Existing law, the California Public Records Act, requires public records to be open to inspection at all times during the office hours of the state or local agency that retains those records, and provides that every person has a right to inspect any public record, except as provided. The act requires state and local agencies to make public records available upon receipt of a request for a copy that reasonably describes an identifiable record not otherwise exempt from disclosure, and upon payment of fees to cover costs.

This bill would provide that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the act. The bill would provide that any provision in a written agreement that purports to exclude a contract specified above from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. By placing additional duties and responsibilities upon local agencies in connection with requests for inspection of records, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the California Public Records Act, requires public records to be open to inspection at all times during the office hours of the state or local agency that retains those records, and provides that every person has a right to inspect any public record, except as provided. The act requires state and local agencies to make public records available upon receipt of a request for a copy that reasonably describes an identifiable record not otherwise exempt from disclosure, and upon payment of fees to cover costs.

This bill would provide that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the act. The bill would provide that any provision in a written agreement that purports to exclude a contract specified above from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. By placing additional duties and responsibilities upon local agencies in connection with requests for inspection of records, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the California Public Records Act, requires public records to be open to inspection at all times during the office hours of the state or local agency that retains those records, and provides that every person has a right to inspect any public record, except as provided. The California Public Records Act act requires state and local agencies to make public records available upon receipt of a request for a copy that reasonably describes an identifiable record not otherwise exempt from disclosure, and upon payment of fees to cover costs. Existing law recodifies and reorganizes provisions of the act, commencing on January 1, 2023.

This bill would provide that unless exempt from disclosure by express provisions of law, it is presumed that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the act. The bill would provide that any provision in a written agreement that purports to exclude a contract specified above from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. By placing additional duties and responsibilities upon local agencies in connection with requests for inspection of records, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

Existing law, the California Public Records Act, requires public records to be open to inspection at all times during the office hours of the state or local agency that retains those records, and provides that every person has a right to inspect any public record, except as provided. The California Public Records Act requires state and local agencies to make public records available upon receipt of a request for a copy that reasonably describes an identifiable record not otherwise exempt from disclosure, and upon payment of fees to cover costs. Existing law recodifies and reorganizes provisions of the act, commencing on January 1, 2023.

This bill would provide that unless exempt from disclosure by express provisions of law, it is presumed that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the act. The bill would provide that any provision in a written agreement that purports to exclude a contract specified above from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. By placing additional duties and responsibilities upon local agencies in connection with requests for inspection of records, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: June 21, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 790

Author:(Padilla) – As Amended Ver:March 22, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill specifies that a government contract for goods or services is a public record subject to disclosure under the Public Records Act (PRA) unless the contract is exempt from disclosure under state or federal law. Under the bill, a provision in a written agreement that states that a government contract is exempt from public disclosure is void and unenforceable.

FISCAL EFFECT:

Minor, potentially absorbable costs to state and local governmental entities. Final government contracts are generally considered disclosable public records under current law, unless a statutory exemption applies to an individual contract. To the extent government entities no longer need to negotiate contract terms mandating confidentiality, the bill may result in some cost savings to those entities. Local costs resulting from this bill may be reimbursable from the General Fund if the Commission on State Mandates determines that the bill imposes a reimbursable state mandate.

COMMENTS:

1. Author’s Statement. According to the author:

This bill would clarify current legislative intent of the law under Government Code Section 7921.005, and expressly identify a contract for the purchase of goods or services, including the price and terms of payment, as a public record subject to disclosure under the California Public Records Act (CPRA). The proposed amendment would expressly identify a public agency contract for purchase of goods or services, including the price and terms of payment as a public record subject to disclosure. This would be declaratory of existing law. The proposed amendment would clarify that a written agreement to keep a public agency contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA. This bill would preserve existing exemptions from the CPRA.

1. Background. The PRA requires a government entity to provide access to a public record to a member of the public unless the record is exempt from disclosure under state or federal law, or if the public interest in withholding the record from public release clearly outweighs the public interest in disclosure of the record. Currently, final government contracts are subject to disclosure under the PRA and existing case law, unless they are exempt from public release under a specific state or federal law. Trade secret information is generally exempt from disclosure under the PRA. Government Code section 7921.005 provides that a state or local agency may not allow another party to control the disclosure of information that is otherwise subject to disclosure under the PRA.

