Untitled Texas Attorney General Opinion ( 1951 )

. .
November 20, 1951.
Hon. Robert S. Calvert
Comptroller of Public Accounts
Austin, Texas
Opinion No. V-1354
Re: Application of S.B. 118,
Acts 521-dLeg., R.S.
1951, ch. 60, p. 94, re-
quiring the recording of
contracts between State
agencies and the Federal
Dear Sir: government.
You have requested an opinion of this office
regarding the legal effect to be given the provisions
of Senate Bill 1.18,Acts 52nd Leg., R.S. 1951, ch. 60,
p. 94, which read:
“Section 1. When an agency or polit-
1 eal, subdivision of the State government
has entered Into a contract or agreement
with the Federal government, such State
agency or political subdivision shall file
a copy of such contract or agreement with
the Secretary of State for recording.
Such State agency shall not encumber or ex-
pend any Federal funds received through
such contracts or agreements until said
copy is filed with the Secretary of State.
Provided that copies of research contracts
‘classified’ in the Interest of national
security shall not be filed, but in lieu
thereof a statement that such a contract
has been made shall be filed.”
A similar provision is contained In a rider
in the general appropriation bill for the biennium
ending August 31, 195 .
1951 ch. 499, pe 122 8, a~*~:s``~t”``````````````~
merei y parallels the genera
flicts therewith, we shall consider only the effect of
Senate Bill 118, w.
. ,
Hon. Robert S. Calvert, page 2 (V-1354)
On the basis of these statutory provi-
sions, you have asked the following questions:
(1) “Would these Federal funds
placed in the State Treasury prior to
the .52nd Legislature be governed by the
requirements of the two above mentioned
Acts?”
(2) “Would funds placed in the
State Treasury after the effective dates
of S.B. No. 118 and H.B. No. 426, but ob-
tained under contract or agreement dated
prior to September 1, 1951, be governed
by the above mentioned legislation?”
(3) “What action should this de-
partment take concerning accounts pre-
sented for payment out of funds which do
come under the provisions of S.B. No. 118
and H.B. No. 426 but were incurred prior
to the filing of a contract or agreement
with the Secretary of State?”
The main problem presented by your request
is a determination of the meaning of the language,
“When an agency or political subdivision of the State
government-has-entered into a contract or agreement
with the Federal government .I’ We must determine wheth-
er the Legislature intended this statute to apply only
to contracts which had been entered into prior to the
effective date of Senate Bill 118, or only to con-
tracts made on or after that date, or to all contracts
under which State agencies receive Federal funds, re-
gardless of the date of the contract.
The general rule is that statutes will be
construed to operate prospectively unless the contrary
is clearly indicated. eeman v. Terra 115 Tex.
530, 284 Sew. 946 (1926fi But they may oierate retro-
spectively when it is apparent that such was the in-
tention, “provided no impairment of vested rights re-
sult . ” -American Surety co. of New York v. Axtell Co.9
120 Tex. 166, 36 S.W02d 715, 720 (1931)*
The general rule as to retrospective appli-
cation of legislation is stated in State
Oil & Refinine; CQ 141 Tex. 40, 169 Sew.%
(1943), as follow;lf
Hon. Robert S, Calvert, page 3 (V-1354) *
,I
. It is the law of this State,
a .
and the law generally, that, in the ab-
sence of any special Indication or reason,
a statute will not be applied retrospec-
tively, even when there is no constitution-
al impediment against it. Stated in an-
other way, it is the rule that statutes
will not be applied retrospectively unless
it appears by fair implication from the
language used that it was the intention of
the Legislature to make it applicable to
both past and future transactions.”
In that case the court held that a statute providing
for a credit against current taxes where a taxpayer
“has erroneously paid more taxes than were due dur-
ing any tax paying period II did not apply to overpay-
ments made prior to the effective date of the statute.
However, each statute must be construed in the light
of its own peculiar wording and the legislative pur-
pas.; in enacting it. As stated in Connecticut
Li 9. 0. v. Talbot, 113 Ind. 373, 14 N.E.
11887). “a statute must be so construed as to make it
effect’the evident purpose for which it was enacted;
and if the reason of the statute extends to past
transactions as well as to those in the future, then
ftn ;i;isbe so applied, although the statute does not,
so direct, unless to do so would impair
some ves !. ed right, orbviolate some constitutional guar-
See Cox v. Ro ison, 105 Tax. 426, 150 S.W. 1149,
:%;1912L
A determination of the meaning of the phrase
“has entered into a contract” is aided by the emergency
clause of Senate Bill 118, which indicates the purpose
of the Legislature in enacting this statute. Although
an emergency clause cannot limit or enlarge unambiguous
language in the body of an act , it may be considered in
“The fact that sound budgeting pro-
cedure requires that the Legislature have
Hon. Robert S. Calvert, page 4 (v-1354)
knowledge of the funds that State agen-
cies expect to receive from the Federal
government, and the fact that the Leg-
islature should know the conditions con-
tained in contracts between State agen-
cies and the Federal government, create
an emergency . . ,. ”
The necessity for knowledge of these facts exists
equally with respect to prior contracts and to con-
tracts entered into subsequent to the effective
date of the statute.
