. . 

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-d Leg., R.S. 

1951, ch. 60, p. 94, requiring 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 polit1 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 expend 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 

mere i 

8, a~*~:s~~~t”~~~~~~~~~~~~~~~ 

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 provisions, 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 obtained under contract or agreement dated 

prior to September 1, 1951, be governed 

by the above mentioned legislation?” 

(3) “What action should this department take concerning accounts presented 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 whether 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 contracts made on or after that date, or to all contracts 

under which State agencies receive Federal funds, regardless 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 retrospectively when it is apparent that such was the intention, “provided no impairment of vested rights result . ” -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 application of legislation is stated in State 

Oil & Refinine; CQ 

(1943), as follow;lf 

141 Tex. 40, 169 Sew.% 
Hon. Robert S, Calvert, page 3 (V-1354) * 

,I 

. a . It is the law of this State, 

and the law generally, that, in the absence of any special Indication or reason, 

a statute will not be applied retrospectively, even when there is no constitutional impediment against it. Stated in another 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 during any tax paying period II did not apply to overpayments 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 purpas.; 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 !. 

:%;1912L 

See Cox v. Ro ison, 105 Tax. 426, 150 S.W. 1149, 

ed right, orbviolate some constitutional guarA 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 procedure requires that the Legislature have 
Hon. Robert S. Calvert, page 4 (v-1354) 

knowledge of the funds that State agencies expect to receive from the Federal 

government, and the fact that the Legislature should know the conditions contained in contracts between State agencies and the Federal government, create 

an emergency . . ,. ” 

The necessity for knowledge of these facts exists 

equally with respect to prior contracts and to contracts 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 contracts 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 construction 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 impairing 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~nkllection 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 designates the contracts which must be filed with the Secretary of State. The second sentence states the consequence 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 effective 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 expending of funds received under the contracts rather than 

the making of the contracts themselves. The transactions 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 affects only the encumbering or expending of funds after 

its effective date. The existence of the agreement between the State agency and the Federal government under 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 operating retroactively because of the mere fact 

that it relates to antecedent events, or 

draws upon antecedent facts for its operation.” 

Also see 59 C.J. 1158, Statutes, Sec. 69O’and cases 

there cited; City of Sour Lake 6. Branch 

(C.C.A. 5th 1925). 

6 F.2d 355 

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 

26 517 (Tex. Ci~.~App. 1941 error ref ) 

a e 159 S.W. 

tax assessed on the basis oj condition; & 

heid that a 

transactions 

which occurred prior to the effective date of the statute did not violate this provision of the State Constitution. 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 respects to the present situation. In that case a contract of suretyship between the contractor on a public building and the surety company was entered into 

on August 8 

the 

1927, pursuant to a statute requiring 

contrac ? or to furnish a bond for the prompt payment of claims for labor and material. By an amendment 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 after the labor or material was furnished. The court 

held that the amendment operated on claims for material 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 Federal Constitutions against the enactment of retroactive laws or laws impairing the obligation of contracts. 

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 encumbering 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 September 7, 1951 

ate Bill 114. 

are governed by the requirements of SenIn 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 action 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, stating: 

"The emphatic language that 'no policy of life insurance' shall be issued or 

delivered in this state, containing prohibited 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 construction 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 duties in issuing Warrants relate only to the expending of 

these funds and that you would be Under a duty to ascertain only whether the contract was filed prior to the issuance of the warrant. At times in the past the Legislature placed upon the Comptroller certain duties with respect to the encumbrance of funds. 

1941, ch. 

1943, ch. L 

Acts 47th Leg., R.S. 

71, p. 1114, at p. 1286; Acts 48th Leg., 

0, p. 885, at p. 1019. but at the present 

time there is no statute requiring the Comptroller to approve or otherwise act upon the encumbering of funds. We 

think the failure of the Legislature to continue to impose 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 Legislature has used the language "encumbered z expended," 

a construction which would require the filing of the 

governmental contract befOr payment of a claim incurred 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 into effect. Pickle v. Finley, 91 Tex. 484, 44 S.W. 

480 (1898). 

Leg., 

The requirement of S.B. 118, Acts 52na 

R.S. 1951 

of contracts 

ch. 60, p. 94, that copies 

be c ween State agencies and the 

Federal government be filed with the Secretary of Stat8 before 3'ederal funds received 

under such contracts are encumbered or expended applies to all Federal funds in the 

State Treasury on and after September 7, 

1951 (the effective date of S.B. 118) regardless of the date on which the con t ract 

was made or the funds were received. 

Before issuing a warrant, the Comptroller 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 

First Assistant 

BY% K 

Mary K. Wall 

Assistant 

MKW:wb