This bill seeks to clarify whether a government contract is disclosable under the PRA if the terms of the contract say the contract must remain confidential. The bill adds to state law an express statement that a government contract for goods or services is subject to disclosure under the PRA unless a statutory exemption applies to the contract. The bill also prohibits enforcement of any contract clause that prohibits public release of the contract.

Analysis Prepared by: Annika Carlson / APPR. / (916) 319-2081

Date of Hearing: June 6, 2023

ASSEMBLY COMMITTEE ON JUDICIARY

Brian Maienschein, Chair

SBPCA Bill Id:SB 790

Author:(Padilla) – As Amended Ver:March 22, 2023

PROPOSED CONSENT

SENATE VOTE: 37-0

SUBJECT: PUBLIC RECORDS: CONTRACTS FOR GOODS AND SERVICES

KEY ISSUE: should an executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, be a public record; and should any written agreement that purports to make such a contract confidential be void and unenforceable as a matter of law, except as specified?

SYNOPSIS

The California Public Records Act (CPRA) makes all documents and “writings” of a public agency open to public inspection upon request, unless the records are otherwise exempt from public disclosure. The CPRA also gives the public the right to obtain a copy of any public record. The only exception is when the document, or a portion thereof, is exempt from public disclosure as a matter of law—under the CPRA itself, or pursuant to another law that is incorporated by reference into the CPRA—or because based on the facts of the particular case, the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record. (See Sections 7922.000 7922.525, 7922.530.) Generally, final contracts with public agencies are disclosable public records due to the public’s right to determine whether public resources are being spent to benefit the community as a whole. The California Supreme Court has held that public disclosure of competitive proposals or bids as part of a process of qualifying and negotiating for a public contract generally is not required until final approval and award of the contract.

According to the author, it is common for public agencies to receive contract documents from vendors that include standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. Often, these provisions must be negotiated out of the contract before execution. Given that a public agency’s expenditure of public funds is indisputably “information concerning the conduct of the people’s business” the disclosure of which is a core principle of the CPRA, it seems unconscionable that public agencies are forced to negotiate over this issue—to essentially purchase the public’s right to access public records that is mandated under state law (absent a law that prohibits disclosure of the record or information therein). Furthermore, as the author points out, allowing a private entity to change the nature of a record from public to confidential by means of a contract would seem to violate Section 7921.005, which prohibits a public agency from allowing “another party to control the disclosure of information that is otherwise subject to disclosure pursuant to [the CPRA].”

This bill clarifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record and makes any written agreement that purports to make such a contract confidential void and unenforceable as a matter of law, except as specified. Finally, the bill would preserve protections for confidential information that is protected from public disclosure under existing law (such as trade secrets). The bill does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law. Therefore, the bill neither expands existing law, nor takes away existing confidentiality protections. The bill is sponsored by the San Diego Metropolitan Transit System and supported by a number of open government advocacy organizations. It has no opposition on file.

SUMMARY: Clarifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record and makes any written agreement that purports to make such a contract confidential void and unenforceable as a matter of law, except as specified. Specifically, this bill:

1. Specifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record.
2. Makes any provision in a written agreement that purports to exclude a contract specified in 1) from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law.
3. Clarifies that the bill does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law.

EXISTING LAW:

