                                 COPY




Honorable A. C. Saott,     Jr., Seoretary
Z’razor River Conrrrvation     and Reolamation
        Distrlot Powor Committee
Temple, Texas
Dear Dr. Soott:                      0plnion       “NO. 0-3170
                                     Be:        Contract for sale 0r elso-
                                                trlolty   by Brazoa River
                                                Convservation    and Reolama-
                                                tlox! Distrlot   to the Brazos
                                                River Xleotrlc    Trtinsmieeion
                                                Cooperative,   Inc.
            You have eubmltted       for our ooneideration        a draft
of the propoard oontract        for sale of electricity         by tha Brazos
River Conservation     and Reolamation       Distriot     to the Brazoa
River Xleotrfo     Transmission     Cooperative,      Ino.,  oopy of whloh
ie attached    hereto.    You have requested        our opinion    on the
following   questions    pertaining     to this contract:

            “$, Doe8 the Brazcjs River Conservation  and
      Reclamation    District have the power to enter into
      this contract?
             “2.  Are the terms of the oontlact   violative
      or the   oonrtltutlon  or lawa of.the State of Texas?
           n3.   When the     oontraot     is    axeouted,    will it
      be a valid binding      obligation        aocordlng    to Its terms?m
             The Brazoe Rivrr Conservation        and Beolamation     Diatriot
was created    and it8 powers defined       by Acts 1929, 4lst Leg., 2nd
C.S.) spec. L., p. 22, oh. 13, aE amended.             Thr oonstltution-
ellty    of thm act oreatlng    the dlatrlot    ha8 been ertat$lrhrd        by
the Supreme Court of T&as in Brazes River Conservation                and Re-
olamatlon    Dirtrlot   v. MoCraw, 125 Tax. 506, 91 S.W. (2d) 665.
Section    3 or thr Aot prescribee     ths powers and purposes of the
district    and subsection   (1) thereof     provides:




                                                    I
Hononblr      A.C.   soott,    yr.,   PI&@ t


            *For the oontrol,   rtorlng  and rmployment of
     flood,   storm and unappropriated    flow water8 in
     the drvelspmant   and dirtributlon     of bydro-rleotrlo
              where euoh UBO may be roonomloally.      coordl-
     na l with other and numdor
     wg                                 usea. and subordinated
     to the uae.a declared    by* law to br iuperlor.*        (em-
      ptwla      ourr)
              An rtatrd       ln our opinion      No. O-2619:
            WIt’lr famlllar      law that thr grant of power to
      a corporation,     llther    prlvatr or publlo,    to do
     ap00iri0    thlnge. or r0r apeoirio       purpom8,    oarrler
     with it by lmplloation         the further powr     to do any
     and all things whatroever          reasonably  nroersary      to
     the aocom?lisb.ment       of the ziajor   purponrn enumerated.*
           It is our’ opinion    that tha powrr to sol1 lleo tr io
powor is a neoeseary oorollary       to tbm wwer expressly        granted
for *the devrlopmsnt    and dlrtrlbution     of hydro-eleotrio       powar,w
and consequently,   that the district      has authority    and power to
enter into the proposed oontract        for salr of lleotrlolty       to
the Brazoa River Elaotrlo     Transmigsion     Cooparatlva,    fno.

           ‘80 have given carerul      oonsldrratlon   to the attached
draft of Oontract,    and are of the opinion that the same is
valid under the Constitution       and law8 of Tara and that when
exeouted  It will   constltuts    a binding obligation    as between
the part188 ttsrsto     aooordlng   to its terua.
          To.1 have further   asked that ‘10 consider   the          proposed
amendment&o the oontract    as provldad by the resolution             of the
Board of Direotors  of the dlstrlot    dated February 17,            1941,
which amendment made:

            *That in the event theru 18 located        wlthln    thr
      BrazO8 Rfvrr Dlrtriot      any national   drirnsm prOJeOt
      the Brazos River Consorvatlon        and Reolamation    Dir-
      trlot  rworva8   the right     to furnlrh eleotrlo     onorgy
      to maid national    derrnse    projeot in tha event the
      Brazer RlvOr Xl&r18        Tranamlsaion   Cooporatlvo,     Ino.,
      does not rurnirh    8lootrio    energy to raid project       In
      ample quantltirr    and amounts.’
               we find    no vlca     la   this   amendment.




