April 4, 2012

Mr. Andrew D. Clark

Powell & Leon, LLP

1706 West Sixth Street

Austin, Texas 78703

OR2012-04869

Dear Mr. Clark:

You ask whether certain information is subject to required public disclosure under the Public Information Act (the "Act"), chapter 552 of the Government Code. Your request was assigned ID# 449557.

The Texas Education Service Center Curriculum Collaborative (the "collaborative"), which you represent, received two requests for all curriculum currently published by the collaborative, all check registers for a specified time periods, and specified tax returns. You state that you do not possess the responsive check registers and tax returns. ⁽¹⁾ You contend that the collaborative is not a "governmental body" subject to the Act. Alternatively, you claim that the remaining requested information is excepted from disclosure under sections 552.104 and 552.110 of the Government Code. We have considered your arguments and reviewed the submitted representative sample of information. ⁽²⁾

Initially, you argue that the submitted information is not subject to the Act because the collaborative is not a governmental body. Under the Act, the term "governmental body" includes several enumerated kinds of entities and "the part, section, or portion of an organization, corporation, commission, committee, institution, or agency that spends or that is supported in whole or in part by public funds[.]" Gov't Code § 552.003(1)(A)(xii). The phrase "public funds" means funds of the state or of a governmental subdivision of the state. Id. § 552.003(5).

Both the courts and this office previously have considered the scope of the definition of "governmental body" under the Act and its statutory predecessor. In Kneeland v. National Collegiate Athletic Association, 850 F.2d 224 (5th Cir. 1988), the United States Court of Appeals for the Fifth Circuit recognized that opinions of this office do not declare private persons or businesses to be "governmental bodies" that are subject to the Act "simply because [the persons or businesses] provide specific goods or services under a contract with a government body." Kneeland, 850 F.2d at 228; see Open Records Decision No. 1 (1973). Rather, the Kneeland court noted that in interpreting the predecessor to section 552.003 of the Government Code, this office's opinions generally examine the facts of the relationship between the private entity and the governmental body and apply three distinct patterns of analysis:

The opinions advise that an entity receiving public funds becomes a governmental body under the Act, unless its relationship with the government imposes "a specific and definite obligation . . . to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser." Tex. Att'y Gen. No. JM-821 (1987), quoting ORD-228 (1979). That same opinion informs that "a contract or relationship that involves public funds and that indicates a common purpose or objective or that creates an agency-type relationship between a private entity and a public entity will bring the private entity within the . . . definition of a 'governmental body.'" Finally, that opinion, citing others, advises that some entities, such as volunteer fire departments, will be considered governmental bodies if they provide "services traditionally provided by governmental bodies."

Kneeland, 850 F.2d at 228. The Kneeland court ultimately concluded that the National Collegiate Athletic Association (the "NCAA") and the Southwest Conference (the "SWC"), both of which received public funds, were not "governmental bodies" for purposes of the Act because both provided specific, measurable services in return for those funds. See id. at 230-31. Both the NCAA and the SWC were associations made up of both private and public universities. Both the NCAA and the SWC received dues and other revenues from their member institutions. Id. at 226-28. In return for those funds, the NCAA and the SWC provided specific services to their members, such as supporting various NCAA and SWC committees; producing publications, television messages, and statistics; and investigating complaints of violations of NCAA and SWC rules and regulations. Id. at 229-31. The Kneeland court concluded that although the NCAA and the SWC received public funds from some of their members, neither entity was a "governmental body" for purposes of the Act, because the NCAA and SWC did not receive the funds for their general support. Rather, the NCAA and the SWC provided "specific and gaugeable services" in return for the funds that they received from their member public institutions. See id. at 231; see also A.H. Belo Corp. v. S. Methodist Univ., 734 S.W.2d 720 (Tex. App.—Dallas 1987, writ denied) (athletic departments of private-school members of SWC did not receive or spend public funds and thus were not governmental bodies for purposes of Act).

