OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

### AUSTIN

HonorableW. Lee O*Daniel @overnor oi Texas Austin, Texas

Deer Qovernor OlDanlelt Opinion No. O-8313 Ret Whether or not the Qulf Coast Water Company ia a utility oompany 

### "02 any kind or charaoter

whatsoever* ,/' ,/ within the manin& of Seotlon

3, Aots 1934, 4Srd Leg., 4th 0. S., Ch. 7, page Z3.

We reaeived ~your’ist+m dated June 15, 1940, requwtompany was lnoorporetedin 1931 er to the publio for frrigation,

The Company apparent8 of Art1016 1308, Reelaum* in its oherter go in eald article. It authorityuuder it8 which has been deolarad Se0 Gulf States Utllitlss 00..

rror Refucred).

e been informed that the Gulf Oaaat Water Uoml.of Its water from the OoLorado RIveri that the oorogany

has approximately

ninety (90) oontraotefor the furnishing

### Or water to rios famere for irrigation purpo444; that the oorapany

furnishedwater yaerly to irrigatr approximately thirty thousand (30,000)aores of land; that the aoazpany owns pumping plants, oanelr, laterale,ditohes, eto., used in furnlsh-t RonorebleI?, lea O*Denlel,paga 8

fog water to Its ouetomereand that the company doer not own eny lntereat in the land farmed to rlae.

Wa deem it neceeeary to quote e part of section 3, botcr 1934, 43ra Leg., 4th Oalled 866dlion, Oh. 7, at pccge 33 alnoe your puery arises by 7irtua of the provleioneof eala Aat. Said aeotlon reefla, in par6, as follower
*That no gereon shall ho eligible for suoh appointment (to the boera of QireatorsOS the Iawer ColoradoRiver Authority) if he haa, during the precadlna three yearr berore his enrointmantbeen (IDIployeb: by en eleotriopewer and-light company, gar

Berore determining whether the dulf Ooaet water Company is a uttlltp oompanywlthln the meaning of the Aoh oreatlng tha l.ower ColoradoRiver Authority,it 18 proper to ooneiderthe erldent intent of the legislature in eneatingthe6 per6 of the above mentionedAoQ.

An inepeotion

0r sallate Bill le?. 8, Aete 43rd Leg., 4th C. 8.. ch. 9, page 19, reveals that paver has been conferred upon the Lower ColoradoRiver Authority, eating threugh it8 alreotore, to control, store, pre6brve,uee, dietribute**and** sell the weterm of the Colorado River, 60 develop,generate,dietribute and eel1 water power and sleatrloal enorgy, to oonstruct,meintaln, u8e ana operate tsoilitien, and meny ether poware toe numeroue to mention here.

The legislatureintended thaf the afreotore of the **Lower** ColoradoRirer Authority should be persons who would aot for the bent intereetsof the.State. It there?ore sought to end did disqualifythose persons from being appointed to the Board of Direotorsof the Lower ColoradoRiver Authoritywhho, at the time of egpointzent,

had been employed**by** an utility **oompsny** within three (3) yeere preaedingthe date o d e appolntmen6. This safeguard waar

enaoted to insure as far (18 possible thet 6he affairs of the l,ower

Colorado

### RiverAuthoritywould be oarrlsd on to theReuoxable1. Lea OvDanlel,page 3

best Interestsor the State rather than for the Interestof private lndlvlduale.

In this aouuectlan,It has been aalled to our attentlon that the Gulf Coast Water Corcpany has entered Into a aontraat with the Rorrd 0r Dlreators0r the Lower ColoradoRiver Authority for the purahase or water. It 1s r4aUlIy seen that it a alreator,Officer or other employee or the Gull boast Water Wapany 18 eligible for the appOintdcent la question,he rr,lght roll be mom InterestedIn seelug that the water oompanybenefited rather than in protectInSthe best interest8or the Stste.

Xn Title Xo. 188, Revised Clvll Lftatutee, we flhd the followl~ articleswhlah we believe to be pertinentto the questlon herein involved. They are a8 followst

*Artlalr 7466. Public rights
=!fhe aonservatlon

and develnpmentor alt or the natural resourae8 or thla State, 1ncIkQlngthe aontrol. etorlm. 9reaervatlon and dletributlon

of Its stoim and rid water8, the waters 0r Its rivers and streams ior irrigation, power and all other use- ?tul purposes~the reuu2m6ffon

### ana Irrigation

### 0r it8 aria, semi-aridand other lauds needing irrigation; the realarcatlon

and drainage of its overflowedlands, and other lands needing drainage;the aonservatlon and deveIapuent~.of Its forest,water and hgd?o-aleatrla power! the navlgatlonof its inland aad aoastalwaters, ana tha preservation and oonservatlohoil all snah 1)1- tural r46ourcesor the State dre each and all hersb dealaredDubHa right4 and dufi~;s.~ Iunaerscorlng

o&a)

