April 4, 1949 

Hon. E. V. Spence, Chairman 

Board of Water Engineers 

Austiri, Texas 

Opinion Wo. V-003 c 

Fle: Authority of Board to 

entertain appropriation 

application of Upper 

Colorado River Authority 

The question 

your letter, 

Dear Sir: 

tained in 

lows : 

submitted for opinion is conwhich we copy in part as fol.- 

‘In Attorney Oeneral’a Opinion 

No. O-7338, approved August 9, 1946, 

it Is held that the Upper Colorado 

River Authority, a atate agency, created by act8 of the Regular Session of 

the 44th Legislature, Chapter 126, ia 

not required to secure a permit from 

the Board of Water Engineers to approprlate waters within Its boundaries 

and that the Authority ia not subject 

to payment of feea preecribed by Articles 

7497 and 7532, Vernon’8 Annotated Civil 

Statutes of Texas. 

“Notwithrtandlng thle opinion, the 

Upper Colorado River? Authority cannot 

get its proposed projeata finanoed without having flrrt seuured a permit from 

the Board of Water Engineers protecting 

ite source of water supply under the 

Doctrine of Approprlatlon. Therefore, 

the Authority filed its application and 

was granted permit by the Board covering 

lta Robert bee project on the Colorado 
Hon. E. V. Spence - Page 2 - V-803 

River in Coke County, and is now preparing to file an application to appropriate and use the waters stored in 

the North Conch0 River Flood Control 

Project In Tom Green County for munlcipal, Industrial and irrigation purposes. 

"Article 7501, Vernon’s Annotated 

Civil Statutes of Texas, reade a8 fol1OWB: 

“‘Every such application shall be 

accompanied by the fees hereinafter 

provided, add shall not be filed 

or considered until such fees are 

paid. t 

“In view of Artiole 7501, can the 

Board of Water Engineers file and conelder the application of the Upper Colorado River Authority for permit to appropriate the waters in the North Concho River Flood Control reeervolr wlthout It being accompanied by the feea 

prescribed by Articles 7532 and 75357” 

The question which you raise has been the 

subject of many prior opinions by thie office, which 

we briefly review ae follows: 

1. Letter opinion dated June 30, 1925, by 

Assletant Attorney General C. L. Stone, addressed to 

the Game, Fish & Oyster Commlsslon, decided that the 

Commleelon need not pay the statutory feea in order 

to acquire a permit to appropriate water for the purpoee of maintaining a game prerrerve and fish hatchery. 

The basis of the opinion Is that since game, fIeh, 

water, and permlt fees are all the property of the 

State, and slnoe the fee statutes do not expressly 

require the oomml~slon to pay the feen, none need 

be paid, 

2. Letter opinton dated January 3, 1938, 

by Asslntsnt Attorney Qeneral Ruaaell Rentfro, addressed to the Board of Water Engineers, Involves 

the liability of the Federal Farm Security Admlniatration for payment of Baid fees. The above oplnlon 

of June 30, 1925, was distinguished on the ground 

that the same community of interests between game. 

fish, water,ard fees ‘existing there did not ,..*A.<*, 

exist in the case of the Federal Earm Security AG- 
Hon. E. V. Spence - Page 3 - V-803 

ministration. The opinion holds that since the fees 

are not taxes, 80 as to forgive payment thereof 

by the Federal Government, and Article 7532 being 

mandatory, your Board had no alternative but to 

collect the fees prescribed by said article-~ 

'3. Letter opinion dated March 8,‘ 1938, 

by Assistant Attorney General H.. L..,Wllliford, 

addressed to the Brazes River Conservation and 

Reclamation District, holds Baid DiBtI?i,Ct exempt 

from the fees in question. It was suggested in 

the letter. requesting the opinion that since thefees~ are paid by your Board directly Into the General Revenue Fund and since the net revenue of the 

Brazes Diatrlct is also paid. into said fund, payl. 

ment of the fees would be nothlng~ more than a 

bookkeeping transaction, and thesefore need not 

be pai.d. The opinion recognizes this argument 

but bases its holding upon utility considerations, 

stating that since “the entire enterpriee is an 

undertaking,by the State to conserve its public . 

waters and to utilize same for the benefit of the 

State in ita entirety ,~. . . the fees are not re-~ 

qulred. ” 

4. Letter oplnlon dated May .4, 1938, by 

Assistant Attorney General H. L. Wllli~ford, addressed to Upper Red River Flood Control and Irrigation District holds such ,dlatrict not liable~ for 

the fees. Utility considerations were again employed, it being pointed out that the Irrigation 

District is a state agency exercising powers .and 

privileges in furtherance of governmental purpose. Xn addltlon, It was stated that one deportment of government la not required to pay another 

department a license or prlV.llege tax sin,ce this 

would be merely paying the revenue ,of ,the State 

Into the revenue of the State. 

