Is a private nonprofit that gets public utility money subject to Texas open records law?

TX AG Opinion GA-0603: Is a publicly funded private nonprofit subject to open records?

Plain-English summary

A state representative asked whether a private nonprofit economic development foundation that receives part of its funding from "quasi-public" utilities is subject to the Texas Public Information Act, and whether such a foundation must account to the public for the part of its budget that comes from CPS Energy or the San Antonio Water System. The Public Information Act applies to "governmental bodies," and its broad definition includes the part of a private organization that spends or is supported in whole or in part by public funds.

The Attorney General gave a general rule and then declined to apply it to any specific entity. The general rule has two steps: first, are the funds at issue public funds; and second, is the private entity "supported" by, or does it spend, those public funds. If both are met, that part of the entity is a governmental body subject to the Act. But whether a particular entity is "supported" by public funds is fact-intensive. Drawing on the Fifth Circuit's Kneeland decision, the opinion explained that an entity receiving public funds becomes a governmental body unless its relationship with the government is an arms-length contract imposing a specific, definite obligation to provide a measurable amount of service for a set amount of money. If instead the funding reflects a common purpose or an agency-type relationship, or the entity provides services traditionally provided by government, it can be a governmental body. Deciding which pattern fits a given foundation requires examining the contracts and the relationship, a determination the opinion process cannot make. So the opinion would not say whether any specific foundation (including the San Antonio Economic Development Foundation, which identified itself in briefing) qualifies. If an entity is a governmental body, it must release public information when requested unless it claims a statutory exception, and whether particular information must be disclosed is itself a matter for an Attorney General decision under chapter 552 or for a court.

Currency note

This opinion was issued in 2008. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Public Information Act (Government Code chapter 552), including the "governmental body" definition and the exceptions and procedures cited here, may have been amended since 2008. Confirm the current statute and any later open-records decisions before relying on this analysis.

Who this opinion affected (as of 2008)

Private nonprofits and economic development foundations: The opinion told them they could be governmental bodies subject to open records to the extent they are supported by or spend public funds, but that the answer for any specific organization depends on the facts of its funding relationship.

Journalists and requestors: The opinion explained the framework for arguing that a publicly funded nonprofit must disclose records, while making clear the threshold "governmental body" question for a particular entity has to be resolved through an open-records decision or litigation, not a general AG opinion.

Public utilities and the entities they fund: The opinion identified the key distinction (arms-length payment for measurable services versus general support or an agency relationship) that determines whether a funded entity is pulled into the Act.

Common questions

Does taking any public money make a nonprofit subject to open records?
Not automatically. The opinion said a private entity is not a governmental body simply because it provides goods or services under a government contract. It depends on whether the public funds are an arms-length payment for measurable services or instead general support or an agency-type relationship.

Why wouldn't the AG just say whether the foundation is covered?
Because that requires resolving facts about the entity's contracts and relationship with the utilities. The opinion repeatedly noted that questions of fact are not appropriate to the opinion process, so it answered only in general terms.

If a nonprofit is a governmental body, what must it disclose?
It must release "public information" (information collected, assembled, or maintained in connection with official business) on request, unless it withholds under a statutory exception. Whether specific information is public or excepted is decided by an Attorney General open-records ruling or a court.

Background and statutory framework

The Public Information Act applies to information collected, assembled, or maintained by or for a governmental body (Tex. Gov't Code Ann. § 552.002(a)). The definition of "governmental body" includes the part of a private organization that spends or is supported in whole or in part by public funds (id. § 552.003(1)(A)(xii); see id. § 552.003(5) (defining public funds)). A private entity falls within the definition when the funds are public and the entity is supported by or spends them (Kneeland v. Nat'l Collegiate Athletic Ass'n, 850 F.2d 224, 228 (5th Cir. 1988), cert. denied, 488 U.S. 1042 (1989)).

Whether an entity is "supported" by public funds requires an analysis of the facts surrounding each entity (Blankenship v. Brazos Higher Educ. Auth., Inc., 975 S.W.2d 353, 362 (Tex. App.-Waco 1998, pet. denied)), which is inappropriate for the opinion process. Kneeland described three patterns: whether there is a specific, definite obligation to provide a measurable amount of service for a set amount of money; whether there is a common purpose creating an agency-type relationship; and whether the entity provides services traditionally provided by government. If an entity is a governmental body, it must make public information available (Tex. Gov't Code Ann. §§ 552.021, 552.022(a)) unless an exception applies, and whether information must be disclosed is resolved by an Attorney General decision under the Act or by a court (id. §§ 552.301, 552.303; see id. § 402.042(a)).

