# The Attorney General of Texas

December 31, 1982

MARK WHITE Attorney General

Supreme Court Building P. 0. BOX 12546 Austin. TX. 76711. 2548 5121475.2501 Telex 9101674-1367 Telecopier 5121475.0266

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An Equal Opportunity/ Affirmative Action Employer Mr. Bob Armstrong Comissioner GeneralLand Office Austin, Texas 78701 OpinionNo.MW-591

Re: Whether name of person or entity nominating a tract of land to be put up for lease by the School Land Board at lease sale is open topublic

DearMr. Armstrong:
Chapter 52 of theNatural ResourcesCode empowers the SchoolLand Board to conductmineral lease sales, at which the mineral rights to tracts of state-owned land are made available for lease. We understand that private individuals and companies, the School Land Board itself, and the General Land Officemay nominate tracts of land tobe includedon the list of tracts, themineral rights towhich are offered for lease at these lease sales.

You recently asked this office to render a decision under the Open Records Act, article 6252-17a, V.T.C.S. You asked whether you must disclose to a private attorney the identity of the person, company, or entity which had requested the School Land Board to includea certain tract of land on the list of tracts tobe leased for mineral rights at a forthcoming lease sale. This lease salewas held four days afterwe receivedyour request letter.

Sincewe had not receivedall the relevant informationpertaining to thismatterbefore the lease salewas held,we couldnot respond to your requestbefore that date. Normally, the eliminationof thebasis for a request under the Open RecordsAct moots the request. In this instance, however, your letter clearly indicates that you are more interested in knowing how to deal generallywith this kind of request than you were in being advised as to how to handle this particular request. We will, therefore, treat your inquiry as a request for an attorney general opinion regarding the availabilityof the identities of thosewho nominate tracts to be leasedby the School Land Board at mineral lease sales, rather than as an open recordsdecision regarding the availabilityof the identityof a particularnominator.

We understand that the procedure for leasing state lands for minerals is essentiallyas follows. The SchoolLand Board sets a date

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for a mineral lease sale. It then notifies interestedparties of the sale and invites them to nominate tracts of land to be put up for lease. As we have already noted, the School Land Board and the GeneralLand Office, aswell as private individualsand companies,are eligible to nominate tracts. When a tract is nominated, the Land Office checks it to ensure that it is free of encumbranceswhich would make it unavailable for lease. After the deadline fornominationshas passed, the Land Office mails to various interestedparties a Notice of Bids, which describes each tract and discusses the terms under which it will be leased. The sealed bids which are sent to the Land Office in response to this notice are opened at the beginning of the SchoolLand Boardmeetingwhich is held on themorning of the sale and
are then read to thepublic.

In your letter, you advanced several arguments for treating as confidential the identities of those who nominate tracts of land for lease. You contend that sections 3(a)(4), 3(a)(lO), and 3(a)(ll) of the Open Records Act, article 6252-17a, V.T.C.S., authorize you to withhold this information. Inview of our dispositionof thismatter,
we need only consider section 3(a)(4), which excepts from required public disclosure "information which, if released, would give advantage to competitorsor bidders."

For purposes of our discussion of section 3(a)(4), we deem it useful to subdivide the class of potential nominators of tracts of land into two subclasses: (1) those who may (and likely will) themselves bid for the mineral rights to the tract which they nominate, i.e., private individuals and companies, and (2) thosewho will not do so, i.e., the School Land Board and the General Land Office. In our opinion, the identities of those in the former group may clearly be withheld from disclosure under section 3(a)(4). This office has previously recognized that "information concerning the identity of those who have submitted bids (before the last day of bidding), would be of advantage to other competitors or bidders...." Open Records Decision No. 46 (1974). See Open Records Decision No. - 170 (1977). The policy reason for withholding the identities of bidders is obvious. Merely knowing the identities of other bidders could furnish a bidder with insights concerning the others' competitive capabilitieswhich he may then use in structuringhis own bid. Thus, if, when the Land Office receives a request for the identity of a nominator, that nominator has already bid on the tract which he nominated, his identity may be withheld under Open Records Decision No. 46. He would then be a "bidder" and disclosure of his identity could harm him, particularly since the identities of other bidders for the samemineral rights forwhich he bid may be withheld. Furthermore,even if a nominatorhas not yet bid when his identity is requested, we conclude that his identity may be withheld. We understand that individuals and companies which nominate tracts for leaseusually bid for the mineral rights to those tracts. Thus, even ,.- .

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Mr. Bob Armstrong - Page 3 (MW-591)

if a nominator has not yet bideon the tract which he nominated, he will likely do so in the future. Therefore, because the likelihood thathe will bid is substantialand becauseby the timehe doesbid it will be too late to preservehis identity,the identity of a nominator must be protected evenbefore he bids.

The question of the availabilityof the identitiesof nominators who will not bid for the mineral rights to the tracts which they nominate,-a, the School Land Board and the General Land Office, is
more difficult. Nevertheless,we conclude that their identities may be kept secretaswell.

The informationwhich we have obtained about the practice in the industry indicatesthat knowledgeof the fact that a privateparty, as opposed to the School Land Board or the General Land Office, has nominated a particular tract for lease may well furnish an important clue as to thevalue of themineral rights to that tract. To be more specific,such informationwould suggest that thosemineral rights are more valuable than one might have assumed if the Land Board or Land Office had nominated the tract. If we were to hold that the identitiesofprivate partieswho nominate tractsmay be withheld,but that the fact that the School Land Board or General Land Office nominated a tractmust be released, the resultwould be as follows. A requestorwho asks for the identity of the nominator of a particular tract will know, once he is told that this information is confidential,that neither the School Land Board nor the General Land Office nominated that tract. In other words, he will know that a private individualor companynominated it. While we understand that the value of tracts of state-owned land is already generally known throughoutthe industry,the fact remains that it is not inconceivable that someone could acquire informationabout a particular tractwhich is unknown to others, informationwhich suggests that the tract is especially valuable, and then, acting on the strength of that information, nominate that tract for lease in order to bid for the mineral rights to it. The legitimate competitive edge which his informationwould have affordedhim would be lost to some extent if it became known that a private party, rather than the state, nominated the tract. Competitors who might otherwise have thought the tract worthlessmight enter the field andbid for themineral rights to that tract; at the very least, they might endeavor to determine whether their original assessment of the tract's value was incorrect. Those who have alreadybid on the tractmight adjust theirbids. In short, public disclosure of the fact that the state did not nominate a particular tract of land for leasemay afford a competitiveadvantage to "competitors or bidders" by placing at a competitive disadvantage the partywhich did nominate that tract.

We thereforeconclude that the identityof anyonewho nominatesa tract of land tobe leased formineral rightsat lease sales conducted

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by the School Land Board may be withheld from public disclosureuntil the deadline for bidding on that tracthas passed. Once the deadline has passed, this informationmust be released.

SUMMARY
Section 3(a)(4) of the Open RecordsAct excepts from required public disclosure the identity of anyonewho nominates tracts of state-ownedland to be included on the list of tracts, the mineral rights to which are leased by the School Land Board at lease sales conductedunder chapter 52 of theNatural ResourcesCode.

-MARK WHITE Attorney General of Texas

JOHNW. FAINTER,JR. FirstAssistantAttorney General

RICHARD E. GRAY III ExecutiveAssistantAttorney General
Preparedby Jon Bible AssistantAttorney General

APPROVED: OPINION COMMITTEE

SusanL. Garrison,Chairman Jon Bible Rick Gilpin Jim Moellinger BruceYoungblood

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