5.‘. Letter oplnlo,n dated May 13, 1939, by 

Assistant Attorney General ?Ngene Tate, addressed to 

Board of Water Engineera, overrules the Wllllford 

opinion of May 4, 1938, and holds the Upper Red River Flood Control & Irrigation District lfable for 

the fees. Earlier opinions were reviewed and the 

Game, Fish and Oyster Commission and Srazos District 

opinions approved. It is clear, however, that ?,he 

Brazes opinion was not approved upon the utility 
. 

Hon. E. V. Spence - Page 4 -V-803 

baais upon-which it naa decided but upon the basis 

euggested for decision, namely, that the net revenuea 

of the Brazoe Dlatrlct ultimately find their way into the General Revenue a8 do the fees collected by 

your Board. Baa&use the Upper Red River District’s 

Act did not contain thle net revenue provlalon, It 

wae held liable for the fees. 

6. Opinion Uo.O-78, dated January 13, 

1939, addressed to the State Parka Board, holds such 

Board not liable for the fees. This opinion reviews 

all prior opinions and adopts a8 lte basis the above 

indicated fee theory. It 18 asserted that the Parke 

Board falls within that class of governmental agency 

which is not required to pay the fees since its revenues go into and come out of a State fund. 

‘7. Opinion So.O-4304, approved Pebruary 

9, 1942, addressed to the Loner Colorado River Authority, holds the Authority not liable for the 

feea, The basla of this opinion Is the inability 

of the Authorlty to spend its fund0 for any but a 

btatutory purpose. It wan decided that the Author,ity 

acquires no right through such a permit, its right,to 

appropriate being oonferred by Its hot, in consequence 

of whioh payment of the fee in order to ueoure the 

permit would be use of Its fundr for a non-statutory 

purpose. The earlier oplnlonn on the subjeot were 

not disouased. Neither the Upper nor Lower Colorado 

hot8 aontain a provision whereby net revenuea go into 

the Qeneral Fund. 

8. Opinion No.O-7330, approved Awuat 9, 

1946, addreseed to the Upper Colorado River Authority, 

reaohes the same rerult and for the name rea.aon an 

that set forth in Opinion No.O-4304, Irupra. 

Artiole 7532, V.C.B., aeta up the various 

fee8 in question, -The opening rentenoe of said artlole 

provider that “The Board ahall oharge and oolleot for 

the benefit of the State the fees hereinafter provided. , . .‘I The fee8 referred to under thlrr lanf 

uage are of three typer, vie., filing fees,p;mgdlng 

ee8 and fees for maklng oertlfied copies. m 

ample - a filing fee la required for eaoh presentation, 

application for permit, petition for formation of a 

district, applioatlun for approval of bond IafJue, applioatlon for adjustment or fixing of rates, and application for extension of time. A recording fee 18 re- 
Hon. E. V. Spence - Page 5 - v-803 

quired for the filing of any .instrumeBt which is 

recorded In, the office of the Board: A ~fee is also 

provided for certification by the Board of any ‘in.- 

strument or map dealred to be certified. In addition to the above fees, Article 753'2 pr~ovides for a 

use fee, also to be collected for the,benefitof 

the State, such fees being required for the us,e of 

water for Irrigation, for hydraul.i,c power, for parks, 

pleasure.,, resorts and game preserves and th,e amoun.ts 

in which these fees are payable are based upon the 

volume of the proposed power or water consumption. 

In conclusion, Article 7532 provides that “the fees 

paid upon application for a permit other thanthe 

filing fee herein provided,,shall be held~ by the 

Board until said application is passed upon and If 

same is not granted, such fees shall be returned to 

the applicant therefor. . . .” 

Article 7533, V. C. S., provides that the 

fees Andy charges collected by the Board of Water 

EnglneerB,Bhall be’ immediately deposited in the State 

Treasury to the credit of the General Revenue Pund. 

Article 7535, V. C. S., merely allows an 

installment method of payment when the fees exceed 

the Bum of $l,OOO.OO, and has ‘no real bearing on the 

subject involved herein. 

Where this office has held that a particular State agency need not pay the fees, this Is 

necessarily also a holding that, In drawing the statutory provisions dealing with feea, the Legislature 

intended In the first place to exempt such~ agencies. 

It conslatently follows therefore that the Legislature did not Intend for Article ~7501 to have a 

mandatory effect so as to requlre,ln these exceptional cases the collection by ,you of the fe,Fo;f;+$ 

to your taking action on the application. 

words, Article 7501 is not mandatory as to those 

agencies which are not required to pay fees. 

