North Dakota governor fights bill on nondisclosure agreements
North Dakota Governor Kelly Armstrong is opposing a bipartisan bill, Senate Bill 2406, which aims to restrict public officials from signing nondisclosure agreements (NDAs) with developers, including data center companies. The governor argues the bill, without his proposed amendment, could hinder economic development and that existing open records laws are sufficient. Supporters of the bill contend it adds necessary enforcement mechanisms and transparency.
North Dakota Governor Kelly Armstrong and various industry and economic development groups are actively opposing Senate Bill 2406, a bipartisan legislative proposal that seeks to restrict public officials and agencies from entering into nondisclosure agreements (NDAs) with developers of industrial projects, including data centers. The bill, if passed, would penalize project developers by potentially revoking permits if an NDA is signed in violation of the law.
Governor Armstrong testified in favor of an amendment proposed by Rep. Jonathan Warrey, R-Casselton. This amendment would clarify that agencies could still enter NDAs to protect information already deemed confidential under state law, preventing issues for entities like the Bank of North Dakota. Armstrong asserted that the state's current public records laws are adequate, though he acknowledged debates on enforcement.
Supporters of Senate Bill 2406, including its introducer Sen. Tim Mathern, D-Fargo, and David Tamisiea of the North Dakota Catholic Conference, argue that the bill provides crucial "teeth" to existing open records laws by adding a clear enforcement mechanism—the potential loss of permits. They highlight the need for greater transparency for communities often caught unaware by large-scale projects, citing Applied Digital's project near Harwood as an example. Industry representatives like Terry Effertz of TechND, however, warned that such a bill could halt or unwind projects over minor "paperwork violations."
Additional proposed amendments to the bill include an exemption for public energy providers to negotiate service agreements privately and the elimination of a state sales tax exemption for data center developers. Nick Phillips from Applied Digital confirmed the company has used NDAs in North Dakota but always in compliance with state law, lifting them once permitting began. Stark Power, which is planning a data center in Mandan, has publicly stated it will not use NDAs for its project.