  i   OFFICE OF THE ATTORNEY GENERAL . STATE OF TEXAS

      JOHN    CORNYN




                                                   May 29,2002




The Honorable J. E. “Buster” Brown                         Opinion No. JC-0509
Chair, Committee on Natural Resources
Texas State Senate                                         Re:    Whether section 402.909 of the Local
P.O. Box 12068                                             Government    Code is applicable to the San
Austin, Texas 7871 l-2068                                  Antonio Water System, and related questions
                                                           (RQ-0489-JC)


Dear Senator Brown:

        You have requested our opinion regarding the proper construction of a statute, enacted by
the Seventy-seventh    Legislature as section 402.909 of the Local Government Code, that places
certain restrictions upon a municipal water system’s authority to contract with former members of
the board of the water system. Specifically, you ask whether the statute applies to the San Antonio
Water System (SAWS), which was established in 1992. If the statute is applicable to SAWS, you
ask two other questions about the authority of SAWS to contract with a former board member, or
a law firm that employs him, under particular circumstances.   For the reasons set forth below, we
conclude that section 402.909 has no application to SAWS.

         You indicate that in 1992 the City of San Antonio adopted an ordinance that “combined three
water-related functions owned and operated by the city into a single system, the San Antonio Water
Systems (SAWS), and established a board of trustees to manage the system?            The city council
appointed a certain member to the board in September 1998. That member resigned effective April
18,200l. See Request Letter, supra note 1, at 1. You state that, “[ulnder applicable city ordinance
and SAWS bylaws, no holding over applies to resigning board members and a vacancy is created
on the effective date of a member’s resignation, in this case, on April 18,200l.” Id. In any event,
on May 17, 2001, the city council appointed another individual to fill the vacancy created by the
resignation. See id. “On June 18,2001, the former board member began employment with a law
firm which is interested in being considered to perform legal services for SAWS.” Id. at 2.

        Section 402.909 of the Local Government Code is entitled, “Prohibited Employment                       of or
Contracting With Former Trustee or Board Member” and provides:




           ‘Letter from Honorable J. E. “Buster” Brown, Texas State Senator, to Honorable John Comyn, Texas Attorney
General,   at 1 (Jan. 3,2002) (on file with Opinion Committee) [hereinafter Request Letter].
The Honorable J. E. “Buster” Brown       - Page 2       (JC-0509)




                (a) This section applies to a municipality that creates a board of
                trustees or other board to manage and control a water, wastewater,
                storm water, or drainage utility system that the municipality owns.

                (b) The municipality or a board of trustees or other board described
                by Subsection (a) may not employ or contract with an individual who
                was a member of the board before the second anniversary of the date
                the individual ceased to be a member of the board.

TEX. Lot.   GOV’T CODE ANN. 5 402.909 (Vernon Supp. 2002) (emphasis           added).

          Subsection (a) of section 402.909 specifically declares that it “applies to a municipality that
creates a board of trustees.” (emphasis added). Section 3 11 .012(a) of the Government Code, which
is part of the Code Construction Act, provides that “[wlords in the present tense include the future
tense.” This rule of construction does not indicate, however, that the present tense includes thepast
tense or theperfect tense. TEX.GOV’T CODEANN. 4 3 11 .012(a) (Vernon 1998). Had it intended that
meaning, the legislature might easily have used the term “has created or shall create” instead of the
single verb “creates.” The legislature might also have chosen to use the verb “operates.” “Operates”
implies an ongoing activity. See X OXFORDENGLISHDICTIONARY847 (2d ed. 1989) (“Operate”
means “[t]o be in working, exercise force or influence, produce an effect, act, work.“). “Creates,”
on the other hand, suggests a one-time event. See III OXFORDENGLISHDICTIONARY1134 (2d ed.
1989) (“Creates” means “[t]o bring into being, cause to exist; esp to produce where nothing was
before . . . .“). Section 3 11 .Ol 1(a) of the Government Code provides that “[wlords and phrases shall
be read in context and construed according to the rules of grammar and common usage.” Id. 8
3 11 .Ol 1(a). Consequently, subsection (a) of section 402.909 would seem on its face to apply only
to a municipality that creates the relevant board of trustees on or after the effective date of the
statute. Section 43 of Senate Bill 1444, which enacted section 402.909 of the Local Government
Code, provides:

                   SECTION 43. This Act takes effect immediately if it receives a
                vote of two-thirds of all the members elected to each house, as
                provided by Section 39, Article III, Texas Constitution. If this Act
                does not receive the vote necessary for immediate effect, this Act
                takes effect September 1,200l.

