Opinion
Opinion By: Gregory D. Stumbo, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Jefferson County Property Valuation Administrator (PVA) violated the Open Records Act in denying that portion of the November 21, 2003 open records request of Tim Holman for inspection and copying of "[a]ll records kept by your agency as required by KRS 133.120 pertaining to conference/appeals requested on property tax assessments by the following [listed] taxpayers from 1990 to the present." For the reasons that follow, we conclude that PVA's blanket denial of the request was inconsistent with the requirements of the Act, but the agency could properly withhold information from its conference records which constitute the "affairs of any person" and "affairs of a person's business," as set forth in KRS 131.190(1).
By letter dated November 26, 2003, Harold Thomas, Director of Finance, Custodian of Public Records, Jefferson County PVA, denied Mr. Holman's request for the above described records, stating in relevant part:
. . . With respect to PVA conferences envisioned by the subject statute [KRS 133.120], it is the position of this office that any records created during the process are exempt from disclosure per KRS 133.047(4) and KRS 131.190(1). The former statute makes "real estate tax returns and accompanying documents submitted by a taxpayer" confidential under the terms of the latter statute, KRS 131.190. That statute states, in pertinent part, "[n]o present or former . . . property valuation administrator or employee, or any other person, shall intentionally and without authorization inspect or divulge any information acquired by him of the affairs of any person, of information regarding 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." KRS 131.190(1). In that regard, we would note that the majority, if not all, of the identified taxpayers are individuals and their business interests, so it would appear the foregoing exception applies since any conference record "may have to do with the affairs of the person's business."
Moreover, to the extent the foregoing exception may be inapplicable; we believe such records are exempt from disclosure per KRS 61.878(1)(a), (i) and (j). In the first instance, preliminary information provided by or to a taxpayer pertaining to the contested value of his/her personal residence, other than final assessed value, clearly would be an unwarranted invasion of privacy under KRS 61.878(1)(a). Also, conference records are exempt under subsections (i) and (j) of said statute because they are either (1) preliminary drafts, notes, or correspondence with private individuals, other than correspondence which is intended to give notice of final action of the PVA's office on the assessed value, or (2) such records are merely preliminary recommendations of assessed values because the taxpayer may pursue an appeal of the PVA's final assessment to the board of assessment appeals. In any event, the KRS 133.120 conference records are exempt from disclosure.
On the other hand, the record of the appeal and any public hearing before the board of assessment appeals is clearly a public record subject to inspection. Unfortunately, this office is not the official custodians of such records as they are filed with the Jefferson County Clerk. See KRS 133.120(3). Per KRS 61.872(4), the County Clerk's address is 527 West Jefferson Street, Louisville, Kentucky 40202. You may contact that agency about your request.
As a result of the PVA's denial, Mr. Holman initiated the instant appeal, arguing that none of the exemptions cited by the PVA applied to his request.
After receipt of notification of the appeal and a copy of Mr. Holman's letter of appeal, Thomas J. Hodge, Attorney Division of Legal Services, Revenue Cabinet, provided this office with a response on behalf of the PVA to the issues raised in the appeal. In his response, Mr. Hodge advised, in relevant part:
Mr. Holman is correct that the PVA declined to provide the requested records. The PVA believes that these records are exempt from the application of the Open Records Act, KRS 61.872 to KRS 61.884 (the "Act"), for several reasons. The most important of these reasons, however, is that the records sought contain taxpayer information which the General Assembly has specifically made confidential. The PVA believes it is extremely important to protect the information given by taxpayers to the PVA and the PVA looks forward to the guidance that will be provided by the Attorney General in this matter.
?
The Attorney General has recognized that KRS 61.878(1)(l) incorporates KRS 131.190(1) into the Act. See, e.g., OAG 89-50 (also holding that "'affairs of any person' and 'affairs of a person's business,' as used in KRS 131.190(1), refers to matters associated with a person that are recognized as being private, and not subject to routine public perusal.") Thus, unless the General Assembly has given some indication that the information in question does not fit under the provisions of KRS 131.190, the information is excluded from the Act.
