Can a Texas school district refuse to do business with vendors that work with charter schools?

Plain-English summary

A Texas state senator raised a concern about school district contracting and asked the AG several questions about Education Code section 44.043. The worry was that some districts might be requiring vendors to agree not to work with Texas charter schools as a condition of getting or keeping a district contract, or otherwise reducing a vendor's ability to do business with the district based on a relationship with an organization like a charter school.

Section 44.043 sits in the chapter governing school district contracts and purchases. It applies while a district is procuring goods or services, awarding a contract, or overseeing procurement or construction for a public work or improvement. In those settings it provides that, notwithstanding any other provision of the chapter, a district may not consider whether a vendor is a member of or has another relationship with any organization, and must ensure its bid specifications and any later contract do not deny or diminish a person's right to work because of the person's membership or relationship status with any organization.

The senator's first question was whether "consider" and "deny or diminish" mean a district cannot give any effect to a vendor's relationship with an organization. Because the chapter does not define those terms, the AG used their ordinary meanings: to "consider" is to take something into account, to "deny" is to refuse, and to "diminish" is to make less. Reading them together, the AG concluded a court would likely hold that section 44.043 bars a district, in its procurement, from taking a vendor's or person's relationship with another organization into account.

The remaining questions asked about scope. The AG concluded a court would likely find that, for a public work or improvement under subsection (a)(3), the section applies to all aspects of the process from the start through any subsequent contracts, while outside that subsection it applies to each procurement of goods or services or award of a contract. The AG also concluded the section applies to procurement under any statute authorizing a district's procurement, contrasting it with a parallel right-to-work provision in Government Code section 2269.054 that the Legislature limited to activities "under this chapter." On the last two questions, the AG concluded subsection (b) reaches a business relationship between a vendor and an organization, and that the term "organization" includes charter schools, which are organized bodies of people operating under Education Code chapter 12 for the purposes that chapter lists. The AG noted in a footnote that the senator did not ask about, and the opinion did not address, the abuse-of-official-capacity provision in Penal Code section 39.02.

Currency note

This opinion was issued in 2018. 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.

What the opinion meant for those who asked

School districts running procurements: The AG concluded a court would likely hold that section 44.043 bars a district, in its procurement, from taking into account a vendor's or person's relationship with another organization, including a charter school, and from using bid specifications or contracts that deny or diminish a person's right to work because of such a relationship.

Vendors and contractors bidding on district work: The opinion read the statute to reach business relationships and to apply across the procurement process, so a court would likely find a district may not condition work on a vendor's ties to, or distance from, an organization.

Charter schools: The AG concluded a court would likely treat charter schools as "organizations" within the statute's protection.

Common questions

Can a Texas school district make a vendor promise not to work with charter schools?
At the time of this opinion, likely no. The AG concluded a court would likely hold that section 44.043 bars a district from taking a vendor's relationship with any organization into account in procurement.

Does the statute cover business relationships, or just memberships?
The AG concluded a court would likely find subsection (b) reaches a business relationship between a vendor and an organization, not only formal membership.

Are charter schools "organizations" under the statute?
Yes, in the AG's view. The opinion concluded a court would likely treat charter schools, which operate under Education Code chapter 12, as organizations within section 44.043(b).

Does section 44.043 apply to every kind of district procurement?
The AG concluded a court would likely find the section applies to procurement activities authorized by any statute, unlike a parallel Government Code provision the Legislature limited to its own chapter.

Background and statutory framework

Education Code chapter 44, subchapter B, governs school district contracts and purchases (Tex. Educ. Code §§ 44.031-.047). Section 44.043 applies while a district procures goods or services, awards a contract, or oversees procurement or construction for a public work or improvement, and bars the district from considering a vendor's organizational relationships or denying or diminishing a person's right to work based on such relationships (Tex. Educ. Code § 44.043; § 44.043(a); § 44.043(a)(1); § 44.043(a)(2); § 44.043(a)(3); § 44.043(b); § 44.043(b)(1); § 44.043(b)(2)).

Because the chapter does not define the operative terms, the AG applied their plain meanings (Harris Cty. Appraisal Dist. v. Tex. Workforce Comm'n, 519 S.W.3d 113, 128 (Tex. 2017)). On scope, the AG contrasted the unqualified list in section 44.043 with the parallel right-to-work provision in Government Code section 2269.054, which the Legislature limited to activities "under this chapter," reasoning that the Legislature knows how to limit a statute when it intends to (FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 885 (Tex. 2000)); the senator's question also referenced Government Code section 2254.003 and chapter 2269. The AG treated charter schools as organizations operating under Education Code chapter 12 and its stated purposes (Tex. Educ. Code § 12.0011; § 12.001(a)). The opinion expressly did not address Penal Code section 39.02 (Tex. Penal Code § 39.02).