1. Provides that the people have the right of access to information concerning the conduct of the people’s business and, therefore, the writings of public officials and agencies shall be open to public scrutiny. Specifies that any law or rule that limits the public right of access shall be adopted with findings demonstrating the interest protected by the limitation. (California Constitution, art. I, Section 3.)
2. Provides that, in enacting the California Public Records Act (CPRA), the Legislature, mindful of the right of individuals to privacy, finds and declares that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Government Code Section 7921.000. All further statutory references are to this code, unless otherwise indicated.)
3. Defines “public records” to include any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics and those in the custody of, or maintained by, the Governor’s office means any writing prepared on or after January 6, 1975. (Section 7920.530.)
4. Provides that public records are open to inspection at all times during the office hours of a state or local agency and every person has a right to inspect any public record, exempted as otherwise provided; and that any reasonably segregable portion of a record shall be available for inspection by any person requesting the record after deletion of the portions that are exempted by law. (Section 7922.525.)
5. Requires a public agency to determine whether it has disclosable public records in its possession within ten days or, in specified “unusual circumstances,” within 14 days of the ten-day period, of its receipt of a request for public records and to promptly notify the person making the request of the determination and the reasons therefor. (Section 7922.535 (a).)
6. Requires a public agency to justify withholding any record by demonstrating that the record in question is exempt under express provisions of this division, or that on the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record. (Section 7922.000.)
7. Authorizes any person to institute proceedings for injunctive or declarative relief or writ of mandate in any court of competent jurisdiction to enforce their right to inspect or to receive a copy of any public record or class of public records under the CPRA; and requires the times for responsive pleadings and for hearings in these proceedings shall be set by the judge of the court with the object of securing a decision as to these matters at the earliest possible time. (Sections 7923.000, 7923.005.)
8. Provides that whenever it is made to appear by verified petition to the superior court of the county where the records or some part thereof are situated that certain public records are being improperly withheld from a member of the public, the court shall order the officer or person charged with withholding the records to disclose the public record or show cause why they should not do so. The court shall decide the case after examining the record in camera, papers filed by the parties and any oral argument and additional evidence as the court may allow. (Sections 7923.100 7923.105.)
9. Requires the court to award court costs and reasonable attorney’s fees to the requester should the requester prevail in litigation filed pursuant to the CPRA; and requires the costs and fees to be paid by the public agency, while only requiring the requester to pay the agency’s costs and attorney fees if the court finds that the requester’s case is clearly frivolous. (Section 7923.115.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: The California Public Records Act (CPRA) makes all documents and “writings” of a public agency open to public inspection upon request, unless the records are otherwise exempt from public disclosure. The CPRA also gives the public the right to obtain a copy of any public record. The only exception is when the document, or a portion thereof, is exempt from public disclosure as a matter of law—under the CPRA itself, or pursuant to another law that is incorporated by reference into the CPRA—or because based on the facts of the particular case, the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record. (See Sections 7922.000 7922.525, 7922.530.).

This bill clarifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record and makes any written agreement that purports to make such a contract confidential void and unenforceable as a matter of law, except as specified. According to the author:

This bill . . . would expressly identify a public agency contract for purchase of goods or services, including the price and terms of payment as a public record subject to disclosure. This would be declaratory of existing law. This proposal would clarify that a written agreement to keep a public agency contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA. The bill would preserve existing exemptions from the CPRA.

Background – The California Public Records Act. Access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Section 7921.000.) In 2004, the right of public access was enshrined in the California Constitution with the passage of Proposition 59 (Nov. 3, 2004, statewide general election), placed on the ballot by a unanimous vote of both houses of the Legislature. (SCA 1 (Burton, Ch. 1, Stats. 2004), which amended the California Constitution to specifically protect the right of the public to access and obtain government records: “The people have the right of access to information concerning the conduct of the people’s business, and therefore . . . the writings of public officials and agencies shall be open to public scrutiny.” (Cal. Const., art. I, sec. 3 (b)(1).) In 2014, voters approved Proposition 42 (Jun. 3, 2014, statewide direct primary election), placed on the ballot by a unanimous vote of both houses of the Legislature, (SCA 3 (Leno, Ch. 123, Stats. 2013), to further increase public access to government records by requiring local agencies to comply with the CPRA and the Ralph M. Brown Act, and with any subsequent statutory enactment amending either act, as provided. (Cal. Const., art. I, sec. 3 (b)(7).)

Under the CPRA, public records are open to inspection at all times during the office hours of a public agency for inspection by the public, unless exempted. (Section 7922.525.) A public record is defined as any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any public agency regardless of physical form or characteristics. (Section 7920.530.) The CPRA allows a public agency 10 days or, in specified “unusual circumstances,” within 14 days of the 10-day period to respond to a request for the requested public record, and authorizes the agency to charge a fee for its “direct costs of duplication” of the record. (Sections 7922.530 (a), 7922.535.) The CPRA prohibits a state or local agency from allowing another party to control disclosure of information that is otherwise subject to disclosure under the CPRA. (Section 7921.005.)

