New Jersey Senate votes 38-0 to ban data center NDAs

New Jersey's Senate has voted 38-0, with two abstentions, to pass a bill that would ban non-disclosure agreements covering data center development projects across the state. Senate Bill 4304 now sits with the Assembly's Science, Innovation and Technology Committee, which must clear it before a full Assembly vote.

The legislation targets a practice that has shaped how hyperscale facilities get built in the United States for years. Operators have routinely hidden their involvement behind shell companies and project codenames until permits were secured, citing commercial reasons for the secrecy.

What does the bill actually prohibit?

SB 4304 orders any applicant, and agents working on their behalf, not to enter into any agreement that conceals details of a project or prevents public review. The bill describes such NDAs as "against public policy and unenforceable."

The restrictions cover agreements with two specific counterparties:

• An approving authority or municipal agency
• A property seller

The bill also gives the rules teeth. Approving authorities and municipal agencies may not approve any site plans or subdivisions if the applicant violates the NDA rules, effectively tying project permits to transparency compliance.

Eight senators sponsored the measure: Democrats Linda Greenstein, Brian Stack, Angela McKnight, Patrick Deignan, Joseph Cryan, Teresa Ruiz and Shirley Turner, plus Republican Carmen Amato. The unanimous Senate floor vote suggests the bill faces little partisan resistance.

Why transparency became the issue

"Transparency is crucial during the data center development process, especially since these projects can have a major impact on our communities," Senator Greenstein said. "This legislation makes it illegal for applicants who attempt to conceal data center development plans and makes clear that these agreements have no place in the approval process."

Senator Stack framed the bill as a duty owed to residents. "There is a responsibility that must be honored to surrounding communities when a data center is proposed for development," he said. "Residents deserve to know what is being proposed in their neighborhoods and how it could impact their communities. This legislation will help prevent agreements that keep important information out of the public eye."

The bill lands amid a broader shift in how regulators treat data center secrecy. Earlier this year, US Representative Jamie Raskin, Ranking Member of the House Judiciary Committee, opened an investigation into Amazon, Google, Meta and Oracle over their use of NDAs for data center projects. Raskin said Amazon's former secrecy agreements prevented local officials from disclosing broadly defined "proprietary" or "confidential" information, leaving officials uncertain about what they could share publicly.

Some operators have moved before the law forces them. Amazon and Microsoft have both recently promised to drop the use of NDAs around their data center developments going forward, a concession that separates their position from operators still relying on codenames and intermediaries.

A sizeable market under pressure

New Jersey hosts a meaningful slice of the US data center market. Data Center Map lists 65 facilities in the state, much of it overspill from New York City demand, clustered around Newark and Secaucus.

Established operators in the state include QTS, Equinix and Iron Mountain. CoreWeave and Nebius are looking to develop new capacity there, adding AI-driven demand to an already busy market.

Local sentiment, however, has hardened. Many parts of New Jersey have recently introduced moratoriums on data center development, and several municipalities have put permanent bans in place. A 38-0 Senate vote against NDAs reflects the same pressure at state level.

The bill now depends on the Assembly committee and a full chamber vote. If it becomes law, New Jersey would move from tolerating secrecy agreements by default to making them legally void at the permitting stage.