Generally, thls,anBwepB your question. However, in order to fully reply, It is necessary to 

solve certain problema raiBed by the above opinions 

of this offlce~. 

Excluding Opinion No. O-4304 dealing with 

LCRA and Opinion Ro.O-7338 dealing with UCRA, the 

ultimate conclusion of the above opinions Is that the 
Hon. E. V. Spence - Page 6 - V-803 

fees are not 

the receipts 

payable In two Instances: (1) If 

of an agency go into some State fund 

and, because the feea go Into a State fund, the 

agency la exempt; (2) Where the subject matter 

under the control of the agency la State property, 

such as fish, the water required for the protection thereof being also State property, no fee 

is required. Up to the time of Opiniona O-4304 

and o-7338, the foregoing were the principal, if 

not only, two bares upon which exemption could be 

allowed, Although we have excepted these opinions, 

actually they form no basis upon which a prospective exemption can be allowed. The holding of 

theae opinions is merely that the Districts require 

no permit, obtain no right under It, and, being 

able to spend thelr funds only in furtherance of 

the statutory purposes for which they were created, 

are legally unable ‘to pay the feea. 

It appears from the statement of facts 

contained In your letter that In order to finance 

its North Conoho River Flood Control Project, It 

la neoeaaary for UCRA to acquire the usual permit 

forming the basis of an approprlatlve water right. 

It la evident that UCRA requires for a ;;ryhrectloal reason a permit In thlr lnatanoe, 

Dlatrlota require a permit, it la no longer an anawer to the question of payment of fees to say that 

;;oauae they do not require it they cannot pay for 

. 

An examlnatlon of the Acto of Upper and 

Lower Colorado River Authorities will show that 

thalr aota are nearly l4entloal. See LCRA, Aota 

1934, 4 C.9. oh.71 UCRA, Aota 1935, 

8mendmentai [both Aota are oarrled 

o 

in % 

;Edi and 

followln 

Section Is 

Artiole 8197f). With one minor*e;oeptlon, 

of both Aota contains this Identical provision (from UCRAla Aot)r 

"~Seo.8. The Board shall establish 

and oolleot rate8 an4 other ohargerr for 

the sale or uae of water, water oonneotlona, 

power, eleotrlo energy or other services 

sold, furnished, or supplied by the Dlatrlct, 

whioh fee8 and charges shall be reasonable 

and nondlaorlmlnatory and sufflolent to 

praduoe revenuea adequate, in addltlon to 

funds received from tax diversion; 
, 

Hon. 6. V. Spence - Page 7 -v-803 

‘l(a) to pay all expenses necessary 

to the operation and maintenance of the 

propert?es and faclllties of the District; 

“l(b) to pay the Interest on and 

principal of all bond? Issued under this 

Act when and aa the same shall become 

due and payable; 

“l(c) to pay all sinking fund and/or 

reserve fund payments agreed to be made 

In respect of any such bonds, and payable 

out of such revenuea, when and as the 

same shall become due and payable; and 

’ 1 (d) to fulfill the terms of any 

agreements made with the holders of such 

bonds and/or with any person in their 

behalf, 

"'Out of the revenues which may be 

received in excess of those required for 

the pur oBes specified In subparagraphs 

(a) (bP (c) and (d) above, the Board 

may’ln iis discretion establish a reasonable depreciation and emergency fund, or 

retire (by purchase and cancellation or 

redemption) bonds issued under this Act, 

or apply the same to any corporate purpose. 

“‘It la the Intention of this Act 

that the rates and charges of the District 

shall not be In excess of what may be 

necessary to fulfill the obligations imposed upon It by this Act. , : .I” 

The same degree of slmllarlty existing between the Colorado Acts does not exist between them 

and the Brazos River Reclamation and Conservation 

District ‘8 Act. For the~most part, these differences 

lie In language employed rather than in substance. 

Substantially, and eepeclally as regards district 

objectives and functione, the Acts are the same. 

