= OFFICE OF THE ATTORNEY GENERAL . STATE OF TEXAS
JOHN CORNYN
June 24,2002
The Honorable Warren Chisum Opinion No. JC-05 15
Chair, House Committee on
Environmental Regulation Re: Whether the provisions of House Bill 2912 on
Texas House of Representatives regulated entities’ compliance history authorize the
P.O. Box 2910 Texas Natural Resource Conservation Commission
Austin, Texas 78768-2910 to consider compliance history that occurred prior to
February 1,2002 (RQ-0482-JC)
Dear Representative Chisum:
Your questions relate to House Bill 2912 of the Seventy-seventh Legislature, which
continues the Texas Natural Resource Conservation Commission (the “TNRCC” or “Commission”)
following review under the Texas Sunset Act. See Act of May 27,2001,77th Leg., R.S., ch. 965,
2001 Tex. Gen. Laws 1933. See also TEX. GOV’T CODE ANN. ch. 325 (Vernon 1998 & Supp. 2002)
(Texas Sunset Act). You inquire whether the provisions of House Bill 2912 regarding the
compliance history of regulated entities, in particular, section 18.05(i) of the enactment, permit the
TNRCC to consider compliance history that occurred before February 1,2002.’ We conclude that
the Commission has authority under House Bill 2912 to consider compliance history of regulated
entities that dates from five years prior to the time the Commission’s regulatory authority is initiated
or invoked, including compliance history from before February 1, 2002. You also state that any
provisions of House Bill 2912 authorizing the Commission to define compliance history to
encompass facts dating from before February 1, 2002 would be retroactive and unconstitutional
under article I, section 16 of the Texas Constitution. We need not decide whether these provisions
impair a vested right. They protect the public health, safety, and welfare, and accordingly are not
facially violative of article I, section 16 of the Texas Constitution.
We first consider whether compliance history under House Bill 29 12 includes pre-February
1,2002 events. Even before the Seventy-seventh session, the Legislature required the Commission
to consider a regulated entity’s compliance history in some of its decisions. For example, if “an
applicant’s compliance history for the preceding five years” raised an issue regarding the applicant’s
ability to comply with material terms of a solid waste disposal permit, the Commission was to
provide an opportunity to request a contested case hearing. See Act of May 18, 1989, 71 st Leg.,
‘Letter from Honorable Warren Chisum, Chair, House Committee on Environmental Regulation, to Honorable
John Comyn, Texas Attorney General at 1 (Dec. 18, 2001) (on file with Opinion Committee) [hereinafter Request
Letter].
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R.S., ch. 678,s 1,1989 Tex. Gen. Laws 2230,2635, amended by Act of May 27,1991,72d Leg.,
R.S., ch. 296,§ 1.14,1991 Tex. Gen. Laws 1235,1248 (~~~~~~~~TE~.HEALTH&SAFE~~!CODEANN.
8 361.088(f) (2000)). H owever, compliance history was not clearly defined and how it was used
varied among the Commission’s air, water, and waste programs. See SUNSETADVISORY COMM’N,
STAFFREPORT: TEX. NATURAL RES. CONSERVATIONCOMM’N at 23 (2000); see also Act of May 30,
1999,76th Leg., R.S., ch. 1350, 5 5, 1999 Tex. Gen. Laws 4570,4573-75 (formerly TEX. HEALTH
& SAFETY CODE ANN. 8 382.056(e) (2000)) (authority to hold a hearing under the Clean Air Act on
a permit amendment, modification, or renewal based on compliance history); Act of May 19, 1999,
76th Leg., R.S., ch. 795, 4 1, 1999 Tex. Gen. Laws 3419 (formerly TEX. WATER CODE ANN. 5
26.028(d)(4) (2000)) (C ommission to consider applicant’s compliance history for the preceding five
years in deciding whether to grant wastewater discharge permit without a public hearing); Act of
May 27, 1985,69th Leg., R.S., ch. 566, 8 16, 1985 Tex. Gen. Laws2166,2182-83 (forrnerly TEX.
