Which formula decides how Texas hands out county road grants from the SB 500 transportation fund?

Plain-English summary

Texas runs a program called the Transportation Infrastructure Fund that gives counties grant money for road projects in parts of the state hit by heavy oil and gas production. The Texas Department of Transportation administers it. In 2019 two bills landed close together: Senate Bill 500 put an extra $125,000,000 into the Fund (effective June 6, 2019), and House Bill 4280 rewrote the formula the Department uses to split grant money among counties (effective September 1, 2019). A House committee chair asked the AG which formula governed the new money, since the appropriation took effect months before the new formula did.

The AG's answer turned on a simple principle: the distribution formula in effect at the moment the Department actually awards a grant is the one that applies. The supplemental appropriation in Senate Bill 500 said nothing about which formula to use, and it ran "for the two-year period beginning" on the bill's June 6, 2019 effective date, spanning two fiscal bienniums. Because the money itself carried no formula instruction, the timing of each award controlled.

The AG then explained why the new formula could not be applied backward. Texas law presumes statutes operate only going forward unless the Legislature expressly makes them retroactive (Government Code section 311.022), a presumption reinforced by the constitutional bar on retroactive laws in article I, section 16. House Bill 4280 contained no language making it retroactive, so it did not govern grants awarded before its September 1, 2019 effective date. The AG also declined to treat the Senate Bill 500 money as a signal that the Legislature wanted the new formula applied early, noting that appropriation bills under article III, section 35 are limited to the single subject of appropriating money and cannot enact or amend general law.

The practical upshot the AG gave: grants the Department awarded from the Fund before September 1, 2019 followed the old (pre-amendment) version of Transportation Code section 256.103, and grants awarded on or after that date followed the amended version. In a footnote the AG added that the Department had reported its grant-award process for this money would not be finished until after September 1, 2019, which in practice pointed to the new formula.

Currency note

This opinion was issued in 2020. 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.

What the opinion meant for those who asked

For the legislator who raised the question and for the Department of Transportation, the opinion drew a bright line at the award date rather than the appropriation date. At the time, that meant the Department had to apply whichever version of section 256.103 was in force on the day it committed each grant: the old formula for any award made before September 1, 2019, the new House Bill 4280 formula for awards on or after that day. The opinion did not redistribute money already granted and did not force the Department to recompute earlier awards under the new formula, because House Bill 4280 was not retroactive. For counties watching the Fund, the opinion's significance was that the size and method of their grants depended on when the Department acted, and the AG flagged that the Department itself expected to act after September 1.

Common questions

Q: What is the Transportation Infrastructure Fund?
A: It is a state fund administered by the Texas Department of Transportation that gives counties grants for transportation infrastructure projects in areas affected by increased oil and gas production (Transportation Code section 256.103(a)).

Q: Why did two formulas come into play at all?
A: Senate Bill 500 added $125 million to the Fund effective June 6, 2019, while House Bill 4280 changed the grant distribution formula effective September 1, 2019. The gap between those dates created the question.

Q: Which formula did the AG say applied?
A: The formula in effect when the Department actually awards a grant. Awards before September 1, 2019 used the old formula; awards on or after that date used the new one.

Q: Could the new formula apply to grants made before it took effect?
A: No. The AG explained that Texas presumes statutes operate prospectively unless expressly made retroactive, and House Bill 4280 said nothing about applying backward.

Background and statutory framework

Subchapter C of chapter 256 of the Transportation Code (sections 256.101-.108) governs the Transportation Infrastructure Fund, which under section 256.103(a) grants counties money for transportation infrastructure projects in areas affected by increased oil and gas production. Senate Bill 500 (Act of May 26, 2019, 86th Leg., R.S., ch. 465, § 78), effective June 6, 2019, made a $125,000,000 supplemental appropriation to the Fund "for the two-year period beginning" on its effective date; Texas Constitution article VIII, section 6 caps any appropriation at two years. House Bill 4280 (Act of May 26, 2019, 86th Leg., R.S., ch. 1322, §§ 1, 4), effective September 1, 2019, amended the distribution formula codified at section 256.103(b). The AG applied the prospectivity presumption in Government Code section 311.022 and Texas Constitution article I, section 16, citing Merchs. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502 (Tex. 1978) for the rule that statutes apply retroactively only when their language so indicates. It cited FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (via Tex. Att'y Gen. Op. No. GA-880 (2011)) for the proposition that the Legislature knows how to draft a law to effectuate its intent, and Strake v. Ct. App., 704 S.W.2d 746 (Tex. 1986) for the limit, drawn from article III, section 35, that appropriation bills are confined to the single subject of making appropriations and cannot enact, amend, or repeal general law.

Citations and references

Statutory provisions:

• Tex. Transp. Code § 256.103; §§ 256.101-.108
• Tex. Gov't Code § 311.022
• Tex. Const. art. VIII, § 6; art. I, § 16; art. III, § 35
• Senate Bill 500, 86th Leg., R.S., ch. 465, § 78 (2019)
• House Bill 4280, 86th Leg., R.S., ch. 1322, §§ 1, 4 (2019)

Cases:

• FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 884-85 (Tex. 2000)
• Merchs. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502, 504 (Tex. 1978)
• Strake v. Ct. App., 704 S.W.2d 746, 748 (Tex. 1986)

Attorney General opinions:

• Tex. Att'y Gen. Op. No. GA-880 (2011)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0280
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2020/kp-0280.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 2, 2020

The Honorable Garnet F. Coleman
Chair, Committee on County Affairs
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. KP-0280

Re: Distribution of county transportation grant funds appropriated under Senate Bill 500 (RQ-0295-KP)

Dear Representative Coleman:

You ask about the proper allocation formula for distribution of county transportation grant funds appropriated to the Transportation Infrastructure Fund ("Fund") under Senate Bill 500.[1] See Act of May 26, 2019, 86th Leg., R.S., ch. 465, § 78, 2019 Tex. Sess. Law Serv. 891, 905 ("Senate Bill 500"). Administered by the Texas Department of Transportation ("Department"), the Fund provides grants to counties "for transportation infrastructure projects located in areas of the state affected by increased oil and gas production." TEX. TRANSP. CODE § 256.103(a); see also id. §§ 256.101-.108 (Subchapter C, chapter 256, governing the Transportation Infrastructure Fund).

