Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
This matter comes to the Attorney General on appeal from the Revenue Cabinet's denial of Mark F. Sommer's open records request for:
Any list or compilation or other document or writing providing identifying information (such as names, addresses, etc.) of the recipients of all Kentucky pollution control tax exemption certificates issued to date.
Susan F. Stivers, Division of Legal Services, Revenue Cabinet, responded to Mr. Sommer's request, stating:
Pursuant to KRS 61.878 and under the authority of the official custodian, the Revenue Cabinet hereby denies your request for the requested documents. The denial of your request is based upon an exception to the open records law, KRS 61.878(1)(c)1. and 2. and (1), which excludes from the law's coverage the following:
(c)1. Upon and after July 15, 1992, records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which if openly disclosed would permit an unfair commercial advantage to competitors of the entity that disclosed the records;
2. Upon and after July 15, 1992, records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which are compiled or maintained:
a. Public records or information the disclosure of which is prohibited or restricted or otherwise made confidential by enactment of the General Assembly.
Subsection (1) incorporates the confidentiality provisions of KRS 131.190 and KRS 131.081(15). KRS 131.190 provides in relevant part:
Furthermore, the Kentucky Taxpayers' Bill of Rights emphatically states:
KRS 131.081(15).
Documents, if any, that would meet the description of your request would constitute matter or information acquired in administering the tax laws, or confidential or proprietary information, disclosure of which is prohibited by the statutory provisions cited and quoted above.
In his letter of appeal, Mr. Sommer stated: "For sake of clarity and to narrow what is being sought here, only a list or compilation of the names and addresses of those taxpayers which have been issued a pollution control facility certificate, and a copy of the certificate so issued is sought."
After receipt of the letter of appeal, we sent a "Notification to Agency of Receipt of Open Records Appeal" to the Cabinet, along with a copy of Mr. Sommer's letter. As authorized by KRS 61.880(2) and 40 KAR 1:030, Section 2, Ms. Stivers provided this office with a response to the issues raised in the appeal.
In her response, Ms. Stivers, in part, advised that the Cabinet does not maintain a list of names and addresses of taxpayers who have been issued pollution control tax exemption certificates. She further states that Mr. Sommer, in his letter of appeal, requests a copy of the tax exempt certificates, which was not part of his original request. She indicates that there are over 2200 files containing applications which would have to be retrieved from storage and reviewed to determine if a pollution control tax exemption certificate was issued. She argues that it would be unduly burdensome and would impose an unreasonable burden upon the Cabinet to search 2200 files to produce and redact the taxpayers' confidential and proprietary information contained on the certificates. Finally, Ms. Stivers amplified the Cabinet's original response, stating:
Enclosed please find a blank copy of the Pollution Control Tax Exemption Certificate. The form contains taxpayer information, which is confidential pursuant to KRS 61.878(1) (1), KRS 131.190 and 131.081(15). The information contained on this form is also confidential or proprietary pursuant to KRS 61.878(1)(c)1 and 2. See Hoy v. Kentucky Indus. Revitalization Auth., Ky., 907 S.W.2d 766 (1995).
The Cabinet's position concerning names and addresses of taxpayers who have been issued tax exemption certificates is that providing such information to a third party would be divulging information acquired by the Cabinet of the affairs of that particular taxpayer. The Cabinet does not confirm or deny that any taxpayer has even applied for an exemption, since to do so would effectively be divulging information of the affairs of that taxpayer. KRS 131.190 and 131.081(15).
We are asked to determine whether the Cabinet's denial of the requested information was consistent with the Open Records Act. For the reasons that follow, we conclude that the Cabinet properly denied access to the requested records under authority of KRS 61.878(1)(1) and KRS 131.190. We find that KRS 131.190 operates as an absolute prohibition on disclosure of the records requested, and therefore do not address the applicability of the other exceptions cited to the records withheld.
