A more thorough explanation:

Definition: Retroactive refers to a law, rule, or decision that holds people responsible for things they did in the past. This means that someone can be punished for something that was legal when they did it, but is now illegal. However, most of the time, retroactive laws are not allowed because they are unfair. The idea is that people should only be punished for breaking laws that existed when they did the thing they are accused of. This is called the "presumption against retroactive application of statutes." It comes from the Fifth Amendment of the U.S. Constitution, which says that people have a right to due process of law. This means that people should be treated fairly by the legal system.

For example, let's say that a person did something that was legal at the time, but later became illegal. If they are charged with breaking the law after it became illegal, they might argue that they should not be punished because they did not know it was illegal when they did it. This is an example of the presumption against retroactive application of statutes.

However, there are some situations where retroactive laws are allowed. For example, if a court or government agency creates a new rule or standard, they might apply it retroactively if they think it is necessary to do so. This is called "retroactive application of statutes." But even in these cases, the court or agency has to be careful to make sure that it is fair to apply the new rule or standard retroactively.

One example of retroactive application of statutes is in tax law. Sometimes, Congress will change the tax laws and make them apply retroactively. This means that people might have to pay more taxes than they thought they would, even for things they did in the past. However, the courts have generally allowed this because they think it is important to make sure that people pay the right amount of taxes.

Another example of retroactive application of statutes is in a court case called SEC v. Chenery II. In this case, the Securities and Exchange Commission (SEC) created a new rule about how companies should behave. The rule was created after a company had already done something that might have violated the rule. The court decided that it was fair to apply the new rule retroactively because it was important to make sure that companies followed the new rule.