The bill did in fact pass both houses of the legislature with a greater than two-third’s majority, and
as a result, became effective on June 17,200l. See Act of May 26,2001,77th Leg., R.S., ch. 1423,
$4 38,43,2001     Tex. Gen. Laws 5069,5078,5080.

         Although retroactive laws are prohibited by article I, section 16 of the Texas Constitution,
this provision “operates only to prohibit the application of statutes which disturb vested, substantive
rights.” Ibarra v. State, 11 S.W.3d 189, 192 (Tex. Crim. App. 1999). See McCain v. Yost, 284
S.W.2d 898 (Tex. 1955); Southwestern Bell Tel. Co. v. Pub. Util. Comm ‘n, 615 S.W.2d 947, 956
The Honorable        J. E. “Buster” Brown - Page 3          (JC-0509)




(Tex. Civ. App.-Austin      198 1, writ ref d n.r.e.). In our view, there can       be no doubt that the
legislature could have made section 402.909(a) applicable to a board created         in 1992. Application
of the statute to boards created before 2001 would not have impaired vested          or substantive rights.
But the legislature did not explicitly opt to apply the statute in a retroactive    manner.

         Section     3 11.022 of the Government Code declares: “A statute is presumed to be prospective
in its application     unless expressly made retrospective.” TEX.GOV’T CODEANN. 8 3 11.022 (Vernon
1998). As the         court stated in Reames v. Police Officers’ Pension Bd., 928 S.W.2d 628 (Tex.
App.-Houston         [ 14th Dist.] 1996, no writ):

                     In Texas, “[a] statute is presumed to be prospective in its operation
                     unless expressly made retrospective.” Texas law strongly militates
                     against the retroactive application of laws. Houston Indep. Sch. Dist.
                     v. Houston Chronicle Publishing Co., 798 S.W.2d 580, 585 (Tex.
                     App.-Houston      [ 1st Dist.] 1990, writ denied). Texas courts apply
                     statutes retroactively only if “it appears by fair implication from
                     language used that it was the intention of the Legislature to make it
                     applicable to both past and future transactions.” State v. Humble Oil
                     & Refining Co., 141 Tex. 40, 169 S.W.2d 707,708-09 (1943).

Id. at 63 1 (citation omitted). Furthermore, “[t}he general rule is that there exists a presumption that
an act is intended to operate prospectively and not retroactively. If there is any doubt, the intention
will be resolved against retrospective operation of a statute.” Exparte Abell, 613 S.W.2d 255,258
(Tex. 1981). Although there can be no doubt that the legislature could, without violating article I,
section 16 of the Texas Constitution, have applied section 402.909 to boards created before the
effective date of the statute, the fact remains that the legislature did not in plain language explicitly
do so. Because it must be presumed that a statute is to operate prospectively only, we believe it
follows that section 402.909 ought to be deemed to operate prospectively only. As a result, section
402.909 of the Local Government Code is not applicable to the board of trustees of the San Antonio
Water System.

         Nothing in the legislative history suggests a contrary construction.       This statute was
originally proposed in the House of Representatives as one of a group of floor amendments to Senate
Bill 1444, a bill “relating to the general powers and authority of water districts.” Tex. S.B. 1444,
77th Leg., R.S. (2001). Amendment three, which became section 402.909, was offered by
Representative    Robert Puente and was adopted without objection in the House. See H.J. OF TEX.,
77th Leg., R.S. 3 170 (2001). The Senate refused to concur in the House amendments and requested
a conference committee. See S.J. OFTEX.,77th Leg., R.S. 2506 (2001). The conference committee
report on Senate Bill 1444, including the amendment under consideration here, described therein as
section 38 of the bill, was adopted by both houses on May 26, 2001. Senate Bill 1444 became
effective on June 17,200l. On June 19,2001, the Senate Research Center filed its bill analysis of
the enrolled version of Senate Bill 1444. The bill analysis contains an almost verbatim summary of
The Honorable J. E. “Buster” Brown - Page 4          (JC-0509)




section 38, but offers no additional comment. See SENATE COMM. ON NATURAL RESOURCES,BILL
ANALYSIS,Tex. S.B. 1444,77th Leg., R.S. (2001).

        Because we conclude that section 402.909 is not applicable to the board created on behalf
of the San Antonio Water System, we need not address your second and third questions.




                                       SUMMARY

                        Section 402.909 of the Local Government Code, which places
               certain restrictions upon a municipal water system’s authority to
               contract with former members of the board of the water system, is
               prospective in its application and therefore does not apply to the San
               Antonio Water System created in 1992.




                                              JOHN     CORNYN
                                              Attorney General of Texas



HOWARD G. BALDWIN, JR.
First Assistant Attorney General

NANCY FULLER
Deputy Attorney General - General Counsel

SUSAN DENMON GUSKY
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee
