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The Attorney General of Texas 

February 21, 1980 

Honorable Charles Evans, Chairman 

House Committee on Government 

Organizations 

P. 0. Box 2910 

Austin, Texas 78769 

Opinion No. l~q- 14 2 

Re: Authority of the Texas 

Department of Community Affairs 

to enter into an interagency 

contract with the Governor’s 

Committee on Aging. 

Dear Representative Evans: 

You ask two questions concerning an interagency contract entered into 

by the Governor’s Committee on Aging and the Texas Department of 

Community Affairs. Your first question involves state law, while your 

second question involves federal law. 

You first ask: 

May the Texas Department of Community Affairs 

and the Governor’s Committee on Aging enter into an 

interagency contract under which the department 

performs the following services for the committee: 

‘general administrative services, including fiscal and 

accounting services, legal services, personnel 

services, public information services, management 

auditing services, and other administrative services?’ 

We believe both entities have authority to contract under the Interagency 

Cooperation Act, V.T.C.S. art. 4413(32). The Governor’s Committee on 

Aging is also described as a “state agency.” See Human Resources Code, 

S 101.025(a). The Interagency Cooperation Act authorizes any state agency, 

including a department, to enter into written contracts with other agencies 

of the state. V.T.C.S. art. 4413(32), 5 3. The Department and the 

Committee have in fact entered into a contract to perform the services 

detailed in your question. It has been approved by the State Purchasing and 

General Services Commission pursuant to section 4 of article 4413(32), 

V.T.C.S., in exercise of responsibilities transferred to it from the Board of 

Control pursuant to section 1101 of article 601b, V.T.C.S., enacted by the 

66th Legislature, Acts 1979, 66th Leg., ch. 773, at 1908,1956. 

P. 457 
Honorable Charles Evans - Page Two (MW-142) 

Section 3 of the Interagency Cooperation Act authorizes contracts for furnishing 

“necessary and authorized special or technical services, including the services of 

employees, the services of materials, or the services of equipment,” a broad grant of 

authority. The validity of an interagency agreement is for the State Purchasing and 

General Services Commission in the first instance. See Attorney General Opinion H-446 

(1974). In reviewing administrative action, the courts apply an abuse of discretion 

standard. Railroad Commission v. Galveston Chamber of Commerce, 145 S.W. 573 (Tex. 

1912). In view of the broad language describing the subject matter of interagency 

contracts, we believe the action of the State Purchasing and General Services Commission 

in approving the contract is valid. 

Your second question is as follows: 

If employees of the Texas Department of Community Affairs 

who are not employed under a merit system perform these services 

for the Governor’s Committee on Aging under an interagency 

contract, is the committee ineligible under federal law to receive 

federal funds for programs for older persons? 

The Governor’s Committee on Aging is the state agency designated to handle federal 

programs relating to the aging that require action within the state and that are not the 

specific responsibility of another state agency. Human Resources Code, 5 101.025(a). The 

Federal Older Americans Act, 42 U.S.C. Sections 3001 - 3037a, requires that the agency 

receiving federal funds under the Act operate under a state plan which provides for a 

merit system of personnel administration. 42 U.S.C. S 3027(a)(4). Laws, rules, 

regulations, and policy statements effectuating such methods of personnel administration 

are part of the State plan, and are set out in 45 C.F.R. Part 1321. See 45 C.F.R. 

5 1321.37(a). 

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If certain portions of the State plan are to be administered by an agency other than 

the one designated for that purpose, the methods of administration required by federal 

regulation are still applicable. 45 C.F.R. 5 1321.35(b). Whenever the Commissioner of 

H.E.W. finds that there is a failure to comply substantially with any provision of the Older 

Americans Act in the administration of the state plan, he shall, after notice and an 

opportunity to be heard, stop federal funds. 45 C.F.R. § 1321.20(a). Based on a reading of 

these regulations, we conclude that the Committee incurs a risk of having federal funds 

cut off when it contracts to have administrative services performed by persons who are 

not employed under a merit system. Of course, any decision to interrupt funds is at the 

option of the federal government, and action may be taken only after the Committee is 

given notice and an opportunity to be heard. We note for your information that an opinion 

on the validity of this contract under federal law can be obtained from the Federal Office 

of Personnel Management. 

P. 458 
Honorable Charles Evans - Page 3 (MW-142) 

SUMMARY 

The Governor’s Committee on Aging has authority under state law 

to enter into a contract with the Texas Department of Community 

Affairs for the performance of administrative services. The 

performance of such services must be consistent with federal 

regulations in order to avoid interruption of federal funds to the 

committee. 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

TED L. HARTLEY 

Executive Assistant Attorney General 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

C. Robert Heath, Chairman 

Bill Campbell 

Bob Gammage 

Susan Garrison 

Rick Gilpin 

P. 459