KRS 133.045 provides that the real property tax roll for the current year shall be open for inspection for a period of time in the month of May. During the inspection period, a taxpayer may review the roll. If a taxpayer desires to appeal the assessment shown on the roll, KRS 133.120(1) requires the taxpayer to schedule a conference with the PVA. During the conference, KRS 133.120 further requires the PVA to explain the procedures used to reach the assessment of the property in question, and the PVA must:
It is this record that Mr. Holman seeks. There can be no doubt the record falls under the dominion of KRS 131.190 as it is clear that the record contains "information acquired by [the PVA] of the affairs of any person, or 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 . . . ." KRS 131.190(1).
Even a cursory review of what is contained in the record makes it plain that the record contains information that is personal to the taxpayer. The record is required to contain the value that the taxpayer places on his property. This valuation is more than likely based on information that cannot be gained through the mere observation of the taxpayer's property. Indeed, if the taxpayer had nothing but external observation of the property on which to base her claim of value, it is difficult to see how she could have a dispute with the PVA. It is clear that when there is a dispute over the PVA's assessment, the taxpayer is probably basing that dispute upon information not generally known to the public and therefore private. The Attorney General has made just this distinction, between readily observable and non-observable information, when discussing the status of "property cards" used by PVA's. See, e.g., OAG 89-50. Moreover, 133.120(1) specifically provides that other personal information may be included within the record. Thus, there can be no doubt that this record is exempt from the Act and the PVA properly guarded the privacy interests of taxpayers by withholding the record from disclosure.
The General Assembly's intention that the conference record be kept confidential is further evidenced by other sections of KRS 133.120. Mr. Holman incorrectly argues that a taxpayer waives confidentiality when she seeks a conference with the PVA. A reading of KRS 133.120(1) reveals that if a taxpayer is unhappy with the outcome of the conference with the PVA, the taxpayer may appeal to the local board of assessment appeals (the "BAA"). KRS 133.120(3) specifically provides that the BAA will hold a public hearing. No such mandate is found with regard to the PVA conference. It is clear that the General Assembly has chosen a point in the appeals process where a taxpayer has waived her right to confidentiality and that this point is the BAA hearing rather than the PVA conference. See Palmer v. Commonwealth, Ky. App., 3 S.W.3d 763, 764 (1999) (As a general rule of statutory construction, expressio unius est exclusio alterius provides that an enumeration of a particular thing demonstrates that the omission of another thing is an intentional exclusion.").
Not only is it clear that the General Assembly intended the conference record to remain confidential, the policy behind this decision is likewise clear. The Constitution and statutes of Kentucky provide that all property is to be assessed at 100% of its fair cash value. Taxpayers are entitled to proper and accurate assessments and the PVA is charged with this responsibility. In order [to] fulfill this duty to taxpayers, the PVA needs access to as much accurate information as possible. By providing for the confidentiality of the conference record, the General Assembly has wisely allowed the PVA access to information while protecting the privacy interests of taxpayers.
Taxpayers need not fear that if they come forward to dispute their assessments, personal and private information will automatically be available to the public. The PVA, in turn, is given access to more information about the value of property in the community, as it is without question that taxpayers will be more willing to offer information if they are guaranteed that the information will retain its private nature. It is a delicate balancing act, to be sure, and the General Assembly has wisely decided to keep that protection in place at the conference level for the good of all Kentucky's taxpayers.
After receipt of the Cabinet's response, Mr. Holman provided this office with a reply to the response, arguing in part:
The PVA ignores the language of KRS 133.047(4) which makes all. "real property records" in the PVA's office, other than tax returns, subject to disclosure under the Open Records Act. The last sentence of that provision goes on to state that any person, "including the press", who seeks information related to "appeals" is not subject to fees for person[nel] time. This provision obviously assumes that information regarding appeals is subject to disclosure.
