AUSTIN – Rep. Giovanni Capriglione, R-Keller, and Sen. Kirk Watson, D-Austin, announced Tuesday they had filed two bills aimed at restoring public access to information essential to holding government accountable in its business dealings with private businesses and non-profit groups.
The lawmakers said the bills will restore access to financial information open to the public for decades prior to two 2015 rulings by the Texas Supreme Court that severely weakened the Texas Public Information Act.
In the months that have elapsed since the rulings, companies and non-profit groups contracting with governmental bodies such as cities, schools and hospital districts increasingly have used the “competitive disadvantage” clause to avoid releasing financial data related to projects financed by taxpayers. In some cases, the clause was even cited as an example for the governmental entities themselves to keep the information secret.
Examples of the results of the court rulings discussed at the Capitol press conference included:
• The City of McAllen won’t say how much entertainer Enrique Iglesias was paid for a local concert in 2015, saying it might hurt the city’s ability to negotiate and compete with neighboring cities for future concerts;
• A search firm retained to help a public hospital in El Paso hire a new administrator did not have to release details of the administrative contract because officials alleged competitors might use the information against them;
• City-owned Denton Municipal Electric refused to release bid information and contracts for its new $265 million power plant — the largest capital purchase the city has ever made; and
• Non-profit groups contracting with cities to perform economic development work aren’t required to release financial information even though their efforts are funded by tax dollars.
The stated purpose of the Texas Public Information Act – to enable people to remain informed so they can retain control over their government – has been undermined by the court rulings closing off access to information once deemed clearly public, Watson said.
Watson pointed out that the decisions weakened the law by allowing governmental bodies and private entities that receive public funds to more easily conceal their dealings.
“I believe it is our duty as the Legislature to ensure the people of Texas can track how government spends public money,” he said.
“Taxpayers have a right to know how their money is being spent,” Capriglione said. “The original intent of the Public Information Act was to be as permissive as possible in favor of the citizens of Texas. The bills filed today will get us back to that intent and bring Texans true transparency. As the first bills I have filed this session, I hope to underscore their importance to citizens and legislators alike.”
Watson and Capriglione said they worked with a number of interested parties to craft the legislation, known as Senate Bill 407/House Bill 792 and Senate Bill 408/House Bill 793. Among those consulted were the Texas Attorney General’s Office; the Freedom of Information Foundation of Texas, represented at the press conference by attorney Laura Lee Prather, past board president; the Texas Press Association, represented by Bill Patterson, chairman of the TPA Legislative Advisory Committee and publisher of the Denton Record-Chronicle; Texas Association of Broadcasters; Texas Municipal League; Texas Association of Counties; and Texas Conference of Urban Counties.
The two bills will be top priorities for TPA in the upcoming session, said Donnis Baggett, executive vice president of the association. “We have been extremely concerned about the terrible damage that these two court rulings have done to transparency and accountability in Texas,” Baggett said. “These are monumental governance issues, and our legislative team is grateful to Rep. Capriglione and Sen. Watson for their willingness to take the lead in addressing the problems.”
The legislators gave a synopsis of the bills filed Tuesday:
Senate Bill 407/House Bill 792:
Boeing v. Paxton (2015) greatly expanded the competitive bidding exception to the Public Information Act in two ways:
1. It allowed private entities to claim the exception; and
2. It allowed the exception to apply to final, awarded contracts.
In essence, these changes allowed governments and the private entities with whom they transact business to withhold basic information on prices, etc. simply because at some point in the future the information may be used by a competitor. The proposed legislation would undo this damage by limiting the competitive bidding exception to those cases when a governmental body demonstrates that the release of information would harm its interests “in a particular competitive situation.” Furthermore, the bill explicitly states that the exception does not apply to finalized government contracts.
Senate Bill 408/House Bill 793
Greater Houston Partnership v. Paxton (2015) redefined when publicly supported private entities must comply with the Public Information Act.
For more than 30 years before this case, Texas relied on the Kneeland test, which protected the public’s ability to monitor public funds. In Greater Houston Partnership, the Texas Supreme Court abandoned the Kneeland test and said the Public Information Act only applies if a private entity is “sustained” by public funds. This is a much higher threshold that seems to ignore a section of the act which covers any private entity “that spends or that is supported in whole or in part by public funds.”
This bill restores this protection by codifying the Kneeland test, which holds that a private entity must comply with the Public Information Act if it:
• Receives public funds, unless the funds are received pursuant to an arms-length contract for services;
• Receives public funds under a contract that indicates a common purpose or creates an agency-type relationship with the public entity; or
• Provides services traditionally provided by a governmental body.
Watson noted that since the ruling in the Boeing case in June 2015, the attorney general’s office has had “300 requests to keep information secret based on these loopholes.” Declining to say whether the court’s rulings were “wrong,” Watson said there have been “bad results” that are “something the Legislature needs to address.”
Although there may be behind-the-scenes resistance from those who have been using the loopholes, the legislators said they aren’t expecting public opposition to the legislation because it deals with the basic tenet of citizens’ right to know how public funds are being spent.
“Sunlight is the best disinfectant,” Capriglione said.
The 85th session of the Texas Legislature convenes Jan. 10.