Generally, final contracts with public agencies are disclosable public records due to the public’s right to determine whether public resources are being spent to benefit the community as a whole. (Cal. State University, Fresno Assn., Inc. v. Superior Court (2001) 90 Cal.App.4^th 810.) The California Supreme Court has held that public disclosure of competitive proposals or bids as part of a process of qualifying and negotiating for a public contract generally is not required until final approval and award of the contract. (Michaelis, Montanari, & Johnson v. Superior Court (2006) 38 Cal.4^th 1065.) Existing law also provides that financial statements and questionnaires submitted by prospective bidders to local and state agencies are not public records and not subject to public disclosure. (See Pub. Contract Code Sections 10165, 10506.6, 10763, 20101, 20111.5, 20209.7, 20209.26, & 20651.5.) Additionally, under the CPRA, there are a number of “exceptions to the general policy of disclosure” for several categories of disclosure-exempt material. (CBS, Inc. v. Block (1986) 42 Cal.3d 646, at 652.) These exemptions are permissive, not mandatory and provide the public agency with discretionary authority to override any statutory exceptions when public interest favors disclosure. (Ibid.) One of these exemptions is that the CPRA does not require the disclosure of records that are exempt or prohibited from disclosure under existing state or federal law including under the Evidence Code. (Section 7927.705.) This section essentially imports the confidentiality of trade secrets protected under Section 1060 of the Evidence Code into the CPRA.

Alleged Lack of Clarity of Existing Law and the Bill’s Proposed Solution. While all records in the possession of a public agency, including records of the agency’s contracts with other entities, are by definition public records (see Section 7920.530), there is no express provision in the CPRA that unequivocally states that purchase contracts are public records. Instead, the argument that the contracts are public and the confidentiality provisions within them are unenforceable relies upon the general legislative intent of the law; the fact that the CPRA presumes all records to be public and contains exemptions for a very narrow category of contracts and confidential information within public records, as well as Section 7921.005’s prohibition against allowing another party to control disclosure of information. Public agency and court resources should not be wasted to litigate these issues when the law could be clarified.

According to the author, it is common for public agencies to receive contract documents from vendors that include standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. Often, these provisions must be negotiated out of the contract before execution. Section 7921.000 provides that, “In enacting this chapter, the Legislature, mindful of the right of individuals to privacy, finds and declares that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state.” Given that a public agency’s expenditure of public funds is indisputably “information concerning the conduct of the people’s business” the disclosure of which is a core principle of the CPRA, it seems unconscionable that public agencies are forced to negotiate over this issue—to essentially purchase the public’s right to access public records that is mandated under state law (absent a law that prohibits disclosure of the record or information therein). As Oakland Privacy points out in its letter of support for the bill, “When non-disclosure agreements are attached to public transactions, in general they represent the prioritization of the interests of a private business over the right of the public to understand the disposition of public monies and assets. . . . .[S]uch agreements should be void and unenforceable under law.” Furthermore, as the author points out, allowing a private entity to change the nature of a record from public to confidential by means of a contract would seem to violate Section 7921.005, which prohibits a public agency from allowing “another party to control the disclosure of information that is otherwise subject to disclosure pursuant to [the CPRA].”

This bill would clarify the law and expressly identify a public agency’s contract for the purchase of goods or services, including the price and terms of payment, as a public record that is subject to disclosure under the CPRA, which essentially restates existing law. The bill would declare that a written agreement to keep a contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA. Finally, the bill would preserve protections for confidential information that is protected from public disclosure under existing law (such as trade secrets). The bill does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law. Therefore, the bill neither expands existing law, nor takes away existing confidentiality protections.

ARGUMENTS IN SUPPORT: The sponsor observes that the bill will be a helpful clarification of existing law:

Many contracts from vendors including standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This often must be negotiated out of the contract before execution.

. . .

SB 790 would expressly identify a public agency contract for purchase of goods or services, including the price and terms of payment as a public record subject to disclosure. This would be declaratory of existing law. SB 790 would clarify that a written agreement to keep a public agency contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA.

California News Publishers point out that the bill will increase accountability of public agencies and improve public access to important government records:

State and local agency would be held accountable if they do not follow proper protocol for entering into contracts for the purchase of goods or services. It will also ensure that the state or local agency does not abuse their power and have the interest of the people as a priority.

. . .

By making these contracts executed by the state or local agency subject to disclosure unless exempted, it would allow the public to monitor the government’s transactions. This would provide the people a way to review contracts for any abuse, fraud, or incompetence. It would further allow the people to see if their tax dollars are being used properly.

REGISTERED SUPPORT / OPPOSITION:

Support

San Diego Metropolitan Transit System (sponsor)

California News Publishers Association

Oakland Privacy

UCAN - Utility Consumers' Action Network

Opposition

None on file

Analysis Prepared by: Alison Merrilees / JUD. / (916) 319-2334

 CONSENT  

Bill No: SB 790

Author: Padilla (D)

Amended: 3/22/23

Vote: 21

SENATE JUDICIARY COMMITTEE: 10-0, 4/11/23

AYES: Umberg, Wilk, Allen, Ashby, Durazo, Laird, McGuire, Min, Niello, Wiener

NO VOTE RECORDED: Stern

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Public records: contracts for goods and services

SOURCE: San Diego Metropolitan Transit System

DIGEST:

This bill specifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the California Public Records Acts (CPRA), and that any written agreement that purports to exclude such a contract from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. This bill provides that is does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law.

