                        @ffice of tfie IZlttornep@eneral
                                   Qtate of @exae

                                September 11.1991




Robert A MacLean, M.D.                     Opinion No. DM- 39
Acting Commissioner
Texas Department of Health                 Re:    Construction of the public hearing
1100 West 49th Street                      requirement for certain state grants
Austin, Texas 787563199                    awarded pursuant to the Human Immu-
                                           nodeficiency Virus Services Act, chapter
                                           85, Health and Safety Code (RQ-92)


Dear Dr. MacLean:

       Your agency has asked us to construe the public hearing requirement for
certain state grants awarded to nonprofit community organizations pursuant to the
Human Immunodeficiency Virus Services Act (the “act”). See V.T.C.S. art. 4419b-4.
The act was initially adopted in 1989 and subsequently codified in 1991 during the
regular legislative session as chapter 85 of the Health and Safety Code. Acts 1991,
72d Leg., ch. 14, # 36, at 62-73; Acts 1989, 7lst Leg., ch. 1195, 8 1, at 4854-64.
Chapter 85 took effect September 1,199l. Subchapter B of chapter 85 requires the
Texas Department of Health (the “department”) to establish and administer a state.
grant program to nonprofit community organizations for HIV education, prevention,
risk reduction, treatment, health, and social services programs.     See Health &
Safety Code 9 85.031.

       Section 85.034 of subchapter B, which requires the department to establish
grant application procedures and eligibility guidelines, provides in pertinent part:

            (a) The department shall establish application procedures
        and eligibility guidelines for the state grants under this
      , subchapter.

              (b) Application procedures must include regional public
         hearings after reasonable notice in the region in which the com-
         munity organization is based before awarding an initial grant or
         grants totalling more tlm $25,000 annually. (Emphasis added.)




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Robert A. MacLean, M.D. - Page 2            (DM-39)




In accordance with these provisions, the department has adopted formal rules
describing the grant application procedures and eligibility guidelines for grants
awarded pursuant to subchapter B. See 25 T.A.C. 99 98.1 - 98.44; Tex. Dep’t.
Health, 15 Tex. Reg. 4819 (to be codified at 25 T.A.C. 8s 98.61- 98.89); Tex. Dep’t.
Health, 16 Ten Reg. 971 (to be codified at 25 T.A.C. 9 98.90). Those rules provide
that the department shall contract with eligible organizations for the provision of
HIV services. 25 T.A.C. 5 98.22(a); Tex. Dep’t Health, 15 Tex. Reg. 4821 (to be
codified at 25 TALC. Q 98.82(a)). Those rules also provide that regional public
hearings will be conducted before the award of an initial grant or grants totaling in
excess of $25,000, but that no public hearing will be required for the renewal of a
contract. 25 T.A.C. 0 98.22(e); Tex. Dep’t Health 15 Tex. Reg. 4821 (to be codified
at 25 T.A.C. 9 98.82(e)).                                                  _

        The department has requested our assistance in construing the public
hearing requirement in section 85.034(b). In particular, the .department requests
that we interpret the phrase “an initial grant or grants totalling in excess of $25,000
aMually.” In information submitted to us, the department states that it has
construed this language to require public hearings only before the award of an
initial grant in excess of $25,000, and to not require public hearings prior to the
renewal of any previousl) awarded grant. In that information, the department also
states that it construes this language to prohibit it from circumventing the public
hearing requirement by awarding a series of initial grants to an eligible organization
that separately are for $25,000 or less, but which together exceed $25,000. The
department seeks our guidance because this language is subject to differing
interpretations. For instance, the statutory language could be construed to require
a public. hearing before the award of any initial grant regardless of its amount as
well as before the renewal of a grant in excess of $25,000. After a review of the
legislative history, however, we conclude that only the department’s interpretation
of section 85.034(b) is correct.

        The legislature’s adoption of Senate Bill 959 in 1989 enacted the provision
 subsequently codified as section 85.034(b). As introduced in the Senate and as sent
 to the House for consideration, Senate Bill 959 did not include a public hearing
requirement for state grants awarded to nonprofit community organizations. See
 C.S.S.B. 959, 71st Leg. (1989) (Senate committee substitute located in bill file to
 S.B. 959); S.J. of Tex., 71st Leg., at 1374-78 (1989) (amendments to Senate C.S.S.B.
 959 on second and third readings in the Senate). The House, prior to its
 consideration of Senate Bill 959, had discussed and amended on the floor the
 committee substitute for House Bill 1901, the companion bill to Senate Bill 959.


