North Dakota Senate Rejects SB 2406 Banning Non-Disclosure Agreements in Municipal Data Center Negotiations

BISMARCK, N.D. — Following an intense floor debate over open-records transparency and interstate economic competitiveness, the North Dakota Senate voted 32 to 15 on September 4 to reject Senate Bill 2406, defeating a legislative effort to prohibit public officials and municipal agencies from signing non-disclosure agreements (NDAs) with enterprise data center developers.

The vote, taken during the special legislative session in Bismarck, followed sustained resistance from state commerce leadership and the administration of Governor Kelly Armstrong. Executive branch officials argued that an outright statutory ban on confidentiality pacts would severely hamstring North Dakota's ability to compete against neighboring states for capital-intensive technology campuses, noting that companies routinely require proprietary security and trade secret protections while evaluating power grid interconnection feasibility and land acquisition.

However, the measure drew passionate support from bipartisan transparency advocates, grassroots property owner associations, and agricultural organizations concerned about the rapid influx of high-consumption data centers across rural townships.

Co-authored by veteran State Senator Tim Mathern (D-Fargo), SB 2406 sought to declare all non-disclosure agreements between government entities and data center operators legally void as a matter of public policy. Proponents argued that when municipal councils, county commissioners, and state utility regulators sign restrictive confidentiality pacts, local taxpayers are excluded from crucial discussions regarding electrical generation capacity, water consumption volumes, and long-term tax abatement packages.

"No citizen that pays for government should be left in the cold when major industrial projects alter the character of their communities," Senator Tim Mathern stated during legislative deliberations in Bismarck. "People can discuss speculative economic proposals, but for public servants to sign formal legal agreements not to disclose information to their own constituents is fundamentally improper. Citizens have a constitutional right to know what is happening in their townships, their cities, and their counties before deals are finalized behind closed doors."

Opposition to the ban was championed by legislative floor leaders who emphasized that existing North Dakota open-records statutes already mandate complete public disclosure once formal applications for zoning permits, tax abatements, or state infrastructure grants are submitted to municipal bodies. Lawmakers opposing the measure noted that premature disclosure during preliminary discussions could derail sensitive corporate expansions before state utility evaluators can determine project viability.

Agricultural leaders and civic groups across Cass, Grand Forks, and Williams counties expressed disappointment with the vote, warning that public unease over water depletion and power grid strains will continue to fuel local zoning challenges.

Following the defeat of SB 2406, legislative leaders confirmed that regional oversight and energy transmission standards will remain active subjects of interim legislative study as North Dakota manages expanding industrial energy demand.