WATER CODE ANN. 8 27.05 1(d)-(e) (2000)) ( considering compliance history to determine whether
use of injection well for disposal of hazardous waste is in the public interest). The Sunset Advisory
Commission staff recommended that the Legislature require the Commission to develop a common
definition for compliance history through rulemaking, to track and report the compliance history of
all regulated entities, and to develop a performance assessment that differentiated regulated entities
based on compliance performance. SUNSETADVISORYCOMM’N, STAFFREPORT:TEX. NATURALRES.
CONSERVATIONCOMM’N at 23,27 (2000). The Legislature included in House Bill 2912 provisions
that “taken together, [would] require the Commission to establish a performance regulatory structure
using a uniform standard for evaluating compliance history to guide permit and enforcement
decisions, and to determine eligibility for participation in innovative programs.” SUNSETADVISORY
COMM’N, SUMMARY OF SUNSETLEGISLATION,‘77~~ LEGISLATUREat 35 (2001).
The substantive provisions on compliance history are codified as Water Code subchapter Q,
consisting of sections 5.75 1 through 5.758, and the transition and effective date provisions applicable
to the compliance history sections are found in section 18.05 of House Bill 2912. See Act of
May 27,2001,77th Leg., R.S., ch. 965, art. 4, 8 4.01, art. 18,§ 18.05,2001 Tex. Gen. Laws 1933,
1950-53, 1986-87. While your question refers only to a transition provision, section 18.05(i) of
House Bill 2912, a discussion of the other provisions is necessary to provide a context for addressing
it.
Subchapter Q applies to programs under the jurisdiction of the Commission under Water
Code chapters 26 and 27, and Health and Safety Code chapters 361, 382, and 401. TEX. WATER
CODE ANN. 8 5.75 1 (Vernon Supp. 2002). These are programs under the Solid Waste Disposal Act,
the Clean Air Act, the Radiation Control Act, the water quality control law, and the Injection Well
Act. See TEX. HEALTH & SAFETY CODE ANN. $5 361.001,382.001,401.0005 (Vernon 2001); TEX.
WATER CODE ANN. $5 26.003 (Vernon Supp. 2002), 27.001 (Vernon 2000). Section 5.753 of the
Water Code provides that “[clonsistent with other law and the requirements necessary to maintain
federal program authorization, the commission by rule shall develop a uniform standard for
evaluating compliance history.” TEX. WATER CODE ANN. 5 5.753(a) (Vernon Supp. 2002). The
components of compliance history must include:
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(1) enforcement orders, court judgments, consent decrees, and
criminal convictions of this state and the federal government relating
to compliance with applicable legal requirements under the
jurisdiction of the commission or the United States Environmental
Protection Agency;
(2) notwithstanding any other provision of this code, orders
issued under Section 7.070;*
(3) to the extent readily available to the commission,
enforcement orders, court judgments, and criminal convictions
relating to violations of environmental laws of other states; and
(4) changes in ownership.
Id. 8 5.753(b) (footnote added). The set of components must also include “any information required
by other law or any requirement necessary to maintain federal program authorization” and “notices
of violations” ( “NOVs”), although a notice of violation “administratively determined to be without
merit shall not be included in a compliance history,” and a notice of violation included in a
compliance history “shall be removed from the compliance history if the commission subsequently
determines the notice of violation to be without merit.” Id. 8 5.753(c)-(d). Finally, section 5.753
provides that the Commission “by rule shall establish a period for compliance history” except as
required by other law or any requirement necessary to maintain federal program authorization. See
id. 4 5.753(e).
The Commission must “[nlot later than February 1,2002,” establish by rule “the components
of compliance history, as required by Section 5.753, Water Code” and the Commission has
promulgated rules doing so. Act of May 27,2001,77th Leg., R.S., ch. 965, art. 18’8 18.05(a), 2001
Tex. Gen. Laws 1933’1986. See 27 Tex. Reg. 191,262 (2002) (to be codified at 30 TEX. ADMIN.