When all the provisions of Senate Bill 118
are considered together, we are of the opinion that
the statute requires the filing of copies of all con-
tracts under which funds received from the Federal
government are to be expended, regardless of the date
of the contract. This construction of the phrase “ha
;y;$ent;
-i
(
i% 353219
5i ~?oxL 3$2
We must next determine whether such a con-
struction of the statute violates any constitutional
provision. Section 16, Article I, Constitution of
Texas, provides:
“No bill of attainder, ex post facto
law, retroactive law, or any law impair-
ing the obligation of contracts, shall be
made. I1
Similar restrictions on State legislation result from
Section 10, Article I of the Federal Constitution and
the Fourteenth Amendment to the Federal Constitution,
See 50 Am. Jur, 492, Statutes, Sec. 475.
The distinction between ‘lretroactive” laws
which are prohibited and retrospective laws which are
not prohibited has been discussed in numerous Texas
R oublic Building & Loan Ass
x:‘CiG. App. 1930) for a partia~nkl-
lection of authorities. From a con&deration of the
decisions, we are of the opinion that Senate Bill 118
is not retroactive in the prohibited sense.
Hon. Robert S. Calvert, page 5 (V-1354)
The first sentence of Senate Bill 118 desig-
nates the contracts which must be filed with the Sec-
retary of State. The second sentence states the con-
sequence of a failure to file the required copy, as
follows: “Such agency shall not encumber or expend
any Federal funds received through such contracts or
agreements until said copy is filed with the Secretary
of State.” lhe statute does not attempt to invalidate
contracts entered into either before or after its ef-
fective date, nor does it prohibit the State agency
from receiving funds from the Federal government under
any of these contracts. It becomes apparent that the
Legislature is regulating the encumbering or expend-
ing of funds received under the contracts rather than
the making of the contracts themselves. The transac-
tions affected by the statute are contracts between
the State agency and persons having claims against the
funds. The statute does not operate retroactively to
impair the obligation of these contracts, since it af-
fects only the encumbering or expending of funds after
its effective date. The existence of the agreement be-
tween the State agency and the Federal government un-
der which the agency receives the funds is merely an
antecedent circumstance affecting the agency’s ability
to expend the funds.
In 50 Am. Jur. '~93,Statutes, Sec. 476, the
following rule is stated:
“A statute is not regarded as operat-
ing retroactively because of the mere fact
that it relates to antecedent events, or
draws upon antecedent facts for its opera-
tion.”
Also see 59 C.J. 1158, Statutes, Sec. 69O’and cases
there cited; City of Sour Lake 6. Branch 6 F.2d 355
(C.C.A. 5th 1925). The effect of the ho i dings in a
number of Texas-&&es is in accord wt4hs~hits rule.
Washington Oil Co ooration of Texas a e 159 S.W.
26 517 (Tex. Ci~.~App. 1941 error ref ) heid that a
tax assessed on the basis oj condition; & transactions
which occurred prior to the effective date of the stat-
ute did not violate this provision of the State Consti-
tution. Similarly, Citv of San Antonio v. Baird, 209
S.W.2d 224 (Tex. Civ. App. 1948! error ref.), held that
years of service’qualifying a c ty employee for higher
pay may be service either before or after the effective
date of the statute defining the employee’s rights.
Hon. Robert S. Calvert, page 6 (V-1354)
American Surety C v. Axtell Co. 120 Tex.
166, 36 S.W.2d 715 (1931), yi parallel in m&y re-
spects to the present situation. In that case a con-
tract of suretyship between the contractor on a pub-
lic building and the surety company was entered into
on August 8 1927, pursuant to a statute requiring
the contrac ? or to furnish a bond for the prompt pay-
ment of claims for labor and material. By an amend-
ment to the statute which became effective September
5, 1927, persons seeking to recover on the bond were
required to file an itemized claim within 30 days af-
ter the labor or material was furnished. The court
held that the amendment operated on claims for mater-
ial furnished after the effective date, although the
bond against which recovery was sought was made prior
to that date. ‘While the materialman’s rights arose
out of the contract of suretyship, he had no vested
right in the bond prior to the time he furnished the
materials. The court expressly held that the statute
did not violate the provisions of the State or Fed-
eral Constitutions against the enactment of retroac-
tive laws or laws impairing the obligation of con-
tracts.
