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July 10 2015

Via Messenger and Via CMRRR No 70123460 0001 04140155 Office of the Attorney General Open Records Division 209 West 14th Street 6th Floor Austin Texas 78701

Re ID 570346 - SUPPLEMENT to Section 552301 Request for Decision Based on Decision in Greater Houston Partnership v Paxton

Greater Fort Bend Economic Development Council Texas Public Information Act (Act) from Yvonne Larsen (Requestor)

Dear General Paxton

Procedural Background

By electronic mail dated April 17 2015 the Greater Fort Bend Economic Development Council CFBEDC) received a request (Second Request) from Yvonne Larsen (Requestor) under the Texas Public Information Act ( Act) for various documents On April 30 2015 the FBEDC wrote your office (and copied Requestor) that it would be seeking a Section 552301 decision regarding the Request and filed its letter brief on May 7 2015

On July 2 2015 the FBEDC received a request from your office to provide an explanation regarding whether the Greater Fort Bend Economic Development Council is supported by public funds as interpreted by the supreme court in Greater Houston Partnership v Paxton No 13-0745 (Tex June 26 2015)

This letter is in response to your July 2 correspondence and supplements the FBEDCs original request for decision to bring to point out the direct applicability of Greater Houston Partnership v Paxton No 13-0745 2015 WL (Tex June 26 2015) to the matter at hand

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Attorney General Ken Paxton July 10 2015 Page 2 of 5

Summary of the Argument

Based on GHF the FBEDC is not a public entity subject to the Act Therefore it does not have to produce the documents requested

Previous Conflicting Decisions From Your Office

Over ten years ago your office correctly ruled that the FBEDC is not subject to the Act because it is not a governmental body (ORD2001-2062)

Despite that decision and that the facts underlying ORD2001-2062 had not substantially changed in March of this year your office issued ORD2015-05916 requiring the FBEDC to produce a check register In subsequent filings the FBEDC noted its exception to your decision

Now based on GHF your decision in ORD2015-05916 should be reversed and your decision on the instant matter must be that the FBEDC is not subject to the Act

The GHP Holding

The GHP holding directly impacts the matter before you

bull [A]n entity supported by government funds would not just receive government funds it would require them to operate in whole or in part [S]upported by public funds must be appropriately defined to only include those entities sustained by public funds-thereby ensuring that the statute encompasses only those private entities dependent on the public fisc to operate as a going concern Id at 14-15 (emphasis added) [W]e recognize as a general proposition that an entity that does not depend on any particular revenue source to survive-public or private-is not sustained even in part by government funds Id at 18

~ The FBEDC does not depend on public dollars to operate

bull The Act captures only those entities acting as the functional equivalent of the government Id at 17

~ The FBEDC does not act as the functional equivalent of a government

bull Because the relevant provisions of the TPIA are unambiguous we do not apply the analysis outlined in Kneeland v National Collegiate Athletic Assn 850 F2d 224 (5th Cir 1986) nor any other extratextual construct Id at 26

~ The Kneeland test used by your office in its decisions is no longer valid

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Attorney General Ken Paxton July 10 2015 Page30f5

Under the GHP Holding the FREDe is a Private Entity Not Subject to the Act

In determining that the Greater Houston Partnership was not a public entity the Texas Supreme Courts only inquiry was whether applying the TPIAs plain and unambiguous language the Partnership was supported in whole or in part by public fundsI Neither the Kneeland factors nor any other extratextual construct were (or could be) used with supported being defined as sustained [d at 14-15 26

The Court recognized that Transparency openness and accountability in the government are all of fundamental importance However these important policy objectives cannot extinguish the privacy rights properly belonging to private business entities in Texas [d at 2

Under GHP the FBEDC -- whose organization and operation parallels that of the Greater Houston Partnership - is a private entity with privacy rights Like the Partnership

Onlymiddot a minority of the FBEDCs members may be classified as non-private entities The majority - approximately 84 -- of FBEDCs members are private entities such as land development companies commercial real estate companies and developers homeowners associations engineering firms banks and other financial institutions law firms numerous national regional and local businesses hospitals and medical practitioners construction companies and more

Even without government-entity contracts the FBEDC could - and would -shycontinue its stated mission to support quality residential commercial and economic growth throughout Fort Bend County and to provide specific membership services such as hosting networking and professional development events and holding monthly membership meetings on topics relevant to the regional economy to name a few