CODE 8 60.1) (Tex. Natural Res. Conservation Comrn’n). You are concerned that the Commission’s
rule establishes a period for compliance history that is inconsistent with section 18.05(i) of House
Bill 29 12. The compliance history period established by rule
includes the five years prior to the date the permit application is
received by the executive director; the five-year period preceding the
date of initiating an enforcement action with an initial enforcement
settlement offer or the filing date of an Executive Director’s
2Water Code section 7.070 deals with agreed orders compromising or settling an alleged violation of a statute,
rule, order, or permit. An agreed administrative order may state that it is not intended to become a part of a party’s or
facility’s compliance history. See TEX. WATER CODEANN. 3 7.070(3) (Vernon 2000).
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Preliminary Report (EDPR),3 whichever occurs first; for purposes of
determining whether an announced investigation is appropriate, the
five-year period preceding an investigation; or the five years prior to
the date the application for participation in an innovative program is
received by the executive director.
Id. at 262 (footnote added) (to be codified at 30 TEX. ADMIN. CODE 8 60.1 (b)). This rule provides
that compliance history includes relevant events during the five-year period before the Commission’s
regulatory authority is initiated or invoked. See id. at 2 10. Pursuant to this rule, the Commission
may look back to components of compliance history that occurred during the previous five years,
including compliance history occurring before February 1’2002. Id. There are some exceptions to
the five-year time period. With respect to orders developed under section 7.070 of the Water Code,
compliance history includes only those approved by the Commission on or after February 1,2002.
Id. at 262 (to be codified at 30 TEX. ADMIN. CODE 8 60.1 (c)(2)). Compliance history includes “all
written notices of violation . . . issued on or after September 1, 1999, except for those
administratively determined to be without merit.” Id. at 262 (to be codified at 30 TEX. ADMIN. CODE
8 60.1 (c)(7)). Thus, the Commission has established a compliance period of five years, with certain
exceptions to its “five-year backward look at compliance history components.” See 27 Tex. Reg.
2934 (2002) (comments in connection with rule-making process under Water Code section 5.754).
While section 5.753 of the Water Code requires the Commission to establish the components
of compliance history, section 5.754 governs the Commission’s use of a regulated entity’s
compliance history in the regulatory process. The Commission must adopt rules under section 5.754
by September 1’2002. See Act of May 27, 2001, supra, 8 18.05(b), 2001 Tex. Gen. Laws 1933,
1986. The Commission’s proposed rules for this section have been published. See 27 Tex. Reg.
2930 (2002) (to be codified at 30 TEX. ADMIN. CODE $5 60.2, .3) (proposed Apr. 12’2002).
Section 5.754 of the Water Code requires the Commission to adopt rules for classifying a
regulated entity’s compliance history to distinguish among entities that are
(1) poor performers, or regulated entities that in the
commission’s judgment perform below average;
(2) average performers, or regulated entities that generally
comply with environmental regulations; and
(3) high performers, or regulated entities that have an
above-average compliance record.
TEX. WATERCODEANN. 6 5.754(a)-(b) (Vernon Supp. 2002). See also id. 8 5.754(c) (requirements
for Commission in classifying compliance history), (d) (Commission shall establish methods of
3The executive director’s preliminary report is a pleading filed by the executive director, which, when issued
and served, seeks an enforcement order against a respondent. 30 TEX. ADMIN. CODE $ 70.2(2) (2001).
The Honorable Warren Chisum - Page 5 (JC-05 15)
assessing compliance history when it does not have adequate compliance information, such as
compliance inspection). The rules must provide for “the use of compliance history classifications
in commission decisions” regarding
(1) the issuance, renewal, amendment, modification, denial,
suspension, or revocation of a permit;
(2) enforcement;
(3) the use of announced inspections; and
(4) participation in innovative programs.
Id. 0 5.754(e). They must also “provide for additional oversight of, and review of applications
regarding, facilities owned or operated by a person whose compliance performance is in the lowest
classification developed under this section.” Id. 9 5.754(g). The rules must prohibit a person whose
compliance history is classified in the lowest classification from receiving an announced inspection,
obtaining or renewing a flexible permit under the program administered by the Commission under
the Clean Air Act, or participating in the regulatory flexibility program administered by the
Commission under section 5.758 of the Water Code. Id. 8 5.754(h). See also id. 5 5.754(f) (rules
shall establish enhanced administrative penalties for repeat violators), (i) (Commission shall consider
regulated entity’s compliance history when determining whether to grant application for a permit
or permit amendment for any activity under the Commission’s jurisdiction to which subchapter Q
applies). Thus, depending on the facts of a regulated entity’s compliance history, it may have an
important bearing on certain of the Commission’s decisions about the entity.