ANALYSIS:

Existing law:

1. Provides, pursuant to the California Constitution, that the people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies are required to be open to public scrutiny. (Cal. const. art. I, § 3(b)(1).)
   1. Requires a statute to be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access. (Cal. const. art. I, § 3(b)(1).)
   2. Requires a statute that limits the public’s right of access to be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. (Cal. const. art. I, § 3(b)(1).)
2. Governs the disclosure of information collected and maintained by public agencies pursuant to the CPRA. (Gov. Code §§ 7920.000 et seq.)
   1. States that, the Legislature, mindful of the individual right to privacy, finds and declares that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Gov. Code § 7921.000.)
   2. Defines “public records” as any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics. (Gov. Code § 7920.530.)
3. Provides that all public records are accessible to the public upon request, unless the record requested is exempt from public disclosure. (Gov. Code § 7922.530.)
   1. Some records are prohibited from being disclosed and other records are permissively exempted from being disclosed. (See e.g. Gov. Code §§ 7923.600 et. seq.)
   2. Requires a public agency withholding any public record to demonstrate that the record in question is exempt under express provisions of the CPRA or that the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record. (Gov. Code § 7922.000.)
4. Prohibits a state or local agency from allowing another party to control disclosure of information that is otherwise subject to disclosure under the CPRA. (Gov. Code § 7921.005.)

This bill:

1. Specifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the CPRA.
2. Provides that any written agreement that purports to exclude such a contract from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law.
3. Provides that it does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law.

Comments

Access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Gov. Cod § 7921.000.) In 2004, the right of public access was enshrined in the California Constitution with the passage of Proposition 59 (Nov. 3, 2004, statewide general election),^[1] which amended the California Constitution to specifically protect the right of the public to access and obtain government records: “The people have the right of access to information concerning the conduct of the people’s business, and therefore . . . the writings of public officials and agencies shall be open to public scrutiny.” (Cal. Const., art. I, sec. 3 (b)(1).) In 2014, voters approved Proposition 42 (Jun. 3, 2014, statewide direct primary election)^[2] to further increase public access to government records by requiring local agencies to comply with the CPRA and the Ralph M. Brown Act^[3], and with any subsequent statutory enactment amending either act, as provided. (Cal. Const., art. I, sec. 3 (b)(7).) Under the CPRA, public records are open to inspection at all times during the office hours of a public agency for inspection by the public, unless exempted. (Gov. Cod § 7922.525.) A public record is defined as any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any public agency regardless of physical form or characteristics. (Gov. Code § 7920.530.) The CPRA allows a public agency 10 days or, in specified “unusual circumstances,” within 14 days of the 10-day period to disclose the requested public record, and authorizes the agency to charge a fee for its “direct costs of duplication” to the record. (Gov. Code §7922.530(a) & 7922.535.) The CPRA prohibits a state or local agency from allowing another party to control disclosure of information that is otherwise subject to disclosure under the CPRA. (Gov. Code § 7921.005.)

Generally, final contracts with public agencies are disclosable public records due to the public’s right to determine whether public resources are being spent to benefit the community as a whole. (Cal. State University, Fresno Assn., Inc. v. Superior Court (2001) 90 Cal.App.4^th 810.) The court has held that public disclosure of competitive proposals or bids as part of a process of qualifying and negotiating for a public contract generally does not have to be disclosed until final approval and award of the contract. (Michaelis, Montanari, & Johnson v. Superior Court (2006) 38 Cal.4^th 1065.) Existing law provides that financial statements and questionnaires submitted by prospective bidders to local and state agencies are not public records and not subject to public disclosure. (see Pub. Contract Code §§ 10165, 10506.6, 10763, 20101, 20111.5, 20209.7, 20209.26, & 20651.5.) Additionally, under the CPRA there are “exceptions to the general policy of disclosure” as set forth under the former Section 6254 provisions^[4], which lists several categories of disclosure-exempt material. (CBS, Inc. v. Block (1986) 42 Cal.3d 646, at 652.) These exemptions are permissive, not mandatory and provide the public agency with discretionary authority to override these statutory exceptions when a dominating public interest favors disclosure. (Ibid.) One of these exemptions is that the CPRA does not require the disclosure of records that are exempt or prohibited from disclosure under existing state or federal law including under the Evidence Code. This section essentially imports the confidentiality of trade secrets protected under Section 1060 of the Evidence Code into the CPRA.

