                                   September    10, 1990



    Honorable  John B. Holmes, Jr.                Opinion   No.    ~~-1218
    Harris County District Attorney
    District Attorney's    Building               Re:   Authority    of a local
    201 Fannin, Suite 200                         governmental      body to pay
    Houston, Texas   77002                        for   an    item    purchased
                                                  under    contract     executed
                                                  prior    to   the   effective
                                                  date   of section      140.003
                                                  of the    Local    Government
                                                  Code    (RQ-2017)

    Dear   Mr. Holmes:

          You ask whether section 140.003, Local Government                  Code,
    applies to a purchase,      made   with funds administered            by   the
    district     attorney   under    article    59.06     of    the    Code      of
P   Criminal Procedure,     where the contract was executed,              and the
    goods    delivered,    prior    to  the   effective       date     of      the
    provisions    of section 140.003, but payment has not yet                 been
    made.    The provisions    of section 140.003 were added in               1989
    by section 1 of House Bill 1434.         Acts   1989,    71st   Leg.,      ch.
    1250, 5 1, at 5046.      Section 22 of the act provides            that the
    act takes effect September       1, 1989.

          Section 140.003      requires     that   a    "specialized     local
    entity," defined in subsection         (a) to include a "district        or
    criminal    district    attorney,"      "shall    purchase     items     in
    accordance   with the same procedures        and subject to the       same
    requirements    applicable     to   a county     under    subchapter     C,
    chapter 262" of the Local Government          Code.    Subchapter    C of
    chapter 262,     known as    the County      Purchasing    Act,    imposes
    detailed requirements       on    county purchases,       including     the
    requirement   that, with certain exceptions,          purchases   over    a
    certain amount      be  made    pursuant to      competitive     bids    or
    proposals.    See Local Gov‘t Code g 262.023.

          Presumably,    the   cause   of   your concern    is   that the
    acquisition    in question was not made in accordance        with the
    the requirements     of the County Purchasing     Act, which section
    140.003 makes applicable       to  district attorney purchases     as
    of   September    1,    1989.     YOU   indicate   that    since  the




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Honorable   John   B. Holmes,    Jr.   - Page    2   (JM-1218)




performance   of the   parties was not   completed,    by   payment,
prior to    September   1,   1989, payment    has   to    date   been
withheld    out of a concern that making payment for the items
after September    1, 1989, would violate section 140.003.

      It appears that       at the time     the contract     in   question
here was executed       and the items      delivered,    purchases     with
district   attorney    funds administered      under article 59.06        of
the Code    of   Criminal    Procedure     were    not subject     to   the
competitive    bidding    and other     requirements     of   the    County
Purchasing   Act.    Article 59.06 provides        for the    disposition
of forfeited    property by law enforcement         agencies.     See art.
59.01 et    ea     Code Crim.     Proc. (seizure and forfeiture           of
property tsed'or intended         to be used      in the commission       of
certain offenses,      or   of the proceeds      or property      acquired
with   the   proceeds     gained    from    the    commission     of   such
offenses).     Attorney   General Opinion JW-783        (1987) indicated
that purchases     with forfeited     funds, under V.T.C.S.,       article
4476-15,   § 5.08,     (now   article 59.01      et sea       Code    Crim.
Proc.) were not      subject to the      reguirements';f      the    County
Purchasing   Act, then found at article 2368a.5, V.T.C.S.

      You do not raise or provide us with sufficient            facts to
address issues     as to   the propriety      generally   of    the   use
under article 59.06 of       forfeited   funds for the      acquisition
in question.     We address here only the narrow legal question
you raise:    whether the purchase by the district          attorney    of
items for    which    a  contract    was   executed     and   of    which
delivery was     taken,   prior to     the  effective    date    of   the
provisions   of section 140.003, but for which payment was not
made before such date, is subject to the provisions             of   that
section.

      You suggest that application       of section 140.003 to          the
transaction   in   question would     violate the     prohibition        in
article    I,  section    16    of   the   state    constitution         on
retroactive    laws   or   laws    impairing    the   obligations        of
contracts.    See also U.S. Const. a*.       I, 0 10.