We next address section 18.05 of House Bill 2912, which phases in the compliance history
program mandated by the Legislature. We have already seen that subsection 18.05(a) requires the
Commission to adopt rules under section 5.753 of the Water Code, establishing components of
compliance history by February 1,2002, and subsection 18.05(b) requires the Commission to adopt
rules under section 5.754 of the Water Code, establishing standards for the classification and use of
compliance history by September 1’2002. See Act of May 27,2001, supra, 8 18.05(a), (b), 2001
Tex. Gen. Laws 1933, 1986. Because your question about subsection (i) turns on differences in
language between subsection (i) and subsections (f), (g), (h), and (j), we quote these provisions in
full:
(f) The changes made by this Act in the consideration of
compliance history in decisions by the Texas Natural Resource
Conservation Comrnission relating to the issuance, amendment,
modification, or renewal of permits under the following sections
apply only to an application for the issuance, amendment,
modification, or renewal of a permit submitted to the Texas Natural
Resource Conservation Commission on or after September 1,2002:
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(1) [Water Code provisions applicable to perrnits under Water
Quality Control Act and Injection Well Act].
(2) [Health and Safety Code provisions on application for
hazardous waste disposal permit, preconstruction permit under Clean
Air Act, and licensing of processing and disposal of radioactive
substances].
(g) For the purposes of consideration of compliance history in
decisions by the Texas Natural Resource Conservation Commission
relating to the issuance, amendment, modification, or renewal of a
permit under the sections listed under Subsection (0 of this section,
an application submitted before September 1, 2002, is governed by
the law as it existed immediately before September 1,2001, and the
former law is continued in effect for that purpose.
(h) The changes made by this Act in the consideration of
compliance history in decisions by the Texas Natural Resource
Conservation Commission relating to inspections and flexible
permitting under Subchapter Q, Chapter 5, Water Code, as added by
this Act apply, effective September 1,2002, to an action taken by the
Texas Natural Resource Conservation Commission that is subject to
those sections.
(i) The changes made by this Act in the definition of compliance
history apply to an action taken by the Texas Natural Resource
Conservation Commission on or after February 1, 2002. An action
taken by the Texas Natural Resource Conservation Commission
before February 1,2002, is governed by the law in effect on the date
the action is taken, and the former law is continued in effect for that
purpose.
(j) The changes made by this Act in the consideration of
compliance history in decisions of the Texas Natural Resource
Conservation Commission relating to the suspension or revocation of
a permit or the imposition of a penalty in a matter under the
jurisdiction of the commission apply only to a proceeding that is
initiated or an action that is brought on or after September 1, 2002.
A proceeding that is initiated or an action that is brought before
September 1, 2002, is governed by the law in effect on the date the
proceeding is initiated or action is brought, and the former law is
continued in effect for that purpose.
Id. tj 18.05(f)-(j).
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You point out that subsection 18.05(i) “specifies that the new definition of compliance
history applies to actions of the TNRCC on or after February 1’2002,” see Act of May 28,2001,
supra, 8 18.05(b), 2001 Tex. Gen. Laws 1933, 1986, while the other subsections establish the date
the Commission’s decisions on specific matters will consider compliance history as changed by
House Bill 2912 and the rules adopted thereunder. Request Letter, supra note 1, at 2-3 (emphasis
in original). You read subsection (i) as specifying “the point in time when TNRCC actions (such
as issuance of notices of violation, enforcement orders, etc.) are to be categorized according to the
new compliance history definition.” Id. at 3. You interpret the first sentence of subsection (i) as if
it read as follows:
The changes made by this Act in the definition of compliance history
apply to an action [generating compliance history information about
a regulated entity] taken by the Texas Natural Resource Conservation
Commission on or after February 1,2002.
According to your reading of subsection (i), it provides that the new definition of compliance history
established pursuant to section 5.753 may be used to describe only those compliance history facts
occurring after February 1, 2002. As a consequence of reading subsection (i) in this way, you
conclude that the Commission may consider in its decisions subject to section 5.754 of the Water
Code, only compliance history of a regulated entity occurring after February 1,2002. See id. at 7.
