Can a Texas transit authority charge a city that withdrew from it for disabled-rider services?

Plain-English summary

Capital Metropolitan Transit Authority ("Capital Metro") was created in 1985 by voters in Austin and surrounding cities, including West Lake Hills. In 1988 West Lake Hills voted to withdraw from Capital Metro. Years later, in 1991, the Legislature added two Transportation Code provisions: section 451.610, which requires a transit authority to keep providing transportation services for persons with disabilities even in a city that has withdrawn, and section 451.616, which sets up the funding. Under section 451.616, the Comptroller withholds part of the withdrawn city's sales and use tax revenue (the gap between the cost of the disability services and the fares collected) and pays it to the authority.

A state senator, on the City's behalf, asked whether Capital Metro could charge the City this way, given that the City withdrew before the 1991 funding laws existed. The City's worry was retroactivity: the Texas Constitution (article I, section 16) bars "retroactive" laws, and the City argued that being made to pay under statutes passed after it left was an unconstitutional reach into the past that took its tax money.

The Attorney General disagreed. A law is not retroactive just because it upsets expectations formed under older law. The 1991 statutes operated only going forward, imposing the payment duty from their effective date on, not reaching back to tax the period before. And a city stands on weak ground here for a second reason: a municipality is a creation of the Legislature, so it acquires no vested rights against the State and cannot claim immunity from a duty its own creator imposes. The Attorney General concluded sections 451.610 and 451.616 are not retroactive laws forbidden by article I, section 16, so Capital Metro is not barred from charging the City for the disability transit services.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later Attorney General 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.

What the opinion meant for those who asked

The City of West Lake Hills and other withdrawn cities (as the opinion held for them): The opinion concluded that a city which had withdrawn from a transit authority could still be charged, through withheld sales and use tax revenue, for disability transit services the authority continued to provide, because the 1991 funding statutes applied prospectively and were not unconstitutionally retroactive.

Capital Metro and other transit authorities (what the opinion described): The opinion held that article I, section 16 of the Texas Constitution did not prohibit the authority from charging a withdrawn city for transportation services provided to that city's residents with disabilities under sections 451.610 and 451.616.

On a city's argument about its tax money (what the opinion noted): The opinion explained that a municipality acquires no vested rights against the State and, as a creation of the Legislature, has no privileges or immunities it can invoke against its creator, so the City's claim that the statutes took its sales and use taxes did not establish a retroactivity violation.

Common questions

Could a transit authority charge a city that had already withdrawn from it?
The opinion concluded it could. The funding statutes that required a withdrawn city to pay for continued disability services were not unconstitutionally retroactive.

Wasn't it unfair to apply a 1991 law to a city that left in 1988?
The opinion explained that a statute is not "retroactive" just because it upsets expectations based on prior law. The duty to pay ran only from the statute's effective date forward, not backward into the period before it existed.

Why couldn't the City claim the law took its sales and use tax money?
The opinion noted that a municipality acquires no vested rights against the State. As a creature of the Legislature, a city cannot invoke privileges or immunities against its creator.

What did the disputed statutes actually require?
Section 451.610 required the authority to keep providing transportation services for persons with disabilities in a withdrawn city, and section 451.616 directed the Comptroller to withhold the difference between the cost of those services and the fares charged from the city's refunded sales and use tax revenue and remit it to the authority.

Background and statutory framework

Capital Metro was created in 1985. In 1987 the Legislature enacted the predecessor to section 451.603 of the Transportation Code, which let certain cities withdraw from a metropolitan rapid transit authority, and the City voted to withdraw effective January 19, 1988. After the withdrawal, the Legislature enacted section 451.610, requiring metropolitan rapid transit authorities to "continue to provide transportation services for persons with disabilities in a withdrawn unit of election." Tex. Transp. Code Ann. § 451.610 (West 2007). Alongside it, section 451.616(a) directed the Comptroller to withhold, from the sales and use tax revenue refunded to a withdrawn unit of election, the difference between the cost of providing services to persons with disabilities and the fares charged, and to remit that amount to the authority providing the services. Tex. Transp. Code Ann. § 451.616(a) (West Supp. 2010).

Because those two sections were enacted in 1991, after the City withdrew, the question was whether they were retroactive in violation of article I, section 16 of the Texas Constitution, which provides that "No ... retroactive law ... shall be made." Tex. Const. art. I, § 16. The Texas Supreme Court has explained that "[a] retroactive law literally means a law that acts on things which are past." Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002). The Attorney General reasoned that the Legislature imposed the new payment duty only prospectively, from the statute's effective date onward, and that "[a] statute does not operate 'retrospectively' merely because it ... upsets expectations based in prior law." Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1998) (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 269 (1994)). No entity has a vested right merely in the continuance of present law. Subaru, 84 S.W.3d at 219.

The opinion added a second, independent ground addressed to the City's vested-rights argument. A municipality "acquires no vested rights against the State." Tooke v. Mexia, 197 S.W.3d 325, 345 (Tex. 2006); Deacon v. City of Euless, 405 S.W.2d 59, 62 (Tex. 1966). As a creation of the Legislature, a municipality has no privileges or immunities which it may invoke in opposition to the will of its creator. Williams v. Mayor of Baltimore, 289 U.S. 36, 40 (1933). The Attorney General therefore concluded that sections 451.610 and 451.616 are not retroactive in violation of article I, section 16, and that Capital Metro is not prohibited from charging the City.