      Assuming   that the August 1989 contract    in question    was
validly entered into and delivery      of the subject merchandise
properly   taken in August, under the laws then in force,
agree that     application   to  the  transaction  of  the    subs::
guently effective     provisions  of section 140.003 -- so as      to




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        Honorable   John   B. Holmes,   Jr.   - Page    3   (JM-1218)



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        prevent or    make    subject to     injunction,1     the    purchaser's
        performance,    by payment of its obligations        arising from such
        contract and delivery      -- would    violate the prohibitions          in
        article I, section 16 on retroactive          laws or laws     impairing
        the   obligations     of   contracts.      See. e.a.,     Hutchinas      v.
        Slemons    174 S.W.2d 487 (Tex. 1943) (broker's oral             contract
        entered'into     before effective      date    of statute     of    frauds
        pertaining   to   such    contracts    not subject     to    statute     of
        frauds); Cardenes v. State, 683 S.W.Zd 128 (Tex. Civ. App. -
        San Antonio   1984,    no writ) (statute       authorizing    surety     to
        receive a remitter of       its bond under stated        circumstances,
        was enacted subsequent      to bond forfeiture      in case and, since
        it would impair rights acquired by state under laws at                time
        it entered into contract with surety, was not retroactive                in
        application).     See        u                   173 S.W.Zd 200 (Tex.
        Civ. App. - Eastland       1943, writ     ref'h) (broker's       contract
        antedating   statute     of frauds    provision):    Attorney     General
        Opinions JM-897     (1988) and JH-774     (1987) (imposition      of   fee
        by Veterans   Land Board for delivery of paid-in-full            deeds to
        purchasers   under contracts      not contemplating      imposition      of
        such fee).

              That the contract      in question here was made by a public
        entity does not remove it from the scope of the prohibitions
        of article I, section 16 of the Texas Constitution.               Fazekas
        V.     iversitv of Houston       565   S.W.Zd 299 (Tex. Civ. App.         -
        Houston    [lst Dist.] 1978:      writ ref'd n.r.e.),       m.    denied,
        440 U.S. 952.      Nor, we    think, would application       of   section
        140.003 to the transaction        in   question be in the nature        of
        an exercise     of   police power       or    change in    procedure    or
        remedy which might be        permissible    under article I,      section
        16.   See. e.a., Caruthers        v. Bd. of     Adiustment   of City    of
        Bunker Hill     Villaae,     290   S.W.2d 340      (Tex.   Civ.   App.    -
        Galveston    1956, no    writ) (zoning); Commercial                0.   of
        Newark. N.J.     v. Lang      480    S.W.2d 781     (Tex. Civ.'           -
        Dallas 1972,     writ    r;f8d n.r.e.)       (retroactive    law A%ing
        procedural    or remedial change not invalid unless it            impairs
        vested    rights    or   takes     away    or   unreasonably      impairs
        litigant's    remedy, right of action, or defense).

             It might be suggested that         the parties     to the  contract
        in question here were on notice         at the time     of its execution



              1. &9  Local Gov't Code 5 262.033   (taxpayer may enjoin
        performance of contract made in violation   of County Purchas-
        ing Act).

    -

    .



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Honorable     John   B. Holmes,   Jr.   - Page    4   (JM-1218)




in August,   1989, that    the provisions    of section     140.003,
approved by the governor    on June 16, 1989, would take effect
September  1    1989.  Addressing    a similar    situation,     with
regard to aA act taking effect 90 days after adjournment            of
the legislature,   the court in purser v. Pool, 145 S.W.Zd 942
(Tex. Civ.   App.    - Eastland   1940,   no  writ)    stated    that
passage of an act does not give contracting       parties     "notice
of anything.    It did not operate as notice until it became a
law ninety days after adjournment."

      Again, we conclude      in   response to your question,          that
application   of    Local   Government     Code    section    140.003    --
requiring    that    district     attorney     purchases     be  made     in
accordance   with the competitive        bidding and other       reguire-
ments of the County Purchasing         Act -- to a district      attorney
purchase   for which the contract was executed           and delivery    of
the subject merchandise       taken prior to the effective         date of
the provisions    of that     section, would violate the         prohibi-
tions in    article     I,  section 16      of   the    constitution     on
retroactive   laws    and   laws    impairing      the   obligations     of
contracts.



                Application    of    Local    Government      Code
            section 140.003, which requires that district
            attorney purchases     be made in accordance      with
            the competitive     bidding and     other    require-
            ments of the County Purchasing       Act, does     not
            apply to    a district attorney        purchase    for
            which the contract was executed        and   delivery
            of the subject merchandise      taken prior to the
            effective   date   of   the   provisions     of   that
            section.    Application     of that    provision     in
            such situation    would violate the prohibitions
            in article I, section 16 of the         constitution
            on retroactive     laws and    laws impairing      the
            obligations    of contracts.




                                             JIM      MATTOX
                                             Attorney  General    of Texas




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    Honorable   John   B. Holmes,      Jr.    - Page    5   (JM-1218)




    MARYKELLER
    First Assistant     Attorney      General

    Lou MccREARY
    Executive  Assistant      Attorney       General

    JUDGE ZOLLIE STEAKIXY
    Special Assistant  Attorney          General

    RENEA HICKS
    Special Assistant      Attorney      General

    RICK GILPIN
    Chairman,  Opinion     Committee

    Prepared by William Walker
    Assistant Attorney  General




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