Because disclosure is "authorized" by the act, KRS 131.190 does not apply. Even if it did, the specific authorization to inspect records in KRS 133.047(4) would trump the generic prohibition in KRS 131.190. In addition, there has been no showing by the PVA that all of the requested records related to someone's business as required by 131.190.
Pursuant to KRS 61.880(2)(c) and to facilitate our review, this office asked the PVA and the Cabinet to provide us with representative copies of the records in dispute so that we could make an in camera inspection of them. Pursuant to KRS 61.880(2), we acknowledged our obligation not to disclose those records.
In addition to the above, we asked that the PVA and the Cabinet respond to the following questions:
1. Pursuant to KRS 133.120(1), the conference record must include, but is not limited to:
. . . the initial assessed value, the value claimed by the taxpayer, an explanation of any changes offered or agreed to by each party, and a brief account of the outcome of the conference.
Please explain how the cited confidentiality provisions or exemptions upon which you rely in your responses apply to each category of records identified in KRS 133.120(1) and any other records which are found in the conference file.
2. Please provide us with your interpretation of the phrases: "affairs of any person" and "affairs of a person's business," as set forth in KRS 131.190(1), any legal authority construing the phrases, and how the conference records at issue fall within these phrases.
3. Please provide us with copies of any Revenue documents, created pursuant to KRS 133.047(5), that provide "advice, guidelines, and assistance to each property valuation administrator in implementing the provisions of KRS 61.870 to 61.884," or any other documents that instruct the PVAs on the confidentiality of conference/ appeal records.
Responding to our questions on behalf of the PVA, Mr. Hodge, in answer to question number 1, stated:
As can be seen from the attachments to this letter, the items listed in KRS 133.[1]20 are not maintained as separate records, but instead are included on one or two documents per tax year per property. Thus, while the PVA will respond below concerning each individual item listed in KRS 133.[1]20, the actual record to be considered contains more than a single item.
The value claimed by the taxpayer, the explanation of any changes offered or agreed to by each party, and the brief account of the outcome of the conference (excepting the PVA's evaluation following the conference) all raise confidentiality concerns under KRS 131.190(1) . . .
The attachments to this letter reinforce [the] argument [that when there is a dispute over the PVA's assessment, the taxpayer is probably basing that dispute upon information not generally known to the public and protected under the observable/non-observable test established in OAG 89-50]. A review of those documents clearly shows that the taxpayers' valuations and explanations are based on confidential information. Likewise, the discussion of the outcome of the conference also contains such information. The attached documents list such things as the income and expenses of the properties, internal improvements or the lack of improvements made to the property, vacancy rates, and other items of information that are not by any means "readily observable." Each of these items of information also clearly fall within the confidentiality provisions of KRS 131.190(1) as the "affairs of any person" and the "affairs of the person's business." These items of information are precisely what the General Assembly sough to protect from public disclosure KRS 131.190(1) when it enacted 131.190(1) and are so inextricably intertwined with the remainder of the information found in the attached documents that disclosure of these documents under the Act is impossible without divulging information the General Assembly has declared to be confidential. Confidentiality is particularly important to the General Assembly's explicit statement in the Taxpayer Bill of Rights. See KRS 131.081(15).
It is the need to keep such information confidential that motivates the PVA in this matter and upon which the PVA most strongly relies. The PVA fully supports the goals pursued by the General Assembly when it enacted the Open Records Act, those of open government and providing information to the citizens of the Commonwealth. But the General Assembly recognized and the PVA is defending the right of those citizens to have government protect their personal and confidential information.
To allow any person who wishes to obtain private and confidential information found in the attachments and the remainder of the documents requested by Mr. Holman would cause every taxpayer in the Commonwealth to be extremely reluctant to appeal or question assessment. Taxpayers would thus be forced to choose between the disclosure of private information or the burden of a possibly incorrect assessment. Although such public disclosure may be required at some later stage of the appeal process, the General Assembly has clearly stated that public disclosure is not required at the conference with the PVA, as discussed in the PVA's initial response. Disclosure of this private information also harms the Commonwealth in that the PVA will lose access to a source of accurate information about the value of property in the community, as taxpayers become reluctant to appeal assessments for fear of disclosure.