Your interpretation is contrary to provisions of the Commission’s rule, which establishes a
time period for compliance history covering the five years before the Commission takes jurisdiction
of a matter involving a regulated agency, and which allows the inclusion of pre-February 1’2002
information in compliance history. The courts will generally defer to the construction of a statute
by the administrative agency charged with its enforcement. See Osterberg v. Peca, 12 S. W.3d 3 1,
51 (Tex. 2000). See also Bullock v. Hewlett-Packard Co., 628 S.W.2d 754, 756 (Tex. 1982)
(administrative rules will be upheld if they are reasonable); Browning-Ferris, Inc. v. Tex. Dep ‘t of
Health, 625 S.W.2d 764, 767 (Tex. App.-Austin 1981, writ ret? d n.r.e.) (administrative rules
presumed valid and the burden of demonstrating invalidity is on the challenging party). When
subsection (i) is read in its entirety and in context, it may be given a reasonable meaning that does
not involve the limitation you suggest.
Words in statutes are to be read in context and construed according to common usage, unless
they have acquired a technical or particular meaning. See TEX. GOV’T CODEANN. 9 3 11 .O11 (Vernon
1998). The word “action” in common use is a broad term meaning “conduct” or “deed.” I OXFORD
ENGLISHDICTIONARY 127,3.a (2d ed. 1989). See also id. at 128; Thomas v. Oldham, 895 S.W.2d
352,356 (Tex. 1995) ( in some circumstances, “action” may have the narrower meaning of legal
process or suit). The Legislature has adopted provisions using the term “action” as a general
description of an administrative agency’s powers and duties, ranging from rule-making powers to
house-keeping functions. For example, in preparing to implement legislation that has not taken
effect, “a state agency may adopt a rule or take other administrative action” that the agency
determines is necessary or appropriate. TEX. GOV’T CODE ANN. 8 2001.006(b) (Vernon 2000).
Notice of “proposed state agency rules and state agency actions” is given through publication in the
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Texas Register. See id. 8 2002.002 (Texas Register shall contain, among other items, state agency
organizational and personnel changes). State agencies that issue permits are required to make a
report to the governor and legislature that must include, among other information, “specific actions
taken by the agency” to simplify and improve its permit application, processing, and paperwork
requirements. Id. 8 2005.007. Thus, an “action” of a state agency in the general sense of the term
may include internal changes necessary to administer new legislation or to respond to a change in
workload.
The first sentence of subsection (i) provides that the new definition of compliance history
applies to an action taken by the Commission on or after February 1,2002, while the second sentence
continues in effect the old law for an action taken by the Commission before February 1’2002. We
point out that the term “action” in this provision must mean something other than consideration of
the new law on compliance history in Commission decisions under section 5.754 of the Water
Code, because the Commission does not have that power until September 1, 2002. See Act of
May 27, 2001, supra, § 18.05 (t), (h), (j), 2001 Tex. Gen. Laws 1933, 1986. We believe that
“action” is used in the first sentence of subsection (i) in a broad, general sense to encompass the
various ways the Commission might recognize and use the new definition of compliance history.
An example of an “action” to be taken after February 1, 2002 that uses the new definition of
compliance history is found in the Commission’s rule on the components of compliance history:
“Beginning February 1, 2002, the executive director shall develop compliance histories with the
components specified in this chapter.” See 27 Tex. Reg. 191,262 (2002) (to be codified at 30 TEX.
ADMIN. CODE 9 60.1(a)(6)). Thus, the phrase “action taken” by the Commission may be given a
reasonable meaning that is consistent with the rule adopted by the Commission.
It is also important to read subsection (i) in its context among other effective date and
transition provisions. See Act of May 27,2001, supra, art. 18,200l Tex. Gen. Laws 1933, 1985.
September 1,200l is the general effective date of House Bill 2912, see Act of May 27,2001, supra,
9 18.15,2001 Tex. Gen. Laws 1933,1989, but section 18.05 establishes delayed effective dates for
implementing provisions of Water Code, subchapter Q, and rules adopted thereunder. See id.