                                                    ,
Honomblr               A. C. soott,    Jr.,   Pago b



                        Although not wIthin tho aoope of three queatlona
aubmlttod               to ua, n offer thr following    luggoatlons and ob-
arrvatlona                rolatlng to tho drart of oontraot   aubraittrd to ua.
                        ThO lo o o nd
                                    paragraph    of aeotlon   2 reada   aa tollowa:
                        VeginnIng     on the date ot inltlel       dollrary  and
                  thrOUghOut the tam 0i thI8 OOntfaOt, the Dlatrlot
                  ahall umko avallablo      to the F’urohaaor,     the output oi
                  it8 entire   lleotrlo    gonerating     oapaolty  at Poeaum
                  KIngdOm Dam and 18 Bat forth In Sootion lo.*
             Sootlon  10 of thr oontraot   la rntltlad   Valvor   of Do-
rault,*  SootIon 11 Ia~antltlrd     *AvaIlabllIty,W    wherefor’n WI
l aauao that   tho refeMnoo    to *Section   lOa In the above quoted
paragraph of SaotIon 2 ahould bo ohangrd to read aSaotIon          11.”
             Wa undrkand   thr intent   of the partI.  with rrrrrenoa
to   thr abova quotad paragraph of Sootlon    2 to be that tho dla-
trlot   ahall be free to aell,   to other uaora, a n3.lx o a ~a power,
ovar and above that whloh tha Purohaarr ran uaa.        Poaslblr   am-
biguity   may br avoided by adding an exprosa olauso to that effeot.
           Thr last aentenor    of tha first   paragraph of Srotlon
22, reads:   *Aa provided   in seotion   4 hareof,   this total   awn of
money may be adjusted   artrr Yanuary 1, 1945.”       It apparently
should read,   Veotlon    5 hereof.”
              Both Seotions      5 and 22 of the oontract       rerer to a re-
detcnrilnetlon     in January,     1945, of the annual oonslderatlon             of
$203,925     provided   In thlr oontraot;        auoh reoonalderatlon       to be
“on a baaia of amortizing           $4,000,000     over 50 years on a l     lnklng
fund baa1a.a       Tho oontraot      a-ppoara nowhera to mantl;;        ;~t~terrst
rato upon whIoh auoh a oomputatlon             la to be made.
IntentIon      of tha partlea     that tho preaont Interrat        rate or thr
outHanblng obligationa           oi tho Diatrlrt       Ia to be used?      In the
event tho dIrtrIot       should rorlnanoo        it8 proaontly    outstanding
bond8 or ahould Iaaue additional             bond8 brarlng a different         rate
of Lntaroat,      whloh ratr ahall be uaod to detormIno the aallow-
lnoe ror amortization?,;
  .: /                       -_
 .’            wo raiao thebe queatlona        morelp beaauae thoy aoem to
ua .~:to Indicate    amblgutira     In thr oontraot      whioh may be easily
nPaeAIed at thIa the,           but whloh might poaalbly       give riaa to
o~a%ly litigation       In thr tutura.


         /

    ‘i       ,’
I




                                                         .
    Honorablr    A. C. Soott,    Jr.,   Pagr 4


                  we are returning     to you herewith        the   draft    or the
    oontract     which you left    with us.
                                                         Tours very         truly
                                                 ATIORNEYGENSRALOF TYXAS

.   ‘.%L:db                                      BY      a/     Walter R. Koch
                                                                     Aaslatant-
    Enoloauira
                                                 AFPROVIED:CPIMCN COKMITTEE
    APPROVEDPgB 21,       1941
                                                 BY       BWB          Chairman
    a/ Gerald     C. Mann

    AT. ORNEYGENERALOF TEXAS
