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 elsotrlolty by Brazoa River 

Convservation and Reolamatlox! 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 oonstltutionellty of thm act oreatlng the dlatrlot ha8 been ertat$lrhrd by 

the Supreme Court of T&as in Brazes River Conservation and Reolamatlon 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 

wg 

where euoh UBO may be roonomloally. coordlna l with other and numdor usea. and subordinated 

to the uae.a declared by* law to br iuperlor.* (emptwla ourr) 

An rtatrd ln our opinion No. O-2619: 

WIt’lr famlllar law that thr grant of power to 

a corporation, l lther 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 l leo 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 l leotrlolty 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 Dirtrlot 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 l uggoatlons and obarrvatlona rolatlng to tho drart of oontraot aubraittrd to ua. 

ThO l ooo 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 l leotrlo gonerating oapaolty at Poeaum 

KIngdOm Dam and 18 Bat forth In Sootion lo.* 

Sootlon 10 of thr oontraot la rntltlad Valvor of Dorault,* 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 dlatrlot ahall be free to aell, to other uaora, a n3. l x o a ~a power, 

ovar and above that whloh tha Purohaarr ran uaa. Poaslblr ambiguity 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 redetcnrilnetlon 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 aallowl noe 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 

ATIORNEY GENSRAL OF TYXAS 

. ‘.%L:db 

Enoloauira 

BY a/ Walter R. Koch 

AaslatantAPPROVED PgB 21, 1941 

a/ Gerald C. Mann 

AT. ORNEY GENERAL OF TEXAS 

AFPROVIED: CPIMCN COKMITTEE 

BY BWB Chairman