The Business Council opposes the broad reach of this bill which will bring public university research foundations, LLCs, and not-for-profits within the definitions of “state agency” for purposes of the Freedom of Information Law (FOIL). While advanced as a means of ensuring transparency, the practical effect that certain provisions of this bill will have is to quell public-private partnerships at public universities.
Any private sector partner supplying services, tools or performing research individually or collaboratively with a state agency –and this bill brings public universities research foundations, LLCs, and not-for-profits within the definition of state agency — understands that when doing business with a state agency that public interest considerations can override certain confidentiality obligations negotiated in the first instance. For existing public university partners, their expectations and interest will be turned upside down. For substantial stakeholders – often key industry partners — the expanded FOIL reach could easily result in litigation against the State under the grounds of unconstitutional taking of existing contract rights. Even if the law isn’t applied retroactively, the future performance of the contracts would be jeopardized. The risk to continued operation of existing contracts would be in jeopardy, increasing the risk of litigation and liability to research foundations.
Rather than a “welcome mat’” to opening R&D to collaborative investments, this bill sends a very strong “steer clear” signal to what are very complex business-higher education relationships. Liability risks for the public university research foundation programs will become disproportionate if these programs cannot ensure confidentiality, especially given the cutting edge industry partnerships these programs seek to attract.
The Business Council believes current law, as it relates to ensuring quality and integrity of public-private partnerships at public university systems, assures confidentiality while ensuring the public interest is protected. Public university research foundations are subject to numerous levels of audit on public-private partnerships investments including from the State Comptroller, the Inspector General and federal agencies -- allowing for appropriate internal controls to be tested and for the integrity of the programs to be evaluated in a confidential manner while protecting sensitive information.
At a time when the legislature and governor have made very strong commitments to leveraging the assets of our public university systems as engines of economic growth in their communities, provisions in this bill take a significant step away from that commitment.
For these reasons, The Business Council opposes this bill.