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HRA director warns proposed state bill could void existing NDAs and complicate economic development talks
Summary
The HRA director told the board a proposed nondisclosure bill moving through the legislature is advancing quickly and said it could bar NDAs going forward and retroactively nullify existing agreements, a change she said may force nonprofits to act as intermediaries and complicate early-stage negotiations for development projects.
The HRA Director warned the Hubbard County board that a nondisclosure bill moving through the state legislature could upend how local governments and developers negotiate sensitive deals, potentially nullifying NDAs the HRA and others have already signed.
"It has already passed house committee and has been, sent to house floor. It's house file 4 0 7," the Director said, explaining that the bill aims to limit or block nondisclosure agreements for local public entities. She added, "And this bill doesn't not only prohibit them moving forward, it null nullifies all of the ones that are already in place." The Director said that consequence — if accurate — could pull the rug out from under businesses that signed NDAs with an expectation of confidentiality.
The Director said she expects many organizations to be supportive of the bill but warned of unintended consequences for economic development: local nonprofits or intermediaries might be asked to take on NDAs on behalf of public entities because the bill, as described at the meeting, would not apply to some nonprofit arrangements. She recommended the board seek legal advice on how to proceed if the bill passes and noted that organizations such as the League of Minnesota Cities and local economic development groups are monitoring the issue.
Board members asked whether there were similar laws in neighboring states and whether a personal pledge of discretion would hold water if the law changed. The Director advised that legal counsel and further guidance will be necessary to determine when and how staff and board members may discuss prospective projects.
Next steps: the Director said staff will watch the legislation and seek legal counsel to clarify what the bill would mean for existing and future confidentiality arrangements.
