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F I S C A L I M P A C T R E P O R T

SPONSOR Smith

DATE TYPED 01/26/05 HB

SHORT TITLE Tax & Revenue Employee Info Disclosure

SB 199

ANALYST Wilson

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

No Response From

Taxation & Revenue Department (TRD)

SUMMARY

Synopsis of Bill

Senate Bill 199 amends a section of the Motor Vehicle Code (66-2-7.1) to prohibit TRD employ-

ees or former employees from disclosing to persons other than fellow TRD employees “trade se-

crets”, “customer information”, “proprietary information” or “commercial or financial informa-

tion” acquired by TRD from contractors having electronic access to MVD records. The bill

seems to contain an exception from this prohibition if such information is “disclosed by a public

entity”. Misdemeanor criminal penalties are imposed for disclosure.

Significant Issues

TRD contracts with several entities which have access to TRD electronic information. For exam-

ple, Samba Holdings Inc. and Oso Grande Technologies Inc. pay the state for driving record in-

formation. They then resell that data to school districts, municipalities, trucking companies or

Senate Bill 199 -- Page 2

any company wanting information on employee driving records. Automobile dealers have access

to the TRD database when they register vehicles. It appears as if this bill attempts to afford those

contractors, and their customers, protection against disclosure of information submitted to TRD

during their contracts. TRD employees are already prohibited from disclosing personal informa-

tion about driver’s license or vehicle registration applicants, with certain exceptions. (66-2-

7.1A)

It is unclear as to the meaning of the exception for information disclosed by a public entity. The

exception seems to imply that if proprietary information or trade secrets, or customer information

is received from another governmental body, it may be disclosed.

The terms “trade secrets” and “proprietary information” are also not defined. Those terms are

therefore subject to interpretation by either TRD and the contractor, who may not agree.

Certain information covered by this bill may be received by TRD during the procurement and

contracting process and as the contract is implemented. For example, payment may be based

upon the number of customers serviced. This information would be made confidential under the

bill’s prohibition against disclosure of “customer information” or “financial information”. Gen-

erally proposals submitted in response to requests for proposals, executed contracts, and bills

submitted for payment by private contractors are public records subject to inspection. It is un-

clear whether this bill intends to prohibit the release of those documents, thereby creating an ex-

ception to the disclosure requirements in the Inspection of Public Records Act.

FISCAL IMPLICATIONS

The AGO believes there may be a cost in defending the actions of TRD employees who interpret

the bill to either prohibit or allow disclosure of certain information.

ADMINISTRATIVE IMPLICATIONS

TRD employees will be required to interpret the new prohibition and determine whether the in-

formation they receive is subject to disclosure. TRD might be subject to suits from either the

contractors seeking to prevent disclosure, the media or the public seeking disclosure.

DW/lg