N.D. data center nondisclosure bill lacks support in committee
A North Dakota legislative committee has recommended rejecting Senate Bill 2406, a bill aimed at adding penalties for data center developers entering nondisclosure agreements with public agencies. Although an amendment was adopted to clarify state agencies' ability to use confidentiality agreements, the committee voted against the bill, citing its complexity. The bill will now proceed to the full Senate with a do-not-pass recommendation.
The North Dakota joint House-Senate policy committee has recommended rejecting Senate Bill 2406, a legislative measure that sought to impose repercussions on data center developers for utilizing nondisclosure agreements (NDAs) with public agencies or officials. Despite the committee's recommendation, the bill will still advance to a full Senate vote with a "do-not-pass" recommendation.
An amendment introduced by Rep. Jonathan Warrey (R-Casselton), who is also a bill sponsor, was approved. This amendment clarified that state agencies retain the ability to enter into confidentiality agreements to protect sensitive information related to data centers and other industrial projects. However, the committee ultimately decided against the bill, with some members, including Rep. Warrey, arguing that the issue's complexity made it unsuitable for a three-day special session. Rep. Todd Porter (R-Mandan) suggested that current transparency laws were sufficient, while Rep. Austin Foss (D-Foss) supported the bill, emphasizing its provision to potentially revoke an industrial developer's permit if an NDA is in place. Primary bill sponsor Sen. Tim Mathern (D-Fargo) had proposed amendments to allow private negotiations for municipal power providers and to repeal a state sales tax exemption for data center developers, but these were not considered.
Applied Digital, which is constructing a data center near Harwood, was mentioned, with its executive vice president of external affairs, Nick Phillips, testifying that the company uses NDAs in compliance with state laws. Separately, a committee chaired by Rep. Warrey is evaluating the broader impact of data centers and artificial intelligence, potentially paving the way for future legislation in the 2027 regular session.