In response to our question number 2 regarding the PVA's interpretation of the phrases: "affairs of any person" and "affairs of a person's business," as used in KRS 131.190(1), Mr. Hodge, relying upon City of St. Matthews v. Voice of St. Matthews, Inc., Ky., 519 S.W.2d 811 (1974) and 92-ORD-119, OAG 89-50, OAG 89-40, OAG 83-78, and OAG 82-435, argued:
. . . the terms in KRS 131.190 at issue mean information pertaining to a person's affairs or business that cannot be readily ascertained by routine public observation or perusal. There is no doubt, from a review of the attachments to this letter, that the information requested by Mr. Holman falls squarely within this definition. The attachments contain income and expenses of the properties, internal improvements or the lack of improvements made to the property, vacancy rates, and other items specifically mentioned by the above authority as exempt from disclosure pursuant to KRS 131.190.
In response to our question number 3, regarding documents offering advice, guidelines, or assistance to property valuation administrators in implementing the provisions of the Open Records Act, Mr. Hodge advised that the PVA and counsel for the PVA found no documents responsive to this question. He indicated that the "authorities listed and described and the statutory language itself have been considered to provide adequate guidance in this situation."
Having considered the arguments advanced by the parties to this appeal, we conclude that the PVA's blanket denial of the request was inconsistent with the requirements of the Act, but the agency could properly withhold information from its conference records which constitute the "affairs of any person" and "affairs of a person's business," as set forth in KRS 131.190(1). That statute is incorporated into the Open Records Act by operation of KRS 61.878(1)(l), which provides an exemption for the application of the Act to, ". . . public records or information the disclosure of which is prohibited or restricted or otherwise made confidential by enactment of the General Assembly."
To begin, this office has recognized that records maintained by the PVA are generally subject to public inspection. OAG 92-30; OAG 89-50; and OAG 89-40. KRS 133.047(1) specifically states the property tax roll shall be open to the public. However, we have held that certain information contained in PVA records may be exempt from disclosure under KRS 131.190(1), if it relates to the "affairs of any person" or "their business," within the meaning of that statute. OAG 92-30. This office has interpreted these phrases to mean "matters associated with a person that are recognized as being private, and not subject to routine observation," (OAG 89-50) and "information about property that is not of general recordation or observation," (OAG 89-40). Compare OAG 92-30, in which we held that mapping cards and property assessment cards that contained "information about real property that is either publicly recorded in records recognized as being subject to routine public scrutiny, or that may be relatively readily observed from a public street," should be made available for inspection. The Attorney General has never addressed the question of whether the confidentiality provision found at KRS 131.190 extends to records generated at conference, challenging newly assessed property values.
If a taxpayer/property owner disagrees with the PVA's new assessment, and desires to appeal it, KRS 133.120(1) requires the taxpayer to first schedule a conference with the PVA. At the request of the taxpayer, the conference may be held by telephone. During the conference, KRS 133.120 requires the PVA to:
Keep a record of the conference which shall include, but shall not be limited to, the initial assessed value, the value claimed by the taxpayer, an explanation of any changes offered or agreed to by each party, and a brief account of the outcome of the conference.
It is these records that are in dispute in the appeal before us.
Our in camera review of the sampling of conference records 1 provided to this office revealed they generally contained the following categories of information: the conference date/time, neighborhood/class, property address, PVA assessment, parcel ID #, property owner name & mailing address, owner or representative with whom conference is held, daytime phone, checklist of information reviewed at conference by Deputy PVA, information provided at conference from taxpayer or authorized representative, property owner's opinion of value, Deputy PVA comments, property owner comments, date by which property owner had to file with the County Clerk his appeal of the assessment to local board, taxpayer certification that information he submitted was true and accurate, and signature and date lines for the taxpayer or his representative and the Deputy PVA.