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Robert A. MacLean, M.D. - Page 3            (DM-39)




HJ. of Tex., 71st Leg., at 2108-10 (1989). As issued from the House Committee on
Public Health, the committee substitute for House Bill 1901 included in section
2.02(a) of article 2 of the act a requirement that the department’s grant application
procedures for grants to nonprofit community organizations “include a public hear-
ing, after reasonable notice, in the county in which the community organization is
based before awarding a grant.” See C.S.H.B. 1901, art. 2, !42.02(a), 71st Leg. (1989)
(House committee substitute located in bill file to H.B. 1901). An amendment
sponsored by Representative Brad Wright on the floor amended that language in
section 2.02(a) by adding the phrase “or grants totalling in excess’of $10,000
annually.” HJ. of Tex., 71st Leg., at 2110 (1989) (second reading of C.S.H.B. 1901).
Prior to adoption of the amendment, the sponsor explained that the committee
substitute for House Bill 1901 would require a public hearing before awarding any
grant to a community organization and that the purposes of his amendment was to
avoid the cost of the hearing procedure exceeding the amount of the award by
applying the public hearing requirement only “to grants in excess of $10,000.”
Debate on C.S.H.B. 1901 on the Ploor of the House, 71st Leg. (May 19, 1989) (tape
available through Office of the House Committee Coordinator). Thus, the phrase
“totalling in excess of $10,000 annually” was meant to modify the word “grant” as
well as “grants.”

         In lieu of the amended committee substitute for House Bill 1901, the House
subsequently considered on the floor the committee substitute for Senate Bill 959
that was issued by the House Committee on Public Health. HJ. of Tex., 71st Leg.,
at 2286 (1989); C.S.S.B. 959,71st Leg. (1989) (House committee substitute located
in bill file to S.B. 959). In the House committee substitute for Senates Bill 959, the
House committee included in section 2.02(a) of the act a provision requiring that
the department’s grant application procedures for grants to nonprofit community
organizations “include a public hearing, after reasonable notice, in the county in
which the community organization is based before awarding a grant or grants
totalling in excess of $10,000 annually.” The quoted language is identical to that in
the House committee substitute for House Bill 1901 after adoption of Wright’s
amendment on the floor of the House during second reading of the bill. The
quoted language in the House committee substitute for Senate Bill 959 was
thereafter amended during second reading on the floor of the House so that the
public hearing requirement in section 2.02(a) applied only to “a grant or grants
totalling in excess of $20,000.” H.J. of Tex., 71st Leg., at 2287 (1989) (emphasis
added).




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Robert A. MacLean, M.D. - Page 4                         (DM-39)




       After the Senate refused to concur in the changes made by the House to
Senate Bill 959, the House and the Senate met in conference to resolve their differ-
ences. In conference, section 2.02(a) of the act was amended to require the de-
partment’s grant application procedures to “include regional public hearings after
reasonable notice in the region in which the community organization is based before
awarding an initial grant or grants totalling in excess of $25,000 annually.” See S.J. of
Tex., 71st Leg., at 3558, 3561 (1989) (Conference Committee report on S.B. 959,
revised section 2.02(a)) (emphasis added); see ako Conference Committee side-by-
side comparison of House, Senate,’and Conference versions of bill at 5, S.B. 959,
71st Leg. (1989) (located in bill file to S.B. 959).

        The Conference Committee’s explanation of the changes to section 2.02(a)
in the committee’s side-by-side comparison of its version of Senate Bill 959 with the
House and Senate versions states that the committee’s version amended section
2.02(a) to refer to-grants in excess of $25,000 and to require regional hearings “only
with initial grants.” See Conference Committee side-by-side comparison, supra, at
5. The Conference Committee’s explanation clearly indicates the legislature’s intent
was to limit the public hearing requirement only to initial grants that exceed
S25,ooo.’

        Given this iegislative history, we conclude that section 85.034(b) does not
require the department to hold hearings for the renewal of grants with eligible
organizations or for the initial award of grants of $25,000 or less. However, section
85.034(b) does not permit the department to award a series of initial grants to an
eligible organization that separately are for $25,000 or less, but which together
exceed $25,000, without holding a public hearing.




          lAt the same time that the Conference Committee amended section 2.02(a) to refer only to
initial grants, the committee amended section 1.09 of article 1 of the act. Prior to amendment, section
1.09 read “[a] contract entered into by the department under this article may not be for a term of more
than one year, except that a contract may be renewed.” The committee added the phrase “without a
public hearing” to the end of the quoted language. This phrase must have been added to clarify and be
consistent with the public hearing requirement in section 2.02(a) of article 2 because at no time has any
other part of article 1 or any other article of the act contained a public hearing requirement. Section
1.09 has been coditied as section 85.015(e) of subchapter A of chapter 85.




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Robert A. MacLean, M.D. - Page 5             (DM-39)




                                   SUMMARY

              The Texas Department of Health is not required by the
         Human Immunodeficiency Virus Services Act, chapter 85 of the
         Health and Safety Code, to hold a public hearing prior to the
         renewal of a grant to a nonprofit community organization; nor
         does the act require the department to hold a public hearing
         before the award of an initial grant that is $25,000 or less. The
         act requires the department only to hold a public hearing before
         awarding an initial grant that exceeds $25,000 or before
         awarding a series of initial grants to the same organization that
         exceed S25,OOO.

                                                  Very truly yours,




                                                  DAN      MORALES
                                                  Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY (Ret)
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Celeste A. Baker
Assistant Attorney General




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