The Texas Senate cleared a pair of bills Tuesday aimed at plugging "loopholes" in public records law that have left taxpayers in the dark about key details of some government contracts.

Senate Bills 407 and 408 both breezed through the chamber and will head to the House. Filed by Sen. Kirk Watson, they push back against two 2015 Texas Supreme Court rulings that immediately made it easier for private companies involved with government contracts to keep parts of those contracts secret.

“What we’re trying to do is to make sure the public has information as to how its tax dollars are being spent,” Watson said.

Some businesses have lined up against the bills. The Texas Association of Business is among those who have voiced concerns over the bills.

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“It’s important that proprietary information of businesses be protected when doing business with government,” Chris Wallace, the group’s president, said last month during a Senate committee hearing on the legislation.

Following the Supreme Court rulings, government entities have withheld a wide range of information from contracts that had long been considered public. Such secrets include how much the city of McAllen paid pop star Enrique Iglesias to sing at a holiday parade, how many driver permits Houston had issued to the ride-hailing giant Uber and details of a Kaufman County school district’s food service deal. Specifics on a private prison contract and a $10 million local contract for emergency medical services have also been kept secret, Watson said Tuesday.

The rulings have “blown a glaring loophole into the act,” Watson said, adding that "things will only get worse” without the Legislature’s intervention.

In June 2015, the Texas Supreme Court ordered Texas Attorney General Ken Paxton to block the release of information in a lease between Boeing and the Port Authority of San Antonio because the aerospace manufacturer said making the details public could tip off its competitors.

That ruling expanded the secrecy in government contracts in two key ways: by broadening an exemption in public records law used to protect the government’s competitive interests and by affirming that businesses could also invoke it.

Originally, lawmakers sought to prevent a bidder for government work from nabbing a competitor’s bids on a contract. Once that contract was finalized, it was considered public. But the Boeing v. Paxton decision lowered the threshold for what can be secret while affirming that private entities could invoke that protection when doing business with governments in Texas.

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Hundreds of entities have since cited that ruling in asking Paxton to shield contracting details.

“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," Wallace said last month. He said his group's members aren't entirely opposed to transparency efforts but worried about disclosures that would put them at a competitive disadvantage. 

SB 407 seeks to reverse that trend by limiting the competitive interest threshold governments could use to withhold information. It states that all finalized contracts would be released. It cleared the Senate in a 31-0 vote. 

SB 408 responds to a separate Supreme Court opinion. The justices ruled in March 2015 that the Greater Houston Partnership, which received some public funds, could withhold details of contracts for economic services because it was not entirely dependent on public funds. The ruling narrowed the definition of groups subject to open records law.

That bill, which passed 28-3, would restore a legal test that made private entities subject to state open records law under certain circumstances — if they receive public funds to perform services traditionally regulated by government agencies, for instance. 

Rep. Giovanni Capriglione, R-Southlake, has authored the same proposals in the House.

Read more coverage: 

  • McAllen taxpayers cannot find out how much their city paid Enrique Iglesias to sing at a holiday concert, and that's just one example of the fallout from a Texas Supreme Court decision that is shielding many business secrets from the public.
  • Businesses opposed SB 407 and SB 408 at a public hearing, arguing that open records requests could put them at a competitive disadvantage.
  • Health workers and first responders hoped Texas might be awarded $1 million to buy an anti-overdose drug, but state officials never submitted the grant application. The agency is going to unusual lengths to keep the public from seeing government records related to the grant.  

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

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