In exploring the scope of the definition of "governmental body" under the Act, this office has distinguished between private entities that receive public funds in return for specific, measurable services and those entities that receive public funds as general support. In Open Records Decision No. 228 (1979), we considered whether the North Texas Commission (the "commission"), a private, nonprofit corporation chartered for the purpose of promoting the interests of the Dallas-Fort Worth metropolitan area, was a governmental body. See ORD 228 at 1. The commission's contract with the City of Fort Worth obligated the city to pay the commission $80,000 per year for three years. Id. The contract obligated the commission, among other things, to "[c]ontinue its current successful programs and implement such new and innovative programs as will further its corporate objectives and common City's interests and activities." Id. at 2. Noting this provision, this office stated that "[e]ven if all other parts of the contract were found to represent a strictly arms-length transaction, we believe that this provision places the various governmental bodies which have entered into the contract in the position of 'supporting' the operation of the Commission with public funds within the meaning of [the predecessor to section 552.003]." Id. Accordingly, the commission was determined to be a governmental body for purposes of the Act. Id.

In Open Records Decision No. 602 (1992), we addressed the status of the Dallas Museum of Art (the "DMA") under the Act. The DMA was a private, nonprofit corporation that had contracted with the City of Dallas to care for and preserve an art collection owned by the city and to maintain, operate, and manage an art museum. See Open Records Decision No. 602 at 1-2. The contract required the city to support the DMA by maintaining the museum building, paying for utility service, and providing funds for other costs of operating the museum. Id. at 2. We noted that an entity that receives public funds is a governmental body under the Act, unless the entity's relationship with the governmental body from which it receives funds imposes "a specific and definite obligation . . . to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser." Id. at 4. We found that "the [City of Dallas] is receiving valuable services in exchange for its obligations, but, in our opinion, the very nature of the services the DMA provides to the [City of Dallas] cannot be known, specific, or measurable." Id. at 5. Thus, we concluded that the City of Dallas provided general support to the DMA facilities and operation, making the DMA a governmental body to the extent that it received the city's financial support. Id. Therefore, the DMA's records that related to programs supported by public funds were subject to the Act. Id.

We note that the precise manner of public funding is not the sole dispositive issue in determining whether a particular entity is subject to the Act. See Attorney General Opinion JM-821 at 3 (1987). Other aspects of a contract or relationship that involves the transfer of public funds between a private and a public entity must be considered in determining whether the private entity is a "governmental body" under the Act. Id. at 4. For example, a contract or relationship that involves public funds, and that indicates a common purpose or objective or that creates an agency-type relationship between a private entity and a public entity, will bring the private entity within the definition of a "governmental body" under section 552.003(1)(A)(xii) of the Government Code. The overall nature of the relationship created by the contract is relevant in determining whether the private entity is so closely associated with the governmental body that the private entity falls within the Act. Id.

Pursuant to section 552.303(c) of the Government Code, this office sent a notice to you via facsimile requesting that you provide this office with additional information as to how the collaborative is not a governmental body as well as a copy of the collaborative's bylaws. In response, you provided a copy of the collaborative's bylaws, which state that the collaborative is non-profit organization created by Texas Education Service Centers to develop, market, and support a curriculum throughout the State of Texas. You state the collaborative developed CSCOPE, which is a curriculum support system. You explain that membership in the collaborative is open to any Texas Education Service Center ("ESC"), and that each ESC that chooses to become a member pays membership dues. You state that in return for its dues, each ESC is granted a license to sell CSCOPE to the public school districts in its region. We understand that the members also elect the governing board to carry out the business of the collaborative and to control the funds. The governing board is comprised of executive directors from participating ESCs. You argue that the public funds paid to the collaborative by members are for specific and gaugeable goods and services, the right to sell CSCOPE products to school districts within the ESC's particular region. However, upon, review we conclude that the collaborative is funded through public funds, and the collaborative is governed by governmental bodies, namely the member ESCs through its governing board. We find that the members share a common purpose and objective, such that an agency-type relationship exists between the parties. See Open Records Decision No. 621 at 7 n.10 (1993). Accordingly, we conclude that the collaborative falls within the definition of a "governmental body" under section 552.003(1)(A)(xii) of the Government Code. As we conclude that the collaborative is a governmental body for purposes of the Act, we will next address the collaborative's alternative arguments to withhold the submitted information pursuant to the Act.

