Sponsor urges ban on NDAs for data-center deals, committee releases bill

Senator Linda Greenstein, sponsor of S4304, told the Senate Community and Urban Affairs Committee that the bill would forbid agreements—such as nondisclosure agreements (NDAs)—used to conceal the scale, energy use and local impacts of proposed data centers from municipal review. She said the legislation would make such agreements unenforceable and require applicants to attest that no NDA was used to shield development plans.

"This bill expressly prohibits data center applicants and their agents from entering into any agreement, including an NDA, that has the purpose or effect of concealing project details or preventing public review," Greenstein said, arguing the practice has undercut local planning. She described a proposed multi-building project near her Plainsboro home she said was presented to municipal officials with a level of secrecy that left residents unable to learn basic details about generators, water use or emissions.

Advocates urged the committee to act. Taylor McFarland of the Sierra Club said NDAs have been used to keep communities from assessing environmental impacts, telling the committee, "When this information is locked under an NDA, the public cannot calculate the cumulative environmental damage like air pollution from backup diesel generators or local aquifer depletion before construction begins." Several environmental and housing groups were recorded in support without testifying.

Committee members pressed the sponsor on drafting scope. Senator Schappizzi said the bill should not sweep in routine commercial NDAs used for negotiations between buyers and sellers; Greenstein said the intent is targeted at data-center secrecy and that the bill focuses on agreements that prevent public review and municipal decision-making.

The committee moved to release S4304 for further consideration. On the recorded roll call, Senator Schappizzi expressed a no vote based on drafting concerns; the motion nevertheless passed and the bill was released from committee.