Even without government-entity contracts the FBEDC would have a budget of over $790000 derived from annual membership fees sublease services geographic information map sales conferences and other private sector fund raising events from its 170+ private members This sum is sufficient to allow the FBEDC to successfully maintain its operations and pursue its missions Id at 15 (And even if these government contracts were eliminated [GHP] could continue to operate given the substantial revenue derived from other non-governmental sources Moreover GHP could and would continue to promote the greater Houston economy to advance its own interests and those of its more than 2000 non-government members GHP in sum does not require public funds and thus is not sustained by public funds)

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Attorney General Ken Paxton July 10 2015 Page 4 of 5

The FBEDC provides marketing consulting and event-planning services pursuant to quid pro quo contracts (as explained in the FBEDCs previous filings) Although the FBEDC may share common objectives with some of its government-entity contract clients without more such shared interests can hardly transform a service provider into a government appendage ld at 25

The FBEDC does not function as a governmental equivalent Its contracts with governmental entities do not delegate governmental decisions to the FBEDC and the majority of its Board of Directors are private entity representatives And as explained in its earlier filings the FBEDC takes positions adverse to some of its government members It clearly is not an auxiliary and mirror of any governmental entity ld at 23-24 (explaining the problems with the Kneeland test) and

Even as a private entity FBEDC contracts with governmental entities remain transparent thus serving the purpose of the Act that [t]ransparency openness and accountability in the government remain intact ld at 2 26 CYet even if not directly subject to disclosure obligations under the TPIA GHPs transactions with the government are hardly in a black box the City - which is indisputably a governmental body -must disclose information regarding its contractors including GHP)

Conclusion The FBEDC is Not a Governmental Entity and Is Not Subject to the Act

The Court realized that The proper scope of [supported by public funds] is significant because the consequences of being characterized as a governmental body are considerable Id at 8 Under the same reasoning it set aside the test historically applied by your office (and used in ORD2015-05916) saying that using it makes it impossible to conclude that any business compensated for providing goods or services to a governmental entity pursuant to a quid pro quo contract was not using public funds to pay for necessities Thus any entity doing business with the government would be a II governmental body Id at 13

Using the GHP decision as applicable law as is required the FBEDC meets all of the criteria to be deemed a private entity not subject to the Act

549087doc

Attorney General Ken Paxton July 10 2015 ~age5 of 5

Should you have any questions or need any additional information please do not hesitate to contact me Thank you

c Mr Jeff Wiley Ms Yvonne Larsen

549087doc

Attorney General Ken Paxton July 10 2015 Page30f5

Under the GHP Holding the FREDe is a Private Entity Not Subject to the Act

In determining that the Greater Houston Partnership was not a public entity the Texas Supreme Courts only inquiry was whether applying the TPIAs plain and unambiguous language the Partnership was supported in whole or in part by public fundsI Neither the Kneeland factors nor any other extratextual construct were (or could be) used with supported being defined as sustained [d at 14-15 26

The Court recognized that Transparency openness and accountability in the government are all of fundamental importance However these important policy objectives cannot extinguish the privacy rights properly belonging to private business entities in Texas [d at 2

Under GHP the FBEDC -- whose organization and operation parallels that of the Greater Houston Partnership - is a private entity with privacy rights Like the Partnership

Onlymiddot a minority of the FBEDCs members may be classified as non-private entities The majority - approximately 84 -- of FBEDCs members are private entities such as land development companies commercial real estate companies and developers homeowners associations engineering firms banks and other financial institutions law firms numerous national regional and local businesses hospitals and medical practitioners construction companies and more

Even without government-entity contracts the FBEDC could - and would -shycontinue its stated mission to support quality residential commercial and economic growth throughout Fort Bend County and to provide specific membership services such as hosting networking and professional development events and holding monthly membership meetings on topics relevant to the regional economy to name a few

Even without government-entity contracts the FBEDC would have a budget of over $790000 derived from annual membership fees sublease services geographic information map sales conferences and other private sector fund raising events from its 170+ private members This sum is sufficient to allow the FBEDC to successfully maintain its operations and pursue its missions Id at 15 (And even if these government contracts were eliminated [GHP] could continue to operate given the substantial revenue derived from other non-governmental sources Moreover GHP could and would continue to promote the greater Houston economy to advance its own interests and those of its more than 2000 non-government members GHP in sum does not require public funds and thus is not sustained by public funds)

