                      The Attorney                 General of Texas
                                           June        27,   1978

JOHN L. HILL
Attorney General

                   Mr. Everett J. Grindstaff                   Opinion No. H-1195
                   Chairman
                   Upper Colorado River Authority              Re: Authority     of Upper Colorado
                   Ballinger, Texas                            River Authority to purchase, store,
                                                               and sell water outside of its district.

                   Dear Mr. Grindstaff:

                         You ask whether the Upper Colorado River Authority may contract for
                   and purchase water outside its district, in particular from the Stacy Reservoir
                   Project, which is to be built by another water district. You also ask whether
                   the authority may impound purchased water in the Stacy Reservoir pending
                   actual need by the users in its district and in the interim sell some of the
                   water to users outside of the district. It is predicted that the authority will
                   not need to use the purchased water within its boundaries for a ten year
                   period.

                          The Upper Colorado River Authority was created under the authority of
                   article 16, section 59(a) of the Texas Constitution. Acts 1935, 44th Leg., ch.
                   126, S 1. -It has only those powers expressly granted by statute or implied as
                   an incident to express powers. Franklin County Water District v. Majors, 476
                   S.W.2d 371. (Tex. Civ. App. - Texarkana 1972, writ ref’d n.r.e.); Harris
                   County Water Control & Improvement District No. 58 v. City of Houston, 357
                   S.W.2d 789 (Tex. Civ. App. - Houston 1962, writ ref’d n.r.e.).      The Upper
                   Colorado River Authority Act provides:

                                  Sec. 2. Except as expressly limited by this Act, the
                               District shall have and is hereby authorized to exercise
                               all powers, rights, privileges and functions conferred
                               by General Law upon any District or Districts created
                               pursuant to Section 59-a, of Article 16, of the
                               Constitution of the State of Texas. Without limitation
                               of the generality of the foregoing the District shall
                               have and is hereby authorized to exercise the following
                               powers, rights, privileges and functions:




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Mr. Everett J. Grindstaff     -   Page 2    (H-1195)



               (a) to control, store and preserve, within the boundaries
            of the District, the waters of the Colorado River and its
            tributaries for any useful purpose or purposes, and to use,
            distribute and sell the same, within the boundaries of the
            District for any such purpose or purposes;
                (b) to sell and distribute water without the boundaries of
            the District to any municipality for domestic, municipal and
            irrigation purposes, and to any person, firm or corporation
            for municipal purposes or irrigation, together with the right
            to construct     flumes, irrigation  ditches, pipe lines and
            storage reservoirs without the District for such purposes;

              . . . .

Acts 1935, 44th Leg., ch. 126, S 2.

       These provisions expressly authorize the district to store and sell the waters
of the Colorado River within its district, and also to sell water without the
boundaries of the district. In addition, section 2 is a general grant of power to the
authority to exercise any powers conferred by general law on any district created
pursuant to article 16, section 59(a). See City of San Antonio v. Texas Water
Commission, 392 S.W.2d 200 (Tex. Civ. A= - Austin 1965), aff’d, 407 S.W.2d 752
[Tex. 1966) (discussing similar provisions relating to Guadalupe-Brazes         River
Authority).

       Section 50.272 of the Water Code authorizes districts created pursuant to
article 16, section 59 to contract with other districts for a water supply. --
                                                                            See also
Water Code § 55.189.        It has been held that a county water control and
improvement district could purchase water from a source outside of the district to
distribute   within the district.  King v. Jefferson County Water Control and
Im rovement District No. 7, 281 S.W.2d 185 (Tex. Civ. App. - Austin 1955, writ
re d ; see also Ball v. Merriman, 245 S.W. 1012 (Tex. Civ. App. - Beaumont 1922),
-+T--
rev’d on other grounds, 296 S.W. 1085 (Tex. 1927). We believe the Upper Colorado
River Authority may purchase water from the Stacy Reservoir Project.

     The statute    which created the authority   authorizes   it

           to acquire by . . . lease . . . and to maintain, use and operate
           any and all property of any kind, real, personal or mixed, or
           any interest therein, within or without the boundaries of the
           District, necessary or convenient to the exercise of the
           powers, rights, privileges, and functions conferred upon it by
           this Act.




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Mr. Everett 3. Grindstaff   -   Page 3        (H-1195)



Acts 1935, 44th Leg., ch. 126, S 2(f). In our opinion, this language authorizes the
authority to use the Stacy Reservoir for impoundment of purchased water prior to
distribution to users within the district.

       We find no statutes expressly authorizing water districts to buy and sell water
outside of the district, although there is authority for the sale of “surplus district
water” outside of the district. Water Code SS 51.188, 55.197 (emphasis added).
Court of Civil Appeals has determined that a water district lacks implied authority
to acauire a water distribution svstem located twentv-two miles from the district
which’ distributed water from a source wholly outside of the district’s boundaries.
Harris County Water Control & Improvement District No. 58 v. Cit of Houston,
357 S.W.2d 789 (Tex. Civ. App. - Houston 1962, writ ref’d n.r.e. Me   .
facts you present differ from those in Harris County Water Control & Improvement
District No. 58 v. City of Houston, we believe its dicta is relevant to your second
question. The court stated that the district’s authority to sell water and condemn
land outside its limits did not empower it to operate an autonomous system outside
of its boundaries. It discussed the water conservation statutes as follows:

            [Tl he overriding purpose is service within the district.
             There may not be sufficient supply within the district so the
            statutes have authorized     acquisition of properties outside
            the district but, we think, to be used primarily in developing
            the area within the district. . . . While we recognize a plant
             for the accumulation or production of water may lie wholly
            outside of the district (Lower Nueces River Water Supply
            District v. Cartwright, Tex. Civ. App., 274 S.W.2d 199, ref.,
            n.r.e., and King v. Jefferson County Water Control &
            Improv. Dist. No. 7, Tex. Civ. App., 281 S.W.2d 185, error
            ref.), the primary use of the water is to be within the
            district.    Incident to that primary service, if the needs
            within the district are served, water may be furnished
            without the district.   The same is true where the source of
            the water is within the district. We have no such case here.
             We have a case where the source of the water is wholly
            unconnected with the limits of the district and distribution
            is in an area wholly unconnected with and outside the limits
            of the district.

357   S.W.2d, at 796. This language indicates that a district may purchase and
distribute water wholly outside its boundaries only where that undertaking is
incident to a primary purpose of providing water within its boundaries. Whether a
particular transaction in water outside the district is subordinated to its primary
purpose is of course a fact question, and we do not resolve fact questions in the




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Mr. Everett J. Grindstaff   -   Page 4        (H-1195)



opinion process. However, the ten year period that the authority would sell Stacy
Reservoir water exclusively outside the district would tend to show that those sales
were not merely incident to the provision of water within the district.    Thus, we
cannot conclude that the Upper Colorado River Authority may sell water from the
Stacy Reservoir to users outside the district.

                                   SUMMARY

            The Upper Colorado River Authority may purchase water
            from another district for distribution to its own users and
            may store it in a reservoir outside its boundaries prior to
            distribution.  Any sale of such water to purchasers outside of
            the authority’s boundaries must be incident to the primary
            purpose of distribution within its boundaries.




                                               Attorney General of Texas

APPROVED:




C. ROBERT HEATH, Chairman
Opinion Committee




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