BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Joseph L. Dunn, Chair
2005-2006 Regular Session
SB 1003 S
Senator Escutia B
As Introduced
Hearing Date: April 5, 2005 1
Public Resources Code 0
GMO:cjt 0
3
SUBJECT
State ERCDC Reports: Confidentiality and Disclosure
DESCRIPTION
This bill would establish the standard to be used by the
State Energy Resources Conservation and Development
Commission (ERCDC) in granting a written request for
disaggregated or unmasked records of confidential
information it has received or developed.
BACKGROUND
SB 1389 (Bowen, Chapter 568, Statutes of 2002) repealed the
planning and forecasting provisions of the Warren-Alquist
State Energy Resources Conservation and Development Act and
enacted a new mandate for the ERCDC to prepare an
integrated energy policy report, based on data to be
collected and information to be developed by the
commission.
As heard and approved by the Senate, SB 1389 contained
specific provisions for the handling of requests for
records of information submitted to the ERCDC for the
purpose of preparing the Integrated Energy Policy Report.
SB 1389 also contained language comporting its provisions
with the requirements, intent and interpretation of the
Public Records Act (PRA), which generally applies to
records of all public agencies. This language was deleted
from SB 1389 in the Assembly.
(more)
SB 1003 (Escutia)
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SB 772 (Bowen, 2003) would have reinserted that deleted
language (now in SB 1003) into Public Resources Code
25322. SB 772 was passed by this Committee, but the bill
was later gutted and amended in the Assembly.
SB 1003 would reinsert this same balancing-test language
into 25322.
CHANGES TO EXISTING LAW
Existing law permits persons submitting information to the
state ERCDC (for the purpose of developing the Integrated
Energy Policy Report) to request that specific information
be held in confidence, and requires the ERCDC to grant the
request under specified circumstances.
Existing law deems confidential information presented to or
developed by the ERCDC as required by law. Existing law
requires the ERCDC to aggregate or mask confidential
information to the extent necessary to assure
confidentiality if public disclosure of the specific
information would result in unfair competitive disadvantage
to the person supplying the information.
Existing law provides the procedure for handling requests
for records of information collected or developed by the
ERCDC. With respect to a request to disclose a
disaggregated or unmasked record of information designated
as confidential by the ERCDC, existing law requires the
ERCDC to deny the request if the disclosure will result in
an unfair competitive disadvantage to the person that
submitted the information.
This bill , with respect to a request to disclose a
disaggregated or unmasked record of information designated
as confidential by the ERCDC, would require the commission
to grant the request if the disclosure would not result in
unfair competitive disadvantage to the person that
submitted the information, unless the public interest
served by nondisclosure clearly outweighs the public
interest served by disclosure, or unless another applicable
provision of law exempts the information from disclosure.
This bill would make information denied disclosure
(withheld) by the ERCDC under this provision exempt from
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disclosure under the Public Records Act.
COMMENT
1. Need for the bill
When SB 772 was heard in Committee in 2003, Senator Bowen
stated that SB 772 "strikes the proper balance between
the private interest in maintaining the confidentiality
of sensitive commercial information and the public
interest in understanding the functioning of energy
markets and institutions which serve as the basis for
important public decisions."
The author of SB 1003 agrees, and therefore has
reintroduced the substance of SB 772.
2. The Public Records Act compared to Public Resources
Code 25322: the balancing test
The Public Records Act (PRA) requires public agencies,
upon request by any person, to make available for
inspection or copying records it maintains. [Gov. Code
6250 et seq.] The basic principle underlying the PRA is
that all records kept by a public agency are disclosable
unless exempt from disclosure. Thus, the PRA provides a
long list of records that are exempt from disclosure
(such as personnel and medical records, which are
confidential and require a court order or a request to be
made by the person entitled to the record), and
establishes a process for the court to review the denial
of a request for public records. When a request for
inspection or copying of a public record is denied, it is
usually because the record is specifically exempt from
disclosure. Where a record is not exempt, but the agency
denies the request, the person requesting the record may
petition the court for an order requiring disclosure.
The court, in that case, weighs the public interest
served in having the record disclosed against the public
interest served by not disclosing the record and denies
the request if the public interest served by not having
the record disclosed clearly outweighs the public
interest served by disclosure.
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Public Resources Code 25322 provides the manner by
which the ERCDC must handle requests for records of
information submitted to it by various business interests
that deal with energy resources. Some of the information
submitted may be confidential, and some not. Section
25322 provides a means for the submitting party to
request that the information provided to the commission
be held in confidence, and the commission is required to
grant the request under one of three circumstances: (1)
the information is confidential and exempt from the
Public Records Act; (2) the information is confidential
(proprietary) under specified regulations; or (3) on the
facts of the case the public interest served by not
disclosing the information clearly outweighs the public
interest served by disclosure.
Section 25322 also authorizes the commission to
designate, by regulation, certain categories of
information as confidential, thus removing the necessity
for a submitting party to request confidentiality for
certain information. Lastly, all information held in
confidence by the commission is aggregated or masked to
the extent necessary to assure confidentiality if public
disclosure of the specific information would result in an
unfair competitive disadvantage to the party that
submitted the information.
a. Requests for disaggregated or unmasked confidential
information
SB 1003 deals with a written request for disaggregated
or unmasked record of information deemed confidential
by the commission at the request of the submitting
party, or because it falls within a category
designated confidential by regulation. Current law [
25322(b)(2)] requires that when the commission
receives a written request for this record, notice of
the request shall be provided to the party that
submitted the information. Within five working days
of the receipt of the notice, the submitting party
must provide written justification of the claim of
confidentiality. Within 20 working days of its
receipt of the written request, the commission is
required to issue its ruling.