Citations

Statutory provisions:

• Tex. Educ. Code §§ 44.031-.047; § 44.043; § 44.043(a); § 44.043(a)(1); § 44.043(a)(2); § 44.043(a)(3); § 44.043(b); § 44.043(b)(1); § 44.043(b)(2); § 12.0011; § 12.001(a)
• Tex. Gov't Code § 2269.054; § 2254.003; ch. 2269
• Tex. Penal Code § 39.02

Cases:

• Harris Cty. Appraisal Dist. v. Tex. Workforce Comm'n, 519 S.W.3d 113, 128 (Tex. 2017)
• FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 885 (Tex. 2000)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0225
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2018/kp0225.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

November 21, 2018

The Honorable Kelly Hancock Opinion No. KP-0225
Chair, Committee on Business & Commerce
Texas State Senate Re: Applicability of Education Code section
Post Office Box 12068 44.043 to a school district's consideration of a
Austin, Texas 78711-2068 vendor's or person's relationship with a charter
school (RQ-0227-KP)

Dear Senator Hancock:

    Expressing concern about possible contracting practices by some Texas schools, you ask

several questions about the meaning and scope of section 44.043 of the Education Code. [1] You
state that you are "concerned that some school districts in Texas may be requiring vendors to agree
not to work with Texas charter schools as a requirement to either contract with or continue to
contract with such school districts." [2] Request Letter at 1. You also state that "school districts may
be diminishing the ability of a vendor to work with a school district based on a relationship with
an organization such as a charter school." Id.

   Education Code, chapter 44, subchapter B, governs school district contracts and purchases.

See TEX. EDUC. CODE §§ 44.031-.047. Your questions concern section 44.043, which provides:

             (a) This section applies to a school district while the school district
             is engaged in:

                  (1) procuring goods or services;

                  (2) awarding a contract; or

                 (3) overseeing procurement or construction for a public work or
                 public improvement.

              (b) Notwithstanding any other provision of this chapter, a school
              district:

                  (1) may not consider whether a vendor is a member of or has
                  another relationship with any organization; and

                  (2) shall ensure that its bid specifications and any subsequent
                  contract or other agreement do not deny or diminish the right of
                  a person to work because of the person's membership or other
                  relationship status with respect to any organization.

Id. § 44.043.

    You first ask whether the terms "consider" in Education Code subsection 44.043(b)(1) and

"deny or diminish" in subsection 44.043(b)(2) "mean that a school district cannot give any effect
to a vendor or [other] person's relationship with an organization in its procurement practices."
Request Letter at 1. Chapter 44 does not define these terms, so we look to their common meaning.
See Harris Cty. Appraisal Dist. v. Tex. Workforce Comm'n, 519 S.W.3d 113, 128 (Tex. 2017) ("In
the absence of a statutory definition, we must determine a term's plain or ordinary meaning .... "
(quotation marks omitted)). "Consider" means to "take (something) into account when making
an assessment or judgment." NEW OXFORD AM. DICTIONARY 370 (3d ed. 2010). Thus, under
subsection 44.043(b)(1), a school district may not take into account a vendor's relationship with
any organization while engaged in contracting and procurement as provided by subsection
44.043(a). The word "deny" means to "refuse access to (someone)" or to "refuse to give or grant
(something requested or desired)." Id. at 465. "Diminish" means "make or become less" or "make
(someone or something) seem less impressive or valuable." Id. at 487. Under the plain meaning
of these terms, a school district may not use its bid specifications or any subsequent contract or
agreement to refuse a person work with the school district or to lessen a person's ability to work
with the school district because of the person's membership or other relationship status with
respect to any organization. Accordingly, a court would likely conclude that section 44.043
prohibits a school district, in its procurement efforts, from taking into account a vendor's or
person's relationship with another organization.

     You next ask whether section 44.043 "appl[ies] to all aspects of the procurement process

from the beginning of the process to any subsequent contracts or agreements." Request Letter at

1. The plain language of subsection 44.043(a) states that the subsection applies "while the school
   district is engaged in: (1) procuring goods or services; (2) awarding a contract; or (3) overseeing
   procurement or construction for a public work or public improvement." [3] TEX. EDUC. CODE
   § 44.043(a). To the extent a procurement or contract involves subsequent agreements, the
   subsequent agreement is within the scope of subsections 44.043(a)(1) and (a)(2) if it is a
   procurement for goods and services or an award of a contract. Thus, with respect to a procurement
   or construction for a public work or public improvement under subsection (a)(3), a court would
   likely determine that section 44.043 applies to all aspects of the procurement process from the
   beginning of the process to any subsequent contracts or agreements. Outside of subsection (a)(3),
   a court would likely also find that section 44.043 applies to each procurement of goods or services
   or award of contract.