With respect to revenues, the Brazos Act (Acts 1935, 

ch 368 sec.6 copied V.C.S. following 

~~~l%~‘&&+) p&Ides 4s follows: 

“lSec.6. It Is contemplated by this 

Act that the Brazos River Conservation and 
. 

Hon. E, V. gpence - Page 8 - v-803 

Reclamation Dletrlct will apply for and 

receive the cooperation of the United 

States of America in alleviating the 

public calamity herein declared, and 

that beneficial usea may be found for 

the flood waters impounded, which are 

hereby deolared incidental to the purpose 

OS removing said public calamity, and that 

revenue0 will be derived from euch lncjdental benefits; all of which, to ether 

with the funda hereby donated and 7 or 

granted shall be used during the, time 

and for the purposes herein specified, to 

the end that such publlo calamity may be 

averted, Until all obligatione herein authorized have been fully discharged, the 

tax money hereby donated and/or granted to 

the District, together with the net revenues as herein defined accruing to the 

District from any other oourceB whateoever 

shall be used exclualvely for the purpoae 

of diachargrng aaid obligations and for 

the proper operation and maintenanoe of 

the l.mprovemente proposed. to be oonetructcd; but after all of such obligations have 

been paid in full, then the revenuee accruing to the District rrom all aourcea 

whatsoever, shall be ured by the Dietrlct; 

%irst, to pay the rearonable oost ot oolleoting suoh revenuesi second, for the coat 

of the operation, maintenanoe, depreoietlon, replaoement and betterment of the 

propertler aoquired and oontrolled by the 

Dsstrioti third, for the oompletlon of 

the neoesoary unit0 of the coordinated 

oonneoted aystem by water oonservation 

that will prevent the pub110 oalamity declared to exlsti and the balanoe of such 

revenues ahall be paid annually, not later 

than Wlroh 18t of eaoh year, to the Treasurer of the State of Texas and by him 

plaoed in a Oeneral Revenue Fund. 

“The term ‘net revenue’ as ueed in 

this Act shall be construed to mean the 

revenuea of the Dlstrlot, from whatsoever 

aouroe derived remaining after the payment 0r all oosts 0r oolleotion, all coat0 

of operation and maintenance, depreoiatlon, 
Ron. E. V. Spence - Page 9 - v-803 

replacement and betterment of the properties owned and/or acquired and/or 

controlled by the Dlatrlct, and the establishment and the maintenance of an 

adequate depreciation~and emergency 

fund sufficient to construct, replace 

and/or repair works, and/or properties 

when and If necessary.” 

Instead of llmltlng net revenue to operational coat and providing that net revenue over and 

above these costs may be devoted in furtherance of 

statutory purpose, as was done in the Colorado Acts, 

the Legislature has made provlalon in the Brazos 

Act for turning net revenue to the Qeneral Fund. 

This difference In method of diaposlng of net revenue should create no dfatinctlon, elnce all three 

Districts are conservation and reclamation districts 

created pursuant to Section 59, Article XVI of the 

Constitution; and under no circumstances would they 

be authorized to produce a profit over and above 

conetitutlonal and statutory coats. As a practical 

matter, of course, year to year revenues might not 

exactly equal such costs and as to any net revenues 

80 produced some provision wa8 necessary. In providing on the one hand that theae net revenues be 

put back to corporate purpose and, on the other, 

that they be put In the Qeneral Fund should not 

create a distinction which can ‘have any material 

bearing on the fee question here involved. 

The Colbrado and Brazos District8 were created pursuant to the ooneervation amendment to the 

Constitution, Sec. 59, Art. XVI. A casual reading of 

the Acts reveals that the Districts were intended to 

acoompllsh the same pub110 purpose. This elmllarltg 

has been recognized by our Supreme Court. See Brazos 

River Conservation dc Reclamation District v. Mccraw, 

126 Tex. 506, 91 S.W.2d 665, 672; and Lower Colorado 

River Authority v. Mocraw, 125 Tex. 268, 83 S.W.2d 629. 

In v5ew of this slmllarlty and because of 

the absence of any subntantlal difference of result in 

the handling of net revenuea, ab that difference relates to the fee question, we are of the opinion that 

the came exemption accorded the Brazos District should 

be accorded the Colorado Districts. Believing this 

to be sufficient reason for exem tlon, we withdraw 

Opinion O-4304 and Opinion O-733 8 and substitute ln- 
- . ,.. 

Hon. E. V. Spence - Page 10 - V-803 

I 

.:, 

stead this oplnlon. A copy of this opinion has been 

furnished the Upper and Lower Colorado River Authorlties to apprise them of this action. 

As Indicated earlier, Article 7501 1s not 

mandatory as to those governmental agencies found 

to be exempt from the payment of fees. Such Article 

Is not mandatory as to the Upper Colorado River Authority and you may rile and consider Its appllcatlon although not accompanied by the fees provided 

by Article 7532. 

The Board of Water Engineers 

may file and consider an approprlation application filed by Upper Colorado River Authority even though such 

application 1s no,t accompanied by the 

feea prescribed b$z 

Opinion8 O-4304 8 

rtlole 7532,V.C.S. 

an’ O-7338 by prevlous 

administration wlthdrpwn. 

Yours very truly 

ATTORNEY OENERU OF TEXAS 

HDP:bt 

BY H. D. Prueti,.Jr. 

Asslstant 

.:. .