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Under current law, the commission must deny the
request if the disclosure would result in an unfair
competitive disadvantage to the party that submitted
the information. If it grants the request, it must
withhold disclosure for up to 14 working days to allow
the submitting party to seek judicial review of the
commission's decision to grant the request.
b. SB 1033 provides standard of review applicable to a
request for disaggregated or unmasked confidential
information
Section 25322 does not provide a standard for the
commission to use in determining when a request may be
granted. Absent that standard, the commission would
be bound by Section 3, Article 1 of the California
Constitution, as amended by SCA 1, which allows for
the broad construction of a statute, court rule, or
authority if it furthers the people's right of access
and the narrow construction of such a rule if it
limits that access. (See Comment 3 below).
SB 1003 provides the commission with a specific
standard of review, following as closely as possible
the standard of review that a court would use under
the Public Records Act, i.e., that disclosure would be
granted unless the public interest served by not
disclosing the information clearly outweighs the
public interest served by disclosing the information,
while protecting any proprietary information deemed
confidential that could result in an unfair
competitive disadvantage to the submitter of the
information. Obviously, if there is another
applicable provision of law that would exempt the
information, the commission (and a court hearing a
petition under the PRA) must deny the request for
disclosure.
It should be noted that the commission's discretion to
grant the request for information under these
circumstances is predicated on first finding that
disclosure will not result in an unfair competitive
disadvantage to the party that submitted the
information. This is a fairly high hurdle to jump, so
that in most cases, if a party that submitted the
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requested information can make a colorable claim that
disclosure would result in "unfair competitive
disadvantage" to that party, the commission will deny
the request.
Opponents of the bill believe otherwise. They state
that once information has been determined to be
confidential, it should remain so, and the market
participant should not be required to repeatedly
defend the confidentiality of information. [Letter of
opposition from Western States Petroleum Association
dated March 30, 2005.] This may make sense, except
that under existing law, the party submitting the
confidential information must already show that
disclosure of the requested disaggregated or unmasked
information will result in unfair competitive
disadvantage to the submitter. If the submitter fails
that test, then the commission, in the absence of the
balancing test using public interests, may grant the
request. In that case, the submitter will probably
end up in court, where the court would apply not only
that same balancing test that it applies to cases
involving the Public Records Act, but also the
provisions of Section 3, Article 1 of the State
Constitution. By allowing the commission to apply the
test after a finding that the submitter of information
failed to show unfair competitive disadvantage
resulting from disclosure, the submitter would have a
preview of how a court may look at the public
interests involved, and may save itself the trouble of
going to court.
Opponents also contend that the bill will likely
contribute to increased litigation and related
increases in legal fees. They base this contention on
the lack of definitive standards for how a submitter
may demonstrate an "unfair competitive disadvantage"
and therefore, commission determinations must be made
on a case-by-case basis. They then conclude that in
the event of litigation, "the bill gives the courts
the discretion to weigh public policy concerns against
a submitting party's interest in keeping the documents
confidential." In light of the discussion in the
preceding comments, this argument loses its weight.
This bill would not change the existing balancing test
that courts will use in the event of litigation. In
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fact, the ERCDC's ability to apply the balancing test
as described in SB 1003 may save the opponents actual
court litigation and its attendant costs.
3. SB 1003 broadens public access to information, thus
meets SCA 1 mandate
In 2004, California passed Senate Constitutional
Amendment 1, which expands the people's right of access
to information concerning the conduct of the people's
business, and provides that meetings of public bodies and
writings of public officials and agencies shall be open
to public scrutiny. SCA 1 also provides that after its
effective date, a statute, court rule or other authority
that limits this right of access by the public shall be
adopted with findings demonstrating the interest
protected by the limitation and the need for protecting
that interest. [Section 3, Article 1, California
Constitution.]
SB 1003 concerns information that has been determined to
be confidential by the ERCDC and has been aggregated and
masked for purposes of public access. SB 1003 would
expand, rather than limit, the opportunity for public
access to the disaggregated and unmasked information now
protected under the ERCDC's rules of confidentiality by
allowing the ERCDC to use the balancing test described in
the bill. Further, the bill would not create a new
exception to the Public Records Act or make confidential
any information that is now not confidential.
For the above reasons, SB 1003 would not run contrary to
the mandate of Section 3, Article 1 of the California
Constitution, but rather, promote its goal.
4. Information withheld by ERCDC is exempt from PRA
This bill would ensure that information withheld or made
confidential by the ERCDC either through a case-by-case
basis using this balancing test or through a categorical
designation remains confidential and exempt from
disclosure under the Public Records Act. This language
has been used in other legislation dealing with
confidential information received or maintained by public
agencies, where it would be impractical to include such
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information as an exemption to the PRA within the Act
itself.
Support: None Known
Opposition: Western States Petroleum Association
HISTORY
Source: Author
Related Pending Legislation: None Known
Prior Legislation: SB 1389 (Bowen, Ch. 568, Stats. 2002)
See Background
SB 772 (Bowen, 2003) See Background
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