April 16, 1990
Honorable William P. Hobby Opinion NO. JM-1156
Lieutenant Governor
The State of Texas Office Re: Child care facilities in
of the Lieutenant Governor building owned or leased by the
P. 0. BOX 12068 State of Texas (RQ-1905)
Austin, Texas 78711-2068
Dear Governor Hobby:
You ask several questions about Senate Bill 1480. Acts
1989, 71st Leg., ch. 1207, at 4904. That bill established
the Child Care Development Board, which is charged with
developing and administering a program to provide child care
services for state employees who work in state-owned
buildings. V.T.C.S. art. 6252-3e. The bill also made
several amendments to the provisions of the State Purchasing
and General Services Act, article 601b, V.T.C.S., that deal
with the lease of space in state-owned buildings to private
tenants.
Your first question is whether the site must be located
in a state-owned building.1 The language of Senate Bill
1480 and the legislative history make clear that the
legislature contemplated that the site for a child care
facility would be in a state-owned building. The caption to
Senate Bill 1480 states that the act relates "to the
creation of a Child Care Development Board and a Child Care
Advisory Committee and to using state-owned buildings for
child care facilities." A bill analysis prepared for Senate
Bill 1480 states that the purpose of the bill is to
"implement a program to use state-owned buildings for child
care facilities." Bill Analysis, S.B. 1480, 71st Leg.
(1989). Also, section 7 of article 6252-3e provides that
1. We do not consider what particular financing
arrangements may qualify a building as a *'state-owned
building."
P. 6098
Honorable William P. Hobby - Page 2 (JM-1156)
the Purchasing and General Services Commission shall lease a
state child care facility site at a reasonable rate. A
requirement that the State Services and General Purchasing
Commission lease the space for the facility at a reasonable
rate makes sense only if the facility site is owned by the
state. m V.T.C.S. art. 601b, S 4.15 (dealing with lease
of space in state-owned buildings to private tenants).
think that the caption to Senate Bill 1480 and t::
provisions discussed above make clear that child care
facilities developed under article 6252-3e were 'intended, to
be in state-owned buildings.
your second question is:
Under SB 1480 and Article 5, State
Purchasing and General Services Act, may a
child care facility site be located in a
building of appropriate size that would be
newly constructed specifically for the board
by the commission, or is the board limited
respecting newly constructed state buildings
to buildings that contain at least 100,000
square feet of net usable space, under
section 5.01(b), State Purchasing and General
Services Act?
Most of the provisions of Senate Bill 1480 deal with the
development of a child care facility in existing state-owned
space. Nothing in the bill suggests that the legislature
intended that a building be built solely for child care.
Our conclusion that Senate Bill 1480 does not authorize the
construction of a building solely for the purpose of
providing a child care facility is supported by section 5.01
of article 601b, which provides:
(a) Under such terms and conditions as may
be provided by law, the commission may
acquire necessary real and personal property,
modernize, remodel, build, and
buildings for state purposes, and em?:E
contracts necessary to carry out and
effectuate the purposes herein mentioned in
keeping with appropriations authorized by the
legislature. The commission shall not sell
or dispose of any real property of the state
except by specific authority from the
legislature.
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Honorable William P. Hobby - Page 3 (JM-1156)
(b) The Child Care Development Board shall
determine if a child care facility may be
included in a state-owned office building
constructed after September 1, 1989, that
contains at least 100,000 square feet of net
usable space and shall notify the commission
of that determination. The commission shall
notify the Child Care Development Board of a
project to rehabilitate or renovate
substantially an existing state-owned office
building containing at least 100,000 square
feet of net usable space before developing
the rehabilitation or renovation plan. Not
later than the 30th day after the date on
which the Child Care Development Board
receives the notice, the board shall
determine if a child care facility may be
included in the rehabilitation or renovation
project and shall notify the commission of
that determination. The commission shall
include a child care facility in a
construction, rehabilitation, or renovation
project if the Child Care Development Board
determines that the child care facility
should be included.
The language that is now subsection (a) has been in article
601b 'since it was adopted in 1979. Acts 1979, 66th Leg.,
ch. 773, at 1908. Subsection (a) addresses the authority of
the State Purchasing and General Services Commission to
construct new state buildings. Senate Bill 1480 added
subsection (b), which deals with inclusion of space for a
child care facility in a newly-constructed state building.