In view of the foregoing authorities, we
are of the opinion that SenateBill 118 does not operate
retroactively nor does it impair the obligation of
contracts in violation of constitutional provisions.
Since Senate Bill 118 regulates the encum-
bering or expending of funds after its effective date,
regardless of the date on which the contract with the
Federal government was made or the funds were received,
your first two questions are answered as follows: All
Federal funds in the State Treasury on or after Septem-
ber 7, 1951 are governed by the requirements of Sen-
ate Bill 114. In connection with your first question,
relative& funds received prior to the effective date
of Senate Bill 1.18,it is noted that the emergency
clause of this act refers to funds which the State
agencies exnect to receive. ROWeVer, the body of the
act provides in unambiguous language that the agency
shall not encumber or expend any Federal funds received
through such contracts until a copy of the contract is
filed with the Secretary of State. This provision may
not be varied by the recital in the emergency clause.
Becker v. Williams, supra.
Hon. Robert S. Calvert, page 7 (V-1354)
In your third question you ask what ac-
tion your department should take concerning accounts
presented for payment out of funds coming within the
provisions of Senate Bill 118 which were incurred
prior to the filing of a contract or agreement with
the Secretary of State.
The language of Senate Bill 118 that a
State agency llshall not encumber or expend any Federal
funds. . . until said copy is filed" is mandatory.
In First Tex s Stat8 Ins. Co. v. Smalley 111 Tex. 68
228 S.W. 550a 551 (19211, the Supreme Co&t construed'
an analogous'statutory provision as mandatory, stat-
ing:
"The emphatic language that 'no pol-
icy of life insurance' shall be issued or
delivered in this state, containing pro-
hibited provisions, does not admit of the
construction that life insurance polici8s
may be issued containing the prohibited
provisions . . .n
Similarly, the language here does not admit of the con-
struction that b'ederal contracts need not be filed prior
to encumbering or expending the funds. Since money in
the State Treasury may not be expended except on warrant
drawn by you, your department must be satisfied that the
statutory provision in respect to the expending of funds
has been COmPli8d with prior to issuing a warrant.
HOW8V8X',we are of the opinion that your du-
ties in issuing Warrants relate only to the expending of
these funds and that you would be Under a duty to ascer-
tain only whether the contract was filed prior to the is-
suance of the warrant. At times in the past the Legisla-
ture placed upon the Comptroller certain duties with re-
spect to the encumbrance of funds. Acts 47th Leg., R.S.
1941, ch. 71, p. 1114, at p. 1286; Acts 48th Leg.,
1943, ch. L 0, p. 885, at p. 1019. but at the present
time there is no statute requiring the Comptroller to ap-
prove or otherwise act upon the encumbering of funds. We
think the failure of the Legislature to continue to im-
pose these duties on the Comptroller indicates that he
is not responsible for the manner in which the funds are
encumbered.
It should be noted that claims inCUrr8d prior
to the effective date of Senate Bill 118 but not presented
Hon. Robert S. Calvert, page 8 (V-1354)
for payment until after that date are not included
in the prohibition of the statute. While the Legis-
lature has used the language "encumbered z expended,"
a construction which would require the filing of the
governmental contract befOr payment of a claim in-
curred prior to the effective date of the statute
would impair the obligation of the contract between
the agency and the claimant. Since the Legislature
is presumed to have been cognizant of constitutional
provisions and to have intended the enactment of valid
legislation, we cannot ascribe to the Legislature an
intention to place a restriction upon the payment of
claims which were incurred befOr the statute went in-
to effect. Pickle v. Finley, 91 Tex. 484, 44 S.W.
480 (1898).
The requirement of S.B. 118, Acts 52na
Leg., R.S. 1951 ch. 60, p. 94, that copies
of contracts be c ween State agencies and the
Federal government be filed with the Secre-
tary of Stat8 before 3'ederal funds received
under such contracts are encumbered or ex-
pended applies to all Federal funds in the
State Treasury on and after September 7,
1951 (the effective date of S.B. 118) re-
gardless of the date on which the con t ract
was made or the funds were received.
Before issuing a warrant, the Comptrol-
ler of Public Accounts should ascertain
that a copy of the contract has been filed
with the Secretary of State in compliance
with S.B. 118.
Yours very truly,
APPROVED: PRICE DANIEL
Attorney General
Jesse P. Luton, Jr.
fieviewing Assistant
Charles D. Mathews BY% K
First Assistant Mary K. Wall
Assistant
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