(The Center Square) – The House on Tuesday passed a bill removing tax breaks from data center developers that engage in non-disclosure agreements with local officials, despite significant debate.
While passing 171-to-31, the bill received several contradictory opinions on the floor.
Proponents argued that data centers have caused significant damage to Pennsylvania communities by pressuring local officials to sign NDAs and keeping residents unaware of who or what is setting up shop in their neighborhoods until it’s too late.
“It has ripped our community apart,” said Republican Rep. Jamie Walsh of Luzerne County. Walsh described how data center companies can hold NDAs “over those supervisors’ heads,” while keeping them “locked into” those agreements at the expense of being honest with their constituents.
Some Republicans on the floor, however, disagreed on several fundamental fronts.
“Nobody is forcing a local official to sign an NDA,” said Republican Rep. Joshua Kail from Beaver County. Instead of providing local communities with more information and say in data center development, Kail argued that the bill only took away local authority and insulted their competency to act in the best interests of those who elected them.
“Today we are deciding that our local officials are not competent enough to sign a piece of paper,” said Rep. Kial. “This bill is a knee-jerk reaction and won’t actually accomplish anything it’s setting out to do.”
Not unique to data centers, large manufacturers commonly enter into NDAs with local officials to keep information confidential from competitors before a firm decision is reached. However, some legislators said that data centers deserve separate treatment. By leveraging intense economic pressure, data centers can make signing an NDA seem like the only option for a municipality hoping to provide their community with millions in investment.
“This bill assures transparency with data centers by helping local officials not be pressured by signing into large dollar non-disclosure agreements in order to give data centers approval,” said Democratic Rep. Jim Haddock of Luzerne County, who experienced in his own county a data center proposal of over $105 million. Haddock argued that instead of challenging the competency of local officials, the bill enabled them to make better decisions for their community and constituents.
Some Republicans, again expressed doubts, accusing the bill itself of a lack of transparency.
While the bill had been described as relating primarily to NDAs, much of the bill’s actual language focuses on separate issues, such as implementing a “community protection plan” that requires data centers to report such things as water, energy and power usage, and set up at least one public meeting.
“This bill quietly expands government authority,” said Republican Rep. Robert Leadbeter of Columbia County. “It creates new mandates, new reporting requirements, additional compliance deadlines, and ongoing oversight by unelected bureaucrats.”
“If we truly believe in local control then we should trust the people closest to these decisions, and not continue shifting responsibility toward Harrisburg,” Leadbeter said.
Republican Rep. Charity Kruppa from Fayette County agreed that Capitol legislation to keep officials from entering non-disclosure agreements should not be necessary, but far from stepping back, Krupa believed that Harrisburg should address NDAs more directly.
“We need to work diligently to prohibit them at all levels, not just with data center development,” Krupa said. “It is unacceptable, it’s disgraceful, and it’s un-American for elected officials to hide information from the people that they’ve been elected to represent.”
The bill will now head to the Senate for approval.