Federal officials may sue a Texas town over its decision to halt a religious association's plans to build a Muslim cemetery.

The U.S. Department of Justice is investigating whether Farmersville violated a law designated to stop municipalities from discriminating against land use decisions, the Dallas Morning News reported. The U.S. Attorney General's Office "has approved the filing of a lawsuit against the city under the Religious Land Use and Institutionalized Persons Act," according to a city statement.

The Farmersville City Council unanimously voted this week to enter negotiations to reach a potential settlement that would allow the cemetery to proceed and avoid a lawsuit. The city, about 45 miles north of Dallas, has roughly 3,300 residents, 75 percent of whom are white.

The Islamic Association of Collin County announced in July 2015 that it planned to create a graveyard on the land it bought in the city's extraterritorial jurisdiction.

But the City Council denied the Plano-based organization's preliminary proposal last summer, despite the plan meeting all of the city's criteria, according to records. Farmersville officials cited concerns over drainage issues, according to City Council meeting minutes from July 2017.

Some residents responded to the cemetery plan with anti-Islamic sentiments and expressed concern that it would lead to a mosque or a Muslim school being added to the area next.

The association has said there are no plans to add such facilities to the area.

"A lot of those people — their feelings are still out there," said Mayor Randy Rice, who was elected in May. "It's going to take time."

A U.S. Department of Justice spokeswoman declined to comment. An association attorney also declined to comment.

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Information from: The Dallas Morning News, http://www.dallasnews.com