Minnesota Lawmakers Advance Bill Banning NDAs in Data-Center Negotiations

The controversy that erupted when St. Louis County commissioners signed nondisclosure agreements with a mystery developer, later revealed to be Google, over a proposed hyperscale data center near Hermantown has pushed Minnesota lawmakers to act. The House Elections Finance and Government Operations Committee unanimously passed HF4077 on March 11, sending the measure to the General Register and marking the first significant legislative response to secrecy concerns that have dogged large-scale data center negotiations across the state.

HF4077 would prohibit municipalities from entering NDAs with private companies. The bill defines "municipality" broadly to include counties, cities, towns, school districts, housing and redevelopment authorities, economic development authorities, port authorities, and any other political subdivision of the state with authority to contract for use of real property. The definition also extends to employees, elected officials, appointed officials, and other representatives acting in official capacity, meaning the kind of individual-level NDAs that drew criticism in St. Louis County would fall under the ban. Critically, if the bill clears the full Legislature, it would be retroactive and apply to NDAs already signed.

Rep. Emma Greenman, DFL-Minneapolis, who co-authored the bill with Rep. Drew Roach, R-Farmington, framed the measure as a question of civic participation rather than a referendum on data centers themselves. "This isn't about whether you like or don't like data centers," Greenman said. "The question is, do you think the public should be involved in that decision?" She has also argued that NDAs are becoming "normalized" to protect corporate interests at the expense of public transparency.

Business and city officials have defended the practice, characterizing NDAs as standard trade secret protection during sensitive economic development negotiations. That tension reflects a pattern that has played out in multiple Minnesota communities: several cities have signed confidentiality agreements in connection with hyperscale data center proposals over the past few years as technology companies race to build infrastructure to meet surging demand driven largely by artificial intelligence applications. Minnesota's cooler climate reduces cooling costs, and the Upper Midwest's available power and fiber infrastructure make the region attractive to developers.

Rep. Duane Quam, R-Byron, pressed Greenman on why the bill stops at local governments rather than also covering state agencies. Greenman said she is open to expanding the bill's scope but wants to prioritize local governments first given the urgency of the Hermantown situation and similar cases.

The Hermantown case put St. Louis County at the center of a statewide debate. Commissioners faced sharp criticism for signing agreements that kept Google's identity as the potential developer hidden from the public, leaving residents without the information needed to weigh in on a project that raised concerns about noise and strain on the power grid during both construction and operation.

Residents in Monticello have separately raised similar concerns about proposed data center projects in their area, underscoring that the NDA controversy is not confined to St. Louis County.

The committee heard a second bill on March 11, HF3886, which would prohibit local governments from contracting to provide detention facilities for federal immigration authorities. Rep. Samantha Sencer-Mura, DFL-Minneapolis, tied that measure to recent federal enforcement activity: "This bill comes on the heels of our communities experiencing the trauma of Operation Metro Surge. Part of the chaos, confusion and cruelty that ICE deployed during Metro Surge was the use of county jails." Unlike HF4077, that bill did not advance from committee.

HF4077 now awaits action on the General Register. Whether the full House takes up the measure and whether the Senate introduces a companion bill will determine if the transparency push sparked by the Hermantown controversy becomes enforceable law before the next round of data center negotiations begins.