farmland preservation
Ohio is a “top 5” state for its number of data centers, which currently number around 200. But that’s a title some in Ohio don’t embrace. In Ohio’s agricultural and rural communities, some citizens appreciate the technology and economic activity data centers bring while others fear loss of farmland, intensive water use, sales tax exemptions, and impacts on electric infrastructure and prices. Here’s a summary of recent developments that illustrate the challenges and discord Ohio faces as we determine how to deal with data centers.
- Ballot initiative for a constitutional amendment on data centers moves forward
Ohio Residents for Responsible Development wants Ohio citizens to determine the fate of data center development in the state. The group is petitioning for a constitutional amendment on data centers that would go before Ohio voters on the November ballot. The proposed constitutional amendment would prohibit the construction of any data center with a peak monthly load of more than 25 megawatts.
The Ohio Ballot Board on April 2, 2026 authorized the group to begin collecting the signatures for the ballot initiative. The Ohio Ballot Board approval and an earlier certification on March 16, 2026 by Ohio’s Secretary of State indicate that the group has satisfied the legal requirements for the petition and can begin the signature-gathering phase of the petition process.
The group behind the initiative is a grassroots organization of citizens whose goal is responsible growth that protects Ohio communities, resources, and local voices. The group now has until July 1 to collect about 413,000 valid signatures from at least half of Ohio’s counties on the petition. Verification of the signatures collected by the Secretary of State will then determine whether the measure will be on the November ballot. Read the “Prohibition of Construction of a Data Center” petition language on the Ohio Attorney General’s website, and learn more about ballot measures on the Secretary of State’s website.
- AEP data center tariff goes before Ohio Supreme Court
The parties have filed their briefs with the Ohio Supreme Court in a challenge to an unprecedented data center tariff by AEP. The Public Utilities Commission of Ohio (PUCO) approved the statewide data center tariff last July. Backed by AEP, the Ohio Consumers Counsel, the Ohio Energy Group, Ohio Partners for Affordable Energy, and Walmart the tariff aims to prevent the possibility that residential electricity customers will bear the costs of data center development by requiring data centers with a load of 25 MW or more to pay a minimum of 85% of their committed load over a 12-year contract. The approved tariff also requires AEP to end the moratorium it had placed on connecting new data centers. The Ohio Manufacturers’ Association Energy Group (OMAEG) appealed the PUCO tariff approval, arguing that the tariff is discriminatory. OMAEG had backed an alternative narrower proposal that would have applied to any electric service agreement for a single location with a load in excess of 50 MW if AEP could prove that the load would create transmission capacity constraints. All parties filed their briefs in the case by the March 24, 2026 briefing deadline, and we now await a date for the oral arguments before the Court. Read the briefs and follow the case on the Ohio Supreme Court’s website.
- Ohio House passes Data Center Study Commission bill
We’ve reported previously on Ohio House Bill 646, which proposes establishing a commission to study the data center development issue in Ohio. The Ohio House of Representatives passed a revised version of the bill on March 18, 2026. The bill would have the Governor, Speaker of the House, and President of the Senate appoint a Data Center Study Commission to examine data center issues and submit a report of findings and any legislative recommendations to the Governor and Ohio General Assembly within six months. The report must also contain suggested best practices and considerations for local decision-making bodies dealing with data center development.
The thirteen-member Commission must include persons knowledgeable in data center operations, agriculture, county and township government, rural electric cooperatives, water and environment impacts, municipalities, public utilities and economic development and tax incentives. The Commission must hold at least four public hearings and examine the following topics related to data centers:
- Environmental impact;
- Effect on the electrical grid, including on behind the meter electric supply and on
- consumer utility rates;
- Water usage, wastewater discharge, and impact on the local water supply;
- Noise pollution;
- Light pollution;
- Impact on the local economy;
- Impact on farmland;
- Value to national security and the development of artificial intelligence;
- Reports of foreign propaganda intended to create opposition to data centers;
- Any other relevant topics determined by the Commission.
The bill is now before the Ohio Senate and was referred to the Senate’s Financial Institutions, Insurance and Technology Committee on March 25.
- Other data center bills linger in the General Assembly
Several additional bills addressing concerns with data center development don’t appear to be moving forward quickly.
H.B. 706 focuses on the infrastructure impacts of data centers and aims to “ensure costs of new infrastructure and grid upgrades needed to serve these facilities are not shifted onto existing Ohio ratepayers.” The bill would require long-term service agreements of at least 12 years with electric utilities for data center customers, require the Public Utilities Commission to create standards for interconnection practices, load study deposits, and milestone requirements. It would also prohibit utilities from recovering data center costs from other customer classes, set minimum gilling standards, and require financial assurance prior to facility construction. The bill received its first hearing before the committee on March 4.
