Commercial Fishing License Moratorium Appeals Panel

October 11, 1994

Mr. Robert Jamieson Chairman Commercial Fishing License Moratorium Appeals Panel 3441 Arendell Street Morehead City, North Carolina 28557

RE: ADVISORY OPINION: Commercial Fishing License Moratorium Appeals Panel; G.S. §§ 105-259; 113-154; 132-1; 132-6; 143-318.11

Dear Mr. Jamieson:

You have asked this office for an opinion as to whether state tax records submitted to the Commercial Fishing License Moratorium Appeals Panel by petitioners seeking a hardship license under the commercial fishing moratorium, as authorized in G.S. § 113-154, Section 3, Chapter 576 of the 1993 Session Laws (1994 Session), must be held confidential by the Panel.

In our opinion, the Appeals Panel must hold information con»tained on a petitioner’s attached state income tax return confidential, except to the extent it is also con»tained elsewhere in the petition.

Legal Principles

The state Public Records Law, G.S. § 132-1 et seq., defines public records as all materials received by a state agency in connection with the transaction of public business. It defines public records as:

[A]ll documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data-processing records, artifacts, or other documentary material, regardless of phys» ical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions.

G.S. § 132-1. This provision goes on to define "agency of North Carolina gov» ernment or its subdivisions" as: [E]very public office, public officer or official (State or local, elected or appointed), institution, board, commission, bureau, council, department, authority or other unit of government of the State or of any county, unit, special district or other political subdivision of government. G.S. § 132-1. Under these definitions, the Appeals Panel clearly qualifies as a state agency. Thus, the materials submitted to it by citizen petitioners are generally considered public records, subject to inspection by any person. G.S. § 132-6.

Recent amendments to the Public Records Act specifically provide, however, that state tax information may not be disclosed. Effective July 23, 1993, the follow»ing provision was added to the Public Records Act: (b) State Tax Information — Tax information may not be disclosed except as provided in G.S. 105-259, 153A-148.1, and 160A-208.1. As used in this subsection, "tax information" has the same meaning as in G.S. 105-259.

G.S.: 105-228.90. G.S. 105-228.90 defines a tax as "A tax levied under Subchapter I, V, or VIII of this Chapter or an inspection fee levied under Article 3 of Chapter 119 of the General Statutes." The term includes the following:
a.: Information contained on a tax return, a tax report, or an application for a license for which a tax is imposed.
b.: Information obtained through an audit of a taxpayer or by cor» respondence with a taxpayer.
c.: Information on whether a taxpayer has filed a tax return or a tax report.
d.: A list or other compilation of the names, addresses, social secu» rity numbers, or similar information concerning taxpayers.
G.S.: § 105-259(a)(2). This definition encompasses the types of state tax informa» tion that the Appeals Panel can expect to receive.

The North Carolina Supreme Court recently held that information expressly exempted from the Public Records Act can lose this exemption when it becomes part of the records of a public agency subject to the Public Records Act. News and Observer Publishing Co. v. Poole, 330 N.C. 465, 412 S.E.2d 7 (1992), involved SBI records prepared for the Poole Commission, a commission that was established to investigate improprieties relating to the men’s basketball program at North Carolina State University. Although G.S. § 114-15 expressly exempted SBI records and evidence from the public records law, the Court held that this exemption was lost when the records became part of the records of the Com» mission.

Under Poole, it could be argued that G.S. § 132-1.1(b)’s exemption of state tax information from the public records law is lost upon the Appeals Panel’s acquisition of such informa»tion. State income tax information in the hands of the Appeals Panel are public records. However, the analysis does not stop with this determination. G.S. § 132-1.1, as interpreted by Poole, must be read in pari materia with other parts of the General Statutes. Unlike the Poole Commission, the Appeals Panel is subject to a statute imposing criminal penalties on public officials for disclosing the subject information. The state revenue law imposes misdemeanor charges and dismissal from state employment for state officials who disclose state tax information:

An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes.. . .

G.S. § 105-259(b). The statute also lists eighteen different purposes authorizing disclosure and provides for misdemeanor charges and dismissal from employment for those violating this law:

Punishment. — A person who violates this section is guilty of a misdemeanor and may be fined not less than two hundred dollars ($200.00) nor more than one thousand dollars ($1,000), imprisoned for up to two years, or both. If the person committing the violation is an officer or employee, that person shall be dismissed from public office or public employment and may not hold any public office or public employment in this State for five years after the violation. G.S. § 105-259(c).

Reading the public records provision together with this revenue provision reveals that, although state income tax information in the hands of the Appeals Panel are public records, they are public records which may not be subject to disclosure by the Appeals Panel.

Note that the disclosure prohibition is limited to state tax information. There is no corresponding provision of state or federal law prohibiting state officials from disclosing federal tax information. 26 U.S.C. § 6103 et seq. pro» hibits state officials from disclosing federal tax information where they received the information through federal officials or federal programs. However, since the Appeals Panel is receiving the information directly from the taxpayer, this law does not prevent the Appeals Panel from discussing and disclosing federal tax information.

Application

The prohibition against disclosing state tax information plainly applies to instances where the information being discussed is presented only in the petition» er’s attached state tax forms. However, any information provided in other ways, e.g., on the petition form or on attached federal tax forms, may be discussed and dis»closed as a matter of public record, even where that information is also on the state tax form.

Where the Panel wishes to discuss information found only on the state tax form, a closed session must be called. Under the Open Meetings Law, a closed session, formerly called an executive session, may be called "to prevent the disclosure of information that is privileged or confidential pursuant to the law of this State . . . or not considered a public record." G.S. § 143-318.11 (1993 Supp.). State tax information is considered confidential because its disclosure is prohibited under threat of criminal penalty.

The Open Meetings Law was recently amended, effective October 1, 1994. Because the Appeals Panel conducted some business before October 1, the relevant provisions of both versions are set forth below.

Version effective until October 1, 1994:

G.S. § 143-318.11 Executive sessions. (a) Permitted Purposes. A public body may hold an executive session and exclude the public: . . . .

(12): To consider information, when State or federal law (i) directs that the information be kept confidential or (ii) makes the confiden» tiality of the information a condition of State or federal aid. . . . .
(c): Calling an Executive Session. A public body may hold an exec» utive session only upon a motion made and adopted at an open meeting. The motion shall state the general purpose of the execu» tive session and must be approved by the vote of a majority of those present and voting.

Version effective on October 1, 1994:

G.S. §143-318.11 Closed sessions. (a) Permitted purposes. It is the policy of this State that closed sessions shall be held only when required to permit a public body to act in the public interest as permitted in this section. A public body may hold a closed session and exclude the public only when a closed session is required: (1) To prevent the disclosure of information that is privileged or confi» dential pursuant to the law of this State or of the United States, or not considered a public record within the meaning of Chapter 132 of the General Statutes.

. . . . (c) Calling a Closed Session. A public body may hold a closed session only upon a motion duly made and adopted at an open meet» ing. Every motion to close a meeting shall cite one or more of the permissible purposes listed in subsection (a) of this section. A motion based on subdivision (a)(1) of this section shall also state the name or citation of the law that renders the information to be discussed privileged or confidential.

Note that a closed meeting may only be called upon a motion duly made and adopted at an open meeting. As of October 1, 1994, any motion to close a meeting must include a citation to the law rendering the information confiden» tial. Thus, the motion should cite G.S. § 105-259.

We trust this fully answers your question. If you have the need for further assistance, please feel free to contact us.

Daniel C. Oakley Senior Deputy Attorney

Amy R. Gillespie

Associate Attorney General