When two 1991 Texas laws on minority-business contracting goals conflicted, which one controlled cities?

Plain-English summary

Texas lets cities run programs that steer a share of their public contracts to minority-owned businesses, as an exception to the general rule against treating people differently by race in government contracting. In 1991 the Legislature managed to amend the very same provision twice in the same session, and the two versions did not match. One version (from Senate Bill 992) raised a population cutoff and kept a requirement that a city use an outside "independent source" to figure out its participation goal. The other version (House Bill 338) opened the program up to more cities and swapped the outside source for an "in-house audit" the city does itself. A House committee chair asked the Attorney General to sort out the mess.

The usual tiebreaker, found in the Code Construction Act, is that the amendment passed later in the session wins. By that rule, Senate Bill 992's version would have controlled. But Senate Bill 992 contained its own instruction saying that if any other law passed by the same legislature conflicted with it, the other law wins, no matter which came first. The Attorney General treated that specific instruction as overriding the general tiebreaker, so House Bill 338's version controlled.

From there the opinion answered the practical follow-ups. "In-house audit" means an audit the city runs itself. A city is not limited to construction contracts; it can set minority-business goals for other contracts too, and it can set different goals for different kinds of contracts. The goal has to be based only on minority businesses located in the city, not ones based elsewhere that could do the work. And a separate provision does not let a city skip competitive bidding, but it does let the city turn away bidders who do not meet uniform standards designed to bring in minority-business participation.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Minority-business contracting programs also raise federal and state equal-protection questions that have developed substantially since 1993; confirm both the current statute and current constitutional law before relying on anything described here.

Background and statutory framework

Section 106.001 of the Civil Practice and Remedies Code generally bars an officer or employee of the state or a political subdivision, acting in an official capacity, from discriminating against a person on the basis of race, religion, color, sex, or national origin, including by refusing to award a contract (§ 106.001(a)(7)). Subsection (c) creates an exception allowing municipalities to adopt programs designed to increase the participation of minority business enterprises in public contract awards.

In 1991 the Legislature enacted two versions of subsection (c)(2). Amendment A (Senate Bill 992, ch. 597, § 56, effective Sept. 1, 1991) was a population-bracket update changing "900,000" to "one million" and retaining the "qualified independent source" requirement. Amendment B (House Bill 338, ch. 665, § 1, effective June 16, 1991) extended the exception to municipalities with a population of 465,000 or more, or home-rule cities in a county with more than 465,000 people and more than 35 incorporated municipalities, and replaced "independent source" with "in-house audit." The Attorney General found the two conflicted because amendment B reached a broader class of cities and used a different method.

On which controls, the Code Construction Act (Gov't Code § 311.025(b)) provides that same-session amendments to the same statute should be harmonized if possible, and if irreconcilable, the latest in date of enactment prevails, which would point to amendment A. But Senate Bill 992's section 112(b) expressly stated that any conflicting law enacted by the 72d Legislature prevails over Senate Bill 992 regardless of the relative dates of enactment or effective dates. The Attorney General held that this specific instruction overrode the general Code Construction Act rule, so amendment B (House Bill 338) prevailed.

The opinion then construed the surviving text. "In-house audit" means an audit a municipality conducts itself, consistent with the bill author's explanation. Reading the statute as a whole (Taylor v. Firemen's and Policemen's Civil Service Comm'n of Lubbock) and giving effect to all words (Chevron Corp. v. Redmon), the AG concluded subsection (c)(2) is not limited to construction contracts, permits different goals for different categories of contracts, and bases the goal only on minority businesses located in the municipality. Finally, in light of Attorney General Opinion DM-113 (1992), the AG concluded subsection (c)(4) does not create a competitive-bidding exemption but does authorize a municipality to refuse bids from prospective bidders who fail to meet uniform participation standards.

Citations

• Civ. Prac. & Rem. Code § 106.001 (general bar on official discrimination); § 106.001(a)(7) (including refusing to award a contract); § 106.001(c)(2) (municipal minority-business participation programs; population brackets; goal-setting method); § 106.001(c)(4) (competitive bidding and uniform standards)
• Gov't Code § 311.025(b) (Code Construction Act; same-session amendments harmonized if possible, otherwise latest enactment prevails)
• Taylor v. Firemen's and Policemen's Civil Service Comm'n of Lubbock, 616 S.W.2d 187, 190 (Tex. 1981) (look to the entire act to determine legislative intent)
• Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex. 1987) (give effect to all words, do not treat statutory language as surplusage)

Common questions

Two 1991 laws changed the same provision. Which one wins?
The Attorney General concluded House Bill 338 (amendment B) controlled. Although the Code Construction Act ordinarily makes the later amendment prevail, Senate Bill 992 included a provision (section 112(b)) saying any conflicting same-session law beats it, and that specific instruction overrode the general rule.

