November 8, 1993

The Honorable Gil Koetzle
State Representative
705 N. Prairie Ave.
Sioux Falls, SD 57104

OFFICIAL OPINION NO. 93-10

Confidentiality of REDI Loan Information

Dear Representative Koetzle:

You have requested an official opinion from this Office concerning the following facts:

FACTS:

I am interested in gaining access to information submitted to the Governor's Office of Economic Development, in particular information on loans made from the REDI Fund. I understand the need for confidentiality when it comes to the finances of businesses in this state. The information I am requesting, however, is not of this nature. I am interested in the number of jobs that have been created to date, the hourly wage that is paid to employees and if there are any benefits included. My intent is to make sure that the company receiving the REDI Fund loan is living up to the mission, goals and objectives of the GOED and REDI Fund, without delving into the financial status of the company.

As a representative of the people of this state, and having their best interest in mind, I feel it is necessary to have this information made available. My purpose is to run checks and balances, if you will, to make sure that the various Boards and Commissions that have been created are accomplishing their goals. I believe that the public or at least the Legislature is entitled to all information dealing with job creation numbers and wages paid to employees.

Again, as a representative of the taxpayers of this state, I feel it is my obligation to see that the intent of the laws we as a Legislature pass are followed, especially when I receive a complaint. I feel it is important to remember that the REDI Fund loan money is the property of the taxpayers of this state, and it is to them that the correct and current information needs to be forwarded.

Based upon these facts, you have asked the following question:

QUESTION:

Does a member of the South Dakota Legislature have access to information submitted by the recipients of REDI Fund loans to the Governor's Office of Economic Development concerning the number of jobs created, the hourly wage paid to employees and if there are benefits included?

The Revolving Economic Development and Initiative Fund ("REDI Fund") was created by the Legislature in 1987 for the purpose of making loans for economic development. SDCL 1-16G-3. The Board of Economic Development is responsible for making loans from the Fund and has adopted administrative rules to implement statutes governing the loan program. SDCL <185><185> 1-16G-1; 1-16G-5; 1-16G-8; and ARSD 68:02:01. Applicants are to submit certain information, including business plans pursuant to SDCL 1-16G-8(3). A business plan includes information on job descriptions and salaries attendant to those jobs. Reporting systems also are established to monitor company performance in complying with its individual business plan. SDCL 1-16G-8(5).

SDCL 1-27-1 provides generally that where the keeping of a record, document or other instrument is required of a public officer or servant by statute, such records are open to inspection by the public. SDCL 1-27-3 goes on to provide, however, that "[s]ection 1-27-1 shall not apply to such records as are specifically enjoined to be held confidential or secret by the laws requiring them to be so kept." The Legislature has seen fit to provide that certain information submitted to or made by the Board of Economic Development or the Governor's Office of Economic Development in connection with REDI Fund loans is to remain confidential. SDCL 1-16G-11 provides as follows:

Any documentary material or data made or received by the board of economic development or Governor's office of economic development for the purpose of furnishing assistance to a business, to the extent that such material or data consists of trade secrets or commercial or financial information regarding the operation of such business, may not be considered public records, and is exempt from disclosure pursuant to the provisions of <185><185> 1-16G-3 to 1-16G-11, inclusive. Any discussion, consideration of, or action upon such trade secrets or commercial or financial information by the board of economic development may be done in executive session closed to the public, notwithstanding the provisions of the open meeting laws of this state.

Thus, the question is whether the type of information you are seeking 1) is "data made or received by the board . . . pursuant to the provisions of <185><185> 1-16G-3 to 1-16G-11," and 2) constitutes "commercial or financial information regarding the operation of such business." Resolution of this issue is a matter of statutory construction. The goal is to determine the intent of the Legislature not only from the words used in the statute at issue, but from other statutes on the subject as well. Words used in the statute are to be given their ordinary meaning, unless the context clearly requires otherwise. American Rim and Brake Inc. v. Zoellner, 382 N.W.2d 421 (S.D. 1986); Border States Paving v. Department of Revenue, 437 N.W.2d 872, 874 (S.D. 1989); SDCL 2-14-1.

Information concerning "job descriptions with attendant salary and wage information by job category" is part of the data businesses have to submit to the board in the form of a business plan pursuant to SDCL 1-16G-8(3). Specific information on jobs created is also required under board regulations. Job information is clearly data submitted to the board "for the purpose of furnishing assistance to the business" as required in SDCL 1-16G-11, and is data submitted "pursuant to <185><185> 1-16G-3 to 1-16G-11, inclusive."

Similarly, information on the hourly wage paid to employees and the benefits included in the wage package is "financial information regarding the operation of the business." The ordinary meaning of the word "financial" connotes fiscal matters, that is matters dealing with the use and distribution of money. Wages and benefits certainly fall within that meaning. That the Legislature considered such information to relate to the operation of the business is evident from the fact that it instructed that wage information be included in business plans submitted to the board pursuant to SDCL 1-16G-8(3).

Therefore, it is my opinion that information concerning the wages and benefits paid by a particular REDI Fund Loan applicant or recipient, as made or received by the board or GOED in the loan process, is confidential under SDCL 1-16G-11. I am also of the opinion, however, that information on the number of jobs created as a result of a particular loan would not be confidential information under that statute, assuming for the sake of argument that such information is data made or received by the board. The number of jobs created, without some reference to the amount of wages paid in relation to those jobs or some other financial data, does not fall within the ordinary meaning of either "commercial or financial information."

Our state courts have not had an opportunity to interpret these provisions. Public policy, however, dictates that public records should be accessible to the public. Exemptions should be strictly but reasonably construed to extend only so far as their language fairly warrants. Doubts should be resolved in favor of disclosure. See State v. Peters, 334 N.W.2d 217, 221-22 (S.D. 1983). In my opinion, disclosure of the number of jobs created by a particular business receiving a REDI Fund loan is not confidential under SDCL 1-16G-11.

Likewise, the board may summarize and disclose to the public data concerning the total number of jobs created and wages paid through the REDI Fund loan program. As long as the information provided does not identify particular companies, but instead relates to the entire portfolio, there would be no violation of SDCL 1-16G-11. For example, it would be permissible for the board to disclose that lending activity created x number of jobs in the last fiscal year and that the average wage was y dollars per hour. Although the wage information is financial in nature, if it cannot be tied to a particular business, the intent of the confidentiality statute would not be violated.

It is clear that information on job creation and wages is important to the REDI Fund program; it is information required by statute and by rule. It is the type of information one would expect to find in the board's annual report. SDCL 1-16G-10. Disclosure on a portfolio basis would strike a fair balance between the public's right to information and the need for confidentiality expressed by the Legislature in SDCL 1-16G-11.

I have considered SDCL 1-33-19.1, but that section does not call for a different answer. In my opinion, for REDI Fund loans, the specific language in SDCL 1-16G-11 controls over the general language of SDCL 1-33-19.1. SDCL 1-33-19.2 supports such a construction.

There is no statute that would afford to a legislator any greater right of access to this type of information than to the members of the public in general. In my opinion, then, a legislator would be entitled to information on the number of jobs created by a particular REDI loan, but information on the wages and benefits paid with relation to that loan would remain confidential. Furthermore, a legislator would be entitled information on the wages and benefits paid on a portfolio basis, if such information can be disclosed in such a manner that the information is not identifiable with specific companies.

Finally, I note that the REDI Fund is entirely a creature of legislative enactment. Therefore, what the Legislature has given in the way of confidentiality, it can take away. That, of course, is a policy issue for the Legislature.

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