Two bills from the 86th Legislature prompt your question. See Request Letter at 1. Senate Bill 500 makes a supplemental appropriation of $125,000,000, effective June 6, 2019, to the Fund. See Senate Bill 500, §§ 78, 88. House Bill 4280, effective September 1, 2019, changes the distribution formula for the Department to allocate Fund grants. See Act of May 26, 2019, 86th Leg., R.S., ch. 1322, §§ 1, 4, 2019 Tex. Sess. Law Serv. 3885, 3885-86 ("House Bill 4280") (to be codified at TEX. TRANSP. CODE § 256.103(b)). Given the difference in effective dates for these two bills, you ask whether the funds from the supplemental appropriation should "be allocated for grants to counties under the distribution formula contained in the present statute or should it be allocated under the provisions that will be effective on September 1, 2019[.]" Request Letter at 1. Because September 1, 2019, has now passed, we refer to the pre-September 1 distribution formula as the previous formula and to the post-September 1 formula as the present distribution formula.

In making the supplemental appropriation to the Fund, the Legislature did not limit the expenditure of the additional funds to the 2018-2019 fiscal biennium. See Senate Bill 500, § 78. Senate Bill 500 makes supplemental appropriations to myriad programs, and in it the Legislature set the period of each appropriation. See id. §§ 1-87. In several appropriations, the Legislature provided that they were "for the state fiscal year ending August 31, 2019." Id. §§ 11, 13, 24. In contrast, with respect to other supplemental appropriations, the Legislature provided they were for "the two-year period beginning on the effective date of this Act." Id. §§ 10, 54. The supplemental appropriation to the Fund is "for the two-year period beginning" from Senate Bill 500's effective date of June 6, 2019. Id. § 78; see also TEX. CONST. art. VIII, § 6 (providing that "nor shall any appropriation of money be made for a longer term than two years"). The supplemental appropriation to the Fund spans both the 2018-2019 and the 2020-2021 fiscal bienniums. See Tex. Att'y Gen. Op. No. GA-880 (2011) at 2 n.3 (citing FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 884-85 (Tex. 2000) for the proposition that the Legislature knows how to enact a law effectuating its intent). The supplemental appropriation in Senate Bill 500 makes no special provision for the distribution formula. Thus, the formula in effect at the time the distribution is made governs.

Further, House Bill 4280 does not operate retroactively to apply the current distribution formula to the supplemental appropriation prior to the formula's effective date. See House Bill 4280, §§ 1-4. Generally, "[a] statute is presumed to be prospective in its operation unless expressly made retrospective." TEX. GOV'T CODE § 311.022; see TEX. CONST. art. I, § 16 ("No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made."). Statutes apply retroactively only if their statutory language indicates that the Legislature intended that the statute be retroactive. Merchs. Fast Motor Lines, Inc. v. R.R. Comm'n, 573 S.W.2d 502, 504 (Tex. 1978). Nothing in House Bill 4280 indicates that the Legislature intended the current distribution formula to operate retroactively to govern the award of grants prior to its effective date. See House Bill 4280, §§ 1-4. Nor can we construe the supplemental funding provided by Senate Bill 500 as indicia of the Legislature's intent for House Bill 4280's new formula to operate retroactively. Cf. Strake v. Ct. App., 704 S.W.2d 746, 748 (Tex. 1986) (noting that because appropriation bills are limited to the single subject of making appropriations by Texas Constitution article III, section 35, they may not enact, amend, or repeal general law). And because nothing in Senate Bill 500 addresses the Department's awarding of grants, the appropriate distribution formula is determined solely by the provision in effect when the Department makes the award.

For these reasons, the previous distribution formula governs any grants the Department may have awarded from the Fund prior to September 1, 2019. And, the current distribution formula governs grants the Department awards on or after September 1, 2019.[2]

SUMMARY

In providing a supplemental appropriation to the Transportation Infrastructure Fund in Senate Bill 500 with a two-year period, and in amending Transportation Code section 256.103's distribution formula with an effective date within that two-year period, the Legislature provided that different distribution formulas govern the supplemental appropriation.

Section 256.103's pre-amendment distribution formula governs any grants the Department may have awarded from the Fund prior to September 1, 2019. Section 256.103's post-amendment distribution formula governs grants the Department awards on or after September 1, 2019.

Very truly yours,

KEN PAXTON
Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

RYAN L. BANGERT
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee

[1] Letter from Honorable Garnet F. Coleman, Chair, House Comm. on Cty. Affairs, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (rec'd July 18, 2019), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] As a practical matter, the Department informs us that its "timeline for implementation of the [grant] application process and the ultimate final award of grants to counties will all take place after September 1, 2019." Letter from Jeff Graham, Gen. Counsel, Tex. Dep't of Transp., to Virginia K. Hoelscher, Chair, Op. Comm. at 1 (Aug. 19, 2019) (on file with the Op. Comm.).