The Cabinet's response to our information request generally described the information in the sampling of conference records responsive to Mr. Holman's request, in addition to the taxpayer's claim as to the value of the property, as income and expenses of the properties (if commercial properties), internal improvements or the lack of improvements made to the property, and vacancy rates. Our in camera review of the attachments substantiated the Cabinet's general description of the confidential or proprietary information contained within the conference records, but does not substantiate that the protected and non-protected information is inextricably intertwined.
As explained by the PVA and the Cabinet, the initial conference with the PVA is an informal process in which the PVA explains to the taxpayer how the new assessment was derived and the taxpayer gives his opinion of the value of the property and provides information and documentation to support the declared value. KRS 133.120(1) provides that the taxpayer can ask that the conference be held by telephone. In its response to the letter of appeal, the Cabinet stated the conference process serves to encourage the taxpayer to come forward to dispute his assessments and provide the PVA with additional information about the property and better enable the property to be assessed at its fair cash value. While we appreciate the importance of these policy considerations, we believe that there is an equally compelling public interest in disclosure of conference records to enable the public to assess uniformity in property tax assessments.
If a taxpayer is still aggrieved with the assessment, he may appeal to the board of assessment appeals "by filing in person or sending a letter or other written petition stating the reasons for the appeal, identifying the property for which the appeal is filed, and stating to the county clerk the taxpayer's opinion of the fair cash value of the property." KRS 133.120(2). Pursuant to KRS 133.120(3), the board of assessment appeals shall hold a public hearing for each appeal filed in accordance with KRS 133.120(2). At the hearing, the taxpayer is required to provide factual proof to support his appeal. It is at this stage of the appeal process that the taxpayer puts his basis for challenging the PVA's assessment in writing and information revealed to the PVA in the conference becomes a matter of public record. As noted by the PVA in his initial response to Mr. Holman's request, the record of the appeal and any public hearing before the board of assessment appeals is clearly a public record subject to inspection. Consistent with the requirement of KRS 61.872(4), the PVA advised Mr. Holman that these records are filed with the Jefferson County Clerk and provided him with the County Clerk's address.
The Court of Appeals, in City of St. Matthews v. Voice of St. Matthews, Inc., Ky., 539 S.W.2d 811 (1974), recognized the legislative policy set forth in KRS 131.190. In holding that the lower court's judgment granting the right to inspect all tax records of the City was overly broad, the Court, at p. 816, stated:
. . . The city contends that information contained in occupational tax returns is of a confidential nature, the disclosure of which would give competitive disadvantage to others engaged in like occupation. There may be other tax records, not specifically called to our attention by this record, which would be exempt from inspection upon proper consideration. KRS 131.190 is indicative of some legislative policy in this regard. (Footnote quoting KRS 131.190(1) omitted).
Accordingly, based upon the above, we conclude that conference records containing the information required to be kept by KRS 133.120(1) and other information of a confidential nature that is information about property that constitutes the "affairs of any person" and "affairs of a person's business," as set forth in KRS 131.190(1) and is not of general recordation or routine observation may properly be withheld from disclosure under KRS 131.190(1) and KRS 61.878(1)(l). OAG 89-50; OAG 89-40. However, we find that these exceptions do not support a blanket denial of a request to inspect conference records. Information contained in the records that is either publicly recorded in records recognized as being subject to routine public scrutiny, or that may be relatively readily observed from a public street," should be made available for inspection. OAG 92-30. If the conference records contain information made confidential by KRS 131.190(1), the agency should mask that information and make a redacted copy of the records available for the requester's inspection. KRS 61.872(4). See, OAG 89-50. As noted, we are not persuaded by the PVA's argument that this information is "inextricably intertwined. "
We believe this holding supports a balancing of the taxpayer's right to privacy with the public's right to know that the PVA is discharging her statutory function and to verify the equality of property tax assessments. OAG 89-50.