According to the author and sponsor, it is common for public agencies to receive contract documents from vendors that include standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This provision must often be negotiated out of the contract before execution in order to ensure that a public agency can meet its obligations under the CPRA. The author and sponsor note that as there is no express provision in the CPRA that unequivocally states that purchase contracts are public records legal arguments against including these confidentiality provisions in a contract relies upon the general legislative intent of the CPRA, existing case law, the fact that the CPRA contains exemptions for a very narrow category of contracts, and the prohibition against allowing another party to control disclosure of information. This bill seeks to make it explicitly clear that purchase contracts are public records under the CPRA. This bill specifically provides that its provisions do not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law to ensure that information currently protected from disclosure under the CPRA remains protected.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 4/24/23)

San Diego Metropolitan Transit System (source)

California News Publishers Association

Oakland Privacy

Utility Consumers' Action Network

OPPOSITION: (Verified 4/24/23)

None received

ARGUMENTS IN SUPPORT: The author writes:

This bill would clarify current legislative intent of the law under Government Code Sec tion 7921.005, and expressly identify a contract for the purchase of goods or services, including the price and terms of payment, as a public record subject to disclosure under the California Public Records Act (CPRA). The proposed amendment would expressly identify a public agency contract for purchase of goods or services, including the price and terms of payment as a public record subject to disclosure. This would be declaratory of existing law. The proposed amendment would clarify that a written agreement to keep a public agency contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA. This bill would preserve existing exemptions from the CPRA.

The San Diego Metropolitan Transit System, sponsor of this bill, writes in support stating:

Many contracts from vendors including standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This often must be negotiated out of the contract before execution. How a public agency spends public funds is a core principle of the CPRA. However, there is no express portion of the CPRA that unequivocally states that purchase contracts are public records. Instead, the legal argument against these confidentiality provisions relies upon the general legislative intent of the law, the fact that the CPRA contains exemptions for a very narrow category of contracts, and the prohibition against allowing another party to control disclosure of information in Section 7921.005.

The California News Publishers Association writes in support stating:

By making these contracts executed by the state or local agency subject to disclosures unless exempted, it would hold the state and local agency accountable. State and local agency would be held accountable if they do not follow proper protocol for entering into contracts for the purchase of goods or services. It will also ensure that the state or local agency does not abuse their power and have the interest of the people as a priority.

By making these contracts executed by the state or local agency subject to disclosure unless exempted, it would allow the public to monitor the government’s transactions. This would provide the people a way to review contracts for any abuse, fraud, or incompetence. It would further allow the people to see if their tax dollars are being used properly.

Prepared by: Amanda Mattson / JUD. / (916) 651-4113

4/26/23 15:12:03

**** END ****

1. Prop. 59 was placed on the ballot by a unanimous vote of both houses of the Legislature. (SCA 1 (Burton, Ch. 1, Stats. 2004). ↑

2. Prop. 42 was placed on the ballot by a unanimous vote of both houses of the Legislature. (SCA 3 (Leno, Ch. 123, Stats. 2013). ↑

3. The Ralph M. Brown Act is the open meetings laws that apply to local agencies. (Gov. Code §§ 59450 et. seq.) ↑

4. The CPRA was recodified in Division 10 of Title 1 (§ 7920.000 et. seq.) of the Government Code effective January 1, 2023 and prior Section 6254 provisions were re-numbered (see Gov. Code § 7920.505). ↑

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: SB 790 (Author:Padilla)

Version: March 22, 2023

Hearing Date: April 11, 2023

Fiscal: Yes

Urgency: No

Consultant: AM

SUBJECT

Public records: contracts for goods and services

DIGEST

This bill specifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the California Public Records Acts (CPRA), and that any written agreement that purports to exclude such a contract from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law. The bill provides that is does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law.

