Provides exceptions to FOIL; identify which portions of the record shall be exempt from disclosure

Justification

The Freedom of Information Law (Article Six of the Public Officers Law) includes unique and innovative provisions concerning the treatment of records required to be submitted to a state agency by a commercial enterprise pursuant to law or regulation. The provisions are intended to provide a procedural framework for consideration of the so-called "trade secret" exception to rights of access. This bill intends to streamline that procedure and reduce the burdens imposed upon state agencies while maintaining reasonable opportunity and notice procedures for those seeking to preserve a trade secret exception.

Section 87(2) (d) of the Public Officers Law permits an agency to withhold records to the extent that they "are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise which, if disclosed, would cause substantial injury to the competitive position of the subject enterprise".

Under Section 89(5) of the Public Officers Law, a commercial enterprise that is required to submit records to a state agency may, at the time of submission, identify those portions of the records that it believes would fall within the scope of the exception. If the agency accepts the firm's contention, those aspects of the records are kept confidential.

If and when a request for the records is made under FOIL, the agency is obliged to contact the firm to indicate that a request has been made and to enable the firm to explain why it continues to believe that disclosure would cause substantial injury to its competitive position. If the agency agrees with the firm's claim, the person requesting the records has the right to appeal the denial of access. If the determination to deny access is sustained, the applicant for the records may seek judicial review, in which case the agency bears the burden of proof. However, if the agency does not agree that disclosure would cause substantial injury to the firm's competitive position, the firm may appeal. If that appeal is denied, the firm has fifteen days to initiate a judicial proceeding to block disclosure. In such a case, the firm has the burden of proof.

Of late, the state agencies that typically receive the most requests by firms for confidentiality, along with the most requests for records, have suggested that the procedure might be streamlined. A staff member of one of those agencies wrote as follows:

"As it stands now, the process for determining whether or not an enterprise should be granted or continued protection under TS trade secret status is lengthy and often repetitive as outlined under 89(5). It requires a series of correspondence every time a request for disclosure of records is received which an enterprise has requested confidentiality protection as a 'trade secret'. Often, at least at the Department of Health, certain records which are maintained here and fall under the TS category, are consistently 'foiled'. For example, HMO applications. Typically, the portions of interest to requestors are the very sections that the HMO ha.s requested confidentiality. This means that we may receive a response for justification for continued exemption from an HMO one day, approve it, and then three days later get a request for the same exact information for the same HMO. By law, we must once again begin the process of requesting justification, reviewing, and notifying both the requestor and HMO of our decision. I suggest that TS protection, if granted, should be given an expiration date. For example, TS protection would be granted for one year -- if the enterprise feels that it is necessary to extend it beyond that, then they would have to 'renew' or apply for continued TS protection. This way when TS status is given, any subsequent requests within the protected time period, are advised of the protection to resubmit their request at the end of the expiration date (this may also weed out frivolous requests)."

Thus, in order to streamline the trade secret status procedure, the Public Officers Law should be amended to allow for a protection time period of one year from the date on which trade secret status was originally granted, for the purpose of protecting the confidentiality of the information in question and preventing frivolous requests.

Prior legislative history

A.8009A, 2005 and 2006 referred to government operations. Same as S.5129A, 2005 and 2006 referred to investigations and government operations.

Fiscal implications

None.

Effective date

This act shall take effect immediately.