What does "in-house audit" mean?
An audit the municipality performs itself. The 1991 change replaced the older "independent source" language, and the bill author explained the goal-setting would be done by the cities themselves.

Can a city set minority-business goals for contracts other than construction?
Yes. The Attorney General concluded subsection (c)(2) is not limited to public construction contracts and lets a city set different goals for different categories of contracts.

Can a city count minority businesses based outside the city?
No, not toward the goal. The Attorney General read the statute to base the percentage goal only on minority businesses located in the municipality. A city could still consider or award a contract to an outside minority business; it just could not count it in setting the goal.

Does this let a city skip competitive bidding?
No. Following Attorney General Opinion DM-113, the opinion concluded subsection (c)(4) does not create a competitive-bidding exemption. It does, however, let a city refuse bids from prospective bidders who fail to meet uniform standards designed to assure reasonable minority-business participation.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0234
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0234.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

July 12, 1993

Honorable David H. Cain
Chair
Committee on Transportation
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

Opinion No. DM-234

Re: The construction of recent amendments to section 106.001(c)(2) of the Civil Practice and Remedies Code regarding a municipality's program to increase participation by minority business enterprises in public contract awards and related questions (RQ-516)

Dear Representative Cain:

You ask several questions about subsection (c) of section 106.001 of the Civil Practice and Remedies Code. Section 106.001 generally prohibits an officer or employee of the state or a political subdivision of the state acting in an official capacity from discriminating against a person on the basis of his or her race, religion, color, sex, or national origin, including refusing to award a contract to the person. Civ. Prac. & Rem. Code § 106.001(a)(7). Subsection (c) provides an exception to this general prohibition for municipalities which adopt programs designed to increase the participation of "minority business enterprises" in public contract awards.

Specifically, you ask us to consider the effect of two recent amendments to section 106.001. In 1991, the legislature enacted two different versions of subsection (c)(2) of section 106.001. Prior to 1991, subsection (c)(2) provided as follows:

Neither this section nor any home-rule charter to general law may be construed to prevent a home-rule municipality with a population of 900,000 or more according to the most recent federal census from adopting a program or programs designed to reasonably increase participation by minority business enterprises in public contract awards. If, as a part of a program described by this subdivision, the governing body of such a municipality establishes a goal of having a certain percentage of its public contract awards made to minority business enterprises, the governing body shall use a qualified independent source to establish to what extent minority business enterprises in the municipality are available to receive awards for each of the various kinds of construction of public contracts that will be awarded. The percentage goal shall not exceed the availability of minority business enterprises in the municipality as determined by the independent source.

See Acts 1987, 70th Leg., ch. 1058, § 1, at 3590 (emphasis added).

The first amendment, which you refer to as amendment A, was enacted as part of Senate Bill 992. See Acts 1991, 72d Leg., ch. 597, § 56, at 2148. It was enacted on May 25, 1991, and became effective on September 1, 1991. See id. § 113, at 2158. The purpose of Senate Bill 992 was to change population figures in statutes that apply to political subdivisions with certain populations "so that the statutes continue to apply under the 1990 federal census to the same political subdivisions to which the statutes applied under the 1980 census." Senate Comm. on State Affairs, Bill Analysis, C.S.S.B. 992, 72d Leg. (1991). The amendment to subsection (c)(2) of section 106.001 of the Civil Practice and Remedies Code changed the italicized figure "900,000" to "one million." Acts 1991, 72d Leg., ch. 597, § 56, at 2148. Senate Bill 992 also contained section 112(b) which provided as follows:

To the extent that a law enacted by the 72nd Legislature, Regular session, 1991, conflicts with this Act, the other law prevails, regardless of the relative dates of enactment or the relative effective dates.

Id. § 112(b), at 2158.

The second amendment, which you refer to as amendment B, was enacted as House Bill 338. See Acts 1991, 72d Leg., ch. 665, § 1, at 2423. It was enacted on May 16, 1991, and became effective on June 16, 1991. See id. § 2. That amendment provides as follows:

Neither this section nor any home-rule charter to general law may be construed to prevent a home-rule municipality that has a population of 465,000 or more according to the most recent federal census or home-rule municipality located in a county containing (1) a population of more than 465,000 according to the most recent federal census, and (2) more than 35 incorporated municipalities according to the most recent federal census from adopting a program or programs designed to reasonably increase participation by minority business enterprises in public contract awards. If, as part of a program described by this subdivision, the governing body of such a municipality establishes a goal of having a certain percentage of its public contract awards made to minority business enterprises, the governing body shall use a qualified in-house audit to establish to what extent minority business enterprises in the municipality are available to receive awards for each of the various kinds of construction of public contracts that will be awarded. The percentage goal shall not exceed the availability of minority business enterprises in the municipality as determined by the in-house audit.

