Federal Lawmakers Target Data Center Secrecy with New ‘No Data Center NDAs Act’

Last updated: September 2, 2026

NewsWK — Federal lawmakers are moving to curb non-disclosure agreements that prevent local communities from learning the full details of massive tech development deals before they are approved. House Resolution 10118, titled the “No Data Center NDAs Act,” was recently introduced in the U.S. House of Representatives to establish greater transparency surrounding the construction and expansion of data centers across the country.

The legislation arrives amid growing scrutiny over how local governments, public utility authorities, and corporate developers negotiate the infrastructure needed to support artificial intelligence and cloud computing. In recent years, local officials across multiple states have frequently signed binding non-disclosure agreements with tech firms before publicly discussing tax abatements, water usage, or power grid allocations, leaving taxpayers and property owners unaware of major projects until negotiations are finalized.

Why it matters here

For residents and taxpayers across the nation, data center developments represent significant economic, environmental, and infrastructure commitments. While these facilities can generate commercial property tax revenue and create construction jobs, they also place enormous demands on local resources.

A single enterprise data center campus can consume as much electricity as a mid-sized city, driving the need for new transmission lines, substations, and dedicated power generation. When local utility boards or regional grid operators negotiate behind closed doors, existing residential and small-business ratepayers often face uncertainty about whether their monthly electric bills will rise to subsidize the required electrical upgrades.

Water resources present an equally pressing concern for local municipalities. Cooling systems for large-scale computer servers can require millions of gallons of water daily, raising questions about municipal supply resilience, particularly in drought-prone regions. When public officials operate under strict confidentiality clauses, local zoning boards and residents cannot independently evaluate these resource demands or hold decision-makers accountable before public funds or municipal assets are pledged.

Transparency, Local Governance, and Fiscal Accountability

From a fiscal and constitutional standpoint, government transparency remains a cornerstone of responsible local governance. Conservative and free-market policy analysts have long cautioned against behind-closed-doors arrangements between government bodies and private corporations, emphasizing that special tax carve-outs and public infrastructure pledges should always face rigorous public review.

Proponents of ending non-disclosure agreements in public economic development argue that open governance fosters fair competition. When local governments negotiate in secret, they risk picking winners and losers in the marketplace while shielding economic incentives from competitive scrutiny. Ensuring that negotiations are accessible to the public protects property owners from sudden industrial zoning shifts and reinforces the fundamental rule-of-law principle that taxpayers have a right to know how public resources are utilized.

Conversely, developers and some economic development agencies have traditionally defended confidentiality agreements during preliminary site selection, arguing that NDAs protect proprietary trade secrets and prevent land speculation before purchase contracts are executed. The debate surrounding H.R. 10118 is expected to focus on balancing the protection of genuine trade secrets against the public’s right to open government.

Background on the Data Center Boom

The rapid expansion of artificial intelligence, high-performance computing, and cloud services has accelerated land acquisition for data facilities nationwide. Established hubs in Northern Virginia, Texas, Ohio, and Arizona have seen record capital investment, while newer developments are spreading into rural and suburban counties across the Midwest and the Southeast.

As these developments multiply, state and local lawmakers have increasingly faced pushback from community groups, taxpayer advocates, and municipal leaders who report learning about large-scale projects only days before final zoning votes. Several state legislatures have debated their own transparency measures, but federal action through H.R. 10118 marks an effort to address the issue at the national level.

Next Steps in Congress

H.R. 10118 has been formally introduced in the House of Representatives and assigned a bill number. The measure will next be referred to the appropriate House committee for initial review, hearings, and debate. If advanced by the committee, the legislation would proceed to the full House floor for consideration as lawmakers continue to examine the broader economic, regulatory, and energy impacts of the nation’s expanding digital infrastructure.

Related: Protecting Local Control of Data Centers Act Introduced in Congress to Guard Municipal Authority

Related: Fighting Fire with Fire: How One Small Town Is Shielding Itself from Catastrophic Wildfire

Related: Congress Receives New Legislation Aimed at Local Health Care Protection

Related: Cities Deploy AI to Slash Building Permit Delays and Cut Red Tape for Homebuilders

Related: NewsWK App now available for Iphone and Android Users

Related: News That Works

Related: FBI Reports Record Nationwide Drop in Violent Crime as 2025 Homicide Rates Match Historic Lows

Related: Flock Safety tightens safeguards as states, cities question surveillance network

Related: New York Data Center Moratorium Announced to Address Grid and Cost Concerns

Related: Virginia Data Centers: Balancing Rapid Growth and Community Concerns