Does a new Texas school-district contract ban apply to agreements signed before it took effect?

TX AG Opinion GA-0596: Does Education Code section 11.168 reach contracts signed before it took effect?

Plain-English summary

Texas Education Code section 11.168 bars a school district's board of trustees from entering into an agreement that authorizes the use of district employees, property, or resources to provide materials or labor for designing, constructing, or renovating improvements on real property the district does not own or lease. The statute took effect on June 18, 2005. The Webb County Attorney asked how it applies to an agreement that was entered into before that date but under which the district's resources would keep being used after the statute took effect. His position was that, because the statute does not apply retroactively, it does not prohibit or affect the validity of an agreement signed before June 18, 2005.

The Attorney General agreed that the statute does not operate retroactively. The general rule in Texas, codified in the Code Construction Act and confirmed by the Supreme Court of Texas, is that a statute is presumed to apply only going forward unless the Legislature expressly makes it retroactive, or the statutory language otherwise shows retroactive intent. Section 11.168 contains no such language. It says a board "may not enter into" the described agreement, which addresses future acts of contracting, not past decisions a board already made. Nothing in the text reaches back to agreements already in place.

The opinion added that the only timing language the Legislature actually enacted, the emergency clause making the act "effective immediately" on a two-thirds vote, supports prospective operation rather than undercutting it. As Texas courts have reasoned, if the Legislature thought the law could apply retroactively, there would be no reason to make it effective immediately. So section 11.168 does not apply retroactively to an agreement entered into before its effective date. The opinion was careful about its limits: it did not decide whether section 11.168 would apply to any particular agreement described as predating the statute (for example, one later modified or renewed, which can create a new contract), and it did not address whether the underlying type of agreement was authorized in the first place. Because the statute does not apply retroactively, the opinion also did not need to reach the requestor's argument that retroactive application would impair a district's vested contract rights.

Currency note

This opinion was issued in 2008. 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.

Education Code section 11.168, the Code Construction Act provisions on prospective application, and the case law cited here may have changed since 2008. Confirm the current statutes before relying on this analysis.

Who this opinion affected (as of 2008)

School districts and their boards of trustees: The opinion told them section 11.168's prohibition on agreements to use district resources for off-site improvements reached only agreements entered after June 18, 2005, not those validly in place beforehand.

Parties contracting with school districts: The opinion indicated that a pre-existing agreement was not voided by the new statute merely because performance continued after the effective date, though it cautioned that modifying or renewing a contract can create a new one.

Anyone reading a new Texas statute for timing: The opinion restated the default rule that statutes are prospective unless the Legislature clearly says otherwise, and that an "effective immediately" emergency clause reinforces, rather than rebuts, prospective operation.

Common questions

Does section 11.168 cancel a school district agreement signed before June 18, 2005?
No. The opinion concluded the statute does not apply retroactively, so it does not prohibit or invalidate an agreement validly entered into before its effective date.

Why is the statute read as prospective only?
Because Texas law presumes statutes operate prospectively unless the Legislature expressly makes them retroactive, and section 11.168's text ("may not enter into") addresses future contracting, with no language reaching past agreements.

Did the AG decide whether the district's specific agreement was valid?
No. The opinion answered only the legal question about retroactivity. It did not review any particular contract or decide whether the underlying type of agreement was authorized, noting this office does not construe contracts.