"Jirtlolo

7467. Property of the State
*The watera Or the ordlasry flbw ana underflow and tlaes of,

every ilowing river or netural stream, of all lakes, bays or am.6 or tFis Gull of Kexlco. and the eta&, fiood or rain watare or every rivb or natural stream. eanvon. ravine. ao~r4ssloaor watarshed, within the StkePot 'Paxa;, ai?4 h&by &cl&d and the right t the ~roarlatldnin zhe manner and ior-

the us& and piwp%ee-hereinafterprovlaea, and icay

be taken or diverted from its natural channel r0x any **0r** the purpo64s expreesed la this chapter. Wen an appllaatlon16 aadr ror approprla

# c 510HonorableW. L. OrDaniel,~680 4

tion af suah water for mining purpoaea,the owner of the land throughwhich the water flows and whlah 28 to be arpropristed

ahell here the prior right to agpropriate dlamo,

ana ehall be permitted to extrolse suah right, although nuah ownermey not hsts mde appl2oatlon**prior** to such eppliaation by another,and suah owner ahall have only ten days aftor the notice of application to appropriate muoh **water** In whlcah to exeraisshis prior right to appropriate,

whiah he shall do by written application filed with the Board of Water Xn&mers within suah time.*
"Artiale7858. **Possessory** tight ~till,ptrsana

who owa or h0ia a passes6cryrisht or title to land adJoining cr aont2@ous to any dem, re84rvoir,aanal, dltah, rlume or let4s%l, oonstruatoa and maintained under the provisionaot this ahapter, and who shall have esaured B ri&t to the ~4% of water in mild aand dltoh, iluin6, ldtcral, ~4%~0lf, aam or lake, shali be entitledto be supplied iram suah aanal, dltah, flume, lateral., dam, nwrvolr or lake with nater ror irrl@tlon of suah Xand, and for mining, tilling, manufaoturlng, aevslopment0r power, 

### ana etoakralslng,

In accordanct

wl%h the tsrmr of hir or their oontract."
"Artlale 7656. Failure to fasrqe upon pria*~

*ff the person, essoaletlon **0r** persona, or oorport&ion owning 

### or controllingrush wetek, and the person who own8 or hold8 a porssaaoryrl&ht or tlfla to land aajofnlngor .co;lt2g~?us to any eanrrl,

ditah, rliie or lateral, lake or remxvolr, aonstruat4dor maintained unQ,er

the provl62onsof'this ahapter, fall to aerse upon a price for a permanent~viater right, or for the ~4 or rent@1 of the neeeasary**water** to lrrlgato **the** land or such person, or for mining, milling, m4nutaoturing,the aevslogmentof power, or **stook** raising, wch person, assoaiationof pereon8,03 aorporatlon #hall, nsver8helesa+If h4, they or it, h4v4 or aontral any water not aontraatedto othrrs, ttmnish the neoes**sary water**  **to** euah pareon to irrigatehis lads or ror mining,milling,manufcaatuing,the development or power or atook ralalnq, at aueh prices as aball be reasonableand .just, and without d2aarlsinaflon.~”Honorable2. lee O'Daniel,page 5

WArticle 7565. Ford to fix rct68
"The said Ecoard

shall have Rower and eidhcrity, and it ~&till

?e its duty to fix reasonablerates for the furniSbiIl& 

### 0r water for the puryoaes or any SWpose msntioned in this chapter."
Urticle 7370. Rules and regulctians mate and published
TWery p6rSon, aasooiation**0r** persone, oorporatlon,

or irrigationdistrict,coneervlngor 8uyFlyIng water for any of the purpoaeaauthorizedby this chapter; shall make and pu'bliah reeeonablerules and ngulatlonr relatingto the method and manner of sqgly, u6e en4 dietribution

of rater, and prescribingthe time and manner of making eppllaationfor the une of water and payment therefor.W
*Article 7883. Additionalright or way obtained
*Any person, asoooiatlon

### 0r pereons, aorpcration, irrigbtlm or water improvementdistrlot,or any oity or town,may 

### ale0 obtain the right 

### 0r way over privatr lend8 and ale0 the 

### lonae tar pumping plants, intakes, beadgatesand atorace re8ervcslr8, by oondemnetlon,

by causingthe darr%iges for any Drivets property appTopried.ed by any euoh person, aoeooirtion

### 0r persone, oorpor2tioq water improvement

or irrigationdistrictor city or town, to be aasesscd end **paid** for as provided.bythe Statutes 

