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2003 Opinions

Date:   October 2, 2003
Prepared By:   Michael D. Kooi
Phone:   (850) 245-0442
Suncom:   205-0442
Opinion No.:   03-09
Staff Contact:    
MEMORANDUM OPINION
TO: Lynn Cobb
Policy Coordinator
Office of Policy and Budget
Florida House of Representatives
FROM: Daniel J. Woodring
General Counsel
SUBJECT: Applicability of Public Records laws to Scholarship Funding Organizations and Private Schools participating in scholarship programs.
REFERENCE: Chapter 119, Florida Statutes

QUESTION PRESENTED: The question asked is whether Chapter 119, F.S. can be applied to scholarship funding organizations and to private schools that participate in the educational scholarship programs.

SHORT ANSWER: Upon review of applicable Florida law relating to whether a private entity is “acting on behalf of an agency”, the scholarship funding organizations and private schools that participate in state scholarship programs should not be subject to Florida’s public records laws.

DISCUSSION: As noted in Weekly Planet, Inc. v. Hillsborough County Aviation Authority, 829 So. 2d 970, 974 (Fla. 2nd DCA 2002), there are two instances where documents in the possession of a private entity must be produced as a public record. “First, when a public entity delegates a statutorily authorized function to a private entity, the records generated by the private entity’s performance of that duty become public records…” (citing Memorial Hospital- W. Volusia, Inc. v. News-Journal, 729 So. 2d 373 (Fla. 1999).) The second circumstance involves “when a public entity contracts with a private entity for the provision of certain goods or services to facilitate the public agency’s performance of its duties, the private entity’s records in that regard may be public if the ‘totality of factors’ indicates a significant level of involvement by the public agency."

In News and Sun-Sentinel Co. v. Schwab, Twitty & Hanser Architectural Group, Inc., 596 So. 2d 1029, 1031 (Fla. 1992), the Florida Supreme Court set out nine factors to be reviewed in determining the “totality of factors” in determining whether a private actor is “acting on behalf of a public agency.” Those factors are as follows:

  1. the level of public funding;
  2. commingling of funds;
  3. whether the activity was conducted on publicly owned property;
  4. whether services contracted for are an integral part of the public agency’s chosen decision making process;
  5. whether the private entity is performing a governmental function or a function which the public agency otherwise would perform;
  6. the extent of the public agency’s involvement with, regulation of, or control over the private entity;
  7. whether the private entity was created by the public agency;
  8. whether the public agency has a substantial financial interest in the private entity; and
  9. for who’s benefit the private entity is functioning.

SCHOLARSHIP FUNDING ORGANIZATIONS

SFOs are organizations that accept corporate donations and find underprivileged families that wish to use the money for a scholarship that allows their child to attend an eligible private school. The corporate donors receive a dollar for dollar tax credit on their donation to the SFO. The statute requires that the full amount of the donated money must go to scholarships and none of it can be retained or used by the SFO for any other expenses.

The money received by the SFOs for scholarships is in the form of charitable contributions from corporate donors. The fact that the corporations get a tax credit for the full amount of the donations does not convert that money into public funds. This issue will be analyzed further with regard to private schools, but given the fact that one hundred percent of all corporate donations must go to scholarships, the SFOs do not actually receive and retain any of the money from the corporate donations. Accordingly, SFOs do not receive any public funding (1).

Given that there is no public funding there can be no commingling of funds by SFOs (2). Their activities are not conducted on public property (3), they were not created by a public agency (7), and no public agency has any financial interest in the SFOs(8). The SFOs’ function is to benefit qualified parents who choose to send their children to eligible private schools. SFOs act on behalf of the corporate donors and the poor children who are eligible for the scholarships, not on behalf of any public agency (9). The benefit to the state as a result of this arrangement is incidental to the benefit it clearly provides to disadvantaged children and their families. Furthermore, the SFO is not performing a function that is within the authority of a public agency to perform (5). The statute clearly places the authority and responsibility of determining eligibility of students, schools and expenditures with the SFOs. While the Department of Education is charged with determining the qualifications of SFOs and monitoring operation of the program, the Department does not control the functions of the SFOs (6).

In several cases, Florida courts have found private entities have been delegated an agency’s statutorily authorized function. In Memorial, a private hospital that leased from a public hospital authority and performed the functions that would otherwise have been performed by the authority was subject to public records laws. 729 So. 2d at 380. In Stanfield v. Salvation Army, 695 So. 2d 501 (Fla. 5th DCA 1997), the court applied public records laws to a private entity that had completely assumed the county government’s obligation to provide probationary services. And in Schwartzmann v. Merritt Island Volunteer Fire Department, 352 So. 2d 1230 (Fla. 4th DCA 1977) the court found that a volunteer fire department was acting on behalf of an agency by providing fire protection services otherwise delegated to the agency and was therefore, subject to public records laws.

However, the circumstances leading to the functions and authority of SFOs are clearly different from the private entities listed above. In the above-referenced cases, the agency had been given constitutional or statutory authority to perform the functions that were being performed by the private entity. The agency then delegated that authority and function to the private entity.

