Court Opinion

ID: 4137419
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:24:40.254928+00
Date Added: 2024-06-11T14:36:49.287057
License: Public Domain

.   .

                           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
MKW:wb