### 0r thic Stctc and ae prcvided in Title 5Z 

### 0r this Aot relatingto 1 minent Domain* provided,however, that

E. when the power granted by this section is eought to be exeroiaedby any person or aasoolaticnof persons,but net including irrigationoorporatlona, diatrfcte,cities or towns, he or they shall first make appliceEtion to the Doz~rd ci :vater

Hnginsers for suoh condemnation and said Board shallmake due inveatigotion entl if it deems advisable ahall give notioe to the party ownihg the land
**8oU@t to**  **be** oondemned,end after hearing,may institute such oondsnn!Jtion

prooeedingsIn the name of the State d OL Texes ror the use 

### an d benefit of said person or persons and eL1 others aimllwly aitunted,the coats of said cult and condamnation to be paid by the person or persons at whoose

instance the same la Institutedin proportion to the benefit8reoeived by each a6 fixad by eaid board and to be paid before use is m<ide of such oondemnedrights of property;and thereafterall persane seeking to take the benefits of suoh condemnation proceedingsshall make applioationtherefor to the IW>rdHonorableE. Lee C'Daniel,Rags 6

of Water Rnginviera and ii euoh appllotiticn is granted shall pay lees and clxrges 68 may be fixed by the Bocrd."
The ?asr6 of Water Engineer8 is vestedwith broad powers in regulatingthe use o? water over whloh It has regulatory ocntrol. Reoause the Gulf **Coast** Water Company takes all of its weter out of the ColoradoRiver and rdslla it to rioe farmers for t!le

rurpoae of irrigatingrios land, the raid oompmny is subject to regulation by the Roerd of Watsr Engineersae provided in Title 128, Revised Civil Statutes. Artio1e 7555, 8upra, provides that the furnisher of water must supplywater to *all persons who own or bold a possesscryright or title to land adjoining or oontiguoua**to** any **den,** rcwervclr,tanal, ditch, flume or letcrel*

when they shall have asoured a rl ht to the use OS the water. \:e

are **lnforrced** that some ninety 90) persona have 7 secured the right to receive the water from the Gulf Coast Water Company.

Artioies 7556 and 7557, provide, thst water must be suppliedat suoh prices as shall be rsaeoneblsandwlthout dieor#dntition. Artiole 755.5 $ivrs the Roard ot Water Engineers power end authorityto fix reasonablerntes lor the use of the water. Article 7570 reqtirae the furnisherof water to make and publish reasnncblerules and regulations rslatiq to the manner and x&hod of supply, usa and distribution, and preeorlblng the time and manner OS making applloatlanfor the use of water and ya~yment

therefor,
krtiole 9883 grants irrigationoonpaniesth,s right of eminent doma:n. To make oertein that irrigation ocn5p4aie4 had the right to condemn land under Artlols 7583, the 44th Xegislature, Reguler Eession, 1935, enaotsd Senate Bill Roe. 155, Ch. 48, page 126, clarifyingaaid article. The emergency oleuse of said Aot reads aa follows:

"b00. 2. The Sect thet under the oodlfioation of 1925 the oodiilsrs,or else the printers,left a questionunCer the new laws of 1925 as to the power4 9f irrigationcorpora,tions to oondtvmn

lend, whioh power has a,lways

been expressly reoogninedin Texas, and it is necessary to clear up the questionand it is vital to the agriculturaldevelopmentof this Stats, oreates an emargenoyand on imperativepublic neoeselty

## 513

HonorableW. Leo O*Daniel,page 7

that the Constitutional Rule requiringbills to be read on three several days la each House be surpended, and the name is hereby suspended,and that thlrr Aot take effeot and be in foroe from and after its passage, and it is 80 eneoted.n

In the oase of Colorado Canal Co., vs. KoFarland and 5outhwel1,94 8. W. 400, the Court of Civil ~ppealrwent LIO far
**aI** to sag that the possessionof the right of anbent domain flxad the status of an Irrigationoompany as a quart publfa corporation

regardleesof whether it exerolnesthe power or not.

Wr. Justice Dibrall, speaking for the Supreme Court of Texas in the oase of Raywood Rice, Canal and YillSng Co., vs. V, F. Erp.and W. E. @right, 105 Texae 161, said:

*The granting of the power of eminent domain imposesa public service in return. No authority under our law exists ror conferringthe power at eminent domain for private use. The moment suoh p-or is granted the grantee beoomm quasi publio in ohsraoterand while hi8 or Its funotlonaare exerolaed for prorlt they must be exeroieedin the interent of the publio upon reasonableterme and without dlaerlm,fnation.