The SFOs have not been delegated anything by the Department of Education or any other agency. The authority and function given to SFOs in relation to corporate tax credits is provided by statute and is not something that had been previously provided by a state or local agency. Additionally, the legislation did not “create” these SFOs. The SFOs are incorporated and run by private individuals. Indeed, the most prominent and active SFOs were in existence and providing scholarships prior to the passing of the legislation that provided for the CTC program. The Department’s role in approving the SFOs is much the same as any governmental licensing body and would not convert the SFO into an entity subject to public records laws any more than the Department of Business and Professional Regulation’s licensing of hotels and restaurants would make Holiday Inn or Outback Steakhouse subject to public records laws.

Furthermore, the monitoring of SFO operations through financial and compliance audits which the SFOs are required to file in accordance with rules adopted by the Auditor General (see Section 220.187(4)(f), F.S.) would not render them subject to public records laws any more than environmental testing and other administrative regulations of private entities make those entities subject to disclosure requirements. Of course, any documents submitted or received by the Department in connection with SFO approval and the audits, and any documentation included with the audits, would be public records that could be requested from the appropriate public entity, except as otherwise exempt.

CTC SCHOOLS

For private schools participating in the Corporate Tax Credit Scholarship (CTC) program, the analysis is somewhat similar to that of SFOs. The scholarship money is received from private corporations by parents who have an option to choose how to use such money. The fact that these parents choose a particular private school cannot be said to convert that school into an entity that “acts on behalf of a public agency.”

Similar to SFOs, almost every single one of the Schwab factors point to a determination that private schools participating in the CTC program are not subject to public records law. First of all, the scholarships are not public funds (1-2). To hold that a private entity that receives funds from charitable contributions is subject to public records laws by virtue of the fact that the donor received a tax credit would subject virtually all charitable organizations to the same disclosure requirements.

Such an absurd interpretation would mean that churches and synagogues, and citizen organizations like the NAACP, ACLU, Greenpeace, and the NRA, would all be subject to intrusive public records requests. The phrase “acting on behalf of a public agency” was not meant to be interpreted in such an overreaching fashion and there is no provision in law that would lead to the conclusion that the size of the tax credit would affect this analysis.

The schools participating in the CTC program do not conduct their business on public property (3), and they were not created by the government nor does the government have any financial interest in them (7-8). In fact, the government’s involvement and oversight of the schools is limited to “monitoring” whether they are eligible to participate and are compliant with the legal requirements of the program(6).

Any implication that the State is attempting to delegate its constitutional duty to provide an education for Florida’s children to private schools through these scholarships programs is a mischaracterization of the programs’ purpose and intent. The schools that accept scholarships from SFOs and the state are providing a service to an individual child based on the choice of that child’s parent or guardian, not by virtue of a delegation of authority by a governmental agency.

The state continues to perform its constitutional duty in the same way it always has; by providing a free public education to anyone that chooses to take advantage of that option. While providing a child with an education has become a governmental function, this was not always the case, and it has never been exclusively a governmental function. In any event, providing an individual child’s education is not an integral part of the decision making process of a governmental agency(4-5). (See Trepal v. State, 704 So. 2d 498, 499 (Fla. 1998) holding that while product testing may be a traditional governmental function, it is not an integral part of the decision making process of law enforcement authorities.)

Finally, the receiving schools are acting both on their own behalf and on behalf of the parents and children who choose them, not on behalf of the Department of Education or the school district (9). The benefit to the state and the local district is incidental.

OSP AND MCKAY SCHOLARSHIP SCHOOLS

The only difference between the analysis above for schools in the CTC program and schools in the Opportunity Scholarships Program (OSP) and McKay Scholarship Program, is that the money received by the schools involved in OSP and McKay is initially provided by the government. However, as noted above, the scholarship money is directed to these schools by individual parents and not by the government.

This distinction is important in the context of public records just as it was important in the context of determining whether voucher programs violate the Establishment Clause. (See Zelman v. Simmons-Harris, 536 U.S. 639 (2002), where the Court found that vouchers for students to use in private religious schools did not violate the Establishment Clause because the money flowed to those schools as a result of independent choices by parents.) There is no direct contract or relationship between the schools and the state as the parent is the one determining which school to direct the scholarship money. Although there are some regulations that schools must follow, the government does not regulate or control the schools participating in the program other than to ensure that they meet certain minimum requirements.

The state has a number of different higher education scholarship and grant programs, including, but not limited to programs like Bright Futures and the Florida Resident Access Grants that provide moneys to college students who attend private institutions of higher learning. The colleges and universities that receive such state funds through the choices of individual students provide educational services that are also provided by state government, but this should not make them subject to public records laws. These private colleges and universities, like the schools participating in the OSP and McKay programs, are not “acting on behalf of a public agency” simply by virtue of receiving these scholarships and grants.

CONCLUSION: While the schools and SFOs may have possession of certain documents that are considered public records, their distinction as public records arises from their receipt or production by the district or state agency. Accordingly, any such records are available and may be requested and obtained from the appropriate governmental agency. Indeed, many, if not all, documents requested in relation to these programs may be available from the district or Department of Education. Consequently, under a “totality of factors” review pursuant to the Florida Supreme Court’s ruling in Schwab, the SFOs and private schools participating in the CTC and OSP scholarship programs would not be subject to Chapter 119, F.S., as they are not “acting on behalf of a public agency.”

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