The fact that subsection (b) refers to the "inclusionl' of a
child care facility in a newly constructed building
indicates that the legislature did not intend that new
state buildings be constructed solely for the purpose of
housing a child care facility.
Your third question is:
Once a site is obtained, may it be leased
to a child care provider at a reasonable rate
that is less than fair market value under
Section 4.15(b), State Purchasing and General
Services Act: Section 7(a), Article 6252-3e,
Revised Statutes: Article III, Section 51, of
p. 6100
,
Honorable William P. Hobby - Page 4 (JM-1156)
the Texas Constitution; and other relevant
law?
Section 7(a) of article 6252-3e provides in part:
The [State Purchasing and General
Services] commission shall lease a state
child care facility site at a reasonable rate
to a child care provider selected by the
board.
Section 4.15 of article 601b deals with the lease of space
in state-owned buildings to private tenants. Senate Bill
1480 amended subsection (f) of section 4.15 to provide as
follows:
The commission may lease space in a
building after the lease is negotiated with
the tenant or after the tenant is selected
through a competitive bidding process. In
either case, the commission shall follow
procedures that promote competition and
protect the interests of the state: except
that, if the space is leased for the purpose
of providing child [day] care services for
&&R employees [e+hhe-bai%di?g], the w
Care Devel nment board. m 1t sole
discretion, yeemmissien] may select t:e child
Eare nrovidec [tenant] through procedures
other than competitive bidding. (Language
added by S.B. 1480 emphasized: language
deleted by S.B. 1480 overstricken.)
Read together, those provisions indicate that space for a
child care facility is to be leased at a rate that is
reasonable to charge for a child care facility, not
necessarily at the rate that could be charged for the same
space if it could be leased for other purposes. Therefore,
we conclude that space to be used as a child care facility
is not required to be leased at fair market value.
You ask whether leasing space for child care facilities
at a rate lower than fair market value would be a donation
of public property and therefore in violation of article
III, section 51, of the constitution. Article III, section
51, would not prohibit lease of public property for less
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Honorable William P. Hobby 1 Page 5 (JM-1156)
than fair market value if it served a public purpose.2
Attorney General Opinions JW-1091 (1989); WW-373 (1981).
The bill analysis to Senate Bill 1480 sets out the public
purpose to be achieved by leasing space for child care
facilities at a rental rate that may be less than fair
market rates:
Various studies have shown that absenteeism,
tardiness and employee turnover can be
reduced substantially when employees with
young children have convenient, economical,
quality child-care services available. Such
studies have also shown positive effects on
employee morale, job satisfaction, and
productivity.
Bill Analysis, S.B. 1480, 71st Leg. (1989). We think the
courts would agree with the legislature that leasing space
for child care facilities at a rate less than fair market
value in order to improve employee performance is a public
purpose.
Your fourth question is:
Under Section 7(a), Article 6252-3e,
Revised Statutes, may the board determine and
set what constitutes a reasonable rate for
the lease as part of the board's power to
prescribe by rule provisions that must be
included in a lease to a child care provider?
Section 7(a) of article 6252-3e provides:
The [State Purchasing and General
Services] commission shall lease a state
child care facility site at a reasonable rate
to a child care--prwider selected by the
board. The [Child Care Development] board by
rule may prescribe provisions that must be
included in a lease and provisions that may
not be included in a lease.
2. There must also be adequate controls to assure that
the public purpose is achieved.
p. 6102
Honorable William P. Hobby - Page 6 (JM-1156)
We think the plain meaning of that provision is that the
determination of a wreasonablew rental rate was to be a
matter for the State Purchasing and General Services
Commission, not the Child Care Development Board.
SUMMARY
Senate Bill 1480, Acts 1989, 71st Deg.,
ch: 1207, authorizes the development of child
care facilities in state-owned buildings. It
does not authorize the state to lease space
for child care facilities in privately owned
buildings. The bill does not authorize the
construction of a new state building solely
for the purpose of housing a child care
facility. The bill authorizes the State
Services and General Purchasing Commission to
rent space for a child care facility at a
rate that is nreasonable*' to charge for a
child care facility; that rate may be less
than fair market value. It is for the State
Services and General Services Commission, not
the Child Care Development Board, to
determine what constitutes a "reasonable"
rental rate.
JIM MATTOX
Attorney General of Texas
WARYKELLER
First Assistant Attorney General
JUDGE ZOLLIE STEAXLEY
Special Assistant Attorney General
RENXA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
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