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DAN MORALES                              May 20,199l
 Al-rORNEI
       GENERAL




    Honorable Carl A Parker                    Opinion No.    DM-25
    chairman
    Education Committee                        Re: Meaning of the locality in which the
    Texas State Senate                         work is performed” for purposes of article
    P. 0. Box 12068                            S159a, V.T.C.S.. the prevailing wage statute,
    Austin Texas 78711                         and related questions (RQ-2189)

    Dear Senator Parker:

            You ask whether the interpretation of V.T.C.S. article 5159a, which you say
    the Texas Department of Criminal Justice (hereinafter, TDCJ”) has adopted, is
    correct. That article provides generally that laborers on a public works project of
    the state or any of its political subdivisions are to be paid ‘[n]ot less than the general
    prevailing rate of per diem wages for work of a similar character in the locality in
    which the work is performed,” as determined by the public body authorizing or
    contracting for the work, with such wage rates to be specified in the call for bids and
    in the contract for such work. You state:

              According to TDCJ, when letting a bid for construction of a
              prison site, they believe this particular article shows them the
              discretion to determine that ‘locality in which the work is
              performed’ does not particularly mean the specific county but
              rather any political subdivision in which the proposed site is
              located. After making that determination, TDCJ further
              believes that it is at liberty to set the prevailing wage in the bid
              based on the area’s prevailing wage rather than the prevailing
              wage in the ‘locality in which the work is being performed.’

             You ask two questions based on your description of TDCJ’s interpretation of
     article 5159a:




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         1.      [DJoes ‘locality in which the work is being performed
                 mean only the particular political subdivision in which
                 the work is being wholly performed?

         2.      Additionally, for purposes of article 5159a, what are the
                 criteria and method for determining ‘general prevailing
                 rate of per diem wages’?

       Article 5159a was Srst adopted in 1933. Acts 1933,43d Leg., ch. 45, at 91.
The terms you ask about - “general prevailing rate of per diem wages” and “locality
in which the work is performed” - are defined in section 4 as follows:

         The term ‘locality in which the work is performed’shall be held to
         mean the county, city and county, ci&, town, dirtrid or other
         political subdivision of this state in which the building, highwuy,
         roaci, axzvation, or other stmcture, project development or
         improvement is situated in all cases in which the contract is
         awarded by the state, or any public body thereof, and shall be held
         to mean the limits of the county, city and county, city, town,
         district or other political subdivisions on whose behalf the
         contract is awarded in all other cases. The term : ‘general
         prevailing rote of per diemwages’shall  be the rote determined upon
         as such rate by the public body awarding the contract, or
         authorizing the work, whose decision in the matter shall be final.
          (Emphasis added.)

        Both of your questions relate ultimately to how the TDCJ may determine
“the general prevailing rate of per diem wages” under article 5159a. Citing the
language of section 4 of the act, Texas courts have consistently held that such
determinations are matters within the discretion of the public body awarding the
contract or authorizing the work and not subject to judicial review.         See Terac
Highwq Comm’n v. El Pare Bkig. & Constr. Trades Council, 234 S.W.2d 857,858-59
(Tex. 1950) (despite plaintiffs allegations that Highway Commission’s determina-
tion was unrelated to wages actually prevailing in El Paso and “did not cover the
‘locality’of the City of El Paso, but covered a much wider territory,” court would not
review such determination in view of provision of article 5159a that the
determination of prevailing wage by public body authorizing or contracting for work




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“shall be final”); C@ of Houston v. Houston Gulf Coast Bldg. & Corn@. Trades
Council, 710 S.W.2d 181 (Tex. App.-Houston [lst Dist.] 1986, writ refd n.r.e.);
Attorney General Opinions H-845 (1976); H-350 (1974); G-2059 (1940). However,
we think it is clear. notwithstanding such non-reviewability, that the legislature did
not intend the provisions of article 5159a to be disregarded by the public entities to
which they apply. See 2A SrmnuuAND STATUTORYCONSTRUCTION                  9 57.01 (4th
ed. 1984).