     In your third question, you ask whether section 44.043 "appl[ies] to all types of school
   

   district procurements, including those governed by" Education Code subchapter B, chapter 44,
   Government Code section 2254.003, and Government Code chapter 2269. Request Letter at 2.
   By its terms, section 44.043 applies when a school district procures goods or services, awards a
   contract, or oversees procurement or construction for a public work or improvement. See TEX.
   EDUC. CODE § 44.043. In specifying the activities to which section 44.043 applies, the Legislature
   did not place a limitation or otherwise qualify the activity. A similar right-to-work provision in
   Government Code section 2269.054 contains an identical list of activities but with each activity
   qualified by the language "under this chapter." TEX. GOV'T CODE § 2269.054. So, section
   2269.054's right-to-work provision applies to only procuring, contracting, and overseeing public
   works contracts undertaken under the authority of chapter 2269. See id. In contrast, section 44.043
   does not limit its applicability to procurements under certain authority. See FM Props. Operating
   Co. v. City of Austin, 22 S.W.3d 868, 885 (Tex. 2000) (relying on principle of statutory
   construction that the Legislature knows how to enact laws effectuating its intent). Thus, a court
   would likely conclude that Education Code section 44.043 applies when a school district engages
   in procurement activities under any statute authorizing a school district's procurement activities.

    Fourth, you ask whether Education Code subsection 44.043(b) "appl[ies] to a business
   

   relationship between a person or vendor and an organization." Request Letter at 2. The common
   meaning of "relationship" is "the way in which two or more concepts, objects, or people are
   connected; or the state of being connected." NEW OXFORD AM. DICTIONARY 1473 (3d ed. 2010).
   Subsection 44.043(b) therefore means that a school district may not consider a vendor's connection
   with any organization. Additionally, subsection 44.043(b) does not specify a type of relationship.
   See TEX. EDUC. CODE § 44.043(b). Lastly, by using the term vendor, which is typically used in a
   commercial context, subsection 44.043(b) contemplates the relationship to include a business one.
   See NEW OXFORD AM. DICTIONARY 1919 (3d ed. 2010) (defining "vendor" to mean "a person or
   company offering something for sale"). For these reasons, a court would likely conclude that
   subsection 44.043(b) includes a business relationship between a vendor and an organization.

     You finally ask whether the reference in subsection 44.043(b) to "organizations" includes
   

   charter schools. Request Letter at 2. "Organization" is commonly defined to mean "an organized
   body of people with a particular purpose, esp. a business, society, association, etc." NEW OXFORD
   AM. DICTIONARY 1236 (3d ed. 2010). Generally, a charter school is one that operates under
   Education Code chapter 12. See TEX. EDUC. CODE § 12.0011 ("[a]n independent school district, a
   school campus, or an educational program may choose to operate under a charter" (emphasis
   added)). Chapter 12 identifies five purposes, including improving student learning, increasing
   choice of learning opportunities, and encouraging different and innovative learning methods. See
   id. § 12.001(a). An entity operating as a charter school is an organized body of people. And each
   charter school serves the common purposes set out in section 12.001. See id. A court would likely
   conclude that the term "organization" in subsection 44.043(b) includes charter schools.

                                 SUMMARY
   
                 A court would likely conclude that Education Code section
         44.043 prohibits a school district, in its procurement efforts, from
         taking into account a vendor's or person's relationship with an
         organization. The scope of subsection 44.043(b) includes a business
         relationship between a vendor and an organization, and the term
         "organization" in subsection 44.043(b) includes charter schools.
   
                 With respect to a procurement or construction for a public
          work or public improvement, a court would likely determine that
          section 44.043 applies to all aspects of the procurement process
          from the beginning of the process to any subsequent contracts or
          agreements. Outside of the public work or improvement project, a
          court would likely find that section 44.043 applies to each
          procurement of goods or services or award of contract.
   
                 Section 44.043 applies to procurement activities authorized
          by any statute authorizing a school district's procurement.
   
                                       Very truly yours,
   
                                       KEN PAXTON
                                       Attorney General of Texas
   

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee

[1] Letter from Honorable Kelly Hancock, Chair, Senate Comm. on Bus. & Commerce, to Honorable Ken Paxton, Tex. Att'y Gen. at 1-2 (May 1, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] You do not ask about, and we do not opine on, the application of section 39.02 of the Penal Code, which governs abuse of official capacity. See TEX. PENAL CODE § 39.02.

[3] Briefing submitted to this office argues that the term "overseeing" in subsection 44.043(a)(3) works as a catch-all phrase indicating a legislative intent to apply to every aspect of the procurement process. See Brief from Lindsey Gordon, Gen. Counsel, Tex. Charter Schs. Ass'n at 3 (June 4, 2018). Under the plain language of subsection 44.043(a)(3), "overseeing" applies to only the "procurement or construction for a public work or public improvement." TEX. EDUC. CODE § 44.043(a)(3). To the extent "overseeing" involves the entirety of a project, from beginning to end, it does so only with respect to a public work or improvement. Overseeing does not apply to the activities in subsections 44.043(a)(1) or (a)(2), and no other language suggests a continuing role of a school district once a good or service has been procured or a contract entered into.