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Texas AI Infrastructure
Regulatory Checklist
A due diligence framework for companies investing in AI infrastructure in Texas
Updated February 2026 · 3 Critical Sections · Actionable Checklists
Why This Checklist Exists
Texas infrastructure projects raise questions about ownership, public policy, and local finances. This checklist helps your team organize those questions for discussion with counsel and other advisers.
Whether you're evaluating a site, conducting due diligence on an existing facility, or managing stakeholder relationships, this checklist helps you identify regulatory exposure before it becomes a liability.
What's Inside
SB 17 Real Estate Audit
Beneficial ownership mapping, control test compliance, leasehold review
90th Session Critical Infrastructure Forecast
Supply chain scrutiny, grid vulnerability, alternative legal systems
"Operation Double Nickel" Fiscal Hedge
Appraisal growth caps, Chapter 312/313 strategy, voter sentiment
1. SB 17 Real Estate Audit
Texas SB 17 restricts ownership and leasing of property near critical infrastructure by certain foreign entities. This section provides a compliance framework:
- Beneficial Ownership Verification: Map all entities with 5%+ ownership, identify foreign government-affiliated investors
- Control Test Compliance: Review board composition, assess management agreement provisions
- Leasehold Review: Verify ground lease structures, assess sublease chains
2. 90th Session Critical Infrastructure Forecast
The 90th Legislature (2027) is expected to revisit foreign investment scrutiny, grid resilience, and supply chain integrity. This section helps you prepare:
- Supply Chain Integrity: Map vendor relationships subject to foreign entity scrutiny
- Grid Vulnerability Assessment: Model ERCOT demand-side risk, evaluate backup generation
- Alternative Legal System Exposure: Review contractual provisions referencing foreign legal frameworks
3. “Operation Double Nickel” Fiscal Hedge
Property tax appraisal growth caps (“5.5%” proposals in the 90th Session) could reshape local government fiscal capacity. This section models the impact:
- Property Tax Appraisal Growth: Model revenue impact of 5.5% appraisal cap on host jurisdiction
- Chapter 312/313 Strategy: Inventory existing abatement agreements, model Chapter 313 expiration impact
- Voter Sentiment Assessment: Track local ballot measures affecting tax policy
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Who This Checklist Is For
AI Data Center Developers
Evaluating Texas sites for hyperscale AI infrastructure. Understand foreign ownership restrictions, critical infrastructure scrutiny, and local fiscal dynamics.
Infrastructure Investors with Foreign Capital
Conducting due diligence on Texas data center projects. Identify SB 17 exposure, map beneficial ownership structures, and assess control test compliance.
Companies Navigating ERCOT + Property Tax Policy
Operating in jurisdictions affected by appraisal growth caps and tax abatement uncertainty. Model local government fiscal capacity and voter sentiment.
Legal & Finance Teams
Managing regulatory risk for AI infrastructure portfolios. Prepare for 90th Session proposals and evolving state-level scrutiny.
About JD Key Consulting
James Dickey and Blake Sbrocco help companies with Texas local government and public affairs, working alongside their existing legal, technical, and communications teams.
Tell us which city or county is involved, what you want to accomplish, when the decision is, and which local concerns you have heard.
Explore Data Center WatchFrequently Asked Questions
What is the Texas AI Infrastructure Regulatory Checklist?
It is a free due diligence framework for companies investing in AI infrastructure in Texas. The checklist covers three critical areas: SB 17 foreign ownership compliance, 90th Legislature critical infrastructure forecasts, and property tax fiscal policy considerations including appraisal growth caps.
What is SB 17 and how does it affect data center investments?
Texas SB 17 restricts ownership and leasing of property near critical infrastructure by certain foreign entities. For data center developers and investors, this means mapping beneficial ownership structures, verifying board composition for control test compliance, and reviewing ground lease and sublease chains for foreign entity exposure.
What is Operation Double Nickel?
Operation Double Nickel refers to proposed 5.5% property tax appraisal growth caps expected in the 90th Texas Legislature (2027). These caps could reshape local government fiscal capacity and affect tax abatement strategies for data center and infrastructure projects. The checklist helps model the revenue impact on host jurisdictions.
Who should use this checklist?
The checklist is designed for AI data center developers evaluating Texas sites, infrastructure investors with foreign capital conducting due diligence, companies navigating ERCOT and property tax policy, and legal and finance teams managing regulatory risk for AI infrastructure portfolios.
How current is this checklist?
This edition is dated February 2026. Use it to organize questions for your legal and finance advisers, and confirm current requirements before acting.
Do I need a government affairs firm to use this checklist?
Use the checklist with your legal and finance advisers. JD Key can add local relationships, community outreach, and public advocacy when your team needs help with a city, county, or district decision.