                       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.




                                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