Section 552.104 excepts from disclosure "information that, if released, would give advantage to a competitor or bidder." Gov't Code § 552.104. This exception protects a governmental body's interests in connection with competitive bidding and in certain other competitive situations. See Open Records Decision No. 593 (1991) (construing statutory predecessor). This office has held that a governmental body may seek protection as a competitor in the marketplace under section 552.104 and avail itself of the "competitive advantage" aspect of this exception if it can satisfy two criteria. See id. First, the governmental body must demonstrate that it has specific marketplace interests. See id. at 3. Second, the governmental body must demonstrate a specific threat of actual or potential harm to its interests in a particular competitive situation. See id. at 5. Thus, the question of whether the release of particular information will harm a governmental body's legitimate interests as a competitor in a marketplace depends on the sufficiency of the governmental body's demonstration of the prospect of specific harm to its marketplace interests in a particular competitive situation. See id. at 10. A general allegation of a remote possibility of harm is not sufficient. See Open Records Decision No. 514 at 2 (1988).

You assert the collaborative has a specific marketplace interest in the curriculum marketplace because it is competing with several for-profit entities to provide curriculum to public school districts. You explain that release of the collaborative's curriculum product, CSCOPE, would cause the collaborative specific harm because competitors could use the CSCOPE product as a framework for creating competing curriculum without incurring the substantial development costs necessary to create such a product. You also explain the collaborative would suffer indirect harm because competitors could develop unauthorized products for use in conjunction with CSCOPE, which would cause the collaborative to lose its ability to regulate the quality of products that can be used with its CSCOPE curriculum causing the collaborative to lose market share. Therefore, you argue that release of the requested curriculum would allow competitors to develop similar products and highlight the collaborative's weaknesses, causing specific harm to the collaborative's marketplace interests in a particular competitive situation. Based on these representations and our review, we find the collaborative has demonstrated that it has specific marketplace interests and may be considered a "competitor" for purposes of section 552.104. Further, we find that you have demonstrated that release of the information at issue would cause specific harm to the collaborative's marketplace interests. We therefore conclude the collaborative may withhold the submitted information under section 552.104 of the Government Code. As our ruling is dispositive, we need not address the remaining argument against disclosure.

This letter ruling is limited to the particular information at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other information or any other circumstances.

This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For more information concerning those rights and responsibilities, please visit our website at http://www.oag.state.tx.us/open/index_orl.php, or call the Office of the Attorney General's Open Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable charges for providing public information under the Act must be directed to the Cost Rules Administrator of the Office of the Attorney General, toll free, at (888) 672-6787.

Sincerely,

Nneka Kanu

Assistant Attorney General

Open Records Division

NK/em

Ref: ID# 449557

Enc. Submitted documents

cc: Requestors

(w/o enclosures)

Footnotes

1. We note that the Act does not require a governmental body to release information that did not exist when it received a request or create responsive information. See Econ. Opportunities Dev. Corp. v. Bustamante, 562 S.W.2d 266 (Tex. Civ. App.--San Antonio 1978, writ dism'd); Open Records Decision Nos. 605 at 2 (1992), 555 at 1 (1990), 452 at 3 (1986), 362 at 2 (1983).

2. We assume that the "representative sample" of information submitted to this office is truly representative of the requested records as a whole. See Open Records Decision Nos. 499 (1988), 497 (1988). This open records letter does not reach, and therefore does not authorize the withholding of, any other requested records to the extent that those records contain substantially different types of information than that submitted to this office.

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