Citations

Statutes:

• Tex. Gov't Code Ann. §§ 552.002(a), 552.003(1)(A)(xii), 552.003(5), 552.021, 552.022(a), 552.303 (Vernon 2004)
• Tex. Gov't Code Ann. § 552.301 (Vernon Supp. 2007)
• Tex. Gov't Code Ann. § 402.042(a) (Vernon 2005)

Cases:

• Kneeland v. Nat'l Collegiate Athletic Ass'n, 850 F.2d 224, 228 (5th Cir. 1988), cert. denied, 488 U.S. 1042 (1989)
• Blankenship v. Brazos Higher Educ. Auth., Inc., 975 S.W.2d 353, 362 (Tex. App.-Waco 1998, pet. denied)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0603
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2008/ga0603.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

February 28, 2008

The Honorable Tracy O. King
Chair, Committee on Border and International Affairs
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0603

Re: Whether a non-profit economic development foundation that receives partial funding from quasi-public utilities is subject to the Texas Public Information Act (RQ-0619-GA).

Dear Representative King:

Without identifying any particular entity, you ask whether a "private non-profit economic development foundation which receives part of its funding from 'quasi-public utilities'" is subject to the Texas Public Information Act.[1] You also ask if the private non-profit economic development foundation must "account to the public for the portion of its budget received from [CPS Energy or San Antonio Water System] if so requested under the Texas Public Information Act[.]" Request Letter, supra note 1, at 1.

The Public Information Act (the "Act") found in chapter 552 of the Government Code applies to information "collected, assembled, or maintained" by or for a governmental body. TEX. GOV'T CODE ANN. § 552.002(a) (Vernon 2004). In its broad definition of "governmental body," the Act does include "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." Id. § 552.003(1)(A)(xii); see also id. § 552.003(5) (defining "public funds"). Private entities fall within this definition of "governmental body" if two requirements are met. See id. § 552.003(1)(A)(xii). The first requirement is whether the funds at issue are public. Id.; see also Tex. Att'y Gen. ORD-569 (1990) at 5 ("The threshold question is whether the commission receives any funds from the City ...."). If the funds at issue are public, the second requirement is whether the private entity is "supported" by or spends those public funds. See Kneeland v. Nat'l Collegiate Athletic Ass'n, 850 F.2d 224, 228 (5th Cir. 1988), cert. denied, 488 U.S. 1042 (1989) (defining question as "whether those [public] funds constitute the 'support' envisioned by the Act"). Thus, the general answer to your first question is that a "private non-profit economic development foundation which receives part of its funding from 'quasi-public utilities'" is subject to the Act as a governmental body where the foundation, or a part thereof, is supported by or spends public funds. See Request Letter, supra note 1, at 1.

However, to the extent you inquire about a particular non-profit economic development foundation, we cannot answer your question.[2] While the determination regarding whether funds are public is usually straightforward, the determination regarding whether an entity is "supported" by the public funds[3] "requires an analysis of the facts surrounding each entity." Blankenship v. Brazos Higher Educ. Auth., Inc., 975 S.W.2d 353, 362 (Tex. App.-Waco 1998, pet. denied); see also Kneeland, 850 F.2d at 228 (recognizing that attorney general determinations relating to open records and public information that consider the question are generally fact specific). Such a fact-intensive inquiry is inappropriate to the attorney general opinion process. See Tex. Att'y Gen. Op. No. GA-0446 (2006) at 18 ("Questions of fact are not appropriate to the opinion process.").

Without considering any particular entity, we can advise you generally that a private entity is not automatically a governmental body subject to the Act "simply because [it] provide[s] specific goods or services under a contract with a government body." Kneeland, 850 F.2d at 228. Attorney general decisions issued under chapter 552 distinguish between private entities that receive public funds in return for specific, measurable services and entities that receive public funds as general support. See Tex. Att'y Gen. Op. No. JM-821 (1987) at 3; Tex. Att'y Gen. ORD-228 (1979) at 2. The Fifth Circuit Court of Appeals, examining attorney general decisions issued under chapter 552's predecessor statute, has delineated "three distinct patterns of analysis" that have been used to examine the facts of the relationship between the private entity and the government body providing the public funds. Kneeland, 850 F.2d at 228. In Kneeland, the court stated:

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." [An] 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, [another] 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."

Id. (citations omitted). Thus, Kneeland requires an examination of: (1) any specific and definite obligation and whether there was a "measurable amount of service in exchange for a certain amount of money;" (2) any "common purpose or objective that creates an agency-type relationship" between the public and private entity; and (3) any provision of services that are "traditionally provided by governmental bodies." Id.

To your question then, under Kneeland's three patterns of analysis, a court, or the attorney general's office rendering a decision under chapter 552,[5] would examine the provisions of any contract, or other financial relationship between the foundation and the utilities, to determine the specificity and definite nature of each of the parties' obligations and to determine whether there was a quid pro quo exchange. And the analysis would require a determination whether the foundation's purpose is such that it is acting as an agent of the utilities or whether its purpose is to provide a service ordinarily provided by the utilities.

