USA – TEXAS Trends and Developments Contributed by: Kenneth “KJ” Johnston and Blaine Grant, Phelps Dunbar LLP
material considerations. Lenders and investors face similar concerns. Even with a strong site, sponsor, and incentives, a project may face considerable execution risk if power procurement is uncertain. Financing par - ties should assess the interconnection pathway, utility discussions, load forecast maturity, backup genera - tion availability, and contractual allocation of delay or curtailment risk. Texas will likely remain attractive for data centres and other high-growth infrastructure projects due to its land, large power market, major technology customers, favourable business climate, and energy development tradition. However, these advantages do not remove constraints, making disciplined diligence essential. Legal work on Texas infrastructure projects is becoming more inte - grated. Real estate, energy, environmental, tax, con - struction, finance, procurement, corporate, and liti - gation counsel must all understand the same project assumptions. The key issue is not only whether the project can be built, but whether it can be powered, connected, operated, and financed in line with the business plan. SpaceX’s Starbase operations in South Texas provide a case study in how Texas approach - es frontier industries. While most companies do not resemble SpaceX, Starbase demonstrates both the speed and complexity of disruptive projects in Texas. Commercial space activity involves multiple layers of law and regulation, including federal launch licensing, environmental review, public safety, land use, road and beach access, local government authority, infra - structure development, workforce housing, and com - munity relations. Starbase also illustrates how private industrial projects can influence local governance and regional identity. The FAA’s approvals for expanded Starship/Super Heavy launch activity demonstrate the importance of federal review, even in a state known for business-friendly policy. Texas may provide the local and political environment for rapid development, but a launch operator still depends on federal licensing, environmental analysis, and operational approvals. For businesses in other sectors, the lesson is broader: Texas welcomes ambitious projects, but legal com - plexity persists. Advanced manufacturing, semicon - ductor, energy, carbon-capture, data centre, logistics, and aerospace projects all present multi-layered legal obstacles. Larger and more visible projects are more
likely to attract scrutiny from regulators, communities, counterparties, competitors, and advocacy groups. Starbase also stresses the importance of local plan - ning. Texas is not a uniform market; projects in differ - ent regions may face distinct political, labour, infra - structure, environmental, and community dynamics. While state-level policy is important, local execution often determines project success. Privacy, data, and technology compliance as a cross-cutting issue Texas is emerging as an important regulator of privacy and technology. The Texas Data Privacy and Secu - rity Act applies to many companies doing business in Texas, providing products or services to Texas resi - dents, or processing personal data. It grants consum - ers rights over their data and imposes obligations on businesses regarding notices, consumer requests, data security, sensitive data, and data protection assessments. This extends past traditional consumer- facing businesses. Data centres, software providers, financial services, healthcare-adjacent businesses, retailers, employers, marketing platforms, artificial intelligence developers, and technology vendors must assess whether and how Texas privacy law applies to their operations. Privacy compliance should be inte - grated into Texas expansion planning. Companies entering the Texas market should review consumer notices, vendor contracts, data-processing agree - ments, cybersecurity practices, biometric data prac - tices, targeted advertising, sensitive data processing, and consumer-request workflows. Recent enforcement actions by the Texas Attorney General have focused on failure to provide clear con - sumer notices, insufficient processes for responding to consumer requests, and inadequate safeguards for sensitive personal data, including biometric and health-related information. Common compliance pitfalls include failing to respond promptly to data subject requests, inadequate employee training in handling personal data, and insufficient documen - tation regarding data processing activities. Counsel should remain aware of evolving enforcement priori - ties and ensure that privacy programmes are regularly reviewed and tested to reduce enforcement risk. The key takeaway is that Texas’s pro-business reputation does not equate to a lack of regulation. In privacy,
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