KRS 61.878(1)(1) authorizes public agencies to withhold" public records or information the disclosure of which is prohibited or restricted or otherwise made confidential by enactment of the General Assembly." This provision operates in tandem with KRS 131.190(1) to preclude a present or former secretary or employee of the Revenue Cabinet, or employee in the Finance and Administration Cabinet's Office of Financial Management and Economic Analysis, member of a county board of assessment appeals, property valuation administrator or employee thereof, or any other person, from divulging:
any information regarding the tax schedules, returns or reports required to be filed with the cabinet or other proper officer, or any information produced by a hearing or investigation, insofar as the information may have to do with the affairs of the person's business.
With the exception of providing information to the Internal Revenue Service, any person violating KRS 131.190 by divulging information contained in tax records or reports may be fined a maximum of $ 500 and imprisoned for a maximum of six months.
Although KRS 131.190(1) has been the subject of a number of past open records opinions, this Office has not had occasion to address the specific question raised in this appeal. We have, however, "consistently recognized that much but not all of the material generated in the administration of tax statutes and ordinances is privileged and not subject to public inspection. " OAG 86-11, at p. 3.
In OAG 86-11, we held that records pertaining to the affairs of the business of a particular coal company, such as the amount of taxes paid or the amount of coal extracted, can only be released to the company or its properly authorized agent.
In 93-ORD-130, we held that the Revenue Cabinet properly denied an attorney's request for Cabinet records, including production data, relating to certain gas wells located on or near his client's property, under authority of KRS 131.190(1).
In OAG 83-78, this office upheld the Revenue Cabinet's denial of a request for the adjusted cost reports filed by the group self-insureds operating in the state, affirming the Cabinet's argument that KRS 131.190(1) makes tax records and reports to the Cabinet concerning taxes confidential. In that opinion, we noted:
That specific statute dealing with the subject [of the confidentiality of tax records and reports] prevails over any provision of the Kentucky Open Records Law? The Department of Revenue [now Revenue Cabinet] is not only allowed a policy of keeping such records confidential but is mandated by a statute with penal provisions to keep such records confidential. [Citations omitted.]
OAG 83-78, p. 2.
On the other hand, this Office has recognized that the identity and business addresses of persons or companies obligated to pay occupational license taxes and whether those taxes are being paid is a legitimate public concern, and such information cannot be withheld under KRS 131.190(1), as such information does not reveal the affairs of the business within the contemplation of that statute. OAG 85-1; OAG 82-2.
We believe that the instant appeal is more closely analogous to the first line of decisions. As noted above, it is the Cabinet's position that the pollution control tax exemption certificates which Mr. Sommer seeks are excluded from public inspection by KRS 131.190(1). We have reviewed the blank pollution control tax exemption certificate provided by the Cabinet. A certificate requires the disclosure of information such as the estimated or actual capitalized cost of construction of the facility as determined by the IRS (per application) and the estimated market value of the facility for which application is made (per application). This is clearly information having to do with the affairs of the taxpayer's business, and to which the confidentiality requirements of KRS 131.190(1) would apply.
Moreover, the Cabinet takes the position that disclosing the names and addresses of taxpayers who have been issued the tax exemption certificates to third parties would also be divulging information of the affairs of those taxpayers. The Cabinet explained that, as a matter of practice, it neither confirms nor denies whether a taxpayer has even applied for a pollution control tax exemption, because to do so would effectively be divulging information of the taxpayer's business affairs.
In 98-ORD-78, we stated that, as a rule of general application, this office will defer to the public agency in its interpretation of confidentiality provisions which are binding upon it. In that opinion, we deferred to the Revenue Cabinet in its interpretation of KRS 131.190(1) and affirmed its denial of a request to inspect maps, filed with tax returns, which contained information such as names of owners, boundaries, locations of seams, and amounts of coal severed and remaining on the property as a reserve. See, also e.g., 94-ORD-76 (deferring to Cabinet for Human Resources in its interpretation of KRS 620.050(4); 97-ORD-33 (deferring to Corrections Cabinet in its interpretation of KRS 197.025).
In the instant appeal, it is the Revenue Cabinet's interpretation that to disclose names and addresses of taxpayers who have applied for or have received the tax exemption certificates to third parties would be divulging information of the business affairs of those taxpayers in violation of the confidentiality provisions of KRS 131.190(1). Thus, in the absence of any legal authority which is contrary to this position, we affirm the Cabinet's denial of Mr. Sommer's request.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.