9 18.05(f), (h), (j) (establishing September 1, 2002 effective date for the changes in considering
compliance history in Commission’s decisions under certain permitting statutes, under provisions
relating to inspections and flexible permitting, and under provisions on the suspension or revocation
of a permit or the imposition of a penalty). Transition provisions, such as delayed and staggered
effective date provisions, provide for the orderly implementation of legislation. See TEX.
LEGISLATIVE COUNCIL DRAFTING MANUAL 5 3.12(a) (2000) (saving and transition provisions).
Corresponding to the effective date provisions in section 18.05, there are savings clauses, which
continue former law in effect for certain purposes. See Firemen’s Pension Comm ‘n v. Jones, 939
S.W.2d 730, 733 (Tex. App.-Austin 1997, no writ); 1A NORMAN J. SINGER, STATUTES AND
STATUTORYCONSTRUCTION5 21.12 (6th ed. 2002) (a savings clause is an exemption from general
operation of the statute, employed to restrict repealing acts and to continue repealed acts in force as
to pending proceedings); Act of May 27,2001, supra, 9 18.05(g), (j), 2001 Tex. Gen. Laws 1933,
1986 (savings clauses continuing prior law on consideration of compliance history for decisions
under the statutes enumerated in subsection (f) and decisions on the suspension or revocation of a
permit or the imposition of a penalty on an application submitted before September 1’2002).
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Subsection 18.05(i), like other provisions in section 18.05 of House Bill 2912, consists of a
deferred effective date, providing that the Commission shall begin to use the changed definition of
“compliance history” on February 1,2002, and a savings clause, which continues in effect the former
law defining “compliance history” for actions taken by the Commission prior to February 1,2002.
The Cornmission established the components of compliance history, including the time period, in
its rule adopted pursuant to section 5.753 of the Water Code. Subsection 18.05(i) states when the
new definition of compliance history becomes effective and how the Commission may use it. There
is no express limit in subsection 18.05(i) or elsewhere in section 18.05 on how the various
components of compliance history may be defined. The February 1,2002 effective date applies to
the definition of compliance history as a whole, including the time period component. We conclude
that the Commission rule defining compliance history as the five-year period before the
Commission’s regulatory authority is initiated or invoked, see 27 Tex. Reg. 191,262 (2002) (to be
codified at 30 TEX. ADMIN. CODE 8 60.1(b)), including compliance history that occurred before
February 1,2002, is not inconsistent with subsection 18.05(i) of House Bill 2912.
You believe that any provisions of House Bill 2912 authorizing the Commission to include
compliance history that occurs before February 1,2002 would be retroactive and unconstitutional
under article I, section 16 of the Texas Constitution. This constitutional provision states that “[n]o
bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts,
shall be made.” TEX. CONST. art. I, 5 16. Under this provision, retroactive laws affecting legally
recognized or secured vested rights are invalid. See Barshop v. Medina County Underground Water
Conservation Dist., 925 S.W.2d 618,633 (Tex. 1996) (citing Tex. Water Rights Comm ‘n v. Wright,
464 S.W.2d 642,648-49 (Tex. 1971)).
You maintain that two particular components of compliance history are retroactive in
violation of article I, section 16 of the Texas Constitution: notices of violation issued before
February 1,2002 and “no findings” orders issued under Water Code section 7.070. Request Letter,
supra note 1, at 3,5. The Commission’s rule, however, defines these components so that they do
not raise an issue of retroactivity. We will first address these components of compliance history and
then consider whether other provisions of House Bill 29 12 violate article I, section 16.
You state that TNRCC inspectors in many situations issue notices of violations that are
mistaken or inaccurate, but that are minor and not worth the regulated entity’s time or expense to
contest. Id. at 5. Thus, you are concerned about including in compliance history any notices of
violation issued before February 1, 2002. Section 5.753, however, provides that “[a] notice of
violation administratively determined to be without merit shall not be included in a compliance
history,” and a notice of violation included in compliance history “shall be removed from the
compliance history if the commission subsequently determines the notice of violation to be without
merit.” TEX. WATER CODEANN. 8 5.753(d) (Vernon Supp. 2002). The Commission’s rule provides
that compliance history includes “all written notices of violation, including written notification of
a violation from a regulated person, issued on or after September 1, 1999, except for those
administratively determined to be without merit.” 27 Tex. Reg. 262 (2002) (to be codified at 30 TEX.
