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SB 1049

Public employees and officers: other; certain nondisclosure agreements; prohibit. Creates new act.

2025-2026 Regular Session Introduced by Rosemary Bayer and 9 co-sponsors

The bill would ban public employees and officers from entering nondisclosure agreements on data center projects, with civil penalties for violations.

SENATE CO-SPONSOR(S) NAMED: SEAN MCCANN
#publicemployeesandofficers:other
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Bill Summary · SB 1049

Summary of SB 1049 (2025-2026) — Michigan

Purpose and intent

  • Proposes a new act titled the “data center nondisclosure agreement prohibition act.”
  • Aims to prohibit public employees and public officers from entering into nondisclosure agreements related to data center projects, with certain limited exceptions.

Key definitions

  • Data center: A centralized facility for data management, storage, processing, and distribution with:
    • maximum aggregate demand of 20 megawatts or more at a single site, or
    • aggregated demand across more than one site within a utility’s service territory.
  • Nondisclosure agreement (NDA): An agreement that restricts disclosure of information based on confidentiality or trade secrets to non-parties.
  • Public entity / public officer / public employee: Broad definitions covering state and local government entities, officers, and employees (including independent contractors) with some exclusions noted for judiciary and certain clerks.
  • Public entity exclusions: Judiciary and certain county clerk office employees acting as clerks to the circuit court are not considered public entities under this act.

What the bill would do (main provisions)

  • Prohibition on NDAs: Except as otherwise provided, a public employee or public officer shall not enter into a nondisclosure agreement.
  • Enforcement and penalties: A violation by a public employee or officer allows civil penalties:
    • Up to $1,000 per violation.
    • Prosecution/collection can be pursued by the county prosecutor where the violation occurred or by the attorney general.
  • Applicability timing: The act applies to NDAs entered into, amended, extended, or renewed on or after the act’s effective date.
  • Permissible disclosures and exemptions: The act does not require or permit disclosure of information that:
    • is legally privileged,
    • is prohibited from disclosure by law,
    • or relates to a written settlement agreement resolving actual or threatened litigation.

Who is affected

  • Targeted group: Public employees and public officers at the state and local level (state agencies, counties, cities, townships, school districts, and other public entities) involved with data center projects meeting the defined threshold.
  • Exclusions to consider:
    • The judiciary and certain county clerk employees acting in clerk roles are not treated as public entities under the act.
    • Privileged or legally protected information remains exempt from disclosure.

Procedural and timeline aspects

  • Introduction and referral: Introduced June 18, 2026, and referred to the Committee on Energy and Environment.
  • Effective date: Not specified in the provided text; the act clarifies that it applies to NDAs entered into on or after its effective date, implying a future date upon enactment and signing.
  • Open questions (not in text):
    • How the act intersects with existing state FOIA or other disclosure laws.
    • Any specific process for challenges or exemptions beyond the stated exceptions.

Potential impact and considerations

  • Likely increases transparency around data center-related discussions involving public entities by limiting NDAs for public officials.
  • Could affect negotiations or settlements in data center projects if NDAs would otherwise be used to restrict disclosure.
  • Businesses and public bodies may need to adjust contracting practices to ensure NDAs with public employees/officers comply with the prohibition and applicable exceptions.
  • Civil penalties provide a potential deterrent for improper NDA participation by public personnel.

If you’d like, I can compare this bill to similar NDAs-related prohibitions in other states, or draft a one-page briefing for policymakers or stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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