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Lawmakers Consider Limits on Local Government Use of Nondisclosure Agreements
Spurred by recent data center proposals where local officials signed confidentiality agreements, lawmakers are considering limits on when nondisclosure agreements can be used.
The House Elections Finance and Government Operations Committee held a hearing on HF 4007 (Rep. Emma Greenman, DFL-Minneapolis) on March 11. The bipartisan bill was passed, as amended, and sent to the House Floor.
The bill addresses whether local government staff, consultants, and elected officials can be bound by a nondisclosure agreement (NDA). The proposal comes in response to several recent data center development proposals in which local officials said they were unable to comment publicly on projects because they had signed NDAs.
Amendments to narrow the scope
Rep. Greenman met with the League of Minnesota Cities and the Association of Minnesota Counties to discuss the issue and ways to limit unintended impacts.
As a result, an amendment adopted during the hearing narrowed the scope of the bill. The measure would apply only to development projects or programs financed in whole or in part with local financial resources or debt capacity.
A second adopted amendment expanded the bill’s coverage beyond cities, counties, and townships to also include all political subdivisions of the state. That includes school districts, housing and redevelopment authorities, economic development authorities, port authorities, and any other political subdivision of the state authorized to enter into a contract for the use of real property.
That amendment also clarified that the prohibited contract would be an NDA between a unit of government and a “private person.”
Next steps
The Senate companion bill, SF 4379 (Sen. Erin Maye Quade, DFL-Apple Valley), was also introduced during the week of March 9 and is scheduled for a hearing on March 17 in the Senate State and Local Government Committee.
Similar amendments to those adopted in the House are expected to be offered in the Senate, though the exact language will not be known until the hearing.
That hearing will also include a separate data center-related bill from Sen. Maye Quade, SF 4296. The proposal would establish requirements for the final approval public-hearing process on data center projects and specify what information must be made publicly available before those meetings.
LMC staff take
The League will continue to monitor legislation related to data centers. The organization is working to avoid unintended impacts from legislative proposals, protect local authority where possible, encourage stronger state resources and assistance for local decision-making, and prevent cities from becoming the default target of litigation when disputes should be between the state and the project developers.