Citations

Statutes:

• Tex. Transp. Code Ann. § 451.603 (West 2007)
• Tex. Transp. Code Ann. § 451.610 (West 2007)
• Tex. Transp. Code Ann. § 451.616(a) (West Supp. 2010)
• Tex. Const. art. I, § 16

Cases:

• Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002)
• Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1998)
• Landgraf v. USI Film Prods., 511 U.S. 244, 269 (1994)
• Tooke v. Mexia, 197 S.W.3d 325, 345 (Tex. 2006)
• Deacon v. City of Euless, 405 S.W.2d 59, 62 (Tex. 1966)
• Williams v. Mayor of Baltimore, 289 U.S. 36, 40 (1933)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0833
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2011/ga0833.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

January 4, 2011

The Honorable Jeff Wentworth Opinion No. GA-0833
Chair, Senate Select Committee on
Veterans' Health Re: Whether a metropolitan transit authority may,
Texas State Senate under section 451.616 of the Transportation Code,
Post Office Box 12068 charge a withdrawn city for special transit services
Austin, Texas 78711-2068 provided to the city's residents with disabilities
(RQ-0899-GA)

Dear Senator Wentworth:

On behalf of the City of West Lake Hills (the "City"), you ask whether Capital Metropolitan Transit Authority ("Capital Metro") has "the authority to charge the City for special transit services that Capital Metro provides" to certain residents with disabilities who reside in the City.[1]

You explain that Capital Metro was created in 1985 when voters in Austin and other surrounding municipalities, including the City, approved of its creation. Request Letter at 1. In 1987, the Texas Legislature enacted the predecessor to section 451.603 of the Transportation Code, allowing certain cities to withdraw from a metropolitan rapid transit authority such as Capital Metro.[2] Pursuant to this statute, the City voted to withdraw effective January 19, 1988. Id. Subsequent to the City's withdrawal, the Legislature enacted section 451.610 of the Transportation Code, requiring that metropolitan rapid transit authorities "continue to provide transportation services for persons with disabilities in a withdrawn unit of election."[3] Thus, pursuant to this statute, you tell us that "Capital Metro provides special transit services to certain residents with disabilities who reside in the City" despite that the City has withdrawn from Capital Metro. Request Letter at 1.

Alongside section 451.610, the Legislature established a procedure for funding such services:

The Comptroller shall withhold from the amount of sales and use tax revenue refunded to a unit of election that has withdrawn from an authority the full amount of the difference between the cost of providing services to persons with disabilities in the unit of election and the fares charged during the period in which the sales and use tax was collected and remit this amount to the authority providing the services.

TEX. TRANSP. CODE ANN. § 451.616(a) (West Supp. 2010). You explain that pursuant to this section, the Comptroller is giving a portion of the City's monthly sales and use tax revenue to Capital Metro as a reimbursement for the cost of providing special transit services to the City's disabled residents. Request Letter at 1. Given that sections 451.610 and 451.616 of the Transportation Code were enacted in 1991, after the City withdrew from Capital Metro, you question whether these statutes are retroactive as applied to the City in violation of the Texas Constitution. Id. at 1-2.

Article I, section 16 of the Texas Constitution provides, "No ... retroactive law ... shall be made." TEX. CONST. art. I, § 16. "A retroactive law literally means a law that acts on things which are past." Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002). When it enacted sections 451.610 and 451.616 of the Transportation Code, the Legislature imposed a new duty on the City to pay for services provided by Capital Metro to the City's disabled residents, but it did so only on a prospective, rather than on a retroactive, basis. Only from the effective date of the statute onward were withdrawn cities required to fund these services. Withdrawn cities may have expected to have no further involvement with such authorities after voting to withdraw. However, "[A] statute does not operate 'retrospectively' merely because it ... upsets expectations based in prior law." Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1998) (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 269 (1994)). No entity has a vested right merely in the continuance of present law in relation to a particular subject. Subaru, 84 S.W.3d at 219 (citation omitted). The Legislature may change laws so long as it does not destroy or prevent the adequate enforcement of vested rights, neither of which it did here. Id.

The City argues through its brief that the Legislature has impaired the City's vested rights by requiring the City to pay Capital Metro for services provided, which, the City argues, unlawfully deprives the City of the use of its sales and use taxes.[4] However, a municipality "acquires no vested rights against the State." Tooke v. Mexia, 197 S.W.3d 325, 345 (Tex. 2006); Deacon v. City of Euless, 405 S.W.2d 59, 62 (Tex. 1966). As a creation of the Legislature, a municipality has no privileges or immunities which it may invoke in opposition to the will of its creator. Williams v. Mayor of Baltimore, 289 U.S. 36, 40 (1933).

We therefore conclude that sections 451.610 and 451.616 of the Transportation Code are not retroactive in violation of article I, section 16 of the Texas Constitution. Capital Metro is not prohibited by that constitutional provision from charging the City for transportation services provided to the City's residents with disabilities pursuant to the Transportation Code.

SUMMARY

Sections 451.610 and 451.616 of the Transportation Code are not retroactive statutes in violation of article I, section 16 of the Texas Constitution. Capital Metro is therefore not prohibited by that constitutional provision from charging the City of West Lake Hills for transportation services provided to the City's residents with disabilities pursuant to the Transportation Code.

DANIEL T. HODGE
First Assistant Attorney General

DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee

[1] Request Letter at 1-2 (available at http://www.texasattorneygeneral.gov).

[2] Act of May 22, 1987, 70th Leg., R.S., ch. 790, § 7, 1987 Tex. Gen. Laws 2774, 2777 (amended 1989 & 1995) (current version at TEX. TRANSP. CODE ANN. § 451.603 (West 2007)).

[3] Act of May 27, 1991, 72d Leg., R.S., ch. 503, § 6, 1991 Tex. Gen. Laws 1766, 1767 (amended 1995) (current version at TEX. TRANSP. CODE ANN. § 451.610 (West 2007)).

[4] See Brief from Alan J. Bojorquez, City Attorney at 2 (Aug. 17, 2010) (on file with the Opinion Committee).