. .

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 andthe 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 52ndLeg., R.S. 1951, ch. 60, p. 

### 94,which read:

“Section 1. Whenanagency or polit1eal, 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. SuchState agency shall not encumber or expend anyFederal 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 madeshall be filed.”
Asimilar provision is contained In arider in the general appropriation bill for the biennium ending August 

### 31,195

. 1951 ch. 499, pe 122 merei 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)

Onthe basis of these statutory provisions, you have asked the following questions:

(1) “Would these Federal funds placed in the State Treasury prior to the .52ndLegislature 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. 

### 118andH.B. No. 

### 426,but obtained under contract or agreement dated prior to September 1, 1951, be governed by the above mentioned legislation?”


### (3) “Whataction should this department take concerning accounts presented for payment out of funds which do
comeunder the provisions of S.B. No. 118 andH.B. No. 426 but were incurred prior to the filing of a contract or agreement with the Secretary of State?”
Themainproblem presented by your request is a determination of the meaning of the language,

“Whenanagency or political subdivision of the State government-has-entered into a contract or agreement with the Federal government.I’ Wemustdetermine 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 madeon or after that date, or to all contracts under which State agencies receive Federal funds, regardless of the date of the contract.

Thegeneral rule is that statutes will be construed to operate prospectively unless the contrary is clearly indicated. eemanv. Terra 115Tex. 

### 530,284Sew. 

### 946 (1926fi But they mayoierate retrospectively whenit is apparent that suchwas the intention, “provided no impairment of vested rights result

.” -American Surety co. of NewYork v. Axtell Co.9 

### 120Tex. 

### 166,36S.W02d715, 720 (1931)*

Thegeneral rule as to retrospective application of legislation is stated in State Oil &Refinine; CQ 

### (1943),as follow;lf 141 Tex. 40, 

### 169Sew.%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 whenthere 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 makeit applicable to both past andfuture transactions.”

In that case the court held that a statute providing for a credit against current taxes where a taxpayer

“has erroneously paid moretaxes thanwere due during any tax paying period IIdid not apply to overpayments madeprior to the effective date of the statute. However, each statute mustbe 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 makeit 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 sowould impair someves!. :%;1912LSeeCoxv. Roison, 105Tax. 426, 150 S.W. 1149,

ed right, orbviolate someconstitutional guarAdetermination 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 anact, it maybe considered in

“The fact that sound budgeting procedure requires that the Legislature haveHon. Robert S. Calvert, page 4 (v-1354)

knowledge of the funds that State agencies expect to receive from the Federal government, andthe fact that the Legislature should knowthe conditions contained in contracts between State agencies and the Federal government, create an emergency

. .,.”
Thenecessity for knowledge of these facts exists equally with respect to prior contracts andto contracts entered into subsequent to the effective date of the statute.

Whenall the provisions of Senate Bill 

### 118 are considered together, weare 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

Wemustnext determine whether such a construction of the statute violates any constitutional provision. Section 

### 16,Article I, Constitution of Texas, provides:

“Nobill of attainder, ex post facto law, retroactive law, or anylaw 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 Amendmentto the Federal Constitution, See 

### 50Am.Jur, 

### 492,Statutes, Sec. 

### 475.

Thedistinction between ‘lretroactive” laws which are prohibited and retrospective laws which are not prohibited has been discussed in numerous Texas Roublic Building &LoanAss x:‘CiG. App. 

### 1930) for a partia~nkllection of authorities. Froma con&deration of the decisions, weare of the opinion that Senate Bill 

### 118 is not retroactive in the prohibited sense.Hon. Robert S. Calvert, page 5 (V-1354)

Thefirst sentence of Senate Bill 

### 118designates the contracts which mustbe 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 anyFederal 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 makingof the contracts themselves. Thetransactions affected by the statute are contracts between the State agency andpersons 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. Theexistence of the agreement between the State agency andthe Federal government under which the agency receives the funds is merely an antecedent circumstance affecting the agency’s ability to expend the funds.

In 

### 50Am.Jur. 

### '~93, Statutes, Sec. 

### 476,the following rule is stated:

“Astatute 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 

### 59C.J. 1158, Statutes, Sec. 69O’and cases there cited; City of Sour Lake6. Branch (C.C.A. 5th 1925). 

### 6F.2d 

### 355 Theeffect of the ho idings in a numberof Texas-&&es is in accord wt4hs~hits rule. Washington Oil Coooration 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 SanAntonio 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. 120Tex. 

### 166,36S.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 andthe surety companywas entered into onAugust 

### 8 the 1927, pursuant to a statute requiring contrac ?or to furnish a bond for the prompt paymentof claims for labor andmaterial. Byan amendmentto the statute which became effective September 

### 5,1927, persons seeking to recover onthe bondwere required to file an itemized claim within 

### 30days after the labor or material was furnished. Thecourt held that the amendmentoperated on claims for material furnished after the effective date, although the bond against which recovery was sought was madeprior to that date. ‘Whilethe materialman’s rights arose out of the contract of suretyship, he hadnovested right in the bond prior to the time he furnished the materials. Thecourt 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 118does not operate retroactively nor does it impair the obligation of contracts in violation of constitutional provisions.

Since Senate Bill 

### 118regulates the encumbering or expending of funds after its effective date, regardless of the date onwhich the contract with the Federal government was madeor 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 anyFederal 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 askwhat action your department should take concerning accounts presented for payment out of funds coming within the provisions of Senate Bill 

### 118which were incurred prior to the filing of a contract or agreement with the Secretary of State.

Thelanguage of Senate Bill 

### 118that 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 228S.W. 

### 550a551(19211, the SupremeCo&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 maybe 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 moneyin the State Treasury maynot be expended except onwarrant drawnby you, your department mustbe satisfied that the statutory provision in respect to the expending of funds has been COmPli8dwith prior to issuing awarrant.

HOW8V8X',

weare of the opinion that your duties in issuing Warrants relate only to the expending of these funds andthat youwould 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 mannerin which the funds are encumbered.

It should be noted that claims inCUrr8d prior to the effective date of Senate Bill 

### 118but not presentedHon. Robert S. Calvert, page 

### 8 (V-1354)

for paymentuntil 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 andto have intended the enactment of valid legislation, wecannot 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., Therequirement of S.B. 

### 118,Acts 52na R.S. 1951 of contracts ch. 

### 60,p. 94, that copies

beween State agencies and the c 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 andafter September 

### 7, 1951 (the effective date of S.B. 

### 118) regardless of the date onwhich the con ract t was madeor the funds were received.
Before issuing awarrant, 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: PRICEDANIEL Attorney General Jesse P. Luton, Jr. fieviewing Assistant

Charles D. Mathews First Assistant BY% K MaryK. Wall Assistant MKW:wb