Addressing specifically the information the PVA is required by KRS 133.120(1) to include in the conference record, it is the opinion of this office that the initial assessed value and the outcome of the conference would be open to inspection, as the initial assessed value would have been recorded on the tax roll and, thus, subject to public inspection under KRS 133.045, and the final action of the conference because, if it is appealed, it will become part of the public record and if not it becomes part of the property tax roll, which is a public record under KRS 133.047(1). Any discussions in the "brief account of the outcome of the conference," excepting the PVA's evaluation, that contain information that relates to the affairs of any person" or "their business" may properly be masked under KRS 131.190(1). The value claimed by the taxpayer and an explanation of any changes offered or agreed to by each party, as they relate to the one's affairs or affairs of one's business, could also properly be masked under KRS 131.190(1).
We next address the other categories of information in the conference records, that were identified above from our in camera review of the representative sampling of conference records provided by the PVA and Cabinet.
It is our opinion that the following information is not exempt from public inspection under KRS 131.190(1) : conference date/time, neighborhood/class, property address, PVA assessment, parcel ID #, property owner name, owner or representative with whom the conference is held, checklist of information reviewed at conference by Deputy PVA, date by which property owner had to file with the County Clerk, his appeal of the assessment to local board, taxpayer certification that information he submitted was true and accurate, and signature and date lines for the taxpayer or his representative and the Deputy PVA.
Conversely, we find that the following information is exempt from public inspection under KRS 131.190(1): information provided at the conference from the taxpayer or authorized representative, property owner's opinion of value, Deputy PVA comments, and property owner comments. Such information relates to one's affairs or affairs of one's business. This would also include information as described by the Cabinet in its description of the sampling of conference records provided this office for review, such as "as income and expenses of the properties (if commercial properties), internal improvements or the lack of improvements made to the property, vacancy rates." Pursuant to 61.878(4), such information may properly be masked from disclosure prior to inspection.
Finally, we address the application of the Open Records Act to records in the PVA's office. KRS 133.047(4) provides in part:
Real property tax returns and accompanying documents submitted by a taxpayer shall be considered confidential under the provisions of KRS 131.190(1). Other real property records in the office of the property valuation administrator shall be subject to the provisions of KRS 61.870 to KRS 61.884. . . .
(Emphasis added). We interpret this section of KRS 133.047(4) to mean that other real property records in the PVA office are subject to the application of the Open Records Act, including its exemptions from disclosure, such as KRS 61.878(1)(l) in tandem with KRS 131.190(1). Neither KRS 133.120(1) nor KRS 133.047 , state that the entire conference record shall be entirely confidential or entirely open.
We further find that the open records exceptions invoked by the PVA provide additional support for the nondisclosure of notes, comments, and information in the conference record that reflect preliminary information or express opinions. This information could properly be withheld from disclosure under KRS 61.878(1)(i) and (j) and may be masked prior to inspection. OAG 89-40; 92-ORD-1119. Information in the conference record the disclosure of which would constitute an unwarranted invasion of person privacy also could be withheld from disclosure under KRS 61.878(1)(a) and may also be masked prior to inspection. OAG 89-50. The standard applied to the KRS 61.878(1)(a) privacy exemption is a balancing of interests. Specifically, the balance is between the protection of an individual's private affairs from unnecessary public scrutiny against the preservation of the public's interest in ensuring all real property is uniformly assessed at fair cash value through records access. OAG 84-315; OAG 89-50.
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 proceedings.
Tim Holman917 E. WashingtonLouisville, KY 40206
Denise Harper AngelProperty Valuation Administrator Fiscal Court Building531 Court Place, Suite 504Louisville, KY 40202-3393
Harold ThomasDirector of FinanceOffice of the Property Valuation Administrator Fiscal Court Building531 Court Place, Suite 504Louisville, KY 40202-3393
Debra Eucker, CommissionerDepartment of LawKentucky Revenue Cabinet 200 Fair Oaks LaneFrankfort, KY 40602
Thomas J. HodgeDivision of Legal ServicesKentucky Revenue Cabinet 200 Fair Oaks LaneFrankfort, KY 40602
Footnotes
Footnotes
1 The sampling of records provided were generated over a substantial period of time and were not identical as to form or content. Our description of those records is therefore couched in general terms.
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