A second bill, H.B. 695, doesn’t address data centers directly but instead targets elected local officials who could have knowledge of such developments. The bill, sponsored by Rep. Adam Bird (R- New Richmond) and Rep. Brian Stewart (R-Ashville) would prohibit county commissioners, township trustees, and village mayors and council members from knowingly entering into nondisclosure agreements that prohibit “disclosing, discussing, describing, or commenting on” matters related to official duties, a repeated complaint of citizens. The bill would make the agreements void and unenforceable and impose civil fines of up to $1,000 on officials who violate the law.” A first hearing before the House Local Government Committee took place on March 11, 2026.
Most recently, Senators Kent Smith (D-Euclid) and Louis Blessing (R-Colerain Township) introduced a proposal to limit sales tax exemptions for data centers beginning on October 1, 2027. The pair introduced S.B. 374 on March 11, but the bill has not received any hearings since its referral to the Senate Finance Committee on March 25, 2026. The bill fills a gap left when Ohio legislators declined to attempt an override of Governor DeWine’s veto of a law passed by the legislature last June that would have ended the sales tax exemptions.
Also referred to committee on March 25, 2026 is H.B. 784, sponsored by Rep. Christine Cockley (D-Columbus) and Rep. Crystal Lett (D-Columbus), which would require any data center that withdraws waters of the state to submit monthly and annual data center water consumption reports to the Division of Water Resources. The bill also contains non-disclosure prohibitions similar to H.B. 695. A third bill also referred to committee on March 25, 2026 is S.B. 381. Rep. Casey Weinstein (D-Hudson) introduced the proposal, which requires interconnection approval from the Public Utilities Commission of Ohio prior to connecting a data center with a monthly maximum demand of more than 25,000 kilowatt hours. The bill is now before the Senate Public Utilities Committee.
Stay tuned to the Ohio Agricultural Law Blog for continued legal information on data center development in Ohio. Also see an analysis of the fiscal costs of data centers from Dr. Gabriel Lade, OSU’s Swank Chair in Rural Urban Policy, though this link to Substack.
An agricultural easement is a legal instrument that can protect farmland from non-farm development and preserve the legacy of family land for the future. An earlier blog post explains how an agricultural easement works and answers common questions about agricultural easements. As we explained, an agricultural easement not only preserves farmland but can also be a valuable financial and tax tool that can enable a transition of the farm to the next generation. But are there drawbacks to agricultural easements? Here's a summary of potential negative implications of easements that landowners should also consider.
It's difficult to forecast the future of a farm. The very nature of the easement requires a best estimate of how the farmland might be used for agriculture into the future--a challenging task. The Deed of Agricultural Easement the parties agree to must predict agricultural activities that are consistent with the easement and those that would violate the easement. There could be future problems if the predictions and forecasting aren’t flexible enough to accommodate agriculture in the future.
The “perpetuity” requirement. While it’s possible to draft an easement that lasts only for a certain term of years, most agricultural easements remain on the land “in perpetuity,” or permanently. The programs that pay a landowner to grant an agricultural easement and the federal income and estate tax benefits for donating all or part of an easement require that the easement is perpetual. This differs from the conservation programs we’re accustomed to in agriculture that require shorter term commitments, and it can be a deterrent to a landowner who wants future generations to have a say in what happens to the land. These concerns might be addressed in the deed of agricultural easement, however, which may provide sufficient flexibility to address those future concerns.
Termination can be difficult and costly. Hand in hand with the perpetuity issue is the difficulty of terminating an agricultural easement once it’s in place. Typically, both parties must agree on a termination and a court of law must determine that conditions on or surrounding the land make it impossible or impractical to continue to use the land for agricultural purposes. Attempts to terminate without following the stated procedures can result in penalties for the current landowner. If there was a payment for the agricultural easement, a deed of easement will likely require the landowner to reimburse the paying party for the proportionate share of the fair market value of the land with the easement removed and will also require the party receiving the reimbursement to use the funds only for similar conservation purposes.
Eminent domain can be an issue. As one Ohio farm family has learned, an agricultural easement might not protect the farmland from an eminent domain proceeding. In Columbia Gas v. Bailey, 2023-Ohio-1245, the Bailey family was forced to litigate an attempt by Columbia Gas to use eminent domain for the construction of a gas pipeline across their farmland. Their predecessor had placed an agricultural easement on the farmland in 2003, and the family argued the easement prevented the taking of land for the pipeline under the doctrine of “prior public use.” That doctrine prohibits an eminent domain action that would destroy a prior public use. The court agreed that the agricultural easement did create a prior public use on the land, and the court shifted the burden to Columbia Gas to prove that the pipeline would not destroy the established prior public use. Rather than doing so, Columbia Gas withdrew its eminent domain proceeding and moved the location of the pipeline. The court's decision to recognize an agricultural easement as a prior public use might provide some protection from eminent domain for future owners of agricultural easement land but, like the Baileys, landowners may have to fight a long, expensive battle to prove that an eminent domain action would destroy an established prior public use.
Lenders and other interests must be on board. A landowner must deal with any existing mortgages, liens, leases, or easements on the farmland before entering into an agricultural easement. The State of Ohio’s agricultural easement, for example, requires a lender to subordinate a mortgage to the rights of the easement holder. Renegotiation of the mortgage might be necessary, and the lender might require a paydown of the outstanding mortgage if the property’s value could reduce below that amount. Without subordination and other approvals, a landowner will not be able to enter into an agricultural easement.
Local governments must be on board. Ohio’s program for purchasing agricultural easements requires a landowner to submit a resolution of support from the township and county where the land is located. This means the local governments must agree that committing the land to agriculture is consistent with local land use plans. An early conversation with local officials is necessary to ensuring consistency with the community’s future plans.
There will be monitoring. An easement holder has the responsibility of ensuring there is not a violation of the easement or conversion of the land to non-agricultural uses. This means there will be a baseline or “present condition” report of the easement property upon easement creation and monitoring of the property “in perpetuity.” An annual visit to the property and completion of an annual monitoring report by the easement holder is common.
It's a lengthy process. Agricultural easements don’t pop up overnight. Especially when applying for funding from competitive programs like Ohio’s Local Agricultural Easement Purchase Program or the NRCS Agricultural Land Easements Program, it can be a year or more before an agricultural easement is in place.
Planning and integration with plans is necessary. An agricultural easement is one piece of what can be a complex plan addressing a landowner’s expansion, retirement, estate, and transition needs. A landowner would be wise to work with a team of professionals—financial planner, tax professional, attorney—to ensure that an agricultural easement integrates with all other parts of the plan.
Still interested? Ohio landowners interested in learning more about agricultural easements may want to consider these steps:
- Review the resources on the Ohio Department of Agriculture’s Office of Farmland Preservation.
- Talk with other landowners who have entered into easements. Refer to the Coalition of Ohio Land Trusts landowner resources and landowner stories.
- Visit American Farmland Trust’s Farmland Information Center.
- Talk with a “local sponsor” or land trust in your area. The Office of Farmland Preservation provides a list of local sponsors for the Clean Ohio Agricultural Easement Purchase Program on its website.
- Talk with your attorney, financial planner, and accountant about the implications of entering into an agricultural easement.
Questions from farmers and farmland owners about agricultural easements are on the rise at the Farm Office. Why is that? From what we’re hearing, the questions are driven by concerns about the loss of farmland to development as well as desires to keep farmland in the family for future generations. An agricultural easement is a unique tool that can help a farmland owner and farming operation meet goals to protect farmland from development or transition that land to the next generation. Here are answers to some of the questions we’ve been hearing.
What is an agricultural easement? An agricultural easement is a voluntary legal agreement by a landowner to use land primarily for agricultural purposes and forfeit the right to develop the land for other purposes, either permanently or, less often, for a term of years. In an agricultural easement, a landowner grants an easement “holder” the legal right to enforce the easement against a landowner or other party who attempts to convert the land to a non-agricultural use. A written legal instrument details and documents this agreement between a landowner and the easement “holder.” The agricultural easement instrument must be recorded in the county land records, and the agricultural easement is binding on all future landowners for the duration of its term.
A state legislature must authorize the use of the agricultural easement instrument, and Ohio’s legislature did so in 1999. At that time, the legislature adopted a detailed legal definition of “agricultural easement” in Ohio Revised Code 5301.67(C):
"Agricultural easement" means an incorporeal right or interest in land that is held for the public purpose of retaining the use of land predominantly in agriculture; that imposes any limitations on the use or development of the land that are appropriate at the time of creation of the easement to achieve that purpose; that is in the form of articles of dedication, easement, covenant, restriction, or condition; and that includes appropriate provisions for the holder to enter the property subject to the easement at reasonable times to ensure compliance with its provisions.
The legislature also required in Ohio Revised Code 5301.68 that a landowner may only grant an agricultural easement on land that qualifies for Ohio’s Current Agricultural Use Valuation (CAUV) program under Ohio Revised Code 5713.31.
