Court Opinion

ID: 4131470
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:16:07.468506+00
Date Added: 2024-06-11T12:51:42.882736
License: Public Domain

The Attorney           General of Texas
                                                        December 31, 1982

MARK WHITE
Attorney General

                                        Mr. Bob Armstrong                      Opinion No. MW-591
Supreme      Court Building
                                        Comissioner
P. 0. BOX 12546
Austin. TX. 76711. 2548
                                        General Land Office                    Re: Whether name of person or
5121475.2501                            Austin, Texas   78701                  entity nominating a tract of
Telex    9101674-1367                                                          land to be put up for lease
Telecopier     5121475.0266                                                    by the School Land Board at
                                                                               lease sale is open to public
1607 Main St.. Suite 1400
Dallas,  TX. 75201.4709                 Dear Mr. Armstrong:
2141742J3944
                                             Chapter 52 of the Natural Resources Code empowers the School Land
                                        Board to conduct mineral lease sales, at which the mineral rights to
4624 Alberta       Ave.. Suite    160
El Paso, TX.       79905-2793           tracts of state-owned land are made available for lease.            We
9151533-3464                            understand that private individuals and companies, the School Land
                                        Board itself, and the General Land Office may nominate tracts of land
                                        to be included on the list of tracts, the mineral rights to which are
1220 Dallas Ave., Suite 202
Houston,     TX. 77002-6966
                                        offered for lease at these lease sales.
7131650.0666
                                             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
606 Broadway,         Suite 312
                                        must disclose to a private attorney the identity of the person,
Lubbock.  TX.       79401.3479
8061747.5236
                                        company, or entity which had requested the School Land Board to
                                        include a certain tract of land on the list of tracts to be leased for
                                        mineral rights at a forthcoming lease sale. This lease sale was held
4309 N. Tenth.     Suite B              four days after we received your request letter.
McAllen,     TX. 76501-1685
512,662.4547
                                             Since we had not received all the relevant information pertaining
                                        to this matter before the lease sale was held, we could not respond to
200 Main Plaza. Suite 400               your request before that date. Normally, the elimination of the basis
San Antonio,  TX. 78205-2797            for a request under the Open Records Act moots the request. In this
512/225.4191                            instance, however, your letter clearly indicates that you are more
                                        interested in knowing how to deal generally with this kind of request
An Equal       Opportunity/             than you were in being advised as to how to handle this particular
Affirmative      Action     Employer    request. We will, therefore, treat your inquiry as a request for an
                                        attorney general opinion regarding the availability of the identities
                                        of those who nominate tracts to be leased by the School Land Board at
                                        mineral lease sales, rather than as an open records decision regarding
                                        the availability of the identity of a particular nominator.

                                             We understand that the procedure for leasing state lands for
                                        minerals is essentially as follows. The School Land Board sets a date

                                                                     0. 2197
                                                                         ,.-   .

Mr. Bob Armstrong - Page 2   CM+'-591)

for a mineral lease sale. It then notifies interested parties 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
General Land Office, as well as private individuals and companies, are
eligible to nominate tracts. When a tract is nominated, the Land
Office checks it to ensure that it is free of encumbrances which would
make it unavailable for lease. After the deadline for nominations has
passed, the Land Office mails to various interested parties 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
School Land Board meeting which is held on the morning of the sale and
are then read to the public.

     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. In view of our disposition of this matter,
we need only consider section 3(a)(4), which excepts from required
public disclosure "information which, if released, would give
advantage to competitors or 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) those who
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 capabilities which he may then use in structuring his 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 same mineral rights for which he bid may be withheld.
Furthermore, even if a nominator has 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
lease usually bid for the mineral rights to those tracts. Thus, even

                                 p. 2198
.   _ .

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

          if a    nominator has not yet bid eon the tract which he nominated, he
          will   likely do so in the future. Therefore, because the likelihood
          that   he will bid is substantial and because by the time he does bid it
          will   be too late to preserve his identity, the identity of a nominator
          must   be protected even before he bids.

               The question of the availability of the identities of 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 secret as well.

               The information which we have obtained about the practice in the
          industry indicates that knowledge of the fact that a private party, 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 the value of the mineral rights to that tract. To be more
          specific, such information would suggest that those mineral 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
          identities of private parties who nominate tracts may be withheld, but
          that the fact that the School Land Board or General Land Office
          nominated a tract must be released, the result would be as follows. A
          requestor who 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 individual or company nominated it. While we understand that
          the value of tracts of state-owned land is already generally known
          throughout the industry, the fact remains that it is not inconceivable
          that someone could acquire information about a particular tract which
          is unknown to others, information which 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
          information would have afforded him 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
          worthless might enter the field and bid for the mineral 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 already bid on the tract might adjust their bids. In short,
          public disclosure of the fact that the state did not nominate a
          particular tract of land for lease may afford a competitive advantage
          to "competitors or bidders" by placing at a competitive disadvantage
          the party which did nominate that tract.

               We therefore conclude that the identity of anyone who nominates a
          tract of land to be leased for mineral rights at lease sales conducted

                                            p. 2199
                                                                        . .   .

Mr. Bob Armstrong - Page 4    (m-591)

by the School Land Board may be withheld from public disclosure until
the deadline for bidding on that tract has passed. Once the deadline
has passed, this information must be released.

                              SUMMARY

             Section 3(a)(4) of the Open Records Act excepts
          from required public disclosure the identity of
          anyone who nominates tracts of state-owned land to
          be included on the list of tracts, the mineral
          rights to which are leased by the School Land
          Board at lease sales conducted under chapter 52 of
          the Natural Resources Code.

                                        -MARK      WHITE
                                         Attorney General of Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

RICHARD E. GRAY III
Executive Assistant Attorney General

Prepared by Jon Bible
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Jim Moellinger
Bruce Youngblood

                                   p. 2200