuelson argued Section 231 did apply, Precinct 1 Commissioner Kevin Andrews voiced concerns about the legality of any action the court might make and the risk of creating liability on the county for an unlawful act, and expressed concern about taking action in the face of three different legal opinions which expressed the belief that the Commissioners Court had no such authority.
By a vote of 3-2, the Commissioners Court failed to pass the moratorium.
At the following Commissioners Court meeting, the issue once again was placed on the agenda by Eagle, and failed by a similar 3-2 vote, with County Judge Massingill and Precinct 3 Commissioner Jack Wilson joining Andrews in opposing the moratorium. Importantly, their opposition was not an objection to whether to regulate development, but rather whether the county had the legal authority to act.
On March 10, Commissioners Court met once again and at that meeting decided by a vote of 5-0 to amend the Development Permit Regulations, limiting size of all industrial developments, including data centers, and the percentage of land which they may utilize for a facility.
Concerns have been expressed by the county judge as well as Wilson that these new regulations will lead to litigation between the county and those attempting to create a data center.
In researching for this series and in speaking with county officials, city officials and state economic authorities about the regulation of industries and particularly “data centers,” the one constant has been no one is advocating that Hood County water be polluted, or over-utilized, the power grid be unduly strained, air and water suffer additional pollution or noise from such faculties affect neighbors quiet enjoyment of their property. The pressing problem is knowing who has the authority to regulate what, and until the legislature acts or a court rules, the issue is clouded.
To date, the state legislature has not taken action to codify who has authority to regulate these new industries. While numerous public speakers and attendees at Commissioners Court have expressed a willingness to battle wealthy, large development groups in court, such bold statements frequently result in large legal expenses to a county and may not bear the fruit advocates are seeking.
This is not a problem unique to Hood County. Other counties in Texas are struggling and growing pressure is being applied for the state legislature to step up, perhaps having Gov. Greg Abbott call a special session to consider how to regulate these new industrial giants so as to build our economy while protecting individual property rights and the quiet enjoyment of property.
The governor and President Trump are on the record as being strong advocates for data centers. Many people in Texas, and especially Hood County, have concerns about what their development looks like. Texas needs the legislature to clarify who has authority to regulate these industrial giants.