Background and statutory framework

When construing a statute, the goal is to effectuate the Legislature's intent (In re M.C.C., 187 S.W.3d 383, 384 (Tex. 2006); Tex. Dep't of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 176 (Tex. 2004)). The Code Construction Act presumes a statute is prospective unless expressly made retrospective (Tex. Gov't Code Ann. § 311.022), and statutes apply retroactively only if the language shows the Legislature so intended (In re M.C.C., 187 S.W.3d at 384, citing Merch. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502, 504 (Tex. 1978), and State v. Humble Oil & Ref. Co., 169 S.W.2d 707, 708-09 (Tex. 1943)). Section 11.168 (Tex. Educ. Code Ann. § 11.168), enacted by the Act of May 27, 2005, 79th Leg., R.S., ch. 979, 2005 Tex. Gen. Laws 3286, contains no retroactivity language; its "may not enter into" phrasing addresses future acts (cf. Tex. Gov't Code Ann. § 311.012 ("Words in the present tense include the future tense.")). A retroactive law is one that acts on past things (Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002); Decordova v. City of Galveston, 4 Tex. 470, 475 (1849)). The emergency "effective immediately" clause supports prospective operation (Houston Indep. Sch. Dist. v. Houston Chronicle Publ'g Co., 798 S.W.2d 580, 587 (Tex. App.-Houston [1st Dist.] 1990, writ denied)).

The opinion expressly declined to decide whether the statute would apply to any particular agreement, noting that contract modification by mutual consent creates a new contract (Lamar Life Ins. Co. v. Jordan, 163 S.W.2d 215, 217 (Tex. Civ. App.-Waco 1942, writ ref'd w.o.m.); Greenbelt Elec. Coop., Inc. v. Johnson, 608 S.W.2d 320, 325 (Tex. Civ. App.-Amarillo 1980, no writ)), and that only retroactive statutes impairing vested rights are constitutionally prohibited (Subaru of Am., 84 S.W.3d at 219; Price Pfister, Inc. v. Moore & Kimmey, Inc., 48 S.W.3d 341, 353-54 (Tex. App.-Houston [14th Dist.] 2001, pet. denied)). It also did not reach the underlying validity of the agreement type, since a district has only the contracting powers conferred or implied by law (Harlingen Indep. Sch. Dist. v. Page, 48 S.W.2d 983, 986 (Tex. Comm'n App. 1932, judgm't adopted); Tex. Roofing Co. v. Whiteside, 385 S.W.2d 699, 701 (Tex. Civ. App.-Amarillo 1964, writ ref'd n.r.e.)).

Citations

Statutes:

• Tex. Educ. Code Ann. § 11.168 (Vernon 2006)
• Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 2, 2005 Tex. Gen. Laws 3286
• Tex. Gov't Code Ann. §§ 311.022; 311.012 (Vernon 2005)

Cases:

• In re M.C.C., 187 S.W.3d 383, 384 (Tex. 2006)
• Tex. Dep't of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 176 (Tex. 2004)
• Merch. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502, 504 (Tex. 1978)
• State v. Humble Oil & Ref. Co., 169 S.W.2d 707, 708-09 (Tex. 1943)
• Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002)
• Decordova v. City of Galveston, 4 Tex. 470, 475 (1849)
• Houston Indep. Sch. Dist. v. Houston Chronicle Publ'g Co., 798 S.W.2d 580, 587 (Tex. App.-Houston [1st Dist.] 1990, writ denied)
• Lamar Life Ins. Co. v. Jordan, 163 S.W.2d 215, 217 (Tex. Civ. App.-Waco 1942, writ ref'd w.o.m.)
• Greenbelt Elec. Coop., Inc. v. Johnson, 608 S.W.2d 320, 325 (Tex. Civ. App.-Amarillo 1980, no writ)
• Price Pfister, Inc. v. Moore & Kimmey, Inc., 48 S.W.3d 341, 353-54 (Tex. App.-Houston [14th Dist.] 2001, pet. denied)
• Harlingen Indep. Sch. Dist. v. Page, 48 S.W.2d 983, 986 (Tex. Comm'n App. 1932, judgm't adopted)
• Tex. Roofing Co. v. Whiteside, 385 S.W.2d 699, 701 (Tex. Civ. App.-Amarillo 1964, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0596
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2008/ga0596.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

January 17, 2008

The Honorable Homero Ramirez
Webb County Attorney
1110 Washington Street, Suite 301
Laredo, Texas 78042

Opinion No. GA-0596

Re: Operation of Texas Education Code section 11.168 prohibiting certain school district agreements (RQ-0609-GA)

Dear Mr. Ramirez:

You ask about the operation of section 11.168 of the Texas Education Code, which prohibits certain school district agreements, with respect to an agreement entered into before the effective date of the statute.[1] Section 11.168, in its entirety, provides as follows:

The board of trustees of a school district may not enter into an agreement authorizing the use of school district employees, property, or resources for the provision of materials or labor for the design, construction, or renovation of improvements to real property not owned or leased by the district.

TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). Section 11.168 became effective June 18, 2005. See Act of May 27, 2005, 79th Leg., R.S., ch. 979, 2005 Tex. Gen. Laws 3286. You specifically ask whether section 11.168

applies retrospectively to an agreement entered before the effective date of [the statute], where the agreement calls for the use of school district resources for improvements to real property not owned or leased by the ... district, and where such use of ... district resources will continue under the terms of the agreement after the effective date of Section 11.168[.]

Request Letter, supra note 1, at 1. You contend that because section 11.168 does not apply retrospectively it does not prohibit and affect the validity of an agreement entered into before June 18, 2005. See id. at 2.

We address here only the legal question you raise: whether section 11.168 applies retroactively to an agreement otherwise validly entered into before its effective date.[2] When interpreting a statute, like a court, we must "ascertain and effectuate the Legislat[ure's] intent." In re M.C.C., 187 S.W.3d 383, 384 (Tex. 2006) (quoting Tex. Dep't of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 176 (Tex. 2004)). The Code Construction Act provides that "[a] statute is presumed to be prospective in its operation unless expressly made retrospective." TEX. GOV'T CODE ANN. § 311.022 (Vernon 2005). And the Supreme Court of Texas has stated that "[s]tatutes are only applied retroactively if the statutory language indicates that the Legislature intended that the statute be retroactive." In re M.C.C., 187 S.W.3d at 384 (citing Merch. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502, 504 (Tex. 1978), State v. Humble Oil & Ref. Co., 169 S.W.2d 707, 708-09 (Tex. 1943)).

Section 11.168 does not indicate an intention by the Legislature to make the statute retroactive. See TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). The statute does not expressly state that it applies to agreements entered into before its adoption. See id.; see also TEX. GOV'T CODE ANN. § 311.022 (Vernon 2005) (stating that statute is presumed prospective unless expressly made retrospective); Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002) ("A retroactive law literally means a law that acts on things which are past.") (citing Decordova v. City of Galveston, 4 Tex. 470, 475 (1849)). Nor does the statutory language otherwise indicate that the Legislature intended retroactive operation. See TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006); see also In re M.C.C., 187 S.W.3d at 384-85 (stating that statutes are applied retroactively only if the language indicates such legislative intent). The statute provides that a school district board of trustees "may not enter into" an agreement described by the statute. TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). It does not attempt to reach past actions or decisions of a school board of trustees to contract with a party. Cf. TEX. GOV'T CODE ANN. § 311.012 (Vernon 2005) ("Words in the present tense include the future tense.").

The only legislatively adopted language regarding the operation of the statute, "effective immediately," also does not support an intent that the statute apply retroactively. See Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 2, 2005 Tex. Gen. Laws 3286 ("This Act takes effect immediately if it receives a vote of two-thirds of all the members ...."); cf. In re M.C.C., 187 S.W.3d at 385 ("The effective date language merely states the amending date and then defines the types of support to which [the amendment] applies without any suggestion of retroactive application."). That language, in fact, leads to the conclusion that the legislative intent was that the statutory prohibition apply prospectively. See Houston Indep. Sch. Dist. v. Houston Chronicle Publ'g Co., 798 S.W.2d 580, 587 (Tex. App.-Houston [1st Dist.] 1990, writ denied) ("The legislature's sole enacted pronouncement on the effective date of the bill is the emergency 'effective immediately' clause; if the legislature believed the provision could be applied retroactively, there would be no reason to make it effective immediately.").