ADMIN. CODE $ 60.1(c)(7)). The statute and the rule allow the regulated entities to protect their
The Honorable Warren Chisum - Page 10 (JC-05 15)
interests, thus providing a remedy for the retroactivity problem you raise. See generally Tex. Water
Rights Comm ‘n v. Wright, 464 S.W.2d 642,648-49 (Tex. 1971).
Section 7.070 of the Water Code relates to an agreed administrative order that may be issued
by the Commission in a penalty proceeding. It provides that the Commission is not required to make
findings of fact or conclusions of law other than an uncontested finding that the Commission has
jurisdiction in an agreed order compromising or settling an alleged violation of a statute, a rule, an
order, or permit. An agreed order may include a reservation that it “is not intended to become a part
of a party’s or a facility’s compliance history.” TEX. WATER CODE ANN. 8 7.070(3) (Vernon 2000).
The Commission’s rule establishing the components of compliance history provides that compliance
history includes only “orders developed under . . . [Water Code] § 7.070 and approved by the
commission on or after February 1, 2002.” 27 Tex. Reg. 262 (2002) (to be codified at 30 TEX.
ADMIN. CODE 8 60.1(c)(2)). Orders issued under section 7.070 before February 1,2002, are not to
be included in an entity’s compliance history. Id. at 229. Thus, this aspect of compliance history
does not raise an issue of retroactivity.
We next consider the Commission’s inclusion of pre-February 1, 2002 information in
compliance history and whether provisions authorizing this decision are retroactive in violation of
article I, section 16 of the Texas Constitution. In Barshop, 925 S.W.2d at 633-34, the Texas
Supreme Court addressed retroactivity in connection with the Edwards Aquifer Act (the “Act”).
Landowners, asserting that the Act was unconstitutional on its face, challenged it under article I,
section 16 and other constitutional provisions. The Act, adopted in 1993, established a permit
system for allocating water among landowners that gave preference to “existing users” who filed a
declaration of historical use and who could “establish, by convincing evidence, beneficial use of the
water withdrawn between June 1’1972 and May 3 1,1993.” Id. at 624; see Act of May 30,1993,73d
Leg., R.S., ch. 626, 1993 Tex. Gen. Laws 2355, as amended by Act of May 29, 1995, 74th Leg.,
R.S., ch. 261, 1995 Tex. Gen. Laws 2350,2505. The plaintiffs argued that the Act was retroactive
because the amount of water a landowner was allowed to withdraw was determined from action or
inaction taken before the passage, signing, or effective date of the Act. Barshop, 925 S.W.2d at 633.
The Texas Supreme Court stated that the plaintiffs were correct that the Act might have retroactive
effects. It referred to its decision in Texas Water Rights Commission v. Wright, 464 S.W.2d 642,
648-49 (Tex. 1971), that a statute which allows an agency to take into consideration conduct
occurring before the effective date of the statute possesses a retroactive effect. The court then stated
as follows:
The Edwards Aquifer Act, similar to the statute in Wright that was
held to be retroactive, takes into account the landowner’s use of water
in the years preceding the effective date of the legislation in
determining future entitlement to water. However, “[mlere
retroactivity is not sufficient to invalidate a statute.” A valid exercise
of the police power by the Legislature to safeguard the public safety
and welfare can prevail over a finding that a law is unconstitutionally
retroactive.
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Barshop, 925 S.W.2d at 633-34 (quoting Wright, 464 S.W.2d at 648) (citations omitted). The court
cited numerous judicial decisions in support of this statement. See Tex. State Teachers Ass ‘n v.
State, 711 S.W.2d 421,424 (Tex. App.-Austin 1986, writ ref d n.r.e.) (the rule against retroactive
laws is not absolute and should yield to a state’s right to safeguard the public safety and welfare);
Ismail v. Ismail, 702 S.W.2d 216, 222 (Tex. App.-Houston [ 1st Dist.] 1985, writ ret? d n.r.e.)