EXECUTIVE SUMMARY

The CPRA makes all records of a public agency open to public inspection upon request unless the records are otherwise exempt or prohibited from public disclosure, and grants the public the right to obtain a copy of any public record. Generally, final contracts with public agencies are disclosable public records due to the public’s right to determine whether public resources are being spent to benefit the community as a whole. (Cal. State University, Fresno Assn., Inc. v. Superior Court (2001) 90 Cal.App.4^th 810.) According to the author and sponsor it is common for public agencies to receive contract documents from vendors that include standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This often must be negotiated out of the contract before execution in order to ensure that a public agency can meet its obligations under the CPRA. This bill specifically provides that an executed contract for goods or services entered into by a public agency is a public record and disclosable under the CPRA and that any provision in a contract otherwise is void and unenforceable. The bill is sponsored by the San Diego Metropolitan Transit System and supported by the California News Publishers Association, Oakland Privacy, and the

Utility Consumers' Action Network. There is no known opposition.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Provides, pursuant to the California Constitution, that the people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies are required to be open to public scrutiny. (Cal. const. art. I, § 3(b)(1).)
   1. Requires a statute to be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access. (Cal. const. art. I, § 3(b)(1).)
   2. Requires a statute that limits the public’s right of access to be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. (Cal. const. art. I, § 3(b)(1).)
2. Governs the disclosure of information collected and maintained by public agencies pursuant to the CPRA. (Gov. Code §§ 7920.000 et seq.)
   1. States that, the Legislature, mindful of the individual right to privacy, finds and declares that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Gov. Code § 7921.000.)
   2. Defines “public records” as any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics. (Gov. Code § 7920.530.)
3. Provides that all public records are accessible to the public upon request, unless the record requested is exempt from public disclosure. (Gov. Code § 7922.530.)
   1. Some records are prohibited from being disclosed and other records are permissively exempted from being disclosed. (See e.g. Gov. Code §§ 7923.600 et. seq.)
   2. Requires a public agency withholding any public record to demonstrate that the record in question is exempt under express provisions of the CPRA or that the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record. (Gov. Code § 7922.000.)
4. Prohibits a state or local agency from allowing another party to control disclosure of information that is otherwise subject to disclosure under the CPRA. (Gov. Code § 7921.005.)

This bill:

1. Specifies that any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, is a public record subject to disclosure under the CPRA.
2. Provides that any written agreement that purports to exclude such a contract from disclosure by agreeing to consider it a confidential or proprietary record of the vendor is void and unenforceable as a matter of law.
3. Provides that it does not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law.

COMMENTS

1. Stated need for the bill

The author writes:

This bill would clarify current legislative intent of the law under Government Code Sec tion 7921.005, and expressly identify a contract for the purchase of goods or services, including the price and terms of payment, as a public record subject to disclosure under the California Public Records Act (CPRA). The proposed amendment would expressly identify a public agency contract for purchase of goods or services, including the price and terms of payment as a public record subject to disclosure. This would be declaratory of existing law. The proposed amendment would clarify that a written agreement to keep a public agency contract for the purchase of goods and services confidential is void and unenforceable, eliminating a potential conflict between these standard vendor agreements and a public agency’s obligations under the CPRA. This bill would preserve existing exemptions from the CPRA.

1. Public right of access under the CPRA

Access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. (Gov. Cod § 7921.000.) In 2004, the right of public access was enshrined in the California Constitution with the passage of Proposition 59 (Nov. 3, 2004, statewide general election),^[1] which amended the California Constitution to specifically protect the right of the public to access and obtain government records: “The people have the right of access to information concerning the conduct of the people’s business, and therefore . . . the writings of public officials and agencies shall be open to public scrutiny.” (Cal. Const., art. I, sec. 3 (b)(1).) In 2014, voters approved Proposition 42 (Jun. 3, 2014, statewide direct primary election)^[2] to further increase public access to government records by requiring local agencies to comply with the CPRA and the Ralph M. Brown Act^[3], and with any subsequent statutory enactment amending either act, as provided. (Cal. Const., art. I, sec. 3 (b)(7).) Under the CPRA, public records are open to inspection at all times during the office hours of a public agency for inspection by the public, unless exempted. (Gov. Cod § 7922.525.) A public record is defined as any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any public agency regardless of physical form or characteristics. (Gov. Code § 7920.530.) The CPRA allows a public agency 10 days or, in specified “unusual circumstances,” within 14 days of the 10-day period to disclose the requested public record, and authorizes the agency to charge a fee for its “direct costs of duplication” to the record. (Gov. Code §7922.530(a) & 7922.535.) The CPRA prohibits a state or local agency from allowing another party to control disclosure of information that is otherwise subject to disclosure under the CPRA. (Gov. Code § 7921.005.)