        We believe that a state agency making a prevailing wage. determination
should select as the “locality” on which it bases such determination the political
subdivision most nearly corresponding fo the location of the work. In other words, if
the work is to be performed within the corporate limits of a town, that town’s limits
should be considered the locality” for article 5159a purposes rather than the entire
county in which it is located. You suggest that the TDCJ construes the statute to
permit a state agency making a prevailing wage determination the discretion to
select as the “locality”whichever overlapping political subdivision it decided would
have the lowest prevailing wages, in order to reduce its costs on the project. We
reject this construction, because the purpose of the article - to protect workers in
the immediate locality of the work from wages being driven down by payment of a
lower rate than was the locally prevailing rate - would be undermined. See
Cullipher v. Weatherby-Godbe Constr. Co., 570 S.W.2d 161, 164 (Tex. Civ. App.--
Texarkana 1978, writ refd nr.e.); Southern Prison Co. v. Rends, 110 S.W.2d 606,
609 (Ten Civ. App.-Amarillo 1937, tit dism’d).

        On the other hand, we think that certain factual scenarios may justify a state
agency’s using a larger geographical area in determining the prevailing wages in a
locality. For example, if a project called for a specialized kind of work that had not
recently been performed in the immediate locality of the project, it might be
impossible for the public entity to establish prevailing wages “for work of a similar
character” in the immediate locality. In such cases, we think that the agency might
reasonably look to a larger geographic area in which “work of a similar character” to
that required on the project had been performed in order to establish a prevailing
wage for such work. Compare, eg., 29 C.F.R. 1.7(b) (Secretary of Labor regulation
adopted under similar provisions of federal Davis-Bacon Act, 40 U.S.C. 5 276a et
seq., providing that if there has not been sufficient similar construction within area
in past year to make determination, wages paid on similar construction in
surrounding counties may be considered).




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       One letter we have received in connection with your request suggests that
while the TDCJ project that prompted the request is to be constructed in Jefferson
County (the Beaumont-Port Arthur area), the TDU is basing its prevailing wage
determination on the Houston area, some 100 miles distant We think that article
5159a would permit such a procedure only where unusual factual circumstances
required it - eg., if no work of a similar character bad recently been performed in
the subdivision most nearly corresponding to the location of the work.

        Article 5159a makes no provision regarding the “criteria and method” a
public entity must use for determining prevailing wages beyond providing for the
selection of the appropriate “locality.” Even apart from the non-reviewability
provision of the article, such lack of legislative specification of the “criteria and
method” for making the prevailing wage determination evidences a legislative intent
to leave the choice of such methods and criteria to the public entity responsible for
making the determination, so long as the resulting determination reasonably reflects
the actual “general prevailing rate of per diem wages” in the locality in question.
Determinations of prevailing wages in a locality made by the Secretary of Labor
under the Davis-Bacon Act, 40 U.S.C. Q276a u seq., union wage scales, and similar
data would be available to the public entity in making the requisite determinations
under article 5159~ See &o Attorney General Opinions JM-1164 (1990) (it is
proper to include fringe benefits in calculating prevailing wage if it is determined
that payment of fringe benefits is the prevailing practice in the locality; following
Attorney General Opinion H-350); JM-329 (1985) (if public entity used a “weighted
average” standard, and that standard was different from a “prevailing wage”
standard, it had “failed to comply with the statute”).

        We note, finally, that you do not raise and we consequently do not address
any issues here as to the applicability of federal law to TDCJ projects in question.
See, eg., Attorney General Opinion M-809 (1971) (applicability of wage
requirements of Davis-Bacon Act, 40 USC. 0 276a er seq., to certain federally
assisted projects).




              The term “locality in which the work is performed” in the
          prevailing wage statute, article 5159a. V.T.C.S., generally refers
          to the political subdivision most nearly corresponding to the




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         location of the work. The criteria and methods for determining
         “the general prevailing rate of per diem wages” under that
         statute are matters within the discretion of the public body
         authorizing or contracting for the work, so long as the resulting
         prevailing wage determination reasonably reflects the actual
         “general prevailing rate of per diem wages” in the locality in
         question




                                         DAN      MORALES
                                         Attorney General of Texas

WILL PRYOR
Fit Assistant Attorney General

MARY KELLER
Executive Assistant Anorney General

JUDGE ZOLLIE STEAKLEY (Ret.)
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General




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