To enact section 5709.122 of the Revised Code to require payments in lieu of taxes from conservation organizations with significant holdings of tax-exempt land.
Summary
HB540 would create a new section of the Ohio Revised Code requiring certain nonprofit conservation organizations to make annual payments in lieu of taxes (PILOTs) on large holdings of tax-exempt land. The bill applies only to organizations described as 501(c)(3) conservation groups whose property is exempt as land used exclusively for charitable purposes and whose qualifying real property exceeds 15,000 acres in a single county. Beginning in 2026, those organizations would owe a payment equal to 2.5% of the unimproved taxable value of the qualifying property, paid to the county treasurer by June 30 each year.
The bill also directs county auditors to distribute the payments to local taxing units in the same proportions they would have received if the land were taxable, and it allows those local governments to use the money for any lawful purpose. If a required payment is not made, the amount would be collected like delinquent real property taxes. The measure is aimed at large conservation landholdings that currently do not pay property taxes, while carving out portions of property used for meetings, research, education, or organizational administration.
Impact
HB540 would add a new statutory obligation for a narrow class of nonprofit conservation organizations, effectively creating a PILOT framework for very large tax-exempt conservation properties. It would not broadly change Ohio’s property tax exemption rules, but it would require certain exempt landowners to make annual payments based on the hypothetical taxable value of their land, and it would create a distribution mechanism for counties and local taxing units. The bill would affect nonprofit conservation organizations with more than 15,000 acres in one county, county treasurers and auditors, and local school districts and other taxing units that would receive the redistributed funds.
Sentiment
The bill was introduced and referred to the House Ways and Means Committee, but no committee transcript or recorded votes were provided, so there is no documented floor or committee sentiment in the available materials. Based on the bill’s structure, it appears designed to address local revenue concerns associated with large tax-exempt landholdings, suggesting support from lawmakers focused on tax base and local government funding issues. At the same time, the targeted nature of the requirement suggests it may draw scrutiny from conservation groups and supporters of charitable land preservation.
Contention
The main point of contention is likely whether large conservation organizations that preserve land for public benefit should be required to compensate local governments for foregone property tax revenue. Supporters would likely emphasize fairness to counties and taxing districts that host extensive tax-exempt acreage, while opponents may argue that the bill penalizes land conservation, could discourage environmental preservation, and imposes a tax-like burden on charitable organizations. Another possible issue is the bill’s threshold and exclusions: it applies only to organizations with more than 15,000 acres in a county and excludes land used for meetings, research, education, or administration, which may be seen as either a narrow targeting mechanism or an arbitrary line-drawing choice.
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