                                                 KEN PAXTON
                                           ATTORNEY GENERAL OF TEXAS




                                                   April 25, 2016



The Honorable Joseph C. Pickett                                 Opinion No. KP-0077
Chair, Committee on Transportation
Texas House of Representatives                                  Re: Authority of the Texas Department of
Post Office Box 2910                                            Transportation to enter into design-build
Austin, Texas 78768-2910                                        contracts during the 2016-201 7 fiscal
                                                                biennium (RQ-0063-KP)

Dear Representative Pickett:

        You ask for clarification regarding "the authority of the Texas Department of
Transportation ("Department") to enter into design-build contracts during the 2016-2017 fiscal
biennium." 1 You explain that your question arises due to a potential conflict between section
223.242 of the Transportation Code and a rider to the General Appropriations Act of the Eighty-
fourth Legislature. Request Letter at 1.

        Section 223.242 of the Transportation Code authorizes the Department to enter into design-
build contracts for highway projects in certain circumstances. See TEX. TRANSP. CODE § 223.242. 2
Relevant to your request, subsection (d) authorizes the Department to "enter into a design-build
contract for a highway project with a construction cost estimate of $150 million or more." Id.
§ 223.242(d). 3 Furthermore, the Department "may not enter into more than three contracts" under
section 223.242 in each fiscal year. Id. § 223.242(d-1). The Eighty-fourth Legislature's General
Appropriations Act likewise includes restrictions related to the cost of the Department's design-
build contracts and the total number of design-build contracts that the Department may enter into.
Rider 47 to the Department of Transportation's appropriations states:




          1
           Letter from Honorable Joseph C. Pickett, Chair, House Comm. on Transp., to Honorable Ken Paxton, Tex.
Att'y Gen. at I (Oct. 29, 2015), https://www.texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request
Letter").

          2"Design-build method" is defined as "a project delivery method by which an entity contracts with a single

entity to provide both design and construction services for the construction, rehabilitation, alternation, or repair of a
facility." TEX. TRANSP. CODE§ 223.241(2).

         3 In 2015, the Legislature amended section 223.242 by increasing from $50 million to $I 50 million the

minimum project construction cost estimate for a design-build contract. See Act of May 29, 20 I 5, 84th Leg., R.S.,
ch. 314, § 7, 2015 Tex. Gen. Laws 1449, 1451 (codified at TEX. TRANSP. CODE § 233.242(d)).
The Honorable Joseph C. Pickett - Page 2           (KP-0077)



               Limitation on Expenditures for Design-Build Contracts. The
               Department of Transportation is authorized to expend funds
               appropriated by this Act to enter into no more than ten design-build
               contracts in the 2016-2017 biennium for highway projects that have
               an estimated construction cost to the department of $250,000,000 or
               more per highway project. If provisions in Transportation Code
               §223.242, or similar general law, establish a limit on the number of
               design-build contracts that the Department of Transportation may
               enter into in each fiscal year or biennium that is less than the amount
               authorized by this section, then the limitation established by general
               law prevails.

General Appropriations Act, 84th Leg., R.S., ch. 1281, art. VII-31, 2015 Tex. Gen. Laws 4343,
5070. In light of section 223.242 of the Transportation Code, you ask whether Rider 47 is valid
and the extent of the Department's "authority to enter into design-build contracts during the 2016-
2017 fiscal biennium." Request Letter at 4. Section 223.242 and Rider 47 include restrictions on
both the number of design-build contracts that the Department may enter into and the estimated
construction cost per project, and we will address each in turn.

        With regard to the number of design-build contracts that the Department may enter into,
section 223.242 limits the Department to no more than three design-build contracts per fiscal year.
See TEX. TRANSP. CODE§ 223.242(d-l). In contrast, Rider 47 limits the Department to "no more
than ten design-build contracts in the 2016-2017 biennium for highway projects that have an
estimated construction cost to the department of $250,000,000 or more per highway project." See
General Appropriations Act, 84th Leg., R.S., ch. 1281, art. VII-31, 2015 Tex. Gen. Laws 4343,
5070. Thus, the two provisions conflict to the extent that Rider 4 7 authorizes the Department to
enter into more design-build contracts in a fiscal year. Rider 4 7 acknowledges the possibility of a
conflict, however, and it recognizes that "the limitation established by general law prevails." Id.
Pursuant to the general law found in section 223.242, during a fiscal year the Department "may
not enter into more than three" design-build contracts for highway projects. TEX. TRANSP. CODE
§ 223.242(d)(l).

        With regard to the minimum construction cost estimate of design-build contracts, section
223.242 authorizes the Department to enter into such a contract with an estimated construction
cost of$150 million or more, so long as the other statutory requirements are met. Id. § 223.242(d).
You suggest that Rider 47 may establish "a minimum project construction cost estimate of $250
million." Request Letter at 2. Rider 47 limits only the number of design-build contracts with
estimated costs exceeding $250 million that the Department may enter into. See General
Appropriations Act, 84th Leg., R.S., ch. 1281, art. VII-31, 2015 Tex. Gen. Laws 4343, 5070. It
does not speak to or otherwise limit the Department from entering into design-build contracts with
an estimated construction cost of between $150 and $250 million. Thus, Rider 47 is a restriction
or qualification on the use of appropriated funds that does not conflict with the general law in
section 223.242. See Strake v. Ct. App. for First Sup. Jud. Dist. of Tex., 704 S.W.2d 746, 748
(Tex. 1986) (explaining that a rider may not alter existing substantive law). The Department may
therefore enter into a design-build contract for a highway project with a construction cost estimate
of $150 million or more.
The Honorable Joseph C. Pickett - Page 3        (KP-0077)



                                           SUMMARY

                     Pursuant to section 223.242 of the Transportation Code, the
              Department of Transportation may enter into a design-build contract
              for a highway project with a construction cost estimate of $150
              million or more. The Department may not enter into more than three
              such contracts in each fiscal year.

                                            Very truly yours,




                                            KEN PAXTON
                                            Attorney General of Texas



JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee
