April 16, 1990 

Honorable William P. Hobby 

Lieutenant Governor 

The State of Texas Office 

of the Lieutenant Governor 

P. 0. BOX 12068 

Austin, Texas 78711-2068 

Dear Governor Hobby: 

Opinion NO. JM-1156 

Re: Child care facilities in 

building owned or leased by the 

State of Texas (RQ-1905) 

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. 

P- 6099 
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 

P. 6101 
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 

P. 6103