Id. § 1, at 2423 (emphasis added). House Bill 338 did not contain a provision similar to section 112(b) in Senate Bill 992.

First, you ask us to determine whether or not these two amendments conflict, and, if they do, which amendment prevails. We conclude that the two amendments conflict. While amendment A would extend subsection (c)'s exception to the general prohibition against discrimination in section 106.001 only to municipalities with a population of one million or more according to the most recent federal census, amendment B would extend it to municipalities with "a population of 465,000 or more according to the most recent federal census or home-rule municipalit[ies] located in a county containing: (1) a population of more than 465,000 according to the most recent federal census; and (2) more than 35 incorporated municipalities according to the most recent federal census." In addition, amendment A requires municipalities to use "a qualified independent source" to establish the extent to which minority business enterprises in the municipality are available to receive contracts, while amendment B would require municipalities to use "a qualified in-house audit" for this purpose. Because amendment B extends the exception to a broader class of municipalities than does amendment A and uses the term "in-house audit" rather than the term "independent source" used in amendment A, the two amendments conflict.

We also conclude that, to the extent they conflict, amendment B prevails over amendment A. Section 112(b) of Senate Bill 992 expressly provides that to the extent that a law enacted by the 72d Legislature during its 1991 regular session conflicts with that Act, which includes amendment A, the other law prevails, "regardless of the relative dates of enactment or the relative effective dates." As you point out, section 311.025(b) of the Code Construction Act provides that "if amendments to the same statute are enacted at the same session of the legislature, one amendment without reference to another, the amendments shall be harmonized, if possible, so that effect may be given to each. If the amendments are irreconcilable, the latest in date of enactment prevails." Gov't Code § 311.025(b). Under this rule, amendment A, the amendment with the later enactment date, would prevail; however, we believe that the Code Construction Act rule is inapplicable in these circumstances. Although this rule of statutory construction applies when two conflicting amendments are silent on the issue, this is not the case here. In enacting section 112(b) of Senate Bill 992, the legislature expressly expressed its intent with regard to the proper course should a provision of that law and a law adopted in the same session conflict. The specific instructions in section 112(b) prevail over the more general rule expressed in section 311.025(b) of the Code Construction Act. Therefore, to the extent they conflict, amendment B prevails over amendment A.

Next, you ask what the term "in-house audit" means as used in subsection (c)(2) of section 106.001 of the Civil Practice and Remedies Code. Prior to 1991, subsection (c)(2) used the term "independent source." See Acts 1987, 70th Leg., ch. 1058, § 1, at 3590. The term "independent source" was replaced by the term "in-house audit" by House Bill 338 in 1991. See Acts 1991, 72d Leg., ch. 665, § 1, at 2423. The term "in-house audit" was introduced as part of a committee substitute bill. In explaining this aspect of the committee substitute bill, Representative Conley, the author of House Bill 338, stated that the setting of the percentage goal for minority business enterprise participation would "be done by in-house audit by the municipalities themselves." Hearings on H.B. 338 Before the House Comm. on Urban Affairs, 72d Leg. (March 4, 1991) (tape available through House Committee Coordinator). Therefore, we conclude that the term "in-house audit" means an audit conducted by a municipality itself.

In addition, you ask about the following language in subsection (c)(2):

If, as part of a program described by this subdivision, the governing body of such a municipality establishes a goal of having a certain percentage of its public contract awards made to minority business enterprises, the governing body shall use a qualified in-house audit to establish to what extent minority business enterprises in the municipality are available to receive awards for each of the various kinds of construction of public contracts that will be awarded.

Civ. Prac. & Rem. Code § 106.001(c)(2) (emphasis added). You ask whether this provision "allows municipalities to set goals for all public contracts" or limits municipalities to "setting goals for public construction contracts." The meaning of the foregoing italicized language is unclear, but there is no other language in subsection (c)(2) that suggests the subsection is limited to public construction contracts. Indeed, subsection (c)(2) contains several references to "public contracts" with no modifying or limiting language. It is apparent from subsection (c)(2) as a whole that the legislature did not intend to limit municipalities to establishing a goal only for public construction contracts. See Taylor v. Firemen's and Policemen's Civil Service Comm'n of Lubbock, 616 S.W.2d 187, 190 (Tex. 1981) (in statutory construction, one must look to the entire act to determine the legislature's intent with respect to specific provisions).

