Minnesota bill targets secret data center deals by local officials

The Minnesota Legislature is considering a bipartisan bill, HF4077/SF4379, designed to prevent local governments from entering into nondisclosure agreements (NDAs) with corporations, particularly concerning data center developments. The proposed legislation stems from a pattern where local authorities have secretly approved data center projects, often with "Big Tech" companies like Meta, without public disclosure of critical information such as ownership, water and power consumption, or even the existence of the NDAs themselves. State Sen. Steve Drazkowski, R-Mazeppa, a co-author of the bill, noted that local officials might feel compelled to use NDAs due to local political pressures, despite not actively seeking them out. The bill aims to mandate greater government transparency for data centers and any other projects utilizing taxpayer funds. It has successfully passed through the House Elections Finance and Government Operations committee and the Senate local government and judiciary committees, with a hearing scheduled in the House Judiciary Committee. While companies argue NDAs protect proprietary information, critics contend they allow projects to avoid public scrutiny and streamline approvals, often in exchange for local tax breaks and economic incentives. The rapid expansion of data centers, driven by artificial intelligence demands, has raised concerns about intensive energy and water usage. Minnesota lawmakers previously passed a data center subsidy in 2025 expected to cost the state over $100 million annually in forfeited tax revenue, and a separate law requiring data centers to cover the full cost of their energy usage and equipment upgrades to mitigate impacts on utility rates for average customers.