Is an agricultural easement the same as a conservation easement? No, not in Ohio, but they share the same legal concept of dedicating land to a particular use. Ohio also allows a landowner to grant a conservation easement, which is a promise to retain land predominantly in its natural, scenic, open, or wooded condition and forfeit the right to develop the land for other purposes. A conservation easement might allow agricultural land uses, and an agricultural easement might allow some conservation uses. The terms used in federal law and some other states vary from Ohio, and include “agricultural conservation easement” or “agricultural land easement.”
Who can be a “holder” of an agricultural easement? Ohio law answers this question in Ohio Revised Code 5301.68, which authorizes only these entities to enter into an agricultural easement with a landowner:
- The director of the Ohio Department of Agriculture;
- A municipal corporation, county, or township;
- A soil and water conservation district;
- A tax exempt charitable organization organized for the preservation of land areas for public outdoor recreation or education, or scenic enjoyment; the preservation of historically important land areas or structures; or the protection of natural environmental systems (generally referred to as a “land trust” or a “land conservancy.”)
What kinds of land uses would be inconsistent with keeping the land in agricultural use? That depends on the terms in the written deed for the agricultural easement. Activities that might violate the agreement to maintain the land as agricultural include subdivision of the property, commercial and industrial uses, major surface alterations, and oil and gas development. It’s typical to identify the homestead or “building envelope” area and allow new buildings, construction and similar activities within that area, but those activities might not be permitted on other parts of the land. Review the Ohio Department of Agriculture’s current Deed of Agricultural Easement through the link on this page: https://agri.ohio.gov/programs/farmland-preservation-office/landowners.
Can a landowner transfer land that is subject to an agricultural easement? Yes. An agricultural easement does not restrict the right to sell or gift land, but it does carry over to the new landowner. That landowner must abide by the terms of the agricultural easement.
Are there financial incentives for entering into an agricultural easement? Yes. There are several financial incentives:
- The Ohio Department of Agriculture’s Office of Farmland Preservation oversees the Local Agricultural Easement Purchase Program, which provides Clean Ohio grant funds to certified local sponsors to purchase permanent agricultural easements in their communities. It’s a competitive process that requires a landowner to work with an approved local sponsor to apply for the program and to donate at least 25% of the agricultural easement’s value if selected. A landowner can receive up to 75% of the appraised value of the farm’s “development rights,” with a payment cap of $2,000 per acre and $500,000 per farm per application period.
- Federal funds are also available through the Natural Resource Conservation Service’s Agricultural Conservation Easement Program. This program is also competitive and requires a landowner to work with an approved partner to determine eligibility and apply for easement funding. NRCS may contribute up to 50 percent of the fair market value of the agricultural land easement.
- There are also federal income tax incentives for donating a portion or all of an agricultural easement’s value to a qualified charitable organization. Internal Revenue Code section 170(h) allows a landowner to deduct the value of the easement up to 50 percent of their adjusted gross income (AGI) in the year of the gift, with a 15-year carryover of excess value. That AGI percentage increases to 100% for a “qualified farmer” who earns more than 50% of their gross income from farming.
- There can also be federal estate tax benefits for land subject to a permanent agricultural or conservation easement. The land is valued at its restricted value, which lowers the estate value. Additionally, Section 2055(f) of the Internal Revenue Code allows donations of qualifying easements to a public charity to be deducted from the taxable value of an estate. Up to 40% of the value of land restricted by an agricultural or conservation easement can be excluded from the value of an estate if the easement meets Internal Revenue Code section 2031(C) provisions, limited to $500,000.
How can a family use an agricultural easement to enable farm transition goals? Here’s an example. John and Sue are fourth generation owners of 250 acres of farmland they plan to leave to their child Lee, and they want the land to remain as farmland into the future. Lee is committed to farming and wants to farm, and John and Sue would like Lee to have more land to improve the viability of the farming operation. They find a local sponsor and apply to Ohio’s Local Agricultural Easement Purchase Program, offering to donate 25% of the agricultural easement value to the program. They are selected for the funding and receive a payment of $2,000 per acre for the agricultural easement. They use the $500,000 in easement proceeds to purchase additional farmland for Lee. John and Sue receive a federal income tax credit for the portion of the easement value they donated to qualify for the program, and carryover the amount until it is fully used, up to 15 years.
What are the drawbacks of agricultural easements? There are challenges and drawbacks of agricultural easements, and we’ll discuss those in our next blog post.
Agricultural easements require legal and tax advice and careful planning. Our short Q&A doesn’t address all of the nuances of agricultural easements. It’s a big decision, and one that should align with current goals and estate and transition plans. To determine if an agricultural easement works for your situation, seek the advice and planning assistance of knowledgeable legal and tax professionals.
