KBS Reference Desk: Trade Secrets Proprietary Info and SB 943

Q:        Our district advertised an RFP seeking proposals from vendors for athletic equipment. The district received and considered several proposals before it selected three approved vendors. One of the approved vendors recently learned the district also placed two of its primary competitors on the approved vendor list and submitted a public information request for its competitors’ proposals and copies of the vendors’ contracts with the district. We heard that the Legislature amended the Public Information Act to add new requirements regarding disclosing certain contract information and notifying affected third parties so they might argue to the AG for protection. Is this true? 

A:        Yes. Senate Bill 943, effective on January 1, 2020, will require districts to promptly make a good faith attempt to notify affected parties in writing of the request. To prevent disclosure, that entity must establish that the requested information meets the new, statutory definition of a trade secret based on specific factual evidence and does not fit within certain categories of contracting information subject to disclosure. 

The Texas Public Information Act (“TPIA” or the “Act”) is codified in Chapter 552 of the Texas Government Code and generally ensures the public’s access to governmental information in an effort to promote accountability and transparency. To that end, the TPIA allows the public to access most governmental information unless one of about 60 exceptions applies. See Tex. Gov’t Code §§ 552.101-.154, 552.301. In 2015, the Texas Supreme Court issued its Boeing Co. v. Paxton decision, which vastly reduced the public’s access to information about governmental contracting. The Legislature recently voted and passed Senate Bill 943 (the “Bill”) requiring governmental entities to release certain contracting information in its efforts to restore transparency related to governmental contracting.  

Relevant to the district’s question above, the new law compels a school district to seek the opinion of the Attorney General prior to release of any third party’s suspected trade secret/proprietary information. See Tex. Gov’t Code § 552.305(a).  This request must be submitted no later than the tenth business day after the governmental body receives the TPIA request. See Tex. Gov’t Code § 552.301(b). Within the letter, the district must cite to the particular provisions of the Act believed to preclude disclosure – in this instance, Sections 552.110 and/or 552.1101 of the Texas Government Code (regarding the confidentiality of trade secrets and proprietary information, respectively). Also within that same tenth business day deadline, the amended TPIA now requires that the governmental body make a good faith attempt to notify affected parties of the request and their options to prevent disclosure. See Tex. Gov’t Code §552.305(d). Specifically, the governmental body must include a statement prescribed by the AG that the affected party is entitled to submit in writing to the AG within ten business days each reason justifying the withholding of the requested information and a letter, memo, or brief supporting the reasons. Id. A copy of the public information request must be attached to the written notification. Id. The AG’s Office provides a third-party notice form on its website at: https://www.texasattorneygeneral.gov/open-government/governmental-bodies/proprietary-information-request

Intended to minimize the number of arguments submitted by vendors seeking confidentiality of documents reviewed and routinely deemed subject to disclosure by the AG, the new statute specifically provides that the trade secret and proprietary information exceptions to the TPIA do not apply to the following types of contracting information: contracts or contract terms specifying the contracting parties; goods or services to be provided; prices and liabilities; execution date, effective date, delivery or service deadlines, duration, and extension options; remedies for breach of contract; the overall pricing for a potential or current contractor; and information regarding whether a contractor performed under the contract. See Tex. Gov’t Code §§ 552.0222.  

For additional or specific questions regarding Senate Bill 943 and navigating the TPIA, please contact your local school attorney.

 

 

 

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