* e en

We quote from the oaee oi Amerioan Rio Wands Land and IrrigationCo., vs. Mercedes PlantationCe., 155 8. W. 886, (re**r023d ani3**  atrimed 208 6. w. 9041, as followa:

*Appellantoorporatlon wae organlsedand ohartsrsd under aeotion 11 o. El, p. 23, ot the dot8 of 1895 (R. 5. ~1911,

art. !&02 at seq.), and follows the language ot that aot In stating its purposesand powers. From these powers grow, by operationof law, ita duties,which cannot be #hanged or leeesnsd by Its intentions, In Borden t. Rio8 & IrrigationCo., 981 Tex. 404, %b 3. #. 11, 107 Am. St. Rep. 640, the Supreme Court of this state held that euoh a oharter create8a quasi publio oorporatioa whiah is ohargedwith duties to the publio aoamienaurate with the powers cand privilegesoonferredupon it by law. The Leglslsturein the above sot has not very olearly doiined the rights of the publio nor the duties of the eorporatlon,but a aartful rtudy of the langur,go of the aot in the light of the well-eetablisbedprinoipies OS law makes clam the meaning. As aptly raid by the learned Judge who wrote the opinion in the Borden



# cDonorable W. I,ee O'Daniel,page 8

Caee the powers of the corporationare oonferred to *i enae e It to approprlnte water and to convey it 'to all persons entitledto the 8me$* to *all personswho OWA or hold a poeeeseoryright or title to land adjoining or con"uiguous

to any canal,* etc., aAd *bho shall h:ive aacured a right to the use of water * * * in aooordance with the terms of their oontraot.' In case-of a shortage of water, a plan for proratingthe supply is Fmvlded, and the sale of a permanent weter ri&t is made an easementupon the land which will ycos with the title, eto. It is further provided that in case no ecntreoi can be agreed upon between the conamer and ttre Irrigation company, the conauxer shnll nevertheless be entitled to water upon rez.scnable terms. Such lmgusge, aided by the rule ot law that only puhlio or quasi puhllo aorporations are endowedwith the power of eainent dozmln, oan only bo understoodto mean that out of the grant of power to the oor?oretlonahall grow, ipso faoto, the right of the property owner to receive,upon reasonable texvca, a fair proportion of the water taken from the water ceurse and conducted through its oanals, and that the power of the corporetionto contract for the aupplp of water ia limited to such subjectsa8 do not oonfllct with the righte of the parties ae rlxed by the law. In the Eorden Case the court, upon t,hla subject, aaid: *The power to oontrtot,here given to the owmr of the plant, oannot, if the business is to he regarded as affectedwith a publia interest,be reaognizeda8 absolute and LIAoOAtrolled. Comon carriersaAd othera engaged in publio oallingsh:ve the power to Cantreat, but it cexmot he 80 employed as to absolve them from their duties to the puhllo or to deprive other8 of their rights. Right8 hre evidentlysecured by this statute to those 80 eitubted 38 to be able to avail themselvesof the water provfded for, and those rights it is the duty of the owners of the contemplatedbuslne38 to rospeot; ami the power to contract,under the well-recngnized

principleaapplicableto those oherged with auah duties, mu& be exercisedin subordination to suoh duties aAd rights. Reasonablecontractsare what this statutemeans, and not contrecteemployed as evasions of duty.' 98 Tex. 511, 86 8. ?i. 15, 107 Am. St. Rep. 640.”

See 8 a. 1. R. 968, 13 k. I. R, I.?27 and 44 Tex. Jur. 339-369 for a full dlsousslonand oit&tioA of authOritio8oonoerning the questionof an irrigationcompany being a utility oom-. 

## 5513_5

RonorableW. Lee O*Danial,pi-ee 9

g-4.
Fran the above oiteb authorities,It ie apperent that an irrigationoompany pamesses many of the attributes oommon to the more generallyknowi utflity oompanies. Further, it seems to ua that there ere a6 many reeson~~, it not more, for alequalifying

a director,of’ffoer or employee of an Irrigation oom~enp than there would be OS disqualifying e direator,offioer or employs of a gas or telephensoomgany. from e persoAa1 6teAdpoint, Certainly, it would seem that e person interested in e water oompeny is in a muoh better poaltlonto profit from the appointmentin questionthan a person lnterested in a gas or telephoneoompanl.

For the reason*herein ststed~, ve are of the opinion that the Gulf aoast Water Company 18 a utility oompany rlthln the meaning of 8eotion 3, Aata 1934, &Ml Leg., 4th 

### a. a., ah. 7, p. es. It follewr that a director, ofifaer or other employee of said oompany is lnelig~blsto be appointedto the Emord of Direotoraof the Lower aoloredo River Authority a8 provided in maid Aat.

Tows very truly

ATTORNRTQEW?AL OF T!XXAS

Leo 8hoptaw

LS:ZF



## OPlNlON **GOMMI ’**  **lTEE: \**