What HB 646 does

• Makes data centers pay for their own power. HB 646 creates a data center rate class so that the data centers alone pay the generation, transmission, and distribution costs of serving them. Utilities would have to file a data center tariff with the PUCO within 60 days.

• Requires the biggest data centers to bring their own power. Data centers above 250 megawatts would have to bring their own generation or enter into a purchase power agreement.

• Tracks water use. Data centers would have to measure and report their water withdrawals to the Ohio EPA and ODNR, and report any anomalies their water quality monitoring detects.

• Requires water conservation. Every data center would have to use a closed-loop system, a water mitigation system, or recognized best practices for water conservation and efficiency.

• Sets a water quality baseline. The Ohio EPA would have 60 days to set up a water quality testing plan.

• Cuts tax breaks. The sales and use tax exemption for future data centers would be capped at 50 percent, and local property tax exemptions would be limited to no more than 50 percent.

• Ends megaproject grants. Data centers could no longer receive the 30-year Job Creation Megaproject Grant.

• Protects local communities. Data center operators would have to deposit a surety bond with the Ohio tax commissioner to give affected communities financial assurance.

• Keeps public records public. The bill states that nondisclosure agreements do not override public records laws.

• Supports local governments. The Ohio Department of Development would publish a toolkit local governments can use to evaluate, negotiate, and manage data center projects.

What HB 646 should do

• Close the sales tax exemption. The exemption was projected to cost $140 million in FY2025, but the real cost was closer to $1.6 billion. With more than 70 large projects in the pipeline, Ohio is subsidizing the industry that is driving up our bills.

• Make every data center pay for the grid. Data centers with their own on-site power still rely on the grid when that power goes down, so they should still pay their share of grid costs.

• Apply the same protections statewide. Every Ohio utility should be held to the same data center protections: a minimum bill of at least 85 percent of contracted capacity, contracts of at least 12 years, exit fees, and financial guarantees.

• Ban nondisclosure agreements. Public officials should be prohibited from signing NDAs with data center developers, because communities can’t judge a project they aren’t allowed to know about.

• Require community benefit agreements. Communities are being asked to approve massive, permanent facilities based on a press release and a promised job count. Enforceable agreements put the risk of over-promising back on the developer.

• Require cleanup plans and bonds. Large data centers should have a state-approved decommissioning and cleanup plan backed by a bond. Ohio communities have already watched announced projects shrink or disappear with no cleanup obligation.

• Give communities the facts on water. Residents should know how much water a project will use before it’s approved, see regular updates once it’s running, and have a way to protect their drinking water.

• Review every water permit on its own. Ohio EPA wants to fast-track one statewide permit for data centers to release water into lakes, rivers, and streams. Every waterway is different, so each project should get its own review, with regular testing for PFAS “forever chemicals.”