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Attorney General Ken Paxton July 10 2015 Page 4 of 5

The FBEDC provides marketing consulting and event-planning services pursuant to quid pro quo contracts (as explained in the FBEDCs previous filings) Although the FBEDC may share common objectives with some of its government-entity contract clients without more such shared interests can hardly transform a service provider into a government appendage ld at 25

The FBEDC does not function as a governmental equivalent Its contracts with governmental entities do not delegate governmental decisions to the FBEDC and the majority of its Board of Directors are private entity representatives And as explained in its earlier filings the FBEDC takes positions adverse to some of its government members It clearly is not an auxiliary and mirror of any governmental entity ld at 23-24 (explaining the problems with the Kneeland test) and

Even as a private entity FBEDC contracts with governmental entities remain transparent thus serving the purpose of the Act that [t]ransparency openness and accountability in the government remain intact ld at 2 26 CYet even if not directly subject to disclosure obligations under the TPIA GHPs transactions with the government are hardly in a black box the City - which is indisputably a governmental body -must disclose information regarding its contractors including GHP)

Conclusion The FBEDC is Not a Governmental Entity and Is Not Subject to the Act

The Court realized that The proper scope of [supported by public funds] is significant because the consequences of being characterized as a governmental body are considerable Id at 8 Under the same reasoning it set aside the test historically applied by your office (and used in ORD2015-05916) saying that using it makes it impossible to conclude that any business compensated for providing goods or services to a governmental entity pursuant to a quid pro quo contract was not using public funds to pay for necessities Thus any entity doing business with the government would be a II governmental body Id at 13

Using the GHP decision as applicable law as is required the FBEDC meets all of the criteria to be deemed a private entity not subject to the Act

549087doc

Attorney General Ken Paxton July 10 2015 ~age5 of 5

Should you have any questions or need any additional information please do not hesitate to contact me Thank you

c Mr Jeff Wiley Ms Yvonne Larsen

549087doc

Attorney General Ken Paxton July 10 2015 Page 4 of 5

The FBEDC provides marketing consulting and event-planning services pursuant to quid pro quo contracts (as explained in the FBEDCs previous filings) Although the FBEDC may share common objectives with some of its government-entity contract clients without more such shared interests can hardly transform a service provider into a government appendage ld at 25

The FBEDC does not function as a governmental equivalent Its contracts with governmental entities do not delegate governmental decisions to the FBEDC and the majority of its Board of Directors are private entity representatives And as explained in its earlier filings the FBEDC takes positions adverse to some of its government members It clearly is not an auxiliary and mirror of any governmental entity ld at 23-24 (explaining the problems with the Kneeland test) and

Even as a private entity FBEDC contracts with governmental entities remain transparent thus serving the purpose of the Act that [t]ransparency openness and accountability in the government remain intact ld at 2 26 CYet even if not directly subject to disclosure obligations under the TPIA GHPs transactions with the government are hardly in a black box the City - which is indisputably a governmental body -must disclose information regarding its contractors including GHP)

Conclusion The FBEDC is Not a Governmental Entity and Is Not Subject to the Act

The Court realized that The proper scope of [supported by public funds] is significant because the consequences of being characterized as a governmental body are considerable Id at 8 Under the same reasoning it set aside the test historically applied by your office (and used in ORD2015-05916) saying that using it makes it impossible to conclude that any business compensated for providing goods or services to a governmental entity pursuant to a quid pro quo contract was not using public funds to pay for necessities Thus any entity doing business with the government would be a II governmental body Id at 13

Using the GHP decision as applicable law as is required the FBEDC meets all of the criteria to be deemed a private entity not subject to the Act

549087doc

Attorney General Ken Paxton July 10 2015 ~age5 of 5

Should you have any questions or need any additional information please do not hesitate to contact me Thank you

c Mr Jeff Wiley Ms Yvonne Larsen

549087doc

Attorney General Ken Paxton July 10 2015 ~age5 of 5

Should you have any questions or need any additional information please do not hesitate to contact me Thank you

c Mr Jeff Wiley Ms Yvonne Larsen

549087doc