Generally, final contracts with public agencies are disclosable public records due to the public’s right to determine whether public resources are being spent to benefit the community as a whole. (Cal. State University, Fresno Assn., Inc. v. Superior Court (2001) 90 Cal.App.4^th 810.) The court has held that public disclosure of competitive proposals or bids as part of a process of qualifying and negotiating for a public contract generally does not have to be disclosed until final approval and award of the contract. (Michaelis, Montanari, & Johnson v. Superior Court (2006) 38 Cal.4^th 1065.) Existing law provides that financial statements and questionnaires submitted by prospective bidders to local and state agencies are not public records and not subject to public disclosure. (see Pub. Contract Code §§ 10165, 10506.6, 10763, 20101, 20111.5, 20209.7, 20209.26, & 20651.5.) Additionally, under the CPRA there are “exceptions to the general policy of disclosure” as set forth under the former Section 6254 provisions^[4], which lists several categories of disclosure-exempt material. (CBS, Inc. v. Block (1986) 42 Cal.3d 646, at 652.) These exemptions are permissive, not mandatory and provide the public agency with discretionary authority to override these statutory exceptions when a dominating public interest favors disclosure. (Ibid.) One of these exemptions is that the CPRA does not require the disclosure of records that are exempt or prohibited from disclosure under existing state or federal law including under the Evidence Code. This section essentially imports the confidentiality of trade secrets protected under Section 1060 of the Evidence Code into the CPRA.

According to the author and sponsor, it is common for public agencies to receive contract documents from vendors that include standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This provision must often be negotiated out of the contract before execution in order to ensure that a public agency can meet its obligations under the CPRA. The author and sponsor note that as there is no express provision in the CPRA that unequivocally states that purchase contracts are public records legal arguments against including these confidentiality provisions in a contract relies upon the general legislative intent of the CPRA, existing case law, the fact that the CPRA contains exemptions for a very narrow category of contracts, and the prohibition against allowing another party to control disclosure of information. This bill seeks to make it explicitly clear that purchase contracts are public records under the CPRA. The bill specifically provides that its provisions do not require disclosure of a record that is otherwise exempt from disclosure or prohibited from disclosure pursuant to federal or state law to ensure that information currently protected from disclosure under the CPRA remains protected.

3. Statements in support

The San Diego Metropolitan Transit System, sponsor of the bill, writes in support stating:

Many contracts from vendors including standard language establishing that the contract itself, including price and terms of payment, is a confidential document that the public agency client agrees to withhold from public disclosure. This often must be negotiated out of the contract before execution. How a public agency spends public funds is a core principle of the CPRA. However, there is no express portion of the CPRA that unequivocally states that purchase contracts are public records. Instead, the legal argument against these confidentiality provisions relies upon the general legislative intent of the law, the fact that the CPRA contains exemptions for a very narrow category of contracts, and the prohibition against allowing another party to control disclosure of information in Section 7921.005.

The California News Publishers Association writes in support stating:

By making these contracts executed by the state or local agency subject to disclosures unless exempted, it would hold the state and local agency accountable. State and local agency would be held accountable if they do not follow proper protocol for entering into contracts for the purchase of goods or services. It will also ensure that the state or local agency does not abuse their power and have the interest of the people as a priority.

By making these contracts executed by the state or local agency subject to disclosure unless exempted, it would allow the public to monitor the government’s transactions. This would provide the people a way to review contracts for any abuse, fraud, or incompetence. It would further allow the people to see if their tax dollars are being used properly.

SUPPORT

San Diego Metropolitan Transit System (sponsor)
California News Publishers Association

Oakland Privacy

Utility Consumers' Action Network

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation: None known.

**************

1. Prop. 59 was placed on the ballot by a unanimous vote of both houses of the Legislature. (SCA 1 (Burton, Ch. 1, Stats. 2004). ↑

2. Prop. 42 was placed on the ballot by a unanimous vote of both houses of the Legislature. (SCA 3 (Leno, Ch. 123, Stats. 2013). ↑

3. The Ralph M. Brown Act is the open meetings laws that apply to local agencies. (Gov. Code §§ 59450 et. seq.) ↑

4. The CPRA was recodified in Division 10 of Title 1 (§ 7920.000 et. seq.) of the Government Code effective January 1, 2023 and prior Section 6254 provisions were re-numbered (see Gov. Code § 7920.505). ↑