CINCINNATI — Lawmakers in Columbus are looking to regulate data centers in Ohio, a state with more than 200 scattered throughout various communities.
The Ohio Senate informally passed legislation on Wednesday, which means it stays on the calendar and can be voted on at a later date.
Substitute House Bill 646 addresses a flurry of issues surrounding the polarizing infrastructure. For one, it creates an electric rate class for data centers, which aims to ensure companies responsible for developments pay for the energy they create and use.
It also requires electric distribution utilities to file a data center tariff before the Public Utilities Commission, according to our partners at News 5 Cleveland. This allows the PUCO to consider grandfathering current contract agreements while reviewing the tariff case. It also creates a collaboration surety bond that data centers must deposit with the tax commissioner.
WATCH: What's in House Bill 646 to regulate data centers?
Last year, Ohio delivered close to $1.6 billion to data center developments in the form of certain tax breaks, according to the Ohio Department of Taxation. HB 646 cuts the size of new sales tax breaks for projects from 100% to 50%.
However, this won’t apply to any of the companies with existing contracts, like Meta, Google and Amazon. State Sen. Kent Smith (D-Euclid) said some of those contracts last for decades.
"If we pull the tax percentage back from 100% to 0%, 76% of the market is not affected because of these deals that those three signed in the Kasich administration," Smith said.
The bill requires the sites to use closed-loop water systems.
The nearly 50-page bill stops short of addressing a major topic of contention for data center critics: non-disclosure agreements. As written, only one provision states that NDAs do not supersede public records law.
"It doesn't change anything that folks get or that they're entitled to get right now," Senate Finance Chair Brian Chavez (R-Marietta) said on Wednesday.
Chavez was asked why more transparency cannot be provided in regard to the NDAs.
"Well, we're not really doing anything about the NDAs other than saying you have to follow the law," he said. "We want to make sure that we're not inhibiting the development of projects, but we also wanna make sure that disclosures are revealed in a timely manner."