In answer to your question, we conclude that section 11.168 does not apply retroactively to an agreement entered into before the effective date of the statute. You do not ask about a particular agreement, and we do not determine whether section 11.168 would apply to a particular agreement that may be described as being entered into before the statute's effective date. See, e.g., Lamar Life Ins. Co. v. Jordan, 163 S.W.2d 215, 217 (Tex. Civ. App.-Waco 1942, writ ref'd w.o.m.) (distinguishing between extension of rights vested at inception of a contract and a novation of such a contract); Greenbelt Elec. Coop., Inc. v. Johnson, 608 S.W.2d 320, 325 (Tex. Civ. App.-Amarillo 1980, no writ) (recognizing that under Texas law a contract modified by mutual consent is a new contract); see also Tex. Att'y Gen. Op. No. GA-0302 (2005) at 2 (stating that "this office does not review or construe contracts").

Because we conclude that section 11.168 does not apply retroactively, we need not address your contention that retroactive application of the statute would impair a school district's vested interest under an agreement entered into before the effective date of the statute. See Request Letter, supra note 1, at 2; see also Subaru of Am., Inc., 84 S.W.3d at 219 (stating that only retroactive statutes that impair vested rights are constitutionally prohibited); In re M.C.C., 187 S.W.3d at 385 (stating that because the court concluded that statutory amendment lowering interest rate on child support arrearages applied prospectively, "we do not reach the issue of whether the beneficiary has a vested right to the interest"); Price Pfister, Inc. v. Moore & Kimmey, Inc., 48 S.W.3d 341, 353-54 (Tex. App.-Houston [14th Dist.] 2001, pet. denied) (considering whether retroactive application of statute altered company's vested rights under a contract to pay commission).

SUMMARY

The general rule in Texas is that statutes apply prospectively unless the statutory language indicates that the Legislature intended the statute to apply retroactively. Texas Education Code section 11.168 prohibits a school district board of trustees from entering into an agreement authorizing the use of school district resources for improvement of real property not owned or leased by the school district. Because the statute does not indicate that the Legislature intended the statute to apply retroactively, it does not apply to such an agreement entered into before the effective date of the statute.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Sheela Rai
Assistant Attorney General, Opinion Committee

Footnotes

[1] See Letter from Honorable Homero Ramirez, Webb County Attorney, to Honorable Greg Abbott, Attorney General of Texas, at 1 (July 24, 2007) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[2] We do not understand you to ask about the underlying validity of the type of agreement at issue, and thus, we do not address that question. See Request Letter, supra note 1, at 1-2. A school district possesses only the powers, including the power to contract with reference to a particular purpose, expressly conferred on it by law or necessarily implied from the powers so conferred. Harlingen Indep. Sch. Dist. v. Page, 48 S.W.2d 983, 986 (Tex. Comm'n App. 1932, judgm't adopted); see also Tex. Roofing Co. v. Whiteside, 385 S.W.2d 699, 701 (Tex. Civ. App.-Amarillo 1964, writ ref'd n.r.e.). An agreement's validity necessarily depends on whether the agreement is authorized by law and whether its terms conform to the applicable law. Cf. Harlingen Indep. Sch. Dist., 48 S.W.2d at 986 (stating that court must look at pertinent statutes to determine validity of school district construction contract payable from bond proceeds). You do not reference or discuss the statutes authorizing the type of agreement you ask about, its terms, or any other facts about the agreement. See Request Letter, supra note 1, at 1-2; see also Tex. Att'y Gen. Op. Nos. GA-0176 (2004) at 2 (stating that attorney general opinions may "address a public entity's authority to agree to a particular contract term, if the question can be answered as a matter of law," but they do not generally construe contracts); JM-1218 (1990) at 1-2 (in absence of factual information, assuming that contract for the purchase of goods was validly entered into and delivery of the goods made before the effective date of statute in analyzing retroactive application of statute).