You also ask whether this provision allows municipalities to set different goals for different categories of contracts, such as utility, highway, and residential construction contracts. Again, subsection (c)(2) is unclear as to whether a municipality is limited to establishing one overarching goal or may establish many different goals. While the term "goal" appears only in singular form, the foregoing italicized language suggests that municipalities are authorized to consider different categories of contracts separately. To conclude that municipalities are limited to establishing one overarching goal would read this language out of the statute. Therefore, we conclude that subsection (c)(2) permits municipalities to set different goals for different categories of contracts. See Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex. 1987) (in statutory construction, one should give effect to all words of a statute and not treat any statutory language as surplusage if possible).

You also ask about the following sentence in subsection (c)(2):

The percentage goal shall not exceed the availability of minority business enterprises in the municipality as determined by the in-house audit.

Civ. Prac. & Rem. Code § 106.001(c)(2). You ask whether this provision limits the percentage goal to "minority business enterprises with offices located within the city limits of the municipality" and whether minority business enterprises "whose offices are outside the city limits . . . but who are available to do work in the municipality, [can] be included in the percentage goal."

Taken by itself, the foregoing language is unclear whether the percentage goal must be based only on the availability of minority business enterprises located in the municipality, or whether it may also be based on minority business enterprises available to perform work in the municipality. This ambiguity is resolved, however, by the prior sentence of subsection (c)(2) which requires municipalities to "use a qualified in-house audit to establish to what extent minority business enterprises in the municipality are available to receive awards." Id. (emphasis added). Clearly, this sentence refers only to minority business enterprises located in the municipality. Therefore, we conclude that subsection (c)(2) does not authorize municipalities to take into account minority business enterprises which are not located in the municipality in establishing the percentage goal.

Finally, in light of Attorney General Opinion DM-113 (1992), you ask about subsection (c)(4) of section 106.001 of the Civil Practice and Remedies Code which provides as follows:

A general law or a home-rule charter that requires competitive bidding and the award of public contracts to the lowest responsible bidders is not affected by this subsection. However, all prospective bidders may be required to meet uniform standards designed to assure a reasonable degree of participation by minority business enterprises in the performance of any public contract.

In Attorney General Opinion DM-113, we concluded that exemptions from competitive bidding requirements must be expressly authorized by the legislature. See Attorney General Opinion DM-113 (1992) at 7. In light of this opinion, you ask whether "a bidder's failure to meet the 'uniform standards designed to assure a reasonable degree of participation by minority business enterprises in the performance of any public contract' [may] be considered as a factor in determining the bidder's responsibility." In essence, you ask whether the second sentence of subsection (c)(4) creates an exemption from competitive bidding requirements. Given that exemptions from competitive bidding must be express, we do not believe that subsection (c)(4) creates an exemption from competitive bidding. See id. We do believe, however, that the second sentence of subsection (c)(4) authorizes municipalities to refuse to accept bids from prospective bidders that fail to "meet uniform standards designed to assure a reasonable degree of participation by minority business enterprises." We base our conclusion on the use of the term "prospective bidders," which suggests that this provision is intended to permit a municipality to use such standards to screen bids. We also base our conclusion on the fact that were this not the case, this second sentence would merely be surplusage. See Chevron Corp., 745 S.W.2d at 316 (in statutory construction, one should give effect to all words of a statute and not treat any statutory language as surplusage if possible).

SUMMARY

To the extent a conflict exists between two amendments to section 106.001(c)(2) of the Civil Practice and Remedies Code enacted by the 72d Legislature, Acts 1991, 72d Leg., ch. 597, § 56, at 2148 and Acts 1991, 72d Leg., ch. 665, § 1, at 2423, the latter provision prevails.

The term "in-house audit" as used in subsection (c)(2) of section 106.001 of the Civil Practice and Remedies Code means an audit performed by a municipality itself. Subsection (c)(2) does not limit a municipality to establishing a percentage goal for contracts awarded to minority business enterprises only for public construction contracts. It permits a municipality to set different goals for different categories of contracts. Subsection (c)(2) does not authorize a municipality to take into account minority business enterprises which are not located in the municipality in establishing the goal.

Subsection (c)(4) of the Civil Practice and Remedies Code does not create an exemption from competitive bidding requirements. It does, however, authorize municipalities to refuse to accept bids from prospective bidders that fail to "meet uniform standards designed to assure a reasonable degree of participation by minority business enterprises."

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by [name illegible in source scan]
Assistant Attorney General