Your second question is whether a private non-profit economic development foundation must "account to the public for the portion of its budget received from [CPS and SAWS] if so requested under the Public Information Act[.]" Request Letter, supra note 1, at 1. If the entity is not a governmental body under the Act, it is not required by the Act to release any requested information including the portion of its budget received from CPS and SAWS. If, and to the extent that, a private entity is a governmental body under the Act, the entity must release "public information." See TEX. GOV'T CODE ANN. §§ 552.002 (Vernon 2004) (providing that "public information" is information "collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business"), 552.021 (providing that public information is available to the public), 552.022(a) (enumerating categories of information that is public information unless otherwise excepted). Thus, if the entity is a governmental body and if the information is public information, the Act requires the entity to release the information, if requested, unless the entity seeks to withhold the information under an exception in the Act. See id. §§ 552.101-.148 (Vernon 2004 & Supp. 2007) (exceptions). Whether an entity is a governmental body under the Act and whether requested information, such as a portion of a budget received from "quasi-public utilities," is public information or excepted from required disclosure is a matter for an attorney general decision under chapter 552 or a court. See id. §§ 552.301 (Vernon Supp. 2007) (providing mechanism and time frame in which to seek attorney general decision regarding authority to withhold information requested under Act), 552.303 (Vernon 2004) (requiring delivery of requested information to the Attorney General); see also id. §§ 552.101-.147 (Vernon 2004 & Supp. 2007) (providing for exceptions to required disclosure).

SUMMARY

A private entity that is supported in whole or in part by public funds or that spends public funds is in whole or in part a governmental body subject to the Public Information Act. Whether a private entity, such as a non-profit economic development foundation that receives partial funding from "quasi-public" utilities, is a governmental body requires a determination regarding the public nature of the funds and whether the public funds are spent or received by the entity in return for specific, measurable services or as general support. Such a determination involves the resolution of facts and is inappropriate for the attorney general opinion process.

Private entities that are in whole or in part governmental bodies under section 552.003, Government Code, are subject to the Public Information Act and must make public information available to the public. Whether information is public information required to be disclosed or information otherwise excepted from disclosure is a matter for an attorney general decision under the Public Information Act.

KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Charlotte M. Harper
Assistant Attorney General, Opinion Committee

Footnotes

[1] See Letter from Honorable Tracy O. King, Chair, Committee on Border & International Affairs, Texas House of Representatives, to Honorable Greg Abbott, Attorney General of Texas, at 1 (Sept. 6, 2007) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[2] In its briefing to us on your question, the San Antonio Economic Development Foundation, Inc. ("SAEDF") states it is the "private non-profit economic development foundation" about which you inquire. See Letter from Mario A. Hernandez, President, San Antonio Economic Development Foundation Inc., to Office of the Attorney General, Opinion Committee, at 1 (Oct. 19, 2007) (on file with the Opinion Committee) [hereinafter SAEDF Brief]. The SAEDF provides factual information regarding its "marketing agreements" with CPS and SAWS. See id. at 2. Even were we to assume that SAEDF is the entity about which you inquire, determining whether a particular private entity is a governmental body under the Public Information Act requires a determination of facts, a determination inappropriate for an attorney general opinion under chapter 402, Government Code. See Blankenship v. Brazos Higher Educ. Auth., Inc., 975 S.W.2d 353, 362 (Tex. App.-Waco 1998, pet. denied); see also Tex. Att'y Gen. Op. No. GA-0446 (2006) at 18 ("Questions of fact are not appropriate to the opinion process.").

[3] The question whether an entity is a governmental body under section 552.003(1)(A)(xii) is usually resolved with an analysis regarding the nature of the support provided with the public funds. See Tex. Att'y Gen. ORD-602 (1992) at 5 (determining that the portion of the Dallas Museum of Art supported by public funds was a governmental body); ORD-228 (1979) at 2 (determining that a private, nonprofit corporation, with a purpose of promoting interest of the area, was a governmental body because of support of public funds); see also Tex. Att'y Gen. OR2007-06167 at 4 (determining that the Laredo Family Planning Services was supported by public funds and therefore a governmental body). We find an isolated instance where a private entity was determined to be a governmental body under section 552.003(1)(A)(xii) due to the fact the entity spent public funds. See Tex. Att'y Gen. ORD-273 (1981) at 1. The 1981 decision concluded that because the entity was reimbursed with public funds, the entity spent public funds and was therefore a governmental body. See id.

[4] See infra note 5.

[5] Section 552.301 of the Act authorizes the Attorney General to decide whether information requested under the Act is excepted from required disclosure. TEX. GOV'T CODE ANN. § 552.301(a)-(e) (Vernon Supp. 2007); see also Kneeland, 850 F.2d at 228 (recognizing Attorney General's express authority to interpret the Act). Compare TEX. GOV'T CODE ANN. § 402.042(a) (Vernon 2005) (authorizing Attorney General to "issue a written opinion on a question affecting the public interest ....").