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