                       November 30, 1990



Mr. Dennis R. Jones               Opinion No.   JM-1252
Commissioner
Texas Department of Mental        Re:    Whether section 2.13
  Health and Mental Retardation   of the Mental Health      and
P. 0.. BOX 12668                  Mental    Retardation     Act
Austin, Texas 78711-2668          authorizes the Department
                                  of   Mental     Health    and
                                  Mental Retardation to pur-
                                  chase and/or lease real
                                  and personal property     for
                                  the purpose    of providing
                                  community-based     services
                                  without following the pro-
                                  cedures of the State Pur-
                                  chasing    and    General
                                  Services Act    (RQ-2049)

Dear Commissioner Jones:

     You ask whether section 2.13 of the Texas Mental Health
and Mental Retardation Act authorizes the Texas Department
of Mental Health and Mental Retardation [the l'departmentl'],
to purchase or lease personal property, or to lease real
property, in connection   with the provision    of communi-
ty-based mental health and mental retardation services under
that act, without  being subject to the provisions of the
State Purchasing and General Services Act, V.T.C.S.  article
601b. See V.T.C.S. art. 5547-201 et sea. (the Texas Mental
Health and Mental Retardation Act).

     Article 601b provides that the State Purchasing     and
General   Services Commission    [the 18commission**] "shall
purchase, lease, rent, or otherwise   acquire all supplies,
materials, services, and equipment for all state agencies."1



     1. Section 3.01(a)(4) makes exception for "materials,
supplies, or equipment purchased by a state-owned   hospital
                                        (Footnote Continued)




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Id. S 3.01(a). Article 6 of that act provides that "[w]hen
a state agency needs space to carry on its functions     [it]
shall submit a written request for the space to the commis-
sion." Id. 5 6.02(a). If state-owned space is not avail-
able "the commission   may lease space for the agency   from
another source.lV &       5 6.05(a).  Under such a     lease
contract "the State of Texas, acting through the commission,
is the lessee." &     0 6.05(e).2

     The department   is clearly a state agency within     the
purview   of the provisions    of article  601b.    Seeid.
§ l-02(2)   (defining "state agency").    Attorney    General
Opinion JM-978 (1988) noted that a "state agency . . . is
subject to the provisions      of article  601b . . . unless
exempted by the legislature."       YOU suggest    that    the
department   has authority    under the circumstances      YOU
describe to purchase or lease personal property or to lease
real property without being subject to the requirements     of
article 601b.

     Article 5547-204 provides specifically for the depart-
ment's duties   regarding   "community-based  services,UV the
context in which your question about the department's     pur-
chasing and leasing authority has arisen. Section 4.03, in
subsection (a), lists the minimum     services that must be
available in each service area and, in subsection          (b),
directs  the   department   to   contract with     "designated
providers" in each service area to provide      the services
directly or by subcontract.    "Designated providers" may be


(Footnote Continued)
or clinic" under the circumstances set out there.      Section
3.06 provides that the commission may delegate to a state
agency authority   to purchase    supplies, materials,     and
equipment in accordance with commission-prescribed      proce-
dures.   Section  3.07 provides    for emergency   purchases.
Section 3.08 provides that "state agencies are delegated the
authority to purchase supplies, materials, and equipment    if
the purchase does not exceed $500" but that the commission
shall prescribe procedures for these purchases.   You neither
reference any of these provisions   nor supply us with   facts
indicating they are relevant to the situations       you are
concerned about. We will therefore not address them here.

     2. See also 1 T.A.C.    55 113.1    et   sea.   (commission
rules regarding purchasing),   115.31    et   sea.   (commission
rules regarding leasing of space).




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"community centers"3 operated by certain local governmen:;
entities, other local agencies,  or private providers.
5 4.03(b).   "If the Department  is unable to identify s
contract with a designated provider  in a service area, the
Department shall provide  the services required under this
article directly  through a departmental facility outreach
program."  &

     Section 4.01A of article 5547-204 provides     that the
term "mental health or mental retardation authority8' is used
in the article to refer to both a "designated provider"   and
a "departmental facility outreach program."   You indicate in
your request that under some contracts       with designated
providers,  and for some departmental      outreach programs
established under article   5547-204, the department     must
acquire and provide equipment,  supplies, and facilities   to
be used by such mental health or mental           retardation
authorities in rendering the community-based services.    YOU
suggest that section 2.13 of the Mental Health and Mental
Retardation  Act, if read together with section        4.03C,
provides the department with authority      to acquire   such
property under    the   "competitive   procurement    system"
established under section 4.03c, rather than under the
requirements of article 601b. We disagree.

        Section 2.13 of article 5547-202 provides:

          The Department may cooperate, negotiate    and
          contract with local agencies, hospitals, pri-
          vate organizations and foundations, community
          centers, physicians   and persons to plan,
          develop and provide community-based     mental
          health and mental retardation services.

        Section 4.03C of article    5547-204 reads, in    pertinent
part:

              (a) This section applies only to a con-
          tract to provide   service for persons with
          mental retardation or mental illness at the
          'community  level,   including   residential
          services, that:




     3. m    V.T.C.S.  art. 5547-203 (providing          for   estab-
lishment and operation of "community centers").




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Dennis R. Jones - Page 4    (JM-1252)




            (1) is between a private provider and a
        mental health or mental retardation  author-
        ity:

           (2) involves the use of state funds or
        funds for which the state has oversight
        responsibility: and

            (3) is initially     awarded   on   or   after
        August 30, 1989.

            (b) The department  shall design a com-
        petitive procurement or similar system that a
        mental health or mental retardation authority
        shall use in awarding  a 'cktract under this
        section.

See also 25 T.A.C.  5s 401.377 -  401.385 (the       departmentts
rules promulgated pursuant to section 4.03C).

     We find nothing in sections  2.13 or 4.03C which  indi-
cates that the legislature     intended these sections    to
provide exemptions from article 601b for leases or purchases
of property by the department.

     Even if the procurement system provided for in section
4.03C might arguably be made applicable        to departmental
procurements where the mental health or mental      retardation
authority to be contracting    for services with a private
provider is a departmental   facility outreach program,     that
section applies only to    contracts with a provider.        If,
under such a contract, a departmental        facility outreach
program is to provide space or property to be used in
rendering the services, the department's acquisition of such
space or property is not exempt from article         601b.   See
Attorney General Opinion JM-445    (1986) (purchases by Texas
Surplus Property Agency with funds from Service Charge Trust
Fund subject to article 601b). s      Attorney General Opinion
JM-978   (1988) (administration   of medicaid     program    for
Department of Human Services).      CornDare  Attorney   General
Opinion H-459 (1974) (the predecessor to article 601b did
not apply to a short-term     rental of space by the Texas
Rehabilitation Commission for a client of the commission).




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                       SUMMARY

          Where the Department of Mental Health and
       Mental Retardation     purchases  or    leases
       personal property, or leases real property,
       to be used in connection with the provision
       of community-based    services by a     mental
       health or mental retardation authority   under
       the Mental Health and Mental Retardation Act,
       section 2.13 of that act does not exempt
       those acquisitions  from the provisions     of
       article 601b, the      State Purchasing    and
       General Services Act.




                                      JIM     MATTOX
                                      Attorney General of Texas

MARYKKLLKR
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLKY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by William Walker
Assistant Attorney General




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