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Florida House wants to narrow 'trade secret' exemption used to keep contracts and records from the public

Matt Caldwell
Companies that do business in Florida would no longer be able to hide behind a trade secrets exemption to shield financial information and contracts from the public -- unless they first get a court's permission -- under legislation filed Thursday in the Florida House.

The measures, HB 459 and HB 461, filed by Rep. Ralph Massullo, a Lecanto Republican, are designed to target what House Speaker Richard Corcoran said has become a widespread abuse of the state public records law used by government contractors to shield basic financial information.

"If you spend one penny of taxpayers dollars, you don't have that trade secret exemption,'' Corcoran said Thursday at a press conference in Tallahassee. 

Together, the bills require that any contractual agreement with a local tourism development board to be disclosed to the public and repeals 75 definitions of trade secrets in an attempt to streamline the law that has been expanded as a way to keep from the public the explosion of public-private partnerships and other contracts. 

Neither Corcoran or Rep. Matt Caldwell, R-North Fort Myers, would say whether the disclosure would apply to companies that use the trade secret exemption to shield the chemicals used in oil and gas fracking activities. Caldwell noted that the House has tried and failed to get the state Senate to pass legislation that would allow the Department of Environmental Protection to designate what chemicals meet the definition of trade secret in those cases, not the companies. 

"This is a gray area we continue to ought to address,'' Caldwell said. 

In recent years, State Farm Insurance has used the trade secrets statute to prevent disclosure of the number of policies it holds in Florida. The Seminole Tribe has used the trade secrets exemption to prevent disclosure of the revenues it makes from its monopoly operation of slot machines in Florida. And the Florida Republican Party claimed that it could not disclose information relating to redistricting because it would have exposed the "trade secrets" of its political consultants. 

"Anything that is a public record and meets the traditional definition of public record should be made public,'' Caldwell said. "Narrowing this down to a single definition provides the greatest opportunity for transparency."

He said the measure was spawned by the $1 million Pit Bull contract that Visit Florida refused to release to the Florida House last year, claiming it was a trade secret. Corcoran sued and the agency settled and released the information. 

The proposal also specifically excludes from the definition of “trade secret” any government agency contract or agreement and any related financial information.

If the bills are passed into law, any agency contract, agreement, and any related financial information would be deemed a public record unless it is exempt from public record requirements.

If a company wants to claim a public record is a trade secret, the bill requires it to petition a circuit court to determine if the information meets the definition of a trade secret.

"It puts the burden on the vendor,'' Corcoran said. 

The House also filed HB 3 that attempts to expand legislation last year that to increase accountability of local tourism development organizations. Under the measure, any contract signed by a local tourist development board or a local tourism marketing board that is valued at more than $250,000 would have to be approved by local county commissioners and any contract over $5,000 would have to be published online. 

Rep. Michael Grant, a Port Charlotte Republican, said that tourism boards in Miami, Orlando, Jacksonville and Broward, Tampa, Pinellas and Okaloosa have failed to provide the public with the transparency they should  regarding the use of their bed tax money.

Last year, the House attempted to get the county-controlled organizations to disclose specifics about how they were spending their millions in tourism development taxes but several refused. 

They will be required to put that information on a website, so that everybody will have that available,'' Grant said. "If they are spending taxpayers dollars then they need to reveal what they're doing. It's as simple as that. It's all our money and they need to reveal how it is spent." 

Under the bill, local tourism development boards also would have to disclose conflicts of interest and financial audits would also have to increase. They would be prohibited from paying anyone a salary that exceeds the authorized salary for the Florida governor and increases penalties on violations of disclosure and ethical standards. 
Robert Skrob, executive director of the Florida Association of Destination Marketing Organizations, warned that the House proposals would add an expensive layer of bureaucracy.

“Florida’s Destination Marketing Organizations are fully transparent and in compliance with all state and local laws,'' he said in a statement. "Our state tourism numbers are at record levels. The current structure is working."

Photo: Rep. Matt Caldwell, R-North Fort Myers, courtesy of The Florida Channel.