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Businesses oppose legislation limiting public information exemptions

Businesses opposed SB 407 and SB 408 at a public hearing, arguing that open records requests could put them at a competitive disadvantage.

Sen. Kirk Watson D-Austin during a February 15, 2017 Senate Committee on Health and Human Services

According to Chris Wallace, Enrique Iglesias is different from a business.

The singer made headlines last year after the city of McAllen refused to disclose how much it paid Iglesias for his concert appearance at a 2015 Christmas parade. The city argued that publicizing his pay would put them at a disadvantage for any future negotiations with performers, and the attorney general’s office concurred.

Senate Bills 407 and 408 aim to apply state open records laws to a private entity — like Iglesias — that receives a government contract. The bills drew more than an hour of public testimony on Tuesday, when 14 commenters spoke at a business and commerce committee hearing.

Wallace, president of the Texas Association of Business and one of six people who voiced concerns about the legislation, said that he sees no problem with making Iglesias’s contract with McAllen public because singers and businesses are different, and businesses should be protected when working with the government.

“It’s important that proprietary information of businesses be protected when doing business with government,” Wallace said. “It’s important to note after years of interpretation, this was finally challenged and it went to the Texas Supreme Court, who ruled that not only government entities have the right to the exception.”

SB 407 was filed in response to the Texas Supreme Court ruling on Boeing v. Paxton, a case that exempted private companies doing business with government agencies from the Public Information Act — the court said contracts could be kept private if releasing them could cause a competitive disadvantage.

Around 600 open records requests were denied using this new standard in 2016 — more than double the number in 2015, Sen. Kirk Watson said. The Austin Democrat, who filed both SB 407 and SB 408, dismissed competition concerns from businesses opposing his legislation as self-serving.

“The primary opposition is coming from businesses that want to do business with government, but don’t want anybody to know what their final numbers are,” Watson said.

Existing law already protects trade secrets and proprietary information, so the primary argument of opponents is moot, Watson said.

“It’s impossible for me to imagine how a final contract with the government shouldn’t be made public,” Watson said.

Wallace said TAB members are not all opposed to releasing contract details, but they are wary of any law that would make information public during the contract bidding process.

“Bidders should be granted exceptions like government entities,” Wallace said.

Watson filed SB 408 in response to the Greater Houston Partnership v. Paxton decision, another Texas Supreme Court ruling that exempted private entities from open records laws unless they are sustained by public funds. If a private entity receives any public money, under SB 408 they would be subject to public information laws.

Today, McAllen residents still have no idea how much they paid for Enrique Iglesias to perform for an hour. They do know the city lost $583,000 on the concert.

Disclosure: The Texas Association of Business and the Greater Houston Partnership have been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors is available here.

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State government 85th Legislative Session Public Information Act Texas Legislature