(“overriding public interest” justified the retroactive application of a special class of marital
property); Kilpatrick v. State Bd. of Registration for Prof’l Eng ‘rs, 610 S.W.2d 867,87 1 (Tex. Civ.
App.-Fort Worth 1980, writ ref d n.r.e.) (concern for public safety and welfare can override
retroactive law prohibition); State Bd. of Registration for Prof’l Eng ‘rs v. Wichita Eng ‘g Co., 504
S.W.2d 606, 608 (Tex. Civ. App.-Fort Worth 1973, writ ref d n.r.e.) (same); Caruthers v. Bd. of
Adjustment, 290 S.W.2d 340,345 (Tex. Civ. App.-Galveston 1956, no writ) (zoning ordinance was
not unconstitutionally retroactive because it was justified by the police power). See also generally
Tex. State Bd. of Barber Exam i-s v. Beaumont Barber Cull., Inc., 454 S.W.2d 729,732 (Tex. 1970)
(barber college challenging statute as a retroactive law merely had right of protection from
unreasonable exercise of police power).
The court noted that its decision in Wright had upheld a statute with retroactive effect on the
basis of provisions providing time for the landowners to protect their interest. See Barshop, 925
S.W.2d at 634 (discussing Wright, 464 S.W.2d at 648). However, Wright hadnot addressed the issue
of “whether the prohibition against retroactive laws precludes the Legislature from enacting statutes
that are necessary to safeguard the public safety and welfare.” Id. at 634. The court concluded in
Barshop that the retroactive effect of the Edwards Aquifer Act did not render it unconstitutional. Id.
Thus, a valid exercise of the police power by the Legislature to safeguard the public safety and
welfare can prevail over a finding that a law is unconstitutionally retroactive. Id. at 634. See also
In re A. V., 57 S.W.3d 51, 60 (Tex. App.-Waco 2001, pet. filed) (the public policy exception
validates a retroactive law which is necessary to safeguard public safety and welfare).
We need not decide whether a regulated entity has a vested right to have its compliance
history determined according to the law in effect when the relevant events took place. See generaZZy
Indus. Found. of the South v. Tex. Indus. Accident Bd., 540 S.W.2d 668,677-78 (Tex. 1976) (Open
Records Act, which applied to information compiled by governmental bodies prior to its effective
date, did not impair any vested right to confidentiality of persons who furnished information to
governmental agencies expecting access to be restricted). Even if it does, the programs which
use compliance history were adopted to protect the public health, safety, and welfare, see TEX.
HEALTHMAFETYCODEANN. §§ 361.002,382.002,401 .OOl (Vemon2001); TEX. WATERCODEANN.
$3 26.003,27.003 (Vernon Supp. 2002), and the Legislature is not precluded from enacting statutes
that are necessary to safeguard these interests. Accordingly, the provisions of House Bill 29 12 and
of the Commission rule that define a regulated entity’s compliance history to include facts dating
from before the effective date of the statute and rule do not on their face violate the article I, section
16 prohibition against retroactive laws.
The Honorable Warren Chisum - Page 12 (JC-05 15)
SUMMARY
Section 5.753 of the Water Code, adopted by House Bill 29 12
of the Seventy-seventh Legislature, requires the Texas Natural
Resource Conservation Commission to establish the components of
compliance history by rule. The provision of the Commission rule
that establishes the time period for compliance history as five years
before the agency’s regulatory authority is initiated or invoked,
including compliance history from before February 1, 2002, is
consistent with section 5.753. The time period is also consistent with
section 18.05(i) of House Bill 2912, an effective date provision
applicable to the changes in the definition of compliance history made
by section 5.753 and the rule implementing it.
It is unnecessary to decide whether a regulated entity has a
vested right under article I, section 16 of the Texas Constitution to
have its compliance history determined according to the law in effect
when the relevant events took place. Even if such a right exists, the
compliance history rule applies to programs designed to protect the
public health, safety, and welfare, and the Legislature is not precluded
by article I, section 16 of the Texas Constitution from enacting
retroactive statutes that are necessary to safeguard these interests.
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
Susan L. Garrison
Assistant Attorney General, Opinion Committee